Case

Study #1: Products and

Services WestJet Airlines
Victoria Giddings, Hilary Levy, Alexander Scott, Monika
Soegianto, Jenny Tran, and Shanice Quitoriano

October 19TH, 2015

MKTG 1G- Risky Business

MKTG 1102- Erin Whittle

Table of Contents
Problem Statement ............................................................................................................................... 1
Key Findings/Facts/Assumptions ................................................................................................... 1
Key Findings ...................................................................................................................................................... 1
Facts ..................................................................................................................................................................... 2
Assumptions ..................................................................................................................................................... 2
SWOT Analysis ....................................................................................................................................... 2
Strengths ............................................................................................................................................................ 2
Weaknesses ....................................................................................................................................................... 3
Opportunities ................................................................................................................................................... 4
Threats ................................................................................................................................................................ 5
Competitive Analysis ........................................................................................................................... 5
WestJet ................................................................................................................................................................ 5
Allegiant .............................................................................................................................................................................. 5
Alaska Airline .................................................................................................................................................................... 6
Air Canada .......................................................................................................................................................................... 6
Target Market ........................................................................................................................................ 6
Alternatives ............................................................................................................................................. 6
Alternative 1- Vacation Booking ................................................................................................................ 6
Advantages: ....................................................................................................................................................................... 7
Disadvantages: ................................................................................................................................................................. 7
Alternative 2- Family Fly .............................................................................................................................. 7
Advantages: ....................................................................................................................................................................... 7
Disadvantages: ................................................................................................................................................................. 8
Alternative 3-Onboard Food and Drink Service ................................................................................... 8
Advantages: ....................................................................................................................................................................... 8
Disadvantages: ................................................................................................................................................................. 8
Solution .................................................................................................................................................... 8
Implementation ..................................................................................................................................... 9
Course Concepts .................................................................................................................................... 9
Appendix A ........................................................................................................................................... 11
Appendix B ........................................................................................................................................... 12
Bibliography ........................................................................................................................................... 1

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Problem Statement

What product strategy should WestJet use to address the problem of Canadian airline
passengers crossing the border to fly out of US airports, in order to increase customer
satisfaction and flying out of Canadian airports by reducing the lost customers by 35% by
2017?

Key Findings/Facts/Assumptions
Key Findings

WestJet is an International airline, which gives it an advantage over its two US competitors,
Allegiant and Spirit, who are only domestic. When people think of WestJet, you often hear
about amazing service to customers, as well as to staff. Online reviews describe WestJet
services as above and beyond, and wonderful. They have an accommodating brand
personality, making their consumers feel like they are getting 5 star services at an economy
level price because they focus on more for less (WestJet Airlines- Customer Reviews).
WestJets superior intangible services have a competitive advantage against other airlines
because of the customer value perceptions, giving WestJet extremely powerful brand
equity. Not only do their services dominate over competing airlines, WestJet also provides
basic care that Allegiant and Spirit fail to provide. In such a technological society, Wi-Fi is
everywhere, including on WestJet planes, but not on Allegiant or Spirit planes.

WestJet offers a rewards program where flying with them can earn you WestJet dollars that
can be used to redeem free flights, as well as co-branding with RBC to earn WestJet dollars
every time you used the WestJet RBC MasterCard. They also offer a money back program
where if your flight costs decrease after your purchase and before your departure, you will
be compensated the difference in WestJet Dollars (WestJet, 2015). This leads to long time
customer loyalty leading to the earning the highest profit potential from them.

WestJets quick and convenient websites gives customers immediate access to booking
group destinations like weddings, and even a flight menu so you can so you can control
everything before you even get onto the plane. In 2013, WestJet Encore was launched,
expanding its company and being able to compete with Spirits BareFare, which are
unbundled flights dedicated strictly from getting from point A to point B. WestJet Encore is
set to increase the amount of destinations in Eastern Canada, and America by 2016
(Marowits, 2014).

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Facts

Canadian Airports Council estimates that almost 5 million Canadians cross the border to US
airports every year for air travel (The Canadian Chamber of Commerce, 2013, 7). WestJet is
in partnership with 34 other airlines from across the globe, including Air New Zealand,
Japan Airlines, and IcelandAir. WestJet offers flights over 153 destinations, unlike Spirit and
Allegiant who only offer approximately 67 and 97 destinations respectively (Wanderbat).

