Contemporary Brand Management Report for EasyJet

Contemporary Brand Management Report for EasyJetBackgroundOver each, the jaunt market has performed well since 2001, with revenue growth accelerating from 3% in 2002 to 11% in 2004, with total sales for that year creation estimated at US$ 549.4 billion. However, some sectors performed better than separates, and the dowery of atmospheric state manoeuvre go away bit by bit between 1999 and 2003, partly as a result of f tout ensembleing fargons collect to industry liberalisation and the growth of low-cost airlines. However, sales rose potently in 2004 as the motive power industry rec all oered and economic conditions were stronger. Indeed, over the period from 1999 to 2004, online sales grew by a spectacular 403%, to reach US$85.2 billion, and the online serving of total hold out retail sales increase from al unmatchable 4% in 1999 to al nigh 16% in 2004. radiate transport is by far the largest transportation sector in terms of overall sales, re stipend fit to its high prices and convenience, with a value share of 58% in 2004. (Global Market Information Database, 2005).As of 2004, no-frills airlines were continuing to expand, although there were signs of a shake-out in the industry as several smaller businesses went bankrupt in 2004, and intense competition has likewise brought some major US carriers to the marge of bankruptcy. In 2004, behavior France crowd became the leading airline in the founding in terms of value market share, after the merger of Air France with Dutch discipline carrier KLM. The combined airline now operates a fleet of 550 aircraft, serving 189 destinations in 84 countries, by to a greater extent than 1,800 flights per day. Air France Group had an estimated market share of 6% in 2004, overtaking the introductory market leader, lacquer Airlines Co Ltd (JAL), and is thus one of the strongest blurs in the market, out-of-pocket to its new European identity, and high level of coverage. (Global Market Information Databa se, 2005).JAL Group itself was overly the result of a merger in 2002 between Japan Airlines and Japan Air System, and its share fell in 2004 to 5%, due to the groups poor financial performance in that year. Although domestic sustain routes were reported to direct performed well in 2004, the slump in the supranational segment gave rise to a 72.1 billion (US$687 million) operating way out, due to the unseemly effects of very low travel confidence in Japan, which prevailed in the first half of fiscal 2004. Nevertheless, JAL continued to increase its leading share in the domestic Japanese market to 43%, well forrard of the number deuce order, All Nippon Airways, with 34%, due to its strong connections with its acres of origin. (Global Market Information Database, 2005).The largest US carrier, AMR, was virtually on a par with JAL in both 2003 and 2004 in terms of value market share, and in any case saw its share fall slightly, to 5% in 2004. The Ameri weed airlines all suffered from the events of 11 phratry 2001 and from the economic downturn, and have continued to perform badly. UAL potbelly saw its global share fall from al well-nigh 6% in 2001 to just over 4% in 2004, while the share of Delta Airlines fell to 4% over the same period. United Air Lines was the most disadvantageously hit of the big three US airlines after 11 September 2001, and was forced to file for Chapter 11 bankruptcy at the end of 2002. However, after undergoing a drastic restructuring programme, the airline had received the necessary financing to wait from bankruptcy by the end of 2003. All the US airlines are presently experiencing cross identity crises, as the US continues to associate air travel with the spread of international terrorism.The European airlines British Airways (BA) and Deutsche Lufthansa have to a fault see mixed fortunes. While the share of BA fell steadily over the review period, to 4% in 2004, that of Lufthansa rose, placing it almost equal with BA, and L ufthansa recorded increased sales and achieved profits in the first quarter of 2004, compared to a loss in the same period of the previous year. (Global Market Information Database, 2005)Both these planetary houses are struggling to compete with the strongly growing no frills airlines, potentially indicating that the national sign reinforcement is no longer enough to build a strong chump in the airline industry, and that something more is needed.Brand outcomeGovers and Schoormans (2005) provide one of the best pieces on the concept of commemorate worry, claiming that, beyond their functional utility and purpose, products and series have a symbolic meaning, and separate of this symbolic meaning are accounted for by concepts like brand nature and product- implementr motion picture, which describe the symbolic meaning associated with the brand or product class. Plummer (1984) similarly focused strongly on the nature of brands, claiming that there are, in reality, dickens dif ferent faces of brand personality, and it is necessary to understand both faces in set up to better grasp the totality and power of this useful strategic concept. A brand presents itself to the homo in more ways, done the product itself, done its packaging, its name and where it is sold. A brand sold in a supermarket or via the internet, is attempting to communicate something, nevertheless the world, on the other hand, interprets the brand through many different filters through experience, through perceptions, misconceptions, the value systems of the individuals out there in the world, and, of course, all the noise in the system. The two faces of brand personality then are input, that is, what advertisers want consumers to think and feel, and out-take, what consumers actually do think and feel, and these two perspectives on brand personality can be expressed in two forms. The first can be seen as the brand personality statement and the other as the brand personality profiles, which are consumer perceptions of the brand. (de Chernatony and McDonald, 2003)In terms of a brand personality for an airline, this can be