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Project mba

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  • 1. MARKETING PLAN FOR LAUNCHING A NEW AIRLINE ROUTE PROJECT REPORT Submitted in partial fulfillment of the requirements for the award of Degree of MASTER OF BUSINESS ADMINISTRATION MARKETING MANAGEMENT (MM), ANNAMALAI UNIVERSITY VINISH BHASKARAN NAIR ENROLLMENT NO. MBMKU10114828 Under the guidance of: Mr. Jomis V.John Page | 1
  • 2. PROJECT REPORTMARKETING PLAN FOR LAUNCHING A NEW AIRLINE ROUTE Submitted by: Vinish Bhaskaran Nair Enrollment No – MBMKU10114828 MBA – MM II YEAR, ANNAMALAI UNIVERSITY STUDY CENTRE: APACHE, KUWAIT Under the guidance of: Mr. Jomis K. John Submitted to the: Faculty of Management Studies in partial fulfillment of the requirements of the Award of Degree of Master of Business Administration – Marketing Management, Annamalai University July, 2012 Page | 2
  • 3. DEPARTMENT OF MANAGEMENT STUDIES APACHE, KUWAIT BONAFIDE CERTIFICATECertified that this project titled “Marketing Plan for Launching a new AirlineRoute” is a bonafide work of Mr. Vinish Bhaskaran Nair who carried out thisproject work under my supervision. Certified further that to the best of myknowledge the work reported here does not form part of any other project reportor dissertation on the basis of which a Degree or reward was conferred on anearlier occasion to this or any other candidate.JOMIS V. JOHN VINISH VISWANSUPERVISOR COURSE DIRECTOR Page | 3
  • 4. ABSTRACTI propose to undertake a project on “MARKETING PLAN FOR LAUNCHING A NEWAIRLINE ROUTE” in partial fulfillment of the requirements for the award of the Degree ofMaster of Business Administration by Annamalai University , Tamil Nadu.This study is conducted on the very successful Middle Eastern Airline – Qatar Airways.Qatar Airways is the first and largest national carrier of Qatar, born in 1993 & witnessedits first flight on 20thJanuary,1994. Initially, they served a limited network of destinationsAbadan, Beirut, Damascus and Jerusalem. Originally owned by the Royal Family ofQatar, three years later the government of Qatar took a 50% interest in the airline,subsequently doubling the companys capital. The rest belongs to various privateinvestors.Qatar Airways Corporation has always proved its ability to be competitive and distinct inrendering services to all its passengers. This was substantiated when QA became thefirst airline in the world to pass IATA’s new stringent IOSA rules of safety audit.In recent times, Qatar Airways has always been trying to focus on introducing flights tothose destinations which normally have no flights / few flights operating from the GulfRegion. As of 2012, Qatar Airways is ready to launch new flights to Kigali (Rwanda),Gassim (Saudi Arabia), Zanzibar (Tanzania) & Bengaluru (India) . And as part ofSocial Responsibility, the idea to launch these new destinations gave me the necessaryencouragement to prepare this project.In this project, I will wish to take the reader through a detailed walkthrough of stepsinvolved in launching these new airline destinations in addition to the existing routes andpresenting the best industry practices of marketing new airline routes through the South-India city of Bengaluru.This project will be focusing on providing safe, cost-effective & value-based air-transportservice to all strata of society who wish to travel home which can only be offered by thevast and ever growing national carrier of the Country- Qatar AirwaysBy its execution, the country would highlight its interest on potential residents / workersof the country connecting to their media space and various rational triggers. In additionthrough this project plan, we will see how Qatar Airways wishes to promote its launchthrough a campaign. Page | 4
  • 5. ACKNOWLDEGEMENTI would like to express my deepest gratitude to my family, who supported me at all times,and now to complete my MBA. I wish to owe my special gratitude to God for helping mesee this through.I would also like to express my gratefulness to Mr. Vintu P. Varghese, our CourseDirector and Mr. Vinish AMU, Apachia, Kuwait for having graced me with the opportunityto undertake this project and gave me constructive advice and assistance throughout theduration of this work. Vinish Bhaskaran Nair Page | 5
  • 6. TABLE OF CONTENTSItem # Description Page No.1 INTRODUCTION 8 Beginning the Beginning 9 – 10 Company Vision and Goals 11 About the Airlines 12 Airline Product 12 Marketing in an Airline 132 METHODOLOGY 15 About Perception and Reality 16 Existing Destinations 16 – 18 Aims and Objectives 19 Market Analysis and Summary 20 Planning, organizing , Leading and Controlling 21 Meeting with Management 22 Market Segmentation 22 Purpose of the Trip 22 Duration of the Trip 23 Nationality of the Traveler 23 Competition Analysis 24 – 25 Market and Campaign Planning 26 What is a Marketing Plan? 27 Market and Campaign Planning – Media Magazines 27 Market and Campaign Planning – Media Newspapers 27 Market and Campaign Planning – Media TV 28 Market and Campaign Planning – Media Radio 28 Market and Campaign Planning – Event Maximizing Benefits 28 from Participation /Benefits Market and Campaign Planning – Press Conferences 293 SELLING – E-COMMERCE 30 – 314 PROMOTION 32 – 335 FEASIBILITY STUDY 34 Proposed Route Structure and Schedule 356 FINANCIAL ANALYSIS 36 Income Statement Related to Expense 37 Income Statement Related to Revenue 38 Statistical Summary (KPI) 38 Returns on Investment 38 Page | 6
