Jetstar Asia – G1 -Group 8

  • 1.      Background and Analysis of Jetstar Asia
    1.1 Organization Overview

    Jetstar Asia Airways, launched in December 2004, is a low-cost airline based in Singapore, managed by Newstar Holdings Pty Ltd which is owned jointly by Singapore Westbrook Investments and Qantas Group. The company runs under the Jetstar group’s umbrella. It has a mission to “offer all day, every day low fares to enable more people to fly to more places, more often” (Jetstar Airways, 2015). Currently, it provides services to 22 destinations across the Asia Pacific region with its 18 A320 aircraft. The airline has achieved several industry and customer awards, such as placed 4th in the Best Low-Cost Airlines in Asia category in the 2016 World Airline Awards.

     

    1.2 Situational Analysis

    1.2.1 Low Cost Airline Industries

    In recent years, there has been a pent-up demand generated by the rising stream of middle-class consumers flying with low cost carrier (LCC) airlines across Asia. This was due to the increased demand for value for money among the passengers, so that they are able to spend their budget more on accommodation, shopping and dining. The LCC airline is attractive to price-sensitive customers such as young, leisure travellers (Snyder, 2014).
    To achieve competitive advantages in the midst of increased competition in LCCs industry, understanding and adapting customer’s demands are important factors to survive in this highly competitive world as this will lead to customer satisfaction. Reliability, responsiveness and empathy are important dimensions to achieve that customer satisfaction (Kim & Lee, 2011; Snyder, 2014). Therefore, LCC airlines are continuously improving its customer service to provide high service quality which in turn will improve customer satisfaction, leading to customers’ loyalty and retention. By doing so, this will directly affect the business performance, profitability and sustained growth of the airlines.

    1.2.2      Jetstar Asia

    According to Jetstar Pacific Airlines Marketing Department 2014’s survey result, service quality which consists of service performance and reputation occupies 71.6% on air ticket purchasing decision (Snyder, 2014). However, the service quality performance of the Jetstar brands has deteriorated (Snyder, 2014; Qantas, 2015). This was evidenced by low Net Promoter Score (NPS), which is a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand (Qantas, 2015). The poor service quality mainly comes from the soft service which represents the performance of the front line employees such as the customer service employees’ ability in handling problems in the event of delayed or cancelled flights (Snyder, 2014). Furthermore, one study showed that the average response time of Jetstar Asia’s social media account is relatively slow compared to other low cost airlines such as Tigerair Singapore and AirAsia (Kalaiarasan, Appannan & Doraisamy, 2015).
    Currently, Jetstar Asia has been slow in response and insincere to customer complaints on social media such as Facebook and Instagram, which mostly were about poor customer service they faced while flying with airline. There are also separate blogs and websites for customers to complain about negative experiences with the airline which could lead to a negative word-of-mouth effect (Appendix A – Figures 1 & 2). Some example of the customers’ experiences will be the last minute cancellation, delay status, unhelpful and rude staff and baggage loss. Hence, Jetstar Asia suffered low costumer’s satisfaction as there are many criticisms, leading to loss of customer trust and good image, which could potentially erode its sales.

    1.3 Competitors Analysis of Social Media Strategy

    Jetstar Asia’s competitors are low budget airlines in Singapore market, namely Tigerair, AirAsia and Scoot. We will be examining Jetstar Asia and its competitors’ social media strategies to evaluate their respective strengths and weaknesses.


    Jetstar Asia’s Social Media Strategy

    Jetstar Asia has a significant shift in marketing spending as 40% of its budget is allocated for marketing on social media platforms (Jetstar Airways, 2011). This shows that the marketing focus of the company will shift to social media platforms. However, the lack of its effort in managing the reputation on these platforms, such as Facebook, has resulted in numerous complaints. This would in turn affect other customers’ decisions when they use the social media (Digital Influence Lab, 2016) which ultimately affect the business.
    There are also areas in which the airline has done well in its social media communication. For instance, its latest digital media marketing strategy involves inviting aspiring travel bloggers to share their travel dreams in an online video contest. It also held a social media competition which the winners received a once-in-a-lifetime trip. The response to both of the strategies were overwhelming.

