EasyJet Analysis

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EasyJet analysis for Marketing Module

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  • http://2009annualreport.easyjet.com/index.html
  • http://2009annualreport.easyjet.com/index.html
  • http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
  • http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
  • http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
  • Ryanair – slightly cheaper air fares as they fly to secondary airport
  • http://www.comparebroker.com/blog/2010/02/18/oil-prices-factors-reasons-behind-why-oil-prices-fluctuate/
  • http://www.comparebroker.com/blog/2010/02/18/oil-prices-factors-reasons-behind-why-oil-prices-fluctuate/
  • Government Regulations - http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
    Government Regulations - http://news.bbc.co.uk/2/hi/8626505.stm
  • Government Regulations - http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
    Government Regulations - http://news.bbc.co.uk/2/hi/8626505.stm
  • Government Regulations - http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
    Government Regulations - http://news.bbc.co.uk/2/hi/8626505.stm
  • http://www.london.edu/facultyandresearch/research/docs/CM_04-904.pdf
  • Punctuality - http://www.easyjet.com/en/news/20000414_01.html
  • Aircraft Fleet
    Flies young fleet (minimise maintenance costs incurred)
  • http://www.docshare.com/doc/98170/Easyjet-cost-strategy
  • http://www.docshare.com/doc/98170/Easyjet-cost-strategy
  • Middle East sector - http://arabianaerospace.aero/article.php?section=events&article=airport-support-systems-slowing-down-business-aviation-potential-in-gulf
    http://www.ameinfo.com/96238.html
  • Middle East sector - http://arabianaerospace.aero/article.php?section=events&article=airport-support-systems-slowing-down-business-aviation-potential-in-gulf
    http://www.ameinfo.com/96238.html
  • EasyJet Analysis

