Market and situational analysis of the Easyjet airline

4240 words (17 pages) Essay

1st Jan 1970 Marketing Reference this

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In 1995 when Stelious Haji-Loannou first laid the foundation to EASYJET his main idea was to offer passengers cheap air fares that were affordable to all that offered a “no frills” approach that was the same of their idol company “SOUTHWEST AIRLINES” and RYNA AIR. Being a British airline the head quarters of Easy jet is based at London Luton Airport and first catered only to two routes that were laid between Luton to Glasgow and Luton to Edinburgh. The rapid expansion of Easy jet was powered by the increase in the demand for low cost air travels as well as the acquisitions they had made. Employing a fleet of staff that’s well over 8000 from UK and other European countries Easy jet now operates on 500 routes in 28 countries including Europe’s top 100 destinations. The destinations are carefully picked up from areas where there are high densities of population and are within easy access to passengers. The values of Easy jet were based on safety, pioneering, passionate and integrity. Easy jet was passionate about who they were and who they were going to be in the minds of the stakeholders and delivered a service with no compromises, that was based on teamwork that enabled them to deliver faster and quicker responds to the customers as a whole while finding new ways and opportunities to deliver their best possible service to their customers. They advertising campaigns did not promise anything that they could not deliver and what was communicated through all media sources was delivered.

Shown below are some of the web based statistics of Easy jet that would facilitate to you to give a better understanding of the company’s growth, existence & financials.

Aircraft

In Fleet

Orders

Passengers

Airbus A319-100

144

34

156

Airbus A320-200

23

11

180

Boeing 737-700

8

0

149

Total

175

45

Fleet Size-currently 175 aircrafts are in operation, these do not include the ones that have been placed on order and are still not in operation.

The current bases at which aircrafts touch down at;

Basel, Belfast, Berlin, Bristol, Edinburgh, Geneva, Glasgow, Lisbon, Liverpool, London Gatwick, Lurton, Lyon, Stan stead, Madrid, Don caster, Manchester, Milan, Newcastle, Paris( 2 bases) , Fiumicino in Rome.

Current activities carried out by the company;

Main business activity – Air Travel

Car Rental

Accommodation-Hotels, Hostels, Apartments

Ski Holidays

Travel Insurance

Airport Parking

Holiday packages

These bases help Easy jet to cover 123 destinations all over Europe. Shown below is a route map that shows the connections and touchdown point from London Gatwick where their largest fleet base is based at.

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The business model of Easy jet was borrowed from Southwest Airlines that dominate the Southwest regional low cost air travel in the Unites States the only difference between the two beings that Easy jet operates a young fleet of aircrafts while Southwest operates with a much aged fleets of air craft’s.

The main pillars the company bases itself is on is;

high aircraft utilisation

quick turnaround times

charging for extras-such as priority boarding, hold baggage and food

keeping operating costs low

The latest Financials of the company as at 30th September, 2010 along with the company’s financial performance for the past decade are listed below.

SITUATIONAL ANALYSIS

The below mentioned situational analysis on Easy jet was carried out using a SWOT and PEST analysis.

SWOT analysis would be carried out to find the internal strengths and weaknesses of the company and the external opportunities and threats that would help the business objectives or create obstacles in carrying out the objectives.

The strengths that Easy jet holds for itself is as follows;

It is one of the leading low budget, no frills air travel service that connects many leading cities in UK and Europe, serving to over 46 million passengers last year, they operate on over 500 routes. The airports they serve has over 289 million people within one hours reach to the airports.

The colour orange they use on all their aircrafts and advertising material helps them to distinguish themselves from their competitors and is well recognized.

The cheerful and cheeky slogan of Easy jet ‘come on, Let’s Fly!’ was later replaced by making flying as affordable as a pair of jeans’, and wanted to facilitate the customer in cutting down the price they paid to the travel agent.

It is named as one of the leading passenger carriers in the Europe as well as a leading brand name in the UK.

Easy jet provides a quality service at competitive prices and has a quick turnaround time of less than of 30 minutes to get their flights ready for the next departure that helps them in giving the quality service mentioned before that is reliable, hassle free and efficient.

They have a user friendly website that could be easily navigated though and offers a breakdown of the price to enable the customer to see that there are no hidden costs involved in calculating the air fare when the customer places an online order. All online promotions are e-mailed to customers as well as parties who have visited their website and have requested information for such offers. This enables them to attract more customers and widen the customer base.

Easy jet also offers services such as ticketless travel, assisted travel, internet booking and also allowing the premier customers to move their flights if they wish to prior departures provided that they could offer the service.

The environment has been a great concern of Easy jet when implementing their future strategies and Easy jet actively embraces these responsibilities as the industry they are currently in is classified under major contributors to the green house effect and global warming.

