Essay on "Marketing Plan for Pet Airways"

Essay 10 pages (3179 words) Sources: 5

[EXCERPT] . . . .

Pet Airways is a low-cost carrier differentiated by its high service levels and its unique ability to handle pets. It will focus on three major target markets in the U.S. Northeast, and will be launched with an extensive marketing campaign. The company is going to have stringent controls and a high level of ethical integrity. The airline is going to use skimming and penetration pricing to build market share and brand loyalty, and the pet strategy will help to capture that untapped market.

Situation Analysis

The airline industry is highly competitive, and as a result is a difficult one in which to break into. For firms entering the market, a competitive edge is required. The objective of Pet Airways is to successfully enter the airline market in the United States. The company will need to compete with a number of key resources. Human resources are essential, as service will be a critical factor in developing the market base. This will include training with respect to handling pets, which is a key point of differentiation for the airline. The opportunity is believed to arise from the poor service that other airlines deliver these days to pet owners. Most pet owners are faced with high fees and questionable service and safety records with respect to pets. Most pet owners have abandoned flying altogether, in favor of driving or other modes of transport. Pet Airways believes that these customers will return to flying if they know that there is going to be a superior service level. Non-pet customers will see that the high level of service afforded to pets is given to them as well, and this will entice them to fly with the airline.

Clearly, ethics and corporate social responsibility are important elements of the company. Any airline needs to be especially oriented towards ethical behavior, because people's lives are in the hands of the airline. Any issues that lead to death not only will be horrific, but will put the company out of business as well. Therefore, nothing can be said to affect the ethical standards of the company. The company will be incorporated in Delaware to reduce its tax burden, but will have the core of its business in the Northeastern U.S.. The company will compete for business in the short-haul sector, because it is going to be drawing on the unserved market that is currently driving because they do not trust airlines with their pets.

Customer Analysis

There are two main customer types that Pet Airways will serve. The first are pet owners, who currently have a lot of problems with airlines. Most airlines do not understand that pets have unique needs. Not all breeds are alike, and therefore need to be handled differently according to their breed. Pets are not "cargo," but specific types of animals. This lack of knowledge of animal handling leads to needless deaths and injuries among pets, and there are a high number of these reported every year (PetFlight.com, 2011). As a result, many pet owners reject commercial airlines, only using them to transport pets overseas. These are people who would prefer to fly, but simply do not wish to risk the health of their beloved pets to do so. This market is estimated to make up around 10-20% of the total load of any given flight.

The largest customer group will actually be non-pet owners. These will be attracted by the airline's price and service offering, which will be competitive with other low cost airlines. As a result, the airline will attract both business and pleasure travelers seeking good connections, and easy travel. Business people are typically in their 30s-50s, upper managerial or executive level, or sales, and often travel on the company tab. The consumer group will be made up largely of seniors and students able to take advantage of good last minute fares, and of ordinary people in their 30-60s who book well in advance for their trips around the U.S. They are typically going to be of middle income and education level, and employed.

Most of the pet customers will select Pet Airways specifically because of our special abilities in handling animals. They are more likely to purchase well in advance, but even if they do not Pet Airways will be able to meet their needs. Other than pet customers, advance purchase customers are going to be oriented towards price as a main selling point, and within the concept of low cost airlines service will be the secondary selling point. It is on this that Pet Airways will truly differentiate itself from the competition. Business travelers will also be price sensitive, but this is a secondary selling factor. The primary selling factor for business travelers is convenience. Scheduling and choice of destinations is therefore an important component of the business.

Essentially, these are the three segments that will be targeted. The business and non-pet consumer markets are critical as the base of any airlines' business. Without these customers, the airline would not survive, due to the high costs associated with flying planes. Business is a growing and lucrative element of business travel and many airlines are reconfiguring their planes to meet demand for this market (Negroni, 2011). It is worth considering that airlines will be increasingly called upon by the market to accommodate the needs of narrower passenger segment types, from those with long legs to those wanting premium meals to those with pets. It is the latter that will be targeted most by Pet Airways, carving out a niche within the low cost segment to deliver a sought-after value-added service.

