Enterprise In the French Market
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Transcript of Enterprise In the French Market
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
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.
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