I. Task 1
A. Explain each of the marketing mix variables and what they mean in the marketing context.
1. Product
In the service industry, products are produced to satisfy the needs and wants of the target market. The production and consumption of the product are simultaneously done. Besides that, the product is different, intangible, and unstable. Moreover, the product should meet consumers’ needs or how they want it for. Additionally, it should perform and it should be what the consumers are expecting to get (Turnbull, 2012).
2. Price
Price is the second P in the formula. Pricing is to make the product low-cost to the target market and reflect the value of benefits provided. However, this does not mean it should be the cheapest one. It is
Explain how the products of EasyJet are developed to sustain competitive advantage.
According to Porter (2004), there are two type of competitive advantages which are cost advantage and differentiation advantage. He stated that a company gains cost advantage when it provides the same products or services as its competitors with a lower cost. EasyJet has gained this advantage as it offers flights to similar destinations when compared with other airlines such as Lufthansa, British Airways, and Air France. However, EasyJet’s cost is lower than those airlines (Porter, 2004).
In terms of differentiation advantage strategy, EasyJet has always targeted at offering value for money for its passengers by providing punctual flights and flexibility for them. EasyJet and Ryanair have the same price tags on their tickets. However, EasyJet flies to major European destinations while Ryanair lands at airports of smaller cities (easyJet Media center, 2014).
B. Explain how distribution is arranged by EasyJet to provide customer convenience
In order to reduce the commission, EasyJet avoids resellers and distribution partners. Therefore, direct marketing strategy has been used as a distribution channel by EasyJet. This strategy has ensured EasyJet’s ticket selling price to the passengers is cut down, yet the company still has totally direct control in sales. Additionally, EasyJet handles its own customer
- People: According to Carolyn McCall, Chief Executive of EasyJet, people lie at the heart of its business. EasyJet is committed to listening to its people and engaging with them to improve what the company should do and how to do it. The most people that EasyJet employs are in Luton (United Kingdom), where the company has strong links with the local community. EasyJet’s priority is to develop good leaders and managers to keep the company strong (Ablin, et al., 2013).
- Physical evidence: Although Easy Jet is based mainly online now, Easy Jet are still booked through travel agents or in the airport itself. Physically offline Easy Jet have recently in the previous few months been advertising in Sainsbury’s stores by staff (Europe by easyJet, 2010).
- Process: There is no check in. You just simply show your passport and supply your reference number. You can select a preferred seat with an extra fee. Otherwise, it is first come, first served basis. EasyJet avoids using air bridges as the company is a low cost carrier. However, there are buses taking you to the aircraft or you can walk to it. Baggage is deposited directly onto the terminal, which is quick (Europe by easyJet,
The following value chain, which focuses on Spirit Airlines, is representative of most of the firms in the Ultra Low-Cost Airline industry. Spirit is the industry leader in many areas such as operational efficiencies/cost structure, aircraft fleet management, brand/network and growth. The firm, however, trails industry foes in areas such as customer service and operational reliability and recoverability. While most in this segment pursue the cost-leader competitive strategy, Spirit has demonstrated the most effective model to date – whether the model is the most sustainable remains to be seen.
Spirit Airlines has long been considered an unorthodox airline. They, of course, address all four P’s in their marketing strategy; however, they focus a large amount of their effort on price and promotion. They focus on cutting price through “unbundling”. They focus on promotion through taking advantage of social issues and breaking news. Many advertisements and deals promoted by Spirit have given the public a definite shock-factor. Spirit has made two objectives very clear: they are furious at getting the customer the lowest fare possible by any means necessary, and they will similarly use any means necessary to get those potential customers to notice those fares. Such a blatant marketing strategy works. Even going up against some big competition, Spirit finds ways to be competitive and successful in flagrant fashion.
Both airlines are Legacy Carriers (Holloway, 2008), each having a domestic American network and an international network. Each operates a hub and spoke network; American from hubs at Dallas Fort Worth, John F Kennedy NY, Los Angeles, Miami and Chicago O’Hare: US Airways from Charlotte, Philadelphia, Phoenix and Washington DC and have many competing sectors and market segments.
WestJet was established in 1996 by Clive Beddoe and a team of like-minded partners, who believed that just because you pay less for your flights, doesn’t mean you should get less. The headquarters of this company is in Calgary, Canada. The company started its journey with three aircraft, five destinations and 220 friendly employees which helped them to become a company of more than 12,000 passionate employees flying their fleet of Boeing 737 Next-Generation aircraft to more than 100 destinations across their network. In 2011, WestJet was proposed as a J.D. Power Customer Service Champion, ranked third in Aon Hewitt’s best employers in Canada and was chosen as the Canadian airline with the best flights attendants by flightnetwork.com. It is a public company and is one of the low-cost airline.
