...In the social world, we live in, where essentially everything is available to us at our fingertips and as consumers, we are spoilt for choice. It is now more important than ever for organisations to stand out from the crowd, to create a personality that we can resonate with, connect with, and empathise with. Brand choice can be seen as an extension of self and what it says about you as not only a consumer but also a person. As a consumer we have access to platforms that make our voices be heard when we are happy, sad, excited, angry etc. In addition, brands are now aware while they may be part of the conversation; they are not running or controlling it. Much like a quality you seek in a partner or a friend; loyalty is absolute key for Brands. Organisations strive to keep a loyal customer base not for revenue purposes but for the opportunities of brand associations, extension, alliances, protected from competitor influence and also promoting the brand by word of mouth. All organisations strive to make the biggest profits, but the ones with the consumer's needs and wants in the forefront of their agenda reap the biggest rewards. Brand loyalty is just one dimension of brand equity, while all five dimensions contribute to the makings of a strong brand as shown in this project. While brand equity provides a long term result, it is worth investing time, money and resources into because as shown in this project, the benefits are not only revenue and bottom line figures, but lasting impressions in the consumer's mind and building relationships, and the rewards come back ten-fold.
The aim of this project is to explore the importance of brand equity to a large organisation. Many academics have researched, discussed, and presented their findings regarding this relatively new concept of brand equity. The main players of this research over the years have been academics such as Aaker and Keller. Aaker's five dimensions of brand equity; Brand Loyalty, Brand Personality, Brand Awareness, Brand Association, and Perceived Quality are discussed in depth with additional findings that support this concept also noted. The value of a brand that can add to an organisation and how this is measured is academically explored and how to manage brand equity. The research question as the building blocks and foundations of this project is;
'Why should companies invest in brand equity?'
The organisation of choice is Irish airline Aer Lingus. Aer Lingus was chosen based on a strong brand equity that is present and the many changes and challenges the organisation has faced over the past few years and how they have adapted. What is interesting was the need for the brand to be modernised and how the company went about doing so since the IAG take over in 2015, as very little had been invested in the branding of the company in the years preceding the take-over. This process of change to modernise the brand is looked at in detail. The Irish airline industry, the history of Aer Lingus and an overview of Aer Lingus branding and most recent campaigns are examined in order to make concise recommendations for the brand management team in Aer Lingus going forward.
CHAPTER TWO: LITERATURE REVIEW
'In an increasingly crowded marketplace, fools will compete on price. Winners will find a way to create lasting value in the consumers' mind'-Tom Peters
In order to understand branding, it is important to know what brands are. A brand is the idea or image of a specific product or service that consumers connect with, by identifying the name, logo, slogan, or design of the company. Advertising professionals work on branding not only to build brand recognition, but also to build good reputations and a set of standards to which the company should strive to maintain or surpass. (Brick Marketing, 2017).
Bastos and Leavey (2012) outline that the despite its early roots, long history and power, the concept of branding has only really emerged in the early twentieth century as a central part of marketing thinking. Stern (2006) suggests the term 'Brand' entered the marketing sphere in 1922 as a compound expression meaning a trade or proprietary name (i.e. brand name). This further backed up by Berthon, Pitt, Chakrabarti, Berthon& Simon (2011), who outline that branding was originally seen as expression- the creation of an entity designed to articulate or conjure up a specific intention, feeling, or vision.
Before the rising phenomenon of branding as a business practice, brands were hardly associated with the actual sale of retail goods as many products for consumer consumption were sold in bulk. (Bastos, Levy, 2012). Moore and Reid (2008) accredit the evolution of branding, into a worldwide phenomenon to the development of media such as; TV, radio, print advertising, e-marketing etc. Early research of Cherington 1920 also saw the acceleration of branding as a result of advertising and salesmanship and referred to this as 'aggressive sales methods'. He saw the importance of advertising, the use of trademarks and labels and perceived quality as essentials for strong brands. Another work of early twentieth century, Clark (1927) The Principles of Marketing agreed that advertising and branding was an important means of selling products from individual producers. He stated that advertising and other selling techniques and efforts tend to establish in the minds of prospective customers an idea of character and quality.
The importance of advertising to brand building has since evolved. Meehan (1995) summarises that on a symbolic and emotional level the prime function of advertising is for brands to achieve a particular personality or character in the perception of its market. How this is achieved is by imbedding the brand with specific associations and values. A sign of a great strong brand is their associations with specific values that are both functional and symbolic. Additionally, Gardner and Levy (1995) suggest that a character, public image, or personality associated with a brand is most important aspect for the overall status of the brand. However, Keller (2006) disputes the importance of advertising in branding by stating, 'Brands would exist even if no money were spent on advertising and promotion for products. Customers would find some distinguishing characteristics (name, colour, shape) to identify products or services that had served them well and use them to simplify (Make more efficient) future choices. '(Keller, 2006).
According to de Chernatony who has executed extensive research in regards to Brands and Brands equity; the first and foremost roles of branding is to attract and stand out from competitors. Differentiation in the cutthroat marketplace is paramount for a company's success. The Marketing Association (AMA) defines branding as 'name, sign, symbol or design, or a combination of them intended to identify the goods or services of one seller or group of sellers to differentiate them from those of a competitor.'
However as pointed out by Keller 2008, where companies who have historically failed at successful branding; lacking branding sophistication, emphasising attributes of a product or service as such as logos, colour and design without associating with unique benefits for the consumer. In his 2006 writings Keller also states that brands growth is accredited to product development; e.g. line extensions and market development; alternative channels and geographic markets.
2.2 Brand Equity
The concept of brand equity has been thoroughly researched by academics such as Aaker, 1991; Keller 1993, Yoo&Donthu 2001, and the list go on. Each of these academics has created many similar and contrasting definitions of brand equity. The main player of this concept Aaker defined brand equity as 'a set of assets (and liabilities) linked to a brand's name and symbol that adds or subtracts from the value provided by a product or service to a firm and/or that firm's customers.' (Aaker, 1996). However, Keller has defined brand equity as 'the differential effect of the brand knowledge on consumer response to the marketing of the brand' (Keller, 1993). Yoo and Donthu similarly define brand equity as 'consumer's different response between a focal brand and unbranded product when both have the same level of marketing stimuli and product attributes.' (Yoo, Donthu 2001).
