Oral group presentation about Hertz car rental and the Service Quality Model MA Marketing Date: 23-08-13

1. Hertz car rental
&
Service Quality
•Audrey Jaspart

2. PLAN
1. Hertz Corporation
 Presentation of the car rental company
 Hertz car rental blueprint framework
2. Investigation context
 Interviewers
 Significant trends in the car rental industry in Ireland
3. Hertz - Service Quality Gaps
a. GAP 1: Knowledge Gap
b. GAP 4: Communication Gap
c. GAP 5: Perceptions Gap
d. GAP 7: Service Gap
4. Conclusion

3. Hertz Corporation
Presentation

4.  Hertz presentation
 The Hertz Corporation (also called Hertz) is a subsidiary of Hertz Global
Holdings Inc
Hertz Report 2012

5.  Hertz presentation
 The company is engaged in car rental and equipment rental business
 There are two main types of customers:
- Customers who rent for leisure (45%)
- Customers who rent for business (55%)
 The rental location is also a key point of Hertz: airport and off-airport

6. Hertz agencies localization in Ireland

7.  Hertz and the use of new technologies
• Major player in the use of new technologies
• The company has set up terminals
reservation, e-receipts, Smartphone applications...

8. Hertz car rental blueprint framework

9. Investigation
context

10.  Interviewers
Mrs. Hayley Murphy, HR Consultant, Hertz Europe Service Centre
Mr. Joffrey Kropfinger, Hertz Sale Representative, Ireland
Two Hertz agencies in Dublin (Ireland):
•Hertz - Dublin Airport
•Hertz - 151-157 South Circular Road, Dublin

11. Significant trends in the car rental
industry in Ireland
• Car rental market remains extremely fragmented in Ireland having 64% value
share in 2012
• Hertz Ireland and AVIS Ireland both have the largest value shares at 10%.
• BUDGET (company) car rental Ireland also had a good market share of 8%.

12. Hertz
Service Quality Gaps

13. Customer experience
relative to expectations
1. Knowledge Gap
2. Standards Gap
3. Delivery Gap
5. Perceptions Gap
7. Service Gap
Customer needs and
expectations
6. Interpretation Gap
4. Communication Gap
MANAGEMENT
CUSTOMER
4.
Customer perceptions of
service execution
Management definition of
these needs
Translation into
design/delivery specs
Execution of
design/delivery specs
Advertising and sales
promises
Customer interpretation of
communications
Service Quality Gaps

14. Knowledge Gap

15.  Key factors and main goals
 We can identify 4 key factors responsible for provider gap 1 :
=> Inadequate marketing research orientation
=> Lack of upward communication
=> Insufficient relationship focus
=> Inadequate service recovery
 The main goals of the Gap 1 are :
=> Understand customer expectations
=> Improve communication between frontline staff and management
=> Turn information and insights into action

16.  First issue for the knowledge gap
Issue: Lack of upward communication
• Managers and employees don’t communicate about customer
expectations
• Too many layers between contact personnel and top management
• Lack of interaction between management and customers
Recommendations for the lack of upward communication
 Executive and management listening to customers
 Executive listening approaches to employees
 Employee suggestions

17.  Second issue for the knowledge gap
Issue: Inadequate service recovery
• Recurrent customers complaints : often the same complaints
• Failure to make amends when things go wrong
• No appropriate recovery mechanism in place for service failures
Recommendations to have an adequate service recovery
 Act quickly
 Cultivate relationships with customers
 Learn from lost customers

18. Third issue for the knowledge gap
Issue: Inadequate Marketing Research Orientation
• The company is too focused on service quality and customers expectation
• Hertz is not enough focused on what customers think about the company
Recommendations to have an adequate Marketing research orientation
 Critical Incidents Studies (CIT)
 Lost customer research
 Futures expectations research

19. Communication
Gap

20. The Services Marketing Triangle
Grönroos (1990) - the Services Marketing Triangle
Hertz

21.  Hertz Marketing – Communications Strategy
 Hertz has embraced the concept of Integrated Marketing Communications
-To have a long term communication with the customer
 ISMC : Integrated Service Marketing Communications
Television commercials
E-mail, travel magazines…
Social Media,
Website…
Notify phone

