10 step marketing plan-cebu pacific

10 STEP Marketing Plan for Cebu Pacific

Kaye AvellanaJune 2011

http://kavellana.blogspot.com

This 10 Step Marketing Plan is part of the mandatory requirements of Prof. Remigio Joseph De Ungria’s AGSB marketing management class.

The data included in this report are based on publicly available data such as those on internet websites, news, package declarations, public reports.

When appropriate, data are “masked” so as not to create unexpected conflicts.

The reports are posted and linked on slideshare, blogs and facebook so that there is easier sharing among students from different marketing classes.

Disclaimer

1. Cebu Pacific’s target market are budget-conscious travelers

2. Cebu Pacific fliers need low-cost airfares to satisfy social and personal needs of traveling

3. Cebu Pacific’s direct competitors are: AirPhilExpress, Zest Air, Philippine Airlines, and AirAsia Philippines

4. The opportunity gap lies in capitalizing on the vast number of destinations and maintaining low-cost status

5. The total market size for domestic air travel was 8.4 million tourists or PhP 42 Billion in 2010. Estimated growth for 2011 is 12%.

Summary: Steps 1 to 5

6. Cebu Pacific has the most domestic destinations available

7. Cebu Pacific is low-cost compared to PAL and SEAir, but varies depending on season with ZestAir and AirPhilExpress

8. Cebu Pacific promos are frequent and very attractive to the market through the use of email blasts, word-of-mouth, print ads, etc.

9. Apart from having covered most domestic tourist spots, they also have an efficient online booking system

10. Cebu Pacific combines low-cost airfare and number of destinations to attract customers and make purchases easy by booking online

Summary: Steps 6 to 10

Primary Target Market Age 21-35; Male and Female; Single and

Married; Social Class BC Employed; budget-conscious; Avid leisure traveler; almost always with

loved ones (friends/family/significant other)

Willing to sacrifice comfort for savings Tech-savvy Not afraid to make online purchases

PTM’s Needs/Wants/ Demands

6Reference: Maslow’s Hierarcy of Needs Marketing Management, 11th ed, Philip Kotler

The need to belong and have relationship-enriching experiences with people they love

The need to feel they can afford to travel, the independence to pay for trips & freedom to travel whenever they want

PTM’s Needs/Wants/ DemandsNeeds:They need to feel the satisfaction of being able to afford and treat

themselves to a vacation whenever the opportunity strikes. They want to share these vacations with great company such as their family, friends and significant other and build memories that will last a lifetime.

Wants: They want a reputable low-cost carrier that could give them the chance to fulfill their travel needs without hurting the wallet.

Demands: They want the best value for their money, being able to reach the destination at hand without compromising safety and service quality in the process.

Cebu Pacific’s competitors Direct Competitors

AirPhilExpress, ZestAir, Air Asia Philippines (3rd QTR 2011), Philippine Airlines, SeAir

Indirect Competitors Bus Lines (Victory Liner, PhilTranCo, etc) Ferries (WG&A, Sulpicio, RoRo, etc)

Variables: Price, Comfort, Availability of Routes, Travel

Time, Companions’ Characteristics/Personalities

Price vs. Socio-Economic ClassPrice/ Age Matrix

A B C DE

High price

Medium priceLow Price ZestAir

Price vs. SEC Matrix

Bus Lines/Ferries

CebuPacific

AirPhilExpress

AirAsiaPhilippines

Benefit positioning vs. brand map for Domestic Airlines

Benefit Positioning vs. Brand Matrix

Functional BenefitCebu Pacific

Philippine Airlines SeAir Air Phils ZestAir

Air Asia Phils

Low fare promos year-roundOnline check-inOnline reservations/paymentoperates at NAIA 3 hub ?Free check-in baggageIn-flight Snacks/RefreshmentsMileage accrualNo re-booking chargesDomestic and International destinations C/S C/S

*C/S: Code-share

Market GapCebu Pacific is the pioneer low-cost airline in the country

wherein Zest Air and AirPhilExpress have followed suit. Air Asia is following the same marketing positioning as CP but with international branding.

CP can focus on tenure in the industry as well as continued low-cost offers to stay ahead of Air Asia.

CP is notorious for delayed flights and poor customer service.

