Easyjet’s market segmentation and related marketing mix strategiesSince established in 1995, easyJet has experienced a rapid

growth with more than 10% each year on the company’s total

revenue. (easyJet 2012) Widely regarded as the model of the

low-cost airlines (LCCs) and the saver of the once ailing

European airline industry (Sull 1999), easyJet built up with a

core business concept to eliminate every unnecessary cost, and

thanks to all kinds of operational and marketing

characteristics based on this concept, such as only use one

type of airplane, point-to-point short-haul travel, no in-

fight meals, the company is wining a huge profit with 478

million pound before tax in 2013 (easyJet, 2013), despite of

the really low ticket price.

The aim of this essay is to analysis the business model of

easyJet by segmenting the company's consumers as well as

studying the market mix, especially the promotion strategies

it applies to satisfy the target consumers.

Part 1: Segmented markets

In 2012, the LCCs has occupied a quarter of the entire

European airline traffic while the figure of the traditional

scheduled airline is 55%, which has declined nearly 5%

(EUROCONTROL 2013). The strong development of the LCCs market

reflects the truth that more and more passengers begin to

choose LCCs instead of the national flag carriers.

Among all the LCCs, easyJet together with its strongest

competitor Ryanair are dominating the market. In 2005, both

company’s fight carried almost 70% of all the passengers

carried by all the LCCs (Mintel 2005). However, due to the

liberalization of the airline industry, a great number of new

companies are now entering the market which significantly

increases the competitiveness of the market (Doganis 2005). A

remarkable evidence of the raising competitiveness is the

continue decreasing of the average price of tickets on both

leisure traveling and business traveling (Marco Alderighi

2012) , which also simultaneously attracting more passengers

of both segments to travel with LCCs.

For Leisure Travelling

Normally the leisure travellers can be classified into two

different segments, which are the business class leisure

travellers and the economic class leisure travellers (Thorsten

Teichert 2008). Unlike the relatively rich business class

passengers, the latter segment has more concern about the

price of the fight, due to the limited personal disposable

income (PDI). These expense sensitive travellers are the best

target market segment for easyJet, and research on leisure

travellers’ price elasticity of airline tickets has also

proved their increasing market demand for LCCs (Martijn Brons

2002).

Moreover, most of the people in this segment are short or

middle-haul passengers and occupy more nearly 82% of the total

number in Europe from 2000 to 2004 (Key Note 2005). Therefore,

for easyJet, this particular price-sensitive short/ middle-

haul passenger group is the company’s easyJet’s main target

segment.

Targeted segment 1: Price-sensitive short-haul travellers

(1) Demographic Characteristic

For most of the LCCs, age factor is more significant than

the gender issue as the number of passengers by both

genders are almost the same (Mintel 2005). The LCCs

passengers cover a broad range of age groups from 19 to

54, while older people who aged above 55 are more likely

to prefer full-service airlines (Mintel 2005). Within the

industry, there are also age differences between

companies. While Ryanair is attracting more young

consumers, the average age of easyJet’s consumer is 41.5,

which has increased by 1.2 since 2009 (easyJet 2013).

However, for the domestic destinations within UK, younger

people, especially students are making up an important

part of the segment, which makes easyJet to pay more

attention to them and design special promoting strategies

to this segment (easyJet 2012).

According to the research done by Mintel and KeyNote

(2005), it is apparent that most of the wealthy and

positioned people will not choose LCCs as ways of

transportation. However, for easyJet, the average social-

economic status of its passenger is higher than other

competitors, as when choosing the LCCs, whether people

are more likely to choice easyJet rather than other

companies.

(2) Travel Preference

1. Travel in groups

Unlike business travellers, leisure travellers often

journey in small groups, and LCCs carry more group

passengers than full-service airlines (John F.

O'Connell 2005).

2. Limited PDI

In the early years of the company, easyJet made a

definition for its target consumers as ‘people who

pay for travel from their own pockets’. From the

definition, it is obvious that the targeted market

segments for easyJet are mainly focused on people

who cover their own traveling expenses. And for

these travellers one of the most significant

variables that they consider is the PDI. Taking

airlines which are cheap with relatively good

service are certainly becoming their best choice.

