10 step marketing plan cebu pacific group v54

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10 step marketing plan cebu pacific group v54

  1. 1. 10 STEP Marketing Plan for Cebu Pacific Air, Inc.<br />Avellana.Gan.Quizon.Li.Turingan<br />June 2011<br />http://cebupacificairv54.blogspot.com<br />
  2. 2. Disclaimer<br />This 10 Step Marketing Plan is part of the mandatory requirements of Prof. Remigio Joseph De Ungria’s AGSB marketing management class.<br />The data included in this report are based on publicly available data such as those on internet websites, news, package declarations, public reports.<br />When appropriate, data are “masked” so as not to create unexpected conflicts.<br />The reports are posted and linked on slideshare, blogs and facebook so that there is easier sharing among students from different marketing classes.<br />http://cebupacificairv54.blogspot.com<br />
  3. 3. Steps 1 to 5Reaching out to every “Juan”<br />Cebu Pacific’s PTM are the budget-conscious young travelers.<br />Who want affordable, no-frills travel experience.<br />Can opt for Philippine Airlines, AirPhil, ZestAir, Seair<br />Gap is there are other brands who can offer lower cost fares and possibly better service<br />The market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 Billion<br />http://cebupacificairv54.blogspot.com<br />
  4. 4. Steps 6 to 10A fun flight at a low cost<br />Cebu Pacific offers year-round low fares.<br />Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest Air<br />Uses sales promotion, word of mouth, advertising, public relations, and events and experiences <br />Flights are mainly booked online <br />Cebu Pacific adopts niche marketing, anticipates competition<br />http://cebupacificairv54.blogspot.com<br />
  5. 5. 1. Cebu Pacific’s target market are budget conscious individuals <br /><ul><li>Demographics: 21-35; Male and Female; lower B to C; may be Single or Married
  6. 6. Lifestyle: Working or starting to work; budget-conscious; internet savvy; keen to travel
  7. 7. Behavior: Travel during long weekend & holidays; with friends/family/colleagues; an average of 3x a year</li></ul>http://cebupacificairv54.blogspot.com<br />
  8. 8. PTM needs to have the travel experience <br />I want to be recognized by my peers.<br />I want to belong<br />http://cebupacificairv54.blogspot.com<br />
  9. 9. 2. PTM wants affordable, no-frills travel experience<br />Budget-driven Young Adult Travelers need the security when traveling, a sense of belongingness and recognition from family/peers.<br />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<br />They demand low cost with no-frills service, safe travel, easy booking, fun travelling experience.<br />http://cebupacificairv54.blogspot.com<br />
  10. 10. 3a. Cebu Pacific has a number of competitors, big and small<br /><ul><li>Direct: Philippine Airlines, ZestAir, AirPhil Express, Seair
  11. 11. Indirect: Super Ferry, Negros Navigation, Sulpicio Lines, RORO, private cars, buses
  12. 12. Variable: Fare rates, flight availability, destination choices, airline membership, traveler’s budget, reputation, travel packages</li></ul>http://cebupacificairv54.blogspot.com<br />
  13. 13. Market share as of 2009<br />http://cebupacificairv54.blogspot.com<br />3b. Price vs Route Matrix of Key Domestic Carriers in the Top 5 Largest Domestic Routes (based on lowest fares offered)<br />
  14. 14. 3b. Cebu Pacific dominates the domestic market!<br />Market share as of 2009<br />http://cebupacificairv54.blogspot.com<br />
  15. 15. Cebu Pacific’s Positioning as detailed..<br />http://cebupacificairv54.blogspot.com<br />
  16. 16. Cebu Pacific’s key differentiators are the most routes per day, youngest fleet age and the “Fun Flight” experience<br />http://cebupacificairv54.blogspot.com<br />