Assumptions

WestJet will continue to have more consumer interest than their American
competitors because of the amount of destinations
WestJet Encore will continue to grow and add more destinations into their company
attracting more small town travelers, increasing their market
WestJets superior customer services will continue to attract consumers because of
value perception
Code sharing with international airlines will continue to give travelers more options
than their competing American airlines
Co-branding with RBC will retain customer loyalty and they will feel like they are
earning every time they spend

SWOT Analysis
Strengths

The WestJet Brand

o Canadian Business ranks WestJet as the number three brand in Canada in the
2016 rankings, down one spot from last year (CB & Philip, 2015). They were
behind Cirque du Soleil and MEC. WestJet is recognized for their branding
homerun with their Christmas Miracle video (Appendix A). WestJet also
ranks high in Canadians favourite brands in the world at number 12, moving
up four spots from 2013 (CB, 2014).
Bombardier Partnership
o In June 2015, WestJet placed an order with Bombardier Airlines to expand
its Q400 fleet by six aircrafts (Bombardier, 2015). Bombardier is a great
partnership for WestJet to have because of their reputation in the aviation
world. Bombardier is the leading manufacturer of airplanes. The produce a
sustainable product and comfortable travel option that is sought after by
many airlines.
Underdog status
o WestJet holds the status of the underdog (Armstrong, Kotler, Trifts,
Buchwitz, & Gaudet, 2015, 557). The currently occupy nearly 22% of
Canadas nationwide seats on airplanes, in comparison to Air Canada at
nearly 41% (Appendix B Figure 1) (Centre for Aviation, 2015). This is a

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positive status to hold, as humans tend to gravitate towards supporting the

underdog company.
WestJet Employees
o Employees at WestJet are happy with the corporation they are a part of. The
employees have an 85% approval rating of the corporate stock option
package offered to employees (Armstrong, Kotler, Trifts, Buchwitz, & Gaudet,
2015, 557). WestJet employees are invested in their company, so they are
concerned with the success of the brand and the business.
Marketing Communications
o WestJet has a great marketing department who is constantly pulling big
stunts to attract attention. Their Christmas Miracle video, and the Ultimate
Las Vegas Upgrade (Appendix A), are both examples of low cost marketing
tactics that made a big impact. The actual events in the video were high cost,
but the attention received online from these stunts was remarkable.
Corporate Social Responsibility
o WestJet values community involvement. They have the WestJet Cares for Kids
program that works with eight Canadian charities for childrens health and
wellness. They also have a program for their employees called WestJetters
Caring for Our Community. If a WestJetter volunteers 40 hours of their time
for one charity, WestJet will give the charity a flight pass for fundraising
purposes (WestJet, Community).

Weaknesses

Encore
o WestJet Encore is a potential threat to the company. Encore flies to smaller
remote destinations, with planes that could be potentially hard to fill. Flying
planes that are not fully booked is an economic loss for the company.
New Company
o WestJet is a fairly new company; it was established in 1996 (WestJet,
Backgrounder). They are still establishing themselves in the national and
international marketplace, and building a brand around their name.
Plane Limitations
o WestJet has limited choices for their customers when it comes to the planes
and seating options. WestJet has cut themselves off from an entire market
segment of people who prefer to fly First Class and have the perks, other than
the larger seats with more leg room, that accompany a first class seat.
WestJet also aims to keep their prices low by not serving in flight meals. This
does have an effect on overall cost, but when customers do want food it again
gives them the perception that they are paying more.
Flight Extras and Fees
o In September 2014, WestJet instated a fee for checked luggage. They claim it
is a way to reduce costs for all passengers, and that customers were already
paying for baggage fees in the total cost (WestJet Blog, 2014). Although it

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may be saving customers money in the long run, it gives customers the
perception that they are paying more.
Rising Costs
o Between 2010 and 2014 WestJets per unit costs increased by 35 cents, from
$8.80 to $9.15. A large portion of the increase was due the establishment of
Encore (Centre for Aviation, 2015).

Opportunities

Co-branding
o WestJets partnership with multiple airlines, such as Cathay Pacific has
created an opportunity for their growth (Jang, 2010). They do this through
codeshare, which is a function to enable customers to have more options and
better connections. Customers can now book a connecting flight on a
partnering airline through WestJet. (WestJet, 2015).
o There is also an opportunity for WestJet to set up co-branding for their
onboard services. WestJet offers fairly bland and basic food on board right
now. They could partner up with another great Canadian company, Tim
Hortons, and offer their coffee and teas on board. All Canadians love to
support their local businesses, and this is something that would remind
flyers that WestJet is a Canadian brand that they need to support.
WestJet Encore Expansion
o Encore is continuing to add more destinations like Thunder Bay and Fort St
John (Marowits, 2014). They have now expanded their destinations to
Quebec City, Montreal, Ottawa, and Fredericton. WestJet could expand encore
to fly to small US cities like Seattle or New York, for customers looking for
less expensive commuter flights, or easy flights for a weekend getaway.
Customer Relationship Management

