Marketing

Confused Branding – Avis, Budget, Payless? Who are you?


“We try harder,” no longer applies.

Three years ago, AdAge reported that Avis’ iconic “We try harder” slogan would be dropped.(1) The slogan positioned Avis as the strong number 2, following Hertz, and because Avis really would try hard to provide a better customer experience, they were worth a try. In 2009, Avis and Budget merged into a corporation that is now Avis Budget Group, Inc., which includes other car rental holdings such as Payless and Zipcar.

AvisBudget also merged their systems, while keeping the brands separate. This was reinforced with a personal experience I had following a plane flight to Albany, NY last week. My wife had made the reservation, but failed to send the confirmation email to her phone. When we arrived at the airport, we did not have ready access to her work email where she had received confirmation of our reservations. As she looked for the paper copy in our luggage, I walked up to a couple of car agencies to see if they had our reservations.

I was standing in the Budget line, when an Avis representative said he could help me find my reservation. Already knowing about the merger, I was not surprised. So I stepped over to the ready counter rep at Avis. The Avis computer could not find the reservation for Albany NY.

By that time my wife, with reservation in hand, led me back to the Budget counter where the confirmation was found not for  Albany, NY, but for Albany, Australia. (This is not an article about website user interface, but that could be another story!)

Of course, the prices were also wrong, and much more expensive. No attempt was made to match the reservations we had. However, this is Budget. They don’t really have to try harder, but, wait, they also were giving us anything but a budget price at this point. After all, they had us over a barrel now.

The Budget rep sent us across the street to the parking garage. “Just tell the attendant you want to pick up your car,” she said. We were off, dragging our luggage. In the garage, we passed two competitors, on the way to  the Budget shack, which was closed. While we were working our way back, we asked the competitor shacks why Budget was closed.

“Try the Avis office,” they replied, as if they had answered the question dozens of times before. “Aha! The merger!” I thought. We then headed the other direction to the Avis shack, where they simply told us to go back down toward the Budget office and pick out a car. This we did, although we were not sure we took one from the right company. Oh well, it was late and we needed to move on.

This is an example of failed marketing emplacement  and positioning.

First, Avis and Budget wanted to integrate their operations, but did not want to lose the brands that each company had built. Avis was “we try harder,” while Budget tried to look like  the more reasonably priced company. Ok, I see the value of the marketing positioning of each. However, their operations have become so integrated that they have destroyed the value of each brand. It  is apparent to virtually every customer, that AvisBudget is one  company competing  with two different positioning statements.

Second, they violated the marketing emplacement opportunity by having their counters immediately next to each other, and by closing the car location office shack.

If each brand had been true to their branding opportunities, they would have had better people with specific, brand-appropriate directions. A true budget operation should not look like the “we try harder” operation. This new company attitude makes the old Budget branding positioning very hollow and just an advertising scheme. People apparently have figured this out, making the old branding moot.

Meanwhile, Avis has tried out a new positioning: “It’s your space.” Remember that one? Apparently, no one else does either. The company is now number 3 and the stock today has been downgraded from a buy to hold.

The car business in America is consolidating under typical market pressures, and naturally customer confusion follows. Just 26% of consumers say they would definitely use the same car rental company next time.(2)  Consumers do not shop for price in the car industry as they will  for other products.They say they need a 25% price reduction for it to be worthwhile to spend the time shopping.(3)  Meanwhile, the brands are no longer differentiated from one another, thus creating the perceived value of a rental company to a price-only consideration.

EMPLACEMENT CASE STUDY

How could the two companies have done a better marketing emplacement job?

For Budget Avis to adopt the  “We try harder” market position, the physical emplacement to support that effort would be to deliver an experience that really supports “try harder.”This is a higher service profile, so more agents with very good people is in order. At the initial counter, the employees should be friendly (a smile increases overall satisfaction), down to business and  move quickly to get the transaction done- no sloths with chatty talk here. Next, the car jockeys should be young energetic quick moving people aiming to please. Put the bags in the car for the customer. Signs should always be clean and fresh, as if in Disneyland.

Contrast this with the Budget Image. First, the cars must be cheaper than Avis. Even a little will support the lower cost image. People who really value low price will put up with longer lines at the counter. Avis should make it priority to keep lines down if they want to keep operations together. Budget can have the cars further form the counter, and car pick-up should be self-serve. Paint, carpet and counters do not need to be worn out, but this is less of an issue than it is for Avis.

Budget should save money where they can on location costs, upkeep and people. Avis should use its increased margin to pay for the same. In this way, two distinct markets are catered to. Now both brands are just another rental company competing with Hertz, and then with everyone else. Only Hertz still has some panache, but they are fast trying to kill that, too.

Small companies must be in a niche to survive, large companies can slug it using finance and  marketing dollars, but they are not immune to losing their edge, just because they are big.

 

References

[1] Adage magazine By Rupal Parekh,August 27, 2012, http://adage.com/article/news/50-years-avis-drops-iconic-harder-tagline/236887/

[2] J.D. Power, http://www.jdpower.com/press-releases/2012-north-america-rental-car-satisfaction-study

[3] Consumer Federation of America, http://www.consumerfed.org/press-releases/337-new-report-shows-consumers-underestimate-the-value-of-comparison