A Case Study Of Fly It Cheap Marketing Essay

A Case Study Of Fly It Cheap Marketing Essay

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I shall consider the 7 P'S for Fly-it-cheap how they might be used to develop and plan to the year 2015. The 7 P'S are known as the marketing mix and are an extension of the 4 P'S to include the service industry. The marketing mix is "the combination of elements that influence a customer's decision whether or not to buy a product."( Malcolm, S. & Andrew, G. 2008, p191). The 4 P'S are useful where physical products are involved by some writers' think it is not enough for service. The other three are needed because Fly-it-cheap is a service marketing; they need extended marketing mix to make sure they can achieve the aims.

"The product is the good-and-services combination the company offer to the target market."(Armstrong, G. & Kotler, P. 2000 ; p83). The product can sell and provide to the customers, the company through this to get the profit. The products or service of Fly-it-cheap for the customer is just flying from A place to B place. The customer just wants to spend less money to fly to another place, so the service for the customer is basic. Fly-it-cheap do not supply food and drink, if the customer need we can sell them on plane. The product that fly-it-cheap offer is very basic and it not emphasised as much as the next P-Price.

2. Price

"Price is the amount of money customers must pay to obtain the product". (Armstrong, G. & Kotler, P. 2000 , K; p83). The price of Fly-a-cheap is the focal point for the customers. Most seats of Fly-it-cheap are sold with the lowest price; however, if the customer wants a more comfortable seat or need extra service, they need to pay more money. Fly-it-cheap will cut out all extras including walkways to the airport and bus passengers to the terminal. This lets them charge a lower price. For example, Ryanair just £7 to fly from London to Cuneo. However, it is just a one way ticket and you just book the ticket until midnight (http://www.ryanair.com/en)

3. Place

"Place includes company activities that make the product available to target consumers" (Armstrong, G. & Kotler, P. 2000 ; p83). For Fly-it-cheap, there is no travel agent and they must find a cheap airport to reduce the landing cost. Budget airline use secondary airports that are farther away. For example, London (Luton) used by Easyjet which is 35 miles from the centre of London-at least an hour away from where most commuters would want to be.

4. Promotion

"Promotion means activities that communicate the merits of the product and persuade target customers to buy it." (Armstrong, G. & Kotler, P. 2000; p83). Promotion is the method that let the customers know about and attract people to fly with us. Because our price is very low, so they can not put much money in promotion. Fly-it-cheap use Internet site to promotion. They can do the advertising by ourselves, for example, we can make the video which can introduce Fly-a-cheap and put it on the Internet. We also can send e-mail to people introduce Fly-a-cheap. Ryanair makes controversial statements to get into the news and promote themselves. For example, they suggested charging to use the toilet in-flight. (www.new.bbc.co.uk).

5. People

"All people that are directly or indirectly involved in the consumption or a service are an important part of the Extended Marketing Mix" (http://www.12manage.com). Fly-it-cheap use the young staffs and recently-qualified pilots and most staff from European countries with lower wages than the staff from UK. This can reduce the income cost. We also can reduce the number of the staff. People are not important when selling a physical product but airlines like Singapore airline emphasis how friendly staff.

6. Process

"Procedure, mechanisms and flow of activities by which services are consumed are an essential element of the marketing strategy". (http://www.12manage.com). Fly-it-cheap use online check-in, no seat reservation the people who first come in the plane can choose the seat he\she like. And the customers can not use the air-bridge. About the baggage, the customers put the baggage into the plane by themselves to reduce the service charge. All trades are do online, the customer buy the ticket online and get the e-ticket.

7. Physical Evidence

"Physical evidence is an essential ingredient of the service mix; consumers will make perceptions based on their sight of the service provision which will have an impact on the organisations perceptual plan of the service." (http://www.learnmarketing.net/servicemarketingmix.htm). For Fly-it-cheap the most important physical evidence is the plane. Fly-a-cheap buy planes which are good quality and cheap. They got a discount from Airbus. They also can buy second-hand planes which have good quality. The second-hand planes are cheaper than the new one. However, the decoration inside is basic and they get the maximum number of passenger seats as possible to make more money. This is not emphasised in their marketing mix.

