QUESTION 1 SWOT is an acronym for strengths, weaknesses, threats and opportunities. A SWOT analysis is a tool used by organisations and individuals to help identify and analyse their strengths, weaknesses, opportunities and threats SWOT analysis for kulula: STRENGHTS * Innovative – Kulula’s biggest advantage is that they’ve often done thigs differently. They have gone to the extent of painting their planes in certain patterns and giving them names like the ‘cow plane’. This alone sets them apart from the other airlines with the usual aircrafts.
The initiative of ‘kululamoolah’ is an innovative way of creating loyalty towards kulula where passengers earn ‘kululahmoolah’ in numerous ways like flying with the airline. They can use this kululahmoolah to part pay or fully pay for a flight booking. This is another example of kululah’s innovation. They went on to use this initiative enhance the jetsetters loyalty programme. The kulula credit card is another innovative idea that ties in with earning ‘kululamoolah’ by using the credit card * Up to date with technology – SecureInstant Deposit (SID) – This is an online payment tool that makes internet transfers easier and faster.
SID allows passengers to transfer cash directly to kulula. The kulula banking details are automatically completed on the payments page. Payments are instant and can be made 3hours prior to departure of the flight. Thii is to kulula’s advantage because not only is the payment process made easier and simpler, but they can cater for emergency situations more effortlessly * Marketing – over the years, kululah’s adverts have been memorable, largely due to their witty approach.
From the superhero campaign right through to the jetsetter campaign, kulula have been able to get their message across, some so well that they are difficult to forget| WEAKNESSES * Not flying further – Kulula only flies in South Africa and to a few southern afican cities. This means that people flying abroad or to further African countries cannot use kulula airlines. This is to the disadvantage of kulula because it’s limited to the market share of local flights. * Not serving free food – Because of their low prices, kulula cannot afford to provide free food like other airlines.
This gives their competitors an advantage, in that they are able to provide a’ benefit’ of free food, while kulula can only afford to sell to their passengers. So their low prices does have a few setbacks. | OPPORTUNITIES * Social investments – This provides kulula with an opportunity to interact with the society its part of and to create a positive image for the brand. Being part of initiatives like CHOC and Project Green creates a likeness to the brand and people are more likely to be drawn to kulula, thus attracting more customers * Flying abroad – kulula flights are currently locally based.
This gives them the opportunity to expand the business and fly to overseas destinations. * Re-branding – The re-branding of kulula has allowed them to provide more than just flights to destinations, but also assess to hotels, car-rentals and other aspects that go allowing with travelling. This provides kulula with the opportunity to expand its brand beyond just an airline, to a travel agency. This would be a good business venture considering kulula deals with people that travel | THREATS| QUESTION 2 STP is an acronym for segmentation, targeting and positioning.
This is an important process in order for a business to identify its target market within a market. SEGMENTATION This is the process of dividing a market into meaningful, relatively similar and identifiable segments or groups. People or organisations, which form part of the market and grouped based on the characteristics they share and the similar products they need. There are a number of bases for segmenting consumer markets, but for the purposes of kulula we will look at demographic segmentation. Demographic segmentation is segmentation based on demographic information including age, gender, income, ethnic background and family life cycle.
In terms of kulula, their demographic segmentation is based on income. Kulula is part of Comair Ltd, a company that operates the British Airways brand in South Africa. British Airways is a big airline company and its prices cannot cater for certain levels of income. So Comair Ltd introduced an airline that would accommodate middle to lower income earners. This is manifested in their ad campaigns which emphasises their affordable, low prices. This segmentation has bared fruits as their market is characterised by people in small-to-medium sized business sector and people in middle management, all who are low-to-medium income earners.
TARGETING A target market is a group of people for whom the firm designs, implements and maintains a marketing mix intended to meet the needs of that group. There are three different strategies for selecting target markets. These include undifferentiated targeting, concentrated targeting and multi-segment targeting. With regards to kulula, a concentrated targeting strategy is used. In a concentrated targeting strategy, a firm selects one segment of the market to target its marketing efforts. The advantages of this strategy are that firms focus on understanding the segments needs and developing a specialised marketing mix.