  17. 17. 4. Cebu Pacific’s Low Fare, Great Value Strategy<br />Cebu Pacific changed the landscape of the domestic airline industry through its LOW FARE, GREAT VALUE STRATEGY<br />Because of competition, other airlines such as AirPhil, Zest Air and SEA Air were forced to cut fares and offer promos.<br />Traditional Positioning was based on luxury, reliability.<br />http://sheilanorturingan.blogspot.com<br />
  18. 18. 4. Cebu Pacific is strongly positioned as the country’s premium “Low Cost Carrier (LCC)”<br />Cebu Pacific is the only airline that:<br /><ul><li>is able to provide the cheapest rate at Php0 base fare,
  19. 19. is able to provide lowest fares when there are promos,
  20. 20. Offers the most routes per day,
  21. 21. Has the youngest fleet age,
  22. 22. Guarantees a “Fun Flight” experience</li></ul>http://cebupacificairv54.blogspot.com<br />
  23. 23. 4. “Positioning”: brand identity from the maker<br />“It’s time everyone flies”<br />Or occasionally modified with humorous intent as:<br />“It’s time ever Juan flies”<br />Source: Cebu Pacific Air Website<br />http://cebupacificairv54.blogspot.com<br />
  24. 24. 5a. Based on PAL’s quarterly revenues, market size is Php 45.54 Billion<br /><ul><li>2010 Passenger revenue is Php 59.32 Billion1
  25. 25. Civil Aeronautics Board reveals PAL average market share of 32.3% for 2010
  26. 26. Revenue contribution for the domestic market is 24.8%2
  27. 27. Market size is (0.248 x 59.32)/0.323 = Php 45.54 Billion</li></ul>http://cebupacificairv54.blogspot.com<br />
  28. 28. 5a. Based on PAL’s quarterly revenues, market size is Php 45.54 Billion<br />References<br />Philippine Airlines Annual and Quarterly Reports 2010 http://www.pse.com.ph/<br />Philippine Airlines Annual Report 2010 http://www.pse.com.ph/<br />http://cebupacificairv54.blogspot.com<br />
  29. 29. 5b. Based on Cebu Pacific’s claimed market share, market size is Php 40.41 Billion<br /><ul><li>Cebu Pacific’s claimed passenger domestic market share is 48.2% for 2010
  30. 30. Passenger revenue for 2010 is Php 24.656 Billion
  31. 31. Domestic capacity share is 79%
  32. 32. Market size is 0.79(24.656 Billion/0.482) = Php 40.41 Billion</li></ul>http://cebupacificairv54.blogspot.com<br />
  33. 33. 5c. Customer data reveals a market size of Php 41.9 Billion<br /><ul><li>Total domestic passengers for 2010: 16,539,0001
  34. 34. Average fare of Cebu Pacific
  35. 35. 1999 = Php 23542
  36. 36. 2010 = Php 2468.8 (Jan-June 2010)
  37. 37. CAGR = 0.48% Growth
  38. 38. Average domestic airline fares in 1999 = Php 25213
  39. 39. Applying CAGR: 2521x1.048 = Php 2533.34
  40. 40. Total domestic passengers x Average airline fare
  41. 41. 16,539,000 x 2533.34 = Php 41.9 Billion</li></ul>http://cebupacificairv54.blogspot.com<br />
  42. 42. 5c. Customer data reveals a market size of Php 41.9 Billion<br />References<br />Cebu Air, Inc 1Q2011 Results of Operations sourcing Civil Aeronautics Board, Company Filings<br />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<br />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<br />http://cebupacificairv54.blogspot.com<br />
  43. 43. 5. Annual market size for the domestic passenger market is Php 40.41 Billion<br />Competitor data= Php 45.54 Billion<br />Company data = Php 40.41 Billion<br />Customer Usage data = Php 41.9 Billion<br />http://cebupacificairv54.blogspot.com<br />
  44. 44. 6a. Cebu Pacific’s websitehttp://www.cebupacificair.com<br />http://cebupacificairv54.blogspot.com<br />
  45. 45. 6a. Competitors’ Website<br />http://www.zestair.com.ph/<br />http://cebupacificairv54.blogspot.com<br />
  46. 46. 6a. Competitors’ Website<br />http://www.airphils.com/<br />http://cebupacificairv54.blogspot.com<br />
  47. 47. 6a. Competitors’ Website<br />http://www.flyseair.com/<br />http://cebupacificairv54.blogspot.com<br />
  48. 48. Cebu Pacific, Philippine Airlines, Super Ferry<br />http://cebupacificairv54.blogspot.com<br />
  49. 49. 6a. Indirect Competitor (SuperFerry’s) website<br />http://cebupacificairv54.blogspot.com<br />
  50. 50. 6a. Indirect Competitor (Montenegro Shipping Lines’) website<br />http://cebupacificairv54.blogspot.com<br />