They also provide a wide range of other services such as accommodation (hostels, hotels, & apartments) air port parking, car rental free travel guides and information about their destination and insurance to their customers.

The 40% stake they held on Swiss Charter Airline Teas Basle gave rise to the first base of Easy jet that was situated outside the UK. The acquisitions of Go airlines that was based at London Stan stead not only doubled the number of Boeing 737-300 aircraft fleet but also facilitated in getting bases at London Stan stead, Bristol and East Midlands airports.

These bases were later supported by the base openings Easy jet were able to facilitate to its customers at London Gatwick, Germany, France, Spain and Italy that enabled them to make a note worthy appearance in the European region.

Weaknesses of the company are shown below.

Food is not served on longer flights.

Domestic travelling has become highly competitive and as for Easy jet they have to compete with many leading competitors as well as many other competitors who fly on restricted number of smaller routes. These competitors have the ability to restrict Easy jets’ pricing policy by offering competitive rates where Easy jet has a smaller profit margin.

Opportunities

Along with theses internal and external factors that enabled Easy jet to be the ‘flying brand’ there were opportunities from the immediate environment that boosted Easy jets’ performance and threats that suppressed its growth potential.

There were a vast and an increasing number of Soccer fans travelling towards UK and as a result of globalization many corporate personnel have started to base their businesses in and out of their main location which in turn gives rise to an increase in air travel that is cost effective, efficient and quick. Thus there were many openings connecting the major cities in Europe up for easy grab to increase their sales.

Many other cheap flights were now offering refreshments on board for flyers who have a travel time of over 2 hours. Thus the offering of free refreshments on board of longer flights would make the customers’ journey with Easy jet more comforting and enjoyable.

Wall documentaries that would enable the customers’ to see the updated versions of the brand would give an increased publicity and coverage amongst its’ clientele.

The threats that came from the immediate environment that suppressed the achieved results of Easy jet could be laid down as follows;

The main attractive routes that had high number of flyers was becoming more and more competitive as competitors who offered services in the same routes were highly competitive on prices and had a significant impact of pressurizing to push down the price Easy jet charged form its’ customers thus making these routes less profitable as the margins were set at very low levels to attract more sales in these routes and time slots.

The daily activities of the business were facing severe blows from the pressure it faced form Unions and committees that were engaged with employee related activities. The strikes that were organized deemed to be very costly as it was hard to maintain the company’s image of offering reliable, efficient travel.

The recent economic downturn was a major threat that was faced by the travel trade as a whole. Many people travelling in and out of the country for pleasure and on holidays were reduced to a great extent. Also corporate travelers that were a large segment of the clientele was also downsized due to company’s having to minimize their costs and cut down their expenditure. The reduction in corporate clientele was also a result of the improvement in the information communication technology that enabled companies to hold conferences across the globe with a single click at any moment.

The rise in oil prices has put a significant pressure on the profitability of routes those were less profitable that Easy jet kept in operation to help its customers to get to places easilt Easy jet kept in operation to help its customers to get to places easily. These external forces have pushed the margins further down and are impacting Easy jets profits.

In Germany Easy jet faced more criticisms for not observing the European Union law on assistance and compensation that was offered to the customers that was to be offered to customers who were denied of bordering the aircrafts, cancellation of flights and delays. Easy jet was not offering a fast service in reimbursing these expenses their customers curtailed and customers had to wait in certain cases for more than a week to get their reimbursement.

Easy jets’ advertising campaign that stated it made 22% less emission than its rivals were highly criticized by ASA( advertising Standards Authority) stating it was a misleading comment that was made by Easy jet and was not a remark that was subjected to all its flights. The Air Passenger Duty Tax the UK government was hoping to place on its air travelers based on the distance they travelled was supported by Easy jet. These two factors contributed in creating a negative impact in the minds of Easy Jets’ clientele and reduced sales.

EMarketing strategies

The various theories that surround the eMarketing make it a controversial topic to talk about since no researcher or no studies have succeeded in unifying the various theories that surrounds it. However, there is one general fact that eMarketing appeared under the form of various strategies and techniques used by many pioneer companies in selling their products in the 1990s via the Internet. These marketing techniques that were used and created by e-trailers and supported by the Internet gave birth rapidly to a new dimension of what is currently known as Marketing, that is, the e-Marketing. E-Marketing strategy is normally built and used upon the tenets that guides the traditional, offline Marketing or the marketing mix that are well known as the 4 P’s, Product, Promotion, Price, and Positioning. The additional 3P’s people, Process and Proof gives the uniqueness of e-Marketing. This is also with a series of relational functions, specific functions, that involves customer service, site, security, community, sales promotion and privacy. EasyJet, a flight company that was founded by the son of Greek shipping tycoon Stelios Hajia Ioannou reputedly used to “hate the Internet.” This case study will discuss the benefits that EasyJet can get if they further utilize the Internet and strategize well on its enhanced implementation.

