Marketing Mix Analysis - Westjet

I. Introduction

This report is a marketing mix strategy analysis of a WestJet round trip. The marketing mix, also known as 4 P's, is the most important elements of a marketing strategy of any company, and in this report we are going to analyze the product, price, place and promotional strategies used by WestJet to the round trip from Calgary to Puerto Vallarta, Mexico between December 20 and December 26 2009

WestJet Airlines is a Canadian airline based in Calgary founded in 1996 today offers 66 destinations in Canada, the United States, Mexico and the Caribbean with a fleet of 81 Boeing Next-Generation 737-series aircraft. WestJet was the pioner of a low-cost flying in Canda and for the future its vision is to be the five most successful international airlines in the world. (WestJet Airlines Ltd)

WestJet also wants to become Canada's vacation international sun destination leader to Mexico and the Caribbean. In July 2008 WestJet introduced the seasonal non-stop service from Calgary to Porto Vallarta twice weekly starting on November 2008. (WestJet Airlines Ltd)

Mexico is the first destination overseas by Canadian travellers, losing the first position only for United States. However this year first quarter Canadian tourist to US was down 8.7% while trips to countries other than US was up to 5.1% as a result of increases in travel to sunny destinations. (Statistics Canada) WestJet offers of sun destinations at winter time are focused on Canadian traveller's needs. (WestJet Airlines Ltd)

Puerto Vallarta located on the Pacific Ocean, is a beautiful, cultured, luxurious vacation spot and great destination for family, romance, golfers and art lovers. (All About Puerto Vallarta)

II. Product Strategy

Product is what a company offers to the consumer to satisfy their need in exchange of money. WestJet mainly products are flight and travel services, and as a service it has four elements know also as 4 I's of service which are intangibility, inconsistency, inseparability and inventory. (Crane 307 - 309)

WestJet's product mix is the average of 383 flights daily and the 66 destinations in Canada, USA, Caribbean and Mexico. (WestJet Airlines Ltd)

The WestJet round trip to Puerto Vallarta between December 20th 2009 and December 26th 2009 is a service and it's 4 I's are explained at Table 1.

WestJet Flight : Calgary - Puerto Vallarta

December 2009

Intangibility Inconsistency Inseparability Inventory

Cannot be touched it's delivered when costumer buys and travel occurs Different WestJeters will offer different service on the selling process and during the flight The use of the flight and the customer experience occurs after consumer bought the service The service is offered independent of the demand. WestJet average load factor is 78.4% for 2009 (WestJet Web site)

Table 1

The flight from Calgary to Puerto Vallarta is segmented specifically for Calgarians who want to avoid the low temperatures of winter and choose Mexico as a hot winter gateway. Puerto Vallarta is a city adequate for families and couples that enjoy sun, beaches, art. Culture and leisure are the main focus of those travellers. They are regular WestJet guests and appreciate its quality and reasonable fares.

The WestJet flight from Calgary to Puerto Vallarta, Mexico is in its growth stage. In November 2008 WestJet added the seasonal non-stop route from Calgary to Puerto Vallarta with an initial frequency of two flights weekly (WestJet Airlines Ltd); by January 2009 it increased the flight frequency for three times weekly (WestJet Airlines Ltd). This winter WestJet has being operating the non-stop flight there times a week and the option of daily with one connection (WestJet airlines Ltd.).

Competitors as Air Canada offers only non-stop flights to return to Calgary from Puerto Vallarta, all flights leaving from Calgary to Puerto Vallarta have a connection in Toronto, Vancouver or Edmonton. (Air Canada)

III. Price Strategy

Price strategy is crucial to the viability of a company in a differentiated competitive market. On another hand, price strategy may not be clearly identified without establishment of pricing objectives, levels and specific approaches in price determination practice.

Marketing and strategic plan of an entity dictate the formation of the pricing objectives of an organization, and these objectives may vary according to the financial standing, the product series on sale and/or in the inventory, target sector of the company or the general situations of competition in the marketplace.

An important consideration in determining the price for a product of a company requires the marketing manager of a company to adopt appropriate approaches to identify a starting point towards setting up the reasonable price level; for the Christmas flight from Calgary to Puerto Vallarta, the pricing strategy goes with the competition approach the most, as this flight could bring about more competitive edge to the West Jet against Air Canada. And West jet would also take demand and cost into consideration, in order to generate the most profit.

It largely depends on the time of the year that the degree of elasticity of the air flight travel from Calgary to Puerto Vallarta varies.

While the season sprit is high and vacation time is long, the demand to air travel is very high, elasticity to price is low because people have to travel, as long as they find it reasonable, they will buy the tickets.

As far as the flight from Calgary to Puerto Vallarta is concerned, it would be categorized into 3 groups: winter get-away, Christmas family reunion, and business travel.

The elasticity to price is highest for winter get-away, family reunion is the second, and business travel has the lowest elasticity.

In the case of winter get-away trip of Calgary-based families/singles/friends, people would take advantage of the Christmas vacation and go to a tropical destination, Puerto Vallarta in this paper. They may choose a different date and time of the flight, should a better deal occurs, which increases the elasticity to price; however, their trip has to be around Christmas to enjoy the 4-day holiday time off and children's break from school, in many cases, which ensures a high demand of travel during this particular time and reduces the elasticity to price.

In the case of Christmas family get together for people who have family in Mexico, their desire to travel during Christmas