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presentation is about Air France Marketin criteria which discuss about how this company formed and growth through world copatiors.

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  1. 1.
  2. 2. INTRODUCTION<br />Air France was formed on 7 October 1933 from a merger of Air Orient,<br /> Air Union , CompagnieGénéraleAéropostale , CompagnieInternationale de Navigation Aérienn (CIDNA),, and SociétéGénérale de Transport Aérien (SGTA). In 1990, the airline acquired the operations of French domestic carrier Air Inter and international rival UTA – Union des Transports Aériens. Air France served as France's primary national flag carrier for seven decades prior to its 2003 merger with KLM. Between April 2001 and March 2002, the airline carried 43.3 million passengers and had a total revenue of €12.53bn. In November 2004, Air France ranked as the largest European airline with 25.5% total market share, and was the largest airline in the world in terms of operating revenue.<br /> <br />
  3. 3. Air France is looking to increase the share of its’ own in the U.S air travel market.<br />According to Sharon Benstein , director of insights media contacts, the revenue of this French company<br />increasing by its’ media marketing strategy through ROA & online advertising.<br />SEM (Search Engine Market) has grown by 62% from 2005 to 2006 which equals to $9.4 billion.<br />
  4. 4. Earlier Life of Air France<br /><ul><li>Five French Airlines merged to form Air France.
  5. 5. New hub setup at the main airport of the I1e de France Region in Paris
  6. 6. 75 years later, the hub had grown to be one of the most efficient in Europe with largest number of connections.
  7. 7. July 1, 1946, first flight to the U.S from Paris successfully lunched in 19 hours 50 minutes.
  8. 8. 2007, 383 aircrafts served 185 destinations in 83 countries.
  9. 9. May 5 2004, concept of “One Group, Two Airlines” between KLM and Air France with the name of Sky Team, 109 countries and 225 destinations with 150,000 workforces.
  10. 10. Air France grew, based on two strategies in it’s aircraft fleet management.</li></li></ul><li>Rationalization and Flexibility<br /><ul><li>Air France was able to adopt quickly to the changing demands. In low demands season the company had to reduce the capacity by eliminating unnecessary aircrafts.
  11. 11. Substantial part of its’ fleet was on short or medium term lease. Known as “Progressive Operating Lease”.
  12. 12. The practice had dedicated positive results form 1999 to 2007 in crisis years for airline industry.
  13. 13. During 2006 and 2007 global economy grew by 4.9% and airline traffic 6.6% according to the AEA Air France revenue increased by 5% which equals 73.5 million passengers carried which posted 5.1% rise in unit revenue per available seat Kilometres.</li></li></ul><li>The Airline Industry & Its’ Competitive Landscape<br />Historically, low return industry, bankruptcies and ever fluctuating demand.<br /><ul><li>2006 finally improved
  14. 14. 2000 - 2006, 42$ billion losses.
  15. 15. 2006, $500 million (0.1% revenue) break even.
  16. 16. 2006 operating income $13 billion more than double comparing in 2005 which was 3% of revenue.
  17. 17. $42 billion losses from 2000 - 20006 generated in U.S market
  18. 18. 2006 returned profitability excluding $10 billion bankruptcy restructuring.
  19. 19. Outside U.S airlines suffered net losses in 2001, because of September 11 attacks event.</li></li></ul><li><ul><li>International travel had begun fastest growing market.
  20. 20. 2006, number of passengers kilometres grow by 6%
  21. 21. Domestic flights less than 4%.
  22. 22. 2/3 air passengers was domestic
  23. 23. RPK (Revenue Passenger Kilometres), 60% revenue for international travels
  24. 24. 50% increase in economy class 2000 - 2006
  25. 25. 2006, 4.3% grew in premium
  26. 26. 2007, American airlines carried more than such as, Lufthansa & British Airways.</li></li></ul><li>Transformation of Travel Industry by the Internet<br /><ul><li>Air France was one of the earliest industry used e-commerce policy.
  27. 27. User friendly browsers was one of the reasons of transformation educational network into consumer-driven network.
  28. 28. User friendly interface made the benefits of browsing faster and at the users’ convenience.
  29. 29. Security trust by customers increased the e-commerce position as fast growing sales medium.
  30. 30. E-Ticketing in cost saving & providing direct sales, has increased the profit of airlines.</li></li></ul><li>Landscape Of The Travel Industry<br />There are Three different types<br /><ul><li> First type, creating website and providing much features beyond the only booking ticket such as, checking time schedule, fleet information and customer loyalty programs. Reasons of increase in e-commerce.</li></ul> Immediately some travel agents came with their own websites<br /><ul><li>Second type, consumers could buy through or, tickets with vacation packages.
  31. 31. Third type, meta searches such as, or They don’t sell, they link customers to the direct websites and makes customer to be able to compare prices and decide where to purchase. These meta searches get companies paid instead of this service which would</li></ul>be an advertising service.<br />
  32. 32. Consumer Adoption Of E-commerce For Travel <br />According to TIA (Travel Industry Association) number of online buyers increased by 263%<br />1996 - 2005.<br />Reason of this growth could be the intangibility of this industry in comparison with other industries. In others, consumers rather to touch and see before making any purchase.<br />
  33. 33. Search Engine Marketing<br /><ul><li>Sorting web pages based on a search among billions of web pages. This turned SEM to a marketing method for companies.
