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10 step marketing plan-cebu pacific


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  • 1. 10 STEP Marketing Plan for Cebu Pacific
    Kaye Avellana
    June 2011
  • 2. This 10 Step Marketing Plan is part of the mandatory requirements of Prof. Remigio Joseph De Ungria’s AGSB marketing management class.
    The data included in this report are based on publicly available data such as those on internet websites, news, package declarations, public reports.
    When appropriate, data are “masked” so as not to create unexpected conflicts.
    The reports are posted and linked on slideshare, blogs and facebook so that there is easier sharing among students from different marketing classes.
  • 3. Summary: Steps 1 to 5
    Cebu Pacific’s target market are budget-conscious travelers
    Cebu Pacific fliers need low-cost airfares to satisfy social and personal needs of traveling
    Cebu Pacific’s direct competitors are: AirPhilExpress, Zest Air, Philippine Airlines, and AirAsia Philippines
    The opportunity gap lies in capitalizing on the vast number of destinations and maintaining low-cost status
    The total market size for domestic air travel was 8.4 million tourists or PhP 42 Billion in 2010. Estimated growth for 2011 is 12%.
  • 4. Summary: Steps 6 to 10
    Cebu Pacific has the most domestic destinations available
    Cebu Pacific is low-cost compared to PAL and SEAir, but varies depending on season with ZestAir and AirPhilExpress
    Cebu Pacific promos are frequent and very attractive to the market through the use of email blasts, word-of-mouth, print ads, etc.
    Apart from having covered most domestic tourist spots, they also have an efficient online booking system
    Cebu Pacific combines low-cost airfare and number of destinations to attract customers and make purchases easy by booking online
  • 5. Primary Target Market
    Age 21-35; Male and Female; Single and Married; Social Class BC
    Employed; budget-conscious;
    Avid leisure traveler; almost always with loved ones (friends/family/significant other)
    Willing to sacrifice comfort for savings
    Not afraid to make online purchases
  • 6. PTM’s Needs/Wants/ Demands
    The need to feel they can afford to travel, the independence to pay for trips & freedom to travel whenever they want
    The need to belong and have relationship-enriching experiences with people they love
    Reference: Maslow’s Hierarcy of Needs Marketing Management, 11th ed, Philip Kotler
  • 7. PTM’s Needs/Wants/ Demands
    They need to feel the satisfaction of being able to afford and treat themselves to a vacation whenever the opportunity strikes. They want to share these vacations with great company such as their family, friends and significant other and build memories that will last a lifetime.
    Wants: They want a reputable low-cost carrier that could give them the chance to fulfill their travel needs without hurting the wallet.
    Demands: They want the best value for their money, being able to reach the destination at hand without compromising safety and service quality in the process.
  • 8. Cebu Pacific’s competitors
    Direct Competitors
    AirPhilExpress, ZestAir, Air Asia Philippines (3rd QTR 2011), Philippine Airlines, SeAir
    Indirect Competitors
    Bus Lines (Victory Liner, PhilTranCo, etc)
    Ferries (WG&A, Sulpicio, RoRo, etc)
    Price, Comfort, Availability of Routes, Travel Time, Companions’ Characteristics/Personalities
  • 9. Price vs. Socio-Economic Class
    Price vs. SEC Matrix
    Bus Lines/
  • 10. Benefit positioning vs. brand map for Domestic Airlines
    Benefit Positioning vs. Brand Matrix
    *C/S: Code-share
  • 11. Market Gap
    Cebu Pacific is the pioneer low-cost airline in the country wherein Zest Air and AirPhilExpress have followed suit. Air Asia is following the same marketing positioning as CP but with international branding.
    CP can focus on tenure in the industry as well as continued low-cost offers to stay ahead of Air Asia.
    CP is notorious for delayed flights and poor customer service.
