1. Introduction
Marketing refers to the set of all the strategies utilized for the purpose of promoting or selling the services of any company. It always plays a key role in the success of all types of small, medium and large sizes of businesses. And, without the shadow of any doubt, the success of a marketing strategy heavily depends on how well it is planned and implemented, and how accurately it addresses the needs of the target audience for a business (Kotler & Armstrong, 2006).The current paper aims to analyze the marketing strategy of two different airline companies i.e. EasyJet Airlines and Eurowings Airlines. It sets out to make a critical comparison of different tactics, techniques, methods, and strategies utilized by both these key industry players in the UK aviation industry.
1.1. A Brief Introduction of EasyJet Airlines
EasyJet Airlines is a low-cost carrier based headquartered in London, the United Kingdom. It is based at the Luton Airport of London. With more than 700 routes and 32 countries to be its destinations, it is rated among some of the best domestic and international airlines in the region. Furthermore, it is traded on London Stock Exchange under the trade name of EasyJet plc. The company was founded in 1995, and within 20 years since its inception, it has seen remarkable growth and expansion (EasyJet Plc 2016a; EasyJet Plc, 2016b).
1.2. A Brief Introduction of Eurowings
Eurowings Airlines was founded in 1993 and is currently headquartered in Germany. It is a fully owned subsidiary of Lufthansa Group. Like EasyJet, it is also a low-cost airline that operates both domestically and internationally. However, unlike the airlines being compared, its international market is mainly confined to Europe. The company offers a decent quality of travel at affordable rates. It has also experienced a high level of success within just above 20 years of its life so far (Eurowings, 2016).
1.3. Justification for the Choice of Companies
Both the airline companies selected for the purpose of the study belong to the same industry i.e. aviation. Then, both of them are also coming from the same sector in the industry being low-cost carriers (as discussed above). Nonetheless, despite all the similarities, both have some critical differences in their approach to business and marketing that provide room for conducting the comparative analysis.
2. Mission Statements
2.1. Mission of EasyJet
EasyJet airlines have a mission typical among different low-cost carriers around the globe. Its mission statement can be divided into different categories of considerations. In a nutshell, the company’s motto is to provide opportunities for “safe and affordable” air journey. The company aims to become the most preferred airline in the Europe and all of its strategies are directed towards this ambition. The vision of the company is to offer friendly and low-cost service to its passengers. Furthermore, the airline has no intention to develop into a long haul airline and prefers to keep its strategy focused on point-to-point short haul air travel (EayJet Plc, 2014).
2.2. Mission of Eurowings
Since Eurowings is a subsidiary of Lufthansa Group, it is wise to have a look at the mission of the parent corporation. Unlike EasyJet, it nowhere refers to low cost, cost-effectiveness, or affordability. Instead, the core mission of the company is to follow a path of sustainable growth. It focuses on “customer satisfaction” more than anything else. Furthermore, core values of the company include a focus on customer centricity and quality of services, digitalization and innovation, novel ideas of growth, constant tendency of adding value to business, and culturally sustainable leadership. Here, it is also important to note that the underlying airline also offers travel on long haul routes along with point-to-point shortly distant destinations (Lufthansa Group, n.d.).
3. Porter’s Generic Strategies (Low Cost Leadership and Differentiation)
Michael Porter came up with three generic strategies which organizations make use of either individually or in combination to create and sustain their competitive advantage. All companies struggle hard to attain competitive advantage- competitive advantage is any strength related to any department of an organization which makes it stand out in competition. Porter suggested that there are three possible strategies which can help organizations build and maintain a competitive advantage. These proposed strategies by Porter include cost leadership, differentiation and niche or focus strategies.
