Case study of Jeju Air highlights branding success

Seoul National University (SNU) Prof. Chu Wu-jin, right in front row, and Macquarie University senior lecturer Chris Baumann, left, listen to lectures by Jeju Air staff, unseen, at the carrier’s headquarters at Gimpo International Airport on Monday. Thirty-eight SNU summer program students joined a field trip to the budget airline. / Courtesy of Jeju Air

By Kwon Ji-youn

Hallyu, or the Korean wave, can be integrated into a firm’s marketing strategy when reaching out to consumers in Asia, a scholar said on Monday.

Prof. Chu Wu-jin of Seoul National University’s (SNU) Business School said hallyu could be a successful marketing tool, citing Jeju Air’s case in his lecture to 38 SNU summer program students held at the carrier’s headquarters at Gimpo International Airport.

Jeju Air is a budget airline. Many people assume that the carrier only flies back and forth between mainland Korea and Jeju Island, when in fact it flies internationally as well as domestically.

"Jeju Air was initially viewed as an airline that just flies to Jeju. Further, it was associated with the quiet and peaceful scenery of the island,” said Chu. “However, through hallyu marketing, it has transformed its image to be exciting, dynamic and global.”

According to Park Hyuk, general manager of the Business Planning Division at Jeju Air, the carrier aims at appealing to its customer base with “something to remember, something to talk about.”

Differentiation has taken place in its destinations, services and brand image.

Chu said that almost every aspect of the business needs to be differentiated these days.

That was where hallyu came in. Hallyu refers to a boom of Korean pop culture abroad.

“BigBang was our spokesperson in 2012,” Chu said. “BigBang hosted a big Asian tour that year, and Jeju Air had its brand prominently displayed in all its concert venues.”

He added, “Our Boeing 737 was wrapped with BigBang photos. As a result, we saw a steep climb in foreigners joining our mileage program and Facebook page.”

The airline wanted to stress Korean-ness, youthfulness and dynamicity. Chu assessed that BigBang embraced all three elements.

The carrier’s signature color, orange, also played a role in rebuilding Jeju Air’s image as a vibrant and energetic airline that appeals not only to older customer tiers, but also to the young and dynamic.

Chu finds this type of change necessary in such a crowded market where there is increasing local and foreign competition.

"The image of Jeju Air used to be rustic and slow,” he said. “Despite its emphasis on direct sales, there was no customer pull.”

Chu also emphasized the role of branding in appealing to customers.

"Branding is a process of building a relatively unknown product into a household name,” he said. “Building a strong brand is especially important for the airline industry, because people need to ‘trust’ the airline that they are flying with.”

An important element of branding, which Jeju Air pulls off well, is maintaining a carrier’s "humanity” tactic. This refers to passengers’ experiences.

Cost-cutting by low-cost carriers (LCC) needs to be checked against the needs of passengers. Of course, customers do not expect a luxurious flight experience on an LCC, but airlines do need to provide a comfortable and memorable experience.

In addition, simplicity plays a major role in maintaining an LCC.

"Simplicity in business processes and product offerings are essential to assure cost competitiveness,” Chu added. “This has been a proven strategy for many LCCs worldwide, and it has been so for Jeju Air as well.”

The lecture was a perfect fit for the students, most of whom are keen on marketing and its application.

The students were enrolled in a class titled “Introduction to Marketing,” taught by Chris Baumann, a senior lecturer at Macquarie University in Australia. It is listed as a course in the International Summer Institute at SNU.

The institute is a five-week intensive program held from June 26 to July 30 and provides an opportunity for students who attend other universities to enroll in classes offered by SNU and taught by renowned professors from around the world.

Students are able to receive credit for the courses depending on policies at SNU and their home institutions. All classes are conducted in English.

The main objective of this specific course is to observe the application of theories and studies that are examined during class. A field trip to Jeju Air’s headquarters was planned to assess how such theories were implemented.

"Jeju Air is a dynamic airline that has reached a strong market position and clear point of differentiation with its Korean originality in a short time-frame,” said Baumann. “The airline applies a hybrid model.”

By hybrid model, Baumann refers to the fact that while it is a budget airline, it offers services that satisfy the Korean clienteles’ high expectations.

"Linking the brand to hallyu, such as BigBang, is a promising approach that positions Jeju Air as a more exciting airline rather than European no-frills airlines that offer little ‘spirit’ other than being cheap.”

For Baumann, it was rewarding to see his students experience an emerging business and brand first hand.

"Linking theory to practice is an important component of modern business and marketing education,” he added.

Students in Baumann’s class described the experience as valuable.

"Reading case studies and online articles about the company is definitely not the same as learning directly from the Jeju Air team,” Nancy Lu, a student in the program, said. “It was an honor to hear from the CEO as well as professor Chu from SNU.”

Robert Chon, another student, said that it was interesting to hear about Jeju Air’s successful story and their effective implementation of marketing strategies.

Choi Joong-keun, who is an engineering Ph. D. student at SNU, said that learning about practice (as opposed to theory) was fascinating.

“I am proud to see this emerging Korean brand utilizing hallyu to build its profile.”