Tuesday 26 May 2020

Ales Airlines - Marketing Strategies by Jeevitha Sugumar Director Marketing

Ales Airlines - Marketing Strategies 
    
      Ales Airlines is looking to expand its operations in the Airline Industry by opening up new routes to new locations. The company is looking to expand its fleet and offer customers short breaks and various summer and winter holiday packages. This is a unique opportunity for the company to invest a new concept of marketing in the aviation industry. In order to achieve this Ales Airlines will need to create a demand in the holiday industry by providing a multitude of destination options, on flight services, cheap and competitive fare rates.
Ales Airlines will have to begin the process of expansion, a marketing strategy plan which incorporates the major ideas of marketing to promote the new holiday packages. This report offers various strategies that can be implemented for the benefit of the airline as well as compete with other airlines. According to the research conducted the direct competitors of Ales Airline operations will be Easy Jet and Ryan Air as they provide low/cheap fare for both long-haul and short-haul travel. However, these airlines have not completely carved a niche in the holiday market, which will be the main aim of Ales Airline to provide luxury holidays with little expense.
The market research conducted for the report includes industry trends, market segmentation, an analysis of the various competitors that Ales Airline will need to interact with, and customer trends/profile. The report develops the marketing strategy for the holiday expansion by following the marketing information system (MIS) approach and comprehending the environmental setting in which the company will be operating in.

Introduction

It is difficult to define marketing in a single best way. However, there are two definitions that truly capture the critical components:
“Marketing is the process of planning and executing programs designed to influence the behaviour of target audiences”
• Alan R. Andreansen and Philip Kotler (as cited in Kramer et al, 2010)
“Marketing is the art of identifying and understanding customer needs and creating solutions that delivery satisfaction to the customers, profits to the producers and benefits for the stakeholders”
• Sean Mauger (as cited in Kramer et al, 2010)
Marketing is a strong tool that can be used to attract customers, expand business, and initiate innovation to match the strategic needs of any organisation. Various marketing concepts are essential to development of a strategic marketing plan for Ales Airline in order to compete with competitors within the market. This data will be obtained from intensive market research to understand the consumer psyche, buying preferences, and air travel market place to capture the maximum market share. This report will discuss the various marketing strategies that can be used to develop a marketing department to focus on the European holiday market.

Overview of Ales Airlines

Ales Airline is a small but successful business mainly operating from small regional airports in the Austin Texus with flights to 20  destinations. The destinations that are catered to are either near major cities or seaside resorts. Ales Airline currently leases its fleet of 5 Boeing 737-600 planes with the capacity to carry 110 passengers. The current goals for Ales Airline include:
1. Upgrade its fleet to include planes that are able to hold 150 passengers
2. Increase current number of destinations to 30
3. Expand operations by offering customers holiday packages and short breaks

MIS & Environmental Scanning

Marketing information systems (MIS) and environmental scanning are essential components that are imperative for data collection in order to develop a strategic marketing plan. MIS is used to bring together incongruent or contrasting items of data into a form of information that is coherent and applicable. MIS should not be considered as just raw data, it provides a means of interpreting the information provided by MIS to aid in decision making. According to Kotler (1988) MIS is a “continuous form and interacting structure of people, equipment and procedures to gather, sort, analyse, evaluate, and distribute pertinent, timely and accurate information for use by implementation and control.” The following diagram illustrates the functional implementation of MIS that Ales Airline will need to employ in order to conduct research for expanding and developing packages for the European Holiday promotion.
Since Ales Airline  is a newly Started Airlines , it has a wealth of information that can be utilised which includes internal records that are of instant value to marketing decisions, orders received, stockholdings, and sales invoices. Records can be used by marketing managers to sort, examine, and interpret data which can be incorporated into a marketing strategy from information received from sales invoices such as:
• Product type, date of purchase, and package type by territory
• Product type, date of purchase, and package type by type of account
• Product type, date of purchase, and package type by customer
• Average value and/or volume of sale by territory
• Average value and/or volume of sale by type of account
• Average value and/or volume of sale by sales person
By looking and comparing invoices Ales Airlines can establish to a certain extent if it is providing acceptable customer care and this data can also provide insight to trends of buying behaviour that is exhibited by customers in terms of purchases of holiday destination packages.
With marketing research systems a proactive search for information is taken by companies. It is suggested that Ales Airlines commission a study to solve the perceived marketing problem in order to develop a strategy that directs its efforts to an affordable European holiday.
 