The resources can also be concentrated on one segment rather spreading them into different segments. The drawbacks though are that the segment concentrated on may be too small or it may be changing. Firms using the concentrated strategy are more vulnerable to environmental changes i. e. a severe recession. So the key to a successful concentrated strategy is specialisation. The firm has to specialise along market, customer, product, or marketing-mix lines. There are a number of options of specialist roles firms can take up, but in terms of kulula, the customer-size specialist is the most relevant.
Here the firm concentrates on selling to small, medium or large firms. For purposes of kulula who are a service, this would translate to concentrating on providing services to lower, middle or higher class of income earners. For kulula the focus would be on lower to middle class income earners and an emphasis to their low prices is a reflection of that. POSITIONING Positioning refers to a specific marketing mix to influence potential customers’ overall perception of a firm, product or brand. In simpler terms, it’s what people think about the firm or its product in comparison to competitors and their products.
Failure to select a position may lead to the firm’s product/ brand being pushed into a position with little customer demand, with no distinctive features or a position with head-on competition. So positioning is a vital part of the STP process. Effective positioning requires choosing a position where the firms marketing efforts will have the greatest impact, but more importantly, the process of differentiation is essential to successful positioning. Differentiation is the process of identifying something that is different about a firm or its product, essentially its finding a competitive advantage.
The differentiation can be based on a number of aspects, but for purposes of kulula, we will look at the image differentiation. An image should ideally convey a message in a distinctive manner that establishes a brands major characteristics and positioning. A good image will set a firms brand apart from its competitors. Kulula has developed an image of simplicity, fun and affordable flight prices. This is evident in the simplicity of their mission statement and their emphasis in that statement, on making travelling easy and affordable.
Even kulula’s ad-campaigns like the ‘hardest part of your trip’ and the come have fun with us’ campaigns portray the same sentiments. There are various elements that a firm that a firm has at its disposal in order to develop and build its image. In the case of kulula, they have made the most of the written and audio or visual media element through their successful ad-campaigns, including those mentioned above. They have also make full use of the events element by sponsoring and being involved in events like ‘Project Green’, ‘CHOC’, ‘Food and Trees for Africa’ and many others.
The results of being involved in programmes and events that aim to uplift communities are favourable for the image of a firm, and this is the same with kulula. QUESTION 3 Benefits: * Good way of introducing one company’s products and services to the loyalists of another company * Enables one brand to benefit from ‘halo of affection’ that belongs to another * Co-branding could save costs * Risk is shared between the company’s involved * Allows brands with lesser reputation to boost that reputation by partnering with a brand with higher reputation Risks: If the vision and mission of the companies are different, then one company’s vision and mission will not be made known * If customers associate adverse experience(s) with one brand, it may damage the total brand equity * Co-branding can affect a partner brand in a negative manner. I. e. instead of the co-branding increasing sales, it has the negative effect of decreasing the sales * Firms would have to compromise on their image in order for them to accommodate the partnering firm i. e. compromising on or trying to incorporate the colours of the two firms
QUESTION 4 The consumer decision-making process consists of five steps: . Problem recognition: * This is when a consumer realises that they have an unfulfilled need. * Kulula – a consumer realises that they need to fly to a particular destination 2. Information research: * The process of recalling information stored in the consumers memory. This can happen internally or externally * Kulula – consumer recalls his/her past experiences with airlines she’s travelled with (internal) or she recalls what she heard from personal or public sources or he/she recalls the airline advertisements she heard or saw (external). 3. Evaluation of alternatives When a consumer has collected all the information, he/she can use a criteria or standards to help him/her evaluate and compare alternatives. * Consumer can pick a criteria based on; important attributes, cut-offs (min/max price) or rank order * Kulula – i. e. consumer bases criteria on cut-offs. She is only willing to spend a certain amount on a flight. Airlines that will cost her more than she is willing to spend will be excluded. 4. Purchase * Consumer decides whether to buy now, later or not buy at all * Kulula – consumer is eventually left with an airline that best suits her chosen criteria.
She now then decides whether to fly with that airline or not. 5. Post-purchase behaviour * If a consumer decides to purchase the product or make use of the service, they expect certain outcomes or benefits from the purchase. How well these expectations are met will determine whether the consumer was satisfied or not. * Kulula – i. e. because consumer chose an airline with low prices, and for this reason, had low expectations. To his/her surprise, the airlines service and the flight was enjoyable and of good quality, then his/her satisfaction is high because it exceeds her expectation. The visa-versa situation is also true.