     

    Tigerair’s Social Media Strategy

    Tigerair is more active in different social media platforms in different countries. Not only it looks far to expand their logo brand, but it also tries to create and communicate unique travel experiences for its customers (Tiger Airways, 2016)
    AirAsia’s Social Media Strategy

    Through an external agency, Publicis Mojo, AirAsia does their social media marketing to create viral contents while staying relevant to what AirAsia intended to promote (Majur, 2013).


    Scoot’s Social Media Strategy

    Scoot has actively sought feedback and suggestions from fans on their Facebook page on different aspects of their product offerings (Tan, 2012). Its social media strategies place a great emphasis on customers’ engagement by keeping fans involved in the brands’ activities to remain relevant and stay ahead of competitors.
    Insights drawn from competitors’ strategies analysis

    We observe that competitors are utilising social media in the ways that are more in line with customers’ expectations such as engaging customers in a two-way communication. Hence, to remain competitive and stay ahead in the airline industry, Jetstar Asia needs to rebrand its strategies.
     

    1.4 Research Question

    Based on the competitive landscape and the current problems that Jetstar Asia faces, the research question is: How can Jetstar Asia make changes to its current social media strategies to improve its image?

2. Critical Analysis and Evaluation of Social Media Strategy

2.1 Sentiment Analysis

As our focus is to measure the user sentiments which reflect customer satisfaction towards the brand, Jetstar Asia’s Facebook visitor posts were monitored manually from August to October 2016.

 

Of the total of 368 user comments during the period monitored, 43% of them shared their negative experiences with Jetstar Asia (Appendix B). Most of the comments were about complaints the travel disruptions such as delays, cancellations, unhelpful contact centre, problems on booking, mishandled baggage.

 

Although Jetstar Asia replied most of the comments, however, the company merely provided standardised reply in most complaint situations. As such, we feel that the company has not effectively addressed the individual concerns and negative sentiments on its social media by answering the customers’ complaints more personally and sincerely which are important for the success of a service company.

2.2. Promotion Strategy Focus

Figure 1: Sales-focused post of Jetstar Asia

Analysis of Jetstar Asia’s social media platforms showed that the airline’s posts are primarily marketing-focused with the purpose of boosting sales. It mainly posts pictures of discounts or promotions (Figure 1). Although the promotion was welcomed by the customers, its reach was limited. The promotion was not synchronized across all of its social media so it did not draw much customers’ attention. Furthermore, all of Jetstar Asia’s marketing posts on Facebook are replicated on other platforms, showing airline’s little effort in differentiating its postings to leverage on the different functions provided by the social media platforms.

 

From the above analysis, we feel that customers will be more engaged in its sales if there is a platform for customers to share and discuss with fellow customers. There is also a potential to gain more media exposure if the company creates more well designed photos and posts.

Figure 2: Selfie competition post (PR-focused) of Jetstar Asia


We have observed that there is a higher customer engagement when the company posts more PR-related and value-adding contents. One such example is the selfie competition (Figure 2). This shows that airline should continue to engage customers through competitions instead of sales-focused posts. Its posts are still lacking as the contents are not as visually appealing as competitors’ posts. Hence, it should improve its post contents on social media.

2.3 Content Analysis

Using Socialbakers as our social media analytic tool, we have done content analysis on Jetstar Asia and its LCC peers – Tigerair and AirAsia. On sales promotion-related posts, Jetstar Asia’s posts are very wordy and lack the visual appeal to attract people (Appendix C – Figure 1). According to Breene (2013), people have a short attention span and thus, eye-catching headings and summarized information are crucial to attract people’s attention. Hence, Jetstar Asia should design more well-edited social media posts with clearer information.
Although Jetstar Asia has attractive sales, its posts fail to attract the customers’ interest. On the other hand, AirAsia and Tigerair’s sales promotion-related posts have attractive headings (Appendix C – Figures 2 & 3). For AirAsia specifically, its content is very clear and concise which is really helpful for the social media users to acquire and share the information with their family, colleagues and friends.
Moreover, Socialbakers’ analysis has revealed that the most engaging posts for Jetstar Asia are those that engage customers through competitions followed by informational post such as things-to-do in its destinations (Appendix D – Figures 1 & 2). This is in line with our own observation of Jetstar Asia’s Facebook page that these two types of posts generated the most interaction between the company and its customers. Also, competitors’ most engaging posts with the highest number of interactions are those that call for interaction from customers and not those that are sales-driven. Since all these posts have the common themes of being interactive and personalized, we can incorporate them in our social media strategies.