  34. 34. SEM constructed SERP (Search Engine Result Page) to show relevant pages to given search.
  35. 35. SERP has provided a huge space to connect customers to exactly what they are looking for.
  36. 36. 2006 SEM became to the most successful form of online advertisements.</li></li></ul><li> Search Engine Optimization (SEO) <br /><ul><li>SEO looks for technical aspects such as, URL address, structure, web server settings, information architecture, site usability and text content.
  37. 37. Multimedia websites must add caption to their photos to make them readable for SEOs.</li></li></ul><li>Pay-Per-Click or Sponsored Search<br /><ul><li>Sponsored Search, usually appears at the top of a SERP for relevant search.
  38. 38. Relevancy was determined by those keywords in comparison with competitor bids, the number of times an ad had been clicked on for a keyword, and proprietary “black box” algorithmic criteria from the search engine provider.
  39. 39. Pay-Per-Click, advertiser normally pays based on the number of clicks searcher does on the link.
  40. 40. This feature has been providing by search engines which is different from one to the other.</li></li></ul><li><ul><li>Google is one of the successful ones.
  41. 41. Advertisers put the maximum bids on keywords and set daily budgets for campaigns.
  42. 42. Per-Pay-Click, campaigns were considered easily measurable, due to the ability to track precise actions on the internet.
  43. 43. SEO and Pay-Per-Clicks worked together in a SEM strategy.</li></li></ul><li>Media Contacts And Its Partners<br /><ul><li>Air France turned to internet marketing campaigns and search engine optimization to reach large customer segments in multiple countries including the U.S.
  44. 44. Air France hired Media Contacts to help it achieve to its’ goals in e-commerce marketing strategy.</li></ul>Media Contact<br /><ul><li>Media Contacts which is the global interactive media network of Havas Media ranked sixth among communications consulting companies in the world.</li></li></ul><li><ul><li>1997, Media Contacts was operating 27 offices in 23 countries in Europe, North America, South America, Asia and Oceania.
  45. 45. Media Contacts was been noticed by Air France because they were believed that Media Contacts is paying attention to its’ customers needs and brand importance.
  46. 46. “One of the most refreshing aspects of working with Media Contacts is that they are genuinely passionate about our brand and delivering results for us. They constantly look to improve our</li></ul>online performance through innovative thinking and testing new approaches. The level of analysis and reporting we receive from them is crucial to the continuing success of our business”, Air France says.<br />
  47. 47. DoubleClick<br /><ul><li>Double Click offers technology products and services for internet ad servicing.
  48. 48. Double Click’s advertising exchange service was designed to help customers maximize ROA through dynamic pricing and intelligent bidding.
  49. 49. Double Click, established a web-based search system which was integrated with leading engines such as Google, Yahoo and MSN.
  50. 50. In 1999, at a cost of $1.7 billion, Double Click merged with data-collection agency Abacus Direct, which worked with offline catalogue companies.</li></li></ul><li>Google<br /><ul><li>Began in Jan.1996 as a research project by two PhD students.
  51. 51. 1998 company was incorporated.
  52. 52. Google’s advanced internet search engine technology positioned the company for rapid growth.
  53. 53. 2004 raise $1.67 billion.
  54. 54. June, 2006 Google employed 7,942 full time workers
  55. 55. Google Ad Word and Ad Sense, two programs of internet ad service provider.</li></li></ul><li> Microsoft MSN & Yahoo<br /><ul><li> Micro soft Established August 1995
  56. 56. Focused on e-mail and as an ISP
  57. 57. To compete with Yahoo, they came out with the idea of Interactive Media Group (IMG)
  58. 58. Microsoft Ad Centre designed to work as Google’s Ad Word
  59. 59. Ad Centre used pay-per-click technology.
  60. 60. YahooWas created in 1994&Designed to search other websites
  61. 61. Yahoo pursued differentiation in SEM by combining ads with content matching.
  62. 62. Yahoo’s performance was less positive than Microsoft and Google.</li></li></ul><li>Kayak<br /><ul><li> This web site founded in 2004.
  63. 63. Website provides a service to find a cheap flight
  64. 64. Focusing on a specific niche in the SEM industry
  65. 65. Although monthly losses were running at $500,000, sales volume was increasing at 15 percent per month, reaching $388,000 in September 2005. In addition, the company boasted a click through rate of 8 p0.8 percent industry average for online travel.</li></li></ul><li>Why Air France is a flagship?<br /><ul><li>Air France has made very smart and swift decisions in different conditions of the airline market to get succeed Being merged with other airlines such as KLM with the concept of “One Group, Two Airlines”
  66. 66. Being flexible to adopt aircrafts in different demand seasons.
  67. 67. Being totally understand of e-commerce and taking advantage of it.
  68. 68. Saving cost in sales such as, being direct and e-ticketing</li></li></ul><li> QUESTION?<br /> THANK YOU<br /> GROUP 1<br />