Sas Scandinavian Airlines

SAS Scandinavian Airlines (SK)
‘12 Month Marketing Plan for the UK Market to Scandinavia’

Module title: CA3002 Aviation Commercial Planning and Marketing

Module leader: Nicholas Coleman

Assignment title: Marketing Plans for Airlines by Country

Student: Adam Marriott 06008442

Aviation Management Bsc
CA3002 Aviation Commercial Planning and Marketing
Adam Marriott 06008442
Table of Contents
1.0Current Marketing Plan in UK................................................................................................................................4

1.1 Market Overview.......................................................................................................................4
1.2Existing Routes..............................................................................................................................5
1.2.1Norway...................................................................................................................................................................5
1.2.2Sweden...................................................................................................................................................................6
1.2.3Denmark.................................................................................................................................................................6

1.3Existing Products...........................................................................................................................6
1.3.1Leisure....................................................................................................................................................................6
1.3.2Business..................................................................................................................................................................7

1.4Competition ..................................................................................................................................7
1.4.1Norwegian .............................................................................................................................................................8
1.4.2Ryanair...................................................................................................................................................................8
1.4.3British Airways.......................................................................................................................................................9

2.0 SAS Macro Environmental Analysis (PESTE)..........................................................................................................9

2.1 Political .......................................................................................................................................9
2.2 Economical.................................................................................................................................10
2.3 Social – Cultural ........................................................................................................................11
2.4 Technological .............................................................................................................................12
2.5 Environmental ...........................................................................................................................12

3.SAS SWOT Analysis for UK Market.........................................................................................................................13

3.1 Strengths....................................................................................................................................13
3.2 Weaknesses................................................................................................................................13
3.3Opportunities .............................................................................................................................14
3.4Threats.........................................................................................................................................14

4.Market Objectives.................................................................................................................................................15

4.1End of 2010 – Targets.................................................................................................................15

5.Market Strategy....................................................................................................................................................15

5.1Product........................................................................................................................................16
5.2Price.............................................................................................................................................16
5.3Promotion ...................................................................................................................................17
5.4Place............................................................................................................................................17

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6.Market Programmes .............................................................................................................................................18

6.1Advertising Methods...................................................................................................................18
6.1.1Outdoor Advertising ............................................................................................................................................18
6.1.2National Press......................................................................................................................................................18
6.1.3Consumer Magazines/Business Journals.............................................................................................................19
6.1.4Online Advertising – Social Networks..................................................................................................................19
6.1.5Direct Mail ...........................................................................................................................................................19
6.1.6 Business Travel Shows...............................................................................................................19

6.2SAS 2010 - 12 Month Advertising Campaign .............................................................................20

7.Marketing Promotions ..........................................................................................................................................21

7.1 Promotions.................................................................................................................................21
7.1.1 EuroBonus FFP Promotion Programmes............................................................................................................21
7.1.2 EuroBonus FFP ALL MEMBERSHIP LEVELS Promotion........................................................................................21
7.1.3 EuroBonus FFP Flyer Miles Promotion...............................................................................................................22
7.1.4 Social Media Promotions....................................................................................................................................22
7.1.5 SAS Globe of Fortune – Facebook Promotion....................................................................................................23
7.1.6 Travel Agents ......................................................................................................................................................25
7.1.7 Co-Operation with Official Country Travel Guides.............................................................................................26
7.1.8 Business Trade Shows.........................................................................................................................................26
7.1.9 Paper Promotion.................................................................................................................................................27
7.1.10 Direct Mail.........................................................................................................................................................27
7.1.11 Environment......................................................................................................................................................27
7.1.12 Holiday Specific Promotion...............................................................................................................................28

7.2 Summary of Promotions over a 12 Month Period Timetable.....................................................29

8.0 Conclusion .........................................................................................................................................................30

Appendix..................................................................................................................................................................31

Flight Data – Frequency, Timings and On-Time Performance.........................................................31
Passenger Numbers .........................................................................................................................33
UK Economic Situation ....................................................................................................................33

Bibliography.............................................................................................................................................................34

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1.0 Current Marketing Plan in UK
1.1 Market Overview

Established in 1948 SAS Scandinavian Airlines quickly became the market leader and national flag carrier for
Norway, Sweden and Denmark offering an extensive European route network. Until recently SAS remained
as a full-service monopoly Airline within Scandinavia offering lucrative European and inter-continental
routes. However, with the emergence of Low Cost Carriers (LCC) Norwegian, Ryanair and Easyjet the price
sensitive leisure market has been hit with SAS having to re-evaluate its position in the market. BA competes
largely on the business and corporate market with SAS offering similar service and a stronger connection to
UK business than SAS.

This marketing plan will set out details of the current market scenario with the various aspects including
competition, current products offered coupled with the new strategy for 2010 and the objectives hoped to
be achieved through marketing promotions and placement.

‘Marketing is the management process responsible for identifying, anticipating and satisfying customer
requirements profitably’ (Shaw, 2007, p. 1)

It is hoped that the conclusion gathered from this plan will help evaluate the needs and requirements for
both the business traveller and leisure traveller with identification of how to sell SAS to these two groups
over rivals. Market share increase and retaining current loyalty from passengers will be the key goals set out
in this market plan with clear indication on how the current scenario can be changed through various
incremental programs over a 12 month period starting at January 2010.

Ties with the UK market have always been strong for SAS with UK being an important source of passengers
with 2008 passenger numbers from UK standing at: Norway – 1.990Million, Denmark – 2.395Million and
Sweden – 2.296Million. Giving a total number of 6.681Million passengers (CAA, 2009). The current
marketing plan for SAS is to compete against LCC for the leisure market and BA for the business market. An
increasingly price sensitive market will have to be tackled by offering more value for money per ticket,
through offering incentives through promotions for existing passengers and potentially stealing passengers
from competitors.

