The holiday spin
Low cost carriers, the Internet, new co-branding opportunities and emerging media niches are redefining the travel sector's marketing dynamics. Travel companies, tourism boards and researchers contacted for this article unanimously agreed that the Internet is transforming the industry. Moreover, while the rest of the world is more likely to purchase books or DVDs online, AC Nielsen's Online Consumer Opinion Survey reports that Singaporeans mostly go online to book airlines, hotels or tours.
Phillip Ho, General Manager and Singapore Director of Marketing for travel portal Zuji.com explained that, "There's a new segment of Net-savvy independent travellers. They are aged 25 to 40, affluent, don't go on packaged tours and prefer to explore destinations on their own." Travel portals are using credit cards, co-branding, roadshows and other traditional channels in their campaigns. Moreover, by eliminating intermediaries, online travel sites are creating opportunities for branding and direct customer relationships.
Rita Goh, Director of Communications and Marketing at hotel booking portal Wotif.com described her web site customers as "young, well-educated and high-income." At the same time, Zuji.com's Ho reported that the travel portals' main challenge is "changing consumer behaviour beyond the 10% (early adopters) who bought their travel online." This is being done through traditional media, events, co-branding and retail tie-ups. Wotif.com's Goh commented that the former includes "ads in Today and niche magazines such as SMB.NET or The Expat. We also engage in many partnerships and events." Often these include nightclubs or retail partners traditionally not associated with travel marketing.
For example, "Wotif.com recently did a roadshow in conjunction with the DBS Ladies' Card. DBS was celebrating the first anniversary of its Ladies Card, so they engaged Blu Inc to run an event for them at Club Momo. The event was themed a ‘Ladies Shopping Night', so they had a few vendors selling items such as watches, nail & spa services and cosmetics. We went in with a set of customised DBS offers which only DBS card members could book. Anyone who booked on the spot that night stood a chance to win in a lucky draw."
Other roadshows Wotif.com participates in include those involving tertiary student groups and the Singapore Chinese Chamber of Commerce's Infocomm show. Goh explained that, "SMEs are concerned they do not have the bulk purchasing power of MNCs, but if they came to Wotif.com, they can be assured of getting of a good offer." She also reported that Wotif.com is "closing a partnership with a premium brand jeweller for the end of this year, giving away Wotif.com vouchers customers can use towards their next hotel room booked through Wotif.com."
Using credit cards to create trust
With both Wotif.com and Zuji.com identifying credit card security over the Net as an impediment to greater acceptance, it is not surprising to find them engaging in credit card promotions and co-branding. Wotif.com's offers web site contains credit card sign up offers, and the company uses statement mailers and offers sent by e-DM. Goh commented that, "We get associated with the right partner to generate the confidence for using credit cards online and for the banks, they get more transactions. At the end of the day, if people have a fear of credit cards and if we can show them that banks endorse us as a merchant, it creates confidence and drives trust."
Zuji.com's Ho added that, "The 25 to 40 year old affluent segment is a perfect match for them (credit cards)." To further reassure customers unfamiliar with online booking, Ho reported that Zuji.com "deliberately keeps a ticket office on Orchard Road so people can check us out."
However, the Internet not only empowers upmarket travellers to perform their own transactions, but also supplies information they once depended on travel agents for. Consequently, travel service providers can enjoy a more direct relationship with potential customers.
Online reshaping branding & tactical strategy
According to Rob McDonald, Regional Marketing Manager for British Airways in Southeast Asia, this means that online sites must now be factored into the branding process. "More people visit our web site than fly with us. Each time they visit our web site, they spend 20 or 30 minutes interacting with our brand, so the Net is now the number one way of interacting with the British Airways brand." Consequently, British Airways now considers its web site experience to be an integral part of its branding strategy.
However, the Internet also redefines the tactical marketing techniques of airlines. Anita Moreira, Marketing Programs and Communications Specialist with Air New Zealand Southeast Asia explained that, "In the past, Air New Zealand predominantly relied on travel agents to promote the airline. There was minimal above- and below the line advertising to consumers. Marketing activity was mostly targeted at travel agents as they were the key influencers in travel decisions." Now, "Air New Zealand focuses on tactical offers utilising print advertising in the dailies complemented by electronic marketing to a qualified database." Annie Yee, Marketing Manager for Malaysia Airlines ASEAN agreed that, "Besides the vast change in mode of booking (online), the frequency of tactical campaigns (including premium carriers) in the market has increased as well."
