Marketing Analysis of Easy Jet Airlines - Assignment Example

Marketing Analysis – Easy Jet Airlines and Section # of This report is about the Easy-Jet airlines, and the way its innovative features and functions have led it to a market leader and a successful position. It is important here to signify that innovation is not just about information technology, and is not always about information technology; however, embedding variables whereby some acts are readily performed in the market and a firm brings them with new rules, and at the same time, packages them with services that were not offered before. Additionally, a mix composition of the two also yields innovation. For years to come, innovation has served as a critical competitive advantage for business across the world. Here, the application of innovation to Easy-Jet is analyzed in the following sections of this report. Innovations as a Competitive Advantage at Easy-Jet Innovation is the key to success for organizations existing today, if they wish to remain in the business, and remain competitive over a longer period of time. The logo of turning Europe orange is much more than a logo for Easy-Jet; it is the vision to which the airlines moves by means of its various lines of businesses – airlines being the case under consideration in this report. Easy-Jet is all about innovation and creativity; in a business where services are rather homogenous in nature, the cost advantage mainly belongs to the old names of the industry since they break-even at a much earlier time, causing issues to the new entrants. Otherwise, the competition remains cut-throat because the technology in the airlines industry is fairly replicable, and does not stay as a competitive advantage for a longer period of time. Subsequently, the importance of innovation and creativity rises as a major source of gaining the competitive advantage in the arena. There is substantial evidence in the research to reveal the fact that the strategy planned by the firm is well defined, and has goals and strategies defined in a manageable mode. The preliminary action is to define the target market which is technically the leisure seeking travelers – as described by the corporate management of the business. Gradually, the firm is also targeting the business travelers, but the major source of revenue or the larger chunk are the leisure travelers. Alongside establishing precise target market, it is also critical to attain the network of key airports that are the major requirements for catering to the leisure class travelers since this category prefers airlines that picks them from their home town and drops them to their destiny. Along the similar lines, Easy-Jet has linked and formed networks across the key airports in Europe and the major population in the same region. Extending the same towards the frequency of flights develops a sense of efficiency in the firm, and when such features are offered at competitive pricing, Easy-Jet is set to drive away with the business. What adds to the idea of creativity is the fact where IT comes into play its role. Other than the conventional online booking, Easy-Jet has also formulated strategic partnership with hotels, rent-a-car facilitators, and other services that a traveler may require during the course of a travel trip. These strategic partners are associated to the web network of Easy-Jet, and the services are offered to the Easy-Jet customers accordingly. Approximately 90% of the customers come through the online booking and the firm also earns from the strategic alliances, since the trust on Easy-Jet transfers to the other strategic partners. Last but not the least, a critical innovation from Easy-Jet is the development of a single class of seating, by means of which, there is no discrimination of first or business or economy class – all passengers stay equal. This point has come under significant threat by various critics but the point remains valid that all individuals sitting in the jet are equivalently important customers for the business – let them be a frequent flyer or just a one timer. Elasticity of Demand Elasticity of demand defines the changes in demand when there is a change in price. On a general note, the demand of airlines and airways traveling is inelastic – a reduction or increasing price does not push the demand to fluctuate by a large margin; however, depending on the category of travel, this fact may vary. When it comes to the leisure travelers, which are the primary target market for Easy-Jet, the demand is relatively elastic in nature – a reduction in pricing or a discounted price strategy would definitely have a significant impact on the volumes of leisure travelers, as travelers tend to have a particular budget, and the more they could do within this budget, the happier their world would be. Strategic Objectives Strategic objectives define the long term goals of the organization or a business. More commonly known as a vision of the business, where vision exists in business, developing short term milestone becomes an easier job thereby allowing performance monitoring against the long term goals. From the analytics of the airlines, it becomes clear that the strategic objective for Easy-Jet airlines to develop market share, and to be the number one preferred airlines for all traveling segments in Europe, and then gradually move forward beyond Europe. The premium target is to have presence at the well-performing, active and key airports across Europe, and therefore, being at the top of the mindset for air travelers across Europe. In the initial phase, the airline targeted the leisure travelers, and now is gradually moving towards the business travelers – taking strategic benefit out of its present resources. Positioning & Segmentation For any line of business, it is critical to develop a position tactics i.e. positioning it appropriately in the minds of the consumers. Jet has positioned itself as an all-economy and all-economical airlines, and follows the behavioral segmentation strategy. The economic perspective is visible from the fact that the airline has a cost advantage over the other. Subsequently, the travelers are able to travel to-and-from major airports at a reduced price, compared to the pricing of other airlines for using the same airport. Similar to the concept of positioning, the gurus of marketing state that including what most of the FMCGs make and sell, firms and businesses should develop segments of the target population and then identify the segment where their product or service is most likely to be acceptable. Jet has classified various behavioral segments of travelers, and the premier ones are leisure and business travelers. So far, Jet has been primarily targeting leisure travelers by means of its various marketing campaigns, and also visible from the fact that the vertical integration with strategic alliances is more with hotels giving vacations discounts and family discounts. However, in accordance with the future plans of the organization, it is visible that it would most definitely be targeting business travelers as well. Performance Areas & Objectives The performance indicators for an airline