//

EasyJet was founded by a Stelios Hajia Ioannou the son of a Greek shipping tycoon in 1994 as a low cost airline, looking to undercut traditional carrier such as British Airways. In order to survive and achieve the acquiring the target market, Ioannou decided on a single chain service. He therefore introduced the user of phone which was then a groundbreaking technology. After the basic trial search was launched, the number of calls to the company increased rapidly per week. The company had to either look for a bigger call center or take their communications and all their adverts to the Internet. Stelios never liked the Internet at all, he reputedly “hate the Internet”. He reportedly denounced the Internet in the 1990s as ‘something for the nerds’. However, the company’s site accounted for 38 per cent of ticket sales or over 135,000 seats by August 1999.

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The original target launch for the company was 30 per cent which was exceeded by the sales made in 1999. The site had 800,000 bookings since during its launch there was a shaky sales start. The online discount for EasyJet was increased by £2.50 for single trip. This was much higher than the other airlines based on a permanent discount. Internet search and benefits increased to 85% of the total sales. 90% of the overall sales were online by 2003. The Internet enabled the market to operate at its own model. This meant that the Internet had been integrated into the central booking system.

EasyJet’ has adopted the Internet services for their e-marketing by designing a Webs site in April 1988, the company has had 800,000 bookings after a shaky a sale of thousand within the first month and. two sales in the first week. In March 2000, EasyJet’s online discounts were increased to £2.50 for single trip which was a advanced level of stable discount than any other airline company. The Internet sales for the company reached 85 per cent by September 2000. Since this period of time, there has been a decrease in the growth of proportion. 90 per cent of the sales were online by 2003.

Therefore, the Internet has become an important EasyJet as it helps it to minimize the running costs. EasyJet makes its savings from customers’ bookings which have enabled the company to offer at least £1 off to passengers who do their bookings online on the part of online proposition. Online buyers also get the privileges of paying the cost of local calls instead of the standard national rate of easy jet booking line. EasyJet has taken the saying of Internet gurus ‘put your URL everywhere factually with its web site address beside its Boeing 737s. The company only runs promotions with varied promotions in newspapers. Its first Internet only promotion was in The Times was very impressive in February 1999.

The measurability of the Internet assisted a great deal with the rising demand since every customer was directed to the company’s web site rather than the company needs to employ 250 more telephone operators. Nevertheless, risk management did happen with a micro site built for Times users (www.times.easyjet.com) to shun putting a tension on easy jet main site. Flight promotions are intended to avoid attracting people who would fly with EasyJet, so prior schemes for booking are planned to attain that. A five week support within The Sunday Times newspapers placed inexpensive flights to a choice of all destinations for EasyJet when 18 tokens were collected. In whole, during the promotion 100,000 seats were sold that was worth extra than £2.

In the first day alone 13, 000 orders were taken through the Internet with over 15,000 people on the site at a given time. The Website also acts as a public relation tool where customers get to interact with the company’s marketers, customer care and managers. The founder of the company, Ioannou give updated information to newspapers about new promotions and offers by mailing journalists, phoning and referring them to the web site. The web site is also used as a tool in a market place that is very competitive. EasyJet’s web site was intended to be highly functional and was simply designed without any bulk. The web site’s home page has an orange color and had the option of buy online, information, and a topic for the moment. The Web site’s log in analysis showed that an average of eight minutes at a time and to prove the effectiveness of the site, almost everyone who called the company’s call center bought a ticket. Instead of answering the normal phone calls, the phone operators were selling tickets to the callers.

COST DETAILS OF WHOLE PROJECT

MEMBER

DAYS

COST

Project Manager

198

198 x 250 = £ 49,500

Lead project Engineer

150

150 x 100 = £ 15,000

Web Designers

25

25 x 120 = £ 3,000

Data Base Designers

22

22 x 120 = £ 2,640

Web Developer

38

38 x 140 = £ 8,120

Data Base Developers

24

24 x 140 = £ 5,320

Quality Assurance Manager

30

30 x 200 = £ 6,000

Quality Assurance Assistant

38

38 x 100 = £ 3,800

Technical Author

9

9 x 80 = £ 720

IT Professional

5

5 x 120 = £ 600

End User – Instructor

5

5 x 100 = £ 500

2 Hardware Engineers

9

2(9 x 110) = £ 1980

3 Software Engineers

8

3(8 x 110) = £ 2640

Test Engineer

15

15 x 130 = £ 1,950

HARDWARE

COST

1 Web server

£ 1399

1 Data Base server

£ 1599

10 Workstation

£ 285 x 10 = £ 2850

Network Component

1 Router

1 Switch

12 Network cards

Cables

£ 212.99

£ 105.47

£ 22.99

£ 60

Broad Brand

10mb fibre-optic

£ 350 per year

SOFTWARE

COST

Operating system

Windows Vista

Windows Server 2007

£ 90

£ 449

Application software

Dream Viewer (new version)