Aaker created the five dimensions that make up brand equity. These are as follows; Brand Loyalty, Brand Personality, Brand Associations, Brand Awareness and Perceived Quality. These five dimensions have been discussed in many literature findings of Branding and Brand Equity.
2.2.1 Brand Loyalty
Oliver 1999 has defined brand loyalty as 'an attained state of enduring preference to the point of determined defence.' This simply means that the consumer has repeatedly purchased the product and that they defend themselves from the attacks from competitors. Millens 1996 however defines brand loyalty in more detail as 'The biased behavioural response expressed over time by some decision-making unit with respect to one or more alternative brands out of a set of such brands and is a function of psychological process.' Gill and Darwa 2010 concluded from these definitions that brand loyalty consists of two dimensions; Behavioural loyalty where there is a repeated purchase by the consumers and attitudinal loyalty means the attitude, beliefs and intentions of the consumer towards the brand.
Brand loyalty creates value to brand equity in many ways. Brand loyalty generates value by reducing marketing costs; as it has been proven that retaining existing customers is much less costly than attracting new ones. This makes it extremely difficult for competitors to entice satisfied brand users as they have very little motivation or interest to learn about alternatives. A common mistake is to grow sales by enticing new customers to the brand while neglecting existing ones. Loyal customers can also entice others by advising others to use it (Aaker, 1992).
Aaker also states that brand loyalty adds value to brands as this loyalty translates into a profit stream. A loyal customer base can be expected to generate predictable sales and profit stream. Additionally, focusing on brand loyalty is an effective way to manage equity because customer satisfaction and repeat buying patterns are indicators of a healthy brand and programs to enhance them will ultimately build brand strength.
2.2.2 Brand Personality
Brand personality is an important aspect of brand equity as consumers use brand personality to express themselves. Many years of research has focused on how this personality of a brand enables a consumer to express his or her own self (Belk, 1988), an ideal self (Malhotra, 1988) or specific dimensions of self (Kleine, Kliene and Kernan 1993) through the use of a brand. As a formal definition, brand personality consists of a set of human characteristics associated with the brand. (Aaker, 1997). Aaker also identified five dimensions of brand personality as sincerity, excitement, competence, sophistication, and ruggedness.
The greater alliance between brand personality and the self or ideal self the greater preference for the brand. The personality traits that are associated with the brand tend to endure and be unique and as a result, the brand personality can be used to differentiate a brand in the market. (Aaker, 1992). How human and brand personality traits are formed are dramatically different. Human personality traits are formed through an individual's behaviour, physical characteristics, attitudes, beliefs, and demographic characteristics (Park, 1986). Whereas brand personality traits can be formed and influenced by direct and indirect contact that the consumer has with the brand (Plummer, 1985).
Directly the brand personality traits become associated with the brand through the brands user imagery, the company's employees, CEO and the brand endorsers. The personality traits of these people associated with the brand are then transferred directly to brand as shown in McCraken's Meaning Transfer Model 1989. How personality traits are associated to a brand indirectly is through product-related attributes, product category associations, brand name, symbol, or logo, advertising style, price, and distribution channels (Batra, Lehmann and Singh 1993).
Brand personality can also be linked to a firm's core values. Brand personality also helps reduce information search and processing by quickly recognising the brand's values through the personality metaphor (Aaker, 1997). The challenge firm's face is to blend the personality presented through the media, with supporting staff behaviour (de Chernatony, 1999). The general feelings about a brand are accredited to emotions stirred by brand communications (Frazen and Bouwman, 2001) and the organizational cultures that drive different forms of staff behaviours (Cameron and Quinn 2006). De Chernatony (2009) states that employees are encouraged represent their brands and interact with stakeholders that reinforce brand values. When these values of the employees align with the desired brand, values communicated to the consumer, the greater the trust. Customers then feel more confident selecting brands to reflect their self-identity (Escalas and Bettman 2005).
2.2.3 Brand Association
Brand association provides meaning to a brand. Aaker defined brand identity as 'a unique set of brand associations that the brand strategists aspire to create or maintain. These associations represent what the brand stands for and imply a promise to customers from the organization members.' Aaker also outlines three types of brand associations that also help measure brand equity; brand as a product, brand as an organization and brand as personality. Alternatively, Keller (1993) states that brand associations are classified into three major categories of attributes, benefits, and attitudes.
Attributes are the descriptive features that characterize a product or service- what a consumers think the product or service is and what is involved with its purchase or consumption. These attributes are spilt into product related and non-product related. Product related attributes are defined as the ingredients necessary the product or service function sought by consumers. Non-product related attributes are price information, packaging or product appearance information, user imagery and usage imagery (Keller, 1993).
Keller (1993) goes on to explain benefits are the personal value consumers attach to the product or service attributes, essentially what consumers think the product or service can do for them. Brand attitudes are defined as consumers' overall evaluations of the brand (Wilkie, 1986). These brand attitudes are important because they often form the basis for consumer behaviour and brand choice.
According to Aaker (1992), these brand associations can help consumers process or retrieve information for differentiation and extensions and provide a reason to buy and create positive feelings. Keller (1993) believes associations can be characterised by the strength of connection to the brand node. The strength of the associations depends on how the information enters consumer memory and how it is maintained as part of the brand image. Gill and Dawra2010 also reaffirm that it is the strength, favourability and uniqueness of the brand associations that are responsible for the differential effect of the consumer towards the brand.
2.2.4 Brand Awareness
For many companies' brand awareness is paramount and contributes hugely to the success of strong brands. This is discussed in findings from both Aaker and Keller. According to Keller (1993) brand awareness involves the concepts of brand recognition and brand recall. Keller (1993) describes brand recognition as the extent to which a person can recognize a particular brand given a set of brands. Aaker (1992) accredits brand awareness at a recognition level to providing the brand with a sense of the familiar and signal of substance and commitment. Brand recall is the extent to which a person can remember a brand given a product category or need. (Keller, 1993). Aaker, (1992) affirms at recall level, brand awareness further affects choice by influencing what brands are considered and selected.