3. Prefer more frequent and shorter trips

The entry of the LCCs such as easyJet and Ryanair

not only has changed the structure of the airline

market, but also has altered people’s travelling

behaviour in Europe. As the cheap tickets enable

people to travel more times with limited PDI,

multiple travels and ‘short breaks’ are becoming

norm (Esther Martı´nez-Garcia 2008). Many consumers

who had previously taken long-haul holidays in

Europe have already changed their destinations to

other regions and made short breaks in Europe, which

increased the opportunity for them to take short-

haul airlines in Europe.

For Business Travelling

While more and more leisure travellers are using LCCs, there

are studies indicating that many business travellers are

starting to do the same. (Thorsten Teichert 2008) In 2011, 18

% of esayJet’s passengers were business travellers and the

company aims to increase this number to 20%-24% by the year

2016 (CAPA 2013).

Business travellers can be divided into two sub-segments as

the ‘cooperate’ travellers and ‘independent’ travellers.

Normally ‘cooperate’ travellers are able to put their travel

expenses onto an expense account, which allows them to value

the travel quality more and less cared about the ticket price.

For the second segment, they are mostly self-employed or who

work for small companies, which means these people are more

price sensitive as the money is mostly likely to come out of

their own pockets. Thus, for easyJet, these price sensitive

business travellers may be the primary target segment.

Target segment 2: Independent business travellers

(1) Demographic characters

The researches by Mintel and KeyNote show that more male

are travelling for business reasons than the female and

the age grade is older than the leisure travellers as

most business travellers are over 25 years old. Besides

the social-economic status are more concentrated on high

and middle social class and over 23% of the businessman

travelling with easyjet earned over €80,000 based on a

report by easyJet. (easyJet 2012)

(2) Travel Preference

1. Price sensitiveness – company’s influence

For most of the independent business travellers, the

price elasticity may be influenced by the size of the

company, and more small and middle companies may prefer

their employees to travel with easyJet than full-

service airlines (Mason 2001). Beside whether the

company has travel policy is also a major influence, as

in Mason’s (2001) research more than half of the

companies had travel policies to encourage their

employees to use LCCs.

2. Punctuality, schedules, and reliability

For business travellers, both cooperate and business

travellers’ the main focuses are reliability,

punctuality and schedules (Martín, Román & Espino

2008). Ticket flexibility is another most valued item

without significant differences between the two groups

(Mason 2001).

3. Care less for in-flight services

Comparing to the passengers usually taking full-service

airlines, the business travellers using easyJet is less

concerned about the in-flight service (Cristian Huse

2007). However, other researches have also indicated

that for LCCs passengers, they may expect more than

just a boring flight tour. A significant relationship

with catering and price sensitiveness is discovered as

the price–conscious consumers may get more sensitive

about price when not be served with meals (Thorsten

Teichert 2008). For easyJet, the lack of catering

service may cause some decline at consumer experience,

but as most of the company’s airlines are short haul,

this problem can hardly be a major one and other

methods are applied to enhance the good travel

experience.

Segmentation variables

For easyJet, based on the analysis above and Jobber’s (2013)

theory, the segmentation variables used by the company are

mainly the usage of the product, perception of airline

services and demographic variables.

Based on the usage, the market can be segmented into four main

segments which are long-haul leisure travellers, long-haul

business travellers, short-haul leisure travellers, and short-

haul business travellers. It’s obvious that easyJet is

targeting on both the short-haul leisure and business

travellers.

Segmenting easyJet’s consumer markets can also be applied by

studying perceptions, beliefs and values, which has a great

impact on forming travel preference. For people who take LCCs,

they may view the airline as a normal tool to deliver point to

point transportation rather than an enjoyable journey with

great comfort, as they value more about price than other

factors.

Age, gender and other demographic variables are also

essential. As explained before age is an important variable

for segmenting as older people are more likely to take full-

service airlines while young generations are becoming the

major consumer for LCCs.

Part 2: Marketing Mix

Promotion strategies

(1) Efficiency is the core of easyJet’s communication

strategy.

Since the beginning of easyJet, its promotion strategies

have been concentrating on the price and punctuality,

which is quite clear and unique. The company’s first

promotion campaign was an extensive PR and advertisement

with a brilliant and attractive slogan: ‘Making flying as

affordable as a pair of jeans – £29 one way’ was

launched, which was proved to be a success and helped to

the company to win its first business.

