Hertz acquisition of Dollar Thrifty raises brand issues

Tom Dougherty, CEO – Stealing Share

26 April 2010

Belk Brand is a meaningful tool in acquisitions

As a brand strategist (and frequent business traveler), I find today’s news that Hertz is purchasing Dollar Thrifty and its brands a reminder that brand is more than just marketing.

In this case, Hertz CEO Mark Frissora said the acquisition is an “excellent strategic fit” and that Hertz is planning to keep the Dollar and Thrifty brands. We’ll see if it’s a fit, although Frissora did say the acquisitions would extend Hertz’s reach in international markets.

“Brand can do many things, but among them is setting the foundation for an acquisition strategy. If the brands fit, mergers or acquisitions make sense from the point of view of the consumer.”

But a brand fit is something completely different.

HertzThink about FedEx when it purchased Kinko’s. FedEx’s brand promise is peace of mind (“When you absolutely have to get it there overnight…”) and consumers have been willing to pay more and inconvenience themselves for it. While Kinko’s was not in the overnight delivery business, it was in the “peace of mind” business. (“Your office away from home.”) Therefore, the acquisition made brand sense and the response from consumers has been positive.

Brand can do many things, but among them is setting the foundation for an acquisition strategy. If the brands fit, mergers or acquisitions make sense from the point of view of the consumer.

And it’s that last point some executives miss, which is why we have counseled many clients through their acquisition strategy. While there might be sound business reasons for an acquisition, brand must be considered as well.

Hertz may understand this by allowing Dollar and Thrifty to maintain their current brand – keeping their low-cost promise away from Hertz’s “choose better” promise (“We’re Hertz. They’re Not”) – but those are significant issues.

Acquisitions and mergers are a time for change, and it’s in those moments of change where the greatest brand opportunities exist.

See more posts in the following related categories: Acquisition Strategy Dollar Thrifty Hertz

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