Last updated: September 19, 2019
Topic: BusinessMarketing
Sample donated:

Question 1.

The goal of every organization can be defined as profit maximization and increase in the value of shareholders. This task is very complicated, and requires joint efforts of many divisions of every company. The company’s success is a combination of many factors, and they are all very important. One of the most important factors which serve as the key to a company’s success is the correct choice of marketing strategies. In the success-oriented company marketing serves as one of the tools of company’s strategy realization.

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EasyJet is one of the best examples of the company which benefits greatly from the correct application of marketing management tools. Like any other company which seeks to occupy a decent share in the market, EasyJet applies concepts of marketing management in order to be ahead of competitors in the major aspects of its activities. EasyJet management has been successful in applying all of the major principles of effective marketing management. “Effective marketing management includes the following precepts: (1) acceptance of change as a constant; (2) recognition of the centrality of consumer wants and needs; (3) adoption of a systems approach to marketing issues; (4) recognition and application of meaningful concepts from other disciplines, and the acceptance of theoretical constructs and findings as helpful in managing marketing effort; and (5) recognition of the relationship between marketing and other aspects of management.” (Lazer, 1971, p.29).

EasyJet has been very successful in choosing correct marketing strategies and doing its best to achieve all of the objectives set by the major strategy. Oftentimes, marketing strategies appear crucial in the company’s strive for success. According to the definition given by James Quinn, “marketing strategies are means, or game plans, by which marketing objectives will be achieved and, in the framework what we have chosen to use, are generally concerned with 4 P’s.” (Quinn, 2002, p.102). The concepts of planning and programming, as well as control, have been successfully applied by EasyJet management through its well-structured marketing plan.

The concept of market segmentation has been successfully applied by EasyJet management when choosing instruments of influencing potential consumers and building the loyalty of existing ones. EasyJet has defined the targeted segments of the market and is doing its best to ensure that all of the marketing tools which it applies are efficient for the chosen segments. The company’s major feature which attracts targeted consumers is convenience and low cost.

EasyJet also devotes enough attention to competitor analysis through the comparison of prices which other airlines providing the same flights offer in order to offer the most favourable terms to passengers. Competitor analysis is particularly important for airlines offering low fare flights because pricing strategy is their largest advantage. If competitors start offering a larger range of services for a slightly higher price, it could be difficult for EasyJet to keep existing customers without bringing changes into its strategies.

Question 2.

Marketing planning is particularly important for companies in the current changing environment. All of the activities taken by EasyJet in the past years answer the company’s marketing plan.

The strategic goal of the company is providing excellent services to consumers with low level of income. The objectives of the company include: bringing the cost of airfares to the minimum as part of pricing strategy; achieving the highest level of customer satisfaction; retaining existing customers due to the advantages of the company; acquiring new consumers as the result of efficient marketing policy; providing services to major corporations which seek to cut their travel costs.

All of the steps which the company took in the last years answered the strategic goal of the company. The choice of approach to marketing planning was very challenging for EasyJet. “Two general approaches to marketing planning exist: a deterministic or general formula approach, and a dynamic approach.” (Lazer, 1971, p.75). EasyJet has chosen a dynamic approach to marketing planning in order to adjust its activities to the requirements of the market. This approach means that the company is very concerned what range of products the passengers need (i.e. the range of flights to various destinations), the price which most of the consumers in the target segments are willing to pay, the tools of promotion which are the most efficient. The activities which the company marks in the plan are subject to change in case the market requires changes.

EasyJet has taken into consideration all of the major components of the marketing plan. “It is evident that the planning of marketing involves (1) corporate values and objectives; (2) the appropriate personnel; (3) personal values and objectives; (4) marketing opportunities; (5) marketing barriers; (6) the business organization and its resources; and (7) the time horizon and space dimension.” (Lazer, 1971, p.80). The company’s corporate values and objectives include offering convenient low fare flights with maximum attention to security. The personnel employed by the company are very professional and has characteristic features, like orange polo shirts and jeans. Personal values and objectives of the employees of the company include high professionalism and good level of service.

Among the marketing opportunities which were chosen by the company are attraction of new customers due to the low level of prices, introduction of new flights, creation of the chain of companies with similar values and a common theme, introduction of cyber cafes to the market which would target consumers with a moderate level of income, attraction of consumers in the face of various companies’ employees. An important market opportunity which the company took advantage of is connected with the increase of the number of seats on the airplane. Due to the fact that EasyJet has no business class seats on the airplane, it is capable to allocate 39 more passengers on the airplane than regular airlines can. The company has also taken advantage of low costs due to the low expenses on uniforms for the employees, simple snacks which are being offered to the passengers. Another market opportunity the company has made use of is the absence of flight connections. It does not have to adjust it flights to the international or domestic connections.

