Public Relations of BlueJet - Term Paper Example

Public Relations Strategy: JetBlue Executive summary Jet Blue Airways is an American flight company that focuses on the low and middle earners. Neelman, David in the February of 1999, founded this company. The company has a fleet of 172 planes and flies within 71 destinations in the USA. The company’s headquarters are located in Forest Hills, New York, with David Barger being the CEO and president and Joel Peterson being the chairperson, both former employees of southwest airlines. Despite the challenges the company faces as a result of accidents, it has one of the strongest marketing strategies which resulted into the company being one of the few airline companies to make a profit after the 9/11 incidence. Jet Blue Airways has had its share of difficulties in the public relations sector such as the stranding of two planes in the JFK airport in the snowstorm of February 14, 2007. Public relations are defined as the management and practice of passing on information between the management and public in an organization. In this report, I shall focus on how Jet Blue Airways is able to keep a growing number of local and domestic flyers. The growth of the company is documented in numerous sources, such as a growth that has recorded over 23 million passengers in the New York, New York, Boston, Massachusetts, Orlando, Florida, Fort Lauderdale, Florida, and long beach, California cities in the August- July 2010 season. This report shall assess the methods, strategies and practices used by Jet Blue Airways with respect to improving public relations. Improving the public relations positively affects the running of the company such as in marketing, advertising and sales department of the company. The report shall also focus on the elements useful is improving the public relations of the company. Table of Contents Chapter 1: 5 SWOT analysis 5 Strengths 5 Weaknesses 6 Opportunities 6 Threats 7 PEST analysis 7 Political 7 Economic 8 Social 8 Technological 8 Marketing analysis 8 Competitive analysis and expenditure 10 Target audience 10 Timing / seasonality 11 Geography 11 The public relations strategy 12 Target audience 12 Key messages 13 Media tactics 13 Timing/scheduling 14 Budget 14 Passenger Sales 14 Other Sales 15 Expenses 15 Operating Cash Flow 15 Evaluation 15 Conclusion 16 References 17 Chapter 1: SWOT analysis The SWOT analysis of Jet Blue Airways consists of the strengths, weaknesses, opportunities and threats that the company faces in running its operations. The analysis should involve all the elements that involve the company’s operations. The SWOT analysis of a company is normally done to aid in marketing the services and products in an aim to attain sustenance and growth. When it comes to the public relations, there are minimal differences in the SWOT analysis as the concerns of the company are in regards to the loyal customers the airline has established (Broom, 2008). Strengths The following are the strengths of Jet Blue Airways in public relations, in accordance to the marketing strategy used by the company (Cutlip, Center, & Broom, 2005). These strengths involve the management, staff and public associations of the involved parties. Jet Blue Airways targets the low and middle level earners making it a low-cost airline. The company has a strong and experienced management and operations bracket that consists of former Southwest airlines employees. The management is experienced in the running of the industry on a technical, operations and managerial level. It provides the customers with a low cost flight alternative, as its rival southwest airlines, but creates competitive advantage by providing the customers with inflight entertainment. Entertainment in the flight is facilitated by seat TVs with 100 channels. The company benefits from a strong brand and its reputation in the public, Low operations and running costs Jet Blue Airways continuously hires and retrains experienced crew Jet Blue Airways has been chosen as one of the most preferred local flight by local media i.e. Coned Nast Traveler magazine’s for over five years concurrently. Weaknesses The company has not introduced inflight-vending services such as the sale of snacks The company is young, introduced in 1999, and has not engaged its services in the whole region of USA and as an international flyer operating in only a dozen countries The company has suffered crashes and accidents such as the latest incidence of 28 March 2012 Limited and outstretched resources Problems of diminishing profits from various economic difficulties, such as stringent measures by the American airline authorities Opportunities The company can still experience industrial growth with Jet Blue Airways’ profits still being on the higher scale