The effectiveness of the company’s promotion strategy can

also be revealed by the media it chose. It is obvious

that easyJet chose its advertising media based on the

size of its budget and more importantly, to achieve

better coverage with the lowest cost. The research

indicated that the most frequently used media for easyJet

is press, outdoor, internet and radio, which are all the

company’s targeted consumers’ favourite media (Mintel

2005).

Besides the cost-effect reason, easyJet is now also

considering the creative factors and behaves willingness

to pay more for better communicating effect. In the

recent campaigns such as ‘generation easyJet’ and ‘Europe

by easyJet’, instead of the most frequently used cheap

print media and internet, TV advertisements are heavily,

for being a better way to build emotion relationship and

transfer the new position of the brand, even though they

are much more expensive.

(2) Repositioning – ‘Europe by easyJet’ and ‘Generation

easyJet’

In 2011, in order to change the brand image from a

company providing low-price airlines to a carrier that

connects people, a £50 million pan-European brand

campaign was launched. The campaign can be separated into

two sub-campaigns, which are ‘Europe by esayJet’ and

‘Generation easyJet’.

The first campaign been launched is the ‘Europe by

esayJet’. The center of the campaign is a ‘where are you

going’ TV ad, which ran across all major European markets

including France, Italy, Switzerland, Germany and the UK

(Campaign.co.uk 2011). Additional activities across

press, outdoor media were also launched at the same time.

For the purpose of building an interactive connection

with consumers, an online promotion using social media

was also carried out, which enabled customers to get

involved with the campaign by creating their own version

of the ad with their travelling photos uploaded on

Facebook. This campaign is totally different from the

previous marketing activities of the company, which were

tactical, price-driven, and often competing directly with

Ryanair. EasyJet was satisfied with the result of the

campaign and announced a 250% increase in customers’

willingness to buy from easyJet.

The ‘Generation easyJet’ campaign was launched in

September 2013, which aims to reflect and celebrate the

diversity of easyJet’s passengers. Both the print and TV

adverts are creative and presented in very unique and

clever way that has not been seen within the airline

industry. The actions have helped to driven strong brand

awareness in all of its core markets and made the company

to be the preferred airline for more than 20% of

consumers in these markets (easyJet 2013). In the UK

market, the campaign can also be viewed as an activity to

against British Airways as being the number one

competitor for easyJet.

(3) Strategies for corporate travel market

In 2007, as a result of realizing the changes in short-

haul business travel market, easyJet turned to select the

business travellers as a new target segment as no other

LCCs have ever done before. In order to entering this

market, easyJet chose the booking channel as an entry

point by building a relationship with the ticket

providers that most business travel agencies uses.

Cooperate with distribution services providers

In order to enter European business travel market with

the best effectiveness, in 2007, easyJet cooperate with

Amadeus and Galileo, which are both technology companies

providing global distribution system (GDS) platforms.

This act enables business travel agencies to view and

book easyJet’s flights in a system that they are familiar

with (easyJet plc 2007). Other business travel management

providers such as the American Express Global Business

Travel and UK travel management business have also joined

the partnership with easyJet (EyeforTravel Ltd 2012).

According to the company’s annual report, the

establishment of the relationship with the GDS providers

is the key to the success in the business travel market

and has already being bringing 6% more of business

travellers to esayJet each year since 2012 (easyJet

2012).

Price Strategies

The low price strategy gives the company a key advantage when

competing with the full-service airlines. The average fare of

easyJet is more than 50% lower than the full-service airline

carriers on short haul and 20% to 40% lower than most other

low cost competitors (CAPA 2013).

The low price is supported by the company’s low cost, which is

a primary advantage over the other competitors. EasyJet put

great effort to ensure their plane’s punctuality which is the

key reason for its outstanding cost performance (easyJet

2013). Besides, the company keeps on using limited types of

planes in its fleet, which saves nearly 7% of cost in

maintain, fuel and crew (easyJet 2012).

Beside the low price, the pricing structure of esayJet is also

simple. In general, prices are low early and will increase as

the departure time arrives. However, unlike other carriers,

easyJet employs two distinct price strategies: 1) it does not

offer last minute deal, 2) it offers a single class and let

price to be the only influence of demand. There are two

reasons that may account for the first strategy. In practise,

last-minute-tickets are usually offered in a relatively low

price which may cause an attraction to tourists segments and

encourages them to buy the tickets in this time, instead of in

the early time (Oded Koenigsberg 2008). Moreover, last-minute-

deal has little attraction to the business segments which is

one of the main target segments of the company.

