Final Presentation Draft - West Jet PDF

Preview

Summary

Download Final Presentation Draft - West Jet PDF

Description

JET WEST

1 Project Group 1 - WestJet April 25, 2018

Airline Limited MARK 1027 - Presentation

Overview • Introduction • Segmentation and Target Market • Product Strategy

• Price Strategy • Channel Strategy

• Promotion Strategy

• Financials

2 Project Group 1 - WestJet April 25, 2018

Introduction • Situation • Growing market due to customer reliance on air travel. • Customers are very price sensitive. • Internal investments in ULCC-style air crafts. • Organization places high value on being customer-oriented.

• Our Proposal? • “WeCAIR” Amenity Bundles. • Customers purchase in-flight amenities and ticket preferences as preset “WeCAIR

bundles.”

3 Project Group 1 - WestJet April 25, 2018

How it Works? • Seat are set at a low, “base” price, but come with no “features or amenities”

• Basic Seat = economy seat + 1 personal item (i.e. a backpack)

• Premium Seat = current economy plus seat + 1 personal item

• Customers then customize their experience: • Add a premade “WeCAIR Bundle” • Choose individual items to ticket 4 Project Group 1 - WestJet April 25, 2018

5 Project Group 1 - WestJet April 25, 2018

Features and Amenities Comfort items includes extra legroom, in-flight food/drink standard and premium,

entertainment. Convenience Items includes flexible ticketing, pre-boarding/exiting, transportation to/from airport. Personal Items includes extra carry-on luggage, checked luggage

WeCAIR Bundles • Standard package

• Business Package

• Family Package

6 Project Group 1 - WestJet April 25, 2018

Key Benefits • Customers are able to customize their travel experience based individual needs. • Bundles allow for more specific segment targeting

• Easily integrated into current WestJet subsidiaries (WestJet Rewards, WestJet Vacation) • Allows for service upgrades and partnership opportunity 7 Project Group 1 - WestJet April 25, 2018

Required Investments • Customer education and product integration

• Upgraded amenities (i.e. improved wi-fi, food/beverage selection, comfort) • Corporate partner involvement

8 Project Group 1 - WestJet April 25, 2018

Year Marketing Objectives • An increase in market shares of 2.5%,

one year after W  eCAIR Bundles introduction. • An increase in seat sales by 50%, one year after WeCAIR Bundles

introduction. • An 50% increase in customer recommendations, based on survey results and loyalty program referrals, one year after WeCAIR Bundles’ introduction. 9 Project Group 1 - WestJet April 25, 2018

Segmentation and

Target Market • WESTJET’s customers • Majority customers are in the age group of 25-651 • 60% of total customers are women1

• Business vs. Leisure Market Share • 50% Market: Leisure • 40% Market: Visiting friends and family • 10% Market: Business2

10 Project Group 1 - WestJet April 25, 2018

General Trends • Customers are price sensitive, and will make decisions based on cost alone.2

• Customers are willing to pay for “what they want” (Social, Cultural and Demographic Factors). • Returning customers provide a significant portion of business, and respond well to customer-oriented initiatives.1

11 Project Group 1 - WestJet April 25, 2018

Target Profile • Individual or individual buying for group • Age: 25-45 • Men or Women

• “Price-Conscious” • Wants to know what they’re paying is valuable to them

• “Customizer” • Will pay for comfort or convenience

• Wide base → varying needs 12 Project Group 1 - WestJet April 25, 2018

Goals for Target

WeCAIR Bundles Increase overall

customer satisfaction and loyalty Increase overall

customer satisfaction Target price sensitive

customer with “basic” and “WeCAIR” pricing. Target smaller, specific, segments

through customized 

and loyalty

3

• i.e. “Young Traveler”, “Business”, “Young Family”

April 25, 2018 Project Group 1 - WestJet 13

2 2

1 Product Strategy • Positioning: • “Fun, Friendly and Caring” • Freedom of choice and customization

• Pay for what is valuable to you • Bundled will be positioned to highlight benefits

• Core User: Travelers • Price-conscious customers • Each “bundle” will target a different core user

14 Project Group 1 - WestJet April 25, 2018

Product Strategy • Frame of Reference: • Airlines offering ULCC services as amenity bundles targeted specifically towards leisure

and business class.