  • 7. 7 SALES AND PROMOTION STRATEGY 39 The Marketing Mix 40 Entry Strategy 41 Distribution 41 Exit Strategy 418 TRADE SHOWS 42 Evaluating Opportunities 43 Preparing for the Exhibition 44 Helpful Tips- Dos and Don’t s 45 After the Exhibition 45 – 469 CONCLUSION 47 – 4810 BIBLIOGRAPHY 49 – 501 Page | 7
  • 8. INTRODUCTION Page | 8
  • 9. BEGINNING THE BEGINNINGQatar Airways was established on November 22, 1993. The airline started its operationson January 20, 1994 using a wet-leased Boeing 767-200ER from Kuwait Airways. It wasoriginally owned by private members of the royal family of Qatar. However, it was re-launched in 1997, under a new management team. Currently, the government of Qatarholds 50% stake of Qatar Airways and the rest is held by private investors.On March 24, 1997, Qatar Airways received their first Airbus A300-600 aircraft on leasefrom AWAS in new Qatar Airways livery. On February 1, 1999, they took delivery of theirfirst new Airbus A320 aircraft (A7-ABR) on lease from Singapore Aircraft LeasingEnterprise (SALE).On May 2002, the Government of Qatar withdrew from Gulf Air. By that time QatarAirways was already a fast growing air service & had 21 airbuses.Soon after on May 10, 2003, Qatar Airways took delivery of their first Airbus A330-200aircraft (A7-ACA). On January 11, 2004, at the Dubai Air-show, Qatar Airways orderedAirbus A380s and A340-600s. Their first A340 was delivered on September 8, 2006.On June 18, 2007 Qatar Airways became the launch customer for the Airbus A350 whenit ordered 80 aircraft worth US$16 billion, at the Paris Air Show. [ On June 27, 2007,Qatar Airways made its first flight to the US when it began service to New York. Page | 9
  • 10. On November 11, 2007, Qatar Airways ordered 60 Boeing 787-8 Dreamliners and 32Boeing 777s. On November 29, 2007, the airlines first Boeing 777-300ER arrived atDoha.On February 3, 2009, the airline took delivery of its first Boeing 777-200LR. The "LR"stands for "Long Range”.On June 15, 2009, at the Paris Air Show, Qatar Airways ordered 20 Airbus A320 and 4Airbus A321 aircraft worth $1.9bn.On October 12, 2009, Qatar Airways completed the world’s first commercial passengerflight powered by a fuel made from natural gas, and on December 1, 2009 QatarAirways first scheduled flight to Australia arrived in Melbourne.On May 18, 2010, the airline put its first Boeing 777F (A7-BFA) into service, with a flightfrom Doha to Amsterdam. The aircraft had been delivered on May 14, 2010.Qatar Airways is expanding. The airline has launched 22 new destinations since 2010,with 9 more destinations announced. These new destinations which Qatar Airways hasalready launched are Ankara, Aleppo, Bangalore, Barcelona, Brussels, Bucharest,Budapest, Buenos Aires, Copenhagen, Hanoi, Montreal, Nice, Phuket, São Paulo,Shiraz, Kolkata, Medina, Oslo, Sofia, Stuttgart and Venice, Tokyo, Baku, Tbilisi, andEntebbe . These new routes will bring the number of destinations Qatar Airways servesfrom 85 to 110 worldwide.On June 22, 2011, Qatar Airways was recognized as the Worlds Best Airline at the 2011World Airline Awards, in a ceremony held at the French Air and Space Museum as partof the 2011 Paris Air Show.In November 2011 at the Dubai Air show, the airline announced an order of 55 Airbusplanes: 50 A320neo and 5 A380, in addition to 2 Boeing 777 freighters.On January 27, 2012 Qatar withdrew from negotiations to buy Spanish carrier Span air,which later ceased operations on the same day. Page | 10
  • 11. COMPANY VISION AND GOALSQatar Airways aims at setting the standard for customer orientation and become anadmired airline to fly, to invest in, and to work for.To become air service provider with global reach -Qatar Airways aims to achieve this goal by focusing on 3 critical factors: • Quality • Reliability • World-class NetworkQatar Airways today travels to over 100 destinations worldwide on 102 aircraft includingtheir own Airbus A300-600 and Boeing 777 freighters. The recent addition of B777freighters boosted their cargo fleet, opening new routes while significantly increasing ourfreighter capacity.Qatar Airways network provides a global reach for customers in Africa, Europe, NorthAmerica, South America, the Middle East, South East Asia and North Asia. Theirservices extend to multiple destinations within each of these countries, constantlyexpanding in frequency and number of locations.Qatar Airways has made substantial investment in its Doha HUB with staff and facilitiesto ensure passengers who travel with Qatar Airways get the best facilities & treatmentever. For the passenger, they provide specialized services such as ‘DisabilityAssistance’ where ground staff attends to customers with special needs, services forexpectant mothers & young travelers. Page | 11