3.1 EasyJet
3.1.1 Low-Cost Leadership for EasyJet
As mentioned in the previous sections, EasyJet is an airline which offers a quality journey to its customers while keeping the fare charges low. There are many airlines which are based in Europe and offer flights all across the globe at various fare charges. Southwest airlines is a major cost leader which offer very low ticket fare to its customers such that they keep coming back to flying with the same airline. Keeping the success and advantages of cost leadership in view, easy Jet decides to follow this particular strategy so as to gain more market share and long term relationship with customers(EasyJet Plc., 2002). Offering low fare to customers has not been an as easy move for EasyJet because the cost of the airline in terms of airport taxes, maintenance of aircraft and ensuring that the employees exhibit loyalty and a high degree of motivation cannot be compromised (Thomas, 2014). So EasyJet offers no frills service to its customers and usually, the flight destinations are those airports which are not always busy as well as the tax they charge is not much. Airlines usually offer a high degree of comfort and charge very high from customers which make traveling impossible for the middle class or even upper middle class. So in order to facilitate its target market, easy Jet keep its fares low by cutting down on its operational expenses.
3.1.2 Differentiation for EasyJet
EasyJet understands that differentiation strategy also plays a key role in the success of airline business. Every airline possesses some factors which differentiate it from the remaining players in the market and helps in attracting and retaining customers. The differentiation feature for EasyJet is based on its low fare which other airlines operating in the United Kingdom rarely offer. The low fare feature has managed to pull in more and more customers especially in vacation seasons such as summer holidays or Christmas. Apart from low fares, there are several other factors which serve to differentiate the reputation and functioning of EasyJet from other airlines. For instance, its quick service with no frills, paperless ticketing two weeks before the flight, addition of new destinations, excellent operational performance and always on time policy make EasyJet stand out from the rest of the airlines in the industry.
There are several ways which assist EasyJet in achieving low-cost leadership and differentiation among the competing airlines including its workforce which is highly incentivized, a single type of aircraft, seats are not pre-assigned, frequent use of secondary airports, fast turn around time, direct flights, limited baggage allowed and e-ticketing etc.
3.2 Generic Strategy for Eurowings
We understand the being a subsidiary of Lufthansa group, the philosophy of Eurowings has to be based on that of Lufthansa(Swiss, n.d.). Lufthansa caters to the customers of Europe mostly which means customers traveling on Eurowings would be mostly European who might not be always looking for cheaper airline fares. Thar target market of Eurowings include customers belonging to upper class mostly who prefer to have a comfortable journey. This implies that it is not mandatory for Eurowings to follow the low-cost leadership structure as proposed by Porter. Therefore, it ensures that it differentiates its service from those of competitors. Eurowings understand that although the competition among airlines in terms of cost is very intense but there are customers who can afford to pay more for their personal trips or business travel. The differentiating feature of Eurowings in terms of its quality and making sure that its customers are satisfied and loyal. Eurowings would never compromise on its quality for cost- it ensures that all customers are provided with exceptional services and the aircraft are also designed in a way to let the passengers enjoy their smooth and luxurious journey. Customer satisfaction is also a differentiating feature of Eurowings. Feedback of customers is very important for Eurowings in this regard. Unlike EasyJet, Eurowings does not focus on low-cost structure but prefers to offer premium quality standards.
4. Marketing Strategies for EasyJet and Eurowings
The core purpose of the marketing strategies of EasyJet is to offer affordable and low cost fare to customers so that they could enjoy their vacations or business trips without crossing the limits of their defined budget. Pleasing customers to the extent that not only they exhibit loyaty to the airline but also make use of word of mouth to attract more customers to fly with EasyJet. For achieving these aims, EasyJet has kept its fare really low which other airlines cannot beat plus the customer service is exceptional and no time of customers is wasted at the airport lounges while waiting for flight boarding announcement. The drinks and meals services are minimal because the basic purpose of the airline is to make the customer reach their destination within their budget.
