Westjet Executive Summary

Introduction to the Marketing Success Story of WestJet Company

WestJet Airlines Company is one of the major airlines in Canada, and as per results in 2014 became one of the market’s best players, growing around 20% and significantly exceeding the TSX* revenue index by almost 8%1. The results achieved by WestJet in 2014 were primarily because of the successful marketing strategy implemented and consistently maintained throughout the years. One of the most effective cause-related marketing activities2 was outstanding association of WestJet with their customers in 2013 known publicly as Christmas Miracle: Real time giving**. The campaign, taken on the video instigated travelers to share their desires with Santa before boarding, and pleasant surprise

shocked them at their arrivals to get requested just hours before gifts lovely packed with their names and presented through luggage line before their bags unloaded and delivered.
The WestJet glorious video gathered over 40 million views on YouTube so far.

It made a great social impact as visits on WestJet’s website increased two times in 2013; reservations get higher to circa 80 percent compared with the same month of the last year, and sales level increased by circa 90 percent3.

Key Factors of the Marketing Success

WestJet implemented a strategic marketing communication mix, which achieved to deliver outstanding media impressions and exceptional increase in sales right after following the marketing event. Remarkable emotional message of joy and happiness transmitted the spirit of Christmas through communication tools of public relations and direct marketing and after enormous audience effectively reached through digital type of media4. The success associated with main marketing metrics for increased sales, profits, awareness, market share, customer satisfaction and advocacy5.

WestJet communication tools targeted to deliver marketing strategy with focus on customer service. The marketing approaches used by the company are distinctive as their concentration to make not only customers but many people happy is seen in many of their

advertisements.
A different example was another great public impact of the cause marketing created with the Christmas Miracle; Spirit of Giving*** video taken in 2014, where WestJet commenced a distinguishing attitude, granting gifts to people of Dominican Republic who are in destitute.
The successful marketing strategy allowed WestJet to develop from initial planning to become a local airline providing service only at the west coast of Canada, to an air company that expanded their services not only in the whole Canada, but grew beyond as well6.
The distinctive marketing strategy enlarged brand awareness and loyalty prospects in Canada and beyond and views of videos and positive customers’ feedback provided strong evidence of that. That became a clear manifestation of WestJet’s empathetic and compassionate business philosophy. The achievements of marketing strategy were easy to measure with key marketing performance metrics7;
• 235 countries viewed the video promoted brand awareness worldwide8
• 40M views on YouTube – exceeded 8,000% from initially planned of 500K9
• Over 5M views for other WestJet videos, representing consumer engagement10
• 207 K YouTube likes of the video11
• 335M media impressions exceeded by 1300 % from initially planned of 27M12
• 43M Twitter impressions specific to “WestJet Christmas” and linked keywords13
An effective and positive marketing communications plan, conducted through collaborative press release supplemented by the video, broadcast media journey such as interviews with “Virtual Santa” alive via Skype, Social Media with encouraged posts on Facebook and Twitter and amongst similar media. However one of the most important things not paid too much attention by the media was internal promotion of WestJet culture. It was not spontaneous decision to award WestJet as Best Employers in Canada for 2015 by Aon Hewitt14. That was followed by a renewed foundation of pride at the company and employees, united the experience with guests, contributors, personal contacts and finally communicated their perceptions of culture to customers through delivery of outstanding service. It is supported by the survey, which covered 1500 Canadians issued by Ipsos indicated that circa 85% expressed that – for the identical level of quality and price the customers would switch to a brand that associated with public connections15. It is another distinguished sign of WestJet brand from their competitors and other organizations, which do not deliver those associations as clearly as they should.
WestJet Market Segmentation and Positioning
As it seen in Table 2, Expanding reach across segments16 (Appendix 1) the company use market segmentation through the product differentiation, where low price segment promoted with Econo product, standard package with Flex and more expensive option through Plus creation. This approach appropriate for the markets where “many competitors selling identical products” and product differentiation tactic address market segments swiftly and meticulously.17
WestJet target family oriented segment, represented by 75-80% of their customer base, which aim to retain savings on air travel for leisure as price would be the main factor of their choice between modes of travelling18.
The business travellers with preference of Plus product are represented in the range of 20-25% of their customer base where their first and the largest competitor Air Canada serves 70% of business travellers’ wants. WestJet positioning created with expansion of offerings from basic product from A to B to fully inclusive and fully flexible.19
Main element of WestJet’s positioning prospects is distinguished through competitive advantage of its exceptional customer services and leisure trips with low fare when their main competitor Air Canada differentiated by exploring of additional dimensions and various types of aircrafts.20 Another element of positioning is an offering value perception by customers, which was not communicated properly in the case with baggage fee implemented in September, 2014.21 WestJet declared that they would be applying a fee on checked luggage. Although the fee was introduced only to offering “Econo” the news revealed adverse perceptions by customers and WestJet was in need to make conciliation.22 However that uncommon case did not impede for WestJet to influence the market, and deliver a value of divergent Customer Care. For example WestJet culture is to refer to staff as owners or WestJetter’s rather than employees, and clients are considered as “guests.” Such unique positioning, associates with guests, and makes them happy especially when other organizations are not so proud about customer relations.23

WestJet Marketing Mix
WestJet is one of the largest low cost airlines in America and its stock value was one of the best in 2014 increasing in price by circa 20% and net income increased by 34%.24
Low fare marketing strategies were of great attention to trades since the marketing mix working towards building a great brand and a very successful business as per history results.

