Easyjet Presentation


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Marketing Presenation on the EasyJet Budget Airline Company.

Easyjet Presentation

  1. 3. swot analysis of easyjet
  2. 4. strengths
  3. 5. weaknesses
  4. 6. opportunities
  5. 7. Threats
  6. 8. Question 1 How do easyJet’s marketing objectives and its marketing mix strategy affect its pricing decisions?
  7. 9. EasyJet ’s Mission Statement: “To provide our customers with safe , good value , point-to-point air services . To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers.”
  8. 10. objectives <ul><li>Low fares and high frequency between major European airports </li></ul><ul><li>Consumers willing to pay ( a little ) more for value-added proposition </li></ul><ul><li>Growth based on joining the dots and adding frequency </li></ul>
  9. 11. <ul><li>Segmentation and Targeting :Business and Leisure Consumers Differentiation and Positioning :Flies to all the primary airports in EuropeCommitment to customer service </li></ul>
  10. 12. 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 best form of budget travel in Europe. Price is a crucial positioning factor
  11. 13. <ul><li>Therefore, the marketing mix is based on keeping costs to a minimum to allow the airline to offer the lowest fares possible </li></ul>
  12. 14. <ul><li>Product / Customer solution : Features: Punctual and no-frills Brand name: EASY to pronounce, recognise, and remember Packaging: ORANGE </li></ul>
  13. 15. <ul><li>Place / Convenience : easyJet’s website acts as a main distribution channel for e-ticketing Can be viewed in 18 languages </li></ul>
  14. 16. <ul><li>easyJet advertisements can be seen everywhere, in cities all over Europe from giant billboards to public transport buses. </li></ul>Promotion/Communications :
  15. 17. Question 2 Discuss factors that have affected the nature of costs in the airline industry since 2000. How have these factors affected pricing decisions?
  16. 18. Factors since 2000 <ul><li>Heightened Environmental Consciousness </li></ul><ul><li>Information Age </li></ul><ul><li>Terrorism </li></ul><ul><li>Energy Crisis </li></ul>
  17. 19. Heightened environmental consciousness <ul><li>2002's World Summit on Sustainable Development </li></ul><ul><li>Environmental Taxes </li></ul><ul><li>Cleaner plane models/engines </li></ul>
  18. 20. information age <ul><li>Broadband mainstream since 2000s </li></ul><ul><li>Introduction of advanced technology </li></ul><ul><li>Less cost for labour and infrastructure and less time incurred to complete the same job </li></ul>
  19. 21. terrorism (9/11 attack) <ul><li>9/11 attacks </li></ul><ul><li>Security procedures introduced </li></ul><ul><li>High-tech detection hardware </li></ul><ul><li>Higher costs incurred for safety and peace of mind </li></ul><ul><li>Aviation insurance </li></ul>
  20. 22. energy crisis <ul><li>2000s energy crisis </li></ul><ul><li>Rising cost of crude oil </li></ul><ul><li>Higher costs are translated to airline industry as jet fuel is processed from crude oil </li></ul><ul><li>Hedging policy reduces fuel cost increase to a limited extent </li></ul>
  21. 23. Average u.s. jet fuel price
  22. 24. airfare pricing trends <ul><li>Low enough to attract demand, high enough to offset increases in cost </li></ul><ul><li>Airfare price range depends dramatically on the following variables listed in order of importance: </li></ul><ul><ul><li>Competition on Route </li></ul></ul><ul><ul><li>Seat Demand </li></ul></ul><ul><ul><li>Distance of Route </li></ul></ul><ul><ul><li>Seat Supply </li></ul></ul><ul><ul><li>Fuel Prices </li></ul></ul><ul><li>Ancillary fees charged separately </li></ul>
  23. 25. <ul><li>Southwest reported that its average one-way fare increased 19 percent to $132, not including government taxes and fees. </li></ul><ul><li>JetBlue reported a 10 percent jump in average fares (to $139 one way). </li></ul><ul><li>American Airlines reported a 14 percent rise in its passenger yield, an industry measure that represents the average fare paid. </li></ul><ul><li>None of these numbers include the extra fees, so travellers are most likely paying even more for a flight than these double-digit fare increases indicate </li></ul>
  24. 26. <ul><li>1995 Q1 to 2010 q2 </li></ul>Average air fares
  25. 27. Factors decreasing prices <ul><li>Introduction of Information Technology (IT) </li></ul>
  26. 28. factors increasing prices <ul><li>Environmentalism </li></ul><ul><li>Terrorism </li></ul><ul><li>Energy Crisis </li></ul>
  27. 29. OUTCOME <ul><li>Higher Costs Are Translated To The Airfares </li></ul>
  28. 30. Question 3 How do the nature of the airline market and the demand for airline service affect easyJet’s decisions?