In order to stay on top in the low-cost airline segment, CP should improve on quality service and maintain their low-cost fares. They should also try to penetrate the tourist-focused routes which are currently monopolized by competitors (Marinduque, Batanes)

Cebu Pacific is still the domestic market leaderCebu Pacific has successfully maintained its

position as the country’s largest domestic carrier

48.2% of sales from domestic air travel market in 2010

From January to June 2010, Cebu Pacific flew 4.1 million domestic passengers, 1.2 million passengers more than Philippine Airlines (PAL).*

The total market size for domestic air travel was 8.4 million tourists in Q1 2010

Source: http://www.financemanila.net/2010/10/cebu-pacific-ipo-last-call-for-boarding/

Cebu Pacific held a 48.7% domestic market share over its competitors in 2010

Cebu Pacific = 48.7%Philippine Airlines = 34.5%AirPhilExpress = 7.9%Zest Air = 7.3%SeAir = 1.6%

Revenues of CP in 2010 was PhP 14.91 Billion, a 30.9% increase from 2009 values.

http://www.usnewslasvegas.com/national/cebu-pacific-overtakes-pal-in-domestic-market/

Cebu Pacific is still the domestic market leader

Source: http://www.financemanila.net/2010/10/cebu-pacific-ipo-last-call-for-boarding/

Domestic Travel Market Size

1. Competitor data= PhP 21.6 Billion

2. Company data = PhP 20.5 Billion

3. Customer Usage data = PhP 42.1 Billion

Print Ads – domestic airlines

Product DescriptionCebu Pacific has promo fares year round and for any

occasion offers the most routes for travelers has the “fun” factor (in-flight activities) Pushes hard for their tag line “it’s time

every Juan flies” and is manifested in all their advertising and promotional materials

Price ComparisonAlthough some airlines are cheaper than CP in other destinations, CP is consistent in maintaining affordable airfare in all routes

June 11-13, 2011

ROUTE (RT)

Manila to: Cebu Pacific Philippine Airlines ZestAir AirPhil Express SeAir

Cebu 2,688 3,686 3,500 2,478 N/A

Davao 3,598 5,926 4,524 3,460 N/A

Caticlan 5,298 13,352 N/A 6,228 10,780

Bohol 3,278 4,493 2,308 3,370 N/A

Batanes N/A N/A N/A N/A 15,327

Busuanga 5,798 8,420 6,538 3,925 N/A

Modes of Communication

Sales Promotions

Advertising

Direct Marketing

Public RelationsPhilippine budget carrier buys 37 new Airbus jets

Philippine pilot soars above gender barrier

Events & Experiences

Word of Mouth

Sales Promotions-Competitors

Advertising-Competitors

Purchase Point Online Sales – cebupacificair.com Call Center Sales Local & International banks

nationwide Cebu Pacific ticketing office Accredited Travel Agencies

Electronic copy via email Print-out from ticketing office/travel

agencieshttp://kavellana.blogspot.com

Cebu Pacific’s Generic Winning Strategy

Low Cost Producer Supply and Distribution Leverage Differentiation Niche

Differentiation as the key Common: low-cost flights, year-round

promos, good number of fleets, online booking

Difference: no-frills & fun flights, most number of fleets, aggressive public communication strategies

Recent Market-changing Event Operations will begin Q3 2011 Joint venture between Air Asia &

Filipino investors Promises low fares to compete with

Cebu Pacific & PAL Travel to both domestic &

international destinations with Clark as its hub

5 brand-new A320 planes this year with target of 20 by 2015

Cebu Pacific VS Air Asia Started

operations in 1996

Flights to/from 25 countries

78 total destinations (excl. domestic)

SEA’s biggest low-cost carrier

Started operations in 1996

Flights to/from 10 countries

49 total destinations (incl. domestic)

RP’s leading domestic carrier

Adapting to Change Air Asia is a rookie in the Philippine

Market 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

Air Asia is a more experienced airline CP should improve on customer service

and timely schedule of flights so that users will not switch to Air Asia

Adapting to Change Air Asia is no-frills and no-fun

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.

Air Asia will be directly competing with CP and PAL for domestic & international destinations

CP should increase their destinations to include up & coming tourist attractions, thereby widening their lead against old & new competitors (Batanes, Marinduque, etc)

10 STEP Marketing Plan for Cebu Pacific

Kaye AvellanaJune 2011

10 step marketing plan-cebu pacific

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