o WestJet could gather previous customers to discuss ways for the companys
improvement. Data mining would give WestJet the opportunity to receive
different perspectives. This would then cause major changes for the
company, which would set a guideline on how to meet satisfaction of
customers needs, wants, and demands.
o WestJet can look to their customers for custom vacation booking to the most
desired areas. They can start small with a few popular destinations, like
Disney World and Land, to target families, Florida and Palm Springs to target
adults, and New York to target young adults, and create packages that are
desired and needed.
Long-Haul Expansion

o WestJet is starting to develop their capabilities by growing their direct
flights, to major destinations. Theyre launching flights from Calgary to
Honolulu and Maui, starting on December 2015 (CAPA, 2015). In addition,
WestJet recently announced they will be flying to London, their first longhaul flight, taking place in May 2016 (Saretsky, 2015). The expansion to

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overseas and European destinations opens the doors to more opportunities

in Europe and WestJets overall expansion.
An overseas expansion will cater to the adult crowd looking to go further
with their travels, as well as book complete vacations to international
destinations.

Threats

Cross Border Airports Nearby

o Major Canadian airports like Vancouver, Toronto, Ottawa, and Montreal are
all near the US border, making crossing the border to fly an easy and
accessible option.
Shuttle Buses
o QuickCoach is a shuttle bus company that will take passengers from
Vancouver to Bellingham or Seattle making it easy for Vancouver residents to
go straight from their home to the airport (QuickCoach).
Allegiant Air Offers Many Flights
o Allegiant air flies to many destinations across the United States. They offer
flights to many smaller areas and major destinations, such as Las Vegas,
Hawaii and Florida. Young people especially who are looking for the cheapest
way to get to their destination take advantage of these flights.
Companys Public Image
o With new costs being constantly added to flights, the public can sometimes
take a negative outlook on the company. For example, the new baggage fee
has people very annoyed, feeling like they are being over-charged. This
negative perception can create bad publicity for WestJet (See Appendix A).

Competitive Analysis

WestJet (Appendix B, Figure 2)

WestJet is a highly regarded Canadian airline with a strong brand identity. It provides
flights across Canada, the United States, Mexico, Europe, and the Caribbean (WestJet,
2015). Apart from its wide range of travel options, WestJet also provides its customers with
complementary refreshments, personal entertainment, more legroom and service from
friendly staff (Skytrax, 2015). Where WestJet falls short is the below average meals and
satellite T.V in flight (Skytrax, 2015).

Competing Airlines
Allegiant (Appendix B Figure 3)

Allegiant is an American airline with a growing popularity among Canadian travelers. With
inexpensive flights to multiple United States destinations (Allegiant, 2015). Allegiant has

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become a serious competitor for WestJet. Allegiant is reviewed similarly to WestJet for its
inflight service and overall seat comfort but provides very minimalistic refreshments and
no inflight entertainment (Skytrax, 2015).
Alaska Airline (Appendix B Figure 4)

Alaska Airlines Is a popular option for both American and Canadian travellers. With
destinations in The United States, Canada, Mexico, and Costa Rica, (Alaska Airline, 2015)
Alaska airlines offers a wide range of locations similar to WestJet. The biggest advantage
Alaska Air holds is its highly developed customer service. The only area Alaska Air doesnt
truly excel is within its inflight entertainment (Skytrax, 2015), but they are currently
enhancing this.
Air Canada (Appendix B Figure 5)

Air Canada Is WestJets Largest Competitor for the industry market. The Air Canada brand
is the same, if not better known among Canadian travelers. Air Canada also provides more
destinations than all its competitors listed, including: Jamaica, Asia, Europe and Australia
(Air Canada, 2015). The overall inflight service is similar to WestJets but excels in its on
demand entertainment service (Skytrax, 2015). Where Air Canada falls short is in its
reported below average customer relations in flight (I Back Pack Canada, 2012).

Target Market

Our target market will be adults with and without children, aged 30-60 who live in urban,
exurban, and suburban areas close to the US bordering cities of Bellingham, Niagara Falls,
and Buffalo. This will target Canadian cities in the Lower Mainland of British Columbia,
Ottawa, Toronto, and Montreal. The urban, exurban, and suburban elite earn a comfortable
income and are large consumers of travel services (Environics Analytics Group Ltd., 2014,
4-22). Canadians across the country have similar travel desires, with destinations focused
on their proximity. Travellers in Central Canada are looking for cheap flights to Florida and
other East coast destinations, where travellers from Vancouver and the surrounding areas
are looking for inexpensive flights to California and Las Vegas.

