Marketing Communication Strategies for Newcastle International Airport - Case Study Example

Marketing Communication Plan for Newcastle International Airport 2007 Introduction Newcastle International Airport (NIA), in North-east England, is the 9th largest international airport in the United Kingdom. The airport handles over 5 million passengers a year traveling to 85 countries. It is the fastest growing airport in the country, with a number of low-cost airlines touching it. It has entered into deals with EasyJet for low cost routes and Copenhagen Airport for investments in capacity addition (CPH). The airport has also rationalized its operations by reducing the headcount, outsourcing non-core functions, increasing manager involvement and accountability. The airport has undertaken a $13mn terminal expansion plan, creating 32,292 space for the departure lounge (Mansfield, 2006). It is predicted that passenger traffic will increase to 9.5 million passengers per annum by 2016 (Pricewaterhouse Coopers, 2004). Marketing communication strategy and objectives Till 2002, the airport did not focus on the low cost market and was passive towards route and passenger growth, as a result of which passengers were choosing other airports. The brand image had tired out even when passenger volume was growing marginally. In addition to the particular shortcomings of the airport, the travel industry was in the doldrums after September 11, 2001, tour operators were cutting back and there was a distinctive shift towards the low cost market. NIA, in 2002, catered mostly to scheduled (47%) and chartered (47%) flights and low cost carriers contributed to only 6% of the passenger traffic. While the charter flights remained strong, scheduled flights were hit by 9/11 (Parkin, 2004). However, NIA was seen to have a good potential since, being the major airport in the North East, had a significant catchment area. The airport has a good infrastructure, with GBP 100 million already invested since 1990 on capacity expansion, and already catered to a critical mass of passengers. The aeronautical charges are not regulated and there are few environmental limitations to growth of the airport. NIA identified select low cost carriers. It entered into a deal with Easyjet, beating 6 other competing airports in the UK. There are 17 low cost routes from NIA with 6 EasyJet and other aircrafts. BA, KLM and Air France has also been motivated to fly important routes to London, Amsterdam and Paris from NIA. Costs have also been reduced by lower paper tasks, reduction of vehicle fleet and supervisory costs. The airport has improved efficiency through greater accountability and management involvement in day-to-day operations (Parkin, 2004). NIA is also in the process of revising its master plan in order to develop the property (CPH). As a result of the new strategy, the flight mix of NIA changed to scheduled (31%), chartered (37%) and low cost (32%) in 2004. Besides the balanced mix, the airport also achieved connection to all key markets and passenger flow of over 5 million per year (Parkin, 2004). For NIA, we propose a communication strategy that would be a mix of pull that is directing the marketing strategy to the final consumers, and push, that is through distribution channels. A combination of pull communication, like online and mobile phone messages and pull strategies through tour operators would be used to keep the customers proactively informed about new routes, allow the company to reach out in case of emergencies as well as to enhance the brand (Berluchhi). The main target for the promotion communication would be the low cost travelers who have rising disposable incomes, to international destinations since this is the main focus of growth of the company. The objectives of the communication strategy would be to increase the attraction of the airport vis-à-vis other airports and increase passenger traffic. The positioning of the airport would be as an efficient and comfortable airport for the international airport, with minimum paperwork, short passenger queue, spacious departure lounge, attractive retail outlets. Promotional mix The promotional mix would be a combination of above-the-line promotion through television sponsorships, radio jingles, print ads and online marketing as well as below-the-line promotion including public relations and media management. The first step in order to begin the communication strategy is to design the message. Since NIA’s corporate strategy is built around low cost airlines, the message should focus on the increasing ease and cost-effectiveness of these carriers and the airport’s efficiency in handling these. Sponsorships in television and radio broadcasts as well as sports events and charities are the most direct promotion. For NIA, we propose a sponsorship program in satellite television channels, Channel 4 and ITV, Direct-to-Home (DTH) and digital television, BBC1 and Sky Digital. Almost 80% of the sponsorship market is captured by sports and broadcasting sponsorship. Sports events like rugby and other team sports may be sponsored. NIA should focus on both mass-market programs and minority programs on television and radio. With the relaxation of sponsorship rules, new media like website and interactive digital programs may also be targeted. It has been found that most adults have a positive attitude about sponsorships and favor companies that sponsor their favorite programs, sport or events (biz-lib). We also propose television advertisements, which is a cost effective medium as compared to sponsorships. TV ad rates in the UK are low. Adjusted for inflation, TV airtime is at the lowest since 1995 (e-marketer). Spot rates on Channel TV, for example, vary from GBP 107 for a 10-second slot to GBP 477 for a 60-second slot at peak hours and between GBP 27 to GBP 120 during daytime (Channel TV). Channels also offer airtime packages consisting of daytime and peak hour combinations over a specified number of weeks, specially designed for popular programs. Newcastle has a predominantly white population and about 2% ethnic Asian communities. We propose NIA chooses airtime packages for mass-market programs and minority programs. Most television channels offer combined TV