The major marketing barriers for the company include the increasing number of competitors with whom the company fights with the help of unique pricing strategy and the increasing costs of advertising using popular media tools. In order to minimize the influence of marketing barriers, EasyJet management has insured that all of the costs of the company are under control and excess financial resources are used to improve the company’s service. The marketing plan of the company has a time horizon of up to 5 years but changes are made in it frequently due to the dynamic approach to marketing planning applied by the management.

It is necessary to emphasize first that the most important part of Easy Jet’s marketing plan is marketing mix. 4 P’s for the company include:

Product:
v Developing new products, repositioning existing ones. EasyJet constantly analyzes which flights are the most popular among the customers and increases their number in order to satisfy the customers. Those flights which do not have enough demand are no longer on the list of the company’s flights. EasyJet management has made a decision to organize flights only to those destinations which are always going to bring enough passengers for the company. It also keeps track of customers’ preferences regarding the introduction of new flights and introduces them as soon as there is such a possibility. EasyJet also makes sure it develops some new products which could be accepted by the market, such as cyber cafés.

v Adding new features and benefits. The company provides close monitoring of consumer preferences regarding the services during the flight and adds new features which could serve interests of the customers.

Price:
v Deciding how to meet competitive pricing. Currently, most of the airlines are seeking to offer one of the following types of services to the customers: high quality of services for high price; competitive quality of services for competitive price; moderate level of services for low price. As its business strategy, EasyJet management has decided long ago that the company was not going to appeal to the interests of wealthy people flying on airplanes. Instead, the managers have decided to offer a very peculiar product to the market: low-cost flights with minimum extra services on the airplane during the flight. This type of pricing strategy appealed to the interests of various groups, including people with medium level of income, students, companies which were seeking to lower their expenses on travel for their employees. Even though consumers using EasyJet do not get the full range of services which is being obtained on regular airlines, they are able to control their budget which is very appealing to many customers.

Promotion:
v Specifying the advertising platform and media. EasyJet does not spend extra financial resources on costly media resources due to the fact that the whole strategy of the company is giving services to maximum number of passengers for the lowest cost. The budget of the company is calculated in such a way that only the most powerful media resources are targeted by the airline. For example, EasyJet has provided a large advertising campaign on the most popular UK TV channels. The advertising campaign mainly focused on the advantages of the company, i.e. the relatively convenient number of services for the low price. EasyJet also used newspapers to advertise its services, for example popular The Times and The Independent which could attract the interest of those potential consumers who do not have a chance to watch TV regularly. The company also offers advertisements of its services inside the airplanes.

v Deciding the public relations brief. The public relations campaigns organized by the company have been very efficient. One of the latest targets of the company were organizations which could use EasyJet services in order to reduce expenses on employees’ travelling.

Place:
v Choosing channels. The task of choice of channels of distribution for the airline product is challenging due to the specific of the product. The company needs to make sure that the number of airports in which is delivers its services is sufficient for the consumers’ needs and is the most efficient cost-vice for the airline. The fact that the airline does not offer connections to other flights but only direct flights enables it to operate in the relatively convenient space of smaller Luton and Liverpool airports in comparison with other large airports in the UK.

v Deciding levels of customer service. The company ensures that the level of customer service offered by it is sufficient to satisfy the basic needs of the passengers. It does not aim to give any luxury services.

PEST analysis for EasyJet is represented in table 1. According to PEST analysis, there are a large number of political, economic, social and technological factors determining the success of EasyJet in the market which need to be taken into consideration by the management of the company.

Political:

o Current legislation regulating airlines;

o European/international legislation development;

o Government policies regulating airlines.
Economic:

o Changes in taxation which could affect the price of airline tickets;

o European economy trends which could decrease the number of passengers traveling by airplanes;

o Appearance of competitors offering similar services.
Social:

o Current lifestyles of consumers and possible changes in them;

o Consumer buying patterns;

o Consumer demographics.
Technological:

o Competing technology development in airlines;

o Innovation potential of competitors in airline business.
Table 1. PEST analysis.

Analysis of the external environment and competition in the industry for EasyJet is presented in table 2. Both tables show that EasyJet functions in a very favourable external environment and thus has prospects of growing. Table 3 represents SWOT analysis for the company.

