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    10 step marketing plan cebu pacific group v54 10 step marketing plan cebu pacific group v54 Presentation Transcript

    • 10 STEP Marketing Plan for Cebu Pacific Air, Inc.
      Avellana.Gan.Quizon.Li.Turingan
      June 2011
      http://cebupacificairv54.blogspot.com
    • Disclaimer
      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.
      http://cebupacificairv54.blogspot.com
    • Steps 1 to 5Reaching out to every “Juan”
      Cebu Pacific’s PTM are the budget-conscious young travelers.
      Who want affordable, no-frills travel experience.
      Can opt for Philippine Airlines, AirPhil, ZestAir, Seair
      Gap is there are other brands who can offer lower cost fares and possibly better service
      The market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 Billion
      http://cebupacificairv54.blogspot.com
    • Steps 6 to 10A fun flight at a low cost
      Cebu Pacific offers year-round low fares.
      Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest Air
      Uses sales promotion, word of mouth, advertising, public relations, and events and experiences
      Flights are mainly booked online
      Cebu Pacific adopts niche marketing, anticipates competition
      http://cebupacificairv54.blogspot.com
    • 1. Cebu Pacific’s target market are budget conscious individuals
      • Demographics: 21-35; Male and Female; lower B to C; may be Single or Married
      • Lifestyle: Working or starting to work; budget-conscious; internet savvy; keen to travel
      • Behavior: Travel during long weekend & holidays; with friends/family/colleagues; an average of 3x a year
      http://cebupacificairv54.blogspot.com
    • PTM needs to have the travel experience
      I want to be recognized by my peers.
      I want to belong
      http://cebupacificairv54.blogspot.com
    • 2. PTM wants affordable, no-frills travel experience
      Budget-driven Young Adult Travelers need the security when traveling, a sense of belongingness and recognition from family/peers.
      They choose Cebu Pacific over other airlines because of price, service, safety, extensive distribution coverage, on-time flights, brand promise of a “Fun Flight” experience
      They demand low cost with no-frills service, safe travel, easy booking, fun travelling experience.
      http://cebupacificairv54.blogspot.com
    • 3a. Cebu Pacific has a number of competitors, big and small
      • Direct: Philippine Airlines, ZestAir, AirPhil Express, Seair
      • Indirect: Super Ferry, Negros Navigation, Sulpicio Lines, RORO, private cars, buses
      • Variable: Fare rates, flight availability, destination choices, airline membership, traveler’s budget, reputation, travel packages
      http://cebupacificairv54.blogspot.com
    • Market share as of 2009
      http://cebupacificairv54.blogspot.com
      3b. Price vs Route Matrix of Key Domestic Carriers in the Top 5 Largest Domestic Routes (based on lowest fares offered)
    • 3b. Cebu Pacific dominates the domestic market!
      Market share as of 2009
      http://cebupacificairv54.blogspot.com
    • Cebu Pacific’s Positioning as detailed..
      http://cebupacificairv54.blogspot.com
    • Cebu Pacific’s key differentiators are the most routes per day, youngest fleet age and the “Fun Flight” experience
      http://cebupacificairv54.blogspot.com
    • 4. Cebu Pacific’s Low Fare, Great Value Strategy
      Cebu Pacific changed the landscape of the domestic airline industry through its LOW FARE, GREAT VALUE STRATEGY
      Because of competition, other airlines such as AirPhil, Zest Air and SEA Air were forced to cut fares and offer promos.
      Traditional Positioning was based on luxury, reliability.