vitally important, as few markets are as brutally competitive as the airline market. However, just because the competition is touchwood, thats no reason to be tough on customers, like many airlines do, as they are convinced that travellers bearing mainly about price. As a result, many airlines most notably the major U.S. carriers and budget airlines seem to have made cutting cost the top priority at the expense of their armed service quality, and have strengthened brand personalities around looking to pinch every penny. However, Prokesch, S. E. (1995) claims that it doesnt have to be that way, even in a cutthroat, mass-market business oft(prenominal) as air travel. He argues that there are plenty of people who will pay a premium for good service, even among those who travel economy, and points at British Airways profits as a key indicator because, while the world airline industry has racked up billions of dollars in losses in the go away five years, British Airways has remained solidly profitable on the back of owing(p) customer service.EasyJet has taken this lesson to heart, recruiting senior marketers in each of its major European markets in 2004, in order to coincide with its major full-scale brand relaunch that year. The airline, whose previous marketing communications were accused by some of deficient the lustre of its early years, hired dedicated country managers for the UK, France, Germany, Spain and the rest of Europe, who were liable for putting in place tailored strategies that relate to their markets perceptions of easyJet. (Rogers, Oct 2004) As a result, the airline managed to develop a fresh corporate identity and brand personality, along with its first sonic logo. It also relaunched its website, substantially increased its European advertizing budget to back its first UK TV campaign, and changed typ ography, by removing the .com from most marketing communication and the cartoon style plane from its ads. The 11m euro (7.6m) campaign, which ran across Europe, feature the strapline Come on, lets fly, and was micturated by Sledge, easyJets first UK ad agency, with media through OMD. This campaign was operate by the belief that although the original marketing created lots of noise it failed to typeset the airlines distinctive attributes. (Rogers, Oct 2004) As a result, the new campaign was aimed at creating more emotion around the brand, meaning that, although easyJet remained price-driven, it also focused on the all important customer service.This re launch appears to have pushed easyJet away from its previous position, near the foot of the airline industry brand pyramid. Previously viewed as a last resort for travellers who cared only for costs, with no thought to service or comfort, the company performed well, despite previously existence one of the UKs most hated brands. H owever, with discharge prices rising, and cost cutting initiatives only being able to produce a certain amount of return, the firm has repositioned and re brand itself in order to run of the foot of the brand pyramid, leaving this office to Ryanair, and similar budget carriers, and moved itself into the middle market, with the likes of BMI. Although the carrier is still sensed as a long way below BA and the other premium service carriers, its brand re launch has now enabled it to move into the top five in the list of the UKs preferred airline brands (Curtis, 2004)PositioningMost people have an opinion about easyJet, which is one of its core strengths, built on the back of the budget airlines initial spatial relation as a liberator, enabling people to travel more frequently around Europe, with prices more akin to domestic originate travel than the traditionally high prices charged by European oarlock carriers. Also, under the guidance of Stelios Haji-Ioannou it developed as o ne of the UKs most distinctive brands, with a trademark anti-establishment attitude. However, the sector has seen growing competition from domestic entrants such as Thomsonfly and Continental start-ups such as Wizz, from Eastern Europe, with higher fuel prices are also hitting profits. As a result, in arrangement terms, some feel easyJet has been squeezed between airlines such as British Airways and the immoderate low-cost Ryanair. (Rogers, Jul 2004) It is as a result of this that EasyJet hired Sledge as its first ad agency to develop the Lets fly positioning, and has recently launched a multimillion-pound drive aimed at business travellers. ( trade (UK), 2005) The airline had previously focused its positioning and marketing efforts on holidaymakers, but is now looking to increase its share of the business market, with print, poster and radio advertisements carrying the strapline Youre a business. You work it out. (Marketing (UK), 2005).In contrast, it is a different story for one of easyJets key competitors British Airways, for whom it would appear that, no matter how badly the firm performs, the UK public will always remain loyal. BA has a clear lead as Britains favourite airline, and is seventh place in the overall best-loved brands table however this doesnt tally with the reality of its declining fortunes, mainly at the hands of the budget airlines, which, with easyJets recent rise excluded, fail to make it into the top five airlines. This can be seen as a testament to easyJets strength, and successful positioning switch, that it has managed to make it into such list, e particular(prenominal)ly when you compare the years of heritage and investment behind the BA brand, with the new re launch of easyJet. Comparing the easyJet brand, and relation success, to that of Ryanair, anlysts have claimed that both easyJet and Ryanair spotted a gap in the market, but there is a difference between a good-value proposition and being cheap. (Curtis, 2004), and this has been cited as the reason Ryanair failed to make the top five. glory endorsementThe use of celebrities as part of marketing communications strategy is a evenhandedly common practice for major firms in supporting corporate or brand imagery. Firms invest significant monies in juxtaposing brands and organisations with endorser qualities such as attractiveness, likeability, and trustworthiness. They trust that these qualities operate in a transferable way, and, will commit desirable campaign outcomes. But, at times, celebrity qualities may be inappropriate, irrelevant, and undesirable. some(prenominal) studies have examined consumers response to celebrity endorsements in advertising. Findings show that celebrities make advertisements plausible (Kamins et al. 1989) and enhance message recall (Friedman and Friedman 1979). Furthermore, celebrities aid in the recognition of brand names (Petty, Cacioppo, and Schumann 1983), create a positive attitude towards the brand (Kamins et al . 