1CASE STUDY- EL-AL ISRAEL AIRLINEPRESENTED BY: LIOR PRIDOR

2COMPANY OVERVIEW

• Incorporated on November 15, 1948 as a state owned company. In 2003, steps for privatizing the Company have begun, and its shares were offered to the public.

• The increasing number of competitors carriers for flights between Israel and Europe caused a problematic business situation since El-Al‘s association with Israel affected many of the company’s services

• El-Al now had to be presented as one that is valued by international standards and provide value for its costumers regardless of the company’s origin

• As a response to the increased competition, in 2014 the Company launched a new aviation brand in the name of "UP" under which discounted flights were operated in the form of low cost flights to destinations in Europe.

EL-AL AIRLINES n.d, EL-AL Israel Airline History. Retrieved from http://www.elal.com/en/About-ELAL/About-ELAL/History/Pages/default.aspx

3PERCEPTION OF THE BRAND IMAGE

The logo’s ‘Mere Exposure effect’The use of the Israeli flag image and colors all elicit favorite attitudes simply because we have been expose to it in the past.

Personally Relevant StimulusUsing associations to Israel in order to appeal to consumers’ goals, values and needs.El-Al uses the national anthem and Israeli celebrities in order to target the consumer attention

Patrick Perelsztejn 6.4.2008, EL-AL HATIKVA ISRAEL 60, Television clip. Retrieved from https://www.youtube.com/watch?v=iVS1yoZMY9I

4Perception of Brand Image, Brand Personality and Routes of

Processing Brand ImageUses a strong linkage of Cognitive and Emotional association to Israel. Uses scripts regarding the sequences of actions that relates to purchasing and using the product- Hebrew speaking crew, Kosher business etc…

Motivation Ability and Opportunity

High Motivation- high personal relevancy. EL-AL answers unique needs for the consumers.Ability- using previous knowledge about the brand history is required. Opportunity only for the target audience who wants to fly to and from Israel

Brand personalityHigh on Competence-expertize presented in the different operation El Al participated along the yearsHigh on Warmth-connection to the Israeli culture and the contribution it has to the Israeli society.

Based on: Hoyer, W. D., MacInnis, D. J., & Pieters, R. (2012). Consumer behavior. Nelson Education.Aaker, J. L. (1997). Dimensions of brand personality. Journal of marketing research, 347-356.Malone, C., & Fiske, S. T. (2013). The human brand: How we relate to people, products, and companies. John Wiley & Sons.

5North America Campaign AnalysisTwo different Market Segments

Israeli consumers who are looking to travel to North America .

Non Israeli consumers looking to visit Israel

EL-AL AIRLINES 12.10.2014, The Israeli Journey starts with EL-AL. Retrieved from https://www.youtube.com/watch?v=QQI3lEwWtgMRabel rabel rabel 7.20.2015 EL-AL Boston. Retrieved from https://www.youtube.com/watch?v=5DMYzvwiaW8

6North America Campaign Analysis Using Attractive Actors and Pleasant Music -More noticeable and often arouse

positive feelings and attract consumers to watch the commercial. By pairing them with the brand consumers will ultimately attribute the positive feelings with the conditioned stimulus- the El-Al brand

Concrete and Vivid Imagery- concrete stimulus are easier to process than abstract ones. Consumers match the images to the goals they look to achieve in using the brand

US US CS

Effecting Consumers’ Attention:

Based on: Burroughs, W. J., & Feinberg, R. A. (1987). Using response latency to assess spokesperson effectiveness. Journal of consumer research, 295-299.Kellaris, J. J., Cox, A. D., & Cox, D. (1993). The effect of background music on ad processing: A contingency explanation. The Journal of Marketing, 114-125.Pavlov, I. P. (1932). The reply of a physiologist to psychologists.

7North America Campaign Analysis Using a Surprising Stimulus: The use of the stimuli out of context

arouse the viewer curiosity as it makes an effort to process and analyze the situation ultimately leading to increased attention

Effecting Consumers’ Attention:

Based on: Menon, S., & Soman, D. (2002). Managing the power of curiosity for effective web advertising strategies. Journal of Advertising, 31(3), 1-14.

8North America Campaign AnalysisSimilarities and Differences between campaigns for High MAO central route processing attitude formation:Aspect Factors influencing

attitudeNon Israeli market segment Israeli Market segment

Emotional

Symbolic consumption-tendency for consumers to focus on meanings beyond the tangible, physical characteristics of material objects

Connectedness function- address the consumer connectedness to the Israel society and the experience of visiting it

Emblematic function- states that by using the brand the consumer connects to his social group

Emotional Appeal-affective shaping of consumers’ attitude toward trying the product

Consumers viewing the commercial can place themselves in the situation presented and experience the positive emotions triggered from it.

CognitiveMatch between the Consumer Values and the brand

Individualistic values- The ability of the experience to match different individual goals as they visit Israel.Equality values- different ethnicities, religions and ages enjoying the brand

Individualistic values- The advantage of the vacation while enjoying the quality and familiarity of home.Masculinity Positive attributes formed from having an army trained male pilotBased on: Levay SJ, (1959), Symbols for Sale. Harvard business review 37 (4), 117-124

Hoyer, W. D., MacInnis, D. J., & Pieters, R. (2012). Consumer behavior. Nelson Education.Kim, J., & Morris, J. D. (2007). The power of affective response and cognitive structure in product-trial attitude formation. Journal of Advertising,36(1), 95-106.

