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Customer Segmentation Analysis - Emirates


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A database management project conducted by NYU students. Using crosstab analysis and other data analytic tools to categorize current customers of Emirates into different value groups and create customized marketing strategy to address each of the segmentation.

Published in: Marketing

Customer Segmentation Analysis - Emirates

  1. 1. Emirates Airlines Database Management and Modeling Analida Cuevas Hiroko Usui Niki (Ye) Zhou Danny (Yifan) Zhu
  2. 2. Agenda 1. Industry Overview 2. Techniques for Analysis 3. Segmentation 4. Marketing Plan 5. Measurements & KPI 6. Evaluating ROI
  3. 3. Global Airline Market What is happening in the global airline industry? • Key Stats snapshot (2012) o Industry Revenue: $680B in revenue (1) o Industry Profit: $7.6B ($2.45 profit/passenger) o • Annual growth in next 5 years: 42% o (1) Projected revenue in 2015: $714B Trends: o Slackening passenger demand due to higher fares forecasts (3) o Soaring fuel prices (3) o Huge trend for Merger and Acquisition (United & Continental, AA & US Airways) o The world's passenger traffic centers on North America, Europe and Asia (2) (3)
  4. 4. Regional Potential The Middle East is the fastest growing region for passengers Largest Group: Middle East Airlines Airline Group Revenue $mil Emirates 14,807 Qatar 5,381 Saudi Arabia Airlines 5,300 Etihad Airways 2,951 El Al Israel Airlines 1,972
  5. 5. Regional Potential How does Emirates fare amongst its main competitors?
  6. 6. Global Airline Alliances What are the major Alliances that exist today? Alliance Star Alliance (United Airlines, U.S. Airways, Air China, All Nippon Airways (ANA), Thai Airways, Lufthansa, Swiss International Air Lines, Turkish Airlines, etc.) SkyTeam (Continental Airlines, Delta Air Lines, Northwest Airlines, Korean Air, Air France, Alitalia, KLM Royal Dutch Airlines, etc.) Oneworld (American Airlines, Cathay Pacific, Japan Airlines, Qantas, British Airways, Finnair, etc.) Rest of the Industry (Emirates, Air India, Aer Lingus, Virgin Atlantic, JetBlue, Southwest, etc.) Facts and Figures (as of March 2013) Member Airlines: 28 Countries: 194 Fleet: 4,570 Annual Passengers: 649 million Revenue: $97.9 billion Member Airlines: 19 Countries: 187 Fleet: 4,150 Annual Passengers: 506 million Member Airlines: 13 Countries: 134 Fleet: 2,382 Annual Passengers: 303 million Revenue: $89.9 billion Market Share: 23.2% Member Airlines: n/a Countries: 204 Fleet: 13,082 Annual Passengers: 1,223 million Revenue: $4,651 billion Market Share: 22.9% Market Share: 29.3% Revenue: $97.9 billion Market Share: 24.6% Over 60% of the world’s passengers
  7. 7. Competitors Framework How does Emirates fare amongst its main competitors?
  8. 8. Analysis Techniques Applied How did we analyze the data? Total Revenue * Last Flight Date Crosstabulation 1. Variables: Last Flight Date, Revenue, Number of flights. 2. Crosstab Analysis: Last Flight Date, Revenue • 1 Business Flight = $10,000 Revenue and 1 Leisure Flight = $ 1,500 Revenue • Higher revenue also means higher profit. (High profit rate for Business Class flights) • Customers with higher previous spent are more willing to join a reward program. Data processing: 1. Categorize Last Flight Date into 4 groups: Last 3 month, 3-6 month, 6-9 month, 9-12 month 2. Categorize Total Revenue (Business+Leisure) into 4 groups: less than $10,000, $10,000 to $40,000,$40,000 to $ 70,000, $70,000 and more. 3. Run a Crosstab Analysis in SPSS:
  9. 9. Direct mail or Email Which is more effective? ROAS: Direct Mail = $1.25 Email = $1.50 → There must be a difference in RR across groups Direct Mail RR is 6 times higher than Email RR: Direct Mail Otherwise: Email
  10. 10. Segmentation Scheme
  11. 11. Marketing Plan How would we approach the target audience? 1st Outreach 2nd Outreach High Direct Mail Direct Mail Medium Direct Mail Email Low Email Email Our proposal is to do 2 outreaches in one year, but the details (i.e. qty) for the second outreach will be based on the response rate of the first. The first outreach will occur in the 2nd quarter in time for the summer holiday purchasing. In addition: • • Social Media: In-flight Advertisement: offering a unique advantage in a distinctive environment (Emirates' In-flight Magazine “Open Skies: Twice voted the World’s best by readers of Executive Travel)
  12. 12. Call-to-action What is our main message? ● Sign up to start earning great travel awards for your organization and for yourself. Go to: x
  13. 13. Call-to-action What action do we ask them to take to enroll? Direct Mail: ● Go to link provided and enter promo code EMIR5M to receive 5,000 extra miles when you sign up Email: ● Go to link provided and enter promo code REWRD5M to receive 5,000 extra miles when you sign up
  14. 14. Evaluating Success How do de measure and evaluate success? PRIMARY KPI: ROI Conversion Rate: # of individuals that enrolls Cost per lead • • • SECONDARY KPI: Email: Open Rate Click-through-rate Unsubscribe and spam complaints Direct mail: Response Rate • • • •
  15. 15. ROI for Year 1 What do we expect to achieve?