Marketing Management, 14th Edition

Kotler Philip, Keller Kevin Lane

HW - Case Study 4 Olympic Rent-A-Car -Customer Loyalty Battles

Course Instructor
Mihai ichindelean

ASSIGNMENT QUESTIONS
What factors help explain Olympics performance? What market factors may impede it in the future?
R:The company was almost totally a franchising operation, which allowed it to grow rapidly and profitably to its
2012 position of approximately 7% market share. Its initial strategy was to price lower than Hertz in every
market, no matter what. Olympic capitalized on its popular founder in its promotion and advertising. The
Olympic theme resonated with customers as the company stressed quality service and the slogan go with the
winners in its ads and promotions. Olympics rental operations were conducted primarily at major airports and
at downtown locations in major cities.
What are the strengths and weaknesses of car rental loyalty programs and Olympics Medalist program
specifically?
R: Olympic had chosen to be a follower-WEAKNESS. Since it tried to provide lower overall pricing than the leading
companies-STRENGHT, management always felt it did not have to offer more in its loyalty programWEAKNESS. Anyone could join Olympic Medalist at no charge-STRENGHT. Members earned rewards by
accumulating credits. When a member accumulated 16 credits he received an award of one free daySTRENGHT. Each rental day under the program equaled one credit. A rental day was based on a 24-hour rental
day starting at the time of the rental. Credits earned were valid for one year from the date of issue. Credits
could also be redeemed for airline frequent flyer programs and other rewards such as rental car upgradesSTRENGHT. The member cannot use his free day in blackout days prior announced-WEAKNESS.
Assuming Olympic responds to Entreprise, how should it do so? What is the potential impact of emphasizing
dollars spent versus days of rental? What is the potential impact of removing blackout days?
R: In my opinion Olympic should create the image of a high-quality company with services for every budget. It
should practice the lowest fares so it will gain market-share. Removing blackout days will make the customer
happy and it will attract more members to the Medalist program. If the program has no constraints the
members will be loyal and they will really feel rewarded for being a member.
What is the economic value of a Medalist member to Olympic?
R: The Medalist members represent 21% of total revenue.

Thanks!