TASK 2

Fly-it-cheap provides a service to customers; this makes it harder to market. Because this airline service is different from products. For example, when customers buy a product like a computer, they can see and touch the computer. In PC World, for example, they have iPads for people to try to see if they like them. However for the airline service, customers cannot see, touch or feel their service. So Fly-it-cheap must pay more attention to market their business. They attract customers by their low price to fly or by using their imagination to appeal to customers about the benefits offered. Like Aviva TV advertising, they focus on the customer doing things they like such as going to music festivals and football matches with the money the save on their insurance with Aviva.

At first, when the customers want to travel with Fly-it-cheap, they buy the air tickets on-line, but they cannot see or feel the service before they fly. This called Service Intangibility which means that:" services cannot be seen, tasted, felt, heard, or smelled before they are bought." (Armstrong, G. & Kotler, P. 2000 , p252). This makes it harder to market as the benefits can only be experienced once bought and in the case of insurance may never be used. Life insurance, for example, is only used when the person is dead!

Secondly, Fly-it-cheap is a business, if they want to run the business they must have the plane and the pilot. Because Fly-it-cheap gives the low price to the customers, they must reduce the cost of physical evidence and staff. So Fly-it-cheap must found providers to support the cheap plane or cheap airport. They cannot run the business without the pilot and crew: This is service inseparability and means that:"service cannot be separated from their providers, whether the providers are people or machines." (Armstrong, G. & Kotler, P. 2000 , p252).

After that, for service, the staff is very important. They face the customer and provide the service directly. However, every member of staff may have different service quality; some are always nice but some can be rude; sometimes a good member of staff can have a bad day. Fly-it-cheap has fewer staff for the service, and the staffs must provide good service to the customers. Service variability means:"the quality of services depends on who provides them as well as when, where, and how they are provided." (Armstrong, G. & Kotler, P. 2000 , p252). To reduce this problem the airline needs to invest in staff training (adding to costs).

Finally, when the customers fly with Fly-it-cheap, it just for a few hours. This service are transitory, it cannot be stored. And Fly-it-cheap has not the extra service for customers. For example, customers have not after-sell service and cannot change the time of the fight. Service perishability means:"services cannot be stored for later sale or use." (Armstrong, G. & Kotler, P. 2000, p252)

For service, service quality is very important. There are many problems when the managers provide service to the customers. First of all, there are some differences between the service provided by the managers and the customers' expectations. When this problem happened, we called this as the service gap. Fly-it-cheap have low price to customers, because the cheap price, customers have not free food or drink, customers need to take their own sandwiches and drink or pay money to buy. Some of these customers may have flown with more expensive airlines and expect free food and complimentary drinks; however, part of the marketing department's job is to make customers' expectations closer to the real experience. Ryanair use the press to do this, for example, talking about charging for toilets. Customers who hear that know they are not going to be experiencing the Business Class of Singapore Airlines! This brings the top line of the graph down and is known as the knowledge gap.

However the managers must understand how important is service quality and do it well. This will bring the lower line up and is called the Design Gap and it means that:"how well the service design specification match up to management's perception of customer expectations." Because the low price the customers choose fly-it-cheap, so the customers do not want to pay more money on extra service. The service must be designed to do what customers want. Marketing is, according to the Chartered Institute of Marketing:

The management process responsible for identifying, anticipating and satisfying customer requirements profitably.

(www.cim.co.uk)

As part of design management must find out what customers want and give it to them while making a profit.

Third gap is the performance gap. The performance of service is depend on the staff attitude and the main part of the service is staff. Because the staff is directly face the customer and provided the service. On the other words, when the staff gives the customers a present service, the performance of the service will good. However, if the staff have a bad day and provide a bad service to the customers, the performance of the service will bad. According to this, the managers need to spend money to training the staff or encourage the staff, let the staff do the service better.

Then, there always have the difference between the advertising and the real service. The company is through the advertising to tell the customers their service. The advertisers communicate with the managers and make sure the advertising is complying with the real service. This called communication gap, and it means:"the difference between what is promised to customers, either explicitly or implicitly, and what is being delivered." (www.cim.co.uk)

TASK 3

The Marketing Communication mix include advertising, public relation, direct marketing, personal selling and sales promotion. These five tools help the business let customers know more about their products and service.