  • 12. ABOUT THE AIRLINEAirline Business discusses everything about transportation of people and goods fromone point to the other, communication that allows people to interact, leisure that takes uson a holiday and logistics that transports our cargo from one point to other very fast.AIRLINE PRODUCTAirline business is all about promoting their services attracting passengers to use theirservices through various constituents that make up an aircraft. These are PassengerSeat (Passenger) and Cargo Space (freight). Both of these are perishables if left unsoldor unutilized they remain lost forever. Role of marketing is to promote the product,educate the intended audience and assist sales. In other words, to get the passenger –client-customer to purchase and repurchase an airline’s product.Therefore marketing consists of finding out what our customers want , and developing astrategy to satisfy those needs , agreeing on the plan to achieve the strategy and finallyto implement it with the customers as the main focus. Marketing strategies needs to beconstantly updated and re-evaluated to attract business and keep ahead of competitors. Page | 12
  • 13. MARKETING MARKETING STATEGY PLAN MARKETING CYCLE MARKETING ANALYSIS IMPLEMENTATIONMARKETING AN AIRLINEMarketing is not a group of people, nor a department, but a way of doing business andthinking. Marketing must flow through a whole organization and must be included ineveryday plans and operations. It is also a subset of the organization strategy andassists in meeting objectives of an organization by ensuring that the products andservices are sold to the right market, meeting market needs and most importantly- at aprice that will yield profit.A marketing strategy translates understanding the gap between visions (where we wantto be) and today (where we are) into a series of actions to get there.Airlines have a very important role to understand the dynamic characteristics of theindustry, where they must sense change in advance and prepare for it. A real lifeexample of this can be seen in the “legacy” versus low-cost airline.Legacy carriers are large, bureaucratic and complex where change does occur but takeslot of time and effort - to get it through the system.While, low-cost airlines, on the other hand are dynamic, proactive and tend to listen tothe market whole heartedly. Page | 13
  • 14. Most important constituents of marketing are: - 1. Products (what is the airline product?) 2. Price (What is the price in the airline sector?) 3. Promotion (What do we promote in the airline business?) 4. Place (What is the place in the airline industry?)But in an airline environment, in addition to all this there are other crucial decisions/considerations that need to be considered as well. 5. The passenger –Need to know the passengers, their traits, habits, trends, demographics, size etc who will be flying .They will also be having certain decisions to make ahead of their selection: a. Will I travel? b. How will I get there (by plane, train, car, bus , ship etc.) c. Am I prepared to transit or do I insist on direct journeys? d. Which airline will I fly with? e. What class of air will I travel in?Cargo Customer is that consumer of the Cargo Airline product, in most cases is theFreight forwarder –the intermediary. Unlike passenger travel, the consumer here simplywants his or her cargo to get from one point to another, with no damage, as fast aspossible and for the lowest possible price. There are expectations though; valuablecargo, live animals etc may dictate preference for one carrier over another but rarely inthe case of general goods transportation. 6. Marketing environment – Political conditions, economic situation, social trends, technological and environmental aspects etc. 7. The Strategy this describes the overall plans and ambitions of the airline - enterprise 8. Product Design and Development - What is the product? 9. Pricing and Revenue Management –What will the passengers pay? Page | 14
  • 15. 10. Distribution and Control –How do we distribute the airlines products and service?11. The Decision –What influences a Passenger’s / Consumer’s /Customer’s decision? a. Personal experience if he/ she has had b. Opinion (of a close relative, friend or colleague) c. Word-of-mouth –personal recommendation (from trusted sources) d. Media (TV, newspapers, magazines, radio etc.) e. Internet (probably one of the most influential tools in travel today) f. Corporate guidelines (if business travel is involved) g. Tour Package (little or no possible choice of airlines) h. Air Miles –FFP points, self benefit programs etc. 2 Page | 15