3. Impact on Business due to Current Problems

The significant shift in marketing spending shows Jetstar group’s increased focus on social media and acknowledges the significance of social and digital media as a marketing tool. Jetstar Asia’s ventures have been hailed as the long-term growth engine for its parent company, Qantas. However, the latest financial data shows Jetstar Asia has struggled to record strong financial results (Qantas, 2015). 

Qantas group consists of Jetstar group and Qantas cargo. Jetstar group’s revenue contributes 49% of the total revenue of Qantas, and among the Jetstar group itself, Jetstar Asia has a significant revenue contribution. According to Qantas Annual Reports (Year Ending 30 June), the group revenue has dropped by 71.6% in the past 8 years (Figure 3). One of the contributory factors is due to poor service quality (Qantas, 2015). Thus, Jetstar Asia is not doing well as company expects and the annual growth of Jetstar Asia is declining sharply. If this poor performance continues to persist, we estimate that the group’s revenue would be further affected.

 

 

4. Proposed Social Media Strategies

4.1 Main Objectives

Figure 4: A summary of the main objectives

4.1.1 Short-term goal 1: To handle and alleviate the negative perceptions and emotions associated to the airline due to complaints

The situational analysis revealed that Jetstar Asia is not being transparent with its customers and unresponsive to customers’ complaints. These negative complaints when left unaddressed could spiral out of control. There is a need for the airline to be more open as a business and to better manage these complaints, specifically by consolidating them in another channel to have better control and organisation. Furthermore, there is also a need to monitor the feedbacks regularly and take prompt actions to reduce customer dissatisfactions.

4.1.2 Short-term goal 2: To improve customers’ attitudes towards the airline by creating positive sentiments

After addressing customers’ concerns, the airline needs to re-connect with its customers, and improve their perceptions towards the brand. Key to achieve this is to get to the basic of what had made it appealing in the first place and re-ignite the passion it had attracted from the customers. The objective is to offset negative customer experiences and remind customers about other good aspects of the airline by appealing to their pathos, thereby generating positive sentiments and word-of-mouth in the process.


4.1.3 Long-term goal 3: To improve the airline’s long term brand image to have a sustainable business

In the long run, it is important to put in place measures to signify the commitment to a change in its customer service. Low cost carrier business is highly competitive and there is a low switching cost for customers. Hence, to strengthen customers’ loyalty towards the brand, airline needs to establish a brand community.

4.2 Target Audience

4.2.1 Demographics

We have chosen youths aged 18-24 and young working adults with middle income who are in the age group of 25-34 as the target group for implementing proposed strategies. Analysis of social media landscape in Singapore shows that 74% of Singaporeans uses social media regularly and 31% of those users are between 25 and 34 years old and 28% between 15-24 years (Appendix E – Figure 1) (Digital Influence Lab, 2016).

4.2.2 Social Media Platform

According to Singapore Business Review, there are more than 2.8 million Facebook users in Singapore. The age group that has the highest usage of Facebook is currently 25-34 with total of 896,128 users, followed by the users in the age of 18-24 (Singapore Business Review, 2012). This is followed by YouTube and Instagram (Appendix E – Figure 2). Hence, we will be mainly using Facebook and YouTube for our proposed strategies.


4.3 Proposed Strategies

4.3.1 Short-term strategy 1: A Fresh Start

To better handle and alleviate the negative perceptions resulting from the complaints, we suggest to set up a “AfreshJETSTART” forum.