Parameters
Scale (0-10 points)
1. Forecast of the industry’s development
10
2. Possibilities of new companies’ entrance of the industry
4
3. Competition in the industry
10
4. Level of use of substitution products
7
5. The level of impact of buyers and owners of distribution channels
4
6. Level of technologies in the industry
7
7. Level of innovations in the industry
8
Table 2. Analysis of the external environment and competition in the industry.

 

Table 3. SWOT-ANALYSIS MATRIX.

 
External environment
Opportunities

Stable political situation in the country

Stable government policy in the country

Increased rate of inflation

Increase in number of airline users
Threats

Large number of competitors

High taxes

 

 

 

 

 

 

Inter-nal environment
Strengths

Highly-qualified personnel;

Efficient advertising policy;

High quality of the company’s management;
All of the opportunities which currently exist in the country speak for the importance of EasyJet’s expansion of its operations, A higher rate of inflation in the European countries in comparison with previous years makes consumers look for cheaper services. EasyJet is able to offer both moderate level of quality of services and low prices which would appeal to consumers.
Due to the large number of competitors in the country, EasyJet needs to ensure it applies all of its strengths in order to increase the number of customers. Efficient advertising policy is going to help the company to remain on the top of the industry in future.
Weaknesses

Large expenses on salaries and advertisement

Inability to target consumers with high levels of income
Stable political situation in the country is going to guarantee large profits to the company even despite its existing disadvantages. Increased number of consumers with lower income level is going to bring enough profits to the company, despite the fact that consumers with a higher level of income do not use the company’s services.
Large expenses on salaries and advertisements are deductions from the company’s profits. Due to the deductions, the net income of the company becomes smaller and it has to pay less on taxes. High expenses on salaries and new technologies eliminate the impact of competitors for EasyJet because in a long run, these expenses turn into profits of the company.

Question 3.

Most of the actions taken by EasyJet as part of its marketing plan are very efficient and answer the requirements of the market. The strategy used by the company is similar to some other airlines operating in different countries, for example Southwest airline in the United States. It also focuses on low fare flights and gives consumers an opportunity to travel for a very low price to various cities of the country. Even though the approach of these two companies to marketing is very similar, there are some features which EasyJet management could add from the experience of Southwest. For instance, a characteristic feature of Southwest airlines flights is a large number of stops which the airplane makes until the final destination. This feature allows the airline to have even more passengers than there would otherwise be on the airplane because people are getting off and on the airplane during the stops. It could be useful for EasyJet to apply this feature.

Regarding corporate values and objectives, in our opinion, the company should start focusing more on the level of services which it provides. The low fare flights are very attractive to the public but time might come when passengers will be seeking more comfort, even if they have to pay extra for that. Besides, the increasing cost of fuel might make EasyJet increase its prices, and its comparative advantage will disappear. Currently, many professionals argue that in the future, the price of airplane tickets is going to keep increasing due to the increase of airline costs and number of passengers willing to travel. The equilibrium to the market could be brought only by raising the prices for airplane tickets. Therefore, it is necessary for the company to ensure that they are competitive in the market not only owing to their low prices but also the level of services they provide.

The market opportunities which the company currently has due to the low prices can also be used more efficiently. Instead of focusing mainly on attracting companies to use EasyJet for their employees’ flights, the management could promote its low airplane fares for students of schools and universities. For many companies, the price of airplane tickets for their employees is a very low cost and they would rather prefer to travel by business class on more prestigious airlines. The company could find itself in the situation similar to the one in which McDonald’s appeared after introducing its Salads Plus. McDonald’s aimed to attract a new group of customers to the restaurant- “Sex and the City” ladies type. Unfortunately, no matter how much the new product was advertised, these customers were not attracted to McDonald’s. EasyJet management needs to be aware that even wide advertising in popular business journals might not attract corporate employees to use the services of the airline.

 

 

 

 

 

 

 

 

 

 

 

 

Bibliography.

Clancy Kevin J., Shulman Robert S. The Marketing Revolution. HarperBusiness, 1991.
Hlavacek J.D. and Ames B.C. Segmenting industrial and high-tech markets. Journal of Business Strategy, 1986.
Johnson R.M. Market segmentation: a strategic marketing tool. Journal of Marketing research, vol. 7, 1981
Kotler P. Marketing Management. 1986.
Lazer William. Marketing Management: A Systems Perspective John Wiley & Sons, 1971
Quinn J.B. Strategies for Change: Logical Incrementalism, 2002.