Aer Lingus Products and Target Market Segments - Essay Example

? Aer Lingus Products and Target Market Segments – A Review or College Address Aer Lingus Products and Target MarketSegments – A Review Description Located at Ireland, Aer Lingus is second largest fleet carrier after its rival Ryanair. Founded by Irish Government in 1930 to provide air services to Ireland, the first flight of Aer Lingus was operated from Dublin to Bristol on May 27, 1936. Aer Lingus is known for the cheap air fares in European Countries. As most of the students and mid class people prefer to travel by Aer Lingus, it has become one among the top three airline services that offer cheaper fares in Europe. Marketing is always important for every company irrespective of size and popularity of the brand name. This research paper describes about Aer Lingus products and its target market. This paper also analyzes the marketing mix (4 Ps); the organization is using to attract the chosen target market. It also analyzes effectiveness or ineffectiveness of the 4P mix that Aer Lingus is using and suggests if there are any changes in the marketing mix. As we are discussing about only products, we are not touching the assessment on physical evidence, people and process of Aer Lingus Auxiliary Services. The paper also suggests the best marketing practices that will help Aer Lingus to improve the communication with customers. Introduction Aer Lingus is one of the reputable fleet carrier companies in Ireland. With the low cost model and one way fares, Aer Lingus brand has become most talked about brand in fleet services. On October 22, 2006, Aer Lingus entered into a new phage of business as it realized nearly 400 million Euros through Irish and London Stock Exchange. Most of the Aer Lingus passenger revenue will be generated from its website www.aerlingue.com. As per the latest records, nearly 81 percent of total passenger revenue was generated from the website. The effective marketing strategies for products as well as services help company to achieve great heights. With the low cost air fleet charges, Aer Lingus has become a competitor for Ryan air. Aer Lingus has celebrated its 75th birthday in May 2001. With 1,215 million revenues in 2010, Aer Lingus is planning to push forward with wide range of products and services in the market. 2009 was a difficult year for Aer Lingus as it witnessed nearly 93 million Euros loss. To turnaround the company, Aer Lingus has come up with several strategies such as better matching of capacity to demand, connectivity improvements with in the network as well as partner’s network and partnerships. Aer Lingus products are considered to be the cheaper products when compared to its competitor’s products. Though, companies like Ryanair offer much cheaper products than Aer Lingus, the customers would love to travel by Aer Lingus because of great service. Aer Lingus offers both Cabin Services as well as Auxiliary services. Cabin Services include a two class business and economy service on long-haul routes and a single class economy service for all short-haul routes. Auxiliary Services include In-flight sales merchandise, car rental sales, hotel accommodations and commission from online currency conversion. Literature Review According to Philip Kotler, Marketing is the process of offering suitable product to customer. Everything comes to one equation; right product at right place at right price to the right customer (Philip Kotler). Marketing has become one of the most focused areas for any company in the world. Be it is a small scale internet based company or a large scale manufacturing company; without proper marketing, the survival would be a big question mark. According to Neil Borden, marketing department of any company should primarily focus on 4Ps. They are Price, Product, Promotion and Place. The 4Ps are also called as Marketing Mix (Neil Borden 1953). 4P mix is majorly used when you are trying to market a product, which customers can touch and feel. When focusing on the services, the marketing mix would be changed slightly. It becomes a 3P mix with the ingredients such as Physical evidence, people and process. In this paper, we are going to focus on Aer Lingus major products such as Business Class, Flex Fare and Low Fare products and evaluate how Aer Lingus has been using marketing mix to market these products. We also describe the target market on Aer Lingus for these 3 products and give suggestions to improve the revenues for each product. Target Market of Aer Lingus As Aer Lingus is branded as low cost air carrier, the target market should be students, non-IT employees and Government employees who earn a reasonable salary. Though, Aer Lingus offer Business class, the major revenue contribution will be from Low Fare and Flex Fare products only. Students who fall under age group 15-25 and employees who fall under age group 25-40 would be best options as old age people prefer luxurious services without bothering of any money. There are no geographical limits for Aer Lingus as majority of people from various European countries to America and vice versa on regular basis. The only thing Aer Lingus needs to do is trying to increase the student passengers as well as attracting old people by offering quality services under Business Class product. If you look at the geographic presence of Aer Lingus, Aer Lingus is known for majority of people in Europe. It is good to expand in US markets too to enjoy the great customer base that plan