Rationale and literature support

The emergence of social media has altered the way customers communicate word-of-mouth (WOM) information. In the past, customers shared experiences in person with a limited number of social contacts. Today, social media allow them to share their experiences with more people (Lin, Fan & Chau, 2014). As such, WOM communication has a significant influence on the network members of their purchasing decision on product and services (Gregoire, Salle & Tripp, 2014). In particular, negative word-of-mouth communication can negatively affect the attitudes, purchasing intentions and brand’s image (Balaji, Khong & Chong, 2016). Hence, it is crucial that affected brands such as Jetstar Asia are attentive to online complaints, take prompt action to resolve them through frequent monitoring on forums. This would aid to reduce customer discontent and prove that the airline cares and listens to customers’ concerns.
Message strategy

Through this strategy, we want to drive home the following key messages with common themes of being interactive and transparent.

Key messages
  1. Inform and provide customers on follow-up plans
  2. Build trust with customers by being transparent about the problems
  3. Build rapport with customers by addressing complaints promptly
  4. Communication of actions taken by airline to resolve complaints
  5. Share about improvement in customer satisfaction

  

Platform

The forum will be embedded in our proposed Jetstar Asia’s website and some of its contents will be shared on Facebook page.

Features and benefits

Feature 1: Forum discussion classified by complaint topics

Currently, there exists different websites for customers to write complaints apart from Facebook page. Also at Facebook, customers write complaints at random posts and some of them are repeated. Hence, current situation makes it difficult for airline to address these concerns and causes various rumours about the brand to go largely unchallenged. To solve this, we propose a forum to consolidate the complaints classified by categories to improve airline’s response time (Appendix F – Figure 1). Customers who face similar problems can click on the relevant thread to check for the airline’s response (Appendix F – Figure 2). It also enables the airline to filter and prioritise the category that requires immediate attention. For instance, due to volcano eruption warnings in Indonesia, scheduled flights are cancelled and ‘Cancelled Flights’ section would be prioritised over others. This allows the airline to address urgent issues quickly and mitigate potential customer dissatisfactions.

 

Feature 2: Display of actions taken by airline

We have observed that airline tends to give standardized responses to customers’ complaints, without addressing individual customer’s real concerns. Thus, for each post, we propose to provide personalised responses as personalization is proven to improve customer relationships (Appendix F – Figure 3).
Furthermore, for each post, we propose to have a “Tracker” which will show the actions taken by airline to address the issue. Displaying a progress status helps the airline to prove that it is serious about resolving complaints and is not merely paying “lip service”. Tracker also features the countdown of time estimated to respond to feedback and provide follow-up plans (Appendix F – Figure 4). This assures the customers that they are well taken care of by the airline and the burden of inconvenience or paying additional accommodation fees do not fall on them. Also, this is a more transparent approach as compared to its usual Facebook response to get in touch via email, suggesting that airline does not want to be upfront with its customers and prefer to settle things behind closed doors.
Feature 3: Sharing of improvement in customer satisfaction

Below each post, a text box would be provided for customers to share about how prompt actions by airline have benefited them (Appendix F – Figure 5). Once the issues have been addressed, Jetstar Asia could screenshot and post detailed descriptions of the actions taken, accompanied by customers’ positive testimonials on Facebook.

 

Key Performance Indicators

The intended outcome of the strategy is to reduce negative perceptions resulting from complaints, and this can be measured by observing a change in number of complaints on Facebook page and other platforms. Also, we want to make improvement in airline’s response time and customer satisfaction by measuring number of ‘likes’ to airline’s response.

Possible obstacles

Firstly, existing customer service staff might go back to the old way of replying in an insincere manner. To tackle this, prelude to launching this forum, we propose the staff to undergo personalized email writing courses and professional training to handle different cases of complaints. Secondly, airline might incur large costs from providing follow-up accommodation plans. This can be overcome due to strong financials from the parent group. Also, this could be the motivation for the airline to improve its operations to save on accommodation costs.