On the other hand, Eurowings focuses on providing quality of journey to its customers. The marketing strategies such as pormotions and advertisements are focused on informing customers of the exceptional quality of the journey and customer services Eurowings offer. The target market of Eurowings is quality conscious which means cost is not an issue for them. Continuous improvement of marketing effort in terms of maintaining the quality and image of the airline or at least preventing it from going negative have to be made. Customers are again at the top most priority of Eurowings however, they are retained as per their personal requirements.
5. Comparision of EasyJet and Eurowings
The marketing mix is the name of all the strategies directed towards promoting a brand, product, or service in the market (Jain, and Jain, 2014).
5.1 Product Strategies
We have learned that EasyJet is a low-cost airline which attracts people with middle incomes and makes traveling an essential experience. The flights offered by EasyJet are direct, short haul and have a fast turn around time. Small or no meals are offered to customers and mostly secondary airports are chosen as destinations.
On the contrary, the products or services offered to customers of Eurowings are based on quality and status. There are different kinds of seating for passengers depending upon the nature of service they wish to avail. Flight meals, luggage, snacks are offered to passengers depending upon their package. The services offered by Eurowings are included in the ticket price which is why the premium quality standards are delivered.
5.2 Pricing Strategies
The business model of EasyJet is based on low cost which means it competes in the airline industry on the basis of low fares. The fares are kept very low so as to make the airline an attractive choice for the target market. Eurowings does not offer cheap ticket prices- its prices are directly proportional to the kind of seating (economy class, business class) chosen by passengers. Since quality is kept at priority so pricing is a bit higher than EasyJet.
5.3 Placement Strategies
EasyJet offers short and direct routes whereas those offered by Eurowings are both short and long hauls. EasyJet covers a number of destinations, however, the choice of airports is secondary so that it could maintain its cost leadership structure. Eurowings covers more destinations that EasyJet by reaching in almost all continents while focusing mainly in Europe (Eurowings, 2016c).
5.4 Promotion Strategies
Since EasyJet has a low cost structure so it cannot afford to allocate a huge budget to the advertisement and promotion side. The promotional efforts carried out by EasyJet are minimal and mostly in the form of leaflets or word to mouth. The customers of EasyJet understand its low cost strategy and there is little room for promotion. Eurowings make use of several promotional tools such as advertisement through social media, travel agencies, billboards, emails, brochures etc. Special budget is allotted for promotional activities. Sometimes special packages including less price and more features make the traveling experience more enjoyable and reliable.
5.5 Physical Evidence Strategies
The physical evidence of EasyJet is based on its aircrafts of various sizes as well as the seating arrangement. Since the airline charges less for its tickets so customers do not have high expectations from its aircraft, luggage cabins, cleanliness and leg space. On the other hand, customers of Eurowings link the reputation and image of the airline by its luggage facility at the airport, the waiting area, the size of aircraft, cleanliness of the aircraft, smooth flight with no jerks, proper seating arrangement with adequate leg space, meal serving trays, luggage cabins etc.
5.6 People Strategies
For any service organization such as airlines, the people part of marketing mix has ample significance. If the employees of an organization are kept satisfied, motivated and loyal, it is likely that they would exhibit superior levels of customer service. Fortunately, the employees of EasyJet and Eurowings are heavily incentivized therefore, they ensure that competitive advantage is maintained.
6. Brand Positioning
6.1. Brand Positioning for EasyJet
As with reference to demographics, EasyJet mostly targets the middle-class or medium income level group of passengers through its cost-efficient services. Since, it is following traditional and conventional patterns of operating, by attitude its target passengers can be regarded as conservative and less inclined to novelty and innovation. Furthermore, it has nothing to offer to business class or group of passengers belonging to upper class or high income group. Here, it is important to note that it also targets another psychographic segment of customer. And, it is the passengers fearing air-travel due to doubts entertained by them regarding safety. In its mission statement, the company retains significant focus on the safety of passengers. Its motto is to provide safe and affordable travel to its valuable customers. This emphasis on passenger safety provides much reason to these psychologically hesitant passengers to opt for EasyJet. So we can say that the brand of EasyJet is positioned as a low cost airline by its target market.