      http://sheilanorturingan.blogspot.com
    • 4. Cebu Pacific is strongly positioned as the country’s premium “Low Cost Carrier (LCC)”
      Cebu Pacific is the only airline that:
      • is able to provide the cheapest rate at Php0 base fare,
      • is able to provide lowest fares when there are promos,
      • Offers the most routes per day,
      • Has the youngest fleet age,
      • Guarantees a “Fun Flight” experience
      http://cebupacificairv54.blogspot.com
    • 4. “Positioning”: brand identity from the maker
      “It’s time everyone flies”
      Or occasionally modified with humorous intent as:
      “It’s time ever Juan flies”
      Source: Cebu Pacific Air Website
      http://cebupacificairv54.blogspot.com
    • 5a. Based on PAL’s quarterly revenues, market size is Php 45.54 Billion
      • 2010 Passenger revenue is Php 59.32 Billion1
      • Civil Aeronautics Board reveals PAL average market share of 32.3% for 2010
      • Revenue contribution for the domestic market is 24.8%2
      • Market size is (0.248 x 59.32)/0.323 = Php 45.54 Billion
      http://cebupacificairv54.blogspot.com
    • 5a. Based on PAL’s quarterly revenues, market size is Php 45.54 Billion
      References
      Philippine Airlines Annual and Quarterly Reports 2010 http://www.pse.com.ph/
      Philippine Airlines Annual Report 2010 http://www.pse.com.ph/
      http://cebupacificairv54.blogspot.com
    • 5b. Based on Cebu Pacific’s claimed market share, market size is Php 40.41 Billion
      • Cebu Pacific’s claimed passenger domestic market share is 48.2% for 2010
      • Passenger revenue for 2010 is Php 24.656 Billion
      • Domestic capacity share is 79%
      • Market size is 0.79(24.656 Billion/0.482) = Php 40.41 Billion
      http://cebupacificairv54.blogspot.com
    • 5c. Customer data reveals a market size of Php 41.9 Billion
      • Total domestic passengers for 2010: 16,539,0001
      • Average fare of Cebu Pacific
      • 1999 = Php 23542
      • 2010 = Php 2468.8 (Jan-June 2010)
      • CAGR = 0.48% Growth
      • Average domestic airline fares in 1999 = Php 25213
      • Applying CAGR: 2521x1.048 = Php 2533.34
      • Total domestic passengers x Average airline fare
      • 16,539,000 x 2533.34 = Php 41.9 Billion
      http://cebupacificairv54.blogspot.com
    • 5c. Customer data reveals a market size of Php 41.9 Billion
      References
      Cebu Air, Inc 1Q2011 Results of Operations sourcing Civil Aeronautics Board, Company Filings
      Competition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, August 2001, Table 4. Average fare by airline per sector, 1997-1999 (PhP), Average of Cebu Pacific Air
      Competition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, August 2001, Table 4. Average fare by airline per sector, 1997-1999 (PhP), Average of PAL, Cebu Pacific Air, Air Philippines
      http://cebupacificairv54.blogspot.com
    • 5. Annual market size for the domestic passenger market is Php 40.41 Billion
      Competitor data= Php 45.54 Billion
      Company data = Php 40.41 Billion
      Customer Usage data = Php 41.9 Billion
      http://cebupacificairv54.blogspot.com
    • 6a. Cebu Pacific’s websitehttp://www.cebupacificair.com
      http://cebupacificairv54.blogspot.com
    • 6a. Competitors’ Website
      http://www.zestair.com.ph/
      http://cebupacificairv54.blogspot.com
    • 6a. Competitors’ Website
      http://www.airphils.com/
      http://cebupacificairv54.blogspot.com
    • 6a. Competitors’ Website
      http://www.flyseair.com/
      http://cebupacificairv54.blogspot.com
    • Cebu Pacific, Philippine Airlines, Super Ferry
      http://cebupacificairv54.blogspot.com
    • 6a. Indirect Competitor (SuperFerry’s) website
      http://cebupacificairv54.blogspot.com
    • 6a. Indirect Competitor (Montenegro Shipping Lines’) website
      http://cebupacificairv54.blogspot.com
    • 6b. Cebu Pacific’s Newest Offering : Non-stop LiteFare
      • All-year round fares
      • Earlier booking gets the lower fares
      • Options for prepaid baggage at the
      time of booking (15,20,25,30 kg)
      http://cebupacificairv54.blogspot.com
    • 6b. Cebu Pacific’s Promotional Seat Sale
      http://cebupacificairv54.blogspot.com
    • 6b. Cebu Pacific’s Tour Packages
      http://cebupacificairv54.blogspot.com
    • 6b. Cebu Pacific’s On-Time Performance
      Global Standard
      77%
      Internal Standard
      85%
      http://cebupacificairv54.blogspot.com
    • 7. Cebu Pacific is priced lower than PAL but is generally higher than the other LCCs
      http://cebupacificairv54.blogspot.com
    • 7. Cebu Pacific is 51% lower than PAL but 11% and 21% higher than AirPhil and Zest Air respectively
      http://cebupacificairv54.blogspot.com
    • 8a. Cebu Pacific Air uses Sales Promotion, Word of Mouth, Advertising, Public Relations, and Events and Experiences
      1
      2
      3
      4
      3
      5
      http://cebupacificairv54.blogspot.com
    • Both screenshots are taken on 06/09/2011. These promos came out right after the Php0 fare promo.
      8a. Cebu Pacific has regular seat sale promos
      http://cebupacificairv54.blogspot.com
    • 8a. Cebu Pacific always has at least a 1/3 spread in the newspapers for its ads
      http://cebupacificairv54.blogspot.com
    • 8a. Cebu Pacific came up with the Fun Flights program
      And a dancing cabin crew while explaining the safety procedures!