Although Aaker believes brand awareness has many layers such as; brand recognition, brand recall, top of mind, brand dominance, brand knowledge and brand opinion. Brand awareness is extremely important when establishing brand strength. Brand awareness is a means of measuring external brand strength. This concept reflects the ability of the buyer to identify and correctly classify a brand to a product category. A high level of brand awareness can also have a positive impact internally on employee's commitment to a brand. Brand awareness is not only for potential consumers but to employees as it represents stability and trust worthiness. (Burmann, Jost-Benz, Riley, 2008).
2.2.5 Perceived Quality
Gill and Dawra (2010) define perceived quality as 'a customer's opinion on the extent to which a particular product will able to meet his/her expectations.' They go on to discuss that perceived quality is nothing to do with the actual performance of the product. A high standard of perceived quality can contribute hugely to the brand's equity. If a customer perceives a brand to have a high quality it will increase the brand preference and ultimately build brand equity (Gill and Dawra, 2010).
Aaker (1992) sees perceived quality as asset separate to brand associations for a number of reasons. Perceived quality has become priority for many firms and motivation for the design of programmes to enhance brand equity. Research from the Strategic Planning Institute PIMS data base- which analyses the financial and operational data of 3,000 business shows that perceived quality is one of the most important contributors to return on investment among the PIMS variables that were measured. Aaker (1992) also speaks of a study completed of 250 business managers, where they identified perceived quality as the most important asset when it comes to sustainable competitive advantage.
To achieve perceived quality, the firm needs to communicate effective messages and information. Gill and Dawra (2010), list brand name, product design, packaging, advertisements and brand identities to communicate unobservable quality. Once these messages are communicated effectively and strategically, it can help build favourable perceived quality in the minds of the consumer.
2.3 Brand Value
Brand value is composed of both intangible and tangible assets to a firm. According to Gill and Dawra (2010) brand tangible value is considered as a function of physical attributes and value not arising from physical attributes are considered intangible value. Brand intangible value consists of the value derives by the consumer from brand name associations. Levy (1999), defines brand intangibles as aspects of the brand image that do not involve physical, tangible or concrete attributes or benefits.
Keller (2006) stresses the importance of brand value tangible and intangibles in positioning the brand. He outlines that brand positioning sets the direction of marketing activities and programs. It also involves establishing key brand associations in the minds of consumers to differentiate the brand and establish competitive superiority. While tangible product attribute levels will have huge influence on the consumers' choice, Keller feels the role of brand intangibles and corporate image and reputation plays just as much of an important role in the consumers' choice. Brand intangibles are a common means by which marketers differentiate their brands with consumers. Brand intangibles include; brand associations with aspirational or actual user imagery; purchase and consumption imagery and history, heritage and experiences (Keller, 2001). In recognition of the value of brands as an intangible asset, increased emphasis has been placed on the understanding how to build, measure and manage brand equity (Kapferer 2005; Keller 1993, 2003).
Aaker (1999) researched the value of brand equity assets in many aspects of his work and believed brand equity assets could add value to a firm in three potential ways. Firstly, it added value to customers as it helped them to interpret, process, store and retrieve a large quantity of information about products and brands. Secondly, this will help consumer's confidence in making a purchase decision, as consumers will be more comfortable with a brand that has higher perceived quality or is familiar to them. Lastly, brand equity assets as such as perceived quality or brand associations will enhance the consumers 'satisfaction when they are using the product (Aaker, 1992).
There are six potential sources of value for the firm to adapt and use to their advantage. Aaker (1992) outlines these six sources in his 1992 findings of 'The Value of Brand Equity.' Firstly, brand equity can enhance the efficiency and effectiveness of marketing programs; an advertisement that is announcing a new feature will be more than likely to be remembered and stimulate action if the potential consumers have a high-quality perception of the brand. Secondly, Aaker (1992), states that brand awareness, perceived quality and brand associations could all strengthen brand loyalty by increasing customer satisfaction and providing reasons to buy the product. Enhanced brand loyalty is especially important in buying time to respond to competitor possible innovations. Thirdly brand equity can provide higher margins for products by permitting premium pricing and reducing reliance on promotions. Fourth brand equity can provide a platform for growth and brand extensions. Fifth, it can provide leverage in the distribution channel. Finally, Aaker states that brand equity assets can provide the firm with a competitive advantage that forms a barrier that prevent customers switching to competitors (Aaker 1992).
However, not all firms find brand building as much of a priority as they should. Most firms are chasing bottom line figures and get preoccupied with short-term financials. Aaker (1992) states that strategists and planners have become experts in managing short-term financials, designing cost and sales programs instead of thinking long term and learning how build a strong brand and manage brand equity assets that will ultimately pay off in the future. It is difficult to illustrate the value of investment in brands and it is next to impossible to financially analyse building brands to show how the net present investment in brand building advertising or additional brand building activities will pay off (Aaker, 1992).
While most managers will affirm that brand equity is a key asset, sometimes the actions of these business managers can be inconsistent due to pressures to deliver short-term results. When there is a focus on budget and earning, brand-building activities are usually the first thing to be cut as they do have very little impact on short-term performance. This can be the kiss of death of some brands as the decline in brand equity is not detected due to systems to measure brand equity are not in place (Aaker, 1992). Brand building activities as such as sales promotions are quite popular as they deliver immediate results and easily measured. Cost-reduction programs also show short-term results, while they do not show an immediate effect of a decline in quality, it can be hard to detect. They are effective and therefore a reliance on sales promotions and cost-reduction programs. This paired with a reduction in brand building activities results in the increase of the importance of price and decreases the role of brand associations when it comes to the purchase decisions (Aaker, 1992).
2.4 Measuring Brand Equity
As brand equity has been proven extremely difficult to quantify in the past, there has been many insights in how to measure brand equity. While it is important to build strong brand equity, it is just as important to measure it, as an intangible asset to the firm and to monitor its incline/decline and manage the brand effectively. According to Aaker (1992), he simply put if he had to choose one single measure of brand equity, it would be the price premium people are willing to pay. Keller (1993) however constitutes the measure of brand equity to brand awareness and brand image. Kamakura and Russell (1993) used actual consumer purchase behaviour and market behaviour to ascertain brand equity. Both perceptual and market behaviours were considered in these measurements.
Keller (1993), Park and Srinivasan (1994) and Yoo and Donthu (2001) all used perceptual or psychological measures to measure brand equity. Whereas Kamakura and Russell (1993) used actual consumer and market, behaviours to formulate results of brand equity. Interestingly enough Aaker (1992) combines both market- behaviour related measures and perceptual measures to provide a framework to capture brand equity (Gill and Dawra, 2010).