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1.2 Existing Routes

Currently the main port for SAS within the UK is the London area where the greatest penetration of SAS is
seen. London is the financial and business centre for the UK and where most Scandinavian companies are
based. Frequency of routes from UK to Scandinavia is largely more focused from London and therefore the
marketing plan will focus upon Oslo, Stockholm and Copenhagen from London. SAS has the most frequency
between London and Scandinavia tailoring to the needs of business travellers who are often more likely to
change itinerary at short notice opposed to leisure travellers and are less price sensitive of the cost to do
this.

As shown in figure 1 the cost per
ticket and frequency offered is
far more attractive than the next
biggest competitor in this case
British Airways.

Figure 1 (SASAnnualReport, 2009)

1.2.1 Norway

The international centre for Norway is Oslo and
this can be shown from the potential regional
routes from the UK that is yet to be largely
exploited. Offering through tickets and a greater
awareness of these regional routes will allow for
a great disparity of passengers from the UK to
regional destinations. 19 identified routes
within Norway can be utilised for the UK
market.

Figure 2 (SASRouteMap, 2010)

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1.2.2 Sweden

Sweden is similar to Norway with the same aspects
applying. Stockholm is largely the international hub
for the country with regional Airports largely un-
served by the UK market. A total of 14 potential
markets from regional Airports could be marketed
for increased business connections and rural leisure
holidays for the UK market.


1.2.3 Denmark

Denmark offers less in terms of regional routes on
offer. However, it is considered the inter-
continental hub for Scandinavia with Copenhagen
dominating International routes for the Country.


1.3 Existing Products

1.3.1 Leisure

SAS offers an economy product for the leisure market, suitably
priced amongst its competitors. Its strong points over other
economy based products can be shown in:

Figure 5 (SAS, 2010)

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1.3.2 Business

The business product within SAS offers a EuroBonus
frequent flyer program coupled with Star Alliance’s
frequent flyer program. The business product and its
incentives are to be improved through the
promotions and various incentives through this
marketing plan 12 month program.

A definitive list of key aspects of SAS’s business
product can be seen in:

Figure 6 (SAS, Business Traveller, 2010)

1.4 Competition

Currently the three main competitors in the UK to Scandinavian market are Norwegian (LCC), Ryanair (LCC)
and BA (Full Service Carrier).

Carrier Route Frequency Low Price Average – Low Price Average –
Economy High Price Business High Price
SAS LHR – OSL 6 £66 £300-£500 £350-£413 £413
LHR – CPH 6 £62 £300-£500 £350-£440 £440
LHR – Stockholm 7 £60 £324-£440 £340-£480 £480
ARN
BA LHR – OSL 5 £68 £209-£600 £636 £660
LHR – CPH 6 £56 £166-£603 £600 £660
LHR – Stockholm 6 £60 £170-£636 £640 £660
ARN
Norwegian LGW – OSL 3 £34 £284 - -
LGW – Stockholm 1 £60 £201 - -
ARN
LGW – CPH 2 £52 £257 - -
Ryanair STN – Oslo Torp/ 4 1p-£10 £50- £150 - -
Rygge

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STN – Stockholm 4 1p-£10 £50- £150 - -
Skavsta/Bromma
Data can be found in Appendix.

1.4.1 Norwegian

SAS is positioned against Norwegian with it serving relatively primary airports at a moderate low cost ticket
price. It uses the similar Easyjet opposed to the Ryanair model.

Main Bases: Throughout Scandinavia, Stockholm, Olso, Copenhagen, LGW

Weaknesses: No destination from LHR, No connections, Baggage fee

Strengths: LC price, Primary Airports, Regional Airport Coverage, Gaining market share on regional
routes

1.4.2 Ryanair

Ryanair is positioned as the ultra-low cost competitor offering secondary - almost regional Airports for major
city centres and exploiting auxiliary revenues through ‘optional’ extras that are often not quite so optional.
Often Ryanair offer ultra loss making ticket prices for its passenger and this is its main strength against SAS
however, when a passenger require ‘service’ such as checked bags it can be comparable and often more
expensive than full service carriers which can be shown on figure 7.

Main Bases: Oslo Torp, Oslo Rygge, Stockholm Svatka to
STN, LGW, No Copenhagen Route

Weaknesses - Secondary Airports, 2 hours from city
centre based, expensive city transfer, no service included,
extra charges incurred by passenger, no connecting
services, bad or no customer service

Strengths – Price and offers, very well known strong
brand, strong publicity style – not afraid

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1.4.3 British Airways

BA is the biggest competitor in terms of business travellers offering similar frequency is offered alongside a
similar service structure. BA is positioned well in the business market in the UK and is a well known brand
within UK attaining a certain level of national pride amongst the public. However, recent stability within the
company concerning unions and strikes has knocked the confidence of its loyal passengers with a further 20
days of strikes planned in the coming months. BA also benefits from the world class T5 terminal in Heathrow
with its dedication solely for BA giving a distinct advantage over its rivals and a streamlined service for
connections.

Main Bases: LHR, Oslo, Copenhagen, Stockholm

Weaknesses – UK Customer confidence low, Booking Fees, Stability within Airline, Strong Unions

Strengths – T5, Oneworld, Strong brand image, LHR Slots, Similar Pricing and model

2.0 SAS Macro Environmental Analysis (PESTE)

PESTE is generally used to assess the wider implications of operating in a market covering the specifics of the
market environment. Political, Economic, Social, Technological and Environment aspects are covered.

2.1 Political

Political stability within Scandinavia is relatively solid with no major opposition to any government in
Norway, Sweden and Denmark. For the UK market the 2010 election has created a certain level of suspicion
over the future stability of government with the Conservative Party not attaining enough of a majority to
outright win the election causing a hung government. This has led to a dubious coalition between the Liberal
Democrats and Conservatives to form enough of a majority to overthrow the 13 year reign of Labour UK
government. Despite the political ideals of both the Liberal Democrats and Conservative party differing
largely on key issues throughout the country, a coalition has resulted in compromise;

‘we’re looking at what a bold move like this with a strong stable government can achieve and if it means
swallowing some humble pie and eating some of your words then I can’t think of a more excellent diet in
which to provide the country with strong government’ (Cameron, 2010)

It has been debated that if the recent coalition is to break down between the Conservatives and Liberal
Democrats then there would be another election, the probability of another election is widely different for
each news source. Another election would most likely result in instability within the UK for a prolonged
period. Whether an election would happen within a year or two years or at all can only be guessed at the
present time.

