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easyjet - This paper will start by briefly discuss the client history then move on to analyse situation in client market.

Extracts from this document...

Introduction

Introduction If one were to ask about a fastest growing airline the name easyJet would be mentioned. The airline is part of the easyGroup owned by a Greek entrepreneur Stelios Haji-Ioannon. The airline use of the Internet has marked it as an innovative, dynamic company. A product the airline offers is air flight. The purchasing of airline ticket is neither low- or high-involvement purchase, it is in the mid-range. It is not a low-involvement purchase since consumers under this condition will go for 'buy the cheapest' and are likely to purchase on impulse (Engel, Blackwell, and Miniard 1990). However, airline ticket purchases are usually not impulse purchases; they are usually planned. On the other hand, it is not under high-involvement purchase because according to Engel et al. (1990), products that have similar alternatives tend to be in low- or mid-range problem solving continuum. The alternatives of an airline flight are quite similar because any airlines can take a passenger from one place to another. It is important to keep in mind that under the context of this paper airline ticket purchases are considered to be in mid-range problem solving continuum and neither low- or high- involvement purchases but in the the middle. However, it is also important to remember that different consumers might have different level of involvement to different products (Engel et al. 1990). This paper will start by briefly discuss the client history then move on to analyse situation in client market. After that Engel, Blackwell, and Miniard (1990) individual consumer decision-making model will be discussed in detail along with some implications to the airline. The paper will also discuss about consumers' E-commerce adoption intention as part of the model. Next, the paper will put forward the critiques made on the model used. Finally, recommendations to the client of what should be done to increase sales and profits will be presented. ...read more.

Middle

The author would agrees with the statement but would maintains that the Internet does not pose significant threat to company, such as easyJet, as much as opportunities the Internet allowed. The Internet allows easyJet to be easily accessible and available everywhere everyday at anytime across Europe (since the airline is currently operating only within Europe). Accessibility and distribution is certainly an important factor in doing a business. Despite the ease for comparative shopping, online shoppers reveal to be less price sensitive when provided with non-price information (Teo and Yeong 2003; Shankar, Smith, and Rangaswamy 2003). Also, as mentioned, airline tickets are not under low-involvement purchases therefore price is not the main driver to purchase decision. Next consumers move on to the stage of alternatives evaluation. Consumers consider alternatives in their evoked set after they have performed enough information searches (Solomon et al. 2002). The set is defined as the set of preferred alternatives (Card, Chen, and Cole 2003). The decision is then made based on evaluation of these alternatives. For instance, a consumer might only consider flying with BA or easyJet but will never consider flying with RyanAir because he dislikes its 'no-service' policy. Hence, easyJet and BA are in his evoked set but not RyanAir. Another difference between easyJet and BA is number of distribution channels. When a consumer wants to book a flight from BA he could go to physical travel agent or go to the Internet. On the other hand, easyJet flights are book direct therefore he must purchase the ticket through the Internet only. If he/she is not an Internet shopper, easyJet might not be in his/her evoked set. It is during this stage that consumers will decide to accept or reject the Internet as a new shopping medium (Card et al. 2003) and subsequently accepting easyJet website as a reliable distributor. According to Solomon et al. (2002), consumers' perceived risks are associated with information search stage. ...read more.

Conclusion

For instance, what will happen if during the payment process the computer crashes or the Internet got cut-off. By providing non-price information easyJet could also reduce risks perceived by consumers. * Use affiliation programme to increase sales Because easyJet does not operate a frequent flyer programme as traditional airlines, the airline could initiate an affiliation programme to attract consumers. For example, if a customer recommends two other customers then the he or she gets 10% discount. Such as friend-recommend-friends affiliation programme is to generate word-of-mouth. The author believes that this programme would be beneficial for easyJet despite the cost that might incur. Online shoppers are usually innovators and early adopters and it is in their character to be opinion leaders. Therefore, if the company initiates such programme, it will act as an incentive for innovators or early adopters to generate word-of-mouth. * Be less aggressive in price war and highlight the simple, no frills process to increase profits The problem with price-led strategy is that it can be copied quite easily. Besides, consumers who are price sensitive are least loyal because they tend to go wherever that is cheapest. More to that, traditional airlines have lowered their fares to compete with low-cost airlines such as easyJet and their prices are sometimes cheaper. These traditional airlines are educating customers that low-cost airlines might not always be lowest price. Therefore, easyJet should not underline their low price but rather to emphasize on their simple but effective, no frills policy in order to increase sale. However increase of sales volume does not mean increase in profits. The ongoing price-war in the market encourages consumers to fly more often but due to the rising fuel prices the profit is not increasing. Therefore the author would recommend easyJet to improve the on-board service, instead of lowering fares, to move the airline closer to traditional airlines and keeping the reasonable prices. Improving service does not mean free meal on-board, but a cup of coffee would make a different. Word count: 4567 ?? ?? ?? ?? 1 ...read more.

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