to travel across US and Europe. Marketing Mix Assessment for Aer Lingus Assessing the Marketing Mix of a company helps top management to take the key decisions marketing the product. As Neil Borden mentioned, it is all about finding the target market and promoting your product. The target market for any product should be narrow and focused. Unless the target market is known to the marketing manager, it is very difficult to come out with right marketing mix for any product. Read on below to find out what marketing mix Aer Lingus is using currently and some suggestions for improvisation on the same. Price The major competitive advantage of the Aer Lingus in the market is price. Yes, Aer Lingus is synonymous for cheap or low car airline service in Ireland. Be it is the Business class travel or Flex Travel, passengers can see a huge price difference between the regular market price and Aer Lingus price. Low price always appeals to the customers whatever the industry it is. It is all about providing quality service at an affordable rate- customer view point. Aer Lingus has learnt to see the things from customer view point over the past several decades and the result of the same is ‘Experience the Quality Service at Low Cost. Low Cost is the weapon of Aer Lingus to attract the customers. Though, Aer Lingus is known for its cheaper rates; majority of the students would prefer its competitor Ryanair for air travel because Ryanair offers much cheaper rates than Aer Lingus. It is very important for Aer Lingus to into the price difference between the Ryanair prices and Aer Lingus prices when it comes to Low Fare product. When you say budget model, it is very important to tap the customers who may not afford to travel in high cost airlines. The target customers would be students, upper middle class people, employees who works in non-IT companies and draws a reasonable salary. These kinds of customers may not look for the great quality service but definitely low cost model. I personally feel, Aer Lingus still need to work on price model of Low Fare product so that the prices can match Ryanair ticket prices. A close evaluation of the operations of Ryanair Low Fare products would help Aer Lingus to come out with the better pricing model. When it comes to Business Class, quality only matters because passengers who travel in business class may not bother about the ticket fare but definitely on the quality of the services. Offering great service (better than competitors) would help attracting huge customer base. And, the best thing with the Business Class passengers is that once they love the service, they never think about choosing other airline. All these things will be possible only when Aer Lingus does a benchmarking study against market’s top player, Ryanair’s pricing model. Pricing is a sensitive issue for any low cost airline service provider. It is very important to evaluate the market dynamics, competitors and quality services to ensure the best possible pricing model. It would be great if Aer Lingus comes up with a couple of offers where in the existing customers can cut down the pricing on the next trip. This will help to retain the existing customers. Offering special cards to regular travelers so that they can pay only 80 percent of the total fare would definitely spread the word in the market. Product Having different kinds of products is another advantage for Aer Lingus. Yes, Aer Lingus has different kinds of products that fit into requirements of various customers. If you are travelling on a business tour, you can select business class product to enjoy the best quality service. Flex fare is another attractive product offered by Aer Lingus for customers. The salient feature of Flex Fare is that passengers can change the date and time of the flight before 2 hours of the journey time. Another product, Low Fare, from which major revenue share of Aer Lingus comes in, offers best value to the customers. The prominent features of the Low Fare product are 1) no check-in fees, 2)1-cabin bag up to 10 kg is free and 3) free meal and soft drink. None of the other airlines offer these kinds of services to customers in Ireland. These 3 major products contribute nearly 70 percent of total Aer Lingus revenues. Low Fare product might be the primary focus for Aer Lingus as the company is planning to brand itself as a low cost air carrier. As we already mentioned that Ryanair has been providing cheaper products when compared to Aer Lingus, it is mandatory for Aer Lingus to make amendments to the Low Fare product. Low Fare product targets majorly students and mid class people for sure. So, making changes according to the student’s needs would fetch better results. Majority of the other fleet carrier companies that provide similar products like Flex Fare offer almost same features. So, reviewing a couple of prominent features of Low Fare Product would help grabbing the attention of more customers. The offers like increasing the limit of cabin bag weight to 25 kg and offering quality food may help attracting customers. As it takes time to come up with new products that completely differentiate Aer Lingus with its competitors, it is recommend making amendments in existing products. Promotion The website, www.aerlingus.com contributes nearly 80 percent of the revenues. This simply signifies that majority of the passengers buy tickets from the website. As Aer Lingus is one of the oldest airlines, it does not need much promotion regarding the brand