    1. 1.  Introduction to easyJet  Factors affecting the airline industry  SWOT  Strategies of easyJet  Recommendations  Conclusion
    2. 2.  British budget airline, 2nd largest low cost carrier in Europe  Founded by Sir Stelios Haji-Ioannou in 1995  Part of EasyGroup  easyHotel  easyBus  easyCar
    3. 3.  Serves major airports in key markets  Targeted market segment  Business travelers due to high frequency of flights and convenience
    4. 4.  Strategic priorities: 1. Safety 2. Building Europe’s No 1 AirTransport Network 3. Develop a winning customer proposition 4. Deliver low cost and maximise margins
    5. 5.  Strategic priorities: 1. Safety • Flight management data • Safety management system 2. Building Europe’s No 1 AirTransport Network • Build frequency and stability to core routes • Number of aircraft based in countries is constantly being reviewed
    6. 6. 3. Develop a winning customer proposition • Arrive at destination within 15min of scheduled time • Tailored marketing email offer according to preference of individual customer  Strategic priorities: 4. Deliver low cost and maximise margins • Focus on fuel conservation • Own family of air craft which is cheaper to operate
    7. 7.  General factors affecting strategies and decisions within airline industry  Market demand  Competitors  Fluctuation in oil prices  Threat from terrorism  Natural disaster / epidemic  Government regulation
    8. 8.  Market Demand  Increased demand for air travel due to: ▪ Reduction in air fares ▪ Increased in average incomes
    9. 9.  Significant increase in short haul travels. Increase to 187million
    10. 10.  Competitive Market ▪ Cannot influence on-going market price  Travelling considered as luxurious good. ▪ Demand is elastic Big drop in demand Small increase in price
    11. 11.  Competitors  Presence of competitors offering similar products  Comparison of price can be done easily through internet
    12. 12.  Fluctuation in oil prices  Due to instability in middle east, influence of cartel  Oil resource drying up
    13. 13.  Increases in oil prices will increase cost of production  Erode profit margin  Consumer have to pay more
    14. 14.  Threat from terrorism  Fear of flying  May avoid air travel until psychological shock is overcome  E.g. ▪ Bombing in London on 7th July 2005 ▪ US recently issued a travel alert to travel in Europe
    15. 15.  Epidemic / Natural Disaster  SARS (November 2002) ▪ Fear of being contracted  Volcanic ash cloud over Europe (April 2010) ▪ Halting of aircraft ▪ Loss of $200 million in a day
    16. 16.  Government regulation  Environmental degradation becoming a major issue  Increase in emphasis on sustainable development ▪ Sustainable marketing – invest in modern fuel efficient aircraft operating at high capacity
    17. 17.  Dynamic Pricing  Adjust prices continually when flight date nearing  Promotional Pricing  Temporary reduction of price to create excitement
    18. 18. Strengths Weaknesses Opportunities Threats easyJet
    19. 19.  Flies to primary airports  Convenience for business travellers on tight schedules  Low cost offering  No frills airline – non essential features removed Eg. Light freshments  Reverse Pricing System The earlier you book, the cheaper the air ticket
    20. 20.  Ease of booking flights  24/7 Internet booking  Phone booking(slowly phasing out)  Fast turnaround time of aircrafts  Planes ready to take off within 30 minutes from landing  Efficient  Increase frequency of flights
    21. 21.  Highly distinctive branding  Featured on Airline TV series, spread name in UK  Bright orange colours  Catchy slogans Eg : “The web’s favourite airline” “Come on, let’s fly”  Website livery painted on plane
    22. 22.  High-density seating  Discomfort for passengers during long distance flights  Hassle in changing bookings  Top up difference in price depending on current price level  Relying solely on price is not a good strategy  Competitors may draw customers away by offering lower prices
    23. 23.  Weakening Pound against Euro  Increased demand in travel from European countries to Britain  Cater more flights  Rising markets  Middle East  China
    24. 24.  Brand names  Easy to copy  Confuses customers  Damage the brand name
    25. 25.  Competitors  Ryanair •Europe largest low-cost carrier in terms of market share •Fly to secondary airport  Air Berlin •Germany’s 2nd largest airline •Offer free snack and drinks •Fly out of Europe
    26. 26.  Alternative modes of transport  Eurorail - Trains  Comparable duration and price for short distances
    27. 27.  4 Ps  Place  Promotion  Product  Price  Other strategies
    28. 28.  Place  Online booking website  Telephone booking
    29. 29.  Promotion  Internet business model ▪ Slowly phasing out telephone sales operation  Aggressive branding ▪ Bright orange colour ▪ Catchy slogans ▪ Website livery on airplane ▪ Featured in AirlineTV Series
    30. 30.  Product  Offers one-way tickets for passengers ▪ Flexibility of travelling  No frill experience
    31. 31.  Price  Good-value pricing – right combination of quality and price ▪ Everyday low pricing  Due to cost advantage strategies ▪ Does not provide free on board snacks and beverages ▪ No business class seats ▪ Direct marketing – use of internet
    32. 32.  Optional-Product Pricing – Pricing of complementary products ▪ Food & Beverages ▪ Priority Boarding Pass  Dynamic Pricing - prices vary according to demand and date of booking ▪ Charges low prices for early bookings
    33. 33.  Diversification  Unable to rely on low-cost approach  EasyGroup provides complementary services ▪ Offer a bundled deal which increases convenience for customer. ▪ Ryanair also use similar approach but tie up with partners to earn commissions ▪ easyJet will have more control over promotion package
    34. 34.  Environmental Strategy  To be efficient in air ▪ Efficient use of aircraft ▪ Fly short haul only  To be efficient on the ground ▪ Using less ground equipment ▪ Keep waste to minimum
    35. 35.  Current Situation /Trend  Global warming  Increased air pollution ▪ Various sources such as factories, power plants, motor vehicles and aircrafts ▪ Aircrafts are a major contributor of carbon dioxide gases to the atmosphere
    36. 36.  Increase emphasis on sustainable development  Green initiatives ▪ Reduce ▪ Reuse ▪ Recycle
    37. 37. What we propose easyJet should do  In view of the current situation  Actively market easyJet as a Green Airline  Allow consumers to see easyJet as intrinsically associated with green issues
    38. 38.  PotentialAdvantage for easyJet  Improve branding of easyJet (Societal Marketing) ▪ Concerned with making a positive impact on the environment ▪ Customers will associate easyJet with being green “Consumers not just buying an air ticket, they are buying into something bigger, and that is reduced air pollution”
    39. 39.  Lower cost of operation  Possible free or extended advertising from green groups  Fuel efficient engines allow greater savings
    40. 40.  PotentialAdvantages for third parties  Companies’ whose staff travel with easyJet ▪ Improve image of companies
    41. 41.  How to do it  Seek constant improvements into greener technology  Jet engines that reduce fuel consumption and emit less harmful gases ▪ NASA is developing technology that would permit Boeing 737 and Airbus A320 jets, in 2018, to burn 25% less fuel and reduce nitrogen oxide emissions by 80%.
    42. 42.  Catchy slogan its easyJet being green…
    43. 43.  Cannot rely solely on low pricing  Only one element of company’s broader marketing strategy  Does not retain customer’s loyalty  Seek to differentiate from competitors  Green Initiatives  Cost savings due to fuel efficiency  Carry on providing low cost

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