£199

Total Cost £ 109,107.45

Cost & Budgeting

Task

Duration

(days)

Cost

Designs

47

£ 20,390

Development

62

£ 33,940

Quality Assurance

38

£ 20,800

Hardware / Software (purchasing, deploy, components )

12

£ 13,657.45

Hardware / Software (installation )

5

£ 2,800

Training

19

£ 8,820

Post-Implementation

15

£ 8,700

Total £ 109,107.45

Sales & Marketing Budget

Promotion 1

Promotion 2

Date of promotion

Advertising and promotion cost

£22,000

£15,560

Number of click-through

£20,000

£22,000

Number of sales

350,000

438,000

Acquisition Cost

£2.10

£2.15

Conversion

3.5%

3.98%

Conversion Cost

£62.23

£56.91

Implementation

EasyJet management developed and designed a Web site that had the basic color as orange that is extending its services to customers and target market. The Web site was designed in such a way that customers could easily navigate from the timetable directly to the booking area without having to go back to the home page. The site is well integrated and designed. For instance, press releases and company’s releases are fed through an electronic feed into the company’s site, and new destinations automatically appear once they are fed into the information system of the company. A dedicated phone number on the site was put to measure the effectiveness of the web site that showed exactly how many calls the site had generated. Web analysis showed that 8 people logged in after fifteen minutes and 85% of them bought tickets.

Every customer was directed to the Internet or the company’s Web site as the mode of communication therefore, the scalability of the Internet or the increased. This was because EasyJet needed a larger office which they could not afford at the moment, thus, decided to expand on their Web site through designing it well. Instead of the company employing 250 more telephone operators, it increased the data base on its Web site and designed an easy way of navigation from one service to the next. For example, the Web site offered an easier way of navigating from the booking site to the flight schedule site without having to go back to home page. During the promotion, over 100,000 sets were sold due to the increased bookings from the Web site.

The Web site for EasyJet was highly functional that the customer care department spent more time selling flight tickets instead of answering questions. This was because many people or customers got more information about the services offered by EasyJet, thus, were attracted by the information.

Legal and Ethical Issues

Some of the legal issues that are facing the economy and most companies are: cyber squatting, cyber piracy, metatagging and keyword. Cybersquatting is the registration of a domain name for the purposes of extorting payments from the legitimate owner. While gathering and distributing information from the Internet, EasyJet should consider the giving credit to the owner or from where does the information come from. While implementing the e-marketing strategies, EasyJet need to acquire all the security checkpoints that will be the firewall against cyberpiracy. Cyberpiracy involves the registration of a domain in order to divert communication traffic from a legitimate site.

The Internet should eliminate and minimize the distribution services such as phone communication postal service, video stores and fax machines. To ensure that the company succeeds, in implementing the strategies, there should be enough funds and budget towards the e-marketing strategies for proper information processing. Ethics is the ability to determine whether an action is wrong or right through a measured standard and humans are responsible for every action they take.

Therefore, Easy Jet should further implement the ethical standards that are compatible with customer’s needs when delivering their service and ensure that no obscene language or communication occurs on their Web site.

EMarketing is very important to any business that wishes to prosper and to be successful. Well laid strategies should be in place for the implementation of the Web site. The Web site design should be easy to manage and navigate through it for faster communication and placing of orders by the customers. For instance, EasyJet utilized the Internet to cut cost and to gain market advantage over their competitors. They further acquired a large customer base which increased their market advantage. Generally, e-marketing is an essential tool for marketing for any organization that deals with customers globally.

Management Summary

This report has been conducted in order to clarify the marketing strategies implemented by Easy Jet in order to gain a competitive edge over its rivals such as Ryan Air in the market for low-cost aviation. This paper has been put down after a research on depth of the ‘budget airline’ industry and looked at the various strategies used by Easy Jet. Easy Jet has been very successful in its approach to its marketing campaigns, as it has built and sustained a strong image over the course of its operations at the top of the airline industry with the perception of making the air travel across Europe go Orange. The company however, must continually seek out new strategies and ideas as the industry becomes increasingly more competitive and also be careful in spreading their views and plus points on the business and its doings. Also the well being of the employees should be a crucial part that Easy jet would now have to look in to. The best example for them in this Aspect would be the US based low budget Air travel provider Southwest airlines.