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In terms of Aviation and London to be specific the Conservative government manifesto has stated the
following:

‘We will stop the third runway and instead link Heathrow directly to our high speed rail network, providing
an alternative to thousands of flights. In addition, we will: block plans for second runways at Stansted and
Gatwick; and, reform Air Passenger Duty to encourage a switch to fuller and cleaner planes.’
(ConservativeParty, 2010, p. 23)

The overall political effects on SAS:

• Strained slot times as existing Airports struggle to grow
• Increased Air Passenger Duty equalling in higher costs or a result in higher fares to passengers
• A shift from the London Airport area to other UK Airports from high speed rail – Other UK routes
gain importance
• Political stability effecting the economy, social issues and disposable income – All affecting the
propensity to travel by air.

2.2 Economical

Economically the Aviation industry has taken a major hit
from global economic instability. For the UK market the
real extent can be shown in FIGURE with spending by
each travel group down by a considerable margin.
Significantly the reduction in spending will have a drastic
effect on the sensitivity on pricing for the UK market to
Scandinavia.

Figure 8(statistics.gov.uk, 2009)

The current economic situation can also be reflected with the rise in unemployment to 8% and the reduction
of GDP growth (data can be found in Appendix). Unfortunately the first casualty from an economically
strapped public is the propensity to travel. This has been reflected globally with passenger numbers down
within Europe and throughout the world from previous 2007 and 2008 levels.

Marketing to a now more price sensitive travelling public and corporate cost saving companies while still
retaining a profit from a loss of travel will be the greatest challenge for SAS for 2010. Offering incentives to
passengers can give the perception that they are gaining more value for money.

The overall economical effects on SAS:

• Marketing to a more price sensitive passenger becomes more important

• Retaining loyalty from lower priced carriers e.g. Norwegian and Ryanair

• Allowing for a modest to low growth for the future as European economic stability is uncertain

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2.3 Social – Cultural
Figure 9 (anna.aero)

Historically Scandinavia and the UK
have been closely tied as with many
close European countries immigration
and residing in foreign countries is
relatively easy due to EU freedom of
movement laws. In terms of
demography, 18,695 Danish, 13,768
Norwegians and 22,525 Swedish
currently live within the UK (OECD,
2009) giving a clear indication of
integration into society. The UK market
has a relatively high propensity to
travel, comparing well with Sweden
and Denmark, Norway leads the
propensity to travel.

An ageing population within the UK has propelled the need to alter service for the older client marketing
away from the younger passenger. This is set to continue for the foreseeable future, with an ageing
population comes the reduction of spontaneous travel and propensity to travel can fall. There is also the
need to cater for any extra care that may be needed for frail passengers.

Record high unemployment coupled with an economic recovery taking place in the UK will have a drastic
effect on the leisure market with public disposable income being the first hit from unemployment and a
revision in money priorities from increased debt over the past few years. Companies that have taken a large
hit from the economic crisis may begin to become price sensitive to business travel tickets and begin using
alternatives or cheaper economy tickets to reduce costs during a time of economic uncertainty.

The overall social effects on SAS:

• A change in public travel patterns and cheaper alternatives used – a change in priority

• An ageing population – a change in passenger demography and the need to market to the growing
ageing market in the long-term future

• Integration of Scandinavians in UK society showing a strong relationship between with the UK –
visiting friends and relatives, SAS brand more appealing to UK market

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2.4 Technological

Technologically SAS were the first Airline to introduce biometric boarding for passenger check-in in 2006.
This allows for a simple and secure process by using fingerprints of passengers which verifies the passenger
details and links the passenger to any checked baggage. The entire process is voluntary and promotes
convenience, efficiency and speed for check-in. Privacy has been identified with data gathered from the
fingerprint being erased after the flight. (check-in.aero, 2008)

Like many Airlines SAS adopts e-booking via flysas.com allowing for online check-in 22 hours before a flight
and customisation of the flight booking with upgrades and optional extras are available entirely through the
internet. SAS have also pioneered mobile check-in via SMS and allows for information such as seat allocation
and a unique 2D boarding pass that enables boarding entirely by mobile phone. (flysas.com/moilecheckin)

The overall technological effects on SAS:

• Increasing ease of check-in and flow of passengers through boarding using phone and internet
check-in

• Complete booking and changes carried out online allowing for a reduce in cost for personnel and
ease of use for passengers coupled with greater convenience

2.5 Environmental

Climate Change and Global Warming have increased in importance over the past decade with passenger
attitudes changing and alternative more environmentally friendly transports exploiting Air Travels impact on
the environment. SAS has pledged to reduce its greenhouse emissions by 20% by 2020 regardless of traffic
growth (flysas.com, 2010) and has openly advocated that they will use bio fuels when it becomes available
on a larger scale. SAS also allows for passengers to pay for the carbon their purchased trip emits allowing for
the opportunity to make the journey carbon neutral.

European trading scheme will come into full force for Aviation in 2012 with emission caps being imposed
upon European Airlines with the expectation of carbon credits price becoming a substantial cost in the
future.

The overall environmental effects on SAS:

• Higher costs imposed for reducing environmental impact

• Changing attitudes of passengers towards their environmental impact will cause a change in market
strategy to cater for these new needs

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• Climate change and Global Warming may have a detrimental effect upon global GDP as flooding and
natural disasters become more frequent.

