Internet Marketing in the of Fly Monarch Airlines - Case Study Example

Internet Marketing – the case of Fly Monarch Airlines Introduction The increase of competition within the international market has led many firms to the establishment of additional marketing tools that could help them increase their customer base either locally or worldwide. Through the years the effectiveness of each particular marketing tool has been found to be related with the market characteristics, the targets of the firm, the customer preferences as well as the position of the competitors within the particular industry. In many case the issue of cost related with the establishment of specific marketing strategies has been also found to have a crucial influence on the decision of entrepreneurs/ marketers to proceed to specific marketing initiatives. Current paper focuses on the examination of the internet marketing strategies that are most appropriate for the firms operating in the airline industry. A specific firm, Monarch Airlines, has been chosen in order to explain the various parameters of marketing tools used by firms that operate in the particular industry. At the same time specific issues of marketing, like branding and consumer behaviour, are explored at the level that they can help to the explanation of the importance of marketing for the development of all business activities. The role of Internet as a strategic marketing tool is highlighted while its potential co-existence with the above mentioned aspects of marketing (i.e. branding and consumer behaviour) is analytically explained both in theory and in practice (referring to the marketing tools used by Monarch Airlines). 2. Aspects of marketing 2.1 Branding Before choosing the marketing strategy that would be most appropriate for a particular commercial activity it is necessary to examine thoroughly in advance the characteristics of the specific industry as well as the current market conditions. In the case of firms that operate in the airline industry the choice of marketing tools used for the promotion of their services should be also based on these firms’ ability to respond to the standards set by the national and the international bodies that are responsible for the regulation of all sectors of airline industry. In accordance with the study of Thurlow et al. (2007, 305) ‘although positioned unfairly in the global semioscape, airlines may resist straightforward cultural homogenization by strategically reworking existing design structures and exploiting possibly universal semiotic meaning potentials’. In other words, firms that operate in the airline industry are very likely to face a series of challenges regarding the continuation of their operation especially under the influence of global political and financial turbulences that characterize the modern market. Branding is one of the most common marketing tools used by firms operating in most industrial sectors. The effectiveness of branding across various industrial sectors has been the main reason for the choice of branding by marketers internationally. The use of branding specifically in the airline industry has been analyzed in the literature and the empirical research. In this context, Westwood et al. (1999) made a research on the firms operating in the air tour market in Britain. Their study led to the conclusion that ‘despite their clear recognition of branding as a potent marketing weapon — UK tour operators are currently failing to build a meaningful and lasting brand-based relationship with their customers’ (Westwood et al., 1999, 238). In any case, it should be noticed that the branding strategies applied on firms operating in the airline industry (as in all industries worldwide) can be differentiated in accordance with the local social and cultural trends, the customer preferences but also the characteristics of the market involved. Highlighting the importance of local culture on the development of marketing strategies and especially on branding, Crockett et al. (1999) noticed that ‘based on intensive consumer research, Brand Western Australia (Brand WA) resulted in an entire organisational shift and has repositioned Western Australia as a premier nature-based tourism destination in the global market’ (Crockett et al., 1999, 276). The above study refers especially to the marketing strategies adopted by the Western Australian Tourism Commission in order to improve the performance of the area’s airline firms; the increase in the effectiveness of the particular marketing strategies (extensive marketing research and development of branding) has led to the increase of profitability of airlines firms in West Australia. It should be noticed that the use of branding as a marketing tool by firms worldwide is a common phenomenon; on the other hand, despite the expansion of branding in most firms that operate in the modern market – both in the area of services or products – the use of the specific marketing strategy by firms that operate in the airline industry is not so common. The specific issue is highlighted by Blain et