• Point of Difference: • Customized to individual (or targeted segment) • Pay for the upgrades you want

• Benefits: • Pricing transparency, potential for lower cost • Customization 15 Project Group 1 - WestJet April 25, 2018

Product Strategy • Brand Name • WeCAIR

• Rational • The brand name, W  eCAIR, signifies the fact that we put our guests above everything by providing them top class services and giving them the option to customize their travel based on their needs. • The name “WeCAIR ” is an amalgamation of “WestJet” – The parent brand name of the airlines and “Canada Air” – The new name for the airline which will be launched in the coming months.

16 Project Group 1 - WestJet April 25, 2018

Product Strategy

• Packaging • Integrated into existing ticket sales outlets

• New section on website (WestJet, WestJet Vacations, Swoop, etc.)

17 Project Group 1 - WestJet April 25, 2018

Channel Strategy Distribution • WeCAIR Bundles will be integrated into current product channels • Direct from WestJet (online, phone, in-person)

• 3rd party ticket vendors (travel agencies) - Discount ticket sites will sell “Standard” tickets only to avoid customer confusion.

• WeCAIR Bundles options can

be integrated into existing subsidiary programs (examples:) • WestJet Vacation + “Honeymoon” WeCAIR Bundle • WestJet Rewards level gets one WeCAIR upgrade 18 Project Group 1 - WestJet April 25, 2018

Promotion Strategy Communication objectives: 1. Education about new product 2. Improved amenities to enhance

your travel experience 3. Pay for what you want

19 Project Group 1 - WestJet April 25, 2018

Promotion Strategy • Educational Advertisements (television, radio, print, online): • Highlights key benefits and features • Emphasizes customer-oriented business model

• Free Trial:

• Customers will receive free upgrade of WeCAIR Bundle with purchase of a ticket during promotion period (i.e. launch weekend, Black Friday) • Lets customers experience new product • Receive customer feedback about product

20 Project Group 1 - WestJet April 25, 2018

Promotion Strategy • Discounted Pricing: • “Buy 3 W  eCAIR bundle, get 1 free”, “Buy 1 WeCAIR Bundle ticket, get the second Bundle

free” • Encourages higher value purchase • Allows customers to sample services

• Joint Offers with Partners: • “Earn points when you purchase...”, “Earn WeCAIR Bundle upgrade when you stay at/rent with...” • Expanded audience

• Highlights new product upgrades (not just new program) • More engaging/natural education 21 Project Group 1 - WestJet April 25, 2018

Standard: Base price + Carry on + Standard Food & Beverage package Packages Price per Person Total Cost* Food &

50% Leisure:

Beverage package *** $15 Coupon** 

84 seats (approx.) Hot and Soft drinks are on the house. 84 seats × $15 = $1260 Total $15 $1,260

Business: Base Price + Carry on + Food & Beverage package + Wi-Fi Packages Price per Person Total Cost* Food/ $15 Coupon 10% Business: 16 Beverage package  seats

(approx.) Hot and Soft drinks are on the house. 16 seats × $15 = $240 Wi-Fi (High Speed Internet $ 6.99 per hour 16 seats × $6.99 = $112 Facility)  Total $22 $352 22 Project Group 1 - WestJet April 25, 2018

Price Strategy Families: Base Price + 4 Carry on + 2 Food & Alcohol package + 2 Kids Food & Beverage package + Kids Tablet

Packages Price per Person Total Cost* Food & 40% Alcohol package (for 2) $25 Coupon for each 