In 1995 when Stelious Haji-Loannou first laid the foundation to EASYJET his main idea was to offer passengers cheap air fares that were affordable to all that offered a “no frills” approach that was the same of their idol company “SOUTHWEST AIRLINES” and RYNA AIR. Being a British airline the head quarters of Easy jet is based at London Luton Airport and first catered only to two routes that were laid between Luton to Glasgow and Luton to Edinburgh. The rapid expansion of Easy jet was powered by the increase in the demand for low cost air travels as well as the acquisitions they had made. Employing a fleet of staff that’s well over 8000 from UK and other European countries Easy jet now operates on 500 routes in 28 countries including Europe’s top 100 destinations. The destinations are carefully picked up from areas where there are high densities of population and are within easy access to passengers. The values of Easy jet were based on safety, pioneering, passionate and integrity. Easy jet was passionate about who they were and who they were going to be in the minds of the stakeholders and delivered a service with no compromises, that was based on teamwork that enabled them to deliver faster and quicker responds to the customers as a whole while finding new ways and opportunities to deliver their best possible service to their customers. They advertising campaigns did not promise anything that they could not deliver and what was communicated through all media sources was delivered.

Shown below are some of the web based statistics of Easy jet that would facilitate to you to give a better understanding of the company’s growth, existence & financials.

Aircraft

In Fleet

Orders

Passengers

Airbus A319-100

144

34

156

Airbus A320-200

23

11

180

Boeing 737-700

8

0

149

Total

175

45

Fleet Size-currently 175 aircrafts are in operation, these do not include the ones that have been placed on order and are still not in operation.

The current bases at which aircrafts touch down at;

Basel, Belfast, Berlin, Bristol, Edinburgh, Geneva, Glasgow, Lisbon, Liverpool, London Gatwick, Lurton, Lyon, Stan stead, Madrid, Don caster, Manchester, Milan, Newcastle, Paris( 2 bases) , Fiumicino in Rome.

Current activities carried out by the company;

Main business activity – Air Travel

Car Rental

Accommodation-Hotels, Hostels, Apartments

Ski Holidays

Travel Insurance

Airport Parking

Holiday packages

These bases help Easy jet to cover 123 destinations all over Europe. Shown below is a route map that shows the connections and touchdown point from London Gatwick where their largest fleet base is based at.

The business model of Easy jet was borrowed from Southwest Airlines that dominate the Southwest regional low cost air travel in the Unites States the only difference between the two beings that Easy jet operates a young fleet of aircrafts while Southwest operates with a much aged fleets of air craft’s.

The main pillars the company bases itself is on is;

high aircraft utilisation

quick turnaround times

charging for extras-such as priority boarding, hold baggage and food

keeping operating costs low

The latest Financials of the company as at 30th September, 2010 along with the company’s financial performance for the past decade are listed below.

SITUATIONAL ANALYSIS

The below mentioned situational analysis on Easy jet was carried out using a SWOT and PEST analysis.

SWOT analysis would be carried out to find the internal strengths and weaknesses of the company and the external opportunities and threats that would help the business objectives or create obstacles in carrying out the objectives.

The strengths that Easy jet holds for itself is as follows;

It is one of the leading low budget, no frills air travel service that connects many leading cities in UK and Europe, serving to over 46 million passengers last year, they operate on over 500 routes. The airports they serve has over 289 million people within one hours reach to the airports.

The colour orange they use on all their aircrafts and advertising material helps them to distinguish themselves from their competitors and is well recognized.

The cheerful and cheeky slogan of Easy jet ‘come on, Let’s Fly!’ was later replaced by making flying as affordable as a pair of jeans’, and wanted to facilitate the customer in cutting down the price they paid to the travel agent.

It is named as one of the leading passenger carriers in the Europe as well as a leading brand name in the UK.

Easy jet provides a quality service at competitive prices and has a quick turnaround time of less than of 30 minutes to get their flights ready for the next departure that helps them in giving the quality service mentioned before that is reliable, hassle free and efficient.

They have a user friendly website that could be easily navigated though and offers a breakdown of the price to enable the customer to see that there are no hidden costs involved in calculating the air fare when the customer places an online order. All online promotions are e-mailed to customers as well as parties who have visited their website and have requested information for such offers. This enables them to attract more customers and widen the customer base.

Easy jet also offers services such as ticketless travel, assisted travel, internet booking and also allowing the premier customers to move their flights if they wish to prior departures provided that they could offer the service.

The environment has been a great concern of Easy jet when implementing their future strategies and Easy jet actively embraces these responsibilities as the industry they are currently in is classified under major contributors to the green house effect and global warming.