3. SAS SWOT Analysis for UK Market
3.1 Strengths

SAS has a number of strengths over its competitors the main strength is its punctuality; ‘SAS Scandinavian
Airlines was Europe’s most punctual major airline during 2009, with an overall arrival punctuality of 89.11%.’
(sas, 2010). This data is also backed up with on-time rating data from flightstats.com this is shown further on
a route basis for SAS and all competing Airlines.

SAS also benefit with a greater level of frequency out of Heathrow to Oslo, Copenhagen and Stockholm
offering direct routes to primary Airports opposed to Gatwick and Stansted. This allows the strong business
presence in Heathrow to be exploited by SAS and allows for a greater flexibility for the business traveller,
from greater convenience from increased frequency compared to BA and rivals.

Being part of Star Alliance the biggest global of the three major Alliances allows SAS to exploit this benefit
over BA’s presence with Oneworld. Star offers more global coverage compared to Oneworld and with that
has a larger frequent flyer base to utilise; this is a strong point to illiterate. Star Alliance frequent flyers may
choose SAS over BA due to the Star Alliance benefit and the opportunity to increase flyer miles to
Scandinavia. Star Alliance Company Plus is a promotion Star offers to corporate travellers by offering the
following benefits:

‘It's up to you how you redeem your points. Choose from free flights, upgrades, free parking, cashback or
enjoy a shopping spree at the WorldShop.

More rewards for less
Earn points for your company – and yourself

Easy to use
24-hour online access gives you complete control of your account, so you can decide exactly when and how
to redeem your points.’ (StarAlliance, 2010)

Over the LCC rivals SAS has its own frequent flyer program EuroBonus that allows for incremental rewards
for frequent flyers to Scandinavia. This strength will be increased with the specific promotions explained
further in the promotion section of the marketing plan. A superior flyer program ideally caters for the
frequent business traveller by allowing pandering to the ego of the business traveller by offering specific
benefits from increased EuroBonus membership levels.

3.2 Weaknesses

Compared to Norwegian and Ryanair the economy aspect of SAS can be deemed a more expensive
alternative to the LCC leaders in the region. With price sensitivity becoming more of an important aspect of

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passengers the move from a more expensive greater service carrier to a cheaper alternative has become an
important weakness.

Heathrow is also a distinct weakness for SAS and BA alike with capacity constrained and little room for
growth for existing Airlines. With the new UK Conservative-Liberal Democrat government ruling out any
expansion for Heathrow in the next 5 years the constraints are set to continue. Growth will most likely be
offset to other London Airports primarily Gatwick and Stansted with Norwegian and Ryanair benefiting from
the extra room for growth and the less congested Airports.

BA has the advantage of the recently built T5 terminal in Heathrow to exploit. The new terminal is primarily
a BA terminal with no other competing carriers operating in the terminal; no other Airline in Heathrow has
this benefit. What this means is an integration of all BA connections in one terminal, allowing ease of use
and convenience for business travellers and simplicity for leisure travellers. There is no alternative for SAS on
this weakness and no way to lessen the effect BA has on Heathrow, operating the most destinations and
highest frequency in the busiest international Airport in the world.

3.3 Opportunities

Taking advantage of BA’s instability with the various strikes over the coming months and the on-going
dispute between its staff is a prime opportunity for SAS. Loyalty and trust in the Airline is likely to fall as a
number of passengers are left stranded or have reduced frequency due to cancelled flights from a lack of
staff. BA is the main full service competitor to Scandinavia with public confidence falling; the only alternative
is SAS for business travellers. A prediction of a switch to SAS during BA’s hardship will encourage strong
opportunity for creating new found loyalty from BA passengers towards SAS.

As the economic recovery of Europe begins to take force the UK market is likely to re-grow into its former
self; this may not occur until late 2010, however, the opportunity to be ready to increase capacity once
growth returns should not to be missed. It is essential to maintain growth once full recovery occurs
otherwise BA and LCC competitors will pick up from the missed opportunity.

3.4 Threats

A real threat is the increased presence of Norwegian Airlines throughout Scandinavia and within the UK
market. Norwegian has been steadily growing within the Scandinavian region and is a real alternative for the
leisure passenger with the use of primary Airports and the lack of optional charges being kept to a minimum.
Norwegian is forecasted to grow in the coming future mostly at the expense of SAS with latent demand
being met in the UK-Scandinavian market.

Fuel prices as ever are very volatile with prices being based upon a mixture of speculation and demand. An
increase of fuel prices historically has had a very damaging effect upon Airlines with the costs involved with
buying fuel becoming the greatest cost as barrel prices rise. The onslaught of another rise in fuel costs
especially after a downturn in the global economy and Commercial Aviation would have a deadly effect on
how effective SAS can make a profit. To combat unexpected fuel price rises, fuel hedging deals can be made

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to ensure that the future is secured at the current fuel price. However, there is always a gamble with fuel
hedging as prices of fuel can decrease therefore leaving SAS still paying for a higher than market value price.

4. Market Objectives
4.1 End of 2010 – Targets

• Raise awareness and remind travellers of current Scandinavian routes and connecting Scandinavian
Regional Routes through a 12 month advertising campaign

• Maintain service and simplicity well established on other routes – Promote Punctuality

• Widen SAS appeal through increasing ‘personal benefits’ from frequent trips for corporate and
business customers

• Pander to ego and pride of the business traveller offering extras and ‘v.i.p treatment’

• Grow despite recession, LCC Norwegian threat within the UK – Increase Market Share from 67% to
79% by 2010 end through intense promotion programs

• Establish new Business connections within UK away
from BA – Travel Shows and Consumer Magazines

It is essential that all marketing activity is aimed at achieving
these goals through the various promotions and incentives
involved in the 12 month period. The details of this can be found
later in the report.

