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Unit 19 Marketing Planning Assignment – Flybe
Diploma in Business (Marketing)
Unit Number and Title
Unit 19 Marketing Planning – Flybe
Through this Unit 19 Marketing Planning Assignment Flybe marketing planning and related theories and principles are illustrated which are done through group work as well as individual work.
Flybe: Marketing Strategy Overview
Review of the changing perspectives in Marketing Planning
Ever since the economic crisis started, the marketing strategy of Flybe became much more aggressive. The company went ahead with its strategy of exploring the acquisition opportunities which was seen as a growth strategy by the company. The plan was to increase the London Gatwick-Newcastle frequency to 4 times on a daily basis. The idea of the top management was to take advantage of the predicted spate of bankruptcies and get lucrative deals. The efforts of the company has been directed towards reduction of costs towards its staff and engaging employees to work more effectively (The Drum 2014). The focus was more towards capitalizing on sector recovering through volume yields and frequency return. The company in an attempt to price its tickets lower and attract customers tried to earn revenue through complementary travel products. It included car hire, on-board facilities, insurance, etc. It also introduced the brand profile as well as database facilities which turned into a revenue stream in form of credit card deals, etc. The airline also introduced its £9m marketing repositioning for removing the perception of being a low-cost airline. The campaign was named Making Flying better is targeted to the business travelers who are about 45% of the total travelers. The marketing plan was backed by the introduction of 3-tier ticketing price model i.e. Essentials, New Economy and Economy Plus. It was done to provide a clear difference in terms of prices as well as advantages which were on offer. The new branding and marketing plans are to make the airline appear to be transparent and upfront in business.
Organization’s capacity to plan its future marketing activities
In order to evaluate the capacity of the firm to implement future marketing strategy the potential and the capacity of the airline needs to be summarized. Presently Flybe accounts for 96% of the group’s turnover. Presently it is flying to 215 routes and serving over 73 airports. It has over 68 aircrafts which caters have catered to over 7.2m passengers till date. The company has its own training academy for different teams from the flight crew to the marketing or operations employees. In an attempt to give its marketing strategy, Flybe recruited BMI Baby and Barclaycard marketer Martin Smith as the new marketing director to turnaround the image of the airline. He has an experience of over 14 years where it did wonders for improving the image of easyJet and Barclaycard. He has always been praised for his innovative marketing strategies and it would definitely be a boost for the airline in implementing marketing activities in the coming future. The company plans to revamp the customer offering and continue on its path to emerge to be one of the strong airlines in the region. It would integrate its future plans with the Making Flying better campaign which was advertised using the services of Souk (an ad agency) through Television. Outdoor, digital, radio and press (Flybe 2014).
Techniques for organizational audits and analyzing external factors
Organizational audit is a compulsory evaluation which helps in understanding the point where the company presently stands. It summarizes the key areas which have been troubling the marketing strategy of the company and the key areas which could be utilized to leverage upon and utilized to enhance the marketing abilities of the airline company. In order to do so some marketing tools like PESTLE, SWOT, and Porter’s 5 forces would be utilized. By the PESTLE analysis, the management would be able to evaluate the political, economic, sociological, legal, and environmental conditions which surround the external environment of the business. SWOT analysis would help in listing down the key internal as well as external elements which are strengths, Weaknesses, Opportunities and threats for the airline. Lastly, use of Porter’s five forces helps in getting the external analysis for the degree of threats from competitors, substitutes, new entrants, and bargaining power of the suppliers and customers (Air Scoop n.d.). Once the airline and its management is clear about these elements it would help them to understand as what the possible reasons which have been a cause of concern or a barrier in implementation of their marketing strategies. It would also point out the areas which have been a winner for the company and an improvement in that area could help it further emerge as an industry leader. Besides that it would actually point out the areas which the company has not been keeping focus on but are those critical areas which could help them in improving and implementing their marketing strategies in a much better manner.
Organizational audit and analysis of external factors
There has been an increase in air control and security with the increased terrorism threats. There is also a heavy regulation on the airline schedules and limitation over the scheduled passenger flights that can ply over UK. Flybe has to comply by the new regulations and beef up customer security which requires a lot of expenditure.
Ever since the economic crisis in 2008 the after effects in the European Union like the world has been evident. Weakening pound against Euro has also affected Flybe in terms of its revenues. Oil prices were at their all-time high in the last 5 years, however it seems to have come down drastically now. Cost cutting measures by both the customers and the business has also resulted in a drastic reduction in the number of passengers and business revenues.
UK has an aging population which is unhealthy and the global business economic meltdown also leads to a critical levels of unemployment which had never been there in UK for over 2-3 decades. However, the positive side of the number of older generation people, Flybe has the option of getting more customers as they are more than willing to make travel plans along with long vacations. However, with increased unemployment levels, bargaining as well as price comparisons the competition would definitely increase in future.