al. (2005) who supported that one of the most usual forms of branding used in the airline industry is the destination branding. Indeed, it is noticed by the above researcher that ‘although the concept of branding has been applied extensively to products and services, tourism destination branding is a relatively recent phenomenon’ (Blain et al., 2005, 328). Other forms of branding could be also developed in order to meet the needs of the particular industry. However, the incorporation of branding within a firm’s marketing strategies should be appropriately prepared and monitored in order to avoid potential failures. In any case, branding is related with low risk for all firms that decide to use it as a marketing tool. For this reason, it is supported by Madden et al. (2006, 224) that ‘strong brands not only deliver greater returns to stockholders than does a relevant benchmark but do so with less risk’. On the other hand, the establishment of branding within a specific organization needs to be followed by a series of measures that will ensure the effectiveness of the particular marketing strategy especially in the long term. Towards this direction, it is stated by Morgan et al. (2003, 285) that ‘critical to the creation of a durable destination brand is the identification of the brand’s values, the translation of those into a suitably emotionally appealing personality and the targeted and efficient delivery of that message’. It has been proved by all the issues developed above that branding is a valuable marketing strategy for most firms that operate in the airline industry. In any case, when branding is chosen by a specific firm that operates in the airline industry, it is necessary to take into account the existing organizational framework making sure that the use of branding by a specific firm will not harm or put under risk current organizational practices or policies. 2.2. Internet marketing strategy In modern market, the use of Internet as a marketing tool by firms belonging in all industrial sectors has been expanded. Of course, there are cases where the application of Internet related technology is not promoted not because of the cost involved but rather because of the lack of knowledge required for the administration of these systems. The specific issue was examined by Christian (2001) who supported that ‘a poor understanding of the technology combined with the plethora of jargon and confusing information concerning Internet marketing and promotion is more likely to be the main cause of the slow uptake’ (Christian, 2001, 170). In accordance with the above study, where the support provided for the promotion of specific Internet applications is adequate, then it is very likely that the use of Internet for the promotion of specific products/ services will be welcomed by the firms/ entrepreneurs involved. Otherwise, the adoption of Internet as a marketing tool will be either limited or even totally avoided. The use of Internet as a marketing tool for the increase of a firm’s profitability within the international (or even the local) market cannot be doubted. However, it seems that no similar performance is achieved by firms worldwide that adopt the specific marketing strategy. Law et al. (2000) tried to identify the performance of airline firms that use the Internet as a marketing tool trying to improve their performance. The airline firms participated in the research operated in three different regions: Asia, North America and Europe). The above study led to the conclusion that ‘some airlines did not provide all components in the chosen attributes and that airlines in these three regions differed significantly in certain dimensions of the chosen attributes’ (Law et al., 2000, 202). The above findings can led to the assumption that Internet’s effectiveness is not the same in all firms operating in modern market; more specifically, it is quite possible that some firms are more benefited by the use of Internet as a marketing tool than other that do not develop an appropriate Internet-based marketing scheme. Criticizing the effectiveness of Internet as a marketing tool, Varadarajan et al. (2002, 296) noticed that ‘competitive marketing strategy focuses on how a business should deploy marketing resources at its disposal to facilitate the achievement and maintenance of competitive positional advantages in the marketplace’. In other words, Internet can be incorporated in the marketing strategies adopted by a specific organization only under the terms that the use of Internet by the specific organization will support the increase of the firm’s profitability; in case that no particular effect will be resulted on a firm’s competitiveness after the implementation of a specific Internet based policy then the specific policy could be avoided. In fact, the use of Internet as a marketing tool has been proved to harm a firm’s performance when the applications involved are not appropriately established and monitored. A common failure in this case is the decrease of the level of security of transactions handled by the system and the decrease