22. Social Media Strategy

23. That Hertz does well to support the Service Quality
 Use of tangibles evidences in advertising
 Building a quality relationships service by
encouraging employees to be efficient
 Meet customer expectations thanks to the service
provided by employees, the service process and the
decor in agencies
A services branding Model. Source: Berry, L.L. (2000)

24.  First issue in Hertz communication
 Issue: Inadequate horizontal communications
- Insufficient communication between sales, operations and
advertising
- Marketing department that makes promises and sales-
reservation departments and agencies which deliver the service
are completely independent
Hertz should improve the
communication inside the company
between the different departments

25.  Second issue in Hertz communication
 Issue: Overpromises in advertising and communication
The availability and range of cars are not promises that can be
hold by all agencies and for all rental periods
1. To make realistic promises
2. To teach customers to avoid
peak demand periods

26. Perceptions
Gap

27.  Perception GAP
• GAP 5: Between a customer’s perception of a service experience and service
delivery
 Perception: cognitive impression that is formed of “reality” which in turn
influences the individual’s actions – AMA, 2009

28.  Hertz promises
 Two main promises
• Attractive price
• Wide range of vehicles
 Three other promises
• provide usable and maintain vehicles
• pleasable and clear reservation experience
• full support of the customer
Feedback questionnaire and claim management allow the company to measure
customer’s satisfation

29.  Identifying perception gap in Hertz
In order to identify the potential perception gap we need to study customer’s
feedback  customer’s opinions on forum
 Five main issues linked
• to vehicles’ condition
• to stock management
• to staff’s behaviour
• to claim management
• to price

30.  Recommendations
Perception gap would lead to bad publicity from customers, direct and wrong
consequences on the image’s enterprise, and loss of potential and actual
business
 Hertz need to
• inform the customer all along the service process
• provide physical evidence
• educate its customers
 In concrete terms
• remind the conditions of the contract, especially price and characteristics
of the vehicle
• stay careful about employees’ behaviour  offer them training
• improve its soft management software
• improve its claim management

31. Service Gap

32.  Hertz Marketing – Customer GAP
Consumer has become increasingly demanding and expect high quality
customer service
• GAP 7: Between a customer’s perception of a service experience and service
expectations
 Customer’s expectations: what the customer expects and influenced by word
of mouth, personal needs, past experience…
 Customer’s perception: It is derived from the customer’s satisfaction of the
specific product or service and the quality of service delivery.

33. Company Rating
• To evaluate the consumer GAP: analyse 5 different websites of consumers feedback
• The advantage: only truth opinions of the customers
Maximum of stars
satisfaction: 2

34.  Customers feedback

35.  Customers feedback

36. Customers satisfaction
42
4
1
2
1
0 10 20 30 40 50
1 star
3 stars
5 stars
1 star 2 stars 3 stars 4 stars 5 stars
Satisfied customers
50 reviews
42 4 1 2 1
CUSTOMER SATISFACTION OF HERTZ
SERVICES
84%
8%
2%
4% 2%
1 star
2 stars
3 stars
4 stars
5 stars
RANKING OF 50 REVIEWS
Analyse of:
• 50 first customers feedback
• 5 websites
• Different countries
Results:
• 84% customers: unsatisfied
• 8% customers: a bit satisfied
• 2% customers: satisfied
• 4% customers: good satisfaction
• 2% customers: Very satisfied

37.  Recommendations
• Understand customer needs and knowing customer expectations.
• Keep promises and provide the same products or services mentioned in
advertising
• Make gesture of goodwill to customers
• Launch mystery shopper waves to improve the results of Hertz in
welcoming customers
• Constant customers-feedback should be taken, including evaluation of the
quality by a questionnaire
• Prompt response to customer request, and sincere interest in problem-
solving

38. Conclusion

39. Conclusion
Hertz is the leader on car rental service’s market
 However, gaps are existing concerning
knowledge, communication, perception and service.
Hertz needs to improve its Service Quality in order to:
- be much more efficient
- stay the number one in car rental service

40. ?
SOME QUESTIONS ?

41. Thank you
for your attention