Product Strategies

The product strategies of easyJet is highly associated with

its price, as for such a low price, people’s expectation of

the service it provide cannot be high. Therefore easyJet

decided to surpass people’s expectation of it service and set

low expectations which are easier to meet and exceed.

Downwards the expectation

The service strategy of easyJet, explained by its founder, is

to downwards manage the consumer’s expectation then to

pleasant surprise them with out-expectation service. The best

example of this strategy is that easyJet’s insist on never

providing free items on-board, including free drinks and

catering service.

However, on other aspects, easyJet is trying to surprise its

consumers.

Exceed the expectation

(1) Wide Fly destination coverage

EasyJet started with providing only airlines between

London and Scotland with two airplanes (Sull 1999). By

now, the number of the entire fleet of the company has

grown up to 217 aircrafts and the company also has built

a leading pan-European network to connect most of the

main airports in European (easyJet 2013).

(2) Simplify the procedure of booking, check in and

boarding

For consumers, to book a ticket is quite simple, only a

few steps are needed through a user friendly website and

the payment is done by online. Passengers are requested

to arrive at the airport one hour before departure while

other companies normally recommend two hours.

The strategy of ‘no pre-signed seats’ is also applied to

minimize the complexity for passengers and stuffs.

(3) Special service for business travellers

In order to maintain and increase company’s

competitiveness and attracting more business travellers,

easyJet introduced a series of business market products,

including the Flexifare system and allocated seating.

The Flexifare system is introduced in Nov 2010, which was

basically consisted of three special services which were

preferential boarding, free hold luggage and ability to

change fight just two hours before plane take off.

In April 2012, easyJet announced that it would carry out

allocated seats across the network, due to the popularity

with both passengers and flight staff (CAPA 2013). Due to

easyJet’s report, the application of allocated seats has

little impact on the flight on-time performance and wins

more than 70% passengers’ support.

Place Strategies

The place strategies of easyJet are also be dominated by the

purpose of saving cost. Apart from it, adapting consumer

habits is also a major concern.

Call centers

From the beginning, travel agents are ruled out from the value

chain for the purpose of reducing cost. EasyJet only has a

national call number, and according to the company’s technical

analysts’ explain, it helps to position easyJet as a

nationwide company as when consumer calling, they cannot see

the geographic place they are calling (Datamonitor PLC 2004).

The simple and memorable numbers have also been shown on the

side of the companies’ planes until be replaced by the website

address.

The easyJet.com

As more and more people from Generation Y (born between 1978

and 1994) begin to using the airline, it is important to meet

the needs of these travellers. These travellers are used to

booking their leisure trips online, thus an online booking

platform is necessary.

The easyJet.com is the third most search airline website by

generating more than 370 million visits, while generating more

than 85% of sales in 2013 (easyJet 2013).Transferring main

sales online also saves the company a great deal of money as

each transaction can be carried out online for only £0.05

while each telephone booking costs £2.50 (Datamonitor PLC

2004).

The mobile app

EasyJet’s app is launched in 2011, and has been downloaded by

over six million people and account for 5% of total sells

(easyJet 2013). In 2013, the new mobile boarding cards is

available in the app, which makes it easier for passengers to

board the plane and hugely improve the travelling experiences,

as the strong customer experience optimise the satisfaction

and loyalty of it consumers.

Conclusion

From the analysis done above, it can be concluded that the

segments of easyJet’s consumers can be separated into two

groups based on their usage of the airline service, their

perception of airline services and demographic variables

including age and gender. The two segments are the Price-

sensitive short-haul travellers and independent business

travellers, who share some similar characters such as price

sensitive and careless for in-flight service.

Targeting on these consumers, easyJet uses a combination of

marketing mix strategies which core aim is to satisfy and

influence people with the best cost-effect rate. The promotion

strategy of easyJet is effective and is repositioning the

company from a low price airline provider to a carrier that

connects people, which means the company will no longer make

price as their only main advantage. The price and product

strategy works well together and create out-expectation

experience for consumer, while the place strategy providing

great convenience for people to get access to the company and

their service.

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