Online price comparison has facilitated more and more customers to opt for the best deals. Moreover, it has further facilitated online booking and check-ins which has been a great advantage for most of the competitors. Hence, it is pretty difficult for Flybe to offer any price which it might want to and need to maintain a technological awareness. They need to avoid the habit of relying too much on technology based customer marketing. However, another aspect which also needs to be taken care is the number of older people who would still like to buy tickets directly from the counters in offline modes (The Drum 2014).
There have been introduction of new environmental policies like the noise pollution controls and energy consumption controls which have been around since 2009 and 2010. Being the most congested yet biggest airport, Heathrow has no positive signs of being expanded in the near future. The legislations and environmental issues concerning land acquisition would lead to increase in operational costs for the airline. Moreover, customers are more environmentally conscious than ever before. Company needs to make sure it abide by all the laws and is in the positive side of being an environmentally friendly company.
Price fixing has risen as a problem in most of the competitors where most hope in countering with a variety of customer preferences in terms of prices. Legal disputes due to the cabin crew strikes owing to job cuts has been an issue for Flybe as well. The open skies agreement in the year 2009 had been an opportunity for the company to expand its operations as well (Flybe 2014).
Marketing Plan for Flybe using the 4Ps of Marketing
The marketing plan would be prepared by using the tool of 4 Ps of Marketing.
- Product: The services offered by the company would be now highlighted as a comfortable airline and not a low cost flier which is without any frills. On-board entertainment through films, music, magazines, etc. would be implemented based on the class the customers travel. Also, the ancillary services such as food and beverage would beat the top quality.
- Pricing: Flybe usually tries to price its services and compares it with high class road travel. Hence, the pricing strategy would be to maintain its legacy besides ensuring that they offer great lucrative deals as compared to other competitors.
- Promotion: FLybe has constantly been working on reducing its costs, and promotion is one of them. Promoting the airline and its offers by the use of social media and internet marketing on a larger scale and investing lessor in print media would be a future strategy.
- Place: The airline company caters to the customers from UK and some other countries within UK. Their products and services are distributed online through their as well as other travel booking websites.
Importance of marketing planning for Flybe
The competition in the airspace is set to be intensive in the coming future. With more and more airlines offering lucrative and cost effective deals along with some traditional airlines coming into the arena of price wars such as British Airways, it is more than important to have a marketing plan in place for the company. Also, the recent changes to the legislations such as open skies agreement in EU as well as with USA, it would further increase the competition in the aerospace. With a marketing plan in place, it would facilitate proper changes and show a road map for going ahead with its operations and hence increasing the customer base and hence the revenues (Cengage n.d.).
Techniques of new product development
New Product Development is a process which comprises of a range of activities which utilizes the complex processes of delivering new products and services in a market. Each new product needs to pass through a series of stages before the idea is finally implemented (Innovation Management n.d.). There are various techniques for new product development, they are:
- Action Steps: Conclude the idea with a decisive plan of action.
- Blind steps: Testing the products or services without having knowledge of the elements of the marketing mix.
- Brainstorming: Structured set of rules to enhance creativity.
- Conjoint analysis: 2 step process which includes preparation of alternative plans/designs and then estimate its profitability.
- Core Benefit proposition: Focusing and offering a product based on the primary benefits to the customer.
- Delphi: Based on iterative survey by experts.
- Design for assembly: Designing the product in a manner which makes it easy to assemble.
- Diffusion of innovation: Recognizing key elements which aid and inhibit diffusion.
- Ergonomics: Based on how people interact with machines and services/products.
- Experimentation: Evaluate optimal price to be charged for a frequently used product/service.
- Formal Planning: Development based on 4 steps of planning i.e. set objectives, generate alternative strategies, evaluate the strategies, and monitor results.
- NPV: Net present value which is based on the capacity of earnings from a product or service (Wharton n.d.).
Pricing Policy, Distribution and Communication mix at Flybe
Pricing is a key when it comes to attracting the customer satisfaction for the airline services. Most of the customers are now comparing prices online and then moving ahead with the best possible deals. In such a scenario the pricing strategy as mentioned above would be as lucrative as comparable to other forms of substitute travel options like Trains. If the company could match it or keep it close to those levels, it would easily beat the low cost flying options available. In terms of distribution, Flybe has beefed up its booking and information systems where initiatives like online ticket, paperless travel, dedicated updates, etc. for the customers have made it far more convenient. Lastly the communication mix which the company should be practicing would be aimed at minimizing the channel members and smoother flow of information. With lessor processing and transfer of data it would make it easier for the company to locate the information origination centers (Marketing Schoolsn.d.).
Taking into account the factors affecting implementation of marketing plan
As mentioned above there are 5 different factors which affect the marketing plan. In order to ensure that those factors are taken into account, the different steps which have been taken are as follows:
- Allocation of Capital and other resources in a planned and judicious manner
- Appointing right individuals with adequate knowledge and training for dedicated levels of implementation of the marketing plan.