They also provide a wide range of other services such as accommodation (hostels, hotels, & apartments) air port parking, car rental free travel guides and information about their destination and insurance to their customers.

The 40% stake they held on Swiss Charter Airline Teas Basle gave rise to the first base of Easy jet that was situated outside the UK. The acquisitions of Go airlines that was based at London Stan stead not only doubled the number of Boeing 737-300 aircraft fleet but also facilitated in getting bases at London Stan stead, Bristol and East Midlands airports.

These bases were later supported by the base openings Easy jet were able to facilitate to its customers at London Gatwick, Germany, France, Spain and Italy that enabled them to make a note worthy appearance in the European region.

Weaknesses of the company are shown below.

Food is not served on longer flights.

Domestic travelling has become highly competitive and as for Easy jet they have to compete with many leading competitors as well as many other competitors who fly on restricted number of smaller routes. These competitors have the ability to restrict Easy jets’ pricing policy by offering competitive rates where Easy jet has a smaller profit margin.

Opportunities

Along with theses internal and external factors that enabled Easy jet to be the ‘flying brand’ there were opportunities from the immediate environment that boosted Easy jets’ performance and threats that suppressed its growth potential.

There were a vast and an increasing number of Soccer fans travelling towards UK and as a result of globalization many corporate personnel have started to base their businesses in and out of their main location which in turn gives rise to an increase in air travel that is cost effective, efficient and quick. Thus there were many openings connecting the major cities in Europe up for easy grab to increase their sales.

Many other cheap flights were now offering refreshments on board for flyers who have a travel time of over 2 hours. Thus the offering of free refreshments on board of longer flights would make the customers’ journey with Easy jet more comforting and enjoyable.

Wall documentaries that would enable the customers’ to see the updated versions of the brand would give an increased publicity and coverage amongst its’ clientele.

The threats that came from the immediate environment that suppressed the achieved results of Easy jet could be laid down as follows;

The main attractive routes that had high number of flyers was becoming more and more competitive as competitors who offered services in the same routes were highly competitive on prices and had a significant impact of pressurizing to push down the price Easy jet charged form its’ customers thus making these routes less profitable as the margins were set at very low levels to attract more sales in these routes and time slots.

The daily activities of the business were facing severe blows from the pressure it faced form Unions and committees that were engaged with employee related activities. The strikes that were organized deemed to be very costly as it was hard to maintain the company’s image of offering reliable, efficient travel.

The recent economic downturn was a major threat that was faced by the travel trade as a whole. Many people travelling in and out of the country for pleasure and on holidays were reduced to a great extent. Also corporate travelers that were a large segment of the clientele was also downsized due to company’s having to minimize their costs and cut down their expenditure. The reduction in corporate clientele was also a result of the improvement in the information communication technology that enabled companies to hold conferences across the globe with a single click at any moment.

The rise in oil prices has put a significant pressure on the profitability of routes those were less profitable that Easy jet kept in operation to help its customers to get to places easilt Easy jet kept in operation to help its customers to get to places easily. These external forces have pushed the margins further down and are impacting Easy jets profits.

In Germany Easy jet faced more criticisms for not observing the European Union law on assistance and compensation that was offered to the customers that was to be offered to customers who were denied of bordering the aircrafts, cancellation of flights and delays. Easy jet was not offering a fast service in reimbursing these expenses their customers curtailed and customers had to wait in certain cases for more than a week to get their reimbursement.

Easy jets’ advertising campaign that stated it made 22% less emission than its rivals were highly criticized by ASA( advertising Standards Authority) stating it was a misleading comment that was made by Easy jet and was not a remark that was subjected to all its flights. The Air Passenger Duty Tax the UK government was hoping to place on its air travelers based on the distance they travelled was supported by Easy jet. These two factors contributed in creating a negative impact in the minds of Easy Jets’ clientele and reduced sales.

EMarketing strategies

The various theories that surround the eMarketing make it a controversial topic to talk about since no researcher or no studies have succeeded in unifying the various theories that surrounds it. However, there is one general fact that eMarketing appeared under the form of various strategies and techniques used by many pioneer companies in selling their products in the 1990s via the Internet. These marketing techniques that were used and created by e-trailers and supported by the Internet gave birth rapidly to a new dimension of what is currently known as Marketing, that is, the e-Marketing. E-Marketing strategy is normally built and used upon the tenets that guides the traditional, offline Marketing or the marketing mix that are well known as the 4 P’s, Product, Promotion, Price, and Positioning. The additional 3P’s people, Process and Proof gives the uniqueness of e-Marketing. This is also with a series of relational functions, specific functions, that involves customer service, site, security, community, sales promotion and privacy. EasyJet, a flight company that was founded by the son of Greek shipping tycoon Stelios Hajia Ioannou reputedly used to “hate the Internet.” This case study will discuss the benefits that EasyJet can get if they further utilize the Internet and strategize well on its enhanced implementation.

