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Focus areas
1. Marketing and distribution in the aviation industry
have transitioned to online platforms
2. Airline strategy is shaped by business model LCC or
FSNC. Think about the marketing Ps in the context
of each business model – how are they different?
3. Product development – in the air/on the ground.
Whole journey experience
4. Pricing – competition/seasonality/elasticity.
TOPIC AREAS
• Loyalty and Relationships
• Research, Data collection and analysis
• Distribution systems in transition
• Pricing and Revenue Management
• Product unbundling and ancillary revenues
• Non-price decision points
• Advertising and Social Engagement
1
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Market Summary
Market: History, Current, and Future
– Consider
• market share,
• market shifts,
• pricing
• competition
2
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Segment Definition
• Business, Leisure, VFR
• Premium or discount
• FSNC or LCC
• Non-stop or connecting
PRODUCT
• What is the product?
3
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PRODUCT
• Product Description
– Can you say in one clear sentence why your
product is perfect for a specific buyer and what it
does best?
• Product Name
– It is more important to be descriptive than creative.
PRODUCT
Functionality Features & Benefits
To understand the product from a
customer s point of view, list
– the functionality,
– the features, and
– the benefits of the product.
• List functionality and features that could be
added.
• Prioritize for the target market segments to
help determine product development and
positioning.
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PRODUCT ADAPTABILITY
• Understanding how consumers use the
product, so you can incorporate the necessary
messages into your marketing.
PRODUCT ADAPTABILITY
Think about Coke introducing Zero and
Cathay Pacific launching Premium Economy
– Relative advantage of the product: How superior is
the innovation/product to the product it was
designed to compete against?
– Compatibility: Does it fit with current product
usage and customer activity?
– Complexity: Will difficulty or confusion arise in
understanding the innovation’s basic idea?
– Divisibility: How easily can trial portions of the
product be purchased?
– Communicability: How likely is the product to
appear in public places where it is easily seen and
studied by potential users?
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Competition
• The competitive landscape
– Provide an overview of competitors, and
their strengths and weaknesses
– Position each competitor s product
against your market position
Positioning
• Positioning of product or service
– Statement that distinctly defines your
product in its market and against its
competition over time
• Consumer promise
– Statement summarising the benefit of
the product to the consumer
• What is Air Asia s promise?
• Is it viable?
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POSITIONING
how your target market defines you
against your competitors.
• If you stand out with unique
benefits, you can capture the
market s attention.
• Again - important to understand
how your product compares with
your competitor s from the
customers point of view
• Are your customers promoters or
detractors? (Social media)
Promoters - Detractors
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POSITIONING ENVIRONMENT
What is the new marketing
environment?
What is your competitive
advantage?
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SEGMENTATION
• Mass Marketing or Undifferentiated Marketing:
– Go after the whole market with one offer and focus on
common needs rather than differences
– Airline example?
– Air Asia
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SEGMENTATION
• Target Marketing or Concentrated Marketing:
– Large share of one or a few sub-markets. Good when
company s resources are limited
– Airline example?
– TIGER
SEGMENTATION POSITIONING
The differences that are promoted for a product
must be:
• Important: Delivers a highly valued benefit to
the target buyers
• Distinctive: Competitors do not offer the
difference, or the company can offer it in a
more distinctive way
• Superior: The difference is superior to other
ways that the customer might obtain the same
benefit
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SEGMENTATION POSITIONING
The differences that are promoted for a product
must be:
• Communicable: The difference can be
explained and communicated to the target
buyers
• Preemptive: Competitors cannot easily copy
the difference (price is not preemptive)
• Affordable: Buyers can afford to pay the
difference
• Profitable: Company can introduce the
difference profitably
Advertising
Strategy and execution
– Overview of strategy
– Overview of media and
timing
– Overview of ad spending
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Communication Strategies
• Messaging by audience – remember the
segment you are marketing to!
• Know the Target Consumer demographics
• Who else is talking to you audience? (Airports,
web aggregators, hotels)
• Does anyone own the customer relationship
Other Promotion
• Direct marketing
– Overview of strategy, vehicles, and timing
– Overview of response targets, goals, and budget
• Third-party marketing
– Co-marketing arrangements with other companies
• Marketing programs
– Other promotional programs
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Distribution
• Distribution strategy
• Channels of distribution
– Identify preferred channels of distribution
• Distribution variances by channel
• What percent share of distribution will be contributed
by each channel – a pie chart might be helpful – and
what impact does this have on revenue management
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Pricing
Pricing
– Summarise specific pricing or pricing
strategies
– Compare to similar products/destinations
– Identify price’s role in revenue management
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PRICE
General Pricing Approaches
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PRICE ADJUSTMENT
When situations change:
• Discount & Allowance: reduced prices to reward
customer responses eg paying early
• Discriminatory: adjust prices to allow for differences
in customers, products, and locations
• Psychological: prices for psychological (optical)
effects. Ex: $299 vs. $300
• Value: adjusting prices to offer a combination of
quality and service at a fair price
• Promotional: temporarily reduce prices to increase
short-run sales
• Geographical: adjust prices to account for geographic
location of customer.
• International: adjust prices in international markets
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Launch Strategies
• Launch plan
– When a sale is announced?
• Promotion budget
• WOMO
• Social media
• Backup material with detailed budget
information for review
Success Metrics
• Short term penetration
• Next year goals
• Longer term growth
• Measures of success/failure
• Requirements for success
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PROMOTION
Promotion is the mix of advertising,
personal selling, sales promotion, and
public relations a company uses to
pursue its advertising and marketing
objectives.
PROMOTION OBJECTIVES
Unawareness>Awareness>Knowledge>
Attitude>Intention>Purchase
Measuring Response
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Product positions…
Narrow
Differentiation Broad
Differentiation
Features
Cost
Leadership
Range of Markets
Dragonair Qantas/SIA
Features
?
Ryanair
Range of Markets
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