The Brand Strength of easyJet Plc - Essay Example

? The Brand Strength of easyJet Plc BY YOU YOUR SCHOOL INFO HERE HERE The Brand Strength of easyJet Plc Introduction easyJet Plc is the largest low-cost airline carrier in the United Kingdom, a low-frills business concept modelled against a lean supply chain philosophy where diminished operational expenses provides opportunities to utilise dynamic pricing structures to gain price sensitive target market loyalty. easyJet maintains over 600 different routes with presence in over 30 countries, utilising a fleet of 200 aircraft that serves 55 million passengers annually (easyJet 2012). The UK, Milan, Geneva and Paris are the highest revenue-earning destinations for the company, accomplished by promoting consumer-centric value and establishing pricing structures that outperform major competition such as British Airways. easyJet just recently experienced record annual profitability, boasting profit of ?248 million, even despite a significant increase in fleet fuel costs (easyJet 2011). Passenger volumes increased over 11 percent in this same period with revenue per-seat up four percent (easyJet 2011). All of these gains are accomplished through positioning by price and promoting efficiency of operations to extend perceptions of value to important customer markets. Brand-building exercises, both historical and current, continue to contribute to what is driving consumers to believe easyJet is a value aligned with their needs and lifestyles. In order to outperform large multi-nationals in this oligopolistic market structure, easyJet has created a business model that relies heavily on brand influence in order to differentiate the firm in its key profitable markets. The brand strength of easyJet is significant, having established brand recall and brand equity in important revenue-producing consumer and business traveller markets. This report highlights how easyJet has managed to sustain its positive brand personality in Europe, giving the business a positive brand reputation as a value leader. 2. The business strategy of easyJet The low-frills model is what sustains easyJet’s profit objectives by allowing the company to provide low cost airfare. Dynamic pricing is utilised to undercut major competitors and others in the low-frills category (such as Air Asia) by focusing on lean operations and procurement. Removing extras from the service model such as establishment of first-class seating and meals allows a firm to cut costs all throughout the entire value chain (Thompson 2008). easyJet recognises that the majority of its customers are going to be price sensitive, thus in order to maintain market interest easyJet cannot deviate from its value model. The original marketing concept for easyJet in the last decade has been to “make flying as affordable as a pair of jeans” and where the company attempts to persuade consumers to cut out the travel agent role in booking and vacation planning (easyJet 2012). The TV series, Airline, created by LWT was a UK television series surrounding the dramas of actors employed with easyJet that ultimately made easyJet a household name in the UK (easyJet 2012). In order to establish brand recognition in key markets during initial marketing strategies, product placement and logo presentation in highly-valuable television markets built the ability of the company to have its logos and colours recognised instantaneously. easyJet has yet to deviate from this strategy of using logo and design characteristics associated with the organisation (e.g. orange and black) to differentiate the organisation from competition. The aggressive product placement strategies have built the brand equity currently experienced by easyJet. According to the company, “orange is one of our greatest distinguishing features. It is an essential part of our brand heritage and brand identity” (easyGroup 2011, p.5). When attempting to create brand recall using logo presentation, it is necessary to use consistent colour representations in order to appeal to consumers’ psychological characteristics related to cognition (Boone and Kurtz 2007). easyJet recognises the value of design as a step toward differentiation from competition, using presentational factors to gain more market interest. 3. Exploring the brand strength of easyJet easyJet has maintained its positive market position by using strategies that are not only aligned with budget-conscious consumers, but also those that promote convenience as part of market positioning strategy. The Internet has been a fundamental tool for easyJet to gain more market interest and outperform even major competitors in key operating markets. In 1998, easyJet provided its first ticket sales online. Today, 95 percent of all bookings occur for easyJet in the online environment (Epsilon International 2011). In 2006, the company was also awarded the Best Airline Website Award, outperforming even KLM and British Airways for website performance and design (Epsilon International 2011). When easyJet realised that the organisation would be gaining considerably higher revenues through establishment of its web-based booking applications, the business began promoting these accomplishments in well-coordinated press releases, thus giving the brand much more credibility with important traveller markets. Adding convenience and efficiency into the web sales environment also allowed easyJet to remove some burdensome expenses in the operational model, especially related to staffing required for traditional direct sales, thus allowing pricing to remain dynamic and lower than major competitors. Using public relations material as a marketing tool has been a critical success factor for easyJet that is founded on legitimate business improvements that provide appropriate service dimensions required of price sensitive buyers. easyJet is also able to rely on sponsorships and alliances throughout the entire business model in order to gain even more brand credibility and establish a set of values that are expressed positively to consumer markets. In 2012, easyJet partnered with VisitBritain, a government sponsored marketing effort designed to lure more domestic and international tourism for the UK. easyJet estimates this short-term marketing partnership is worth ?18 million in cash revenues and this tourism promotion campaign will be occurring in the UK, Switzerland, France, Spain and Germany where easyJet maintains the most market presence (Johnson 2011). These sponsorships allow easyJet to extend more consumer perceptions of value, using a variety of PR tools and logo presentations to secure more brand loyalty and express to consumers the competencies of the organisation. Important marketing sponsorships give the brand much more visibility and also illustrates some dimension of