Families: 68 Seats (approx.) Hot and Soft drinks are on the house. 34 seats × $25 = $850 Kids Food & Beverage package $10 coupon for each 34 seats × $10 = $340 (for 2)  Hot drinks such as milk and hot chocolate are on the 34 seats × $6.99 = house. Kids Tablets $6.99 each  $238 (approx.) Total $67 $1,428 23 Project Group 1 - WestJet April 25, 2018

Price Strategy Price Strategy Rationale

• WeCAIR is not offered by every air

line company. • The Price strategy is Value based. We sell value not price. • WestJet only provides snacks and drinks for short haul flights, with these

packages they get option of having Breakfast / Lunch/ Dinner. • The prices will be included in the ticket price, the customers don’t have to worry about paying it in the flight.

• Customers are very price sensitive & WestJet is Customer oriented.

24 Project Group 1 - WestJet April 25, 2018

Estimated Income Statement 2018 2017

Sales Revenue $ 4,916,533.00 $ 4,502,320.00 Cost of goods sold (Less) $ 1,966,613.00 $1,800,928.00 Gross Margin $ 2,949,920.00 $ 2,701,392.00 Marketing & Selling expenses (Less) $ 2,645,190.00 $ 384,452.00

Gross Profit before Overhead Expenses $ 304,730.00 $ 2,316,940.00

25 Project Group 1 - WestJet April 25, 2018

Financial Estimated Marketing Expenses: $ 2,260,738.00 Marketing Channel Period One time Cost Nationwide total cost Prime Tv Ads 4 months $ 100,000.00 $ 1,600,000.00 Radio 4 months $ 5,000.00 $ 1,120.00 Newspapers 2 months $ 2,000.00 $ 347,658.00

Consumer Magazine 4 months $ 50,000.00 $ 35,960.00 Social Media 10 months $ 5,000.00 $ 10,000.00 Online Banner ads 7 months $ 4,000.00 $ 100,000.00 Total Cost $ 166,000.00 $ 2,094,738.00 26 Project Group 1 - WestJet April 25, 2018

Financial Pre launch Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Activity Who When Marketing

Label Design  team

Factory Sep 

Apr 18 - Jul 18 Production of the Product  17- Jul Create ads/ media plan Marketing team Mar 17 - Jul 18

Marketing Plan Website Marketing 

18

team Mar 17- Aug 18 Digital Marketing In House Marketing Team Experimental Marketing  (Limited time offers, Gift with purchase, Discounted rates, Joint offers with partners) Marketing team and Channel partners Aug 18 - Nov 19 April 25, 2018 Project Group 1 - WestJet 27

Implementation Plan Pre launch Apr-18 May-18Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19

Media Plan Social Media (Facebook, Instagram, YouTube, LinkedIn) Marketing team Jun 18- Mar 19 Website promotion (Banner on the homepage)  Marketing team Jun 18 - Dec 18 Out-of-home Marketing team / Agency Marketing July 18 - Sep 18, Nov 18- Dec 18 Radio   team Marketing

July 18 - Sep 18, Dec 18 Magazines 

team

Marketing

July 18 - Oct 18 Newspaper  team

Jul 18 - Aug 18 A  pril 25, 2018 Project Group 1 - WestJet 28

Implementation Plan Evaluation Strategy • Number of bundles sold in the first four months for each category. • Conduct a survey amongst the current WestJet loyalty members / guests, asking them if they are aware of the new product offerings. If not, why?

• Conduct a survey amongst the guests who have used the product to evaluate customer satisfaction.