Increasing the number of domestic and international flights to the whole USA region and to other popular countries Tap the domestic market as well as the untapped international market Threats An increased threat to the airline industry after the September 9/11 attack Recession and the economic crunch facing the middle and low-level earners The unpredictable and ever increasing price of fuel and other associated resources because of inflation Competition coming from established as well as newly established competitors PEST analysis Pest analysis of Jet Blue Airways represents the Political, Economic, Social and Technological analysis that is associated with the company. The PEST analysis is done since the USA market involves defining the opponent as a candidate, an organization or a group of candidates (Dilenschneider & Bartiromo, 2010). The PEST analysis aids a company in creating a competitive edge as well as solving problems that involve politics and civil society elements in running and operating the business. Political Increased security and travel bans to regions suspected of being vulnerable to terrorism attacks An increased focus by the government on the safety of the airlines from recorded and recent flight crashes Economic High costs of fuel Demands of higher wages by the employees High consumer inflation rates that make it harder for customers to continue their way of life Social Use of social networking strategies to increase the flow of information to the customers Technological Improved consumer technological interactions easing the communication channels such as the official JetBlue website, twitter, faced book and linked. Increased need for additional safety features to inhibit occurrence of accidents Technological advancement that enables monitoring of the operations by the company Marketing analysis In JetBlue’s marketing analysis, the company makes use of several channels to attract new customers as well as retain its old ones. One of the most useful tools available to the company at this day and age is the company website. The official website of the company, www.jetblue.com, allows the customers services, which include browsing through the services offered by JetBlue. The aim of the site is to offer the customer what JetBlue experience online (Gehrt, Moffitt, & Carlos, 2010). In a means to communicate, the site features videos by consumers speaking of different advantages of choosing JetBlue as ones preferred Airline Company. The JetBlue company slogan ‘Above All Campaign’ that replaced the former slogan ‘Happy Jetting’ in 2010 was a part of a new marketing and advertising promotion. The promotion made use of today’s generation preferred communication channels such as Facebook, linked and YouTube. In YouTube, the company featured humorous ads that made use of negative public relations by adding blemish to the practices conducted by competitors in the airline industry, some of the featured practices such as baggage fees (Guth & Marsh, 2011). In addition to the use of negative PR, the campaign also includes a quote informing viewers of what to expect in travels with competitors, mainly "if you wouldn’t take it on the ground, don’t take it in the air.” In addition to the company campaigns by the use of social media and a change in the slogan, JetBlue makes use of promotions such as the recent "All You Can Jet" promotion. These promotions provide the customer with benefits during seasons, which make the airline a discount and legacy airline. This campaign allowed travellers to purchase a monthly-unlimited travel pass to different JetBlue destinations in the U.S. as well as the Caribbean islands. Via this campaign, JetBlue are certain of a two-fold increase in their customer base from this promotion, an increase of new customers who had never used the airline for flights before (Hendrix & Hayes, 2009). The use of JetBlue brand space in the flagship terminal at JFK International airport serves as a "brand space" for the company. It is a marketing strategy currently used to locally advertise the company. In addition, the True Blue loyalty program, which was reformed in 2009 to discourse the customers’ yearning for the elimination of blackout dates, an extended lifespan for points, and a shift to, points for miles flown rather than money spent (Newsom, Turk, & Kruckeberg, 2009). Competitive analysis and expenditure The airline industry has few players whom have succeeded in building an exclusive brand identity and realized noteworthy product and service differentiation. JetBlue does this by occupying the gap left out by major players in the industry providing the low-cost consumer with top-notch flying experience, which is not provided by the legacy airlines. The company has lower advertising costs when compared to its rivals via the use of social media (Seitel, 2010). Objectives Target audience JetBlue Airways is an airline that targets the “fare-conscious travelers who might otherwise have used alternate forms of transportation or would not have traveled at all.”