6.2. Brand Positioning for Eurowings
Eurowings, on the other hand, targets diversified demographic groups of customers. For example, it has three different prices i.e. Basic Fare, Smart Fare, and Best Fare. Basic fare is for those customers that do not want any additional services except flight from one destination to another either long haul or short haul. These passengers mostly come from middle class or medium income group. As for ‘Smart Fare’, it offers in-flight catering and checked item for luggage along with seating after passengers’ choice and preference. And, ‘Best Fare’ offers business class services at high-end prices. This includes a wide range of catering and premium services as well as highly comfortable seating in business class environment (Eurowings, 2016b). However, it has nothing to do with affordability (for middle class). So from here, we can conclude that the brand of Eurowing is positioned as a high quality airline with customer service and features beyond the exceptional levels.
7. Value Chain
7.1 Value Chain for EasyJet
As discussed by Porter, the value chain is composed of primary and secondary activities. The primary activities for EasyJet include the scheduling of flights, crew allocation, route assessment and the pricing of fuel as inbound logistics whereas in the outbound logistics, activities such as hotel and baggage follow. Customer complaint center accounts for service whereas operations deal with the immediate ticket offer to the customers. Marketing and sales team are in charge of the promotional activities and customer relationship services. As for the secondary activities, the firm infrastructure include compliance, fianance and accountancy. Procuerement usually deals with warehousing and eprocurement wheras online ticketing accounts for technology at EasyJet. Human resource deals with the training and developmental needs of pilots, crew members and ticketing reservation team.
7.2 Value Chain for Eurowings
The primary and secondary activities For Eurowings as mentioned by Porter are significant and distinctive. The logistics are interconnected and operaations are also centralized and related to baggage and fuel. Passenger services such as those related to the flight attendants, flight booking and complaint centers make up the services of Eurowings. Sales and marketing activities are not very significant however they do help in achieving marketing objectives. Human resources is highly qualified and experienced so as to deliver exceptional customer service to the passengers of Eurowings. Technological setup is advanced at Eurowings especially customer booking facilities and provision of suitable seating plans.
8. Recommendations and Conclusion
We have seen that not all airlines have their own competitive advantages and they develop their business models in a way that value can be added and maintained in the eyes of stakeholders. EasyJet believes in keeping its cost structure low as it wants to be known as the low price carrier whereas Eurowings wanted to be known for its quality and superior services regardless of the flight fare. The marketing mix, targeting, positioning and value proposition are designed by keeping in view the mission and vision of the respective airlines. Key external factors always play a key role in shaping or reshaping the business and marketing plan for different business entities (Karami, 2007; Cavusgil & Zou, 1994). The marketing mix of Eurowings is comparatively more flexible. It can shift its marketing strategy to make it align with any unexpected change in passenger preferences in years to follow. However, EasyJet has not such option of switching due to its singular approach (low prices to target middle-class passengers) to pricing and targeting.
Some of the practical recommendations for both the airlines based on the insight derived from the whole study are as follows:
EasyJet should also offer some other price categories according to different service categories to target broader segment in the market.
It is the right time for EasyJet to propose merger to its rival airline Ryanair (another LCC), as both are enjoying growth (Thomas, 2014). This alliance will add handsomely to their competitive strength against other airlines in the sector.
Eurowings should come up with a comprehensive strategy to overcome the issue of delays that is damaging its reputation quite badly.
The merger between Eurowings and EasyJet can also be a practically profitable option for both the airlines in hand. So both of them should also consider this option.
The growing trend of social responsibility and concern for the environment must also be made a part of the business strategies of the companies . (Hopkins, 2007; Arvidsson & Peitersen, 2013; Grimmer & Bingham, 2013).
The airlines must also consider the issue of environmental protection while setting up their business strategies so as to strengthen their brand image (Avjobs, 2016; Green Air, 2016)
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