Advertising is "a tool that can get your messages to large audiences efficiently through such avenues as radio, TV, Magazines, Newspapers, Internet, Billboards and other mobile technological communication devices."(http://www.selfgrowth.com). The TV advertising is expensive. Because Fly-it-cheap has low price, so they need low cost of advertising. They can use newspaper to advertise their service. For example, Ryanair put their advertising on the newspaper. When people read the newspaper they can see that advertising. This is a quick and effective way to advertise the service to a mass market. However advertising is quite expensive and not targeted well. In the future Fly-it-cheap can use the National newspaper to advertise their service and not use TV. So it is cheap to do the advertising.

Sales Promotion is a tool that" used through coupons, contests, samples, premiums, demonstrations, displays or incentives. It is used to accelerate short-term sales, by building brand awareness and encouraging repeat buying." (http://www.selfgrowth.com). Fly-it-cheap can give customers the freebies. When the customers fly with Fly-it-cheap, they can get a souvenir. However the company must choose the cheapest souvenirs to give the customers. This way is spend less money to advertise the brand of the company. But it just for a small range of people and has small sector of influence. It cannot know by a lot of people. In the future Fly-it-cheap can give customers the freebies like small toys with logo or pens with logo. http://www.clpromotions.co.uk/pens. When the customers get these freebies they feel good and when customers keep or use these freebies they and advertise Fly-it-cheap.

Public Relations is tool that "initiated through public appearances, news/press releases or event sponsorships, to build trust and goodwill by presenting the product, company or person in a positive light." (http://www.selfgrowth.com). Fly-it-cheap need to use media advertising but not pay for. They can use the news or internet news to let people know the brand. For example, Ryanair uses Public Relation very well. A person writes on his blog that when he changes his flight time his flight price becomes £0.00. This blog become social news and it is popular with bloggers like Digg, Reddit and Twitter. When the company can use Public Relation very well the pay nothing and let public to know their service. But when the company meet a bad news, this will affect the image of the company. In the future Fly-it-cheap can put their service into news. They can do some unique things to make a news, so their brand will famous because the news. Also they pretended they were going to charge for toilets and got on the television.

Direct Marketing is a tool that" will utilized email, mail, catalos, encourage direct responses to radio and TV, in order to reach targeted audiences to increase sales and test new products and alternate marketing tactics." (http://www.selfgrowth.com). This is a way that the company communicate with customers direct. Company and customers communicate with mail, e-mail and social networking sites. This last one is a new way of getting to customers and Fly-it-cheap should use it as they can target the types of people and the place they come from. This uses market segmentation better than the other methods. By choosing their target market they can put in the parameters on Facebook for example and only target people in Manchester or Birmingham if they want to.

Personal Selling is that "Setting sales appointments and meetings, home parties, making presentations and any type of one-to-one communication, to reach your customers and strengthen your relationship with your clients, initiate this IMC tool." (http://www.selfgrowth.com). This is the way that the company communicate with customers face to face. This way let the customers know the products and service very clear. But the company use this promotion need more staff and spend a lot of time. For Fly-it-cheap, the customers buy the flight ticket online very convenient and quickly. Thus Fly-it-cheap will not use this to promotion their service as it would not be cost-effective.

Task 4

Buyer behaviour is change in recent years. The marketing team need to understand the current buyers' behaviours and future buyers' behaviour. Also understand what change of these buyers' behaviour. So the business can change their decision in the future to satisfy the customers' demand. For the airline company Fly-it-cheap depends on the customers need to change their service. Happening with a change of buyers' behaviour, the 4/7 Ps also have some change. Understanding buyer behaviour is important for a business. There are some changes to buyer behaviour in the airline industry. For example, families have always chosen package holidays but when the flight tickets became cheap, they could buy the flight tickets and book hotel by themselves. This was made easier by the Internet so that families could find a hotel in Spain or Greece or Kuala Lumpur without going to a travel agent. Customers enjoy cheaper holidays than from package deals because flights and hotel can now be bought separately.

The customers are through five stages to help them make the right decision. They are Need Recognition, Information Search, Evaluation of Alternatives, Purchase, and Post-Purchase Evaluation. Managers must know these stages to match the customers demand.

