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Easyjet is a successful example of a European no-frills airline. Founded by the Cypriot Stelios Haji-Iaonnou in 1995, Eayjet gained a dominant market position over time thanks to its excellent marketing strategies. How Easyjet has segmented its market for its major product and what is the marketing mix? Which parts of the marketing mix are done efficiently and which parts need some improvements
Market’s segmentation and marketing mix of Easyjet
Easyjet’s market segmentation
Low-cost airlines like Easyjet, have picked up some customers from their traditional competitors like BA (British Airways) or Air France, but have specially created a large traffic of induction (creating a new market). Easyjet operates in a different way to Ryan Air – its direct competitor in the market, which is targeting the leisure traveller for whom the ticket price is important. Easyjet has the same type of clientele for whom the ticket price was slightly less important and also business customers whose companies seek to save on transportation costs, but care about the travel’s conditions. So Easyjet has two different kind of customers who are leisure customers and the business customers.
1.2 Easyjet’s marketing mix
Any business that does not have a concerted marketed strategy is setting itself up to fail. So what is the Easyjet’s marketing mix in term of product, place, price and promotion?
Product is the most important component in an organization. Without a product there is no place, no price, no promotion, and no business. Product is anything that can be offered to a market to satisfy a want or a need. It is the core ingredient of the marketing mix and is everything favourable and unfavourable, tangible and intangible received in the exchange of an idea, service or good (Kotler 11th edition, 2003). Easyjet is a business offering service products, flights across destinations, in the transportation industry. Easyjet operates over 500 routes and has 182 aircrafts in 28 countries (www.easyjet.com).
Easy-Jet positions itself as low-cost airlines or better as cutting costs airlines. Its product strategy stops to the actual product without concern about the augmented product. They don’t offer service at all but just the ticket. For example Easy-Jet’s product strategy ends at the expected level of five-product levels. There is no augmented product. There is no business seat on flights (Easyjet offer a mono class of seat but does not offer last minute deals), no executive lounge at airports, no free food and drinks on flights, no entertainment on flights, and in most cases Easy-Jet flies from major airports.
Easyjet targets customers looking to minimise their transportation costs, or any type of customer looking for a low price. In general Easyjet’s customer is a customer who started to prefer the plane to land transportation to browse for short distances between different cities served. So Easyjet is competing as well with the airlines as the land transports
Price is the value placed on what is exchanged during the marketing process. The customer exchanges his/her money or donation in return for a satisfaction or utility (S. Dibb and L. Simkin 2001).
Easyjet has always had a one-way ticketing policy. The airline has only one price in the market for any one flight at any one time. The lowest fare is offered into the market first and then prices rise as the departure draws closer and the seats are sold. This ticketing philosophy is transparent to consumers. There is a “value for money” offering, which is easily understood by consumers. By offering only one price in the market, the consumer is confident that “shopping around” using other channels or making greater ticketing restrictions will not reap the reward of lower fares. As the airline educates their consumers that the cheapest fares are sold first, consumers checking prices are more likely to purchase straightaway as they will have confidence that lower prices are not likely to appear later. The airline only sells tickets on a one-way basis and therefore if a passenger wants a return ticket they must buy two one-way tickets. The advantage of this for passengers is that they can book short stay trips without having to pay flexible return ticket prices. For business travellers the availability of flexible tickets is usually considered important. If a business meeting runs over the traveller needs to be able to change their ticket and take a later flight. This depends on two things. Firstly the ability to change the ticket, and secondly the availability of a later flight to change on to. Easyjet has been targeting business travellers and therefore they have addressed these issues by increasing the number of daily flights to key business destinations and by introducing a method of changing tickets. For a fee of £10 Easyjet passengers can change their ticket to a different flight as long as there is an available seat on the desired flight To reflect the current market price, the traveller will have to pay the difference between the price they originally paid for the ticket and the current price for a seat on the required flight. The airline can then release the seat no longer required on the original flight and sell this seat again.
The distribution policy of Easyjet shows a high use of direct sales from call centre and internet outside traditional distribution channels. 95% of the seats are sold online (www.easyjet.com).
They use electronic ticket, reducing cost of ticketing procedures and remove two
Kinds of costs:
-commission for travel agencies
-transaction related to reservation systems
What part of the marketing need to be improved?
Easyjet is one of the most successful of the new economy carriers in Europe. So they have a strong marketing strategies and it is going to be a little bite difficult to change this strategy but it can always been improved.
Easyjet could benefit from randomly offering last-minute deal under its single pricing strategy. By occasionally lowering ticket prices to bump up revenue on some unbooked-flights, Easyjet could create the expectation that such bargains would be available on a predictable basis.
Easyjet could create another brand having different mission and different market target and offering an augmented product such a better quality at a low price as Delta Airlines did with Song.
The use of the internet ticketing is dangerous in case of dysfunction of the server because of infection by viruses or any other kind of software problem.
It is undeniable that this system reduces cost but it can cause problem if the general is touched by problem.
If the other marketing strategies enable the company to evaluate everything about the business, only the marketing mix
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