• How many new guests/clients have booked the WeCAIR amenity bundles, specifically for the newly introduced services. April 25, 2018 Project Group 1 - WestJet 29

Product Lifecycle Management

• Introduction • Educational advertisements about program changes • Offer promotions to

encourage • Target high-density areas, or travel hubs

• Growth • Change offers • Increase “WeCAIR Bundle”

advertisements

• Maturity • Discounts • Ads target more specific audience

• Decline • Price strategy redesign • Target new segments (introduce new bundles)

30 Project Group 1 - WestJet April 25, 2018

Financial Calculations • 1. Prime TV Ads are for four months and bi-weekly. ($200,000 × 8 = $1,600,000) • 2. Radio Ads are for four months and weekly. {([$10 × 7] × 4) × 4} = 1120 • 3. $173,829 Newspapers × 2 = Ads $347,658)   are for two months and daily. ($57,943 + $75,326 + $40,560 = • 4. Business Consumer   are  for  = four Journal. Magazine  ($8,990  ×  4  Monthly price is $8,990 by $35,960) months.  The Canadian • 5. Social Media is for ten months. ($250 × 4 = $1,000 × 10 = $10,000) • 6. Online banner ads are going to run for 7 months. $100,000 is the assumption. • 7. Sales revenue is increased by 9.2%. This is the change in between 2016 and 2017

• 8. Cost of goods sold is 40% of Sales Revenue.

• 9. expenses. Marketing expenses is the estimated marketing expenses plus last year's marketing April 25, 2018 Project Group 1 - WestJet 31

Citation 1. * Total cost is based on seats available in Boeing 737 next generation – 737- 800, ** Prices of Coupons is based on West Jet’s inflight menu, *** Customer can choose Food and Alcohol package as well.

2. “Branding WestJet’s New Low-Cost Carrier. ” Strategy, Harmeet Singh, 3 Oct. 2017, strategyonline.ca/2017/10/03/branding-westjets- new-lowcost-carrier/ 3. “Social Cultural and Demographic Factors. ” Market Realist, 21 Mar. 2018, marketrealist.com/2014/09/travel-preferences- of-themillennials-versus- non-millennials. Accessed March 16, 2018.

4. “WestJet Airlines: Concept, Target Market, Core Value Propositions.” Express Yourself RSS, Muhammad Afruzur Rahman, 11 Jan. 2009, w  ww.seriousopinion.com/westjet-airlinesconcept-target- market-core-value-proposition/ 5. “ Advertise with CBJ.ca.” The Canadian Business Journal Advertising Rates - Magazine, www.cbj.ca/magazineadvertising-rates.php. 6. “Boeing 737-600, 737-700, 737-800 - Our Fleet.” Boeing 737-600, 737-700, 737-800 - Our Fleet | WestJet, www.westjet.com/en-ca/about-us/fleet/737-ng. 7. “Jet Aircraft, Airplanes, Seat Maps, Boeing 737 - Our Fleet.” Jet Aircraft, Airplanes, Seat Maps, Boeing 737 - Our Fleet | WestJet, www.westjet.com/en-ca/about-us/fleet/index. Project Group 1 - WestJet 32

April 25, 2018

Citation 8. “WestJet to Target Price-Sensitive Fliers.” The Globe and Mail,

Greg Kenan, 20 Apr. 2017, www.theglobeandmail.com/report-on-business/westjet-looks-to-la unch-new-no-frills-airline-later-this- year/article34757640/ 9. “Target Market.” Social Media/ Marketing Project -West Jet Airlines, Emily Longmire, 17 Feb. 2014, www.ejlongmire.weebly.com/blog/target-marketadvertising 10. “Branding WestJet's New Low-Cost Carrier.” Strategy, Harmeet Singh, 3 Oct. 2017, www.strategyonline.ca/2017/10/03/branding-westjets-new-low-cos t-carrier/ 11. “WestJet Airlines: Concept, Target Market, Core Value Propositions.” Express Yourself RSS, Muhammad Afruzur Rahman, 11 Jan. 2009,

www.seriousopinion.com/westjet-airlines-concept-target-market-c ore-value-proposition/ 12. Statistics Canada. “Population by Sex and Age Group.” Government of Canada, Statistics Canada, 27 Sept. 2017, www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo10aeng.htm.

April 25, 2018 Project Group 1 - WestJet 33...