First stage of Decision Making Process is Need recognition, the business make the decision that what product or service the customers need. The customers need to fly to other places, so they choose airline. Most customer fly to different places, so the airline company need to supply different airline to satisfy customers' demand. When customers' behaviour is change, marketing mix also has change. The products or service change a lot, nowadays, people like to go to near places by air for the weekends. So the Fly-it-cheap can supply more route airline to satisfy the customer. They also can promote their airline all the time instead advertise airline on holidays.

There are three main Decision Making Units; they are Individuals, Families and Businesses. Individuals have free choice, most people choose fly to other place have holiday, most of them stay that place for a long time (at least two weeks). However, because of fly-it-cheap have the cheap tickets for the flight, so many people chosen to fly to the place they like have weekend holiday or day holiday.

For business, when the staffs on business buy plane tickets, the company make the decision about the time, the flight and who you fly with. Yet, sometimes the staff need to change the time of the flight, this spend much money, and because fly-it-cheap have low price, so the staff on business can buy the tickets from fly-it-chap to save money. When the customers need is increased, the business can depend on customers' need to supply more products or service. The People of Marketing Mix changes, the staff of the Fly-it-cheap also very important, when more business choose Fly-it-cheap the staff must very kind and give the business a good image.

Second stage is information search, customers always through information search to decide what product they will buy. And this information come from the people who use the product, like family, friends, neighbours, the customers also can ask the sales people. Because the company get the information from the public, so in seven P's of Marketing Mix the public relation is important. Public relation is a communication tool to help the company get the information from the customers. However Fly-it-cheap also use advertising to promote. The customers also can get the information from advertising. When there are most people use computer and get the information from the Internet. Fly-it-cheap changes their promotion, use more Internet to advertise their product or service. They also can build a good brand to make a good image for the customers. The different between Public Relation and advertising is that when the business does the advertising they need to pay for advertising company, and the advertising always tells the customer the best part of the products or service. But Public Relation is a communication tool, it is free, and the manager cannot control what the information the customers give the public.

Then, the stage is Evaluation of Alternatives. During this stage, customers will make the final decision which products or services they will buy and evaluate these products or services based on their individual need. All the seven P's of Marketing Mix will affect the decision in this stage. The customers fly with Fly-it-cheap because it has low price. Fly-it-cheap can make a good promotion like make interesting Internet video to be the advertising or put the beautiful picture of the holiday places on newspaper to advertise their airline. Through these promotion let the customers fly with them. When there are more choices for customers, Fly-it-cheap need to pays more attention to the promotion. A good promotion can attract the customers choose your product or service.

Next stage is Purchase, when customers decide to buy the products or services they have the action, this action is purchase. The purchase action include customers buy the product and which method of purchase. As usual, customers must go to the physical shop to buy the product. However, today the method of purchase changes a lot. Customers can online shopping or TV shopping. The customers of fly-it-cheap buy the tickets online instead go to physical shop or airport. For Marketing Mix, because of the method of purchase change, the place is change, fly-it-cheap have no agents, customer booking the flight online and can reducing landing charges. The process of Marketing Mix also change, the company can allow the customers change the flight without any fee if the customers buy more than 10 tickets in the year. Fly-it-cheap also can cooperating with the travel company. They can supply cheap air tickets to the package holiday. For the customers, package holiday is very convenient, so many people like package holiday. If fly-it-cheap can catch the chance to cooperate with the travel, they can make more profit.

The last stage is Post-Purchase Evaluation; this means whether the customers satisfied or discontented the products they bought. Because Fly-it-cheap is a short-term airline service, so the customers cannot own this service for a long time. Fly-it-cheap can do the questionnaire from the customers and get the information about their product or service. Through the questionnaire they can know what the customers think about and what can they do in the future.

Task 5

Low-cost airline goes against all that we learn in marketing about building and developing a brand. There are seven factors to help a business build a brand. They are Quality, Positioning, Repositioning, Communications, First-mover advantage, Long-term perspective and internal marketing.