(9) The current conscience base is made up of principally leisure holidaymakers, who are the most price sensitive class of flyers. However, JetBlue is progressively flattering a more endowed class of customers with more resources to cater for the more expensive business and/or first-class traveling packages, but who are still conscious of the high prices charged by competitors. Their aim is to benefit from the same level of comfort, class and experience without forgoing high-class consumer service (Smith, 2009). This is particularly when the airline companies are seeking new ways via which they can reduce their business travel expenses due to the tougher economic conditions. Timing / seasonality As a domestic flyer, the timing and seasonality essence is practiced throughout the year. Being a domestic carrier JetBlue flights are based on needs of the customers and not the season; however, the flight company does engage in seasonal promotions to gather new customers such as the tactics used in the promotion strategies (as discussed above) (Solis & Breakenridge, 2009). Geography JetBlue is largely a domestic flyer that has a fleet of 172 aircrafts. The airline concentrates on the state to states flights, though it also has some international flights, particularly to the Caribbean. The destinations of the flight include the flowing geographic regions: Bahamas Barbados Bermuda Colombia Costa Rica Jamaica Dominican Republic Mexico Saint Maarten Puerto Rico Saint Lucia Kingston, Jamaica Pittsburgh Portland (Maine) Charlotte Raleigh Nashville Bermuda Aruba The public relations strategy Target audience Although recent studies institute that, there is no plausible relationship between customer satisfaction and flight ticket pricing the primary market of the public relations is the price conscious traveller (Stacks & Michaelson, 2010). This favors the current economic trends as with the economic crunch and the increased rates of inflation have led to customers, who would have settled for moderately priced tickets, to look for the least expensive tickets to their destination. The online ventures such as search engines offer flyers a tool through which they can immediately compare prices offered by the airline companies, under various packages. The choice leads to an increase in the promotions and pricing wars amidst the airline entities. The youth are one of the groups targeted by the industry as it has shown that they are the frequent visitors to the social sites. In addition to visiting the online establishments, the youth is also prone to engaging in more flying compared to the elderly. The youth are often engaged in activities such as taking vacations, travelling for studies and work, and engaging in leisure and holidays (Wilcox & Cameron, 2011). With the youth being the most productive segment of the public, the airline companies have them as one of their target market. This is evidenced by the use of tactics such as the inclusion of entertainment in the cabins of the JetBlue flights. The businesspersons are another specific group of people that are frequent flyers and often targeted by the airline industry. The businesspersons differ on their earnings and the allocations set aside for their expenses. The bulk of the business sector lies in the small and medium enterprises. The spending capabilities of these individuals are lower compared to those by the industrial giants. JetBlue Airways takes note of this group of individuals and introduces elements that attract them to the company. There are two main reasons that a businessperson would choose JetBlue Airways over any other domestic flyers. The first reason is the low flight expenses associated with the company, while the low or no baggage costs associated with the flight make the domestic flyer economically viable for the SME entrepreneurs (Yaverbaum & Benun, 2006). JetBlue is in an exceptional position enabling targeting the business flyers in these tough economic times. As a discounted flight service provider focusing on the concept of customer service, JetBlue appeals to cost-conscience entrepreneurs who have the need to cut their travel expenses but want to retain comfort, handiness, and modernism offered by airlines. Key messages 1. Lucrative in six of the last seven business quarters and rapidly growing than other competitors in the U.S. airlines market (6-8% in 2009) (Quinton, 2010) 2. Low operating costs from high aircraft utilization, lesser distribution costs by integrating an all-electronic system, productive