//

EasyJet was founded by a Stelios Hajia Ioannou the son of a Greek shipping tycoon in 1994 as a low cost airline, looking to undercut traditional carrier such as British Airways. In order to survive and achieve the acquiring the target market, Ioannou decided on a single chain service. He therefore introduced the user of phone which was then a groundbreaking technology. After the basic trial search was launched, the number of calls to the company increased rapidly per week. The company had to either look for a bigger call center or take their communications and all their adverts to the Internet. Stelios never liked the Internet at all, he reputedly “hate the Internet”. He reportedly denounced the Internet in the 1990s as ‘something for the nerds’. However, the company’s site accounted for 38 per cent of ticket sales or over 135,000 seats by August 1999.

The original target launch for the company was 30 per cent which was exceeded by the sales made in 1999. The site had 800,000 bookings since during its launch there was a shaky sales start. The online discount for EasyJet was increased by £2.50 for single trip. This was much higher than the other airlines based on a permanent discount. Internet search and benefits increased to 85% of the total sales. 90% of the overall sales were online by 2003. The Internet enabled the market to operate at its own model. This meant that the Internet had been integrated into the central booking system.

EasyJet’ has adopted the Internet services for their e-marketing by designing a Webs site in April 1988, the company has had 800,000 bookings after a shaky a sale of thousand within the first month and. two sales in the first week. In March 2000, EasyJet’s online discounts were increased to £2.50 for single trip which was a advanced level of stable discount than any other airline company. The Internet sales for the company reached 85 per cent by September 2000. Since this period of time, there has been a decrease in the growth of proportion. 90 per cent of the sales were online by 2003.

Therefore, the Internet has become an important EasyJet as it helps it to minimize the running costs. EasyJet makes its savings from customers’ bookings which have enabled the company to offer at least £1 off to passengers who do their bookings online on the part of online proposition. Online buyers also get the privileges of paying the cost of local calls instead of the standard national rate of easy jet booking line. EasyJet has taken the saying of Internet gurus ‘put your URL everywhere factually with its web site address beside its Boeing 737s. The company only runs promotions with varied promotions in newspapers. Its first Internet only promotion was in The Times was very impressive in February 1999.

The measurability of the Internet assisted a great deal with the rising demand since every customer was directed to the company’s web site rather than the company needs to employ 250 more telephone operators. Nevertheless, risk management did happen with a micro site built for Times users (www.times.easyjet.com) to shun putting a tension on easy jet main site. Flight promotions are intended to avoid attracting people who would fly with EasyJet, so prior schemes for booking are planned to attain that. A five week support within The Sunday Times newspapers placed inexpensive flights to a choice of all destinations for EasyJet when 18 tokens were collected. In whole, during the promotion 100,000 seats were sold that was worth extra than £2.

In the first day alone 13, 000 orders were taken through the Internet with over 15,000 people on the site at a given time. The Website also acts as a public relation tool where customers get to interact with the company’s marketers, customer care and managers. The founder of the company, Ioannou give updated information to newspapers about new promotions and offers by mailing journalists, phoning and referring them to the web site. The web site is also used as a tool in a market place that is very competitive. EasyJet’s web site was intended to be highly functional and was simply designed without any bulk. The web site’s home page has an orange color and had the option of buy online, information, and a topic for the moment. The Web site’s log in analysis showed that an average of eight minutes at a time and to prove the effectiveness of the site, almost everyone who called the company’s call center bought a ticket. Instead of answering the normal phone calls, the phone operators were selling tickets to the callers.

COST DETAILS OF WHOLE PROJECT

MEMBER

DAYS

COST

Project Manager

198

198 x 250 = £ 49,500

Lead project Engineer

150

150 x 100 = £ 15,000

Web Designers

25

25 x 120 = £ 3,000

Data Base Designers

22

22 x 120 = £ 2,640

Web Developer

38

38 x 140 = £ 8,120

Data Base Developers

24

24 x 140 = £ 5,320

Quality Assurance Manager

30

30 x 200 = £ 6,000

Quality Assurance Assistant

38

38 x 100 = £ 3,800

Technical Author

9

9 x 80 = £ 720

IT Professional

5

5 x 120 = £ 600

End User – Instructor

5

5 x 100 = £ 500

2 Hardware Engineers

9

2(9 x 110) = £ 1980

3 Software Engineers

8

3(8 x 110) = £ 2640

Test Engineer

15

15 x 130 = £ 1,950

HARDWARE

COST

1 Web server

£ 1399

1 Data Base server

£ 1599

10 Workstation

£ 285 x 10 = £ 2850

Network Component

1 Router

1 Switch

12 Network cards

Cables

£ 212.99

£ 105.47

£ 22.99

£ 60

Broad Brand

10mb fibre-optic

£ 350 per year

SOFTWARE

COST

Operating system

Windows Vista

Windows Server 2007

£ 90

£ 449

Application software

Dream Viewer (new version)

