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.
The culture and structure of WestJet is very much entrepreneurial. There are few levels of management, keeping the organizational structure quite flat and encouraging people to find solutions to issues. (!).Westjet's organizational structure includes informal communication, decentralized decision authority, flatter structures and less hierarchical relationship within different management levels, which explain that the company's personality is organic and effective.
Spirit addresses “price” by attempting to get the lowest possible fair for their potential customers. They have instituted their “unbundling” strategy that essentially removes all the conveniences that other airlines afford. Fees for checked bags, fees for flight changes, and no complementary in-flight beverages are just a few of the cost-trimming techniques employed. This strategy allows Spirit to come up with impossibly low fares. It also conforms to customers who just want to get from point A to point B without paying extra for services they don’t use. This strategy, coupled with an in-your-face “promotion” ploy, has made Spirit Airlines “the most profitable airline in the U.S.” (Nicas, 2012).
JetBlue's mission is "to bring humanity back to air travel". Its low-cost strategy is second-to-none, not even to Southwest. Utilizing Southwest as a model and benchmark early in Neeleman's career in the industry, he's managed to copy the Southwest model and expand upon it with his ability to find more innovative ways to cut costs along the organization's value-chain, while utilizing technology to increase productivity and further add to operational efficiencies. JetBlue's value chain demonstrates its ability to successfully compete in several key areas relative to the bases of competition within the industry and creates processes that focus on reducing costs, for the specific purpose of continuously creating value for its customers, i.e. fare pricing, customer service, routes served, flight schedules, types of aircraft, safety record and reputation, in-flight entertainment systems and frequent flyer programs.
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.
Jet Blue’s strategy to use a combination of cost leadership and differentiation strategies at the same time in an integrated way helps Jet Blue to overcome any major drawbacks and risks associated with any of the standalone individual strategies. The components and enablers for Jet Blue’s low cost strategy and differentiation strategies are complimentary to each other and they mutually reinforce Jet Blue’s overall integrated combined business level strategy. This combination of low cost and differentiation strategies enables Jet Blue to provide a high quality low cost differentiated customer service experience. This helps Jet Blue create a unique value and also provides a unique competitive advantage for Jet Blue to outperform its competition and achieve long term
When a business aims to be as successful as possible in selling its products and services, it must examine in detail whether or not the products will be attractive and necessary; if the price is optimal; if the product is being distributed in the best locations; and finally, how interest and awareness can be created for the products. In order for a business to target all of these elements to the right people at the right time, it must employ the right type of marketing mix: Product, Price, Place and Promotion. In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customer’s needs, and is succeeding because of this approach.
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.
JetBlue follows the differentiation generic strategy in their business. The differentiation strategy focuses on persuading consumers that a service or product is better than its competitors. JetBlue supported this strategy in many ways, providing more advantages for their consumers. JetBlue began with research on other airlines to identify their service trends so they could adapt and adopt these services to benefit JetBlue. They identified a huge strategic advantage over larger and older airlines because they realized that they could achieve tasks more efficiently
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).
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.
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 ...
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.
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.
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.