workforce, new and effectual aircrafts 3. High brand awareness Media tactics JetBlue has created a loyal clientele base that follows proceedings of the company on Facebook and Twitter, and YouTube. By hosting information on their services and videos, it has formed its largest campaign in the use of media tactics. In addition to having a global reach, the use of the social media minimizes the the costs that are incurred in marketing JetBlue products and services. The company offers the following media tactics: • JetBlue website • GDS (Sabre, Travel port and Amadeus) • Online travel agent sites (Travelocity, Expedia, Orbitz, Priceline, etc.) • Newspapers, • Magazines, • Television, • Radio, • Outdoor billboards, • Mobile marketing programs Timing/scheduling The scheduling by Jet blue has been designed to fit the schedule of the targeted groups, by trying to operate without the blackout days. Budget JetBlue budget is operated by three major factors, which contribute to the operating cash flow of the company; these factors are the expenses, passenger and other sales. Passenger Sales From robust inconsistencies in seat returns, utilization of the operational capacity and seats availability, there is no defined means by which passenger sales can be forecasted, in addition they are neither consistent. Historical inference such as the use of Average Daily Revenue per Available Seat Mile (ADR/ASM) is used for budgeting purposes. Other Sales Other sales by JetBlue have been growing since 2005. As depicted in the SWOT analysis, the company is to invest in sale of other products and services with their flight packages. Charges to baggage transportation have also increased the amount of revenue that is collected by JetBlue, though the company expects the trend to reduce significantly with time. Expenses JetBlue Airways’ largest expenses are fuel and taxes. The challenge that faces the airline industry in the provision of gasoline for the aircrafts affects JetBlue, as well. Maintenance expenses have continuously increased year-over-year, and this is reflected in the percentage costs incurred by the customer per seat. Other expenses such as employee compensation, landing fees, devaluation, aircraft lease, sales, advertising and marketing, are relatively constant in the capacity of percentage of JetBlue’s sales (Theaker , 2011). Operating Cash Flow Operating cash flow is estimated by adding earnings before interest and after taxes, to depreciation and amortization, and then subtracting non-aircraft capital expenditures and additions to working capital. Evaluation The marketing and public relation strategy used by JetBlue has been successful. The company is competing with the legacy flyers and being able to get seasonal flights of over 10 million customers in a competitive market, the company is successful. There are areas in which the company may improve on service delivery, which may result to an increase in the generated profits and collected revenue. Research on the SWOT analysis and the PEST analysis generates information that JetBlue has as challenges as well as advantages. Conclusion JetBlue has had its share of challenges and let downs in the PR sector, but via the use of experienced staff, the company has come out of the challenges unscathed. The market that JetBlue operates in provides numerous challenges, but with the use of a competitive marketing strategy and an effective public relations strategy, the team has a 4% share of the total USA market, and the rates are increasing. References Broom, G. M. (2008). Cutlip and Centers Effective Public Relations (10th ed.). New Jersey: Prentice Hall. Cutlip, S. M., Center, A. H., & Broom, G. M. (2005). Effective Public Relations (9th ed.). London: Prentice Hall. Dilenschneider, R. L., & Bartiromo, M. (2010). The AMA Handbook of Public Relations (1st ed.). New York: AMACOM. Gehrt, J., Moffitt, C., & Carlos, A. (2010). Strategic Public Relations: 10 Principles to Harness the Power of PR. Bloomington, Indiana: Xlibris . Guth, D. W., & Marsh, C. (2011). Public Relations: A Value Driven Approach (5th ed.). Boston: Allyn & Bacon. Hendrix, J. A., & Hayes, D. C. (2009). Public Relations Cases (8th ed.). Belmont, California: Wadsworth Publishing. Newsom, D., Turk, J., & Kruckeberg, D. (2009). This is PR: The Realities of Public Relations (10th ed., Vol. Cengage Advantage Books). Belmont, California: Wadsworth Publishing. Quinton, Brian. (October 1, 2010). Brand, Buzz and Bookings – Why Fly the Other Guy? Chief Marketer(chiefmarketer.com). Retrieved from http://chiefmarketer.com/disciplines/branding/jetblue-marketing-success-plan-1001/index1.html Seitel, F. P. (2010). Practice of Public Relations (11th ed.). London: Prentice Hall. Smith, R. D. (2009). 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