In the French Market

By: Max Ostermeyer and Carly Gorka

Enterprise Rent-A-Car

1. Founded by Jack Taylor in 1957.

1. “Take care of your customers and employees first, and

the profits will follow”

2. Largest rental service in North America.

3. Clayton, Missouri

4. Account for 1/2 of rental cars on the road in the

U.S.

5. 6,000 locations worldwide

6. Privately held company

Licensee Network

Enterprise: Present International Experience

1. Canada (1993)

2. UK (1994)

3. Germany (1997)

4. Ireland (1998)

4,000 employees

throughout Europe

France: History

1. Metropolitan France = 22 regions

2. Each region culturally different, dates back to

prehistoric times.

1. North

1. Originally populated by Germans

2. West

1. Geographically lies on Atlantic ocean and English Channel

3. East

1. Ties to central European countries

4. South

1. Linked to Mediterranean culture

France: Marketing Environment

1. Democratic republic

2. 5th largest economy in world

3. Highly skilled workforce

4. Population = 65,350,000

5. Corruption index = 7.0

6. Member of EU, G-8, WTO,

OECD

7. 61% of EU’s total trade in

2009

8. 551,695 km2

France: Marketing Environment

1. Education: Centralized

2. Living conditions: Average standard of living is one

of highest in world

3. Health system: Funded by government

4. Average life expectancy: 80 years old

5. Government: Semi-presidential democratic republic

6. Corruption index = 7.0

France: Business & Working Environment

1. Punctuality depends on social situation

2. Professionalism is highly valued

1. Emphasis on courtesy and formality

2. Hierarchy important

3. Dress code: depends on environment and province.

4. 9:00 AM- 6:00 PM

5. Several vacation periods between Christmas and Easter as well as the month of August.

6. Many business people speak English.

7. Minimum Wage = €8.86 ($11.44)

8. Salaried representatives have employment contracts

France: Unions

1. Extensive institutional role for employee

representatives and organized labor.

1. Different depending on size of organization.

2. Labor code sets minimum standards for working

conditions

3. Flexible 35-hour work week

4. 2006: Employees’ shareholding law (Loi sur la

Participation)

1. Mobility leave

U.S. & France Business Relations

1. French-owned companies employ ~760,000

workers in the US

2. US-owned companies employ 650,000 workers in

France

3. Trade investment between U.S. and France are

strong

1. $1 billion in commercial transaction between France and

US daily

International companies in France

1. “Loi Toubon” 1994 act

2. Every US citizen must

have a passport

3. Visas are required for

foreign citizens to work in

France

Laws hindering

Age requirement

Fuel

Roadways

Safety precautions

Disincentives = tax environment, high cost of labor,

rigid labor markets and occasional negative attitudes

toward foreign investors

Not always equal treatment of foreign investors

Resident French bank account

Stiff laws for marketing and sales to private

consumers

Laws/incentives helping

Driving within the EU

Economic reform that increases the attractiveness of

French economy to foreign investors

No restriction on repatriation of capital & transfers of

profits, interest, royalties, or service fees.

France: GNI per capita

Why France?

1. #1 tourist destination in the world1. #1 best growth rate in 2008: travel and tourism

2. The most car-dependent country in Europe

3. Already has branches in other big players of Europe

4. Initial capital needed would be smaller

5. French investment regime is among least restrictive in the world

6. Fourth largest European automotive market

7. French direct marketing for consumer services in one of largest markets in the world & fastest growing in Europe

8. Investment regulations are simple

Why France?: Continued

1. Commercial environment is favorable for sales of US

goods and services

2. Stated priority of French government = ensuring that

France’s investment climate is attractive to foreign

investors

3. Skilled and productive labor force, good infrastructure,

technology, and central location in Europe.

4. Free movement of people, services, capital and goods

across EU

5. US Embassy in Paris uses government agencies to

promote the export of US goods and services

1. Also supplies information on trade and investment

opportunities and serves as an advocate for US firms

Marketing Plan: Objectives/Goals

Achieve a 5% ROI in the first year of operation

Expand to other regions of France within 10 years

Average at least 75% rental rate on all vehicles in

the fleet

Efficient fleet management

Further cost reductions

Marketing Plan: Acquisition

1. Acquire PSA Peugeot Citroën’s car rental subsidiary,

Citer SA

a) Headquartered in Paris, France.

b) Citer SA has about 15,000 vehicles in its fleet

i. Had sales of 276 million euros ($371 million) last year.

c) Over 1,000 employees.

d) Railway stations and airports in France.

Modifications and Brand Segmentation

1. Spend time on research and development to

modify

1. Focus on cost reductions and fleet management

2. Niche brand

3. Replacement market segment

4. Powerful

5. Benefits motivate purchases

6. Travel and tourism = largest non-agricultural

market in france

Media strategies/marketing

1. 35% of advertising budget on 2 most prominent

French newspapers along with internet and mobile

advertising

1. Le Figaro

2. International Herald Tribune

3. Application

2. 65% on direct marketing and promotions Adjust marketing to fit “Loi Toubon” law

3. Target market: 25-50 year old businesspeople and

vacationers.

4. Message: high-quality rentals at a low cost with

top-notch customer service.

Pricing

Compact car - 30 Euro/day

Mid-Level car - 40 Euro/day

SUV - 50 Euro/day

Selling services is France is similar to US

Buying decisions based on quality, price, and after-sales

service

Budget for Enterprise France

Initial Costs

Purchase for € 300 Million

Rebranding 250,000

Travel Expenses 70,000

Services 120,000

Total € 300,440,000

Budget continued

Yearly Expenses

Marketing & Advertising € 5 Million

Salaries 37.5 Million

Utilities 6 Million

Insurance 72 Million

Fleet Upkeep 3 million

Total € 123,500,000

Sales of € 328.5 Million /Year

Expenses

Marketing & Ad.

Slaries

Utilities

Insurance

Fleet Upkeep

Exit Strategy

Two options

1. Sell the company

outright to the highest

bidder

2. Liquidate the company

1. Disperse vehicle

inventory among other

European branches

2. Sell off any remaining

inventory and structures