Advertising vs. Marketing

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photograph by Masterofall686 | Dreamstime

Hertz said, “We’re No. 1.”

Avis said, “When you’re only No. 2, you try harder.”

Then Hertz said, “Avis has been telling you they’re No. 2. Now we’re going to tell you why.”

Then Enterprise silently slipped in the back door and became No. 1.

The last 50 years of competition among rent-a-car brands is a case study of the difference between advertising and marketing. It’s a perfect demonstration that advertising and marketing are not synonyms.

For decades Avis and Hertz fought a historic advertising battle, while upstart Enterprise passed them both with a better marketing plan and modest advertising.

Even the hard-fought beer ad wars and Coke vs. Pepsi don’t measure up to the Avis-Hertz donnybrook. Avis literally used the Hertz brand as the foundation for its own brand position.
In 1962 Avis lost $3.2 million. It hired Bill Bernbach’s advertising agency of Volkswagen “Think Small” campaign fame. Bernbach spent a couple weeks studying the category, came back and told Avis what he’d learned.

Bernbach said all he could figure out was that Avis was in second place behind Hertz, but the Avis people seemed to try hard. That, of course, fostered the 50-year Avis campaign, “When you’re only No. 2, you try harder.”

It was so successful so fast that by the next year, Avis was $1.2 million in the black. In today’s dollars, that’s a $33.7 million profit swing in one year. From 1963 to 1966 Hertz lost 11 market-share points. Avis gained seven points.

Enterprise, on the other hand, was a “Johnny-come-lately” to the business, only six years old in 1963. It recognized the futility of taking on Avis and Hertz on their dominant airport turf. It didn’t have the capital to enter that fight.

So Enterprise zeroed in on an entirely different market — entirely different, and cheaper, real estate than airports. Enterprise chose downtown and suburban locations. It made smart deals with insurance companies and gobbled up the loaner-car business for people whose cars were being repaired.

The company delivered rental cars to customers at no extra charge. And, realizing its personnel would be riding with customers, the company recruited recent college graduates. Not the top of the class, but the popular, friendly, frat house guys and athletes.

Marketing is all about finding holes in a market. Holes that constitute opportunities to apply a company’s assets for the greatest return.

Avis used brilliant advertising that created a brand position out of turning the Hertz brand position against Hertz.

Enterprise created a brilliant marketing plan that avoided a head-to-head advertising and airport real estate war that in its growth years it couldn’t win.

It was a marketing plan that consisted of a different customer, different real estate, and different personnel.

Enterprise made better use of its assets, and that’s marketing. Now Enterprise is in airports, too, and the company has annual revenues of $18 billion.

So, Enterprise is No. 1. Hertz is No. 2, and Avis is No. 3. Otherwise, the rent-a-car market hasn’t changed much, but it gave us a classic case study of the difference between marketing and advertising.

 

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