Price
In a nutshell WestJet sells the Guest bundle mix to target mainly shoppers for low price with recent expansion to business travellers. WestJet has low fares - 75% of seats are traded at the Econo and Flex fares. 25% of seats are traded for high bundle fare. The last 5% are traded at the highest fare. 25
Place

WestJet have limited number of travel agents so agency commissions are at minimum. Direct marketing practices target to obtain and retain customers with access to new bundles at expanded destinations. Current presence is covered with;
 Booking online to place convenience to save up to 16% on agency commissions.
 National (Eastern and Western) and Domestic and trans border operations
 All towns within 200 km of a US airport.26
Promotion

With the successful strategic communication plan, and media impressions extremely surpassed planned goals, initiating extraordinary growth in sales following right after promotion activities.27

Physical Evidence

The fleet plan is very tight and they target to buy aircraft as economical as possible.28 Airplanes are the most costly asset and they look for used planes because they acquire them at times when planes are available at discounted price or people reduce travelling by air for example after September 11th.

Competitive Analysis

As shown in Table 4, (Appendix 2)29 WestJet directly compete with Air Canada and throughout the years constantly increased the market share30. For WestJet to realise the plan “Be a top 5 global airline by 2016,” is to have challenging competition on the international level.31 Table 4 (Appendix 3) is market share/revenue analysis as of mid of 2013 (CAPA, 2014).32

WestJet is just trying to step into the intercontinental market with start-up flight to Dublin, with representation of market share of circa 5%. WestJet is relatively new not only for international representation but comparing to other airlines such as Porter, Air Canada, American and United have very young but successful history of stable growth, which is about 19 years old.33

Strengths and Weaknesses

Over the long list of strengths34 in table 5 (Appendix 3) the most crucial for further growth are strong corporate culture, brand and marketing focus with constant revenue increase over the last 7

years.35

WestJet weaknesses are another side of their strengths. Where they low maintenance costs for one type of airplane they are losing on additional seats provided by other types of aircrafts. The recent impromptu advertisement for application of new baggage charge was assumed by customers to everyone for every flight where it was designed for customers looking improvements in flight package.36

Opportunities and Threats

WestJet has stimulating prospects especially in social and economic capacities as growth of Canadian economy is in line with growing demand for travelling and especially for regional flights with increased positive attitude for air freight industry.
WestJet have good opportunities for competitive advantages through generating new partnerships and new destinations for trans-border, domestic and long-haul flights (Table 6, Appendix 3)37.
WestJet can add up to USD100 million per year with application of baggage fees implemented since October 2014.
Bearing in mind that for low fare providers costs are the driving factor, and anything what can have impact on costs can be considered as a threat; airport and state taxes and fuel price increase, demand fluctuation or new entries could influence business prospects.
WestJet is intended to build intensively its corporate business niche, however the leisure is the main customer base generating increasing level of profits year by year and the company needs to be cautious to price sensitive low fare segment at the time of pursuing expansion to new business segment with application of costly services (Table 3, Appendix 2).38

Recommendations

To accomplish further consistent growth the company need maintain the successful marketing and business strategies such as Guest Experience and Low Cost. With Guest Experience strategy promoted by WestJet would continue communication of consistent company values and maintain empathetic culture through motivated workforce considered to be Owners or WestJeters.
With Low Cost strategy the company should strive to obtain expressive and reasonable cost advantage versus regional competitors and develop low-fare high-value offerings to international markets.39
Additional course of action would be to create subsidiaries in other regions to take tax advantages and target larger markets. However this option is to be considered for start-up expenses or acquisition investments of foreign airline with challenges of regulatory matters to be accounted.
WestJet have all required resources to create “Magnificent” service team to magnify the existing WestJet culture where staff considered being owners or WestJetter’s, and clients as “Guests”. The expansion to be marketing of creative crew ready to resolve issues as they arise and increase awareness of the brand through delivery of outstanding service. The downside of this option can become annoying data gathering process with calls to customers, additional expenses on forming and training of the enthusiastic and advertising team. However, taking into account past successful experience of implementation of effective marketing strategies and having on board great human resources WestJet is able to deliver fruitful approaches to make the magnificent ideas realistic.