corporate social responsibility that provide more brand credibility and authenticity, important constructs for gaining market loyalty (Aaker 1996). Through these sponsorships and alliances, easyJet is able to emphasise its core efficiencies and nurture all of the company’s market-oriented resources to create legitimate perceptions of value to consumers (Abimbola 2001). The power of such alliances and sponsorships cannot be over-stated when attempting to describe easyJet’s branding-related successes and their inter-dependency for revenue growth. easyJet has also signed up to become the official carrier for Mobo and boy-band JLS, along with supplementary promotional contests that provide prizes associated with the music industry (Eleftheriou-Smith 2012). easyJet recognises the importance of celebrity endorsement to gaining brand attachment and ultimately brand loyalty from important consumer markets. Consumers are more attracted to a brand when it utilises lifestyle-relevant celebrity endorsers that are considered credible and attractive (Pornpitakpan 2003). easyJet actively seeks out opportunities to use sponsorships and other supplementary sweepstakes and contests that put a new consumer-directed interest into the brand with strategic partnerships consisting of celebrity endorsements that have psycho-social importance for important target markets. easyJet attempted to break away from its traditional branding strategies in which positioning was accomplished on pricing. This year, easyJet spent 50 million pounds on a pan-European integrated marketing campaign using the slogan “Europe by easyJet” with the intention of creating connections between the pleasures of leisure travel and the airline as a price and efficiency leader (Eleftheriou-Smith 2012). This campaign, however, did not meet with the expected return on investment hoped for by the organisation. Critics suggested it was too mellow, a “mood video” that was not heralded as appropriate for the company’s most profitable markets (Eleftheriou-Smith 2012, p.1). It was the first notable effort of easyJet to attempt a different brand repositioning in unique European markets where the business operates. However, by creating new and inconsistent messages to the company’s traditional branding strategy, the leadership of the firm realised that pricing should remain the most significant differentiation and positioning strategy. Through the financial losses associated with the “Europe by easyJet” campaign, it reinforced that the company has a pre-existing, viable model for gaining market attention and loyalty that should not deviate from pricing and efficiency as key constructs of brand personality. easyJet also conducts considerable market research analyses both on internal processes and on what is driving consumer-centric trends in the external environment. Conducting series’ of qualitative and quantitative research provides the business with valuable market data that can influence new service innovations or changes to the operational model to make it perceived as more valuable to important consumer markets. easyJet has developed a software-based internal metric that measures actual on-time performance of its many aircraft in multiple markets. Times of airplane arrival are entered into the business’ ACARS system where the data is manipulated and compiled by easyJet’s operational headquarters (easyJet 2012). On average, 82 percent of easyJet’s flights arrive and depart on time. Unlike other companies that only use these metrics and accompanying data to change internal processes and procedures, easyJet uses this as a promotional opportunity and presents on-time coordination right on the company’s booking and corporate websites. Illustrating how the company maintains its efficiency is aligned with its positioning for efficient operations, therefore establishing more dimensions of credibility associated with the service brand to gain more market-generated revenues. More key strengths for easyJet are the advantages that are provided the business as it relates to the tangible industry market. easyJet maintains several advantages as it relates to competition and particular market-based threats. Michael Porter (2012) described five forces that impact business operations, two of which are critical brand success factors for the organisation. In this oligopolistic market structure, there are limited competitors and market share is dominated by a handful of important competitors. Fortunately for easyJet, there are significant regulatory and capital-related barriers to new market entry, thus threats of new competitors are virtually null. This allows easyJet to examine the competitive environment, analysing only a small volume of competition, to identify new strategies that will provide more marketing return on investment to the brand. Additionally, the market does not provide consumers the opportunity to have significant influence on operational strategy for easyJet. Why is this? The majority of customers for easyJet are price-sensitive, budget buyers. RyanAir is the only notable competitor using a similar low-cost model, therefore the brand switching costs to customers are considerably high and they are not able to provide pricing pressures on the business since brand defection will not provide a more efficient and cost-recognised alternative for purchase. easyJet is able to use this market influence by diminishing opportunities for brand switching, which is supported by a proven efficient business model that is attributed to a dedicated organisational culture and effective pricing structures. Cultural issues as it relates to human capital development are very attractive to a variety of investors and considered a competitive advantage in the minds of shareholders (Very et al. 1997). The emphasis of the company on training imperatives in transformational leadership design with consistent and recurring emphasis, internally, on vision and mission continue to provide the brand with confirmed and verified staffing quality to make the tangible experience with this service brand a positive one with consistent reporting of customer satisfaction in a variety of corporate metric evaluation systems. The dynamic pricing model that provides easyJet with the ability to provide consumers with a value-conscious brand identity cannot be stressed enough when attempting to gauge the success dynamics for the organisation. Larger competitors with more elaborate operational models, such as KLM and British Airways, often select price discrimination techniques to enhance revenue production, offering different pricing structures based on geographics, unique fare classes, and a variety of customer loyalty schemes (Malighetti, Paleari and Redondi 2009). Price discrimination creates inconsistent and, oftentimes, transparent price discrepancies that can negatively influence price-sensitive buyers. Because these larger competitors have to offset their capital expenditures associated with a high-frills operational model through ongoing price adjustments, easyJet maintains an advantage by staying consistent with a one-low-fare philosophy that does not require excessive promotion to express value. This allows the business to save costs associated with the promotional function that can be better allocated to better maintenance or development of new service innovations in research and development phases. Since large competitors cannot position on pricing and justify this strategy through relevant ticket pricing, easyJet is able to remain focused on positioning on low price conceptions that continue to meet with multiple market satisfaction. 