5. Market Strategy

The main strategy can be put into three main parts as follows:

• Grow – BA Stronghold at Heathrow - weaken

• Maintain – Retain customer base and expand from
recession

• Establish – Increase presence through advertising and
awareness

To achieve and maintain this strategy within the UK it is important to look at the relevant aspects of the
service offered. In this case the product (ticket, flight and ground service), price (the cost and comparison to
competitors), promotion (using programs to attract new passengers and retaining existing passengers by
increasing incentives) and place (in this case the UK market to Scandinavia)
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5.1 Product

The product SAS offers is a leisure package through an economy ticket and possible hotel/holiday
partnership and a business product specifically tailored for frequent flyers and corporate clients.

Leisure product is presented in a way that is clear and concise that allows for the passenger to know exactly
what they are getting with no hidden costs such as baggage fees and credit card payment fees. There is also
a transparency for free check-in and other services that have historically been expected from an Airline to be
included within the product price.

The business product is positioned to directly compete with BA and its main incentives are the frequent flyer
program and the various incentives involved with attaining higher miles from more frequent travels. There
are deep discounts involved for repeat corporate contracts and a level of service similar to other business
packages in the Aviation market. Ideally SAS’s business product panders to the ego and needs of the
business traveller allowing them to feel important through a higher than expected level of service, superior
punctuality and unrivalled frequency compared to BA.

5.2 Price

Price has become more of a sensitive area for travellers since the economic downturn in Europe with leisure
and business travellers alike looking at ways of reducing the cost of travel. Propensity to travel has fallen
recently with European and UK traffic down since the Global recession took control of economies. With this
in mind over-capacity may occur due to lower load factors from price-sensitive passengers.

Carrier Route Low Price Average – Low Price Average –
Economy High Price Business High Price
SAS LHR – OSL £66 £300-£500 £350-£413 £413
LHR – CPH £62 £300-£500 £350-£440 £440
LHR – Stockholm £60 £324-£440 £340-£480 £480
ARN
BA LHR – OSL £68 £209-£600 £636 £660
LHR – CPH £56 £166-£603 £600 £660
LHR – Stockholm £60 £170-£636 £640 £660
ARN
Norwegian LGW – OSL £34 £284 - -
LGW – Stockholm £60 £201 - -
ARN
LGW – CPH £52 £257 - -
Ryanair STN – Oslo Torp/ 1p-£10 £50- £150 - -
Rygge
STN – Stockholm 1p-£10 £50- £150 - -

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Skavsta/Bromma

Price will be marketed as a higher standard than LCC but with the value of service being marketed to validate
this choice. The promotion of no hidden fees and free baggage coupled with other services that passengers
have come to expect from an Airline will be promoted over the LCC unbundled service that can largely come
close or higher in price when the same level of service is applied. There is also the value of Heathrow
compared to Stansted and Gatwick allowing for more justification of a slightly higher price.

In terms of business product the higher comparable price of BA’s business product will be justified with the
extra promotions for business travellers over the coming 12 months allowing for the value of SAS’s business
product to be justified.

5.3 Promotion

Promotion will be the main objective of the 2010 12 month marketing plan, to gain, maintain and establish
within the UK market there needs to be rekindled awareness of the SAS brand and this can only be done
with relevant SAS brand placement throughout the UK market.

Promotion will allow SAS to compete directly against its competitors allowing potential passengers to view
the benefits of SAS over its rivals. The varied promotions will keep the market fluid with a perceived dynamic
and innovative SAS, which should attract varied new passengers and allow for a greater chance of success
for campaigns that is aimed to suit a multitude of requirements for potential passengers.

A list of promotions and the advertisements methods to be used to spread these promotions can be found
nearing the end of this report.

5.4 Place

Placement of advertisements and the SAS brand will help cater for the diverse UK market allowing for a
greater success in attracting the maximum passengers from the market. Placement through different Medias
such as, Outdoor Advertising, Internet Advertising, National Press, Consumer Magazines/Business Journals,
Direct Mail and Business Travel Shows allows for a varied audience to view the various promotions and
product placements.

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6. Market Programmes
6.1 Advertising Methods

6.1.1 Outdoor Advertising

Outdoor Advertising will be utilised to inform the general public about the SAS brand and what it has to offer
the passenger in the way of routes offered and the various promotions employed over the next 12 months.

Billboards have relevancy wherever they are placed, ideally SAS will place billboards in busy city centres and
where there is a great flow of people, a static area is of no use for Billboards. An area such as Piccadilly
Circus is a prime example of a perfect placement for a billboard. Having an intersection where there are a
great number of people waiting at traffic lights or passing the placement of billboards is the best option.
Suitable areas where there is a great level of passer by traffic, walking and car based will have to be
evaluated throughout the country. London is the UK’s Aviation hub so therefore this is where the majority of
billboards will be placed. There is also the opportunity to place billboards in neighbouring cities where there
is travel towards Heathrow for travel, these areas include: Kent, Sussex and neighbouring counties. Business
centres within Canary Wharf and Bank area in London will be adapted to promote business travel specific
promotions and therefore target this market effectively.

Transport is also a great opportunity for SAS; the London Underground has the greatest value with static and
newly dynamic projectors within underground stations being used to show advertisements for various
companies. The exposure SAS can enjoy from the London Underground includes a ridership of 1.073Billion
and potential coverage in 270 stations. However, stations utilised will be around key business centres and
busy stations with Victoria having 76Million passengers per year being utilised on all underground lines. The
most lucrative line will be the Piccadilly line that directly connects to Heathrow offering coverage for
potential and in-transit passenger. (TransportForLondon, 2010)

Advertisements on bus sides are also a key opportunity; with 6800 London buses in operation on 700 routes
(TransportForLondon, London Buses, 2010). Bus sides can be used as moving billboards with their potential
to cover a great distance allowing for maximum coverage of the SAS brand and the various promotions to be
put in place for next 12 months.

Taxi Advertising will mainly be targeted at potential business clients with taxis being the primary use of
transport for executives and those with high disposable income. Advertisements will be targeting the various
Frequent Flyer Program promotions and allow for maximum exposure to the appropriate target market.