of the firm’s profitability. Indeed, the research of Lang (2000, 368) showed that ‘the main barrier stopping consumers from booking travel via the Internet is the perceived lack of a secure payment method; other significant barriers stated were a lack of confidence in the technology and a need for a personal service and human interface’; however, Internet remains a highly valuable tool for the promotion of services/ products worldwide; it is necessary in any case to develop an appropriate framework in order to ensure the security of the transactions made through the particular system – referring mostly to the confidentiality of the data exchanged with customers. Other benefits of Internet based applications are related with the limitation of cost for a series of transactions made online as well as the decrease of the cost involved in the promotion of the firm’s products/ services. Towards this direction, it is supported by Barnett et al. (2001, 143) that ‘Internet-related technologies dramatically change transaction costs in communication-based activities and raise both challenges and opportunities for this business sector relating to issues of the nature and value of intermediation’. From another point of view, the use of Internet throughout the operational activities of airline firms could lead to the decrease of profits of other firms operating in the same industry – as an example the online booking facility offered by many airline firms could lead to the limitation of the profits of travel agencies that operate online (Standing et al., 1999, 21). Despite its negative aspects Internet is considered to be one of the most important strategic tools for the development of marketing strategies of firms operating in the airline industry. 2.3 Buyer behaviour In most studies referring to the performance of marketing strategies around the world the most common criterion for deciding the effectiveness of these strategies is the response of customers to the products/ services involved – after the use of the specific strategies by firms that operate in a specific market – or worldwide. For this reason, many different theories have been developed trying to provide an accurate explanation of the response of the consumers to particular marketing tools; the so called ‘buyer behaviour’ has become a significant criterion for the evaluation of marketing policies used by firms around the world. The various aspects of buyer behaviour have been examined by researchers and theorists all around the world. An indicative example is the study of Sarkar et al. (2005) who examined the aspects of marketing strategies used by the following airline firms: Air Sahara, Jet Airways and Indian Airlines. Their study led to the conclusion that customer satisfaction is a fundamental criterion for the evaluation of marketing strategies used by firms operating in the airline industry. From another point of view, it is noticed by Cunningham et al. (2004, 10) that ‘although the number of trips declined over the course of the research, passengers’ overall satisfaction with the airline industry, airline satisfaction, and intention to repatronize their airline generally did not change in a statistically significant manner’. The above research refers to a specific period, the years that followed the events of September the 11th in USA. The specific events have led to the decrease of performance of all airline firms around the world; however, gradually the confidence of the customers to the airline firms was increased and the firms operating in the specific industry started to increase their profits. In fact, consumer behaviour in the airline industry is found to be related with a series of factors; the strategic alliances of firms that operate in the industry have been proved to be related with the improvement of the firms’ performance (Weber, 2005). It seems that customers of the airline firms prefer a high level of price/ quality balance than an extremely low price. The buyer behaviour in airline industry cannot be precisely estimated (in most industrial sectors buyer behaviour can be influenced by a series of facts). In this context it is noticed by Walle (1996, 72) that ‘advances in computer technology and the Internet permit and encourage marketing efforts in which the consumer bypasses at least some intermediaries when purchasing travel/tourism services’. In other words, buyer behaviour is strongly depended on the marketing strategies chosen by the firms operating in the modern market; the limitation of intermediaries in the provision of services/ products can lead to the increase of the firm’s profitability. 