4. Analysis of findings easyJet Plc absolutely is most reliant on the promotional function in the marketing mix as a key brand-building conception, superseding the importance of place marketing and product/service emphasis in the marketing mix. Research identified a brand with a great deal of multiple market loyalty, one in which brand equity has been established that can, long-term, be utilised to improve the company’s market position and revenues. Opportunities abound for using the corporate logo in promotional merchandise or otherwise expanding the brand presence of the organisation in many different European markets. easyJet recently capitalised on the opportunities of brand equity earned through a decade of efficient and relevant service provision by piloting sales of promotional merchandise (e.g. shirts and mugs). Though there was minimal revenue-producing successes in this venture, it is only due to the fact that the company did not have an adequate supplementary merchandise sales medium to ensure consumer interest in extended product offerings against the existing service model. However, it does illustrate that easyJet is aware of its strong and relevant brand in many European markets and is consistently considering strategic imperatives to try to expand the corporate brand personality domestic and internationally. Strengths associated with the brand should also, then, recognise strategic management and external market research competencies as success factors for what makes easyJet such a marketing success in Europe. Using pricing positioning is common in many industries, especially saturated markets where there is a great deal of competitive rivalry. easyJet maintains many advantages as it pertains to pricing as only Ryanair genuinely maintain a similar, lean operational model that can provide similar low-cost service offerings. Therefore, the majority of promotional activity occurring at the company can be allocated to psychographics to create meaningful psycho-social and cognitive associations between the easyJet brand and consumer lifestyles. The business does not have to devote its marketing function to price positioning and then use capital resources to express pricing in advertisement. This allows internal marketing experts to remain devoted toward establishing better brand equity through lifestyle-oriented, consumer-centric advertisements that have the most opportunity for long-run consumer allegiance and devotion to use easyJet as their preferred airline carrier. The ability to achieve significant, record revenue gains in a market environment that has moved into maturity is a notable accomplishment for easyJet. In mature markets, demand levels are usually diminished associated with a product or service, making it difficult to predict volume sales and how to extend the life cycle of a product ready to move into the decline stage. easyJet maintains freshness in brand-building activity, such as through aforementioned sponsorships with important lifestyle-relevant celebrity endorsements, therefore avoiding the eventual decline of the existing service model. In an environment where competitive risks of new market entrants are virtually non-existent, easyJet stays relevant in the minds of important consumer target markets without having to devote much labour or capital investment in operational change imperatives or altering its market positioning based on pricing. The brand personality established through years of legitimate competency and effective psychographic targeting schemes give easyJet a significant competitive advantage in a mature industry. Without years of investment in brand-building exercises and utilisation of effective integrated promotions, easyJet would not have the brand loyalty or record revenues experienced by the firm today. 5. Conclusion easyJet is a benchmark for using efficient brand enhancing activities in which promotional focus gives the brand more visibility. Credibility, as identified by research, is created through tangible efficient service delivery as well as sponsorship practices with attractive and lifestyle-relevant celebrities and business partners. Utilising low-cost press releases of these activities alongside consistent pricing-based promotions give easyJet many opportunities for sustaining its profit expectations for the long-term. Staying true to traditional business principles for expressing total purchase and brand values with pricing as the primary differentiation tool continues to serve easyJet with a brand identity that is trusted and relied upon by important target consumers. The strength of the easyJet brand is identifiable not only through the concrete record sales revenues achieved by the business, but through positive customer satisfaction reporting that continues to reinforce that easyJet is perceived as a valuable and indispensable airline brand by important revenue-producing markets domestic and international. Other airlines in this industry struggle with differentiation, especially those with long-standing and inflexible operational models for higher-priced service delivery. easyJet maintains internal competencies related to cultural dedication which, in turn, provides a better stock valuation to improve capital production through market security offerings. Coupled with a dynamic and strategic-minded, consumer-centric model of service delivery and efficiency, easyJet has emerged as the most profitable market leader in Europe. There are very few examples in oligopolistic market structures in which a single business earns substantial market share with higher resource competitors by using only pricing and promotion as important success factors. easyJet should be benchmarked for brand-building success and heralded for the sustainability it has developed that will continue to provide the business with better brand equity and consumer loyalty in the UK and abroad. References Aaker, D.A. (1996). 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