Competitive Market Analysis

There are essentially two types of airlines competing in the domestic U.S. market -- legacy carriers and low-cost carriers. The market is worth $731.5 billion to America's GDP, including $154.7 billion in airline revenue alone (ATA, 2010). In terms of operating revenues, legacy carriers account for five of the top six spots, the other being FedEx. These airlines have revenues in excess of $10 billion per year, while Southwest is the only low cost carrier to have this level of sales, that company being the oldest and most well-established non-legacy carrier. The remaining low cost carriers are a mix of relatively new companies (JetBlue) and older companies that have rebranded themselves (Alaskan), and there are many regional players with in the low cost niche, as most of these companies focus on short-haul flights.

JetBlue competes in the Northeast corridor that Pet Airways wants to target, as do all of the legacy carriers and a significant number of smaller, regional airlines. The industry is characterized by stable demand and is generally a mature industry. Among many consumers there is a high degree of brand loyalty, fostered in part by loyalty programs that almost all airlines have. Yet many casual travelers lack brand loyalty, partly out of dissatisfaction and partly because most loyalty programs do not meet their needs. The airline industry is a high-volume, low-margin business. According to the ATA, the industry's net profit margin for 2009 was negative, as too many airlines lost money in the year. This was despite a load factor of 80.4%. Thus, it is imperative that Pet Airways achieve a load factor over 80% in order to have a chance at being profitable. This will require outcompeting other low-cost carriers. While the price/service offering is expected to get the airline close, the pet focus is expected to push the load factors over the top, allowing Pet Airways to achieve 82-83% load factors, which should be enough for the company to be profitable.

JetBlue and other low-cost competitors are able to deliver good prices; legacy carriers compete mainly on the high number of flights and long-term customer loyalty. The latter are weak financially, but JetBlue is not. However, it has failed to live up to its big talk on customer service, so that is a weakness that can be exploited. The competitive environment illustrates that it is necessary to match prices of JetBlue but offer better service, and be able to undercut the prices of legacy carriers, if Pet Airways is going to be able to attract non-pet customers.

Because of the critical importance of volume, it is expected that the response of other airlines to our market entry is going to be serious. Airlines can be expected to compete on price -- predatory pricing is common industry practice and goes largely unpunished despite it being illegal (Robenalt, 2007). In addition, it may be difficult to secure access to the best routes, because of the strong alliances that many airlines have with major airports. Thus, competitive response is expected to be intense. Other airlines may work to improve their pet service as well, as a means of eliminating one of our most important sources of sustainable competitive advantage.

External Market Environment

The airline industry is dependent on two facets of the external environment -- the general state of the economy and the price of oil. The former is moderately favorable, with the Congressional… READ MORE

How to Reference "Marketing Plan for Pet Airways" Essay in a Bibliography

Related Essays:

Marketing Plan for a Company Marketing Plan

Marketing Plan

This marketing plan is for Starbucks, to guide the company to its revenue and growth objectives. The plan focuses on the cash cow market on the United States… read more

Marketing Plan 15 pages (4494 words) Sources: 5 Topic: Advertising / Marketing / Sales

---

Marketing Strategies the Marketing Plan Delivers Marketing Plan

Marketing Strategies

The marketing plan delivers the various strategies that All Technology Computer will use to enhance competitive market advantages. The paper discusses the company mission statement and the strategies… read more

Marketing Plan 18 pages (5577 words) Sources: 10 Topic: Advertising / Marketing / Sales

---

Marketing Plan for Blueprint Cleanse Marketing Plan

Risks and problems

The organic juice industry is still growing and is greatly influenced by organic food trends. Organic foods have faced huge challenges such as consumers doubting their source… read more

Marketing Plan 6 pages (1725 words) Sources: 2 Style: MLA Topic: Advertising / Marketing / Sales

---

Marketing Plan for a Series of Survival Courses Marketing Plan

Marketing Plan for a Series of Survival Courses

There are no second chances in Mother Nature's survival course. -- Robin Lydenburg, 1999

Manmade and natural disasters can strike at any… read more

Marketing Plan 9 pages (2723 words) Sources: 9 Topic: Business / Corporations / E-commerce

---

Marketing Plan the Potential Audiences Marketing Plan

Marketing Plan

The potential audiences for the Firenze include all smartphone and tablet users in North America and Brazil, specifically those who need to have a tablet device capable of… read more

Marketing Plan 18 pages (5054 words) Sources: 15 Topic: Computers / IT / Internet

---

View 100+ more related papers  >>