Alternatives
Alternative 1- Vacation Booking

People can often find the act of planning a vacation to be very stressful. You need to look at
where you will stay, how you will get there, transportation when you get there, and what
you will do there. WestJet provides a simple, and easy way for families to book everything
they want on their Vacation. The service on WestJet.ca is very efficient, however, many
people still use other websites like Expedia.ca. WestJet needs to expand their easy vacation
planning by including more perks and amenities to the process. WestJet could add a valet

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service upon arrival at the airport, curb-side check-in of bags. On the online system WestJet
could create a better service of picking out the accommodations and entertainment
individuals think would suit them the best.
Advantages:

1. A updated vacation booking system gives customers the ease of booking online in a
organized and efficient manner. The new system would save customers the time and stress
it takes to plan a vacation.
2. An improved vacation booking system would give WestJet a competitive advantage over
Allegiant air, as well as an added local advantage over Air Canada. Knowing your entire
vacation can be booked through one system will give customers a feeling of security about
their choice to use WestJet.
3. By bundling multiple deals together, and creating agreements with hotels and various
attractions, WestJet will be giving their customers the best pricing available. By creating
these bundles customers will save money in the long term.
Disadvantages:

1. Establishing this comprehensive of a system would be a large technological undertaking
that would require expertise in creating a new online system.
2. Creating this successful of a system would require new partnerships with hotels and
attractions in vacation spots.
3. Customers may feel that their choices are being limited by booking through a set and
structured system. It would take some time for the booking system to build a good
presence and positive recognition in order for people to trust it.

Alternative 2- Family Fly

WestJet Family Fly would provide families with everything they need to enjoy a stress-free
and enjoyable flight. Family fly would be located near the front of the plane for easy access
on and off of the plane. It would provide families with a little extra room for baggage. Each
child on board would receive a Lil WestJetters package, which would include a coloring
book, crayons and some candies to help equalize their ears during take-off and landing. The
onboard entertainment system would include many childrens audio books, TV shows and
movies. The idea would be to target the children and make flying enjoyable and fun for
them. This would result in happy and relaxed parents.
Advantages:

1. Family fly would return to WestJets original priority, customer satisfaction.
2. The extra services with family fly would be unique to WestJet, giving them an edge over
other airlines.
3. The cost of even just a family section of a plane would be nothing and would make flyers
with children feel more comfortable on board.

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Disadvantages:

1. Some of the associated costs with family fly could result in added cost for the customer,
resulting in a negative perception of the new program, for non-family flyers.
2. Passengers who are not participating in family fly could feel unappreciated and not
satisfied with the care and attention they are receiving.
3. Having all children in one section of the plane could be slightly busy, and loud. It would
work on only some flights with a larger family presence, but not on commuter flights.

Alternative 3-Onboard Food and Drink Service

Health and nutrition has become a very large market over the last decade. People are
becoming much more health conscious, especially when it comes to food. On WestJets
customer ratings, food and drink on board rate the lowest. WestJet needs to expand their
product development and provide the option of a healthy and nutritious menu onboard.
They should also provide healthy and fresh snacks, unlike the packaged food they currently
serve. WestJet could also expand their beverages on board by having a product partnership
with Tim Hortons. They could serve their coffee and teas on board and partner together as
two Canadian brands.
Advantages:

1. A partnership with another favourite Canadian brand would be positive on board, and
for the companys public image.
2. Redesigning an already existing project that people were not satisfied with will show
that WestJet is listening to their customers and care about what they want.
3. Different food options on board would make customers happy and just be another
advantage of choosing WestJet.

Disadvantages:

1. It would be very expensive to expand the onboard food and drinks.
2. Fresh food on board would have a shelf life, which could result in wasted resources if the
food is not sold.
3. Adding a new food service would complicate the service and structure of a flight and give
the flight attendants more work to do. This could result in needing more flight attendants
on the flight, and an added cost to each flight.

Solution

WestJet Family Fly would create superior customer value for those flying with young
children. Everyone loves going on vacation but the travelling is the least enjoyable part for
parents. WestJet Family Fly would make flying more pleasant for everyone. This service

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would differentiate from any other airline service out there. WestJet would gain
competitive advantage over other airlines (such as Allegiant Air) by providing more
benefits for those flying with a family. Its the small stuff that counts, and providing these
extra benefits throughout the flight would create further customer satisfaction. Families
would realize that its not worth the hassle of crossing the border and being on a flight that
doesnt take you and your family into extra consideration. Customers now more than ever
are valuing their time, and care. It is becoming more appealing to a flyer to pay a little extra
money and have a comfortable flight with a company that cares about your well being.