Market Segmentation

To complete market analysis and market segmentation this will require a specific passenger and destination survey which is an added cost and is recommended for Ales Airlines to conduct such an analysis.
The preliminary analysis that Ales Airline should conduct and include a variety of methods such as observations, interviews with travel and airline industry professionals, economic segmentations, future projections based on marketing plan, and experience within the region and market for planning purposes. The following is an estimate overall market segmentation retrieved from literature review:
• Business- 16%
• Government and International Organisations- 10%
• Regional (America) Resident Personal and Leisure Travellers- 26%
• Personal and Regional travellers based in South England- 11%
Seasonal Holiday travellers- 37%
•  Low fares have become an expectation from consumers due the extent of de-regulation of airlines and focus on price positioning is no longer the only concept an airline needs to build on. The market segment opportunities for an emerging airline such as Ales Airline include a combination of service mix, price, route selection and has to decide on a service mix and price in conjunction with this as this decision will impact customer preferences. Speciality carriers are categorised as either “short-haul” or “long-haul”.  
Competitor Analysis

The SWOT analysis model enables to determine how Ales Airline compares to its peers and competitors. For this particular competitor analysis the following information is focused on:
• Air service offered: destinations, carriers, frequency, and aircraft type
• Business and leisure air fares
• Holiday package deals
• History of service at airports in North West England
From the previous section’s market research it is found that Ales Airline has the following competitors:
• Express jet
• American Airlines
•  Delta Airlines
• Southwest Airlines
• Norwegian Air shuttle

Customer Analysis/Buyer Behaviour
According to Zeithaml (1988) value is a trade off between ‘get’ and ‘give components of customer experiences. The relationship between the benefits that the customer attains from the product or brand and the cost borne by the customer to obtained from those benefits is known as the customer perceived.
Customers of Ales Airlines are mostly those leisure travellers situated in the North of England therefore the airline needs to target outbound passengers from counties such as Greater Manchester, North Yorkshire, Cheshire, Cumbria, Tyne and Wear, Merseyside, Northumberland, etc.
According to Chacon and Mason (2011) a study with respondents indicates the purchasing criteria of consumers in which respondents indicated the most important aspects when choosing an airline:
1. Frequent-flier program
2. Range of Destinations
3. Service (onboard and at the airport)
4. Punctuality
5. Price
For low cost carriers customers included Price and schedule as well as additional product features which included seats, in-flight entertainment, and lounge access. These are important aspects that are incorporated into Ales Airline customer profile which influences buying behaviour. Based on these buying behaviours (See Appendix B) and added demographic preference of travel for leisure travellers for both the summer and winter holidays we can build a customer profile.
 
Pricing Strategy

The airline industry is a competitive setting which is continuously changing and influencing the changes in Ales Airlines. Competition in the market will influence Ales Airlines into evolving their business model or competitors of the company to adapt their strategy in order to look for an advantage. However, with a strong pricing strategy along with revenue management and pricing solutions Ales Airlines can become flexible enough to achieve in the ever changing marketplace. It would be beneficial for Ales Airlines to integrate into their pricing strategy a designed solution that incorporates revenue management to effectively compete in with other carrier and low-cost carriers. The proposal would be to take advantage of Ales Airline’s connecting hubs using the company’s own network. An effective pricing solution needs to be able to collect information and analytics that allow it to respond rapidly and effectively against fare charges of their competitors.
Product and Branding Strategies


Ales Airlines’ main aim is to establish itself as a niche player in long-haul market but low cost fares by providing high level service and comfort at cheap prices. In order to do so the company will work on the following branding strategies to incorporate concepts of significance, positioning, and benefits:

• Frequent Flyer Miles Program

Major airlines such as British Airways, Emirates and Aer Lingus have been successful in retaining customers by giving them frequent flyer miles each time they travel. As customer mount miles they gain specific privileges which include access to airport lounges, upgrades, and free flights. Ales  Airlines will introduce a frequent flyer program of its own which is simple and coherent with the holiday concept. Ales Airlines will offer frequent flyer internet cash to customers that can be spent on specific travel websites for holiday packages.
• Promotions Strategies
Offer special holiday promotions to destinations such as Paris, Madrid, and other for the first month of the holiday scheme operations to attract as many customers as possible and get them to experience the services.
• Airline’s Convenience Services for Flight’s Passengers
• e-tickets- Tickets purchased are 100% electronic and the passenger will need their passport and confirmation number in order to board the plane. They will also be able to print a copy of the itinerary from the company’s website.
• Free transfers to-from airports: A free shared car service will be offered between airports of destination areas to specific hotels, ones that are affiliates of Ales Airlines will be made available to customers.
• Larger carry-on luggage- Increased space on board will allow for the airline to accommodate larger carry-on luggage which is a sensitive issue for most travellers that do not wish to check in.
Ales Airlines needs to market its products under the brand position that it is the complete holiday planning company giving its customers luxury at an affordable price. The developing brand itself creates an emotional tie with the customer that goes further than just the price. Ales Airline’s brand signifies a holiday experience that is developed to allow its customers to make worthwhile memories with family or loved ones. This is evident in the development of logos that target customers to establish an emotional relationship with the company. 


Conclusion

The report features an analysis of the industry and external environment of Ales Airlines and looks at strategic options that the company can implement in order to make the new holiday package destinations to become a success. In order to survive in this industry’s changing environment it is essential that the airline implements a strong marketing strategy that incorporates that various aspects that have been discussed in this report. Competing airlines are also working daily to improve their business operations. There is serious competition for Ales Airlines with Easy Jet and Ryan Air who are already operating regionally and to 
major European destinations. Ales Airlines should focus on improving and maintaining a high level of customer service along with affiliating with hotels and car rental companies to give the customer the ultimate holiday experience and value for money.

Jeevitha Sugumar
Director of Marketing Department 
Ales Airlines Inc. USA


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Disclaimer  :
This is just a Fictional game not a real one . As an MBA students, Interns are playing different Role Plays.

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