9The ‘Open Sky’ Crisis The ‘Open Sky’ agreement created a free-market

environment thereby increasing competition. In response the company launched a new aviation

brand in the name of "UP", under which low cost flights are operated in an attempt to increase Operational Effectiveness.

El-Al trade off, presented by the strategic positioning, creates a uniqueness for the brand. Nevertheless El-Al management choose to keep the UP brand and try to match current competitors by providing low cost flights.

Based on: Porter, M. E., Goold, M., & Luchs, K. (1996). From competitive advantage to corporate strategy. Managing the multibusiness company: Strategic issues for diversified groups, New York, 285-314

10The UP Brand as EL-AL Horizon Two

Horizon Two- the single minded drive to increase revenues. The Up brand provides access to the new market of low cost flights.

???

Based on: Baghai, M., Coley, S., & White, D. (2000). The alchemy of growth: Practical insights for building the enduring enterprise. Da Capo Press.

11EL-AL Functional Fit

Israel Airline

Only Israeli air

force pilots are

hired

Only Israeli

security

Longer security process

Low rate for

organized Jewish groups

Executing operations for bringing Jews

to Israel

Jewish Heritage

Keeping a

Kosher busines

s

Does not operate on Saturdays and high holidays

Traditional Israeli food is

served on flights

Israeli movies

and shows during flight

Kosher Meals

Based on: Porter, M. E., Goold, M., & Luchs, K. (1996). From competitive advantage to corporate strategy. Managing the multibusiness company: Strategic issues for diversified groups, New York, 285-314

12UP and EL-AL Strategic Positioning

“Not just an airline”- consumers look for the experience of Israel as they use the brand

Consumers are looking for a fast

and efficient service from the

airline

The importance of maintaining high level security

Security is not important if it hurts check in times.

Need Based Positioning

Access Based Positioning

Comparing Costumers’ Needs and Accessibility of services for EL-AL and the new UP Brand.

Based on: Porter, M. E., Goold, M., & Luchs, K. (1996). From competitive advantage to corporate strategy. Managing the multibusiness company: Strategic issues for diversified groups, New York, 285-314

EL-AL consumers Low Cost airlines Consumers

13RECCOMENDATIONS

1.Two Separate Brands: El-Al should present a separate brand from UP in order to minimize the overlap of attributes and present a new brand image specifically for the target consumer of low cost airlines.

THE NEW UP BRAND ATTITUDE FORMATION

Emotional Aspects:Changing colors and removing the Israeli flag. Focusing more on emotional appeal of the new presented brand than the emotions elicited by the Israeli associations.

Cognitive Aspects:Presenting supportive arguments: Best quality of pilots, Efficient way to fly etc... Presenting an attractive source which is similar to the target consumer : business men, young couples etc….

14RECCOMENDATIONS2. Building horizon 3:The El-Al brand presented horizon one as the experience of Israel. This quality can be a useful association when forming the third horizon which will involve cooperating with other products who offer the Israel experience.Brand extensions will present horizon three as a well-organized travel experience for both domestic costumers traveling abroad and international consumers visiting Israel.

EL-AL AIRLINES n.d, UP Web site. Retrieved from http://www.flyup.co.il

15References Aaker, J. L. (1997). Dimensions of brand personality. Journal of marketing research, 347-356. Baghai, M., Coley, S., & White, D. (2000). The alchemy of growth: Practical insights for building the enduring

enterprise. Da Capo Press. EL-AL AIRLINES 12.10.2014, The Israeli Journey starts with EL-AL. Retrieved from

https://www.youtube.com/watch?v=QQI3lEwWtgM EL-AL AIRLINES n.d, EL-AL Israel Airline History. Retrieved from http://www.elal.com/en/About-ELAL/About-

ELAL/History/Pages/default.aspx Hoyer, W. D., MacInnis, D. J., & Pieters, R. (2012). Consumer behavior. Nelson Education. Kim, J., & Morris, J. D. (2007). The power of affective response and cognitive structure in product-trial attitude

formation. Journal of Advertising,36(1), 95-106. Levay SJ, (1959), Symbols for Sale. Harvard business review 37 (4), 117-124 Malone, C., & Fiske, S. T. (2013). The human brand: How we relate to people, products, and companies. John

Wiley & Sons. Patrick Perelsztejn 6.4.2008, EL-AL HATIKVA ISRAEL 60, Television clip. Retrieved from

https://www.youtube.com/watch?v=iVS1yoZMY9I Porter, M. E., Goold, M., & Luchs, K. (1996). From competitive advantage to corporate strategy. Managing the multibusiness

company: Strategic issues for diversified groups, New York, 285-314 Rabel rabel rabel 7.20.2015 EL-AL Bostong. Retrieved from https://www.youtube.com/watch?v=5DMYzvwiaW8 EL-AL AIRLINES n.d, UP Web site. Retrieved from http://www.flyup.co.il