3. Fly Monarch – critique on the firm’s marketing strategies Monarch Airlines is a firm that has gradually expanded its activities in the global airline industry. The firm was first established in 1968 and based its operations on the provision of services of high quality in a relatively low price (primarily in many areas around UK). It should be noticed that since its early years of operation the firm managed to reach high performance levels (in 1972 the number of passengers using the firm’s aircrafts reached the 500,000, see corporate website, history). Through the years, the needs of customers have changed. Customers focus on package tours that have a low price (as possible). On the other hand, the destinations preferred by customers have been increased; for this reason it was necessary for the firm’s activities to be expanded (new destinations were added to existing schedule). The development of the firm’s activities and the increase of its profitability have been achieved through the improvement of the marketing strategies used by the firm – marketing policies were added to existing marketing schemes while Internet was incorporated in the firm’s marketing framework. The firm has used its name – well known in the market – in order to develop a variety of operational activities – additional services are offered to firms that operate in the same industry: charter, leasing, technical and cargo (see corporate website) are indicative parts of the firm’s operational framework within the airline industry. Analysis of the corporate website as of its effectiveness for the promotion of the firm’s services – use of literature The firm’s website is offered for a variety of tasks – online booking, provision of information on the firm’s destinations, the firm’s performance as well as the additional services provided by the firm (see corporate website). The specific website can be criticized using the theories presented in the previous section. In the literature presented above it is clearly stated that a firm should align its culture with the cultural trends of its market (Thurlow et al., 2007). The issue of culture is not particularly emphasized in the firm’s website; the particular website is a typical one – if compared to the websites of other airline firms – focusing on the accurate provision of information regarding the firm’s services; no specific reference on culture can be identified in the specific website - the format of the website, its presentation and its content do not give specific information on Britain – country where the firm is based, no information on British cultural events is made; no British characteristic can be identified in the website; it is a well structured website but with no cultural ‘identity’. This is an issue that should be considered by the website’s creators and appropriate alterations could be made. On the other hand, Westwood et al. (1999) have highlighted the importance of branding for all tour operators in Britain. Branding has been used by Monarch airlines in order to support the expansion of business activities; a variety of services is provided by the firm (cargo, engineering, technical, leasing, car hire, insurance and so on, see corporate website) apart from the low-cost flights. On the other hand, a specific aspect of branding, the tourism destination branding as explained by Blain et al. (2005) and Morgan et al. (2003) in the literature section does not seem to be developed by the specific firm. Of course business activities have been expanded using the firm’s name in the market but no scheme with these characteristics – tourism destination branding – is available to the firm’s customers – as it can be assumed through the corporate website. The firm’s managers could incorporate the specific type of branding within the firm’s marketing policies. On the other hand, Internet is wisely used by the firm’s managers in order to promote the firm’s services in a variety of sectors (see corporate website); the information provided for the firm’s services available to customers is accurate while significant attention is paid on the security of all transactions made (see also Christian, 2001 and Lang, 2000). The navigation around the corporate website can be made quickly while all parts of the firm’s operational activities can be clearly distinguished. The booking facility is available even from the ‘home’ page while all other options can be identified in the specific page. There is no loss of time for completing an order or be informed on the firm’s services. The limitation of the cost involved in booking or ordering other services through the corporate website is a significant advantage for the specific firm (see also Varadarajan et al., 2002 and Barnett et al., 2001, Walle, 1996). The features incorporated in the firm’s website can ensure the customer satisfaction. As it has been retrieved in the literature the latter depends on the marketing strategies used by firms within the modern market (Sarkar et al., 2005, Cunningham et al., 2004). It seems that firm’s managers have managed to identify the needs of customers in the specific industrial sector (Crockett et al., 1999) and made the appropriate changes in the firm’s various sectors adding new services in the organizational framework and developing the corporate website accordingly. In accordance with the above, the only differentiations possibly required in firm’s current marketing strategies would be the development of tourism destination branding and the emphasis on the cultural trends of the British market – potentially also of the destination markets. 