As per Gill and Dawra 2010 findings, there is both indirect and direct approaches brand equity. Their indirect approach to assess the sources of brand equity in terms of brand recognition and brand knowledge. If this indirect measure is unable to capture the strength and favourability of these associations, direct measures are employed. The direct approach of measuring brand equity is assessing the impact of brand knowledge on consumers' response to the marketing program (Gill and Dawra, 2010).
The research of findings from Keller and Lehmann 2010, outline the measurement and valuation of brand equity can be done on a variety of levels as such as customer, product market, and financial market- the relationship of customer equity to brand equity. From the customers' perspective brand equity is part of the attraction to a particular product or service from the company generated by the 'non-objective' part of the product offering. Through advertising, usage experience, activities and influences it can lead to a series of attachments and associations that exist above and beyond the actual product or service. Brand equity can be built on attributed that have no inherent value (Broniarcryzk and Gershoff 2003, Brown and Carpenter 2004).
From the company's point of view, a strong brand serves purposes as much as making advertising and promotion more effective, helping secure distribution, insulating a product from competition and facilitating growth and expansion into other product categories. (Hoeffler and Keller 2003). Keller and Lehmann (2006) state, from a financial market perspective brands are considered assets just as value as tangible assets such as machinery or property. The financial worth of the brand is the price it brings in the financial market. However, without market value it can be estimated at the cost associated with establishing a brand with strength or as residual in the model of the value of a firm's assets (Simon and Sullivan 1993). Keller and Lahmann (2006) state when it comes to assessing the financial value of the brand one must take the customers mindset measures and relate them to stock market values.
Various approaches have been created to assess the impact of brand equity in the product market. These approaches measure price premiums, advertising elasticity, decreased sensitivity to competitors pricing and securing and maintaining distribution through channels (Hoeffler and Keller 2003). Raj (1982), Hsu and Liu (2000) believe that advertising plays a part in decreasing price sensitivity. Consumers who are highly loyal to brand have increased purchases when advertising for the brand increased.
Swait (1993), have developed an approach for measuring brand equity using choice experiments that account for brand name, product attributes, brand image and differences in consumer socio-demographic characteristics and brand usage. This is then defined as the price that equates the utility of a brand to the utilities that could be attributed to a brand category where no brand differentiation has occurred (Keller and Lehmann 2006). Alternatively, Dillon (2001) proposed a model for dissecting ratings of a brand on an attribute split into two categories; Brand-specific associations like features, benefits that link the consumer to the brand and general brand impressions- overall impressions based on a holistic view of a brand (Keller and Lehmann, 2006).
2.5 Brand Management
The brand manager within an organization has many strategic decisions to make when it comes to building brand strength. According to Keller and Lehmann (2006), these decisions involve the design of brand architecture, the effects of co-branding and brand alliances, and implementing cross-cultural and global brand strategies. As technologies, product development and competitive markets have improved and developed over time; the differentiation from competition on product quality alone is becoming increasingly difficult so therefore the emphasis on brand equity has become a major driver of success. Brand commitment measurements are increasingly being added to annual management objectives (Burman, Jost-Benz, Riley 2008).
While brand managers need to utilise many marketing tools in order to build brand strength, branding is more than just the marketing strategy. It involves connecting symbolism, fantasy, and design to inanimate objects with distinction and sophistication. This is more appealing than sheer commercialism widely associated with marketing. Bastos and Levy (2012), describe branding as exciting and alluring. It provides a challenge to creativity for brand managers in order to draw in devotees, fans, co-creators and communities rather than just buyers and users. La Fressange states that full-scale attention to branding creates imagery that affects all the senses. The branding reflects the reality of the core product, facts, features, functions, and benefits. It also adds to the aesthetic with music, texture, visualization, and fantasy-like existence in the culture (Bastos & Levy 2012).
Due to rising advancements in technologies and the connected world we now live in, Brand Managers have easy access to platforms and technologies as such as pictures, video, blogs, Instagram, Facebook, Twitter, Snapchat, Tumblr, and LinkedIn which provide easy, inexpensive, quick and broad-reaching ways of conveying meanings, values and views to one's social circle and beyond (Bastos & Levy 2012). While the development of data analytics has risen in popularity over the last few years and this also gives marketers a clear insight of the reach of their campaigns and performance in the online space. Brands well-established status in society may partially shield them from threats posed by technology; however, the brand manager's imagination is relied on to find new and innovative ways that brands can exert their function as a carrier of meaning. (Basto and Levy 2012). Due to this social world, it has given consumers a voice via social platforms. While it can create loyal communities and avid fans, Brand Managers have very little control over the brand image/reputation and what the general feelings are from these brand communities. While they can participate, and add to the conversation they cannot necessarily control it.
Another necessary task for Brand Managers is promoting a culture of brand internally as well as externally. Both Burmann, Jost-Benz, Riley (2008) and de Chernatony (1999) discuss this in their research findings concerning brand identity. De Chernatony (1998) states that managers should strive to incorporate a unique mix of functional and emotional values into their brand. Attitudes, beliefs, and values influence consumers brand perceptions. Brand identity is essentially, how managers and staff make brands unique and the organisations culture, which then in turn influences the corporate brand values. De Chernatony continues to suggest management should focus on integrating values of the organisation with its unique logo, signalling desired behaviour to staff and help align their values with the desired brand values. (de Chernatony 1999). Similarly, Burmann, Jost-Benz, Riley (2008) suggest management should emphasis and promote an internal brand strength just as much as they do for external brand strength, as one helps the other and drives success. Brand conceptualization, which is primarily designed for external shareholder groups should be implemented consistently and continuously among internal stakeholders.
COMPANY REVIEW & CONTEXTUALISATION
3.1 The Irish Airline Industry
The airline industry is largely dynamic, competitive and rapidly growing. The competition within the airline industry is so strong and fast paced, that many airlines utilise pricing and branding in order to gain a larger market share. The buying power of passengers is extremely high due price, elasticity of demand, brand, and perceived quality. Low switching costs enables consumers to freely choose between airlines. This is simply shown by many websites that generate the cheapest fare for the dates in which a consumer desires to travel; e.g. Skyscanner.
