Coach Cabin revolution

Innovation has always played an important part in the corporate culture of Air New Zeland. In that sense, the carrier is the equivalent of Southwest in the long-haul market. Their funny in-flight safety demo, their enhanced dinner services in Economy class or in-flight concierges are some of the recent innovations that the carrier has put in place to improve the customer experience, especially as the client spends around twelve hours inside a small cabin. These efforts for innovation are especially remarkable in an industry not known by its innovation throughout the last decades. As the director of marketing of Air New Zealand recently said, "We like to look at what the other airlines are doing in their marketing and then... don't do that."

Two weeks ago, Air New Zealand did it again. They realized that Economy passengers shouldn´t be forgotten and that families flying together represent a large portion of their customer base. The carriers started investing money two years ago to design their own aircraft seating product, forgoing the standard Boeing options. The results? The coach seats have completely been redesigned, including eleven rows of three seats on each side of the cabin dubbed "Skycouches" that are available for families and couples who want the ability to buy an entire row. Couples who buy the third seat will only need to pay half the price for the third seat.

This new concept might just change how other long-haul airlines look at the coach cabin in the future. Even Boeing, the airline manufacturer, has stated that this represents the future of air travel.

Would this turn up to be a profitable move for the company? That´s hard to say in an industry with very narrow margin profits, but those companies who listen to their customers and take into account their preferences end up prevailing. With this new proposal, having a restful twelve hour flight from Los Angeles or London will be easier for families travelling with Air New Zealand.

Pizza Patron: Focusing on niche preferences pays off

In a recent trip to Dallas, I came across with a logo that raised immediately my attention. Not only because it seemed to be a fast food company which I had never heard before, but also because it was one of those logos which made me want to know more about the company, despite being another pizza chain, something which I don´t really care for. The logo featured a sort of Hispanic Indiana Jones´ face with a fedora hat and the following tagline in Spanish: “ Más pizza. Menos dinero” (more Pizza, less money). The company´s name was “Pizza Patron”. I didn’t have the chance to try the product but I decided that I would research the company when I got back home.

The company was founded in 1986, but it wasn’t until 2003 when the franchising began, allowing expanding from four locations in Dallas to the current 92 locations in six states: California, Nevada, Colorado, Arizona, Texas and Florida. Their current goal is to grow to 750 outlets within the next ten years. Pizza Patron has recently seen five straight quarters of double-digit same store sales increases. And sales continue to grow, despite the state of the economy and the fact that the recession hit pizza chains particularly hard. What is then the secret behind the success of Pizza Patron?

In their corporate site, the company defines itself as “festive, Latin influenced Pizza stores with a community base in Spanish speaking or Hispanic neighborhoods”. Its mission statement: “Service to community, commitment to value”. And they deliver value by its very low priced offerings, which range from $4 to $8. They target immigrant Hispanic families “which previously couldn’t´ afford Pizza nights”.

The key for Pizza Patron is focusing wholly to this niche and earning a reputation within the local Hispanic community as language and culture is not a barrier. Employees are bilingual in English and Spanish, and the chain even accepts Mexican pesos. This move was popular with the customer base, and the chain has continued the practice, though pesos make up a very small percentage of its business.

Domino’s, Papa John’s and Pizza Hut also offer online ordering in Spanish, and Domino´s has a Spanish language hotline, but they’re not devoted to the Latino market the way Pizza Patron is. “We are often asked about opening stores in non-Hispanic neighborhoods, but that will never happen,” said Andrew Gamm, Pizza Patron’s director of brand development. “We are fanatically dedicated to making a strong connection, and doing a better job serving the Latino-Hispanic community than our competitors.”

The brand is uniquely aligned with the youngest and fastest-growing demographic in the U.S. A. From 2007 to 2008 US Hispanic consumers were responsible for 30% of the $40 bn. growth in the food industry. Surprisingly the company is based not on products with Hispanic origin, but with an All-American one: pizza, U.S. style. Today’s Hispanics are largely from the second and third generations and are more acculturated, so they have a lot of influence from U.S. mainstream culture, including food. As Latinos strongly prefer fresh food, the simplified menu is based on natural ingredients with innovative toppings customized for Latin preferences. Everything is offered at a low cost.

This is a very interesting example of how customizing the product to the profile of your niche and committing to their preferences pays off with loyalty. This is becoming more and more important nowadays in America, as cities are more and more diverse.

American Airlines and "Up in the Air": How to promote yor brand with skill

At a time when the airline industry has passed what it has been called the “worst decade of its history” because of falling demand, rising fuel costs and over competition, American Airlines has found a profitable and a smart way of promoting its brand in order to fill its aircrafts and executive lounges.

George Clooney's movie "Up in the Air" is the story of a corporate downsizing consultant who flies across the country, laying off workers in his own warm yet efficient way. In the process, he works to meet his self-imposed goal of collecting 10 million frequent-flier miles. In the film, Clooney's character flies the airline to accrue American Advantage points.

It is a profitable way because it is a free placement of the brand opposite to the expensive sponsorships or campaigns that companies carry out in their marketing efforts. And this is more relevant if we consider the current budget constraints of the airline industry for these type of actions. American provided the locations inside the airports and planes, reducing what otherwise would have been massive costs for the studio, Paramount.

As media fragmentation forces marketers to rely less and less on traditional channels, American turned to the entertainment industry to reach consumers who might not otherwise get the message. “Up in the Air” represents so far the biggest brand integration for American.

The key to this successful marketing effort has been the proper balance between the brand placement and the film creative credibility. The audience doesn’t have the feeling that the brand is over commercialized, because the brand is promoted naturally with the film. As the movie depicts the life of real people who are involved with brands in every day of their life, “Up in the Air” represented a unique opportunity for an airline´s brand to be closely associated with a film. Much of the story takes place in airports or planes and it’s about the character obsession with his lifestyle. The script treats the upside of air travel and it fits perfectly the target customers of American: the high-yield business passengers, whose frequency of flying impacts deeply in the profitability of the airlines. In their last results report, American specifically stated that they forecast a recovery of the demand of this kind of passengers in 2010.

The lesson learned in this example is that the marketing partnership between the entertainment industry and any other kind industry can be done with skill through an engaging story, the performance of the actors and a brand that is naturally placed in a story. The result is a creation of a lasting impression on the audience, the final goal of the marketer.