  51. 51. 6b. Cebu Pacific’s Newest Offering : Non-stop LiteFare<br /><ul><li> All-year round fares
  52. 52. Earlier booking gets the lower fares
  53. 53. Options for prepaid baggage at the</li></ul> time of booking (15,20,25,30 kg)<br />http://cebupacificairv54.blogspot.com<br />
  54. 54. 6b. Cebu Pacific’s Promotional Seat Sale<br />http://cebupacificairv54.blogspot.com<br />
  55. 55. 6b. Cebu Pacific’s Tour Packages<br />http://cebupacificairv54.blogspot.com<br />
  56. 56. 6b. Cebu Pacific’s On-Time Performance<br />Global Standard <br />77%<br />Internal Standard<br />85%<br />http://cebupacificairv54.blogspot.com<br />
  57. 57. 7. Cebu Pacific is priced lower than PAL but is generally higher than the other LCCs<br />http://cebupacificairv54.blogspot.com<br />
  58. 58. 7. Cebu Pacific is 51% lower than PAL but 11% and 21% higher than AirPhil and Zest Air respectively<br />http://cebupacificairv54.blogspot.com<br />
  59. 59. 8a. Cebu Pacific Air uses Sales Promotion, Word of Mouth, Advertising, Public Relations, and Events and Experiences<br />1<br />2<br />3<br />4<br />3<br />5<br />http://cebupacificairv54.blogspot.com<br />
  60. 60. Both screenshots are taken on 06/09/2011. These promos came out right after the Php0 fare promo.<br />8a. Cebu Pacific has regular seat sale promos<br />http://cebupacificairv54.blogspot.com<br />
  61. 61. 8a. Cebu Pacific always has at least a 1/3 spread in the newspapers for its ads<br />http://cebupacificairv54.blogspot.com<br />
  62. 62. 8a. Cebu Pacific came up with the Fun Flights program<br />And a dancing cabin crew while explaining the safety procedures!<br />Games and prizes<br />http://cebupacificairv54.blogspot.com<br />
  63. 63. 8a. Cebu Pacific uses Interactive Marketing by…<br />Sending emails<br />Posting on Facebook<br />http://cebupacificairv54.blogspot.com<br />
  64. 64. 8a. The company uses various PR campaigns such as press releases, annual reports, and their company magazine - Smile<br />http://cebupacificairv54.blogspot.com<br />
  65. 65. 8a. Cebu Pacific’s Press Releases: The airline with flying colors<br />WWF Award<br />Changi Award:<br />ISO 9001:2008<br /> Certificate:<br />Marketing Communication Effectiveness Awards 2007<br />http://cebupacificairv54.blogspot.com<br />
  66. 66. 8a. Cebu Pacific’s Online Press Releases<br />CEB breaks 1M passenger record in one month <br />CEB flies 2.8 million passengers in Q1, posts 12% increase <br />CEB pilot best in the country; wins Airline Pilot of the Year award<br />CEB website most popular travel site in the Philippines<br />http://cebupacificairv54.blogspot.com<br />
  67. 67. Promo fare advertisements sent via email are late at times<br />Individuals could just learn about it through friends <br />Or perchance they’ve come upon an ad on the newspaper<br />8a. Word of Mouth<br />http://cebupacificairv54.blogspot.com<br />
  68. 68. 8a. The use of social networking sites is also a form of Word of Mouth Marketing<br />http://cebupacificairv54.blogspot.com<br />
  69. 69. 8a. Marketing communication through Events and Experiences<br />http://cebupacificairv54.blogspot.com<br />
  70. 70. 8b. AirPhil empasizes on the “free” check-in baggage<br />http://cebupacificairv54.blogspot.com<br />
  71. 71. 8b. Philippine Airlines has a “lowest fare” search engine <br />http://cebupacificairv54.blogspot.com<br />
  72. 72. 8b. Seair has the fastest flight to Boracay—at 35mins!<br />Number of flights to Boracay is even increased!<br />http://cebupacificairv54.blogspot.com<br />
  73. 73. 8b. Seair, like Cebu Pacific, also has a PR campaign through its company magazine<br />http://cebupacificairv54.blogspot.com<br />
  74. 74. 8b. ZestAir has a membership card that acts like a discount card<br />http://cebupacificairv54.blogspot.com<br />
  75. 75. 8b. Cebu Pacific’s communication stand out because..<br /> 2 to 5 advertising methods are implemented at the same time!<br />http://cebupacificairv54.blogspot.com<br />
