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February 11, 2009

WestJet Airlines: Concept, Target Market, Core Value Proposition – From a Marketing Point of View

To succeed in any business you must have a concept or core value proposition, customers, and understanding of your potential competitors. WestJet airline is no different in the travel industry in Canada. Since it started its journey in 1996, WestJet has become the poster child of many books, case studies, articles and the topics of many business conferences. “We are value provider, and I don’t think people realize how much value is in one for our fares. Consumers are looking for value, and we have great value verses our competitors,” said WestJet’s chief executive officer Sean Durfy in an interview recently. In an attempt to differentiate its offerings by providing superior quality based on low price, fun experience and customer knowledge WestJet emphasized on promoting itself as warm and fuzzy organization. WestJet’s comparison list with other competitors is long as it emphasizes lower fees to change or cancel flights, and it also promotes lower fees for everything from overweight luggage to transporting pets. So what is WestJet’s Core Value Proposition? It is, “cheap fare, fun environment and good experience when you fly with WestJet.” The airline’s recipe to attract its clients is “humor, customer service and good value.” WestJet specializes in serving the segment that is visiting friends and relatives. They believe people would choose to fly rather than drive if offered low fares. People always had the need to travel. It was not long ago when people drove to visit relatives or friends or just to take a Vacation. Since WestJet started its service it emphasized on one type of plane, offering basic in-flight services, single class service, and no baggage transfer service for its guests. However, lower service for less money does not mean less customer service.

WestJet also have realized none of these really matters if customers don’t see it. They have heavily depended on marketing department to promote their core value proposition, which WestJet has discovered very early. Not long time ago a trip to Vancouver or Edmonton would have taken at least 8 hours by a car and then cost of gas, cost of food along the way and of course the cost of lost time while driving. WestJet identified and then realized what people really “want.” People want to travel to visit friends and relatives. If they can offer a comparable price for a one hour flight vs. 8 hours car trip, customers will take there offer to save money, time and to have some fun during the travel. Interestingly enough, marketing department of WestJet heavily emphasized on their cheaper price with fun environment on and off flight. This want must also be backed by purchasing power and as a result they have created a demand in low fare air travel. WestJet was founded on the low-fare business model that was implemented by Southwest Airlines in the United States and initially targeted the segment of travelers who travels by vehicles to visit friends and family. Many other companies across the world have tried to copy the formula unsuccessfully. WestJet’s success and retention of its guests can be attributed to its ability to identify a unique set of core value proposition which of course are low fare, guest oriented service, fun to fly with. Interestingly enough all these values align perfectly with their mission statement which is, “To enrich the lives of everyone in WestJet’s world by providing safe, friendly and affordable air travel.” They also seem to have mastered the idea that it does not matter how good of a company strategy you device still customers are the forefront of the business.

WestJet is also continuously scanning market for more opportunities. As a result, slowly WestJet is targeting vacation goers and business travelers. They offer affordable, easy to book travel packages for over 30 destinations in the U.S. and across Canada. Because WestJet vacation operates under its parent company WestJet so everyone can be assured that they can experience the same outstanding guest-friendly, fun-loving travel experience that they expect from WestJet. WestJet is also promoting their travel experience to Business travelers. They believe that busy people deserve to expect more from an airline. As a result they have created a separate website called BIZ Weblink which is free online booking and tracking tool designed for small to medium companies that spend a minimum of $10000 a year on domestic air travel. Companies can take the advantage of this tool to become more cost effective by doing their own in house bookings and can enjoy three different levels of security available to managers and employees.