airtime and web advertisement packages. According to forecasts, television ad market in the UK will grow from 2008 onwards as more companies are planning to increase communication through this medium. The UK households are switching to digital television. More than 78% of all households in the UK have digital television (e-marketer) and 30% have broadband internet connection (Guardian, 2005). Online marketing is growing as a cost-effective marketing tool, especially with the growing internet penetration among households. Although only 3% of mobile phone users watch TV on phones, 64% of the users are men, who are usually the decision-makers in the family on travel (e-consultancy). For a mix of promotional media tools – television, radio and the new media – we propose that NIA hires a media buying agency that may juggle the budget across the media in accordance to the airtime rates available. On the whole, television viewing in the UK is on the rise while radio listening is flat (Ofcom, 2006). Average spending on communication of the US household is GBP 87.67, the largest being mobile communication. Internet users spent 20 minutes longer online than in 2001, TV viewing has increased 11 minutes over the period, while radio listening fell. Hence, television and internet advertisement would reach more potential customers than radio would. The internet is growing to be a crucial advertisement medium. UK online advertisement market was GBP 2.01 billion in 2006 (Guardian 2007). There are 31 million internet users in the UK, hence advertisers are increasingly switching from television, commercial radio and print. NIA should experiment with search engine advertising formats rather than blogs and social network sites, the latter being more popular with the youth who are not major NIA customers. Instead, NIA should advertise with travel and airline sites. Rather than pop-up ads, drop formats that function more like television and print ads work better. UK’s share of print in the advertisement market in 2006 was 10.6% although this medium is falling as a communication preference (Guardian, 2007). Online marketing is the newest, the most direct and cost-effective promotion medium. It may be used as a point of interest or as a point of purchase. To raise awareness of the airport, engaging and interesting display advertisements may be placed at search engines with the possibilities for responding to initial queries. More information should be put in the company website as well as interactive forum and discussion boards. However, rather than a simple brand awareness tool, the internet is emerging as a major point of purchase tool, especially for low cost flights. Hence, NIA should aggressively target this market in association with airlines companies. Typically, online media buying is done through traditional advertisement agencies or specialized online marketers. NIA should have a concerted effort to tap this market immediately. Billboard advertisement is another channel for communication. NIA should buy billboard space in prominent locations. Billboards are large outdoor advertisements typically in high traffic areas. There are various new and interesting formats that are being experimented with billboard advertising, like mechanical billboards that use the tri-action movement showing three advertisement one after the other, digital billboards that allow static advertisements to rotate and holographic billboards. Interactive billboards, like the Coca Cola billboard at Piccadily Circus responding to the weather with a wave at the passer-by and those by London theaters that have computer chips connecting to the website that shows the program schedule. There are also the mobile billboards that are mounted on large trucks (wikipedia). With regard to below-the-line communication, the company should hire a well-known public relations company to develop brochures and engage in mass mailing through the internet. Online marketing is an extremely cost-effective strategy. The management should also get involved in civic businesses and speaking engagements so that the local population, which is witnessing increasing disposable incomes, are made aware of the low cost airlines touching the airport. The company should make a media plan for seeking news stories in local and national newspapers highlighting the new facilities and other events. The PR company should place feature stories, highlighting improved facilities and efficiency of the airport and editorial endorsements about the airport in the print and online media. The local newspaper persons should be invited to events sponsored by NIA. Scheduling and Implementing The communication plan of NIA could be as follows:   Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Online banner ads and search engines X X X X X X Television ad spot     X   X   Television program sponsorship       X   X Radio ad spot X X         Billboard   X X X X X Sponsorship (sport)     X   X   Sponsorship (culture)       X     Media tour       X   X Charity event         X   Print ad   X   X   X Advertorial feature       X   X As we have seen in the previous section, online advertisement has emerged as the most powerful and cost-effective media buying tool. Hence, we propose that NIA begins its communication strategy with online communication by engaging specialized online marketers who would place banner ads at a number of search engines that would take the potential customer to the NIA site. The second stage to boost online sales is to make the NIA website more interactive, with discussion boards, forums and blogging. The third stage in online communication would be to tie up with low cost carrier companies and engage in a joint marketing plan so that customers are attracted to choose NIA in preference to other airports for the specific low cost flights. The next promotion medium to target is the television ad spots. In particular, NIA should take advantage of the package spot combinations of peak and daytime rates. However, assuming the budget provides it, NIA should focus on peak rates since households are more attentive to travel plans during the evening rather than daytime when household product ads get more viewing. Sponsorship of television programs should