Hotels use online, media database to manage customer relationships
Similarly, Zuji.com's Ho reported that, "Over the past five years, there has been a huge focus on brands, particularly in the hotel industry." This because hotels are using the Internet's interactivity to take ownership of customer relationships once mediated by travel agencies. Scott Swank, General Manager of the Pan Pacific Hotel Singapore confirmed that, "The big change is in electronic marketing. We are doing more direct marketing both to bookers and potential guests. About two and a half years ago, we began to actively use online marketing to promote and get people to use the hotel." He added that, "By developing an extensive media database and tracking editorial calendars of relevant publications, we choose media relevant to what our focus will be."
While pursuing a more direct relationship with customers, hotels continue to broaden their relationships with airlines and credit cards. Pan Pacific's Swanks explained that, "Hotels have their own databases whether it's for food and beverage or room customers. We can also work with credit cards and say ‘I'd look to do a DM to all your gold or platinum members who spent more than $1,000 at Chinese New Year.' They won't give you that list, but they'll let you reach them with a personalised mailer." Swank also reported that the Pan Pacific Hotel has a programme whereby SIA boarding passes can be used to get discounts on hotel rates. Similarly, British Airways' McDonald reported that a similar discount programme exists between his airline and Marriot Hotel customers.
Although hotels and traditional airlines are proactively responding to these changes, it is among Asia's budget airlines that the most innovative strategies, unconventional branding exercises and channel strategies are being pursued.
Tiger Airways & McDonald's: Co-Branding Flights with French Fries
Defying most post dotcom era rebranding moves, in June Tiger Airways rebranded itself as TigerAirways.com. Matthew Fanshawe, Managing Director for Euro RSCG Singapore -- which designed Tiger Airways' new campaign -- explained that, "We branded and redesigned the logo. It went from Tiger Airways to Tigerairways.com and we used it across all the marketing collaterals since as a budget carrier, the web is their shop window. Previously it was painted on the plane, but not on the materials."
This, however, was part of a larger campaign that incorporated strong tactical elements. Fanshawe explained that, "Normally you need to focus on either price or brand association, but in the low cost carrier category, you need to deliver the price with personality otherwise there is no appeal and it becomes commoditised. The marriage of brand positioning and price is absolutely critical."
Although print, online, outdoor and TV were all used, the campaign relied on radio to reach a mass market of people who had never flown in a cost-effective manner. He added that, "Using the campaign motto of ‘What's New Pussycat?', we built an audio icon. It cuts across the brand name to the audience while softening the image of the tiger."
From this synthesis of brand positioning and pricing arose Tiger Airway's joint promotion with McDonald's. On the bottom third of a Straits Times front page, McDonald's offered customers who bought a Grilled Chicken Foldover meal the chance to win 1,000 Tiger Airways seats priced at $14.98, 4,000 seats priced at $24.98 and 12,000 seats priced at $49.98.
With travel traditionally being marketed as a luxury, co-branding an airline with fast-food seems very counter-intuitive -- until one recognises that budget airlines are transforming the demographic profile of travellers. Kenneth Chan, General Manager of McDonald's Restaurants in Singapore confirmed that, "Our customers' lifestyle now includes more frequent travel and vacations" and that this co-branding campaign allows McDonald's to be "relevant to our customers' lifestyles".
Tony Davis, CEO of Tiger Airways explained that, "Tiger Airways sees itself as the McDonald's of the budget airline industry with its emergence as the dominant player in offering the lowest fares around Asia Pacific." Davis added that in addition to its powerful co-branding effect, "McDonald's distribution network covers almost every corner of Singapore and is patronised by more than a million customers every week", thereby giving Tiger Airways an exceptionally broad mass market co-branding channel.
Davis concluded that, "Tiger Airways continually looks for creative and innovative ways to bring great low fares to our customers while keeping our costs low through effective partnerships." These include advertising VISA on overhead lockers or UOB credit cards on seatback stickers, thereby creating co-branding associations in the vital credit card consumer submarket.
New inflight media ad niches
At the same time, Tiger Airways is launching a new Tiger Tales inflight magazine and, here too, budget carriers are redefining the market. Jeffrey O'Rourke, CEO of Ink Publishing, which publishes 14 inflight magazines, explained that the regional orientation of budget airlines makes their advertising market very different from that of traditional, long haul carriers.
O'Rourke explained that, "A low cost regional carrier like Tiger Airways is much more demographically focussed. Very few companies have global buying strategies, but many have regional buying strategies." In this way, regional budget carriers' inflight magazines become fertile ground for FMCGs, consumer electronics makers and other companies whose regional campaigns are too focussed for long haul flight passengers. Hence, for the first time, regionally based businesses such as local restaurants, shopping malls or real estate can successfully be advertised in-flight.
