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Transcript

  • 1. SWOT ANALYSIS OF EASYJET
  • 2. STRENGTHS
  • 3. WEAKNESSES
  • 4. OPPORTUNITIES
  • 5. THREATS
  • 6. Question 1How do easyJet’s marketing objectives andits marketing mix strategy affect its pricingdecisions?
  • 7. easyJet’s Mission Statement:“To provide our customers with safe, good value, point-to-point air services . To effect and to offer aconsistent and reliable product and faresappealing to leisure and business markets on a range ofEuropean routes. To achieve this we will develop our people
  • 8. OBJECTIVESLow fares and high frequency between majorEuropean airportsConsumers willing to pay ( a little ) more for value-added propositionGrowth based on joining the dots and addingfrequency
  • 9. Segmentation and Targeting:•Business and Leisure ConsumersDifferentiation and Positioning:•Flies to all the primary airports in Europe•Commitment to customer service
  • 10. With recognition for providing more efficient, low-cost flights,whilst maintaining as a high quality of service as possible,easyJet is positioning itself to its consumer base as the bestform of budget travel in Europe. Price is a crucial positioning factor
  • 11. •Therefore, the marketing mix is based on keepingcosts to a minimum to allow the airline to offerthe lowest fares possible
  • 12. Product / Customer solution:‣Features: Punctual and no-frills‣Brand name: EASY to pronounce, recognise, and remember‣Packaging: ORANGE
  • 13. Place / Convenience:• easyJet’s website acts as a main distribution channel for e-ticketing• Can be viewed in 18 languages
  • 14. Promotion/Communications:easyJet advertisements can beseen everywhere, in cities allover Europe from giantbillboards to public transportbuses.
  • 15. Question 2Discuss factors that have affected the natureof costs in the airline industry since 2000.How have these factors affected pricingdecisions?
  • 16. FACTORS SINCE 2000Heightened Environmental ConsciousnessInformation AgeTerrorismEnergy Crisis
  • 17. HEIGHTENED ENVIRONMENTAL CONSCIOUSNESS2002s World Summit on SustainableDevelopmentEnvironmental TaxesCleaner plane models/engines
  • 18. INFORMATION AGEBroadband mainstream since2000sIntroduction of advancedtechnologyLess cost for labour andinfrastructure and less timeincurred to complete the samejob
  • 19. TERRORISM9/11 attacksSecurity procedures introducedHigh-tech detection hardwareHigher costs incurred for safety andpeace of mindAviation insurance
  • 20. ENERGY CRISIS2000s energy crisisRising cost of crude oilHigher costs are translated toairline industry as jet fuel isprocessed from crude oilHedging policy reduces fuel costincrease to a limited extent
  • 21. AVERAGE U.S. JET FUEL PRICE
  • 22. AIRFARE PRICING TRENDSLow enough to attract demand, high enough to offset increases incostAirfare price range depends dramatically on the following variableslisted in order of importance: Competition on Route Seat Demand Distance of Route Seat Supply Fuel Prices
  • 23. AVERAGE AIR FARES 1995 Q1 TO 2010 Q2
  • 24. FACTORS DECREASING PRICESIntroduction of Information Technology (IT)
  • 25. FACTORS INCREASING PRICESEnvironmentalismTerrorismEnergy Crisis
  • 26. OUTCOME➡ Higher Costs Are Translated To The Airfares
  • 27. Question 3How do the nature of the airline marketand the demand for airline service affecteasyJet’s decisions?
  • 28. NATURE OF AIRLINE MARKETOligopolistic competitionConsists of some older and majorconventional airlinesA few up and coming low costcarriersRival consciousness prevalent
  • 29. DEMAND FOR AIRLINE SERVICE(FROM EASYJET’S VIEWPOINT)The price-demand relationship: lower theprice, the higher the demandeasyJet has positioned itself as low-costairlineIts pricing strategy is based on GoodValue Pricing
  • 30. PRICE ELASTICITY OF DEMAND (FOR EASYJET SERVICES)easyJet faces a consumer DD that is highly elastici.e. There will be a large change in Qd for a smallchange in price
  • 31. REASONS FOR HIGH PEDIts services are no-frills airplaneflights. These are not unique.Relatively easy to find similarsubstitutesTotal expenditure of airline tickets is asignificant proportion of Yd
  • 32. EASYJET MARKETING DECISIONSNature of market + DDproduct= Marketing Decisions
  • 33. COMPETING WITH OTHER AIRLINES
  • 34. Question 4What general pricing approaches haveairlines pursued?
