Marketing Plan of Skyvision Airlines - Research Paper Example

? Skyvision Airlines: Marketing Plan Skyvision Airlines: Marketing Plan Company Overview Skyvision Airlines is a US based company that deals with domestic as well as international aircraft services and it presently operates low-fare discount carriers. The company is headquartered at New York and it has several subsidiaries across the country including California and Las Vegas. It is a well established firm in the airlines industry that maintains stable profitability. From (Airlines renew debate over low-cost model, 2011).Nowadays, it is becoming difficult for low cost airlines companies to confront with market competition due to different factors. As part of business expansion, the Skyvision Airline is planning to enter full service airline operations. As the company is a key player in the industry, it has wider access to a range of potential resources including human and finance and this capability would be assistable for the organization to deal with business expansion activities. In addition, the company has an expert team of aircraft technicians and engineers, and therefore designing full service airlines may not be a difficult task for the firm. The Skyvision Airlines offers additional services including rent a car, hotel accommodation, and other amenities that can be booked online through the company’s website. Executive summary of marketing plan As the company focuses on a full service airline, high income groups would be the main target segments since low and middle class people may depend on low-fare discount carriers. The company will target customers on the basis of their tastes and specifications. Big players in the US airlines industry including Southwest Airlines and JetBlue Airlines are identified to be the potential competitors to Skyvision Airlines. In addition, the increased pressures from lower cost competitors may also raise serious threats to the company. While analyzing the services offered by the company, it seems that the firm has a range of potential advantages over its competitors. Like the most full service airlines, the Skyvision Airlines also operates aircrafts with cabins that have different three classes of services. The company management has budgeted one billion for this service plan implementation. However, the management is willing to raise additional finance if it becomes necessary. The Skyvision Airlines offers its services in economically as well as technologically developed regions to attract more urban customers. The company has a large number of flight services to industrially developing countries like India and China where thousands of people travel by air every day. As the company offers the full service airlines for the first time, it will charge a relatively lower price at initial stages. Stiff competition from low cost competitors also pressurizes the company to reduce its fare margins. The management has decided to raise its price margins once customers are attracted by its service quality. Description of the target market The company mainly plans to focus rich businessmen, business executives, high salaried employees, and other famous personalities including athletes and individuals from film industry. However, the organization will not ignore other classes of people completely as it also provides ordinary cabins. Nowadays women represent nearly fifty percent of nation’s employment sector and therefore it is necessary to target women and men with equal importance. According to IBM, family customers often choose full service airlines as they give first priority to privacy factor; hence, the company will give great emphasis on family customers while framing its promotional strategies. Skyvision Airlines will focus more on people under the age 55, because most of the old aged people are dependent on their younger family members. The firm intends to specifically target businessmen and other famous personalities since they would use airlines services frequently and continue to be the company’s potential customers once they are interested in the service of Skyvision Airlines. The company will also take economic status of people into account while targeting market segments. Since the price margins of a full service airline may not be affordable to low class customers, the Skyvision Airlines plans to specifically focus on people from middle as well high income groups. Finally, the firm will greatly target tourist customers also since the Americans are very much interested in touring and the USA is an attractive tourist destination. Description of Competitors Southwest Airlines and JetBlue Airlines may be the potential competitors to the Skyvision Airlines while operating full service aircrafts. Southwest Airlines is a Dallas and Texas based Airlines Company that mainly deals with domestic passengers and is the largest one in the United States. Different vocation packages and cruises are some of the attractive services offered by Southwest Airlines. In addition, Southwest Airlines serves their customers by providing Business Select, Wifi, Mobile Access, and EarlyBird Check-In facilities. Since the Southwest Airlines avoids too much luxury facilities, it facilitates the company to cut down the passenger charges and ultimately this strategy assists the company to achieve loyalty of customers. Therefore, it is obvious that the Skyvision Airlines will face intensive completion from the Southwest Airlines in its domestic operations. Similarly, JetBlue Airways Corporation is an American low-cost airline and which is headquartered at Forest Hills in New York City. JetBlue is a non-union airline and it has won the ‘Reader’s Choice Awards’ offered by Conde Nast Traverler magazine in October 2007 (Jet blue, 2010). JetBlue has made alliance with the International Student identity Card (ISIC) with intent to extend its services to student travelers. As part of its community relations plan, the JetBlue supports nearly 700 nonprofit organizations throughout its American destinations. The JetBlue has designed a social responsibility program called ‘Jetting to Green’ that functions to deal with environmental issues thereby to achieve a greener planet. In total, the rapid growth of JetBlue through operating low-cost airlines becomes a threat to the Skyvision airlines in its international operations. In contrast to the case of JetBlue, many established companies including Kingfisher are planning to exit from low cost segment (Operating cost of law-cost carrier competitive, 2011). Description of Service The Airline Deregulation Act of 1978 significantly increased the number of low cost airlines, and nowadays they are notably dominating the industry (Deregulation and Its consequences, n.d). Hence, the Skyvision airlines has decided to offer highly improved and innovative services to its customers in order to effectively confront with low-fare discount carriers. Typically, full service airlines fewer seats in each aircrafts with intend to expand the service features. On the contrary, Skyvision Airlines will maintain more number of seats with seat size and seat pitch more generous. The company management plans to offer more in-flight perks including diverse choice of food and beverages and entertainment options and amenities such as headphones and separate mini televisions without actually charging for them. The Skyvision Airlines will