BUSS 5520- ECOMMERCE & IT

CASE STUDY SOLUTION: EASYJET Submitted By: Suraj Ban

1. To what extent was the Internet revenue contribution of around 90 per cent achieved
‘more by luck than judgement’?

Answer:

Since EasyJet started selling its airline tickets online via the Internet in April 1998, the company
has achieved significant growth in sales. It took them only a few years to reach the mark of 90%
of seats were sold online in 2003. With millions of online ticket sold every week, EasyJet
reinforced its position as “The Web’s Favorite Airline”. This dramatic growth may be partially
achieved by luck, but mostly by the company’s low cost strategies and utilizations of the Internet.

1) To minimize the cost, EasyJet overlooked the traditional airline’s business practice. While
the traditional competitors depend heavily on high-cost ticketing offices and sales agencies
such as call centers, EasyJet sells most of their seats over the Internet, which saves them a
large amount of operating costs.
2) Customers only need a PIN number given online as identification to receive their boarding
pass at the airport’s check-in counter, so the company can minimize the time and work
spend on printed tickers.
3) On boards, passengers pay for each drink and snack, this saves servicing cost for EasyJet.
4) In addition, EasyJet’s ticket fees are much lower than the industry average and their capacity
utilization increased, which allowed them to control the cost and gained them competitive
advantage to growth as a low-cost airline.
5) As Internet was the most cost-effective distribution channel for EasyJet to offer low fares,
they pursued many incentives strategies to encourage passengers to book tickets online.
6) They offer discount on ticket’s price only for customers who book seats online, and only
allow passengers to book seats more than two weeks in advance online. As the results, the
company reached one millions seat mark in October 1999, two million seat mark in March
2000, and three million seat mark in June 2000, with 90% of seats sold online.
7) The remarkable growth of EasyJet was a result of their successful business plan and
utilization of the Internet.
8) With the company’s old business model was already a 100% direct phone sales operation, it
was quite easy for EasyJet to integrate their call centers and booking system into the web.
 9) In the market that they were operating in, there were no risks of channel conflicts with
intermediaries.
10) The web also well fitted with EasyJet’s low-cost proposition of no tickets, no travel agents,
no net work tie ups and no in-flight meals.

Therefore, with a bit of luck from the market and timing, EasyJet gained their large amount of
online sales revenues.

2. Explain the proposition of using the Internet for the customer and define the benefits
for the company.

Answer:

EasyJet was founded in 1995 as a low-cost airline carrier. From the first day of foundation,
EasyJet slicked to their unique way selling tickets, however, after realizing that building a new
call center as the increase of bookings will cost a large amount of money, EasyJet launched their
website, EasyJet.com for selling tickets. 

This new selling channel was implemented in April 1998.  EasyJet launched a trial site and a web
specific phone line in order to track the volume of online users. With the introduction of a new
system, EasyJet allowed customers to make online booking with a cheaper price than booking the
ticket somewhere else and be aware of all offers they have. For customers who book their flight
tickets online, each of them is given a PIN number for each order. And those customers only need
to give the PIN number at the airport.  In addition, through the website, all customers can get a
clear overview of their booking and conveniently contact EasyJet through mailing if they need
any further information. And then, EasyJet started using their website as a powerful PR tool as
well. They organized questionnaires and the lucky contestants would be received some free
tickets.  

By proposing customers to use the Internet booking service, EasyJet has gained a lot of benefits.
Those are:
1. Through internet communication, EasyJet is able to collect customer information and get
database about their clients. Thereby, it helped them to promote their services online such as email
customers holiday deals and give them information about it. Also, the company can gather
customer feedback and complains, then find the right way to improve their services.
2. The website will be available 24/7 while if EasyJet has a travel agency, it will only available
with restrict opening hours. This helps EasyJet reach a lot of customers in the world whenever
customers demand and wherever customers are.
3. Giving customers an opportunity to make booking online helps EasyJet save costs. With the
technological advances on the Internet, it's cheaper than having their own travel agency, because
they will have less expense such as fewer employees and the intermediaries have been left, that
will save them more money. 
4. Through the internet strategy, EasyJet is able to improve their sales. The reason is whenever
customers make booking online; they will receive a discount of 2.5 British pounds for a single
fare. This will attract more customers and help EasyJet earn more profit

3. Explain how  EasyJet uses the web site to vary the different elements of the marketing
mix and as a marketing communications tool.
Answer:

Varying elements of the marketing mix:

a) Product

Product is a type of good or service that a company is offering. This element of marketing mix is
very important in order to differ a company from other competitors in term of specialty of
products.