  • 35. PRICING STRATEGIES MATRIX Quality LOW HIGH LOW ECONOMY PENETRATIONPrice HIGH SKIMMING PREMIUM
  • 36. FULL SERVICE CARRIERSPrice Discrimination Based on fare classes Charge each customers as much as they are willing to pay
  • 37. Value-Added Pricing Offering passengers a superior range of ground and onboard services In return for a much HIGHER fare
  • 38. “Fences” Must be built to prevent passengers from substituting higher fares for discounted tickets In the form of minimum stay requirements, date and/ or route change penalties
  • 39. Different Class of Services First, Business, Economy Plus, Economy Business class may cost 5-10 times more than Economy but the service costs much lesser than that
  • 40. LOW COST CARRIERSReverse Price System The further the date of departure, the cheaper the ticket Encourages customers to book early Able to gauge demand for every flight
  • 41. No “Frills” No free meals and beverages onboard, no frequent fliers program etc More seats are available in one flight to maximise profits
  • 42. One-way Ticketing Policy Customers only required to buy one-way ticket Need to purchase two one-way tickets for a round trip Gives full flexibility to plan their trip as they please Appeal to the business travellers
  • 43. Question 5Do you think that EasyJet will be able tocontinue to maintain a competitiveadvantage based on price? What will happenif other carriers match the low-price leader?
  • 44. CURRENT COMPETITIVEADVANTAGES BASED ON PRICESNo frillsLower operating costsHigh productivity of resourcesIncreasing revenueReduced distribution costs
  • 45. ARGUMENTS AGAINST MAINTAININGCOMPETITIVE ADVANTAGES BASED ON PRICESLow cost airline industry increasingly competitiveCompetitors serving secondary airports (More cost savings)Natural limitations on price; Increases in fuel price andairport charges
  • 46. Competitors imitate online booking process andoffer competitive flight ratesLow cost airline industry characterized by mergersand acquisitions
  • 47. Example of mergers/acquisition
  • 48. MAINTAINING NON-PRICE BASEDCOMPETITIVE ADVANTAGES THROUGH DIFFERENTIATIONFlying to main airports incities
  • 49. Improved online booking system (User friendly,interactive)
  • 50. City, Bars + Nightlife, Shopping, Eating, Cafes,EventsEasyJetPlus Card
  • 51. Punctuality and safety
  • 52. Flexibility
  • 53. RECOMMENDATIONS
  • 54. Profile #1: WinstonBackground: ★Businessman ★Age: 25-39 ★Middle Income★High reliance on information technology★Independent★Work for SMEs (size of the company price sensitive)★Job scope requires them to fly frequentlyNeeds:★Punctuality of flights★Adequate amount of comfort★Flexible reservation systems★Affordability
  • 55. INFRASTRUCTUREDevelop infrastructure for in-flightWireless Internet serviceProvide in-flight Wireless Internet forFREE
  • 56. DISCOUNTED CONTRACTSDevelop discounted contracts withSMEsPartner with prominent SMEs andprovide their staff with benefitswhen they travel with easyJet
  • 57. BUSINESS-SELECT SEATS Implementation of business- select seats/tickets Provide front row seats with more leg rooms
  • 58. FREQUENT FLYER PROGRAMImplementation of frequentflyer program-loyalty basedbenefits to ensure continuedrevenue Eg. KrisFlyerCurrent easyJet card has onlymembership-based benefits
  • 59. Profile #2: ShermineBackground: ✴Backpacker ✴Single ✴ Age: 19-29✴High reliance on information technology✴Independent !"#$%& ()*+,,+(&&✴Adventure Seeking✴Low family commitment -.#/)0"1& 2)(3+$&Needs: ?)/39)/3+(;& 4+,5& /%),,+16+(7&✴ Affordability ?#.6+$& +89+(:+1/+& ;++3+(&✴ Flexibility ()*+,,+(&✴ Relish challenges/fresh experiences <"(3:16& =",:.)>&✴ Backpackers/locals interaction 2)3+(;&
  • 60. Facebook and Twitter➡ Social Networking Sites to keep EasyJet backpackers informed for the latest tourist attractions
  • 61. Discounts for Reliable & Low-CostAccomodation Exclusively for easyBIG members
  • 62. EASYJET BACKPACKER FORUM (EBF)Provide a common platform forexchange of information andpreferences on tourist destinationsInform backpackers of upcomingEasyJet promotionsTourists with common interest cantravel together
  • 63. EasyJet Merchandise Partner with an established baggage brand (eg, Crumpler, Timbuk2) Allow members to accumulate flyer points to redeem such merchandize This can create a sense of belonging
  • 64. Links between Recommendations and Profiling of Backpackers
  • 65. GENERIC RECOMMENDATIONSSequence of boarding To minimise obstruction
  • 66. Implement full refund for cancellations within 24 hrs Abolish cancellation fee Psychological comfort – peace of mind Eg, For Businessmen- meeting time changes For Backpackers – Unforeseen circumstances such as weather conditions / political situations
  • 67. CONCLUSION
  • 68. CONCLUSION
  • 69. CONCLUSION “Come on, let’s
  • 70. CONCLUSION fly!!” “Come on, let’s