      Games and prizes
      http://cebupacificairv54.blogspot.com
    • 8a. Cebu Pacific uses Interactive Marketing by…
      Sending emails
      Posting on Facebook
      http://cebupacificairv54.blogspot.com
    • 8a. The company uses various PR campaigns such as press releases, annual reports, and their company magazine - Smile
      http://cebupacificairv54.blogspot.com
    • 8a. Cebu Pacific’s Press Releases: The airline with flying colors
      WWF Award
      Changi Award:
      ISO 9001:2008
      Certificate:
      Marketing Communication Effectiveness Awards 2007
      http://cebupacificairv54.blogspot.com
    • 8a. Cebu Pacific’s Online Press Releases
      CEB breaks 1M passenger record in one month
      CEB flies 2.8 million passengers in Q1, posts 12% increase
      CEB pilot best in the country; wins Airline Pilot of the Year award
      CEB website most popular travel site in the Philippines
      http://cebupacificairv54.blogspot.com
    • Promo fare advertisements sent via email are late at times
      Individuals could just learn about it through friends
      Or perchance they’ve come upon an ad on the newspaper
      8a. Word of Mouth
      http://cebupacificairv54.blogspot.com
    • 8a. The use of social networking sites is also a form of Word of Mouth Marketing
      http://cebupacificairv54.blogspot.com
    • 8a. Marketing communication through Events and Experiences
      http://cebupacificairv54.blogspot.com
    • 8b. AirPhil empasizes on the “free” check-in baggage
      http://cebupacificairv54.blogspot.com
    • 8b. Philippine Airlines has a “lowest fare” search engine
      http://cebupacificairv54.blogspot.com
    • 8b. Seair has the fastest flight to Boracay—at 35mins!
      Number of flights to Boracay is even increased!
      http://cebupacificairv54.blogspot.com
    • 8b. Seair, like Cebu Pacific, also has a PR campaign through its company magazine
      http://cebupacificairv54.blogspot.com
    • 8b. ZestAir has a membership card that acts like a discount card
      http://cebupacificairv54.blogspot.com
    • 8b. Cebu Pacific’s communication stand out because..
      2 to 5 advertising methods are implemented at the same time!
      http://cebupacificairv54.blogspot.com
    • 8b. And no one has yet to do the…
      Php0 fare!
      http://cebupacificairv54.blogspot.com
    • 9. Cebu Pacific’s main distribution channel is the internet
      Three principal distribution channels:
      Internet
      Booking sales office, call centres, client accounts
      Third-party sales outlet
      Distributors
      General Sales Agents
      Wholesalers and Preferred sales agents
      http://cebupacificairv54.blogspot.com
    • 9. Cebu Pacific has many payment options
      Cash and Credit Card Transaction, Over the Counter, ATM, Online Banking, (Mobile) Phone Banking
      http://cebupacificairv54.blogspot.com
    • 10. Cebu Pacific’s generic winning strategy is Niche
      Low Cost Producer
      Supply and Distribution Leverage
      Differentiation
      Niche
      http://cebupacificairv54.blogspot.com
    • 10. Changing the game by finding a niche
      Niche market is price conscious young professionals who want a no-frills service and prefer a “Fun Flight” experience
      Differentiates brand with other LCCs
      End result – No. 1 domestic carrier
      http://cebupacificairv54.blogspot.com
    • Looking Forward: 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
      http://cebupacificairv54.blogspot.com
    • 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
      • Flights to/from 10 countries
      • 49 total destinations (incl. domestic)
      • RP’s leading domestic carrier
      http://cebupacificairv54.blogspot.com
    • 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
      http://cebupacificairv54.blogspot.com
    • 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)
      http://cebupacificairv54.blogspot.com
    • 61
      SUMMARY
      http://cebupacificairv54.blogspot.com
    • Steps 1 to 5Reaching out to every “Juan”
      Cebu Pacific’s PTM are the budget-conscious young travelers.
      Who want affordable, no-frills travel experience.
      Can opt for Philippine Airlines, AirPhil, ZestAir, Seair
      Gap is there are other brands who can offer lower cost fares and possibly better service
      The market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 Billion
      http://cebupacificairv54.blogspot.com
    • Steps 6 to 10A fun flight at a low cost
      Cebu Pacific offers year-round low fares.
      Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest Air
      Uses sales promotion, word of mouth, advertising, public relations, and events and experiences
      Flights are mainly booked online
      Cebu Pacific adopts niche marketing, anticipates competition
      http://cebupacificairv54.blogspot.com
    • 10 STEP Marketing Plan for Cebu Pacific Air, Inc.
      Avellana.Gan.Quizon.Li.Turingan
      June 2011
      64
      http://cebupacificairv54.blogspot.com