Directions: A proper pricing and promotion strategy can make or break any busine
ID: 365196 • Letter: D
Question
Directions: A proper pricing and promotion strategy can make or break any business. Your goal is to develop a comprehensive pricing strategy for your product(s) and/or service(s). In your business plan and/or executive summary, make sure to include how you came up with your pricing strategy. Did you use primary or secondary data, what type of market research did you conduct, etc.
The second part of this assignment is to develop an integrative promotion campaign. If this is a new product/service, how will you launch it to get the most coverage to your potential customers? If this is an existing product/service, how will you re-introduce it to your customers, old and new?
PRICING STRATEGY Create a pricing strategy for your product(s) or service(s). How did you develop this strategy?
PROMOTION STRATEGY Develop an integrative promotion campaign for your product(s) and/or service(s). How long will your promotion(s) last? Your promotion should include some types of social media component.
Explanation / Answer
Directions: A proper pricing and promotion strategy can make or break any business. Your goal is to develop a comprehensive pricing strategy for your product(s) and/or service(s). In your business plan and/or executive summary, make sure to include how you came up with your pricing strategy. Did you use primary or secondary data, what type of market research did you conduct, etc.
Pricing Strategy For Low Cost Carriers
Competitive Advantage through Cost Leadership and Cost Focus (Low Price High Volumes Strategy)
This is a competitive strategy which competes by using aggressive discounts that increase sales and helps the organisation acquire new customers. When a business launches a product or a service at a discounted rate or a low price and then increases it or removes the discount over a period of time as the product or the service market saturation increases. Traditionally e commerce companies use price or cost strategies. Marriott implements this by offering highly competitive rates in the hotel industry. They do this by reducing costs and improving efficiency so that the value can be passed down to consumers.
How Low Cost Carriers can compete on price in the Airline Industry
Planning Routes and Reducing Turn Around Time on the ground to save on Fuel Costs
Fuel is undoubtedly one of the largest factors when it comes to operating costs in an airline, followed by labour (staffing costs) including pilots, cabin crew, ground staff, engineering and operations). After fuel and labour, parking and airport access fees are the next highest costs for an airline. Airports with higher traffic naturally have a higher parking and access fees for the airlines, followed by airline maintenance , servicing and spare parts. Low cost carriers tend to cut the fringe benefits and reduce turn around time on the ground by excluding meals in domestic carriers, which means that the airline can re supply, refuel and get back in the air quickly. Low cost carriers tend to pick cities and routes with high demand to increase occupancy and to improve efficiency.
Where as legacy airlines tend to focus more on the benefits, comfort, easy and reliability.
An efficient Workforce management system GPS ( Global Planning & Staffing) : GPS allows the operations team to track staffing and workforce tasks on a real time basis and allows them to be re skilled to or assigned to high priority tasks based on their skill levels and competency whenever they're needed to. The system shows site central the skill levels and production line the he or she could be re skilled to.
Where as legacy airlines always operate with a buffer staff or a relative excess level of staffing at all times.
The second part of this assignment is to develop an integrative promotion campaign. If this is a new product/service, how will you launch it to get the most coverage to your potential customers? If this is an existing product/service, how will you re-introduce it to your customers, old and new?
I would use a similar campaign that would effectively communicate my Airlines Value Curve. My marketing campaigns would position my Airlines as a low cost and a more convenient alternative to renting a car and driving to another state. The reason for this is that the pricing for my Low Cost Airlines was just a few dollars above the cost of using Hertz Car rental to drive down to another state.
I would primarily use Social Media in order to drive awareness, promotion , marketing and sales conversions. This is an existing product or service. I would re introduce it to my customers by adding reliability as the key differentiating factor between my low cost airline and my competitors. Most low cost carriers often delay , cancel or club flights in order to save costs. This effects the airlines reliability metrics.
An integrated promotion campaign
PRICING STRATEGY Create a pricing strategy for your product(s) or service(s). How did you develop this strategy?
i developed this strategy by studying the marketing strategies, pricing and the market share or low cost carriers. After i had a clear view of the competitive landscape, i created a pricing and a marketing strategy.
hese strategies have largely been successful in the domestic airlines market while legacy airlines have been successful in the international airline market. The chart below shows how low cost carriers have dominated sales in 2015 and the first quarter of 2016. Source :
Bureau of Transportation Statistics
'
Dollar Change 1Q2015-1Q2016
PROMOTION STRATEGY Develop an integrative promotion campaign for your product(s) and/or service(s). How long will your promotion(s) last? Your promotion should include some types of social media component.
The promotion will last until sales pick up to break even point.
Rank Airline 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016Dollar Change 1Q2015-1Q2016
1 AA-US Combined 808 1,465 1,722 4,552 710 -98 American 569 1,052 1,722 4,552 710 141 US Airways 239 414 N/A N/A N/A N/A 2 Delta 745 1,490 1,319 988 955 211 3 United 509 1,193 4,776 824 314 -195 4 Southwest 453 608 584 536 511 58 5 JetBlue 137 152 198 190 199 62 6 Alaska 145 228 268 187 185 40 7 Hawaiian 33 50 71 39 53 20 8 Spirit 69 80 103 79 68 -1 9 SkyWest 17 31 37 28 28 11 10 Frontier 31 54 29 19 39 8 10-Carrier Total 2,947 5,352 9,107 7,441 3,063 116 All Passenger Airlines 3,103 5,515 9,268 7,698 3,056 -46Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.