name. But, surely, Aer Lingus mainly work on the promotion activities that let people know about latest offers and discounts. As per the research, most of the students still prefer Ryanair as it offers much cheaper rates than Aer Lingus. As per the equation, Aer Lingus stands second in terms of attracting the students who are in between 18 -25. The order is Ryanair, Aer Lingus, British Airways and Delta Airlines. Old people, who have got good money to shell out, choose the best quality airlines as they do not think about the money but services. So, the target market for Aer Lingus is people who fall in between 25 to 40 years of age. If Aer Lingus need to tap people who are below 25 years of age and above 40 years of age, coming up with wide range of offers or discounts in existing products is mandatory. Aer Lingus marketing team should look after online marketing activities. Online Marketing includes search engine optimization, social media optimization, email marketing and reputation management. As nearly 80 percent of Aer Lingus revenues come from the website, promoting the website in a better way will increase the revenues. Effective communication is the key for any company which majorly depends on the online revenues. Keeping in touch with the customer through mails or short message services would help. Aer Lingus need to prepare a database of existing customers and ensure a communication mail will be sent on bi-weekly basis. An attractive news letter that carries offers and discounts make customers know about the latest offerings of Aer Lingus. Increasing the database of new customers and get in touch with them through mails and make them know about the offers is a good idea for sure. Affiliate marketing can also be another good idea to increase the sales. The strategy is simple. Divide the target market into 3 major groups based on age and start working on increasing the database of each group. With constant communication, people will definitely turn up. Social media marketing has become a best choice for companies to market services in this technology driven world. Facebook and Twitter helps you to target various age groups and geographies. Facebook will definitely help letting people know about new offers on the existing products. Place Aer Lingus has a great network around the world. As several representatives’ work around the world to assist passengers to reserve tickets, customers feel Aer Lingus is a local company. It does not matter if you are USA, UK or Australia, you can get in touch with representatives of Aer Lingus to book tickets. I personally feel that there is no problem with the placement as long as Aer Lingus maintain and increase the network of representatives around the world. I suggest Aer Lingus to increase the increase the network base across USA, UK, Australia and surrounding countries so that more people can register tickets through these agencies. If there are more representatives or associations working in the market, the possibility of selling more tickets will be increased. In a nutshell, Aer Lingus needs to work on their products, promotions and prices. The price of Low Fare products and Flex Fare products should be much more competitive in the market as air carriers like Ryanair offers cheaper products than Aer Lingus. Increasing salient features of Flex Fare product also would be helpful to increase the market share. For business class, augmenting the quality of services will be helpful. Aer Lingus has come a long way as a low cost fleet carrier but still need to compete with Ryanair’s products to become the to most low cost air carrier in Ireland. Implementing the improvised marketing mix as mentioned in this research paper may fetch the desired results without any doubt. Conclusion Aer Lingus has been doing an amazing job as a low cost air carrier in Europe. With decades of experience, Aer Lingus is operating various flight services to other parts of Europe and America. It is not surprise to say that most of the passengers who want to travel by low cost airlines would prefer Aer Lingus in Europe. With three major products in its kitty, Aer Lingus providers services to students, employees, families and business executives. Known for its low cost products, Aer Lingus has made its mark in the market with wide range of operating experience and regular offers. When it comes to marketing mix, Aer Lingus needs to work on products, price and promotion too. Promotions should target majorly mid class people, students and employees. Online Marketing is one of the best ways to reach students and employees as internet is prevalent in the contemporary world. Regular communication with existing customers is the key here. Sending emails and SMS would be definitely helpful. As mentioned in the literature review, Aer Lingus needs to work on products also. Prices of Low Fare and Flex Fare should be competitive in the market as other low cost airlines like Ryanair offers cheaper products with reasonable quality of service. The idea is to implement a product that can attract people, who want to travel by low cost, without compromising the quality. If Aer Lingus is not there in a situation to introduce new product, it is recommended to amend Low Fare product keeping the customers in view. Aer Lingus would definitely be able to attract more customers by implementing these strategies. References  Philip Kotler, Philip; Kevin Lane Keller. Marketing Management, 12th edition. Pearson Prentice Hall. (2006).  Read More