-Core Product: EasyJet – a British airline company is providing an online booking website, which
is designing to save many hours for customers to order flight ticket. The website from EasyJet was
built for purposes of attracting and increasing customers’ pleasure and online sale for its existing
system. Also, it brings benefits of saving time and cost saving of flight ticket to customers.
Moreover, it is a revelation of ordering ticket when it comes to efficiency and convenience.
Instead of making phone call booking, customers are now able to get tickets online.

-Extended services: easyEverything, easyRentacar are the two services that EasyJet put on its
website for customers’ use, which are specializing in coffee and car rental industry.

b) Price

Price is playing an important factor in term of defining a success marketing mix. It is also one way
of generating sale revenue of a company. The price of a particular good is determining an actual
value of sale good.

EasyJet website is providing a channel for reviewing price and ordering flight tickets. It is giving
more alternatives for seeking proper flight tickets for different places, which suitably fit to
customers’ budget. Moreover, the company actually gains more advantages when it comes to cost
efficiency. To demonstrate, when customers come to EasyJet for ordering tickets, the customers
will receive great online discount from EasyJet. For each of passenger, the customer can save
from 1 to 2.5 pound per trip depending on a current promotion campaign. For each of ticket,
EasyJet can generate 1.50 pound for profit.

c) Place

Place is considering as good methods of storing and transporting a certain goods or services,
which is functionally assisting to make products available to consumers.

EasyJet website provides a place, where customers can seek flight ticket information, price and
route and order it in the most convenient manner. The website is considering as EasyJet
distribution, which is mainly supporting the company to directly sell airplane ticket online to
customers. Instead of having a phone call booking, now users only few steps to book ticket
through EasyJet Internet based system. Indeed, when customer access to EasyJet website and
order a ticket, instead of delivering a paper ticket or electronic ticket to customers. The website is
actually storing enormous amount of ticket codes. For instance, the company provides customer a
PIN number for each order, which represents to an official flight ticket, and then customers just
give the code number to inspector when they arrive the airport gate.

d) Promotion

Promotion is one of essential elements of marketing mix, which is relevant to communication with
customers and other stakeholders for informing them about products and the organization.

EasyJet Company streamlines its online marketing by utilizing Internet promotions in newspapers.
The company firstly cooperated with newspapers – The Times and The Sunday Times to run its
Internet-only promotion, which achieved quite impressive outcomes. And then, those newspapers
came up with news regarding to EasyJet offering cheap flights for all EasyJet destinations. As a
consequence, EasyJet gained 2 million pound with 100,000 sold seats. Moreover, EasyJet
consecutively keeps newspapers informing about new promotion campaigns. By communicating
this way, EasyJet is enabling to gain customers’ awareness and increase its customer’s
relationship.

4. Why Easy Jet created a mobile site? Is it necessary for other e-commerce companies to
create smart phone friendly website?
Answer:

EasyJet created mobile site because they figured out that mobiles were clearly a huge growth area
and they were also facing tremendous demand from the customer side as well. They knew that
going mobile friendly could help their company to be user-friendly and also increase user base
and revenue. Through mobile sites, EasyJet customers, could book their tickets, car rental etc.
whenever and wherever they wanted, with just a few simple touches on Europcar and EasyJet’s
co-branded new mobile site developed especially for the airline. EasyJet had a customized mobile
site developed by Europcar, the leading brand in the mobility in Europe with a wide international
network which enabled EasyJet customers to simply link through after their flight booking to then
add a car rental to their travel plans. This made their site more user friendly.

