Buying Decision Process

• Awareness
– Extensive PR and ad campaign – 10% of revenue
– ‘Fly to Scotland for a pair of jeans’
– Outrageousness used effectively

• Interest
– Takes SouthWest Airlines successful model
– Impacting perception through framing of value proposition
– Core need of safe, cheap, quick travel
– No different from taking bus

• Understanding & Attitudes

– Analogies for price comparison
– Explanations of value in print ads – how cost savings passed on
– Public challenges to traditional players
 Buying Decision contd.
• Purchase
– Removes travel agents from the purchasing process
– Incentives for using website – discounts
– Increased focus on website – easy to navigate & use
– Reduces hassle by not issuing paper tickets
– Encourages early purchase through price differentiation
– Additional revenue streams used for price differentiation

• Repeat Purchase
– Delighting on narrow, accepted parameters of service
– Punctuality guarantee
– Stelios flew 4 times a week himself – interaction, feedback
 Market Development
• Core value – Convenient airport, convenient time, safe, ease of
booking, punctuality

• Educating the market

– New value proposition
– Changing customer perception
– 10% of revenues spent on newspaper, magazine & radio ads

• Building distribution
– Chose cheap airports – started with Luton
– Utilizing planes to high capacity by yield management
– Higher turnaround time – 2 planes do the work of 3
– Brand new Boeing 737s
 Operations Strategy
Strategic focus
– Control expectation – delight on accepted parameters
– Employ price distribution to provide maximum value
– Low margins – only $1.50 per passenger

• Operational Efficiency
– Outsourced operations for lower costs and increased efficiency
– Workshops and training for sub-contractors
– Evaluated sub-contractors on quantitative and qualitative criteria
– Turn-around time faster

• Company culture
– Culture Committee elected from staff for making employee policies
– Every Friday company sponsored barbeque
– All documents available to everyone in company

• Cost Minimization
– Saved $14 on meals per passenger
– No business seats – saved on extra staff and seats
– Luton airport saves $10 per passenger
– Internet sales channels – travel agents add ’25% to total operating costs’
 Holistic Marketing
• At all points emphasizing the difference in core value provided

• Target leisure travelers, entrepreneurs, managers of small firms

– ‘Pay out of their own pockets’

• Brand built around fairness and empowerment

– Airport taxes, flying miles and other frills as ‘rip-off’s and ‘bribes’
– Pitched as the ‘underdog’

• Channels used
– Print Advertising
– Online
– Using news with new product
– Using controversies
– Distinct visual identity - orange