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Kulula case study analysis Essay

How Kulula.com became a big brand in south Africa?

In 2001, it was no secret that the national carrier dominated the domestic carrier market. 9/11 was going to change the world forever. South Africa was not a good market for low cost airline because of two main factors:

1) There were no cheap regional airports.

2) Comair Airlines, kulula’s holding company didn’t have resilience to launch a new brand but the folks in kulula were determined and nothing was impossible for them. They refused to believe that it was mission impossible. The first challenge for them was to position the airline correctly. The folks had done their research and found that leisure market would be more interested in low fares and less need for flexibility than business class.

This mean that new airline could afford to offer no full service(No-frill) something which never had been available before but having no pre-book seating, free meals at board, or no possibility of rebooking to other airlines, the aim was to keep the cost at minimum and savings passed on to the passenger.

It could have been a huge mistake if kulula.com would have concentrated on low cost to position themselves. The smart way to position kulula on promise was to be sustainable and for long term and that is why kulula.com brand positioning of making it accessible and easy was on top.

The second challenge this airline faced was on deciding on a name and in the world of branding your brand name can influence or sink. The name (kulula.com) has taken a brand values such as simplicity, honesty, respect, innovation, safety.

So why was Kulula.com a winner?

1. Available as a dotcom
2. Easy to say.
3. Means “easily” in zulu.
4. Stood for a benfit, rather than a service.

The suitable name now decided upon, now was a time to launch the brand.

It has tiny budget of 23 million rand as a loan and just one opportunity to get it right. It needed to be noticed and what was the better way was to make customers “Superhero” and for that reason that came with a punch line of “Anybody can fly”. The brand’s positioning line, ‘Now anyone can fly, endeavoured to communicate to ordinary people that they could become superheroes as the airline fulfilled their hidden wish to fly.

Porter’s competitive model

The five forces model depicts five elements which act on a business competitiveness. The South African airline industry experiences the following competitive forces which were identified by Michael Porter

1) Potential entrants: Kulula.com might see other airlines coming into the market for example Mango 1996, 1-Time though it liquidated and many other low cost airlines in the country. Foreign carriers including regional ones might also enter. 2) Bargaining power of suppliers: Aircraft manufacturers, aircraft leasing companies, labour unions, fuel companies, airports, hotels and local transportation service. 3) Bargaining power of buyers-in the case of Kulula.com travel agents thought the power is low, business travelers, leisure travelers, organized group tours.

4) Substitute products: Alternative travel modes for example, people might choose to use a bus, Greyhound, Inter-Cape, SA Road-Link or rail transport, private cars (transportation). 5) Intra-Industry rivalry: The competitors for Kulula.com are South African Airways‟ low cost models which are Mango Airlines, South African Air Link, South African Express.

Comparison of Kulula.com with Mango Airlines:
1) Both Mango Airlines and Kulula Airlines allow you to choose your seats online 24 hours before your flight.

2) Both airlines are being copycats & using Boeing 737-800s, which use 26% less fuel than the MD82s, saving a lot in terms of carbon emissions. The planes carry 186 people.

3) Both airlines’ call centres were impressively quick at handling the calls.

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