signify the efficiency with which the customers are handled and repeated travel arrangements are made. Easy-Jet assumes its performance indicator as the number of occupied seats in an aircraft. Easy-Jet claims to be the most preferred airlines for leisure traveling for the customers. The next target area for Easy-Jet is to attain the mass of business travelers – and for this, as mentioned, the airlines have a significant edge over its competitors i.e. by being present across various key airports across the Europe, and therefore, entering the new segment should not be a major issue. Impact of Experience Curve Experience curve defines how organizations develop and alter their short term goals, for reaching the long term strategic objective by means of learning not just from the actions undertaken in the past but also from the actions taken by the competition, and their respective reactions – the said alteration comes with experience and learning. There has been a significant impact of the experience curve on the airlines. Starting off as small airways, the vision was very clear and so were the strategic goals of the organization. The experience curve was very steady for the organization, and learnt quickly from its mistakes and the on-going trends of the industry. The real evidence of influence of experience curve comes from the fact that the business took the industry trends one step beyond the existing practice by the competitors. For example, the industry practices had become providing online booking facility to the customers. Easy-Jet jumped into the wagon, providing not just the online booking facility, but also embedding the likes of discounts, vertical integration (bringing in strategic alliances). Such one-step-ahead moves are learnt over a period of time from the experience gained in the competitive arena. Compensating customers appropriately and an always smiling and helpful staff are also the derivatives of the experience curve learning for the airlines. Enhanced sales volumes, growing sales, and thus, growing profits, lesser customer complaints, increasing word of mouth advertising, and other related variables illustrate the effect that this curve has made to the business, and the consequent application of this learning-and-effect. Critical Success Factors Critical success factors are defined as variables that significantly affect the success of a venture or a project. These factors, as visible from the discussion above and the research done are the fact that Easy-Jet is a cost effective airlines, operating in a segment where price elasticity exists. The real success comes from the point whereby the cost effectiveness of a particular business does not provoke price competition amongst the competing businesses. It is certain believe that the most critical factor for succeeding in any business is the presence of a clear and well defined vision and mission for the business i.e. where the entrepreneur sees the business in a spam of a decade or more. This actually becomes the root of where the business initiates, and its initiation is the major play ground for the business to be successful. The airlines industry is not just a saturated one but extremely competitive. However, each airline seems to be working at a particular segment or a proposition, which is generally not the same for two competing airlines. Developing travel plans at key airports in Europe, at effective pricing, is a major critical success factor for the business. Application of BCG Matrix BCG matrix was developed by Boston Consulting Group, defining the presence of various lines of product or lines of businesses on a grid that assists in developing future strategy for the product or business based on its current market share and market growth. The following pictorial representation illustrates the BCG matrix: From the birds-eye view for the lines of businesses, Easy-Jet definitely turns out to be a star product since it has higher market growth and comparatively higher market share. For such line of business, the recommended strategy in accordance with the BCG matrix is to invest further in the line for maximizing the market share in the growing markets. Further expansion for the target audience would definitely yield much more splendid results for the business. Research Proposal Aims & Objectives of the Research The research would be aimed at understanding the customer’s need for traveling i.e. what are the customer experiences, priorities (when it comes to traveling), the variables that influence the decision for choosing a particular airline, the kind of marketing technique which would influence this decision marketing, and so on. These would assist the viewer of the report (company management in this case) to analyze the variables where the push is needed to trigger the customer reaction towards purchasing the tickets. Such variables need to be highlighted when developing an advertising campaign for the business. Proposed Methodology The proposed methodology for this case would be questionnaires to be filled by the customer. Sampling technique would be simple random sampling, and since the customers would be filling the questionnaires themselves without any push, then the research bias will eliminate itself. Contact method would be three: [1] pop-up windows when online booking is done [2] follow up calls using contact information provided in booking details, email or phone calls [3] paper questionnaires at the booking/reservation counter. Key questions for these questionnaires would include asking the customer about the reasons for choosing a particular airlines, the variables being considered when choosing an airlines, the variables that influence the decision, and various points they would like to see in their preferred airlines. Rationale for the Methodology Respondents have this tendency of getting irritated with survey questions, and therefore, it is important to trigger the survey when and where possible so that they fill out these as and when they get time, and the proposed contact and data collection methods are to ensure that the customer is not pushed into this survey, as those end up in non-fruitful data. If the customer is provided relax time and asked to fill out these surveys at a convenient time, there would be more truth associated rather than just quick responses that eventually fail the purpose of the research. The research conducted herewith shall be a milestone for airlines industry, as on a general note, this industry is more supply driven, rather than taking in customer feedback about how improvements can be brought about. Accordingly, the level of generality that has been associated to this survey not just makes it fruitful for the organizational strategic thinking but would also be beneficial for the industry on the whole. As mentioned, being supply driven, airlines tend to dictate terms ranging from air-fares to the food being served, compensations, etc. however, this step to involve customers for the development of long term strategic objectives and the outlook of the organization, is a big step in itself by the European airlines giant. 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