6.1.2 National Press

SAS will be utilising the national press allows for a wide specific readership to be utilised. Targeting the
business market will be carried out through using the Financial Times and its specific business targeted
readership. Frequent flyer programs promotions and business specific promotions will be placed within this

18

newspaper. The Guardian and The Times newspapers will be used to promote the leisure market with tokens
being placed within the papers to entice people to collect for rewards of free upgrades or discounted ticket
prices. This in turn will increase exposure by keeping readership interested and give a level of interaction for
the reader and the promotion.

6.1.3 Consumer Magazines/Business Journals

Consumer magazines and business journals are largely targeted at the business market as the readership
shows to be a majority of business travellers. Advertisements will consist of promoting the SAS brand and
giving clear indication of the key benefits and advantages of using SAS over BA as a corporate partner and
enabling the integration of specific incentives for corporate and business travellers to adopt over the next 12
months.

6.1.4 Online Advertising – Social Networks

With the current growth of Social Networks with people becoming more connected through the internet, it
enables the advent of out of the box promotions to be placed through channels where travellers can
exchange specific promotions with friends and co-workers. This enables SAS to take an odd-ball approach to
advertising within the Online community without risking a large loss in advertising expenditure. After all
Facebook and Twitter are free mediums that are used by millions of potential passengers. Online presence
also allows interaction with passengers that show a more personal touch for SAS and allows customer
enquiries to be dealt with immediately and tailor to the needs of each request uniquely.

6.1.5 Direct Mail

A more traditional approach to advertisement direct mail is a direct form of communication to the potential
passenger or corporate client. By offering a unique tailored response to needs of corporation and a direct
approach, it allows for a more likely response from the chosen participants.

6.1.6 Business Travel Shows

Business travel shows offer SAS wide coverage with key potential cliental, allowing for interaction with
businesses through the industry without having to set up various other forms of lengthy communications. It
allows a face-to-face approach other businesses allowing partnership to be more personalised without
significant delay. It is hard to gather all potential corporate clients at one time, but with a business travel this
occurs. SAS will present itself at key Aviation Travel shows that will allow to market directly to important
clients that would otherwise be unreachable or hard to contact otherwise. It allows presentation of various
incentives and promotions being offered throughout 2010 to be presented professionally and directly to an
important audience.

19

6.2 SAS 2010 - 12 Month Advertising Campaign

Advertising
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Method
Outdoor Billboards            
London Underground
           
Posters
Taxi Sides            
Bus Sides         
Newspaper Financial Times            
Guardian    
The Times    
Business Trade Journals            
Business
 
Trade Shows
Internet VisitNorway/Sweden/Den
           
mark.com
Facebook.com         
Twitter.com         
Direct Mail Large Corporations            
Medium Independent
           
Businesses

20

7. Marketing Promotions

A list of promotions to be employed by SAS will now be stated. The overall goal of these promotion coincides
with the objectives and goals of SAS with maintaining and expanding market share being the most important
objective to achieve.

7.1 Promotions

7.1.1 EuroBonus FFP Promotion Programmes

Basic, Silver & Gold Membership levels currently available for passengers.

EuroBonus FFP Joining Promotion
Current Promotion Joining EuroBonus – 1000 Extra Points valid till May 31st 2010
Extension of offer till Dec 31st 2010 over a 12 month period from Jan 1st 2010
New Promotion
increase offer to 1500

Promotion encourages frequent flyers + new SAS passengers to join FFP thus a result in further future flights

7.1.2 EuroBonus FFP ALL MEMBERSHIP LEVELS Promotion

Car Rental Promotion for ALL LEVELS of EuroBonus
Current Avis 10% off car rental price + 5% Hertz off car rental Sixt 15% off car rental price +
Promotion 500 Extra FFpoints price + 500 extra FFpoints 500 Extra FFpoints
Avis 10% off price + first two Sixt 15% off price + first day
New rent days free ONLY with Hertz 10% off (Jan-Dec off car rental ONLY with
Promotion return flight (Jan-July) + 500 2010) + 500 Extra FFpoints return flight.(July-Dec) + 500
Extra FFpoints extra FFpoints

Promotion directly encourages EuroBonus members to buy a return flight to earn extra benefits with car
rental – benefits both business + leisure travellers

21

7.1.3 EuroBonus FFP Flyer Miles Promotion

SAS EuroBonus program is based upon a points system with a certain percentage earned for each flight
dependant on class and EuroBonus membership level.

Proposed promotion – Doubling percentage rewards on alternating months over a 12 month period.

Example: Promotional Months – Jan, March, May, July, September, November

Reasons for alternating months – Doubling percentage rewards can be an expensive for an Airline by using
alternating months it gives the perception that the promotion is on-going and offers the promotion
throughout the year; gaining the benefit of increased passengers through all seasons.

Economy Economy Extra Business

25%-100% 150% 200%
EuroBonus Basic
50%-150% 300% 400%

40%-115% 165% 215%
EuroBonus Silver
80%-230% 330% 430%

50%-125% 175% 225%
EuroBonus Gold
100%-250% 350% 450%

7.1.4 Social Media Promotions

Facebook and Twitter to promote, offer new promotions to a global audience. More internet literate public,
more time spent on internet opposed to past, an important outlet, cheap to implement, reduction of
middle-man.

Ability to update promotion and
information instantly – an
advantage over other forms of
media. A modern image for the
airline.

Figure 11 (twitter, 2010)

22

7.1.5 SAS Globe of Fortune – Facebook Promotion

Past Promotion – Interacting directly with
Facebook users to pick a departure point in
Scandinavia, novel idea to have a random
travel partner and random destination.
Ability to win a free return trip.

Figure 12 (GlobeofFortune)

23


New Promotion – Similar concept, using UK Airports
as departure point, whole of Scandinavia as a
destination point (regional & city airports) ability to
promote areas unknown to average UK passenger.
(May-Sept 2010)

Figure 13 (GlobeofFortune)

24

Ability to respond directly
to potential passengers,
ability to post updates of
potential delays and
changes, ability to promote
flight deals.