In 1936 the Irish Government created Ireland's first airline; Aer Lingus as a state-owned entity. Ireland at the time- apart from Bulgaria, where the only European country to have not established its own airline. Now in 2017, the Irish aviation industry contributes '4 billion to the Irish economy and it is continuing to grow.
The Irish Aviation Authority has described Ireland as 'A nation of aviators.' The IAA cites to back-up this claim with the impact of the Guinness Peat Aviation (GPA), which is the Tony Ryan enterprise accredited to inventing aircraft leasing in the 1970's. Ryan air also adds to this legacy as being one of the world's largest airlines with approximately 119 million passengers per annum. The '4 billion is broken down '1.9 billion directly from aviation, '1.3 billion through the supply chain and '900 million from associated spending by people employed in aviation, which is around 40,000 including pilots, engineers, maintenance staff, and cabin crew (McCall, 2016). The bulk of this '4 billion is coming from the niche speciality of air finance. Ireland is the global hub for leasing and financing aircrafts with nine out of ten world's top ten leasers headquartered here. Per Eamonn Brennan CEO of the Irish Aviation Authority, 'There are opportunities for Ireland in virtually every area of aviation. The global aviation industry continues to expand and it is estimated to double over the next 20 years, increasing to over 7 billion passengers flying per annum compared to 3.5 billion today' (McCall, 2016).
3.2 Aer Lingus
The Aer Lingus mission is to be the first-choice airline serving business and leisure passengers and customers of their cargo services in a safe and reliable manner on all its chosen routes. They also vow to operate a commercial and profitable business and will reinvest in the development of its people, its fleet, and its products to achieve these ends.
Although Ireland has a population of less than 4 million, ten million passengers fly annually via Aer Lingus to almost seventy destinations across Ireland, UK, Europe and U.S.A. The Aer Lingus brand prides itself on superior customer service, innovation technologies for a seamless experience, and serving both leisure and business passengers.
In 2015, Aer Lingus went through a major IT revamp. This was a decision made by Michael Rutter, the Chief Operating Officer to simplify the online booking process in order for customers to book flights online and across devices. They also introduced the new FareFinder tool that enables customers to see 30-day pricing allowing the customer to find the best price on dates that suit them (Aer Lingus, 2017). According to Rutter, the key aims of this IT revamp were to personalise Aer Lingus offering to their customers. Aer Lingus collaborated up with Irish software company Datalex to personalise the opportunities the customer receives by tracking consumer behaviour and habits. The second reason was merchandising to reduce the number of customers that come through other channels like online travel agents. They also invested in the Airlines Business class service for transatlantic flights with new lie flat seats, new menus and a new lounge based in the US and Dublin Airport. They also transitioned from the older Loyalty programme of Gold Circle to AerClub loyalty programme. This was a significant year for Aer Lingus as it also seen the rebranding to Smart Flies Aer Lingus which will be examined in detail below.
3.2.1 The History
Although a late starter among European flag carrier, Aer Lingus has grown quickly since its establishment on May 22nd1936 by the Irish Government. The company's first plane was a twin-engine de Havilland DH-84 Dragon named 'Iolar'- Gaelic for 'Eagle' (See Figure 1). Aer Lingus first voyage carried five passengers from Baldonnel airfield to Bristol on May 27th 1936. Aer Lingus was operating out the now Air Corps military base in Baldonnel until the opening of Dublin Airport in Collinstown in 1940. This year also seen expansion for the company, purchasing an additional aircraft and began services to Liverpool and a new domestic route to Shannon (Reference for Business, 2017).
Aer Lingus first plane: a twin-engine de Havilland DH-84 Dragon named 'Iolar'
However, with the outbreak of World War II, Aer Lingus had to strip back services between Ireland and the U.K. Post-war seen commencement of regular service and major demand for additional routes and expansion of the fleet. This brought about the original branding of the distinctive silver and green (See Figure 2) and the introduction of flight attendants. In an attempt to consolidate the Irish-ness of the brand, all aircrafts in the fleet where named after saints. This evokes the first annual blessing of the fleet the following year of 1947 (Reference for Business, 2017).
Aer Lingus first continental flight to Paris in 1946 (Source: AviationWeek.com)
April 1958, marked a historic milestone for the airline with its first transatlantic flight from Shannon to New York on a Super Constellation Aircraft. Subsequent routes from Dublin to New York followed soon after on the affectionately referred to as 'Connie's.' The transatlantic fleet where the first to done the symbolic shamrock on the tail of the aircraft (O'Reilly, 2016). The following year the iconic shamrock replaced the Irish flag on the tails of the European fleet. This shamrock played a significant role and set the tone in the historic and current branding of the Aer Lingus.
The year of 1984 saw Aer Lingus CEO David Kennedy held the presidency of the International Air Transport Association (IATA) sparking the Irish to take pride in their aviation industry. While Aer Lingus enjoyed fifty years as Ireland's sole airline, the following year the launch of independent Irish carrier Ryan Air brought intense low-fare competition into the European Market. In the mid-90'sthe company unveiled a new corporate identity and was proudly one of the 25 most profitable airlines in the world with a ''41 million turnover (Business for Reference, 2017).
Willie Walsh was appointed the Chief Executive of the company in October 2001. Walsh was faced with dealing with the fall-out from the September 11 attacks on Twin Towers in New York City, which hit the airline industry hard worldwide. He also introduced the low fare model to compete with low cost carriers. Walsh left the company in 2005 to become the Chief Executive Officer for IAG Group; British Airways. Ten years later Willie Walsh would resurface in the Aer Lingus sphere with the IAG take over in 2015. August 18th 2015 marked the end of an era as 95% of Aer Lingus vote in favour of an acquisition by International Airlines Group, thus formally bringing an end to 80 years of Irish ownership and state involvement in the airline (Reddan, 2015).
3.2.2 The Aer Lingus Brand
In 2009, Christopher Mueller was appointed Chief Executive Officer of Aer Lingus where he repositioned the declining company to a service airline that could compete with low budget alternatives. He successfully expanded the transatlantic services and repositioned it a more service-orientated carrier. While the primary brand mark of the company is Aer Lingus, they do have several sub brand marks to appeal to a larger audience and offer specific services. These sub brands include; Business Class, AerClub, Regional and Cargo. While Mueller's repositioning promoted superior service than their no-frills competitor Ryan Air, while still offering low cost fares, the tag line was 'Great Care, Great Fare' (See Figure3).
