Consumer Behavior in Jetstar’s Japanese and Australian Transport Markets
Consumer behavior is one of the many variables that marketers take into consideration. This essay elaborates on different theories of consumer behavior and the comparison of their impacts on the Japanese airline industry as compared with their Australian counterparts. Jetstar will be our example as an airline company that operates from Australia to Singapore and Japan. Jetstar is reportedly planning to enter the competitive Japanese domestic market by engaging in joint ventures with local Japanese investors (The Japan Times, 2011). This forms the core focus of this paper, to establish the challenges that they may face resulting from the situation of Japan in terms of consumer behavior. The theories that this essay will focus on are attitude, brand loyalty and brand equity.
Consumer attitudes in the airline industry mainly encompasses the questions that passengers ask themselves as they make choices of booking planes, and looking for more reliable services during their flight. Some customers may prefer online booking while others will prefer offline booking. Some customers who prefer faster and more reliable services may be frustrated whenever they feel that the services offered aren’t reliable and fast enough.
Travel behavior is significantly influenced by self congruity and functional congruity (Claiborne & Joseph 1990 pg1-7). This book refers to self congruity as the closeness between the tourist destination and the tourist’s personality including: self image, social status and ideals. On the other hand, functional congruity is referred to as the match between the functional attributes of the place and the expectations of the tourists. These two factors affect air travel in Japan considering the fact that tourism makes a significant percentage of passengers though there are also a significant number of passengers travelling for business ventures and other personal issues. The book also elaborates on the hypothesis that self congruity has a significant influence on functional congruity.
Following the classification of attitudes by Schiffman and Kanuk (2007, page 7), consumers’ attitudes may be classified into the following functions: utilitarian, ego defensive, value expressive and knowledge functions. Utilitarian function relates to the brand helpfulness while ego defensive refers to the sense of security that drives customers’ attitudes. Attitudes arising from knowledge function refer to the desire of the customers to understand certain concepts. On the other hand, value expression function is connected to the customer’s status, lifestyle and personal values in general.
According to (Journal of Air Transport Management March 2011), Jetstar customers have been complaining of paying an extra 270 dollars for excess baggage and this seems not to please their customers. Travel cancellation was also a common thing by the year 2009 and most customers developed a negative attitude towards Jetstar. Other customers have been complaining of excess delays in the booking process and this creates a negative customer attitude towards the company’s operations.
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This essay will look at brand loyalty in terms of consumer behavior. Some theorists define it as under consumer attitude and they use the example of brand preference as an example of how consumers’ attitude affects marketing. When consumers develop loyalty to a particular brand, it forms the foundation for a growing and a stable market share (Grubb & Hupp, 1968 page 58). Brand loyalty being the most valuable product of consumer learning, it leads to repeat purchase where consumers trust a particular brand and always come to buy it whenever they need products of such categories.
Brand loyalty is developed through instrumental conditioning that is achieved when consumers purchase goods and discover that the goods are satisfactory (Grubb E & Grathwol 1967 pg 22). This will make them to come back when they are in need of it again. Some studies show that most brand loyal customers are older and they earn higher income. Other scholars believe that consumer who have strong bid to solve a problem end up developing strong brand preference and therefore enhancing brand loyalty (Grubb & Stern 1971 pg 382). More information from these journals will be discussed under the following subheading to show how they affect the Japanese and Australian transport industry and especially Jetstar airline company.
Taking the case of Jetstar, most customers recognize the company for its long time play in the Australian aviation market. Despite of Jester being recognized, there are other big players in the Australian aviation market that makes it very difficult for any particular company to win customer loyalty. These competitors include the virgin blue, Qantas and Tiger airways which are all large and preferable companies. The reason why it is difficult for any of these companies to win customer loyalty is because of their close competition and all of them trying to win the customers attention. The end result is that customers will keep shifting from one company to another to feel some little difference in their travel style (Anna K, Tommi L, 2012).
Brand equity is the value that a company derives from a brand name that is trusted by customers. Just like the way Panam airways is trusted by most customers for long experience of safe and timely flights, that is the way customers develop a strong faith in certain brand names. New upcoming companies often try to buy brand names of established companies in order attract customers’ faith in their new products (Journal of Brand Management, 2007). Brand equity and brand loyalty go together. Brand equity leads to brand loyalty which stabilizes the market share and increases a company’s profits.