    In order to stay on top in the low-cost airline segment, CP should improve on quality service and maintain their low-cost fares. They should also try to penetrate the tourist-focused routes which are currently monopolized by competitors (Marinduque, Batanes)
  • 12. Cebu Pacific is still the domestic market leader
    Cebu Pacific has successfully maintained its position as the country’s largest domestic carrier
    48.2% of sales from domestic air travel market in 2010
    From January to June 2010, Cebu Pacific flew 4.1 million domestic passengers, 1.2 million passengers more than Philippine Airlines (PAL).*
    The total market size for domestic air travel was 8.4 million tourists in Q1 2010
  • 13. Cebu Pacific held a 48.7% domestic market share over its competitors in 2010
    Cebu Pacific = 48.7%
    Philippine Airlines = 34.5%
    AirPhilExpress = 7.9%
    Zest Air = 7.3%
    SeAir = 1.6%
    Revenues of CP in 2010 was PhP 14.91 Billion, a 30.9% increase from 2009 values.
    Cebu Pacific is still the domestic market leader
  • 14. Domestic Travel Market Size
    Competitor data= PhP 21.6 Billion
    Company data = PhP 20.5 Billion
    Customer Usage data = PhP 42.1 Billion
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 20. Print Ads – domestic airlines
  • 21. Product Description
    Cebu Pacific
    has promo fares year round and for any occasion
    offers the most routes for travelers
    has the “fun” factor (in-flight activities)
    Pushes hard for their tag line “it’s time every Juan flies” and is manifested in all their advertising and promotional materials
  • 22. Price Comparison
    Although some airlines are cheaper than CP in other destinations, CP is consistent in maintaining affordable airfare in all routes
  • 23. Modes of Communication
  • 24. Sales Promotions
  • 25. Advertising
  • 26. Direct Marketing
  • 27. Public Relations
    Philippine budget carrier buys 37 new Airbus jets
    Philippine pilot soars above gender barrier
  • 28. Events & Experiences
  • 29. Word of Mouth
  • 30. Sales Promotions-Competitors
  • 31. Advertising-Competitors
  • 32. Purchase Point
    Online Sales –
    Call Center Sales
    Local & International banks nationwide
    Cebu Pacific ticketing office
    Accredited Travel Agencies
    Electronic copy via email
    Print-out from ticketing office/travel agencies
  • 33. Cebu Pacific’s Generic Winning Strategy
    Low Cost Producer
    Supply and Distribution Leverage
  • 34. Differentiation as the key
    Common: low-cost flights, year-round promos, good number of fleets, online booking
    Difference: no-frills & fun flights, most number of fleets, aggressive public communication strategies
  • 35. Recent Market-changing Event
    Operations will begin Q3 2011
    Joint venture between Air Asia & Filipino investors
    Promises low fares to compete with Cebu Pacific & PAL
    Travel to both domestic & international destinations with Clark as its hub
    5 brand-new A320 planes this year with target of 20 by 2015
  • 36. Cebu Pacific VS Air Asia
    Started operations in 1996
    Flights to/from 25 countries
    78 total destinations (excl. domestic)
    SEA’s biggest low-cost carrier
    • Started operations in 1996
    • 37. Flights to/from 10 countries
    • 38. 49 total destinations (incl. domestic)
    • 39. RP’s leading domestic carrier
  • 40. Adapting to Change
    Air Asia is a rookie in the Philippine Market
    Cebu Pacific should continue offering promos that connect to the public, using their tag-lines such as “for every Juan” to capture that sense of Pinoy ownership
    Air Asia is a more experienced airline
    CP should improve on customer service and timely schedule of flights so that users will not switch to Air Asia
  • 41. Adapting to Change
    Air Asia is no-frills and no-fun
    Air Asia also follows the no-frills flights model. However, they also don’t have additional activities such as the Fun Flights, an advantage when capturing the Filipino market.
    Air Asia will be directly competing with CP and PAL for domestic & international destinations
    CP should increase their destinations to include up & coming tourist attractions, thereby widening their lead against old & new competitors (Batanes, Marinduque, etc)
  • 42. 10 STEP Marketing Plan for Cebu Pacific
    Kaye Avellana
    June 2011