Mueller's rebrand of 'Great Care. Great Fare' (Source: JohnGilliganTravel.com)
18.104.22.168 Smart Flies Aer Lingus
Christopher left his role as Chief Executive Officer on the 28th of February, where the now CEO of Aer Lingus Stephen Kavanagh stepped into the role right before the IAG take-over. While Mueller's five years of work to reposition the brand did not go unnoticed, Aer Lingus were set to face yet again more change. Mike Rutter, Chief Commercial Officer set out a rebranding journey, one of the largest brand repositioning in Aer Lingus history and the product of 'a journey' on which the airline embarked on. A review of Aer Lingus by strategic brand positioning agency MCCP concluded the company needed to update its image. While the brand is still quite strong, it needed modernising in order to appeal to lapsed customers lost to Ryan Air (McCabe, 2015).This journey to modernise the brand cost the company roughly '2 Million. KesselsKramer a Dutch creative agency designed the 'Smart Flies' campaign, causing a bit of controversy for not using an Irish based agency. It was seen as hypocritical to use images of Ireland and tries to evoke a sense of Irish-ness, and use a foreign agency, however the Aer Lingus Marketing department argued that they presented a challenging brief to all agencies and Kesselskramer had the best execution. Aer Lingus however did use the Dublin-based Sweet Media for all the production for the new campaign.
The 'Smart Flies Aer Lingus' campaign strategy was two-fold. First was the TV ad aired in May 2015. The ad shows 'Smart Travellers' making their own journeys, taking the best routes they can with the assistance of Aer Lingus crew. It contrasted deeply with the mid-century advertisements that saw a sense of awe at the wonders of air travel. The theme of this campaign also centred around the Irish 'Travel Gene'. Roscommon born Chris O'Dowd, famously known for his roles in Moone Boy, the I.T Crowd, and Bridesmaid is chosen as the voiceover. Real Cabin Crew star in the ad that was filmed in Dublin Airport and the Aer Lingus Hangar 6 and is sound tracked by a modern recording of the big band classic Sentimental Journey. The advert had both 40 and 20 second versions broadcasted across RTE, TV3, UTV Ireland,TG4, RTE Player as well as online and social platforms (Slattery, 2015).(See Figure 4). The target audience for this particular campaign was the younger demographic and lapsed Aer Lingus Customers.
Smart Flies Aer Lingus rebrand by Dutch Agency KesselsKramer (Source: AerLingus.com)
22.214.171.124 Sponsorship of IRFU
The second implementation was the partnership established between Aer Lingus and the IRFU. This partnership sees the airline team up with national team, to fly players, management and support staff around Europe as they compete in high profile international tournaments. As a brand, building exercise sees two aircrafts wrapped in IRFU and player branding imagery in order to anchor the brand in the heart of Ireland. They also renamed one of these aircrafts 'Green Spirit' (See Figure 5). Players from each province act as brand ambassadors and take part in a safety demo video shown on all transatlantic flights. The faces of Robbie Henshaw, Rob Kearney, Conor Murray, and Tommy Bowe are displayed proudly on the Airbus A320. (Marketing.ie, 2015). All campaigns promoting the IRFU Partnership has been dubbed '#HomeAdvantage' (See figure 6). Not only do these campaigns support the travel of the team, but also of the loyal and avid supporters who travel all over to back their beloved team. The primary message of this campaign is to bring home advantage no matter where the game is being played, as long as it feels like home.
Green Spirit representing the Aer Lingus Sponsorship with the IRFU
Celebratory send 'offs and homecomings as seen in November 2016 when Ireland flew to Chicago to take on the All Blacks. This match would go down in history for the Irish seeing a magnificent victory against the All Blacks. In course of the activation of #HomeAdvantage, Aer Lingus used a photo marketing activation with Snappie App to give people at Dublin airport and the Aviva Stadium the opportunity to show their support for the team and also share their fan engagement on Social Media. On the eve of the RBS 6 Nations, Aer Lingus released an extremely emotional online video provoking national pride among the Emerald Isle. This video is the centrepiece of the #HomeAdvantage social media campaign that ran through the tournament. With inspirational lines as such as:
'It's your friend at your side, it's your brother by your side, and it's your Dad in the stands''
'It's fifty thousand shivers down fifty thousand spines and fifty thousand lumps in fifty thousand throats''
#HomeAdvantage Campaign (Source: Aer Lingus.com)
126.96.36.199 Aer Lingus Christmas Campaign
In 2015, Aer Lingus briefed, Dublin based agency Radical, to show the world that nobody brings people together like Aer Lingus for their Christmas campaign. This involved bringing six Irish people living abroad home for the holidays, unbeknownst to their families. Radical supplied these lucky ex pats their own Go-Pros to capture their journey home on Aer Lingus Flights and the overjoyed reactions of their loved ones as they showed up unexpectantly on their doorstep. The 'Bringing People Home for Christmas Since 1936' Campaign got 1 million views within 24 hours of its launch on December 23rd 2015 and 6.5k shares on social media (Radical 2017). (See Figure 7). Research conducted by the team in Radical showed that 64% of Ryan Air customers said they were more likely to fly with Aer Lingus and four out of five who watched the video shared that Aer Lingus is perceived a brand that cares about Irish People. (Radical 2017).
Aer Lingus Christmas Campaign 'Bringing People Home for Christmas Since 1936' (Source: YouTube.com)
Following the enormous success of the campaign, Aer Lingus wanted to highlight the role they played in reuniting Irish families in the last 80 years. This campaign was dubbed 'From Our Seat to Yours #TeachtAbhaile' for the following Christmas, and again focused around Irish living abroad. While advances in technology gives much more families comfort to see their loved ones via Skype and FaceTime, nothing compares seeing them in the flesh. The central message of this campaign is while technology can only get you so close, Aer Lingus always has a seat to bring you home (Radical 2017) (See Figure 8). This campaign was hugely successful just as it previous year racking up 1.8 million views and reaffirming in the minds of its target audience that Aer Lingus cares. Both these Christmas Campaigns tie in with the current message of Smart Flies Aer Lingus of the 'Irish Travel Gene' and causing Irish people all over the globe to shed a tear.