Quality is "a vital ingredient of a good brand." If the products have high quality, the customers will believe this brand and they can attract more customers than other competitors. (http://tutor2u.net/business/marketing/brands_building_brands.asp). Typical brand theory needs quality to be very important part to build a brand. Fly-it-cheap has not physical products, they just have basic service. But these services have not high quality. People choose Fly-it-cheap is not because the quality, people fly with Fly-it-cheap because it has low price. And it also famous because it low-cost. So low-cost airline does not fit into the typical mould of usual brand.

Positioning is about "the position a brand occupies in a market in the minds of consumers." Positioning includes the name of the brand, the image, service standards, product guarantees, packaging and the way in which it is delivered. (http://tutor2u.net/business/marketing/brands_building_brands.asp). The image of Fly-it-cheap to the customers is they can fly with cheap price. Fly-it-cheap has not other extra service. Although Fly-it-cheap does not have high quality service positioning but it also use the low-cost positioning to build a successful brand. Compare with the normal airline, low-cost airline just have basic service, and the customers of low-cost airline just want to fly with a lower price from A place to B place, they do not care about the service.

When the brand will change the position of the products and service, they will use Repositioning. Because the customers have not interested in the products, so the business want to change. But for Fly-it-cheap, this service is not depends on the customers like fresh things. The cheap price always attract people fly with Fly-it-cheap. So Fly-it-cheap and other low-cost airline do not worry about repositioning.

For typical brand theory communications play a very important role to build a successful brand. Generally, the business needs to communicate with the customers and understand what the customers' demand. So the business can satisfy the customers. In this way they can supply the good products and service to the customers. However, Fly-it-cheap has not communicated face to face with their customers; the customers buy the air tickets from Internet. Fly-it-cheap can through the promotion to tell the customers their service. They can advertise on radio or newspaper. They also can do the Public Relations to advertise their airline. For example, Ryannair were on the news because they said they would charge customers to go to the toilet. Ryannair use Public Relations good and not spend money to advertise their airline.

Next is first-mover advantage, this means that" it is possible for the first successful brand in a market to create a clear positioning in the minds of target customers before the competition enters the market." (http://tutor2u.net/business/marketing/brands_building_brands.asp). The managers must make a clear positioning and be the first into the market. If the products be the first, customers will easy to remember the brand. The Ryanair and Easyjet are the famours low-cost companies in the world. People choose them not because they are the first low-cost companies. They choose them because they are famous and with the low price.

Another key factor of building a successful brand is long-term perspective. "The managers need to invest in the brand over the long-term. The business need to build customer awareness, communicating the brand's message and creating customer loyalty. " (http://tutor2u.net/business/marketing/brands_building_brands.asp). These factors need much time to do. Fly-it-cheap is famous for its low-cost, and its positioning is spending less money to travel by air. They use the cheap price to attract people to fly with them. They advertise their business on newspaper and Internet. Let more people to know their low-cost airline. They build a successful brand, but not invest much money. They use the cheap tickets attract people at a short time.

Finally is internal marketing, it means that:" the whole business should understand the brand values and positioning." (http://tutor2u.net/business/marketing/brands_building_brands.asp). Its very important for services business, the business pays more attention to brand value and the quality of service. Fly-it-cheap is a company that supply low-cost travel to the customers, they do not have high quality service, but they built a successful brand. They have many customers and they make the business bigger. Other low-cost airline companies also built the brand very well. For example, Ryanair is one of the most popular airlines in the world. The brand not built buys those seven steps, they famous because they are one of the world's most unpopular airlines.

The low-cost airline build the brand is different from typical brand theory, because these seven steps of build a successful brand is not fit low-cost airline company. Low-cost airline without these steps also build a successful brand. And they do the business very well. The reasons of budget airline are show below. First, successful is that they made the price most important factors of deciding on their choice of airline. In other word, the customer prefer fly cheaply than fly comfortable. Second reason is that the customers of low-cost airline always have the short-time fly (no more than two hours). For the short time travel, people prefer to travel by air instead use bus or train. In economics, it is because they have practiced price discrimination. The third reason also can be the choice. For the short flight, for example, people on business or have short-term weekend holiday. They choose to fly to the destination quickly. At this time they will choose low-cost airline instead the normal airline with comfort and two hour wait. Because the short-term of the fly, people prefer spend less money on flight and spend more money on their hotel or entertainment.