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Easyjet Presentation

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Easyjet Presentation

  1. 1. SWOT ANALYSIS OF EASYJET
  2. 2. STRENGTHS
  3. 3. WEAKNESSES
  4. 4. OPPORTUNITIES
  5. 5. THREATS
  6. 6. Question 1How do easyJet’s marketing objectives andits marketing mix strategy affect its pricingdecisions?
  7. 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. 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. 9. Segmentation and Targeting:•Business and Leisure ConsumersDifferentiation and Positioning:•Flies to all the primary airports in Europe•Commitment to customer service
  10. 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. 11. •Therefore, the marketing mix is based on keepingcosts to a minimum to allow the airline to offerthe lowest fares possible
  12. 12. Product / Customer solution:‣Features: Punctual and no-frills‣Brand name: EASY to pronounce, recognise, and remember‣Packaging: ORANGE
  13. 13. Place / Convenience:• easyJet’s website acts as a main distribution channel for e-ticketing• Can be viewed in 18 languages
  14. 14. Promotion/Communications:easyJet advertisements can beseen everywhere, in cities allover Europe from giantbillboards to public transportbuses.
  15. 15. Question 2Discuss factors that have affected the natureof costs in the airline industry since 2000.How have these factors affected pricingdecisions?
  16. 16. FACTORS SINCE 2000Heightened Environmental ConsciousnessInformation AgeTerrorismEnergy Crisis
  17. 17. HEIGHTENED ENVIRONMENTAL CONSCIOUSNESS2002s World Summit on SustainableDevelopmentEnvironmental TaxesCleaner plane models/engines
  18. 18. INFORMATION AGEBroadband mainstream since2000sIntroduction of advancedtechnologyLess cost for labour andinfrastructure and less timeincurred to complete the samejob
  19. 19. TERRORISM9/11 attacksSecurity procedures introducedHigh-tech detection hardwareHigher costs incurred for safety andpeace of mindAviation insurance
  20. 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. 21. AVERAGE U.S. JET FUEL PRICE
  22. 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. 23. AVERAGE AIR FARES 1995 Q1 TO 2010 Q2
  24. 24. FACTORS DECREASING PRICESIntroduction of Information Technology (IT)
  25. 25. FACTORS INCREASING PRICESEnvironmentalismTerrorismEnergy Crisis
  26. 26. OUTCOME➡ Higher Costs Are Translated To The Airfares
  27. 27. Question 3How do the nature of the airline marketand the demand for airline service affecteasyJet’s decisions?
  28. 28. NATURE OF AIRLINE MARKETOligopolistic competitionConsists of some older and majorconventional airlinesA few up and coming low costcarriersRival consciousness prevalent
  29. 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. 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. 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. 32. EASYJET MARKETING DECISIONSNature of market + DDproduct= Marketing Decisions
  33. 33. COMPETING WITH OTHER AIRLINES
  34. 34. Question 4What general pricing approaches haveairlines pursued?
  35. 35. PRICING STRATEGIES MATRIX Quality LOW HIGH LOW ECONOMY PENETRATIONPrice HIGH SKIMMING PREMIUM
  36. 36. FULL SERVICE CARRIERSPrice Discrimination Based on fare classes Charge each customers as much as they are willing to pay
  37. 37. Value-Added Pricing Offering passengers a superior range of ground and onboard services In return for a much HIGHER fare
  38. 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. 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. 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. 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. 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. 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. 44. CURRENT COMPETITIVEADVANTAGES BASED ON PRICESNo frillsLower operating costsHigh productivity of resourcesIncreasing revenueReduced distribution costs
  45. 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. 46. Competitors imitate online booking process andoffer competitive flight ratesLow cost airline industry characterized by mergersand acquisitions
  47. 47. Example of mergers/acquisition
  48. 48. MAINTAINING NON-PRICE BASEDCOMPETITIVE ADVANTAGES THROUGH DIFFERENTIATIONFlying to main airports incities
  49. 49. Improved online booking system (User friendly,interactive)
  50. 50. City, Bars + Nightlife, Shopping, Eating, Cafes,EventsEasyJetPlus Card
  51. 51. Punctuality and safety
  52. 52. Flexibility
  53. 53. RECOMMENDATIONS
  54. 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. 55. INFRASTRUCTUREDevelop infrastructure for in-flightWireless Internet serviceProvide in-flight Wireless Internet forFREE
  56. 56. DISCOUNTED CONTRACTSDevelop discounted contracts withSMEsPartner with prominent SMEs andprovide their staff with benefitswhen they travel with easyJet
  57. 57. BUSINESS-SELECT SEATS Implementation of business- select seats/tickets Provide front row seats with more leg rooms
  58. 58. FREQUENT FLYER PROGRAMImplementation of frequentflyer program-loyalty basedbenefits to ensure continuedrevenue Eg. KrisFlyerCurrent easyJet card has onlymembership-based benefits
  59. 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. 60. Facebook and Twitter➡ Social Networking Sites to keep EasyJet backpackers informed for the latest tourist attractions
  61. 61. Discounts for Reliable & Low-CostAccomodation Exclusively for easyBIG members
  62. 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. 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. 64. Links between Recommendations and Profiling of Backpackers
  65. 65. GENERIC RECOMMENDATIONSSequence of boarding To minimise obstruction
  66. 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. 67. CONCLUSION
  68. 68. CONCLUSION
  69. 69. CONCLUSION “Come on, let’s
  70. 70. CONCLUSION fly!!” “Come on, let’s
  • WallStBrainTrust

    Jun. 20, 2015
  • Mitchell7519

    Apr. 3, 2012
  • emmariegwn

    Sep. 11, 2011

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