the Scoot-Away
Stage 1: Segmentation
From the gathered results of the team’s qualitative and quantitative research, we have identified 3 segments to Scoot’s consumer market. The segmentation is largely based on consumers’ attitudes and purchase habits towards the services provided by Scoot.
The 3 segments are:
1. The Young
2. The Young at Heart
3. The Value Seekers
Who are they?
Customers belonging to this segment are those aged between 18 and 35. They are young, adventurous travelers which choose Scoot over its competitors mainly because of the positive and youthful vibes Scoot portrays through its marketing strategies. Consumers in this segment have significantly high attitudinal and behavioral loyalty towards Scoot and its brand promotions. They are supportive and encouraged by Scootitude, which fuels their repeated purchases with the brand. These consumers have a relatively low tendency to switch to other brands as they have already identified themselves with Scoot.
Why are they important?
Although this group of people represent only a third of Scoot’s customers, it is extremely important for Scoot to expand this group for two reasons. The first being that this group of people are Scoot’s loyal customers, who have similar ideals and beliefs with the brand. This group will have the least deviation in terms of reactions, should Scoot increase ticket prices. Secondly, because of their brand loyalty, repeated purchases from this group is an important contribution to Scoot’s total sales. The current 30% contributes to 40% of sales. Should this group be expanded, Scoot will experience a more than proportionate increase in sales returns from this segment.
Relationship Type: Committed Partnerships & Best Friendships
The relationship this segment has with Scoot represents a voluntary commitment despite the competitive nature of the budget airlines industry. There is trust in the brand and the value it carries, propagating this mutual relationship towards the belief that its products and services are worth the time spent on them. However, there is an element of reciprocity in this friendship – consumers in this segment will only remain loyal to Scoot provided the brand maintains its quality services in addition to the image and beliefs it represents
Values & Beliefs
Freedom and Availability of Choice
Due to the segment’s high commitment and trust towards Scoot, they are not resistant to new services and/or promotions made available by the brand. For example, a new flight route to a new destination or an added flight at a different timing. This segment very much values their ability to choose a service offered by the brand to display confidence in their choice and the brand.
Self-Identity mirrored by Brand Image
This segment is identified by their young age and thus a distinct need to be different and unique. As consumers of Scoot, they strive to reflect this exuberant and energetic personality which draws parallels to the brand’s image. Needless to say, this consumption will only continue in the long-term if the brand grasps the changing needs and demands of this group of people.
Analysis & Implications
Scoot is very much active on social media platforms, especially Facebook. It needs to continue maintaining the interactive element present with current fans of the site, as well as to work doubly hard to secure a brand engagement strategy that will ensure the active commenters and contributors on the Facebook site translate into actual consumers of Scoot’s services. There is great potential in attracting the ‘new young’, Scoot is very much active on social media platforms, especially Facebook. It needs to continue maintaining the interactive element present with current fans of the site, as well as to work doubly hard to secure a brand engagement strategy that will ensure the active commenters and contributors on the Facebook site translate into actual consumers of Scoot’s services. There is great potential in attracting the ‘new young’,
Who are they?
This group of consumers usually consists of middle-aged travelers usually on a tight budget, but majority wanting to be seen and identified with the newest trends and beliefs despite their actual age.
These consumers can be characterized with moderate loyalty, with significant tendency to switch between brands should Scoot fail to exemplify their want to be young. The possibilities of repeated patronage would come with Scoot’s ability to convince this group of people that by engaging its services, they can be deemed as young despite falling out of the specific ‘youthful age range’.
Why are they important?
Despite representing another third of Scoot’s customers and yet holding the lowest sales contributions to Scoot’s profits, this segment holds the key to the possibilities that Scoot can unlock via word-of-mouth marketing. The consumers in this segment look out for differentiating factors Scoot is able to offer that other services providers cannot. If and when satisfied, the consumers here will proudly make it known that Scoot is qualified to be a brand that ‘belongs’ to them.
Relationship Type: Marriage of Convenience & Best Friendships
The Young at Heart relies heavily on the reciprocity principle governed deeply by external influences and in turn their personal perceptions of the brand. Constantly being on the hunt for the ‘right’ brand that suits the personality they want to bring out, this segment chooses Scoot on the pretext of ‘finding something new to tryout’.