4.3.2 Short-term strategy 2: ‘Re-ignition of emotional bond’ Video Campaign

To improve customers’ attitude towards the airline, we suggest to conduct a video campaign to re-kindle consumers’ emotional bond with the brand.
Rationale and literature support

A ‘bolstering posture’ strategy, which includes reminding customers about the brand’s past good performances, is proven to be an effective post-crisis communication strategy (Cheng, 2011). This can be seen from the success story of Toyota’s rebranding campaign to rebuild its reputations. After Toyota was forced to recall 9 million vehicles in the United States due to trapped accelerator pedals causing high-speed accidents, social media was utilised to respond to the crisis (Lacy, 2010; Working, 2011). It created ‘Auto-Biography’ on Facebook for owners to share stories about their experiences with the brand. As people reflected on their experiences, they were reminded that Toyota is a trustworthy vehicle manufacturer. Eventually, its brand opinion and purchased considered improved by 22% and 29% respectively. Given that Jetstar Asia has won numerous awards, we believe that a similar strategy will be highly effective. This is especially so because travel and holiday expenses contribute the most to the household expenditure in Singapore (Choo & Wei, 2015). Thus, airline could play on the affinities of people having strong memories of their travel experiences.

Figure 5: Average monthly expenditure on online purchase
Following a big detrimental revelation that Volkswagen’s cars used software to falsify the emissions test results, its marketing campaign placed a deliberate focus on consumers and their relationship with the brand rather than its technology. It features a “young boy in an original VW Beetle and follows his life through a series of important moments that are made possible by a Volkswagen” (Vizard, 2016). It then ends with his son looking out from a new Volkswagen car’s window and inviting customers to create their “perfect” Volkswagen.
From these two success stories, we can draw key lessons that even in unfavorable times with negative customer emotions, there are still customers who have close emotional bond with the brand and it is important to harness this strength. When consumers think back about the positive experiences, it reinforces these positive feelings. Thus, in line with airline’s 12th anniversary this December, we propose to have two and a half weeks long video campaign in lieu with competition.
Message strategy

Through this campaign, we want to drive home messages with common themes of customer engagement and reinforcement of positive experiences.

Key messages
  1. Rekindle and evoke good memories customers had with airline
  2. Generate more positive buzz and sentiments
  3. Adopts ‘humanised brand’ approach by engaging users emotionally

Platform

Facebook, Instagram, Twitter & YouTube

 Features and benefits

Phase 1

As a prelude to the video competition, airline will run promotional campaigns on all of its social media accounts (Appendix F – Figure 6), with a focus on Facebook. We plan to engage two groups of influencers to generate more interest in the campaign. The first group is The Sam Willows as it is the first Southeast Asian act to break into Spotify’s global viral 50 chart (Min, 2015) and its network of influence can increase the campaign’s reach. The Gentle Bones is the second influencer due to its popularity among our target group. Each of these influencers would be posting a minute-long video recounting about the pleasurable times they had with airline (Appendix F – Figure 7).
Phase 2

Phase 2 marks the start of video competition, which officially starts on 1st December 6am. There are 4 steps to the competition as follows:

Step 1: Take a video of 1 to 2 minutes long, sharing about the time Jetstar Asia has had a positive impact on customers.

Step 2: Upload on Jetstar Asia Facebook page and hashtag #myJetstarAsiaStory.

Step 3: Gather as many votes as possible. Only ‘likes’ on Jetstar Asia’s Facebook page are considered.

Step 4: Announcement of top 2 winners and 10 runner-ups.

 

Phase 3

To incentivize people to post, we propose to have 2 categories of winners: a post with the most number of likes and a post with the most touching story. Both winners will be awarded with a 3D2N hotel package at Movenpick Resort and Spa in Boracay for 4 people. Top 12 stories will be collaged and made into a video montage with a storyline that appreciates all the passengers that have flown with Jetstar Asia through its 12 years of services. It will end with a concluding remark that ‘Jetstar Asia is a part of people’s lives and people’s lives are a part of Jetstar Asia’s’.