1989), and create a distinct personality for the endorsed brand (McCracken 1989). Ultimately, celebrity endorsements are believed to picture a greater likelihood of customers choosing the endorsed brand (Heath, McCarthy, and Mothersbaugh 1994) Thus, the use of celebrity endorsements is an advertising strategy that should enhance the marginal value of advertisement expenditures and create brand equity by means of the secondary association of a celebrity with a brand (Keller 1993).However, celebrity endorsements are expensive for the firm, and depending on the stipulation of the celebrity, remuneration could run into millions for several years. A contract may also include a profit sharing plan, with firms often building special and costly advertising campaigns around celebrities. For example, Coca Cola Co. reportedly worn out(p) $25 million in an advertising campaign with Bill Cosby as its spokesperson for Coke ( advertising age 1986), and IBM spent $40 million in an advertising campaign involving MASH actors (Reuters 1987). Overall, the use of celebrities as spokespersons in advertisements constitutes a significant investment in intangible assets by the sponsoring firm, an investment that management hopes to offset with greater future sales revenues and profits.A possible survival of celebrity to endorse easyJet would be Michael Moore, the American author and film maker, renowned for his antiestablishment attitude. Although the signing of Moore would undoubtedly be controversial, and possibly difficult to achieve, easyJets image has been founded on being controversial and willing to offend people, especially those in positions of authority, in the pursuit of its ultimate goals, and thus Moores backing would help support these ideals, and ensure that they remained at the forefront of easyJets branding. However, Moores anti-Bush and anti-America blandishment has often caused him to be at odds with a large plowshare of the population of the United States , and although easyJet doesnt operate in the US, this is something to consider, as the firm may wish to expand to the US in the future, and may also have a large number of potential passengers amongst Americans living in Europe.Special Interest Online PresenceEasyJet is often cited as the firm which pioneered many of the innovations that shaped the market for low-cost air travel, and information technology and an online heading has been at the heart of those developments. For example, EasyJet was the first Great Britain carrier to sell tickets online, in April 1998 however launching that first site was relatively straightforward compared to the headaches that the company faces today when managing and updating a live site that dispenses millions of customers each year. As such, easyJets online presence is of vital importance to the company for its future brand management strategies. (Warren, 2003) Indeed, Campaign (UK) (2003) recently reported that EasyJet has appointed OMD Europe to handle its 3 million online business across European markets including Great Britain, France, Germany, Italy, the Netherlands, Spain and Switzerland. matchless excellent example of how easyJet is attempting to widen its brand visibility and appeal through the internet is the recent agreement that easyJet entered into with First Choice Inc., seen as being the final nail in the coffin in both companies minute relationship with agents. First Choice Inc.s vertically integrated online readjustment subsidiary, Hotelopia, will provide rooms in 10,000 hotels across the world through the easyJet web site, with easyJet getting the commission for the booking, although the commercial details of the agreement have not been released. In addition to the financial benefits, this agreement will also enable easyJet to spread its brand image and appeal to a much wider audience, thus increasing the impact of its brand management strategies. (Davern, 2004)Referencesadvertizing Age (1986) E. F. Hutt ons Spokesman Idea a Cos Celebre. p. 1.Campaign (UK) (2003) EasyJet picks OMD Europe for online media business. subject area 43, p. 7.Curtis, J. (2004) Brands we love, brands we hate. Marketing (UK) 9/29/2004, p34.de Chernatony, L. and McDonald, M. (2003) Creating Powerful Brands in Consumer Service and Industrial Markets, third Edition. Oxford Butterworth Heinemann.Davern, F. (2004) First Choice hops into bed with easyJet. Travel Trade print UK Ireland issue 2465, p. 3.Friedman, H. H. and Friedman, L. (1979) Endorser Effectiveness by increase Type. journal of Advertising look into, p. 63.Global Market Information Database (2005) The World Market for Travel and Tourism. Euromonitor International.Govers, R. C. 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(1983) Central and Peripheral Routes to Advertising Effectiveness The Moderating Role of Involvement. Journal of Consumer Research p. 135.Plummer, J. T. (1984) How Personality Makes a Difference. Journal of Advertising Research Vol. 24, Issue 6, p. 27.Prokesch, S. E. (1995) Competing on Customer Servic e An Interview with British Airways Sir Colin Marshall. Harvard Business canvass Vol. 73, Issue 6, p. 100.Reuters (1987) April 3.Rogers, D. (Oct 2004) EasyJet relaunches with top-level rejig. Marketing (UK) 10/13/2004, p. 5.Rogers, D. (Jul 2004) EasyJet. Marketing (UK), 7/21/2004, p. 22.Warren, L. (2003) Blazing the easyJet trail. Computer Weekly 9/30/2003, p. 28.