Aer Lingus Christmas Campaign 2016 #TeachtAbhaile (Source: YouTube.com)
3.2.3 Aer Lingus Brand Equity
As discussed in the Literature Review, Aaker outlines five main categories of Brand Equity; Brand Loyalty, Brand Personality, Brand Association, Brand Awareness and Perceived Quality. Aer Lingus have elements of each of these categories that contribute to the organizations brand equity.
As Aaker stated; one of most important indicators of brand equity and brand loyalty is price premium. While Ryan Air offer bottom prices for destinations dotted all around Europe with a no-frills service, customers continue to spend more on their airfare with Aer Lingus. This is contributed to several things such as; brand loyalty, superior customer service, comfort, and more direct routes to destinations. Aer Lingus older loyalty programme was known as the Gold Circle Club- Frequent Flyer programme. The Gold Circle Club, which had more than 100,000 members, had operated since 1987. It consisted mainly of the Irish business community. Membership offered a Fast Track lane to boarding gates, access to the Gold Circle lounges which includes free food, drink, Wi-Fi, newspapers and showering facilities and the ability to accrue points with every eligible flight taken, which can be exchanged for free flights or upgrades. However, this programme was based on air miles not on revenue spent so was cutting off a share of Aer Lingus customers to be involved in the loyalty programme. AerClub was launched in late 2016, where all Gold Circle Members where automatically transferred over. The AerClub programme is revenue-based and is keeping in trends with other international frequent flyer programmes. It consists of four tiers; Gold Silver, Platinum and Concierge. The tier the consumer is entitled to depend on how much they spent over the previous 12 months (Boyd, 2016). Aer Lingus show to have a very strong Brand Loyalty with its consumers. The new loyalty programme brings Aer Lingus into modern times and shows their commitment to its customers.
Brand Personality is discussed in many dimensions in the Literature review. Aer Lingus brand personality can possibly fall into the categories of Sincerity or Sophistication. As Aer Lingus focus on providing superior customer service and providing the most seamless experience for its customers shows sophistication and differentiation from the low-cost competitors as such as Ryan Air. The Brand's image also gives off a wholesome and caring personality dimension, which leads to the personality traits of honesty and cheerfulness, which is within the personality dimension of sincerity. As per Aer Lingus' Brand Identity Systems Guidelines released in 2011, Mueller stated;
'We the people of Aer Lingus, bring our brand to life. Through us, our passengers experience our brand' (Mueller, 2011).
This statement is supported by both Burmann, Jost-Benz, Riley (2008) and de Chernatony (1999) regarding brand identity as discussed in the literature review. Aer Lingus implemented a strategy that supported internal brand identity and a company culture that emphasises desired behaviour of staff and help align their values with the desired brand values. Mueller also reaffirms this by saying:
'Behaviour and communications that reflect our values truly and consistently are vital to enable us to develop a strong, well-recognised, and sustainable brand' (Mueller, 2011).
As per the Aer Lingus Brand Identity Systems Guidelines, the core values are listed as Friendly, Innovative, and Professional.
Aer Lingus decision to sponsor the IRFU was a clever and strategic one. This partnership enhances Brand Associations and portrays the common message of supporting the Irish people and emphasising national pride as the nation's airline. The use of four rugby players from each province as brand ambassadors anchors the Irish pride. With campaigns of 'Let's Bring Home Advantage' and 'Bringing People Home for Christmas since 1936' evoke emotional associations to the brand which is extremely effective as discussed by Aaker 1992 these brand associations can help consumers process or retrieve information for differentiation and extensions and provide a reason to buy and create positive feelings.
Aer Lingus brand awareness is strong in Ireland as the Nation's original airline and the message in all brand communications of Irish-ness and Irish Pride. Aer Lingus reaches many Irish living all over the globe and Aer Lingus is associated with coming home with many across the world. However, brand awareness is considerably lower outside of Ireland. One of Aer Lingus' objectives after the IAG takeover was to increase long-haul business so the Smart Flies Aer Lingus campaign is promoted in the US and the U.K with minor adaptions.
Increasing Brand Awareness can be contributed internal as stated by Burman, Jost-Benz, and Reilly in the literature review. A high level of brand awareness can also have a positive impact internally on employee's commitment to a brand. Brand awareness is not only for potential consumers but also to employees as it represents stability and trustworthiness. All Aer Lingus staff are carefully selected through rigours recruitment process, and trained to the highest standard. Aer Lingus prides itself on providing quality superior service, which is of course provided by their trained Ground Staff, Customer Care, and Cabin Crew employees. They offer excellent benefits and staff travel entitlements, which has created a positive culture within the company, which in turn helps brand awareness externally.
Aer Lingus has a high level of perceived quality by the consumer market and this is accredited to their brand communications of high quality produced television based advertisements and emphasis of the innovation that has been invested to provide the best possible experience for the passengers. Airline review and rating company SkyTrax certified Aer Lingus as a 4-star airline in 2016. This 'World Airline & Airport Rating' is the global quality-ranking programme operated by SkyTrax, the international air transport-rating organisation. This rating is accredited to by the organisation SkyTrax for the following reasons:
'As a value carrier Aer Lingus is committed to delivering to its guests a high-quality travel experience at a value price. As part of that commitment to delivering a high-quality travel experience, two years ago, Aer Lingus embarked upon a mission to offer its guests the ultimate travel experience at every point of their journey ' from booking on Aer Lingus.com, airport check-in, boarding procedures, to stepping on board the aircraft. The 'Good to Great' programme revisited each aspect of the Aer Lingus guest experience to identify ways in which to innovate the overall product offering, increase efficiency, provide a more comfortable experience on board and ultimately offer guests a world-class service' ' (SkyTrax 2016).
It is widely known that Aer Lingus provide much higher quality service than their low-cost carrier counterparts. While Ryan Air have openingly admitted to scrimping on the historical luxury of air travel and still managed to grow in leaps and bounds, is a typical example of disruptive innovation. While Aer Lingus always maintained the message of a luxury carrier and customer care at the focal point of the brand strategy, Ryan Air entered the market causing Aer Lingus to eventually adapt to new market place in order to compete.