also be tied up on the basis of the popularity of the programs. We suggest that NIA targets a mix of mass-market and minority programs in order to target all categories of audiences. Since Newcastle has a significant ethnic Asian communities, who would also be interested in low cost flights from a neighborhood airport, NIA could specifically choose minority programs for sponsorships. Similarly, radio ad spots should be chosen with care, in terms of program schedules and timing. NIA should adopt a comprehensive billboard plan. With new technologies available, the airport should first launch mobile billboards and then buy billboard space in prominent high-traffic areas, highways and suburbs, which are the catchment areas for the airport. The airport could begin with an interesting message on billboards mounted on trucks and carried across neighborhoods. This is the most cost-effective billboard. However, it should also have a couple of digital billboards in prominent locations that are embedded with computer chips enabling it to display airline schedules from the airport. NIA should choose the sponsorship program with care. Since we have already taken care of the television sponsorships, we should now focus on sponsorship of sports and other events. Our target audience being middle class budget travelers, the events chosen for sponsorship should be mass-market ones like charities and culture programs. Sports sponsorships are most effective since these are the most visible, both on the location as well as through television. Although public relations should be a continuous effort, focused media management would include media tours across the airport facilities, advertorials and placement of features in the print and television media. At the same time, print ads should be focused and interesting designed. Media space buying should be effectively made with combination packages through the week. Evaluation and control The evaluation of the communication strategy would involve a number of surveys through focus groups, telephone and online surveys (surveyshare). The questionnaire for the survey would be as follows: 1) How many times have you seen the survey? 2) Did you mention this ad to anyone? 3) Did anyone mention this ad to you? 4) Did the ad catch your attention? 5) Advertisement on which medium caught your attention? Radio/ Television/ Online? 6) Are the claims on the ad believable? 7) Was the ad appealing? 8) Was the ad memorable? 9) How do you rate the creative in the ad? 10) Do you currently use the airport? 11) Based on the ad, would you use this airport? Focus group surveys would include discussions with groups identified from different social and economic classes. The questionnaire would be ratified by NIA and the discussions moderated by a media manager. Telephone and online surveys, too, will be made on random populations across geographical locations. Feedback Based on the above evaluation of the communication plan, NIA would need to analyze the message of the content, the creative, the promotion mix and the media planning strategies. The company may need to change the message when the desirable product mix between low cost, schedule and charter flights are reached. The promotional mix will have to be monitored and altered depending upon the budget and the costs. There must be continuous negotiation with media agencies on the various media platforms. Besides, public relations through media placements are a continuous process. It is recognized that there is scope of much improvement in the brand image of NIA since it is located at a strategic geography and the infrastructure is as good as any other international airport in the UK. Traffic in this airport has fallen behind simply because of its lack of focus on business and communication strategy. With the business strategy put in place through tie-ups with low cost airlines and cost reduction, communication strategy is next on the agenda. The airport’s brand building exercise should therefore focus on the convenience of location and facilities and the large number of mass-market flights connecting the airport to numerous destinations. Works Cited Mansfield, James, Network lockdown: James Mansfield looks at how Newcastle International Airport has improved the robustness of its IT system, Airports International, November 1, 2006, http://goliath.ecnext.com/coms2/summary_0199-6092755_ITM Price Waterhouse Coopers, Newcastle International Airport, Consultancy Advice in connection with Masterplanning Process, January 2004, http://www.newcastle.gov.uk/DelDec.nsf/a19b496b4846c17c80256c0d005cd258/7b877fdafd5b11cb80256e2f005b6f55/$FILE/Newcastle%20Airport%20Masterplanning%20Proposal%203001.doc Parkin, John, Adjusting the Airport’s Cost Base for Low Cost Operations while maintaining a balanced mix of Carriers – Case Study of Newcastle International , http://www.iaae.org/meetings/Airport%E2%80%99scostbaseforlowcost.ppt Copenhagen Airports (CPH), Newcastle International Airport, http://www.cph.dk/NR/rdonlyres/15E1C7BD-5A0C-4EED-82E7-1F55CCD27F85/0/NewcastleAirport1.pdf Berluchhi, Matteo, A new Era of Agile CRM, CXO Europe, http://www.cxo.eu.com/pastissue/article.asp?art=268609&issue=178 E-consultancy, BBC and Sky dominate mobile TV market, http://www.e-consultancy.com/news-blog/361972/bbc-and-sky-dominate-mobile-tv-market.html Guardian, Television took 30 years to reach a mass audience - broadband has taken three, July 14, 2005, http://business.guardian.co.uk/story/0,,1528079,00.html Biz-lib.com, Sponsorship: UK Market Briefing, http://www.biz-lib.com/products/ZKM79582.html E-marketer, UK TV Ad Growth to Resume, August 3, 2007, http://www.emarketer.com/Article.aspx?id=1005216&src=article_head_sitesearch Channel TV, Airtime Packages 2006, http://www.channelonline.tv/resources/Downloads/Channel%20Television/ChannelTelevisionAirtimeRateCard2006.pdf Ofcom, The Communications Market, August 2006, http://www.ofcom.org.uk/research/cm/cm06/ Guardian, Online advertising share overtakes newspapers, March 28, 2007, http://www.guardian.co.uk/frontpage/story/0,,2044429,00.html Survey Share.com, http://www.surveyshare.com/templates/televisionadvertisementevaluation.html http://en.wikipedia.org/wiki/Billboard_(advertising) Read More