Jetstar has goodbrand equity and is reportedly planning to enter the Japanese domestic airline market. This is quite challenging if we consider the fact that the Japanese domestic market is a closed market (Schiffman, L. Et.al 2001). The brand equity of the two major Japanese airline companies has led to customers’ loyalty and any intrusion from outside will not be easy. According to this journal, the two major airlines in Japan; All Nippon and Japan Airlines are considering to lower transport charges to increase consumer loyalty. Every one of these major players is straggling to improve their brand equity by amending their price policies, product policy and communication policy (Kevin E. V Et.al, 2003).
Consumer Behavior in Japan’s Transport Sector
Transport in Japan has always been a center of attraction to private investors due to the large number of passengers travelling from one city to another and also in and out of the country. The infrastructure of Japan is highly developed with roads and high speed trains being the most dominant means of transportation. Roads make 1.2 kilometer network stretches within the country and are the main means of transportation in Japan (transport statistic handout of Japan, page 14)
Several Japanese railway companies also compete in domestic and regional transport market. Since Japanese customers are very strict on punctuality, high speed trains companies compete by improving on their time consciousness to attract customers. Some of the most dominant competitors in this industry are: Kintetsu Corporation, Seibu Railway, and Keio Corporation among other big players in the industry (The Japan Times, 2011). This article from The Japan Times also states that the average delay per train on the Tokaido Shinkansen Company is always an estimate of six seconds.
Air transport in Japan also attracts a big market both domestically and internationally. In 2012, Japan had a total of ninety eight airports with three main international gateways (Neal & Hawkins, 2002). According to the Yomiuri newspaper of China, Jetstar approached Japan’s ministry of transport to seek approval to form joint ventures with the local Japanese market. Though Jetstar’s spokesman could not comment on that statement but Jetstar has been talking about its intention to form joint ventures with other Airlines in Asia to make it one of the fastest growing Airline markets in the world (Japan association of travel Agents report, 2002).
Honey moon travel in Japan shoed remarkable improvement in the year 2002 (JATA survey report, 2012). The following graph shows Japan’s air travel trends between 2001 and 2002.
The above graph shows a high percentage of seniors travelling by air, followed by middle aged, honey moon, business, family, young women and incentives being the last in terms of highest figures recorded.
Four years later, the Japanese airline market had drastically changed and according to the report written by JATA. The trips considered in this survey were those heading to Europe, china, Hawaii and other Asian countries. All member companies were asked to participate in the survey and the results were as follows:
The above graph shows a general decline in the trend of customers travelling in and out of Japan. The number of people travelling for honey moon had the highest decline followed by incentives and the rest were fairly constant.
After four years again, there were changes in the number of individuals travelling for different purposes as demonstrated by the graph below.
The number of people travelling on honey moon drastically improved compared to 2006. The seniors remain the highest numbers of travelers followed by business. This is despite the fact that there was a slight decline in the two over a couple of months while the rest showed a drastic improvement.
The main competitors in the Japanese airline industry are: Delta Airlines. Inc, Jetstar, Singapore Airlines limited and All Nippon Airways Co.ltd among others. The All Nippon is the biggest player from within Japan. Though it has developed its brand to highly competitive standards, it steals faces competition from Jetstar which operates in three countries; Australia, Singapore and Japan (Country report: Air transport in Japan 2012 pg 62).This competition does not affect the Japanese local market which is dominated by All Nippon and other Japanese Companies.
Consumer trend in the Japanese airline market is constantly rising up to the year 2011 when the catastrophic blast altered the trend a little. It picked up again during the year 2012 ( Country report: Air transport in Japan 2012 pg 62).The general trend up to date is still rising as more people keep flowing in and out of Japan every day.
Consumer behavior in Australia
Australia has a very wide diversity of consumers ranging from gender, ethnicity, ages, education, marital status, interests and preferences among many others (Lawson, R.Et.al, 1996). Demography is the major difference between the Australian consumers. The wise diversity of consumers in Australia leads to target marketing as a result of wide variety of needs and wants of the Australian people (Linda. D. H. 2012).The same concept applies to the Airline market in this county. There is a wide diversity of travelers and with different travelling needs. This is the major reason why Australia came up with what is known as consumer oriented legislation to take care of the issues affecting consumers. According to (Linda. D. H. 2012 ), this is further facilitated by the consumer association website which they named “the magazine of choice”.