Values & Beliefs
Thrives on Familiarity and Identification
Although the young at heart do not feel very strongly for any brand in general, they welcome familiarity in any context and is able to build a strong identification with the brand should it fuel the personality they wish to shout out. This is where the possibilities of repeat purchase lies in the context of the services Scoot provides.
Emphasis on Social Approval
Borrowing Malcolm Gladwell’s concepts of Connectors, Mavens and Influencers, the young at heart is the only segment where its consumers are widely spread across each of the 3 types of people. Being middle-aged gives them a large network and friends based. They are also relatively more knowledgeable than the young in many different subject matters or domains. Also, due to their large network, it is very possible for more than a handful of them to be influencers. As such, the messages they spread via word-of-mouth is recognized by a wider audience, making social approval and acknowledgement a crucial factor to their satisfaction.
Analysis & Implications
Scoot is very much active on social media platforms, especially Facebook. It needs to continue maintaining the interactive element present with current fans of Borrowing Malcolm Gladwell’s concepts of Connectors, Mavens and Influencers, the young at heart is the only segment where its consumers are widely spread across each of the 3 types of people. Being middle-aged gives them a large network and friends based. They are also relatively more knowledgeable than the young in many different subject matters or domains. Also, due to their large network, it is very possible for more than a handful of them to be influencers. As such, the messages they spread via word-of-mouth is recognized by a wider audience, making social approval and acknowledgement a crucial factor to their satisfaction.
Who are they?
This group of people represent the largest proportion of customers. Consumers within this segment have the lowest brand loyalty and switch between brands based on the amount of benefit and value they receive in return for each dollar spent. Any possibilities of repeat purchase will be solely due to Scoot’s ability to keep prices low, lower than competitors, and of more value as compared to competing brands. .
Why are they important?
This segment is important as it contributes 40% of the current Scoot market, forming a substantial amount of total sales. There is high potential growth in this segment due to a rising demand and awareness of the presence of low-cost carriers. Its high potential for growth provides Scoot a massive opportunity to increase profits should it be able to acquire long-term loyalty from these people.
Relationship Type: Casual Friends/Buddies
This relationship is characterized by low affect and intimacy and few expectations for reward. Because of the segment’s focus on seeking value, their priority in consuming Scoot’s service pivot solely on price and the value tagged to each price tag.
Values & Beliefs
Prioritizes value and cost
This group of people put emphasis on the functional benefits and advantages they can obtain from the services they purchased, for every dollar’s worth. As long as Scoot is able to provide a competitive edge among other carriers, especially in terms of price, each member in this segment will no longer prolong their decision in choosing Scoot.
Variety Seeking
Attributing to the value seeking element of this segment, value seekers are also variety seekers. Because they tend to look out for promotions that offer ‘the best deal’, these best deals often come in the form of novel, unique offerings that airlines push out to differentiate themselves from competitors. As such, in addition to the ticket’s value for money, value seekers consider the type and variety of services they can expect to receive on board each flight.
Analysis & Implications
A majority, if not all, of consumers in the value seeking segment are also budget travelers. Scoot can capitalize on markets that do not yet offer low-cost flights. This will attract new blood into the segment pool (i.e. a new customer can replace every value seeker that is enticed by another brand). Building on this point, Scoot can offer new flight routes and increase the availability of its flight timings. This has to be done on top of maintain current flight routes and timings, allowing the demand from value seekers to be fueled by their focus on seeking variety.
The brand novelty and uniqueness of Scoot seems to act as a bonus in encouraging repeated consumption of its services. The brand character may appeal to the aspect of variety as the brand uniqueness often carries over to special and distinctive promotions. For example, Scoot was able to leverage on the Anton Casey case to offer a discount on flight tickets to Australia.
To further capture this segment of the market and convert them to long-term customers, a possible suggestion would be for Scoot to carry out promotions bounded by time (e.g. Hourly or ‘Only Tuesdays’ promotions). The benefits are two pronged – Value seekers will be able to hitch on such promotions to grab tickets at largely discounted prices for the same benefit they would have received if a non-discounted ticket was purchased. This increases the value of each ticket. Secondly, Scoot can also leverage on the spike of impromptu decisions made to purchase tickets which were initially unplanned for. Because these promotions will be bounded by time constraints, Scoot should not suffer a huge loss in terms of profit per discounted ticket sold.
Summary of Segmentation
Percentages of each segment to the total number of people consuming Scoot’s services