  • 16. METHODOLOGY Page | 16
  • 17. ABOUT PERCEPTION AND REALITYIn reality, working class constitutes the largest portion of flight seats. The Middle Easthas offered a great amount of working opportunities for all classes of labor and hencethe largest consumers in air tickets in the country. But in perception, Qatar Airways areplaced in a much higher position from where they promise to provide highest customersatisfaction. It has always tried to control pricing keeping in view the growing demandsand requirements of its trusted customers.EXISTING DESITNATIONSQatar Airways presently operates for the following destinations namely categorized asper continents:- MIDDLE ASIA AFRICA The AMERICAS EUROPE AUSTRALIA EASTAhmedabad Benghazi Atlanta Amsterdam Abu Dhabi MelbourneAleppo Cape Town Chicago Ankara Aleppo PerthAlexandria Casablanca Houston Athens AlexandriaAmman Dar Salaam Montreal Barcelona AlgiersAmritsar Entebbe Newark Berlin AmmanAnkara Khartoum New York City Berlin BaghdadBaghdad Kigali Sao Paulo Brussels BahrainBahrain Lagos Toronto Bucharest BeirutBaku Luxor Washington, D.C. Budapest CairoBangalore Malé Buenos Aires DammamBangkok Mashhad Copenhagen DamascusBeijing Mombasa Frankfurt DohaBeirut Nairobi Geneva DubaiBenghazi Sanaa Hahn ErbilCairo Tbilisi Hambantota GassimCebu Tripoli Helsinki JeddahChongqing Tunis Johannesburg KuwaitColombo Zanzibar Kiev MedinaDamascus London RiyadhDammam London MuscatDar es Salaam Luxembourg SharjahDelhi Madrid Shiraz Page | 17
  • 18. MIDDLEASIA EUROPE EAST Page | 18
  • 19. Denpasar Manchester TehranDhaka MilanDoha MoscowDubai MunichGoa NiceGuangzhou OsloHambantota ParisHanoi RomeHo Chi MinhCity SofiaHong Kong Stockholm St.Hyderabad PetersburgIslamabad StuttgartIstanbul VeniceJakarta ViennaJeddah ZaragozaJohor Bahru ZagrebKarachi ZurichKathmanduKigaliKilimanjaroKochiKolkataKozhikodeKuala LumpurKuwaitLahoreLuxorMadridMahéMaléManilaMashhadMedinaREQUIREMENTSAs a company Qatar Airways has always tried to aim at setting standards for customerorientation and become admired airlines to fly in, to invest in and to work for. In realityworking class of the society constituted the largest portion of the flight seats. As Page | 19
  • 20. mentioned earlier the Middle East has always been a dream destination for hugeworking opportunities for the middle and lower class residents.However there are a number of technical marketing required to implement this step forprofit making which is part of corporate responsibility. Page | 20
  • 21. AIMS AND OBJECTIVESThe aim of this project would be to extract and understand the current consumer market,being sensitive to their needs and providing facilities and services that would cater to allclasses and levels of the resident society in the country. In addition following are a briefof what I would like to achieve by presenting this project:- 1- Identify and prepare a survey / analysis of the actual wants of the common class 2- Create a unique value proposition 3- Defining the market strategy and tactics 4- Test the concept and marketing approach 5- Roll out the campaign 6- Know the product lifecycle.Once these have been identified, process will quickly shift itself from implementation tothe execution stage. Page | 21
  • 22. MARKET ANALYSIS SUMMARYA market survey teams up to understand the pulse of the expatriate communitybelonging the Indian City of Bengaluru . It also understands the frequency of travelcarried out by the passengers in a year and the amount of luggage carried ,the nearestairport accessible etc. From this analysis carried out, strategies and market plans areprepared to proceed with implementing the maiden flights to Bengaluru from Doha.In addition it tries to compare the pricing and promotional strategies set forth by itsregional heavy weight competitors such as Etihad & Emirates. The marketing analysisteam is also responsible in filtering space usage by all other major airlines in media,other communication sources etc.A great portion of an airline’s marketing plan’s success depends on a thorough analysisof the market demand through the use of expectations, predictions and projections. Suchanalysis is dependant on forecasting techniques. Forecasting is the attempt to quantifythe demand in a future time period. Quantification can be in terms of revenue or somephysical volume such as revenue passengers kilometer (RPK) or passengersenplanement. Planning for the future cannot be made without forecasting the demand.How to analyze market demand levels?Each forecast performed for market analysis serves a particular purpose;  Short term forecasts ( from one month to max. 1 year) covers the day-to-day operations such as staffing stations, evaluating current competitive situations in the market and projecting short term equipment needs.  Medium term forecasts (one to five years) includes inputs as route planning decisions  Long term forecasts (five to ten years) include fleet planning decisions and long term financial commitments Page | 22