£199

Total Cost £ 109,107.45

Cost & Budgeting

Task

Duration

(days)

Cost

Designs

47

£ 20,390

Development

62

£ 33,940

Quality Assurance

38

£ 20,800

Hardware / Software (purchasing, deploy, components )

12

£ 13,657.45

Hardware / Software (installation )

5

£ 2,800

Training

19

£ 8,820

Post-Implementation

15

£ 8,700

Total £ 109,107.45

Sales & Marketing Budget

Promotion 1

Promotion 2

Date of promotion

Advertising and promotion cost

£22,000

£15,560

Number of click-through

£20,000

£22,000

Number of sales

350,000

438,000

Acquisition Cost

£2.10

£2.15

Conversion

3.5%

3.98%

Conversion Cost

£62.23

£56.91

Implementation

EasyJet management developed and designed a Web site that had the basic color as orange that is extending its services to customers and target market. The Web site was designed in such a way that customers could easily navigate from the timetable directly to the booking area without having to go back to the home page. The site is well integrated and designed. For instance, press releases and company’s releases are fed through an electronic feed into the company’s site, and new destinations automatically appear once they are fed into the information system of the company. A dedicated phone number on the site was put to measure the effectiveness of the web site that showed exactly how many calls the site had generated. Web analysis showed that 8 people logged in after fifteen minutes and 85% of them bought tickets.

Every customer was directed to the Internet or the company’s Web site as the mode of communication therefore, the scalability of the Internet or the increased. This was because EasyJet needed a larger office which they could not afford at the moment, thus, decided to expand on their Web site through designing it well. Instead of the company employing 250 more telephone operators, it increased the data base on its Web site and designed an easy way of navigation from one service to the next. For example, the Web site offered an easier way of navigating from the booking site to the flight schedule site without having to go back to home page. During the promotion, over 100,000 sets were sold due to the increased bookings from the Web site.

The Web site for EasyJet was highly functional that the customer care department spent more time selling flight tickets instead of answering questions. This was because many people or customers got more information about the services offered by EasyJet, thus, were attracted by the information.

Legal and Ethical Issues

Some of the legal issues that are facing the economy and most companies are: cyber squatting, cyber piracy, metatagging and keyword. Cybersquatting is the registration of a domain name for the purposes of extorting payments from the legitimate owner. While gathering and distributing information from the Internet, EasyJet should consider the giving credit to the owner or from where does the information come from. While implementing the e-marketing strategies, EasyJet need to acquire all the security checkpoints that will be the firewall against cyberpiracy. Cyberpiracy involves the registration of a domain in order to divert communication traffic from a legitimate site.

The Internet should eliminate and minimize the distribution services such as phone communication postal service, video stores and fax machines. To ensure that the company succeeds, in implementing the strategies, there should be enough funds and budget towards the e-marketing strategies for proper information processing. Ethics is the ability to determine whether an action is wrong or right through a measured standard and humans are responsible for every action they take.

Therefore, Easy Jet should further implement the ethical standards that are compatible with customer’s needs when delivering their service and ensure that no obscene language or communication occurs on their Web site.

EMarketing is very important to any business that wishes to prosper and to be successful. Well laid strategies should be in place for the implementation of the Web site. The Web site design should be easy to manage and navigate through it for faster communication and placing of orders by the customers. For instance, EasyJet utilized the Internet to cut cost and to gain market advantage over their competitors. They further acquired a large customer base which increased their market advantage. Generally, e-marketing is an essential tool for marketing for any organization that deals with customers globally.

Management Summary

This report has been conducted in order to clarify the marketing strategies implemented by Easy Jet in order to gain a competitive edge over its rivals such as Ryan Air in the market for low-cost aviation. This paper has been put down after a research on depth of the ‘budget airline’ industry and looked at the various strategies used by Easy Jet. Easy Jet has been very successful in its approach to its marketing campaigns, as it has built and sustained a strong image over the course of its operations at the top of the airline industry with the perception of making the air travel across Europe go Orange. The company however, must continually seek out new strategies and ideas as the industry becomes increasingly more competitive and also be careful in spreading their views and plus points on the business and its doings. Also the well being of the employees should be a crucial part that Easy jet would now have to look in to. The best example for them in this Aspect would be the US based low budget Air travel provider Southwest airlines.

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