Key Performance Indicators

As this campaign can be concurrently run across all its 22 destinations, we aim to see a total of 4,500 video posts added to the Facebook page to generate positive buzz and customer engagement. We plan to use output metrics such as post engagement, reach and a change in number of complaints to measure improvement in customers’ sentiments. Lastly, we aim to see an increase in number of Facebook followers.


Possible obstacles

There is a possibility that target groups who dislike both influencer groups may not want to participate in the competition. Thus, we plan to conduct offline promotions such as road shows at popular places in Singapore.


4.3.3 Long-term strategy 3: Building a Brand Community

To improve long term brand image to have a sustainable business, we propose to build a brand community.

Rationale and literature support
Brand community is proven to play a mediating role in the customer-brand relationships and have an influence on brand loyalty and trust. Brand community commitment is said to have a stronger effect on word-of-mouth than on constructive complaints (Hur, Ahn & Kim, 2011). One way to enhance trust is through information dissemination, in the form of members sharing their personal experiences and brand reviews (Hur, Ahn & Kim, 2011).
It has been proven that constant interactions and long-term relationships are crucial in building trust (Hakanen & Soudunsaari, 2012). Also, community interaction and reward for members’ activities are found to significantly impact brand community commitment (Jang, Olfman, Ko, Koh & Kim, 2014). Thus, there is a need to provide incentives for members to stay in the community.
Message strategy

Through this campaign, we want to drive home messages with common themes of quality customer service and brand ambassadors.

Key messages
  1. Customers’ opinions are important to airline.
  2. Airline wants to promote conversations among like-minded customers.


Platform

Website
Features and benefits

Feature 1: ‘MyJetstar Journey’ Ambassador Program

It is a program of having customers as brand ambassadors to represent customers and do quality check on the airline. It is on a voluntary basis and passengers need to sign up on the website to participate while purchasing air tickets. A customer will be selected upon agreement and he/she has to film the entire journey with Jetstar Asia, from the time he/she leaves home, to the airport, to the plane and until arrival at the destination. The video will be free of script and ambassadors can comment, make suggestions or compliment their travel experience with Jetstar Asia. The videos will then be posted to the website and shared among the community members to generate a talking point.
Feature 2: Mileage Points

Currently, only full-service carriers give mileage points. Thus, to differentiate Jetstar Asia from its budget airline competitors, we propose to implement a mileage points system. There will be 2 types of mileage accrual: one based on purchased fare class (Table 1) and another based on destination (Table 2). This system serves to reward frequent flyers as these mileage points could be exchanged for in-flight benefit

Table 1: Mileage classification based on purchased fare class

 

Table 2: Mileage classification based on destination

 

Feature 3: Share your tips

In order to generate talking points among customers, we propose to include this feature encouraging passengers to write in reviews, suggestions and share their travelling tips with fellow passengers. To incentivise passengers to participate, we propose airline to give out various freebies such as mileage points, food and gift vouchers.
Key Performance Indicators

We would be using number of sign-ups for Ambassadors program, number of people writing reviews and tracking of mileage points system to measure customers’ involvement.

5. Limitationspost

Execution of the abovementioned strategies would definitely incur additional costs for the brand. However, we feel that strong financials from the parent group would help to cover the costs. More importantly, these costs are short-term expenses necessary to reap many potential monetary gains in the future.

Another limitation is the short time period used to examine complaints on Jetstar Asia’s Facebook page. Instead of the 3 months’ observation period used for this report, a longer time frame would allow us to gain more comprehensive insights of the problem.

6. Conclusion

With the high number of complaints that Jetstar Asia’s currently facing, such as poor service quality in the event of delayed, as well as the stiffer competition in low cost airline industry, it is important for the airline to take swift action to improve its image. Understanding and adapting to customers’ demands is important to remain competitive in the industry.

Social media has increasingly shaped influence on people’s decisions. As such, Jetstar Asia is recommended to embrace the power of social media as a tool to tackle the existing problems and improve its image, in order to be in a better position to face market competition and stay ahead of the competitors.

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