Majority of the people who fly could care less about what airline they fly on; they want cheapest fare and look for that added value. WestJet’s low airfares and the best service across North America attract its most guests. A study by WestJet shows that 79% of their guests are returning guests. Whether they are just travelling once or they are going for a vacation to Mexico or they travel once or twice every week for business, 79% of their guest clearly feels that their needs are being met with a fair value proposition and that added value of fun. From the moment the customer encounter WestJet, they know they are dealing with a different kind of airline. If you call to cancel your ticket and put on hold, you will hear parody music with the following message, “Wait, wait, wait, wait, wait, wait. Are you tired of waiting? Too bad! We’ll be with you as soon as we can.” You also hear jokes such as, “What do you get from a pampered cow? Spoiled milk.” You are almost disappointed when someone picks up the phone on the other end. This type of humor also waits for travelers on flight. When someone travels through WestJet they know that they are being taken care of by the WestJet airline owners. Not only that, you will be treated as a guest at there homes. They also provide value for the low price you pay as their guest by adding additional benefits such as by informing guests on their mobile phones (upon request) if flight is being delayed or any changes to the schedule. They also manage real-time flight tracker that informs users who visits their websites about any flight changes or any schedule changes. They also provide value by adding self check-in or web check-in service 24 hours prior to your scheduled flight.

Guest experience is the single most important aspect that WestJet as a company emphasizes. It has managed to figure out that in the world of branding, customer service is almost everything. They are also competing with there competitors by offering superior customer service and by offering an experience. They have created and are still actively creating top of the mind awareness of their brand WestJet through all their effort in attracting and retaining existing and new guests. When you hear the word WestJet you can’t help but think cheaper fare, friendly atmosphere, competent and entertaining crew.

When WestJet first started in 1996, interestingly enough its competition was not in the air but vehicles on the roads driven by people wanting to go on a trip to visit friends and families from one town to another. When Mr. Clive Beddoe (founding shareholder and Chairman of the Board of Directors of WestJet Airlines) realized that people would chose to fly if they were given the option of cheaper ticket price and fun environment to fly, he knew his competition would be travelers who do not want to pay $500 or more just to fly to Vancouver or Edmonton or other Canadian destinations to visit family. WestJet continues to compete with cars or family vehicles still and are winning by seat sales or providing that extra ordinary customer service and adding values for their money. They have created their brand so strongly in air travel sector that when someone says I want to go to Vancouver for a day trip, most likely they will fly with WestJet. Their price is cheaper than driving in many cases. They are also competing with other established airlines such as Air Canada. Interestingly enough, Air Canada is trying to implement WestJet’s cheaper rate model by offering cheap flights on many destination through their contract career, Air Canada Jazz. Air Canada Jazz operates more flights and flies to more Canadian destinations than the WestJet. Air Canada Jazz is also serving in all ten provinces in Canada including many smaller communities in Canada and the United States. Air Canada is also offering rewards program which is known as Aeroplan for regular travelers, which WestJet was competing against but in 2004 WestJet started its own reward program by partnering with Bank of Montreal Master Card Travel Reward program. However, because Air Canada Jazz is a contract career of Air Canada, their corporate culture is not well established as WestJet yet. WestJet’s vacation packages are competing with many travel companies Canada wide. While there prices and customer service is an appeal but for vacation goers who will spend about $2000 per vacation they like to rely heavily on experienced travel companies than an airlines.

As originally stated by General Electric six decades ago, the marketing concept holds that the planning and coordination of all company activities around the primary goal of satisfying customers needs is the most effective means to attain and sustain a competitive advantage and achieve company objectives overtime. After seeing WestJet’s success it seems that they have mastered the marketing concept by identifying customer needs of cheaper and comparable air fare, by creating a product of “cheaper and fun to fly with” that people would want, and creating a demand by providing them to people who couldn’t afford before and by competing with well established competitors.

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2 Comment(s)

  1. Curtis Nordheim | Mar 19, 2010 | Reply

    I just went through a frustrating conversation with one of your reps. I recently booked a flight with west jet on a promo that your department gave me.It originally did not want to accept the promo so I contacted a west jet rep. who told me how mhow to proceed. I entered both parts of the promo as told and then booked my flight. To my frustration, the promo did not work and when I contacted your rep. today I was told I did something wrong.I followed the instructions given me originally and obviously it did not work.Since I won’t be flying in the near future, I would like you to do something about my frustaion with your airline.

  2. Sharon mabuli | Apr 7, 2012 | Reply

    They do not answer my question,my question was what is long term objectives for westjet

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