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Nigeria

Essay by   •  March 18, 2011  •  1,709 Words (7 Pages)  •  1,066 Views

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asyJet was founded by Stelios Haji-Ioannou, the son of a Greek shipping tycoon who reputedly used to �hate the Internet’. In the mid 1990s Haji-Ioannou reportedly denounced the Internet as something �for nerds’, and swore that it wouldn’t do anything for his business.

This is no longer the case since by August 1999, the site accounted for 38 per cent of ticket sales or over 135,000 seats. This was past the company’s original Internet contribution target at launch of 30 per cent of sales by 2000. In the period from launch, the site had taken more than 800,000 bookings since it was set up in April 1998 after a shaky start of two sales in the first week and one thousand within the first month.

In March 2000 easyJet increased its online discount to Ð'Ј2.50 for a single trip вЂ" a higher level of permanent discount than any other airline. By September 2000, Internet sales reached 85% of total sales. Since this time, the growth in proportion of online sales has decreased. By 2003, over 90% of all sales were online.

The articles relate the tale of the owner’s office being graced by a photo of the owner with horns on his head and a Mexican moustache on his upper lip. The image was contributed as a complaint by an aggrieved customer. The nature of the entrepreneur was indicated since he sent the customer two free tickets.

The company was originally set up in 1994. As a low-cost airline, looking to undercut traditional carriers such as British Airways, it needed to create a lean operation. To achieve this, Haji-Ioannou decided on a single sales channel in order to survive. He chose the phone. At the time this was groundbreaking, but the owner was encouraged by companies such as Direct Line insurance, and the savings which direct selling would bring.

Although Haji-Ioannou thought at the time that there was no time to worry about the Internet and that one risk was enough, he was adaptable enough to change. When a basic trial site was launched, he kept a close eye on how popular the dedicated information and booking phone line was (having a web-specific phone number advertised on the site can be used to trace the volume of users on the site). A steady rise in the number of calls occurred every week. This early success coincided with the company running out of space at its call centre due to easyJet’s growth. Haji-Ioannou related, вЂ?We either had to start selling over the Internet or build a new call centre. So our transactional site became a Ð'Ј10 million decision.’

Although the success of easyJet could be put down solely to the founder’s adaptability and vision, the company was helped by the market it operated in and its chosen business model вЂ" it was already a 100 per cent direct phone sales operation. This meant it was relatively easy to integrate the web into the central booking system. There were also no potential channel conflicts with intermediaries such as travel agents. The web also fitted in with the low-cost easyJet proposition of no tickets, no travel agents, no network tie-ups and no in-flight meals. Customers are given a PIN number for each order on the web site which they give when they get to the airport.

Sales over the Internet began in April 1998, and although easyJet’s new-media operations were then handled by Tableau, a few months ago easyJet took them in-house.

The Internet is important to easyJet since it helps it to reduce running costs, important for a company where each passenger generates a profit of only Ð'Ј1.50. Savings to easyJet made through customers booking online enable it to offer at least Ð'Ј1 off to passengers who book online вЂ" this is part of the online proposition. Online buyers also benefit from paying the price of a local call, instead of the standard national rate of easyJet’s booking line.

The owner says that вЂ?the savings on the Internet might seem small compared to not serving a meal on a plane, which saves between Ð'Ј5 and Ð'Ј10, but when you think how much it would cost to build a new call centre, pay every easyJet reservation agent 80 pence for each seat sold вЂ" not to mention all the middlemen вЂ" you’re talking much more than the Ð'Ј1 off we give online buyers’.

What about the risks of alienating customers who don’t want to book online? This doesn’t worry the owner. He says �I’m sure there are people who live in the middle of nowhere who say they can’t use the Internet and will fly Ryanair instead. But I’m more worried about keeping my cost base down, and finding enough people to fill my aeroplanes. I only need six million people a year, not all 56 million.’

easyJet promotion or communications strategy

The Internet marketing gurus say �put the company URL everywhere’. easyJet has taken this literally with its web address alongside its Boeing 737s.

easyJet frequently varies the mix by running Internet-only promotions in newspapers. easyJet ran its first Internet-only promotion in a newspaper in The Times in February 1999, with impressive results.

Some 50,000 seats were offered to readers and 20,000 of them were sold on the first day, rising to 40,000 within three days. And, according to the marketing director, Tony Anderson, most of these were seats that otherwise would have been flying along at 600 mph вЂ" empty. The scalability of the Internet helped deal with demand since everyone was directed to the web site rather than the company needing to employ an extra 250 telephone operators. However, risk management did occur with a microsite built for Times readers (www.times.easyjet.com) to avoid putting a strain on easyJet’s main site.

Anderson says, вЂ?The airline promotions are basically designed to get rid of empty seats’. He adds, вЂ?If we have a flight going to Nice that’s leaving in 20 minutes’ time, it costs us very little to put some extra people on board, and we can get, say, Ð'Ј15 a head for it’. Flight promotions are intended to avoid attracting people who’d fly with easyJet, so advanced booking schemes are intended to achieve that.

A later five-week promotion within The Times and The Sunday Times newspapers offered cheap flights to a choice of all easyJet destinations when 18 tokens were collected. In total, 100,000 seats

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