CHAPTER FOUR: RECOMMENDATIONS & CONCLUSION
With rising completion in the Airline Industry, differentiation and brand equity is paramount. Ryan Air launching in 1985, provided Aer Lingus with its first real competition in Ireland. Aer Lingus historically had branded itself as luxury airline with a wonder of air travel. Aer Lingus gave the Irish the gift of travel and easy access to parts of Europe and later to the United States. However, Ryan Air disrupted the entire industry by entering the market with much lower prices than Aer Lingus. Christensen, Raynor, and McDonald (2015) describe disruptive innovation as a 'process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses. Specifically, as incumbents focus on improving their products and services for their most demanding (and usually most profitable) customers, they exceed the needs of some segments and ignore the needs of others. Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality'frequently at a lower price.' (Harvard Business Review, 2015).
While Aer Lingus still strived ahead of Ryan Air, it only took Ryan Air 7 years to catch up to them in terms of revenue generated. While Ryan Air provides an intense competition for the European market, the introduction of other low-cost airlines as such as Norwegian and Wow Air now pose threat to Aer Lingus thriving transatlantic business. However, it recommended that Aer Lingus focus on the already well-established perceived quality and to resist resorting to rock bottom prices. As Aaker (1992) stated while sales promotions and cost reduction programs deliver short-term results and immediate data of its effectiveness. If brand-building activities are reduced also, this increases the importance of price and decreases the brand associations when it comes to the consumers' purchase decision. While Aer Lingus' partnership with the IRFU is an excellent brand building activity, the contract runs up until 2018. It is recommended that Aer Lingus extend the sponsorship contract on capitalise on the momentum the campaigns have to date and engage in more brand activities revolving fans and fan engagement. A social media campaign to engage rugby fans and run a competition for Aer Lingus customers and Rugby fans to win flights, accommodation and game tickets to highly anticipated abroad games. Their experiences can be documented similarly to 'Bringing People Home for Christmas since 1936' with a mix of Go Pros and professional filming to create a user generated video for the campaign to be shared across various social media platforms.
It is proven that it is more cost effective to retain existing customers than to recruit new ones. Brand loyalty also helps marketing communications be more efficient and effective. Strong advertising helps anchor brand loyalty in the eyes of the consumer. However, as part of the IAG take over, Rutter promised a new and modernised loyalty programme dubbed 'AerClub.' The transition from the original loyalty programme Gold Circle to AerClub in late 2016 was received poorly by Gold Circle members for a number of reasons and did not transition as smoothly as the marketing team would have hoped. Gold Circle members were automatically transferred over to the new programme however, long standing members were assigned to the lowest tier in the new programme, leaving them entitled to very little. Outraged customers turned to social media platform Twitter to voice their grievances (See Figure 9).
Aer Lingus Stands by Controversial Aer Club despite Twitter Storm Article: Disgruntled Customer Tweets (Source: The Independent.ie)
The recommendation for the loyalty programme in order to combat the bad press is invest more resources to help transition older loyal customers over more seamlessly and deal with customer queries and complaints. Any IT/ Bug Fixes that customers are experiencing should be investigated and rectified in order to avoid future customer frustration or dissatisfaction. When the majority of the bumps are smoothed out, Aer Lingus should invest in an online campaign to make more people aware of the programme and its benefits. As the Gold Circle Club was based on air miles, and Aer Club is revenue based, this opens the loyalty programme to a much wider consumer base and marketing communications should be released raise awareness and encourage Aer Lingus Customers to join.
Aer Lingus is the Nation's beloved airline that promotes national pride from the iconic shamrock proudly displayed on all fleet tails to inspirational videos cheering on the boys in green or watching people being reunited with their families on cold December mornings that resonates with the Irish home and abroad. However, as stated above Aer Lingus' brand awareness is quite low outside of Ireland. While Aer Lingus are currently promoting Smart Flies Aer Lingus to appeal to U.S. and U.K. markets. It is recommended, if Aer Lingus truly wish to expand on their long haul service and appeal to more markets, research of the relevant markets needs to be conducted to find out culture, needs, and demographic it wishes to target. For example, as there are many Americans with Irish Heritage, Aer Lingus can create a specific campaign to target this demographic, promoting heritage, the beauty of Ireland and stirring up national pride in Irish Americans about their ancestors and history of emigration. A partnership with Tourism Ireland could be effective in promoting more people to visit Ireland flying via Aer Lingus. As Aer Lingus have expanded their U.S routes in the past few years from San Francisco, L.A., Miami, Dulles, Connecticut, this has opened Aer Lingus to larger customer base in the U.S. and this should be capitalised on and integrated marketing communications should be rolled out accordingly.
The aim of this project was to explore the importance of brand equity to a large established organization. Brand equity is a concept that has been discussed and researched by many academics over the last decades. While it is a relatively new concept, in a world that is forever changing, developing and advancing, it is one that extremely important to an organization. Product markets are rapidly developing and new technologies and innovations arising, it is now more important than ever that organizations invest in brand equity as differentiation and brand is what will set the market apart. Brand equity has many layers as discussed in the literature review, and is something that should be top of an organizations yearly agenda to invest time and money into as the results though long-term are much worth-while than bottom line short-term results. Brand building activities are also extremely important to be kept as main priority as it builds strong brand awareness and associations. All elements of Aaker's brand equity model should be evaluated, considered, monitored, and nurtured in order to posses and maintain strong brand equity.
In relation to Aer Lingus, there are many elements that contribute to their strong brand equity as discussed in this project. The aim of this case study was to identity the areas of strengths and opportunities within the marketing strategy of Aer Lingus and make recommendations on these opportunities. Aer Lingus celebrated 80 years of service in 2016, and in those 80 years, they have grown from a single plane to a fleet of 49 aircrafts that service Europe, Canada, and the U.S.A. They have had to change and adapt and modernise with challenges and changes within the market place. The IAG, take over seemed to be the most significant as it marked the end of an era that Aer Lingus was no longer Irish owned. While the marketing team in Aer Lingus have done an excellent job in rebranding the organisation since 2015 and to hold onto the Irish-ness of the brand, there are still some weaknesses and areas of opportunities. These need to monitored and focused on in order to build a strong brand equity that will prove to be invaluable to the organisation as the competition in the market intensifies, and Aer Lingus stand their ground and holds on to what makes them so different.
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