TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES - MANILA

COLLEGE OF BUSINESS EDUCATION

1. What is market segmentation, positioning?

Market segmentation is the process of dividing a market of potential customers

into groups, or segments, based on different characteristics. The segments created
are composed of consumers who will respond similarly to marketing strategies and
who share traits such as similar interests, needs, or locations.
Market segmentation assumes that different market segments require different
marketing programs – that is, different offers, prices, promotion, distribution or some
combination of marketing variables. Market segmentation is not only designed to
identify the most profitable segments, but also to develop profiles of key segments in
order to better understand their needs and purchase motivations. Insights from
segmentation analysis are subsequently used to support marketing strategy
development and planning.
Positioning is the process and focuses on how the customer ultimately views your
product or service in comparison to your competitors and is important in gaining a
competitive advantage in the market. Therefore, customer perceptions have a huge
impact on the brands positioning in the market

2. Why were the early projects of Homewell Development Corp. failures?

They had repositioning failures in Cavite and Pampanga projects. The company
met all sorts of problems-political and internal labor that’s why their father decided
to put the project on hold in Cavite. Their financial losses had pilled up to more than
nine digits. In early 1990’s real estate was booming. So the elder Capulong decided to
expand into real estate. Following their bad experience in Cavite, the Capulong’s
 TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES - MANILA
COLLEGE OF BUSINESS EDUCATION

opted to try their luck with another property in Pampanga.Both projects were low-
cost housing ventures with price tags of P500,000 to 1 million. The Pampanga project
had only sold 30 units in 3 years at P360,000 each and no broker wanted to carry the
project.

3. How did Allan Capulong succeed in turning Homewell Development Corporation

around?

Allan was required by his guru, Danny Antonio to sell 200 low-cost units by
the end of the 18 month course and Allan also required undertaking an external
assessment of his project to survey the political, economic, social, technological and
environmental factors that affect this project. He started visiting his entire
competitor and segmented the projects into which sold and which did not and why.
On top of having a good location and project being viable one, Allan has to
come to identify two key factors-a good concept and good relationship between the
developer and its marketing network.
In the last quarter of 2006 Homewell undertook a total makeover and shifted
its positioning to the middle to above middle market, targeting professionals in
Pampanga and relatives of Filipino professional abroad. There was also a massive
change in the housing styles. American styles Homes were adopted and the project
was also renamed from Villa Regina to Florida Residences.
TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES - MANILA
COLLEGE OF BUSINESS EDUCATION

MARKET
SEGMENTATION,
TARGETING AND
POSITIONING

SUBMITTED BY:

JEIDY HANAHN E. GONZALES

SUBMITTED TO:

MARIEL JAGURIN PH.D.

 TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES - MANILA
COLLEGE OF BUSINESS EDUCATION

SPIRIT AIRLINES

Company Analysis

Spirit Airlines is an airline company providing both domestic and international

flights. It is known for being an “ultra low-cost carrier in the U.S. The company
initially started as Clippert Trucking Company in 1964. The company changed its
name to Ground Air Transfer, Inc., in 1974. The airline service was founded in 1983 in
Macomb County, Michigan, by Ned Homfeld as Charter One, a Detroit-based charter
tour operator providing travel packages to entertainment destinations such as
Atlantic City, Las Vegas, and the Bahamas. In 1990, Charter One began scheduled
service from Boston and Providence, Rhode Island, to Atlantic City. On May 29, 1992,
Charter One brought jet aircraft into the fleet and changed its name to Spirit Airlines.
Scheduled flights between Detroit and Atlantic City began on June 1, 1992. Scheduled
flights between Boston and Providence began on June 15, 1992.

On March 6, 2007, Spirit began a transition to an ultra low-cost carrier,

following a fare model that decoupled amenities that are often included in the base
ticket price of traditional carriers. Passengers who wanted to customize their
itinerary or flight experience paid an add-on fee for each additional feature, which
enabled the carrier to earn ancillary revenue in excess of 40% of total revenue. These
 TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES - MANILA
COLLEGE OF BUSINESS EDUCATION

included having an agent print a boarding pass at check-in versus doing it online or at
a kiosk, for any large carry-on or checked bags, progressive fees for overweight bags,
selected seat assignments, travel insurance, and more. In April 2010, Spirit Airlines
became the first U.S. airline to charge passengers for carry-on bags. They were later
followed by Allegiant Air and Frontier Airlines.

Statement of the Problem

Spirit Airlines has been the subject of complaints and to punitive actions by
the United States Department of Transportation (DOT). Most of the claims against
the company were for allegations of deceptive advertising practices, customer
service, and the airline's policies for charging additional fees at the time of purchase:

 In November 2011, the DOT fined Spirit $43,900 for alleged deceptive
advertising practices. The complaint claimed that the airline had been running an
advertising campaign which promoted specific discounted fares on billboards,
posters, and Twitter, but did not disclose full details regarding extra fees added
onto the advertised rates.
 In January 2012, the DOT fined Spirit $100,000 for mishandling of complaints
related to its treatment of customers with disabilities.
 In 2013, and again in 2015, the DOT received more passenger complaints
about Spirit than any other airline; the rate of complaints was "dramatically
higher" than the overall rate for the industry.

Market Condition
 TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES - MANILA
COLLEGE OF BUSINESS EDUCATION

The market conditions for the airline industry are very volatile as it is affected
by political, economic, social, technological, environmental and legal factors.

Financial Condition
Due to their low-cost structure, Spirit Airlines has seen a steady financial
growth from 2009 to 2013.

Strategic Analysis

 Unbundled components of the travel experience and sells them separately

 Customers decide which services to use.
 Low unit costs in order to compete in price sensitive markets.
 Ad Campaign
 Expand fleet
 Balance growth in large domestic markets, and niche markets in the
Caribbean and Latin America.

Key Points
Strength
 Lowest fare in the industry
 Low Ad Costs

Weaknesses
 Global flights are seasonal
 Lack of marketing alliance
 TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES - MANILA
COLLEGE OF BUSINESS EDUCATION

 Year-round flights are few and far between

Opportunities
 Adding more flights, planes, employees and customers
 Growth in the domestic market segment
Threats
 Competitors
 60% of routes overlap with competitors
 TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES - MANILA
COLLEGE OF BUSINESS EDUCATION

Case Study of Spirit

Airlines

SUBMITTED BY:

JEIDY HANAHN E. GONZALES

SUBMITTED TO:

MARIEL JAGURIN PH.D.