  29. 31. nature of airline market <ul><li>Oligopolistic competition </li></ul><ul><li>Consists of some older and major conventional airlines </li></ul><ul><li>A few up and coming low cost carriers </li></ul><ul><li>Rival consciousness prevalent </li></ul>
  30. 32. Demand for airline service (from easyjet’s viewpoint) <ul><li>The price-demand relationship: lower the price, the higher the demand </li></ul><ul><li>easyJet has positioned itself as low-cost airline </li></ul><ul><li>Its pricing strategy is based on Good Value Pricing </li></ul>
  31. 33. price elasticity of demand (for easyjet services) <ul><li>easyJet faces a consumer DD that is highly elastic </li></ul><ul><li>i.e. There will be a large change in Q d for a small change in price </li></ul>
  32. 34. reasons for high ped <ul><li>Its services are no-frills airplane flights. These are not unique . </li></ul><ul><li>Relatively easy to find similar substitutes </li></ul><ul><li>Total expenditure of airline tickets is a significant proportion of Y d </li></ul>
  33. 35. easyjet marketing decisions <ul><li>Nature of market + DD product = Marketing Decisions </li></ul>
  34. 36. Competing with other airlines
  35. 38. Question 4 What general pricing approaches have airlines pursued?
  36. 39. Pricing strategies matrix Quality LOW HIGH LOW P r i c e HIGH ECONOMY PENETRATION SKIMMING PREMIUM
  37. 40. Full service carriers <ul><li>Price Discrimination </li></ul><ul><ul><ul><li>Based on fare classes </li></ul></ul></ul><ul><ul><ul><li>Charge each customers as much as they are willing to pay </li></ul></ul></ul>
  38. 41. <ul><ul><li>Value-Added Pricing </li></ul></ul><ul><ul><ul><li>Offering passengers a superior range of ground and onboard services </li></ul></ul></ul><ul><ul><ul><li>In return for a much HIGHER fare </li></ul></ul></ul>
  39. 42. <ul><li>“ Fences” </li></ul><ul><ul><li>Must be built to prevent passengers from substituting higher fares for discounted tickets </li></ul></ul><ul><ul><li>In the form of minimum stay requirements, date and/or route change penalties </li></ul></ul>
  40. 43. <ul><li>Different Class of Services </li></ul><ul><ul><li>First, Business, Economy Plus, Economy </li></ul></ul><ul><ul><li>Business class may cost 5-10 times more than Economy but the service costs much lesser than that </li></ul></ul>
  41. 44. <ul><li>Reverse Price System </li></ul><ul><ul><li>The further the date of departure, the cheaper the ticket </li></ul></ul><ul><ul><li>Encourages customers to book early </li></ul></ul><ul><ul><li>Able to gauge demand for every flight </li></ul></ul>Low cost carriers
  42. 45. <ul><li>No “Frills” </li></ul><ul><ul><li>No free meals and beverages onboard, no frequent fliers program etc </li></ul></ul><ul><ul><li>More seats are available in one flight to maximise profits </li></ul></ul>
  43. 46. <ul><li>One-way Ticketing Policy </li></ul><ul><ul><li>Customers only required to buy one-way ticket </li></ul></ul><ul><ul><li>Need to purchase two one-way tickets for a round trip </li></ul></ul><ul><ul><li>Gives full flexibility to plan their trip as they please </li></ul></ul><ul><ul><li>Appeal to the business travellers </li></ul></ul>
  44. 47. Question 5 Do you think that EasyJet will be able to continue to maintain a competitive advantage based on price? What will happen if other carriers match the low-price leader?