- Proper collection of data and processing in a manner that it delivers key outputs in connection to operations and implementation within the company.
- Proper monitoring steps would be in place to check and compare against set parameters at different levels. It would be further followed up with planned corrective measures to ensure that the end goal does not get affected.
- Taking the employees and workforce into confidence while implementing any plans, so that they are aware as what is expected out of them.
Ethics and Market Plans
Ethical Issues Affecting Market Planning
- Market Research: There have been reported instances of privacy invasion and stereotyping which has the potential of leading to various ethically undesirable results.
- Market Audience: There are companies which use selective marketing which results in discouraging demands of the undesirable market sectors and disenfranchise them.
- Advertising and Promotion: There might be some advertisements which might offend some people while being of interest to others. It is ethically not desirable.
- Delivery Channels: Direct marketing is often said to be most controversial when it comes to advertising channels. For instance electronic spam or telemarketing push can irritate any customer.
- Deceptive Advertising and Ethics: Advertisements and promotions which are deceptive in nature and might get overlooked by people. For instance humor of one kind which provides relief from a kind of human constraint could be used by advertisers which might not pleasing to some audience.
- Anti-competitive practices: Bait and switch is one of those unethical forms of anti-competitive practices where a customer is shown that a particular ticket is available at this price i.e. bait and when the customer goes ahead to purchase it is shown that its unavailable or available at higher prices i.e. switch.
- Pricing ethics: Predatory pricing which is evident in the airline industry where a company sells its tickets for a very low price in an intention to drive other competitors out of the market or create a barrier for entry of the new ones (IIMK n.d.).
Example of the way organizations respond to ethical marketing issues
A popular pizza restaurant chain named Domino’s carried out a campaign where they showed customer picture in a real Domino’s pizza outlet without any kind of studio photography or edits. It made it look so perfect and was a refreshing kind of an advertising and promotion. However, it did not signal a more open or an honest relationship between Domino’s with the pizza buying customers which is why this campaign was seen as a attention seeking stunt. Another example can be of Dove soap which had run a campaign which featured “real models”. The ad was actually meant for promoting realistic body images and encouraging girls to love the way they actually looked. But. The other ads by the same company which were featured during the same period or before had featured beautiful models whose images had been edited to hide imperfections. Here, one may say that dove marketed ethically in one campaign while it was unethical in another (Ethical Consumer n.d.).
Customers of Mini Babybel in 2012 had boycotted their cheese after they ran a marketing campaign which used the phrase of “Mentally ill Holidays”. The company had to offer an apology and withdraw a range of its products. In the same year the popular baby products company Johnson & Johnson had to reformulate its baby products for removing the formaldehyde-releasing preservatives. This move was in response of the report and boycott call from the US campaign for Safe Cosmetics regarding the harmful use of chemicals in baby shampoos (Ethical Consumer n.d.).
The Drum 2014, Flybe appoints easyjet’smarting smith as marketing director, viewed on 2nd December 2014, http://www.thedrum.com/news/2014/06/03/flybe-appoints-easyjet-s-martin-smith-marketing-director
Flybe 2014, Annual Report of Flybe Group PLC, accessed on 2nd December 2014, http://www.flybe.com/corporate/investors/2014/annual-results-2014/Flybe-Group-plc-Annual-Report-2013-14.pdf
Air Scoop, SWOT FLYBE, accessed on 2nd December 2014, http://www.air-scoop.com/downloads/SWOT_Flybe_Air-Scoop.pdf
Innovation Management, Brainstorming techniques for new product development, viewed on 2nd December 2014, http://www.innovationmanagement.se/imtool-articles/brainstorming-techniques-for-new-product-development/
Wharton, Techniques of New Product Development, viewed on 2nd December 2014, https://marketing.wharton.upenn.edu/faculty/armstrong/techniques-concepts-newproducts/
Marketing Schools, Types of Ethical Marketing, viewed on 2nd December 2014, http://www.marketing-schools.org/types-of-marketing/ethical-marketing.html
Ethical Consumer, Successful Boycotts as Ethical Consumers, viewed on 2nd December 2014, http://www.ethicalconsumer.org/boycotts/successfulboycotts.aspx
Boundless, Issues in Marketing, viewed on 2nd December 2014, https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/social-responsibility-ethics-in-marketing-16/ethics-in-marketing-102/issues-in-marketing-502-10770/
Cengage, Marketing ethics, accessed on 2nd December 2014, http://college.cengage.com/business/modules/marktngethics.pdf
IIMK, Social Marketing and Ethics in Marketing, accessed on 2nd December 2014, http://dspace.iimk.ac.in/bitstream/2259/392/1/17-27.pdf
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