New Promotion: Use social
media to promote FFP
promotions, offer cut
down fares for ‘Fans’ of a
SAS facebook page
allowing for more people
to join for future
promotions.

Example: LHR – CPH £50
Economy Special Offer
24hr Promotion (dates
between June 1st – June
7th) (Ongoing throughout
2010)

Figure 14 (facebook.com, 2010)

Pioneered by Ryanair via Website, allowing for extra seats to be sold when load factors indicate to be low for
certain dates enables connection with internet community to ‘Watch SAS’

7.1.6 Travel Agents

Importance can be somewhat disputed as passengers become more price sensitive and seek their own
package for holiday trips. However, block bookings attribute to large proportions of SAS load factors. Raising
fees not only encourages travel agents to couple SAS flights with packages over Norwegian and Easyjet but
also allows an increase in load factors.

Promotion: An increase of 10% over standard travel agent fees will be implemented over the 12 month
period to assess whether travel agents have a dramatic effect on passenger numbers.

25

7.1.7 Co-Operation with Official Country Travel Guides

Wider association with visitnorway.com, visitsweden.com, visitdenmark.com allowing for official guides to
the countries being directly affiliated with the legacy carrier for Scandinavia. A greater association allows for
more tailored guides to cities, transportation information, hotel information, tourist guides, promotion of
attractions and events and wider exposure of SAS from being the official transport partner for the UK to
Scandinavia.

Promotions: Free 1 day Travel on Metro in Copenhagen, Oslo, Stockholm when flight bought through official
visitdenmark/Sweden/Norway.com (May-Sept 2010)

7.1.8 Business Trade Shows

Trade shows are one off events where world-wide professionals gather to discuss, socialise and evaluate
each competitor and potential partner’s products. A deep investment into Trade Shows allows SAS to
showcase new promotions and attract potential corporate clients with ideal, tailor made offers that appeal
to both parties.

Promotion: Deep discounts to corporate clients who offer repeat business (Feb, March 2010) at the
following shows:

26

7.1.9 Paper Promotion

Using Newspapers can be a lucrative area for business especially within city centres. However, outside of
readership newspapers become irrelevant.

Promotion One: Coupons within daily/weekly newspapers to qualify for a discounted economy flight or an
upgrade from economy>economy extra or economy extra>business. Coupons to be collected over a
substantial period of time e.g. 5 coupons collected over 5 weeks. (Jan-March, Oct-Dec)

Benefit: Keeps attention of collecting readers by focusing on the advertisement over a 5 week period rather
than just ignoring a usual newspaper advertisement.

Promotion Two: Using the Financial Times and Business/Economic Journals to promote certain other
promotions e.g. increased FFP points or discounted fares. Primary target market – Business Travellers

7.1.10 Direct Mail

Contacting via post to large corporations within the UK offering direct offers and contact details to directly
tailor each corporate contract.

Promotion: Deep discounts compared to BA to allow for a shift from BA and UK corporations travelling to
Scandinavia.

7.1.11 Environment

Environmentally conscious passengers can offset their CO2 Emissions for a cost relating to the flight distance
and aircraft. SAS allow for carbon offsetting but does not exploit it as a marketing program.

Environment Promotion
Example: LHR-OSL one way, one passenger = 0.11Tonnes of CO2 worth €1.21
Potential: Absorb CO2 into costs – Promote that CO2 offset HAS been absorbed by SAS at no extra cost to
passenger.
Benefit: Appeal to frequent flyers conscious of their damage to the environment, promote SAS as an
environmentally friendly airline improving image and brand. All at a relative small cost.

27

7.1.12 Holiday Specific Promotion

Using specific holidays within Scandinavia to promote SAS flights.

Example: Using Christmas, Easter as specific reasons to promote within Aircraft. Shown in picture – Santa
walking through SAS flight offering presents to children on Economy section for free. No advertising of such
events promotes a larger impact allowing for an element of surprise. Spontaneous aspect.

Main Objective:
Promote SAS through
a more personal
touch, using free
cheap gifts to
children to improve
relations with
passengers. A much
greater word of
mouth results from
such events.

Additional Holiday/Event Promotions: Eurovision 2010 Oslo, Valentine’s Day, New Years day, Nobel Prize
Awards Norway, Swedish National Day (June 6th), Constitution Day Denmark (June 5th)

28

7.2 Summary of Promotions over a 12 Month Period Timetable

Au Sep
Promotion Jan Feb Mar Apr May Jun Jul Oct Nov Dec
g t
EuroBonus Joining            
EuroBonus Car Rental            
EuroBonus Flyer Miles      
SAS Globe of Fortune     
Facebook/Twitter         
Travel Agent Fees        
Country Travel Guide            
Website
Business Trade Shows  
Newspaper Promotion    
one
Newspaper Promotion         
two
Direct Mail            
Carbon Offset            
Holiday Specific      

29

8.0 Conclusion

2010 will be a hard year to market SAS with economic recovery being fragile throughout the UK and
Scandinavia and political stability being tested in the coming years from a UK coalition government. It can be
said that the environment that SAS is in at the present time is volatile and subject to change unexpectedly
and without notice throughout the year. Therefore, the marketing plan will have to adapt and change to
cater to these changes.

Threats of fuel prices and Norwegian Airlines rapid expansion in the UK Market will have to be tackled by
using innovative promotions and incentives that will allow SAS to position itself strongly against LCC rivals
with a value for money priced ticket giving the passenger the service they have come to expect from a
traditional Airline without the aggravation and the confusion of unbundled extras with a LCC.

Key Opportunities from BA’s instability and a possible return of rapid growth in the UK market may happen
in 2010 and SAS must cater for any changes in capacity that is needed to take full advantage of these
opportunities. Working on SAS’s strengths of punctuality and frequency will allow itself to position strongly
against any competition as long as brand and awareness are maintained throughout the year.

