Marketing Strategy and Planning – EasyJet Essay Example

network of aircraft, routes and airport slots. Recently easyJet has added an extra slot from Liverpool to Cologne, giving a total network of 148 routes. (www.iol.com) EasyJet have their slots at primary airports, which gives it a distinct advantage over other low cost operators such as Ryanair who operate at secondary airports (www.timesonline.co.uk). This allows them to be more accessible to consumers.

Human Assets

The most important human asset easyJet possesses is Stellios himself. He is the founder of the organisation and initially acted as the face of easyJet. People easily identify with him and he is described by the Times as a bubbly, Greek entrepreneur following in Richard Branson's success. People see him as the plucky underdog pitching against big business on their behalf. (www.timesonline.co.uk )

Marketing Assets

The easyJet name is a major marketing asset. The easy brand is well known and directly associated with Stellios himself. It stands for low-cost, innovative and fun values and vows to fight for the benefit of 'the little guy' (www.easyjet.com). In essence, easyJet (and the other easyGroup companies) remain very true to those core values. The danger of having a renowned 'umbrella-brand' is the possibility of one easyGroup company tarnishing the reputation of easyJet. Conversely if an accident happened involving an easyJet aircraft, the repercussions for the brand would be unthinkable (www.channelnewsasia.com ).

Legal Assets

As a service provider easyJet have no patents or copyrights on products or manufacturing processes. However, they are fighting to protect their trademark brand name from any misuse. easyJet cannot afford for the reputation of the 'easy' name to be tarnished by themselves or other companies. Unsurprisingly, easyGroup do not hesitate to instigate legal battles when there

is any hint of confusion. Recently, easyGroup has won two separate court battles, regarding the use of the 'easy' name (www.easy.com).

Capabilities

Hooley et al (1998) proposed a generic framework for analysing organisational resources, which lists organisational capabilities, not all of which are applicable to easyJet.

The core competencies of easyJet will be discussed and any additional non-core capabilities will be outlined.

Core Competencies

 Cost Focus

EasyJet stands for low cost flights. A company can only charge low prices if they keep their costs low. easyJet have always used cost-saving techniques, unprecedented in the airline industry. Paperless bookings (no tickets), no complementary drinks or food and no enclosed ramps to take their passengers from the terminal to the aircraft are all examples of this. easyJet do this without compromising on their basic service. Other low-cost airlines such as Ryanair save money by flying to secondary airports (often not the desired destination of passengers) and by buying old second-hand planes. This is where easyJet refuse to follow suit and rightly so, according to aviation industry analysts, who suggest Ryanair's idea of further reducing their services is very risky. (www.dailynews.com)

Buying new planes reduces costs further as easyJet are able to fly more hours, before maintenance is due, resulting in a long-term cost advantage rather than Ryanair's short-term edge. (Transcript of Harvard Business Interview)

 Resource Utilisation

The second core competence of easyJet lies in the way they utilise their resources. easyJet realised the marginal cost of taking an extra passenger is virtually zero. Flights happen regardless of whether all seats are filled, which means the petrol, the pilots and cabin crew have to be paid for etc. Therefore, their costs are the same regardless of the

number of passengers, hence each extra ticket sold means more revenue for the company at no extra cost. easyJet achieve this effective use of their assets (referred to by Stelios as 'sweating the assets') through yield management, charging different prices at different times depending on demand. (www.timesonline.co.uk) When demand is low tickets will be even cheaper in order to encourage people to fly.

Another example of easyJet's innovative culture is their idea to remove one of the three toilets on the Boeing planes and replace it with a seat. Taking one extra passenger will bring in extra revenue at no extra cost and the basic service offered by easyJet has not been compromised (www.dailynews.com).

These two activities can be considered core competencies as they fulfil the three characteristics described by Hooley et al. (2004) Firstly; they both provide potential access to a wide variety of markets, shown by the large variety of activities undertaken by easyGroup. Secondly, they enable easyJet to give that low-price benefit to customers and finally, competitors are struggling to copy easyJet. Differences with Ryanair have already been highlighted and also British Airways have found they couldn't duplicate these competencies with their low-cost airline Go. In conclusion, these competencies are the basis for easyJet's mantra: low margins at high volume.

Openness to new market offerings

This is a strategic capability according to the framework by Hooley et al (1998). A clear sign that easyJet is open to new markets is in the addition of new routes to their network. Although the exact reason for additions is unknown, it can be assumed this was not simply to have more operational assets. It would be irrational for easyJet

to add an arbitrary route, therefore it is likely this will have been a strategic decision to tap a particular customer segment. Monitoring new markets and entering them is not something that competitors can't copy but being first will give easyJet a competitive advantage.

Market Orientation

Despite easyJet's priority of cost focus, they haven't disregarded customer needs and wants. For example, the decision not to serve food during the flights was quickly discarded in favour of selling food, upon realisation that customers wanted the option of food. This kind of marketing orientation is another strategic capability.

Marketing

EasyJet worked together with ITV1 on a television program called 'Airline'. The program was set at Britain's Luton and Liverpool airports, both of which are dominated by easyJet. It showed the reality of working for easyJet by following members of staff during their intensive training as well as on the job. It created high awareness of the brand and the level of training the staff undergo, leading to a positive image. It showed any complaints by easyJet customers in a way that portrayed easyJet in a positive light. Viewers were encouraged to sympathise with the easyJet staff.