As full-service carriers invade the no-frills space, Spicejet is finding new ways to bond with customers.

If you visit a travel portal, and search for the best available air fares between Delhi and Mumbai, you will find that every Airline is offering similar fares. That’s the biggest challenge facing budget carriers like SpiceJet since they began flying.

The fare differential they enjoyed with other airlines, which was their key selling point, has disappeared as full-service airlines (FSAs) like Jet Airways and Kingfisher shift more and more flights to their no-frills options like Jet Konnect and Kingfisher Red.

To understand the challenge faced by the low-cost carriers (LCCs), look at the passenger traffic numbers put out by the Directorate General of Civil Aviation (DGCA) for October. While Jet Airways increased its market share to 19.8 per cent on the back of its all-economy configuration Jet Konnect, SpiceJet ’s market share fell to 12.4 per cent from 13.2 per cent in September. Other LCCs showed a similar dip.

It’s a wake-up call for budget carriers like SpiceJet which now have no option but to reinforce their positioning, differentiate or find new ways to bond with customers. That’s what SpiceJet is trying to do through a brand campaign and other initiatives. ‘‘You need to differentiate on service, quality and create top-of-the-mind recall,’’ says SpiceJet CEO Sanjay Agarwal.
Anish Srikrishna, senior VP (marketing), SpiceJet , says the challenge for airlines is to start differentiating on factors other than price. “That’s where branding comes in; we are fighting for her mindspace, intangibles such as the likes and the dislikes of a customer,’’ he says.
Some consumers may like the colour of a plane, others may have heard about the service of another airline, some may have heard of an airline reputed to be serving food while others may associate an airline with hassle-free flight. These are subjective, experiences unique to a customer, or perceptions that may get built over time.

‘‘It’s a great time for a brand to reiterate what it stands for. SpiceJet stands for a warm, friendly, approachable, and efficient airline,’’ Srikrishna says.

To understand the intangibles, SpiceJet sifted through the feedback it collects in every flight, and other consumer surveys. For instance, a feedback revealed that people preferred to have a hot beverage on board. SpiceJet built the equipment needed, and offers hot beverages at a reasonable price of Rs 20 with two cookies.

Like this, it is trying to convert the feedback into many initiatives: for instance, unlike some airlines, it doesn’t charge extra to supervise unaccompanied minors; doesn’t charge for web check-in or preferred seats (next to emergency exits), doesn’t charge extra for sports kits, and offers Rs 1,000 less on return fares. It also ran promotions like Happy Hours, wherein it offered a buy-one-get-one-free offer.

For SpiceJet , the brand has been built over the last four years largely on word of mouth. Until recently, it did not do any mass advertising. With FSAs invading the LCC space, it thought it was time to think in terms of ‘‘brand intervention mode and put out a relevant marketing message that will help consumers identify what kind of an airline brand we are, why should they consider flying with us,’’ says Srikrishna.

‘‘People associated us with innovation, promotion. So, we said if we are looking at a differentiator, there’s a clear way we can offer ‘more’ with the brand. We began looking for attributes (from its operations, sales, in-flight or perception within the company) that could be our USP (unique selling proposition) which customers can see, touch or feel. We are saying this under a theme, 'Get more when you fly SpiceJet,’’ explains Srikrishna.

‘‘Those comfortable days are gone, when we said we are going to operate in our space (LCC); they are going to operate in their own space. Segments have morphed rather rapidly into each other,’’ says an airline official, who didn’t wish to be identified.

Source:
Battle for mind space
Business Standard
Date- 23 November 2009
Edition- New Delhi
http://www.business-standard.com/india/news/battle-for-mind-space/377276/