Yes, it is necessary for E-commerce companies to create mobile friendly site because a mobile
website has a number of inherent advantages over apps, including broader accessibility,
compatibility and cost-effectiveness. Some are:

a) Immediacy – Mobile Websites Are Instantly Available

A mobile website is instantly accessible to users via a browser across a range of devices (iPhone,
Android, BlackBerry, etc.). Apps on the other hand require the user to first download and install
the app from an app marketplace before the content or application can be viewed - a significant
barrier between initial engagement and action/conversion.

b) Compatibility – Mobile Websites Are Compatible Across Devices

A single mobile website can reach users across many different types of mobile devices, whereas
native apps require a separate version to be developed for each type of device. Furthermore,
mobile website URLs are easily integrated within other mobile technologies such as SMS, QR
Codes and near field communication (NFC).

c) Upgradability – Mobile Websites Can Be Updated Instantly

A mobile website is much more dynamic than an app in terms of pure flexibility to update
content. If you want to change the design or content of a mobile website you simply publish the
edit once and the changes are immediately visible; updating an app on the other hand requires the
updates to be pushed to users, which then must be downloaded in order to update the app on each
type of device.

d) Findability – Mobile Websites Can Be Found Easily

Mobile websites are much easier for users to find because their pages can be displayed in search
results and listed in industry-specific directories, making it easy for qualified visitors to find you.
Most importantly, visitors to your regular website can be automatically sent to your mobile site
when they are on a handheld (using device-detection). In contrast, the visibility of apps is largely
restricted to manufacturer app stores.

e) Shareability – Mobile Websites Can Be Shared Easily by Publishers, and Between Users

Mobile website URLs are easily shared between users via a simple link (e.g. within an email or
text message, Facebook or Twitter post). Publishers can easily direct users to a mobile website
from a blog or website, or even in print. An app simply cannot be shared in this fashion.

f) Reach – Mobile Websites Have Broader Reach

Because a mobile website is accessible across platforms and can be easily shared among users, as
well as search engines, it has far greater reach capability than a native app.

g) Lifecycle – Mobile Websites Can’t Be Deleted

The average shelf-life of an app is pretty short, less than 30 days according to some research, so
unless your app is something truly unique and/or useful (ideally, both), it’s questionable how long
it will last on a user’s device. Mobile websites on the other hand are always available for users to
return to them.

h) A Mobile Website Can be an App!

Just like a standard website, mobile websites can be developed as database-driven web
applications that act very much like native apps. A mobile web application can be a practical
alternative to native app development.

i) Time and Cost - Mobile Websites Are Easier and Less Expensive

Last but certainly not least, mobile website development is considerably more time and cost-
effective than development of a native app, especially if you need to have a presence on different
platforms (requiring development of multiple apps).

j) Support and Sustainability

The investment considerations of app vs website don’t end with the initial launch; properly
supporting and developing an app (upgrades, testing, compatibility issues and ongoing
development) is more much more expensive and involved than supporting a website over time.
 5. For the main business risk to Easy Jet, suggest some approaches the company could use
to minimize these risks.

Answer:

All businesses are liable to be subjected to risk, and the airline industry is no exception. In this
case, EasyJet would have the risk of mechanical accidents and disasters as well as the risk of other
corporate and economic issues to deal with. EasyJet has implement to risk identification and
management policy to deal with these risks, which is based upon a strategy of continuous
investigation and communication through the whole of the business management chain

However, despite the success that EasyJet has enjoyed to date, it is not immune from the
challenges and risks that are currently facing the global and regional airline industry. These risks
can be deemed to apply to the following area of its business operations.

a. The possible occurrence of natural disasters and/or severe weather changes, which may
lead to severe delays and cancelations.
b. A slowdown in economic growth or a period of recession which may lead to a sudden drop
in demand for travel.
c. Competition is another major business risks of EasyJet.
d. Technological change

Hence, in order to tackle with these types of business risks, the following strategies could be
suggested:

a. Implementing a proper risk management plan could help EasyJet analyze the potential
risks that would arise time and again.
b. Investing more on research and development and competitor analysis could be a good
strategy as well.
c. Making the Mobile site more user friendly and hassle free Internet booking system can
also help increase the customer base.
d. A better after-sale follow-up through mail or telephone will help them be more connected
to their customers.
e. Evaluating the internal management competencies and control could help them identify
any flaws with-in the management that could bring future risks.
f. The risk management group of EasyJet must accept the constant need to re-evaluate the
significance of existing risks, and be prepared to look-out for new risks that may provide
opportunities as well as threats in the near future