Through examination of the behavior of passengers in Australia, it was very difficult to capture the interest of the Australian of all the varietyy of Australian passengers due to mixed understanding. The study done by (Australian Air Transport Management, March 2011) also found that the effectiveness of aeroplane cabin safety is generally weak in the airline industry as a whole. Social norms that are disgracing together with poor perceptions about relevance of things also were found to inhibit communication effectiveness.
The study also found that the passengers’ level of awareness about the required safety standards were generally down. Very few passengers were found to pay attention to the announcements made by the crew. The safety video and video cards were also found to be ignored by many Australian passengers. All these behaviors do not necessarily indicate the negative attitude of the Australian passengers towards cabin safety but ignorance and carelessness. This is according to the response of many passengers when they were asked if they thought it was important to observe the cabin safety measures. Most of them admitted that observation of cabin safety measures was indeed important.
On the side of Jester, the Qantas group has a number of strategies including, ensuring that Jetstar captures the Asian Boom of leisure air travel at when cost are reduced (Antonio, 2009). This shows how the Asian market is similar to the Australian market in terms of sensitivity to price changes.
According to Antonio (2009), Australian passengers like to be entertained and thus why Jetstar considered installing ipads behind the seats of their jets and hence Jetstar became the first Airline Company in the world to use technology tailored by the apple community. Generally there is a big difference between the Japanese airline market and the Australian market in terms of demand and customer perceptions and attitudes towards leisure travel and need for entertainment. It is this kind of efficiency that Jester has adopted that makes it believe that there is still an opportunity in the Japanese domestic market.
How It Provides Market Opportunity to Australian Exporters
The airline industry in Australia is facing stiff competition in which service delivery is the key to success. According to (Taylor, 2006 ), today’s customer have got a great desire to settle for nothing less than good service delivery from the booking of airline ticket to the conduct of airline employees.
The presence of stiff competition among the major Australian airline companies makes the customer reap benefits that results from reduction in transportation charges. All the players in this tough completion try to enhance flexibility in their operations by enhancing communication channels for easier inquiry and booking by customers (Antonio, 2009). Service recovery and customer treatment is one of the most sensitive areas that both Jetstar and Virgin blue have been trying to improve on.
This is the perfect opportunity for Australian exporters to take advantage and maximize their export business. According to Antonio’s article, Virgin blue has tried to implement its strategies of service recovery and once instance occurred in 2007 when three hundred flights were cancelled left Australian travelers stranded for forty eight hours at the airport. Virgin blue immediately recovered the cancelled flights and in the next few hour, all the stranded passengers were relocated into other planes.
With this kind of competitive environment, the exporters of Australia are lucky and they have a chance to access lower transport charges and more efficient services. This will more so benefit the exporters of highly perishable commodities like horticultural product and the meat exporters.
How Jetstar Provides Information to Customers in order to Change Their Behavior
Jetstar’s target market is a low cost carrier and it has been providing services to customers who could never afford air travel in their life time. Though customers may complain at times about the charges for excess luggage, it is still cheaper than most of its competitors. Though Jetstar was ranked in 2009 as the third largest commercial aviation company in the Australian domestic market, it provided sixteen percent of the services in the domestic in 2006 and slightly improved in the year 2009.For Jetstar to compete Qantas and Virgin blue, it has come up with a strategy that will allow their customers to access their services in a number of ways. Some of these strategies include the use of travel agents, online booking services, online agents and Jetstar outlets (Antonio, 2009). Jetstar has also considered increasing the number of customer destinations in recent years. The negative reputations that Jestar had in the past is slowly changing due to improved communication with their customers through website, newspaper and the jester magazine.
The Jetstar magazine, advertisements on the newspaper and their official website is aimed at mobilizing their customers about their new plans for market differentiation which includes geographic and demographic segmentation. The company believes that this strategy will give it an upper hand against its competitors (Ginestra, 2006 pg. 11). This communication strategy is also aimed at informing their customers about the new discounts that are being offered in order to attract more customers. According to an article written by Julian Ginestra from the Adelaide advertiser on the 11th may 2011, Jetstar’s market share improved since 2006 due to the effectiveness of its new marketing strategies.
In conclusion, there are differences in the way the theories of consumer behavior apply in Japan and Australia and especially with reference to Jetstar Airline Company. The differences arise from the demographical structure of these two countries and the general consumers’ preferences and differences in attitudes as a result of diversity of cultures and believe.
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