4. Conclusion As it has been proved through the issues developed above, Internet can be used by most firms operating in modern market and seeking to improve their performance. In order for the Internet based marketing policies to be effective it is necessary that appropriate preparation will be made in advance ensuring that all Internet – based marketing policies used by a specific organization will be effective in accordance with the targets set by the particular organization both in the short and the long term. In any case, Internet has been proved to be an extremely valuable marketing tool relating with the significant increase of organizational performance (when relevant practices are appropriately prepared as noticed above); for this reason, even if traditional methods for improving performance are used by modern organizations, the incorporation of Internet based marketing tools in a firm’s existing marketing strategy is considered to be extremely valuable even if it is established for an initial – trial period. Towards this direction, it is noticed by Stilliard (2000, 27) that ‘the traditional low-key emphasis on technical expertise or in-house capabilities may no longer be a guarantee of survival for internal providers who fail to offer added value to their customers’. In other words, the use of traditional methods of marketing should not be rejected by modern firms; however appropriate alterations should be made on existing marketing strategies in order to meet the demands of modern market. Firms that operate in the airline industry can be benefited from the developments of marketing in other industrial sectors and adapt any marketing strategy that could be effective in the context of the airline industry. In the case of Monarch Airlines, branding, Internet marketing and consumer behaviour have been critical factors for the development of the firm’s strategic choices as it is proved through the corporate decisions within the various organizational sectors. References Barnett, M., Standing, C. (2001) Repositioning travel agencies on the Internet. Journal of Vacation Marketing, 7(2): 143-152 Blain, C., Levy, S. (2005) Destination Branding: Insights and Practices from Destination Management Organizations. Journal of Travel Research, 43(4): 328-338 Cambell, J. (2005) Outing PlanetOut: surveillance, gay marketing and internet affinity portals. New Media & Society, 7(5): 663-683 Christian, R. (2001) Developing an online access strategy: Issues facing small to medium-sized tourism and hospitality enterprises. Journal of Vacation Marketing, 7(2): 170-178 Crockett, S., Wood, L. (1999) Brand Western Australia: A totally integrated approach to destination branding. Journal of Vacation Marketing, 5(3): 276-289 Cunningham, L., Young, C., Lee, M. (2004) Perceptions of Airline Service Quality. Public Works Management & Policy, 9(1): 10-25 Derudder, B., Witlox, F. (2005) An Appraisal of the Use of Airline Data in Assessing the World City Network: A Research Note on Data. Urban Studies, 42(13): 2371-2388 Harris, J., Uncles, M. (2007) Modeling the Repatronage Behavior of Business Airline Travelers. Journal of Service Research, 9(4): 297-311 Lang, T. (2000) The effect of the Internet on travel consumer purchasing behaviour and implications for travel agencies. Journal of Vacation Marketing, 6(4): 368-385 Law, R., Leung, R. (2000) A Study of Airlines Online Reservation Services on the Internet. Journal of Travel Research, 39(2): 202-211 Madden, T., Fehle, F., Fournier, S. (2006) Brands Matter: An Empirical Demonstration of the Creation of Shareholder Value Through Branding. Journal of the Academy of Marketing Science, 34(2): 224-235 Morgan, N., Pritchard, A., Piggott, R. (2003) Destination branding and the role of the stakeholders: The case of New Zealand. Journal of Vacation Marketing, 9(3): 285-299 Sarkar, R., Baisya, R. (2005) Some Aspects of Market Dynamics and Customer Satisfaction in the Indian Domestic Airlines Sector. Global Business Review, 6(1): 113-124 Standing, C., Vasudavan, T. (1999) Internet marketing strategies used by travel agencies in Australia. Journal of Vacation Marketing, 6(1): 21-32 Stilliard, S. (2000) Can branding add value to business information? Business Information Review, 17(1): 27-33 Thurlow, C., Aiello, G. (2007) National pride, global capital: a social semiotic analysis of transnational visual branding in the airline industry. Visual Communication, 6(3): 305-344 Varadarajan, P., Yadav, M. (2002) Marketing Strategy and the Internet: An Organizing Framework. Journal of the Academy of Marketing Science, 30(4): 296-312 Walle, A. (1996) Tourism and the Internet. Journal of Travel Research, 35(1): 72-77 Weber, K. (2005) Travelers’ Perceptions of Airline Alliance Benefits and Performance. Journal of Travel Research, 43(3): 257-265 Westwood, S., Morgan, N., Pritchard, A. (1999) Branding the package holiday—The role and significance of brands for UK air tour operators. Journal of Vacation Marketing, 5(3): 238-252 Website www.flymonarch.com Read More