Air New Zealand has been our national airline for over 70 years. Kiwis have long felt proud to have one of the best and safest airlines in the world. The success of Air New Zealand delivers to our need to feel that as Kiwis we consistently punch above our weight on the world stage.
The introduction of low cost carriers has changed people’s expectations around how much they should pay for a flight and the level of service they should receive. As the airline which promises to get Kiwis in the air faster, Air NZ has the challenge of continuing to deliver premium service and experience while also providing competitive airfares.
Domestic prices were cheaper than they had ever been before and at the same time the international market was heating up with new products, new routes and new alliances. The challenge was to take an already successful retail strategy and make it blow the competition out of the water.
To achieve this in such an aggressively competitive market, a 3-step process was conducted over an 18 month period to fundamentally re-position Air New Zealand’s retail strategy.
Prior to this point, Air New Zealand’s target market had been the entire country but they recognised that in order to deliver improved results in such a difficult competitive environment, and without always lowering prices to the level of their competition, they would need to take their marketing communications to the next level.
Step 1 was to make their advertising more retail focused
Step 2 in the evolution was to test leveraging sponsorship entities
Step 3 was to fundamentally re-position their retail strategy to be customer focused
Most significantly, in 2013 Leisure Traveller Segmentation was incorporated into their retail strategy, by overlaying the individual segment needs on to their travel markets in order to identify the priority segments for each market.
The results of this strategy have been nothing short of remarkable, and despite a cut-throat competitive environment where the competition is constantly on sale and consistently offers ludicrously cheap prices, phenomenal retail results were delivered.
Sales have increased by up to 49% and ROI by up to 175% of target.