operate more number of long destination aircrafts than domestic services because people may depend on low cost airlines for shorter distance journeys. The firm will also maintain two main hubs through which our flights are routed so as to provide connection opportunities to passengers. Finally, the company’s aircrafts have been mainly routed to fly to large primary airports in major cities as opposed to serve secondary airports with lower cost and accessibility. Marketing Budget The organization has greatly targeted full service airlines’ manufacture costs and advertising and promotional expenses while formulating marketing budget. The conversion of low cost aircrafts to full service airlines will certainly involve huge costs because all the planned facilities are much expensive. As the company presently operates low cost airlines, it is necessary to give great emphasis on promotional tactics in order to effectively advertise the new change. For this purpose, the company budgeted 25% of the total implementation cost towards the promotion of the service change. The Skyvision Airlines has decided to cast Hollywood fames in its advertisements and this approach may involve higher costs. The marketing budget has also made a provision for change management program as it is essential to integrate the whole organization with the new change. In addition, the new service plan implementation is a complex process that requires abundant financial resources for effectively contributing to business expansion notions of the Skyvision Airlines. Hence, the management has divided the implementation process into various phases and set aside proper finance for each phase according to its importance in performing the proposed change. Description of Location New York is the central point of the company’s aircraft operations. The New York City has an international border with the Canadian provinces of Ontario and Quebec and has a population of over 8.1 million. The city is considered as a cultural, financial, transportation, and manufacturing center of the United States. Although the collapse of World Trade Center building has dreadfully affected the overall structure of the New York City, it still remains to be the central point of national and international financial dealings and the city contains “corporate headquarters in finance and services, media, entertainment and telecommunications, manufacturing, and trade” (Major industries and commercial activity, 2009). Therefore, a large number of people come in and go out of the city everyday and this situation offers potential opportunities for the Skyvision Airlines. In contrast, the firm will have to face a number of competitors while operating in a megacity like New York. In addition, the New York City has extensive transportation infrastructure and it prevents the Skyvision Airlines from taking advantages of short distance passengers. In total, the location adds value to the operational efficiency of the organization. Pricing strategy As we mentioned earlier, Skyvision Airlines offers high-tech facilities to its customers, and hence it would not be possible for the company to charge a low cost to passengers. However, the company has decided to set a relatively lower price in order to get easily skip market competition. Unlike most of other full service airline companies, Skyvision Airlines will not charge fees for additional facilities including baggage, carry-on luggage, and flight booking. The company management team has decided to design special offer packages as part of its new service launching strategy. For instance, the Skyvision Airlines will offer 25% concession on travel fare for family passengers and allow a 10% price cut for students. The firm plans to implement a penetration pricing strategy by which it sets lower prices initially and increases the prices over time in accordance with market demand variations. Summary and implementation plan In total, the company needs to covert its structure from a low-fare discount carrier to full service airlines as part of its market expansion. The company is planning to practice a penetration pricing strategy in order to be quickly established in the market. From the market studies, it has been identified that Southwest Airlines and BlueJet Airways Corporation may be the potential competitors of the company. The Skyvision Airlines focuses on upper class as well as middle class customers as the fare structure of the company may be unaffordable to low income groups. The organization intends to focus more on international flight services than domestic services and it will not charge additional fees for its amenities. In short, the Skyvision Airlines is planning to offer extensive facilities to passengers while operating full service airlines. Through this service launch, the organization specifically aims to procure $30 million in sales within the first month of service implementation. The Skyvision management has planned to announce the service change one month prior to the service implementation. As part of prelaunch strategy, the organization will make a list of existing clients using its website and e-mail contact list. Nowadays social networking sites such as facebook and Twitter has attained worldwide popularity and therefore the company will advertise its service change through such social channels. In the prelaunch phase, the organization has also arranged for stage shows and video presentations in order to effectively promote its newly designed full service airlines. The company management is planning to launch the service change during the next summer, because there will be large number of tourist passengers during the summer season. According to the concept of (Bruhn, 2001), a rapid conversion from current low cost service structure to a full service airlines approach may adversely affect the profitability of the organization. Hence, the management has decided to implement the proposed change gradually. As part of this strategy, the firm will withdraw 60% of its low-fare discount carriers initially from the market. After analyzing the market effects of the new implemented change, the Skyvision Airlines will withdraw its remaining 40% aircrafts from the market after three months. The organization will appoint special team to monitor the market fluctuations caused by the implemented change. References Airlines renew debate over low-cost model. (07 October, 2011). Mail Today. ProQuest News Stand. Boland, D., Morrison, D & O’Neill, S. (2002). The future of CRM in the airline industry: A new paradigm for customer management. IBM Institute for Business Value. 1-17. Retrieved from http://www-05.ibm.com/innovation/fi/pdf/highlights/integration/crm_airline.pdf Bruhn, J. G. (2001). Trust and the Health of Organizations. USA: Springer Deregulation and Its consequences. (n.d). U.S. Centennial of Flight Commission. Retrieved from http://www.centennialofflight.gov/essay/Commercial_Aviation/Dereg/Tran8.htm Jet blue. (2010). Maps of World Airlines. MapXL. Retrieved from http://www.mapsofworld.com/referrals/airlines/low-cost-airlines/jetblue.html Major industries and commercial activity. (2009). New York: Economy. City-Data.com. Retrieved from http://www.city-data.com/us-cities/The-Northeast/New-York-Economy.html Operating cost of law-cost carrier competitive: Kingfisher. (5 October, 2011). The Press Trust of India. Asia Pulse Ltd. Read More