The business product will be promoted by giving extra incentives in the form of greater frequent flyer
benefits, and various other business focused incentives that will cater to the needs of business travellers in
the market. Coupled with awareness of the SAS leisure economy ticket will position SAS to be a strong player
in the coming 12 months.

The strategy of Maintain, Grow and Establish will only be achieved from the marketing programs put in place
to promote and keep awareness of SAS in the spotlight for all to see for the next 12 months.

To conclude the marketing plan for 2010 will set out the directions for SAS, to achieve the goals and
maintain clear strategy in the UK market. By offering a clear indication on how and where promotions will
take place, with identification of how to target the appropriate markets through different mediums it can be
concluded that the marketing plan will allow SAS to grow as an Airline.

30

Appendix

Flight Data – Frequency, Timings and On-Time Performance
All frequency, timings and on-time performance provided by (flightstats.com) Flight Date used for flight
data – MAY 10TH 2010.

SAS & BA

London Heathrow to
Stockholm Arlanda.

SAS On-time rating is
consistently higher than that
of BA. 7 SAS flights
compared to 6 BA flights.
Higher Frequency. Similar
competing timings.

London Heathrow to
Copenhagen

SAS On-time rating higher
consistently. 6 frequency for
both BA and SAS. BA utilize
late morning while SAS
utilize late afternoon.

31

London Heathrow – Oslo
Gardermoen

BA on-time performance
relatively poor. SAS higher
frequency 6 to BA 5.

Ryanair

London Stansted – Oslo
Sandefjoyd/Oslo Rygge

Lower frequency than SAS,
secondary out of city
Airports used.

London Stansted –
Stockholm Skavsta/
Stockholm Bromma

Bromma is an out of city
Airport with 1 frequency,
Skavsta has 3 flights a day
covering key periods during
the day

Ryanair does not fly to Copenhagen.

Norwegian & Easyjet

32

London Gatwick – Oslo Gardermoen

Lower frequency but higher on-time rating.

London Gatwick – Stockholm Arlanda
Only 1 flight a day.

London Gatwick – Copenhagen

Direct competition between Easyjet and
Norwegian. 2 Flights a day each.

Passenger Numbers

(CAA, 2009)

UK Economic Situation

UK recession ended in 2010 Q1. However, it has yet to recover the loss during the recession period with
growth being fragile at the current time.

33


(tradingeconomics, 2010)

(tradingeconomics.com)

Unemployment has risen in line with GDP loss and is expected to stagnate at current levels for a substantial
period of time.

Bibliography
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ref=search&sid=100000096016042.471627131..1

34

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times-greater-than-in-china-cyprus-tops-european-rankings/

CAA, D. (2009). TSGB 2009 Data Tables. Retrieved April 2010, from Department for Transport:
http://www.dft.gov.uk/pgr/statistics/datatablespublications/aviation/tsgb2009aviationtables.xls

Cameron, D. (2010, May 12). Cameron and Clegg give their first joint press conference. Retrieved May 12, 2010, from
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check-in.aero. (2008). check-in.aero. Retrieved from http://www.check-in.aero/2008/05/sas-introduces-biometric-
check-in/

ConservativeParty. (2010). The Conservative Manifesto 2010. Retrieved April 2010, from conservatives.com:
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flightstats.com. (n.d.). flightstats.com. Retrieved May 10, 2010, from www.flightstats.com

flysas.com. (2010). C02 Emissions. Retrieved 2010, from http://www.flysas.com/en/uk/Travel_info/CO2-emissions2/

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GlobeofFortune. (n.d.). Retrieved from facebook.com:
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SAS. (2010). Reasons to choose SAS. Retrieved 2010, from flysas.com: http://www.flysas.com/en/uk/Promotions-and-
prices/NEW-Reasons-to-choose-SAS/?WT.seg_4=SIP094PPrtcs&vst=true

sas. (2010, Jan 12). SAS was Europe’s most punctual airline in 2009. Retrieved 2010, from
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SASAnnualReport. (2009). SAS Annual Report 2009. Retrieved 2010, from flysas.com:
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SASRouteMap. (2010). SAS Route Map. Retrieved 2010, from flysas.com:
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Shaw, S. (2007). Airline Marketing and Management . London: Ashgate.

StarAlliance. (2010). Star Alliance Company Plus. Retrieved 2010, from
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statistics.gov.uk. (2009). Overseas Travel and Tourism. Retrieved 2010, from statistics.gov.uk:
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tradingeconomics. (2010). UK GDP. Retrieved from www.tradingeconomics.com:
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35

tradingeconomics.com. (n.d.). Unemployment Rate. Retrieved 2010, from tradingeconomics.com:
http://www.tradingeconomics.com/Economics/Unemployment-rate.aspx?symbol=GBP

TransportForLondon. (2010). Key Facts. Retrieved 2010, from tfl.gov.uk:
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TransportForLondon. (2010). London Buses. Retrieved 2010, from tfl.gov.uk:
http://www.tfl.gov.uk/corporate/modesoftransport/1548.aspx

Figure 1 (SASAnnualReport, 2009)..............................................................................................................................5

Figure 2 (SASRouteMap, 2010)...................................................................................................................................5



Figure 5 (SAS, 2010)...................................................................................................................................................6

Figure 6 (SAS, Business Traveller, 2010) .....................................................................................................................7

Figure 7 (SASAnnualReport, 2009)..............................................................................................................................9

Figure 8(statistics.gov.uk, 2009)................................................................................................................................10

Figure 9 (anna.aero).................................................................................................................................................11

Figure 10 (SASAnnualReport, 2009)..........................................................................................................................15

Figure 11 (twitter, 2010)...........................................................................................................................................22

Figure 12 (GlobeofFortune).......................................................................................................................................23

Figure 13 (GlobeofFortune).......................................................................................................................................24

Figure 14 (facebook.com, 2010)................................................................................................................................25

36

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