With a clear mission and vision, he implemented a low-cost, differentiation business-level strategy, that set out to position JetBlue as the leading low-cost passenger airline in the industry, differentiating on high-quality customer service, providing customers with a geographically diversified flight schedule of both short and long hauls, along with efficient and reliable service.
To sum up, westjet has a positive and passionate personality. Westjet shows fun, friendly and caring service in its daily flies and displays the honesty and openness.
Use of technology and automated processes to reduce reservation, ticketing and customer services costs. Paperless cockpits, use of e-manuals, electronic ticketing, owning its own in-flight entertainment provider, automated baggage handling are some of the examples where Jet Blue’s use of technology has lowered operating costs.
Marketing is a process of determining a consumer’s needs, devising a product or service to satisfy those needs, and trying to focus customers on the goods and services you are offering. Marketing is extremely important, and a fundamental building block for business growth. A marketing team is given the task of creating customer awareness through a variety of different marketing techniques. If a business does not pay close attention to their consumer demographic and needs, they will eventually fail over time. Two important aspects of marketing include acquiring new customers, and the preservation and growth of relationships with current customers. Marketing has always been viewed as a creative outlet, which encompassed advertising, distribution, and the selling of goods and services. Marketing staff will also try to anticipate what customers will want in the future, often being accomplished with market research. In summation, a good marketing plan should be able to create a favorable proposition or series of benefits that a customer can value through goods or services. The marketing mix is normally described as the strategic positioning of a product or service in the marketplace, using the specification of the four Ps. During the early 1960’s, Professor E. Jerome McCarthy of Harvard Business School stated that a marketing mix contains four elements. The four key points are product, pricing, promotion, and placement. It is recognized that all these aspects must be present to ensure a successful business model within a given industry. We will now take a thorough look at the four marketing mix points.
Jet airways India’s second major airline in terms of market shares after Indigo airlines based at Mumbai known as India’s economic capital in addition to being its India’s widest network with 3000 flights a day with 76 destinations worldwide, main operations are handle from Mumbai but secondary hubs are Delhi (Nation Capital of India) Kolkata and Bangalore, It has an international hub at Brussels Airport, Belgium.
With regard to product, JetBlue is cornering the marketplace with its productivity, in-flight features, and customer service. Due to the fact that the company only purchases new planes of a single type, maintenance downtime is reduced and it is able to keep its planes in the air. In fact, JetBlue maintains the highest in-air average in the industry. Additionally, JetBlue employs an "operational recovery tool" technology that allows planners to minimize flight cancellations and delays. On board, JetBlue prides itself on treating all customers as equals and providing more comfort than other airlines.
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ...
The first initiative that they were able to gain in competitive advantage was the reduction of costs. They have been able to use an online system where consumers can reserve tickets avoiding which avoids using travel agents. Having this systems reduces costs for the company as well because they do not have to hire nearly as many as employees. Along with buying tickets, JetBlue has been able to use other systems to reduce costs which helps them with the maintenance of their planes and organizing information that involves every aspect of their business ranging from their planes to their employees and consumers. The second initiative that JetBlue uses is the creating of new services. By creating their new online services and systems they are able to gain competitive advantage because it allows easier and less expensive accessibility to their services. Not only have they created new services but they are able to differentiate these services from their competitors because of the easiness and quality of the services that they do provide. They not only focus on making their services the best but also the highest level of customer service that they can offer which other airlines struggle to do. Other competitors have realized that JetBlue is beating them in many aspects in the business that they have needed to adjust what they are doing to catch up. Even with the jumps in technology use with the other companies, JetBlue has still been able to enhance their services to continue to gain competitive
The second level is the basic product, were customers book their seat on a schedule flight to a particular destination. British Airways flies to the busiest airports in Europe in 95 different cities and to 58 other destination across the world.
Within the airline industry currently the airlines can be divided into low cost airlines and full service airlines. The low cost airlines targets customers that are seeking no frills connectivity between cities at low ticket prices. The full service airlines provide several add-ons like free meals, on plane entertainment, and communication facilities. The target market for full service airlines are customers who are willing to spend extra for the services that the airlines provides.
Ryanair is Europe’s largest low-fares, no-frills short-haul carrier. The organisation was founded in 1985 as a conventional airline but re-launched itself in 1990/1991 as a low-cost carrier, replicating American Southwest Airlines’ business model. Since then Ryanair has grown substantially and successfully. The company currently has 146 routes to 84 destinations in 16 countries, and carries more than 15 million customers annually. Ryanair aims to be Europe’s largest airline in 8 years (www.ryanair.com).