Implementation

1. Create digital marketing plan targeting families through online media and TV
commercials announcing the implementation of Family Fly (Product). Have a press release
1 year in advance. (Promotion)
o Let customers know that they can start booking flights with the Family Fly
option, for flights 1 year from press release
2. Add option to online booking system for Family Fly
o Adding new options to website will have minimal associated costs
3. Create Lil WestJetters flight package
o Start small with low cost (Price):
o Colouring books and crayons
o Treat bag
4. Roll out program on select flights to major destinations
o Toronto
o Vancouver
o Hawaii
o Orlando
o Anaheim
5. Segment rows of the plane based on demand per flight
o No cost
o Supply planes with necessary packages for children
6. In a future roll out, expand to curb side bag check in for families
o This will require costs with the airports, but it is feasible, as it already exists
in many US airports.

Course Concepts

Analyzing the Macro-environment: The opportunities for WestJet looks at macroenvironment, analyzing the possibilities of future improvements. Data mining was
discussed about how it would be beneficial for the company to try and build a
customer relationship management system. By communicating with previous
customers and compiling relevant information based on flight experience, WestJet
could gain new insight on ways to improve their customer relations as a whole. An

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improvement might be, adding extra features based on customer demands. Another
factor is by using customer critiques as a way to reverse mistakes into positive
insights, therefore, previous mistakes should be corrected.

For key facts, findings, and assumptions, we looked into the microeconomics of
WestJet. Data mining was used to gather what the company offered, and how it
would appeal to the mind of the consumer. Customer reviews also helped with
determining how consumers felt about the company as a whole and why they would
choose WestJet over other airlines. We were able to look into the analysis of
WestJets brand characteristics and determine their value proposition. Wanderbat
offered an extremely accurate comparison towards WestJet, Spirit, and Allegiant,
and through primary data from WestJets official website we were able to review
their products and services.

The information used to create the competitive analysis of the case study found
through gathering secondary information from multiple and reputable websites.
Each airline website provided a list of destinations available to the consumers and
the customer review site Skytrax offered an organized profile of customer reviews.
Forum pages such as InsideFlyer gave raw opinions on the pros and cons of each
reviewed airline.

Market segmentation was applied when analyzing out target market. This is to make
sure that we have the appropriate customers who would be able to afford and
benefit from our airline. It is significant to create a market segmentation because
customers will have different needs and wants, therefore, each target market will
have sorts of benefits flying on board with WestJet.

In our alternatives, product development was applied by adding a new service to an
existing set of services. WestJet already has an easy way to plan a family vacation
but this new service will take it to the next level and attract more customers.
We also used product development for adding and modifying food/beverage items
to a current market. Furthermore, co-branding between Tim Hortons and WestJet
would highly be appealing to proud Canadians, which may eventually lead to
customers being on board. If people fly with WestJet, they will associate it Tim
Hortons and both brands will benefit from this partnership.

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Appendix A

WestJet Christmas Miracle video: http://www.canadianbusiness.com/business-news/ador-not-soaring-westjet-viral-video-a-branding-win-marketing-experts/
Ultimate Las Vegas Experience: https://www.youtube.com/watch?v=GUdtIFTCJtU
Baggage fees- http://business.financialpost.com/fp-comment/baggage-fees-westjet-aircanada

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Appendix B

Figure 1 Capacity Share (% seats) (Centre for Aviation, 2015)

Food And Beverage
Entertainment
Seat Comfort
Service in Flight
Overall

2/5
2/5
3/5
3/5
10/20

Figure 2 WestJet Reviews (Skytrax 2015)

*Based on 485 customer reviews

Food And Beverage
Entertainment
Seat Comfort
Service in Flight
Overall

1/5
1/5
3/5
3/5
8/20

Figure 3 Allegiant Reviews (Skytrax 2015)

*Based on 954 customer reviews

3/5

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Food And Beverage
Entertainment
Seat Comfort
Service in Flight
Overall

2/5
3/5
4/5
12/20

Figure 4 Alaska Airlines Review (SkyTrax, 2015)

*Based on 954 customer reviews

Food And Beverage

Entertainment
Seat Comfort
Service in Flight
Overall

2/5
3/5
3/5
3/5
11/20

Figure 5 Air Canada Reviews (Skytrax, 2015)

*Based on 1859 customer reviews

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