Jetstar Asia: Strategic PR, Reality TV & furniture stores
If Tiger Airways has taken a mass market, populist approach, Jetstar Asia is managing a campaign with a different but equally effective array of mass market channels. Using Ogilvy Public Relations for its PR and Ogilvy RedCard for its advertising, Jetstar Asia's campaign took the form of everything from SME events to co-branding opportunities with everyone from petrol stations to jewellers and furniture stores.
Like its budget airline rivals, Jetstar's campaign incorporated both tactical and branding elements. Head of Marketing Dorit Grueber explained that in addition to bus and radio campaigns, "We did a reality TV show about flying with Channel 8. Our target groups were everyone from honeymooners to retirees and young couples. We wanted to bring it into living rooms, and it was the first airline reality TV show in Singapore. We ran ads in many dailies and magazines including Today and I-S Magazine."
According to Nick Tymms, Associate Director of Ogilvy Public Relations, Jetstar Asia "teamed up with FICCI (The Federation of Indian Chambers of Commerce & Industry) because they had a strong standing within the SME community. Working with their representatives, we selected SME industry leaders and pushed them for a conference in Calcutta. On the Indian side, FICCI arranged meetings between Singapore SMEs, Indian businessmen and the West Bengal government. We did this a week before the chief minister for the state of West Bengal visited Singapore to discuss business opportunities between Singapore and Calcutta. This positioned Jetstar in the Indian papers as the way to do business between Singapore and India, but not at the cost you'd expect."
Courting furniture stores
Like other budget airlines, Grueber reported that Jetstar "extends the marketing budget through the mentioning of other brands. We teamed up with Courts so that if you sign up for a certain amount of its Ready Finance credit, you get a free ticket to Bangkok, thus promoting our name in all of Courts' print, TV, radio and outdoor ads." She considers Courts "a great partner since they spend a lot (on advertising) and have a lot of media exposure." In another tactical co-branding exercise, Grueber reported that, "If you spent a certain amount in Caltex petrol stations, you are automatically entered into a lucky draw for Jetstar airline seats." To further augment brand awareness, all Caltex stations were decorated with Jetstar model planes.
In the campaigns of these airlines, hoteliers and travel portals, several trends are in evidence. Firstly, the migration of consumers to online sites is reinventing both tactical and branding strategy. Secondly, new players such as discount airlines are leading the way with successful campaigns that use both traditional travel industry partners as well as populist, mass market channels such as fast food, nightclubs, SME events or realty TV --mediums not normally associated with luxury services such as travel. Thirdly, creativity is required on the part of non-travel advertisers if they are to capitalise on the new co-branding opportunities and media niches opened up by the travel sector's new players. Finally, as consumers take ownership of their travel destiny away from intermediaries, branding and direct CRM relationships will assume paramount importance. Hence, while the travel sector has never been more dynamic, its landscape is in a state of ongoing transformation.
Arts Sponsorship Takes Centre Stage
From plays sponsored by travel portals to joint ventures between TV channels and tourism boards, using the arts to market travel services is an industry constant.
Jetstar Asia recently sponsored the stage musical Peter Pan while giving passengers a 10% discount. Similarly, Zuji.com sponsored Boeing Boeing, a play about three flight airline attendants. Marketing Director Philip Ho stated that for this play, Zuji.com's logo was placed on collaterals such as advertisements or pamphlets, with Zuji's sponsorship mentioned during the play's announcements.
Leveraging Hong Kong's reputation as an entertainment mecca, the Hong Kong Tourism Board (HKTB) and AXN recently created the Hong Kong Movie Odyssey. Gregory Ho, VP of Advertising Sales at SPE Networks Asia stated that Hong Kong Movie Odyssey "took viewers to the various Hong Kong film locations of blockbuster movies." Using famous celebrities, it showcased landmarks such as the Giant Buddha, Victoria Peak, Tsing Ma Bridge and popular districts such as Mongkok.
David Leung, HKTB's Regional Director of South and Southeast Asia explained that, "With a review of market trends vis-à-vis our marketing needs, we identified that a combination of movies and celebrity draws is definitely a good success formula." Working with AXN, HKTB developed a creative campaign with the correlation between movies and the destination.
Nor is the HKTB alone in such ventures. With everyone from Visit Britain to Singapore's STB promoting arts-based tourism, we can expect partnerships between travel companies and the arts to soon emerge as a new source of innovative campaign strategy.
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