  45. 48. Current competitive advantages based on prices <ul><li>No frills </li></ul><ul><li>Lower operating costs </li></ul><ul><li>High productivity of resources Increasing revenue </li></ul><ul><li>Reduced distribution costs </li></ul>
  46. 49. ARGUMENTS AGAINST MAINTAINING COMPETITIVE ADVANTAGES BASED ON PRICES <ul><li>Low cost airline industry increasingly competitive </li></ul><ul><li>Competitors serving secondary airports (More cost savings) </li></ul><ul><li>Natural limitations on price; Increases in fuel price and airport charges </li></ul>
  47. 50. <ul><li>Competitors imitate online booking process and offer competitive flight rates </li></ul><ul><li>Low cost airline industry characterized by mergers and acquisitions </li></ul>
  48. 51. Examples of mergers/acquisition
  49. 52. Maintaining NON-PRICE BASED COMPETITIVE ADVANTAGES THROUGH DIFFERENTIATION <ul><li>Flying to main airports in cities </li></ul>
  50. 53. <ul><li>Improved online booking system (User friendly, interactive) </li></ul>
  51. 54. <ul><li>City, Bars + Nightlife, Shopping, Eating, Cafes, Events </li></ul><ul><li>EasyJetPlus Card </li></ul>
  52. 55. <ul><li>Punctuality and safety </li></ul>
  53. 56. <ul><li>Flexibility </li></ul>
  54. 57. recommendations
  55. 58. <ul><li>Background: </li></ul><ul><li>Businessman </li></ul><ul><li>Age: 25-39 </li></ul><ul><li>Middle Income </li></ul><ul><li>High reliance on information technology </li></ul><ul><li>Independent </li></ul><ul><li>Work for SMEs (size of the company price sensitive) </li></ul><ul><li>Job scope requires them to fly frequently </li></ul><ul><li>Needs: </li></ul><ul><li>Punctuality of flights </li></ul><ul><li>Adequate amount of comfort </li></ul><ul><li>Flexible reservation systems </li></ul><ul><li>Affordability </li></ul>Profile #1: Winston
  56. 60. INFRASTRUCTURE <ul><li>Develop infrastructure for in-flight Wireless Internet service </li></ul><ul><li>Provide in-flight Wireless Internet for FREE </li></ul>
  57. 61. discounted contracts <ul><li>Develop discounted contracts with SMEs </li></ul><ul><li>Partner with prominent SMEs and provide their staff with benefits when they travel with easyJet </li></ul>
  58. 62. business-select seats <ul><li>Implementation of business-select seats/tickets </li></ul><ul><li>Provide front row seats with more leg rooms </li></ul>
  59. 63. frequent flyer program <ul><li>Implementation of frequent flyer program-loyalty based benefits to ensure continued revenue </li></ul><ul><ul><ul><ul><ul><li>Eg. KrisFlyer </li></ul></ul></ul></ul></ul><ul><li>Current easyJet card has only membership-based benefits </li></ul>
  60. 66. <ul><li>Background: </li></ul><ul><li>Backpacker </li></ul><ul><li>Single </li></ul><ul><li>Age: 19-29 </li></ul><ul><li>High reliance on information technology </li></ul><ul><li>Independent </li></ul><ul><li>Adventure Seeking </li></ul><ul><li>Low family commitment </li></ul><ul><li>Needs: </li></ul><ul><li>Affordability </li></ul><ul><li>Flexibility </li></ul><ul><li>Relish challenges/fresh experiences </li></ul><ul><li>Backpackers/locals interaction </li></ul>Profile #2: Shermine
  61. 69. <ul><li>Facebook and Twitter </li></ul><ul><li>Social Networking Sites to keep EasyJet backpackers informed for the latest tourist attractions </li></ul>
  62. 70. <ul><li>Discounts for Reliable & Low-Cost Accomodation </li></ul><ul><ul><li>Exclusively for easyBIG members </li></ul></ul>
  63. 71. easyjet backpacker forum (Ebf) <ul><li>Provide a common platform for exchange of information and preferences on tourist destinations </li></ul><ul><li>Inform backpackers of upcoming EasyJet promotions </li></ul><ul><li>Tourists with common interest can travel together </li></ul>
  64. 72. <ul><li>EasyJet Merchandise </li></ul><ul><ul><li>Partner with an established baggage brand (eg, Crumpler, Timbuk2) </li></ul></ul><ul><ul><li>Allow members to accumulate flyer points to redeem such merchandize </li></ul></ul><ul><ul><li>This can create a sense of belonging </li></ul></ul>
  65. 73. Links between Recommendations and Profiling of Backpackers
  66. 74. Generic recommendations <ul><li>Sequence of boarding </li></ul><ul><ul><li>To minimise obstruction </li></ul></ul>
  67. 75. <ul><li>Implement full refund for cancellations within 24 hrs </li></ul><ul><ul><li>Abolish cancellation fee </li></ul></ul><ul><ul><li>Psychological comfort – peace of mind </li></ul></ul><ul><ul><li>Eg, For Businessmen- meeting time changes </li></ul></ul><ul><ul><li>For Backpackers – Unforeseen circumstances such as weather conditions / political situations </li></ul></ul>
  68. 76. conclusion “ Come on, let’s fly!!”