TSM10106 Airline Marketing & Management

Lecture 6: Business Marketing and

Strategy Development

Edinburgh Napier University

1
Aims of this lecture:

• To identify:
• Business and Marketing Strategy Development
• Distinguish between marketing strategy and
tactics
• Identify the role of marketing, and components of
marketing strategy
• Look at some market analysis tools
• Outline the requirements of assessment 1: the
report
2
Assessment 1

• A 2500-word report
• Covers Learning Outcomes 1, 2 and 3
• 50% of module grade
• Lectures/Tutorials 1-6 relate to assessment 1
• Submission Date:
TBA

3
Learning Outcomes:

1. Identify and evaluate the role of marketing in

airline management
2. Assess and critically appraise the main
components of airline marketing strategy
3. Evaluate marketing strategies and apply them
to airlines

(Note: These are NOT the questions – these are the

outcomes the report covers)
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What is strategy? (1)

The strategist:
Do we need to cross
this river at all?

The tactician:
How will we build a
bridge to cross this
river?

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What is strategy? (2)

• Individual moves would have no linked purpose

• Must have an overall strategy

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What is strategy? (3)

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Strategic level = the overview of the route

Tactical Level = different possible paths

Specific Objectives (mix) = street level

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A hierarchy of objectives –
strategic and tactical (Middleton, 2001, p191)
L External business environment
E
V
E
Organisational goals and objectives
L
Corporate Strategy
1
Marketing
Legal Finance Operations (strategic Sites/ Environment Admin &
& core objectives equipment Requirements personnel
competencies and plans)

L
E Operational/ tactical marketing objectives
V Campaigns :
E -Advertising
Marketing Mix objectives and action plans
L -Sales
-Distribution
2 Prospective, targeted market segment -promotion 9
Marketing Strategy…

…identifies and is primarily responsible for

future sales revenue generation by
specifying the segments, products and
associated programmes required to
achieve sales and market share against
competitors – and deliver customer
satisfaction (Middleton, 2001, p192)
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 The key components of a
marketing strategy are: (Shaw, 2011)

Goals and Image, Budget

Review and
objectives positioning Strategies and Resour evaluation
, branding programmes
Sectors what actions
ces systematic
Segments Percepti are required Staff appraisal of
Product ons of achieveme
to achieve and nt of goals
range products goals and
Volume objectives? money Against
and
Market values
Product needed competitors
developmen External
share Corporat t
to
Profitabilit environmen
e image investment achieve t
y
Branding goals?

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Key concepts in formulating a
marketing strategy

Strategic Business Units (SBUs)

1. SBUs
and
business
portfolio
analysis

strategy tools 1. and

●

2. 2. focus on securing
Product-
long term profitability
market
growth and competitiveness
models (goals and
objectives)
●
strategy tool 3.
3.Corpora focuses on
te and differentiating a
product company from its
positionin competitors through
g perceptual ‘ring-
fencing’ (branding)

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 Business Portfolio analysis:
Boston Matrix

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http://gtwebmarque.com/wikis/gtwm/images/9/9d/Boston_Matrix.gif
Product Market Growth Models:
Ansoff Matrix (Ansoff, 1987 p109)
Present Markets Present Products New Products

1 2
MARKET PRODUCT
PENETRATION DEVELOPMENT
New Markets

3 4
MARKET DIVERSIFICATION
DEVELOPMENT

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Branding and product
positioning

…A strong brand has to exist in the

minds of consumers as a fusion of readily
understood values and benefits and is
used by them to achieve their perceived
needs and in some cases make
statements about themselves and their
personal values (Middleton, 2001, p132)
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Brand Positioning:

Ryanair's brand Flybe’s brand British Airways Singapore Air’s

positioning positioning brand positioning brand is
seems to be: seems to be: is as a: positioned around:
‘Southampto ‘global Innovation,
‘getting
n’s low cost airline’ - technology,
there at airline’ or quality &
the lowest one of the
as a excellent
price and world’s
‘regional customer
leading
on time’ champion’ service
airlines
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A BA icon for 30 years

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Virgin – Brand dilution?

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Assessment: Report

A flag-carrying airline is setting up a discount

airline as part of its portfolio of operations
Its business strategy: to maximise profits by gaining a wider
range of customers

You are a consultant – your job is to make recommendations for potential

marketing strategies to enable them to run both the FSC and LCC profitably –
what must they do and how would they go about it?

2500 word report – submission date - TBA

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 Summary
All eleme nts of the of
Marketing plays
The
Wh atmarketing
bu siness
re commen
pla
strategies
n depen
dations
d on
will FSC
you and
make LCC
toarethevery
airline
a key role in a
different
point
– however
marketing
board about
here
d elivethe
how
isathat they
ringkey
to are
make
cu stomers nd reve nue theat
business
this asame
successful venture ?
aorganisation
p ro fit

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References and further reading

• Evans, N. (2001) Collaborative Strategy: an analysis of the changing

world of international alliances, Tourism Management, Vol 22 pp229-243

• Middleton, V. (2001) Marketing in Travel and Tourism, 3rd Edition, Oxford:

Butterworth-Heinemann

• Shaw, S. (2011) Airline Marketing and Management, 7th Edition, Surrey:

Ashgate Publishing Ltd, (Chapter 4)

• Slater, S., Olson, E., Hult, G (2010) Worried about strategy

Implementation? Don’t overlook marketing’s role, Business Horizons, Vol
53 pp469-479

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