  76. 76. 8b. And no one has yet to do the…<br />Php0 fare!<br />http://cebupacificairv54.blogspot.com<br />
  77. 77. 9. Cebu Pacific’s main distribution channel is the internet<br />Three principal distribution channels:<br />Internet<br />Booking sales office, call centres, client accounts<br />Third-party sales outlet<br />Distributors<br />General Sales Agents<br />Wholesalers and Preferred sales agents<br />http://cebupacificairv54.blogspot.com<br />
  78. 78. 9. Cebu Pacific has many payment options<br />Cash and Credit Card Transaction, Over the Counter, ATM, Online Banking, (Mobile) Phone Banking<br />http://cebupacificairv54.blogspot.com<br />
  79. 79. 10. Cebu Pacific’s generic winning strategy is Niche<br />Low Cost Producer<br />Supply and Distribution Leverage<br />Differentiation<br />Niche<br />http://cebupacificairv54.blogspot.com<br />
  80. 80. 10. Changing the game by finding a niche<br />Niche market is price conscious young professionals who want a no-frills service and prefer a “Fun Flight” experience<br />Differentiates brand with other LCCs<br />End result – No. 1 domestic carrier<br />http://cebupacificairv54.blogspot.com<br />
  81. 81. Looking Forward: Recent Market-changing Event<br />Operations will begin Q3 2011<br />Joint venture between Air Asia & Filipino investors<br />Promises low fares to compete with Cebu Pacific & PAL<br />Travel to both domestic & international destinations with Clark as its hub<br />5 brand-new A320 planes this year with target of 20 by 2015<br />http://cebupacificairv54.blogspot.com<br />
  82. 82. Cebu Pacific VS Air Asia<br />Started operations in 1996<br />Flights to/from 25 countries<br />78 total destinations (excl. domestic)<br />SEA’s biggest low-cost carrier<br /><ul><li>Started operations in 1996
  83. 83. Flights to/from 10 countries
  84. 84. 49 total destinations (incl. domestic)
  85. 85. RP’s leading domestic carrier</li></ul>http://cebupacificairv54.blogspot.com<br />
  86. 86. Adapting to Change<br />Air Asia is a rookie in the Philippine Market<br />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<br />Air Asia is a more experienced airline<br />CP should improve on customer service and timely schedule of flights so that users will not switch to Air Asia<br />http://cebupacificairv54.blogspot.com<br />
  87. 87. Adapting to Change<br />Air Asia is no-frills and no-fun<br />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.<br />Air Asia will be directly competing with CP and PAL for domestic & international destinations<br />CP should increase their destinations to include up & coming tourist attractions, thereby widening their lead against old & new competitors (Batanes, Marinduque, etc)<br />http://cebupacificairv54.blogspot.com<br />
  88. 88. 61<br />SUMMARY<br />http://cebupacificairv54.blogspot.com<br />
  89. 89. Steps 1 to 5Reaching out to every “Juan”<br />Cebu Pacific’s PTM are the budget-conscious young travelers.<br />Who want affordable, no-frills travel experience.<br />Can opt for Philippine Airlines, AirPhil, ZestAir, Seair<br />Gap is there are other brands who can offer lower cost fares and possibly better service<br />The market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 Billion<br />http://cebupacificairv54.blogspot.com<br />
  90. 90. Steps 6 to 10A fun flight at a low cost<br />Cebu Pacific offers year-round low fares.<br />Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest Air<br />Uses sales promotion, word of mouth, advertising, public relations, and events and experiences <br />Flights are mainly booked online <br />Cebu Pacific adopts niche marketing, anticipates competition<br />http://cebupacificairv54.blogspot.com<br />
  91. 91. 10 STEP Marketing Plan for Cebu Pacific Air, Inc.<br />Avellana.Gan.Quizon.Li.Turingan<br />June 2011<br />64<br />http://cebupacificairv54.blogspot.com<br />

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