  • 23. These forecasts should be used by Qatar Airways to carry out three importantmanagement functions: -PLANNING, ORGANIZING, LEADING AND CONTROLLINGPlanning –This includes market identification, segmentation, service levels, aircraft andfleet selection.Organizing – Every airline must effectively organize and plan its limited resources.Leading – Provides the desired direction towards the objectives.Controlling – The measurement and subsequent adjustment of the airlines actualperformance (physical volume or revenue) against the prevailing market as well asinternal forecasts. o Availability of data o Accuracy of available data o Management sophistication o Intended forecast application o Availability of electronic data processing Page | 23
  • 24. MEETING WITH MANAGEMENTA high level meeting is first organized between various departments involved inimplementing the thought and the executors who will be involved in inviting the generalpublic to absorb their thoughts.MARKET SEGEMENTATIONTo begin marketing a new route, marketing begins with market segmentation. Marketsegmentation is done based on the following factors: - 1- The purpose of the Trip – can be for business or leisure or religious or medical reasons 2- Duration of the Trip – Can be short or long or haul. 3- Nationality of the traveler – Based on culture, norms, requirements or practices.PURPOSE OF THE TRIPPurpose of the trip can vary between businesses, personal or leisure travel. Businesshas two subcategories corporate and independent business travel. Corporate trips arethose that are less price sensitive with passengers most likely to travel business or firstclass and independent are those which are more price sensitive and likely to travel onspecial deals or economy class.Leisure makers are again distinguished as holidaymakers and VFR traffic.Holidaymakers count the entire trip as a cost which includes both the hotel and air fare.VFR includes just the ticket cost , accommodation and food is usually free at thedestination. Page | 24
  • 25. DURATION OF THE TRIPDuration explains whether the trip is short or a long haul travel. For shorter flights theairport experience is equally important as the flight, while for longer duration flights theflight and on-board service is more important.NATIONALITY OF THE TRAVELLERThere is usually a lot of difference existing between travelers from different parts of thecountry. And hence their individual requirements may also vary accordingly. A travelerfrom the Middle East is one who would opt to travel an F or a J Class with minimumluggage, while a traveler from Africa is usually a trader flying economy with a lot ofexcessive luggage.A business traveler generally considers the following factors before making his/her trip :-  Convenience – schedule and time table  On-time performance  Airport location and proximity  Seat preference and ticket flexibility – online checking  Generous loyalty programs  Airport features and services  In-flight services and comfort  Airport transfers and limo services. Page | 25
  • 26. COMPETITION ANALYSISBefore analysis oneself, Qatar Airways should analyze the regional heavyweights whohave been in market as much as they have such as Etihad, Gulf Air, Emirates etc. Thiswill then require an analysis study to be prepared and presented to the management andheads of various departments to further analyze and prepare our strategies beforesetting out.Competition takes place any one or many respects such as pricing, facilities provided,media coverage, market positioning, presence and expenditures related to them all.Emirates as of now spends the most in media communication, and then comes EtihadAirways. The next positions vary, as the airlines generally come into media when anysales campaigns come up.Competition analysis is the assessment of strengths and weaknesses of the existing andfuture growing airliners. This analysis provides both offensive and a defensive strategicdecisions / plans to defend own market position. A competitor profiling unites all therelevant sources of competitor analysis into one framework –to support an efficient andeffective strategy and subsequent implementation. Page | 26
  • 27. Page | 27
  • 28. MARKET & CAMPAIGN PLANNINGOverviewSuccessful campaigns tend to be carefully researched, well-thought-out and focused ondetails and execution, rather than resting on a single, grand idea.Planning a marketing campaign starts with understanding your position in themarketplace and ends with details such as the wording of an advertisement. You mayalso want to include decisions about uniforms, stationery, office décor and the like inyour marketing plan.Keep in mind that your plan is not supposed to be a prison. You have to leave room tomake changes as you go along because no plan can perfectly capture reality. But youshould also be able to commit fully to implementing your plan-or some future version ofit-if you want to take a strong step toward Page | 28