Turkish Airlines Marketing Plan

The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B.

The marketing plan for Oman air analyses the airlines market and situational analysis. The competitors, market strength, switching costs, the threat of new entrants, product differentiation, substitute strength and the purchasing power of buyers and suppliers are analyzed using porters five forces. The airline's strength and weakness (internal environment) and opportunities and strengths (external environment) are also looked into based on SWOT analysis.

AirAsia is a low cost leader in Asia. However, the competitors for AirAsia are numerous and it is hard for AirAsia to combat with those competitors. Thus, AirAsia will spare no effort to compete with them by keep the costs low. This lead to the bad perception of the customers that budget airlines like AirAsia may compromise safety to keep the costs low and those accident cases, terrorist attack, and disaster happened before will affect the customer confidence and AirAsia may face the losses of customers.

As Mr Sphor , Chairman of the Executive Board , says in his interview in Annual report of Lufthansa of 2014, they want to be the first choice for customers, employees and shareholders. Furthermore , in his interview emphasizes the need for Lufthansa not only "to build on its strengths but also to be aware of the potentials for improvement and change , to make partnerships and to be more attractive"(Anon, 2016,p.10). One major disadvantage Lufthansa has, according to Mr Sphor, is the high cost and ,to be more specific, he implies the high cost of employees(Anon,

The internet results in less fragmented pricing information and the ability to compare prices across multiple carriers. Airlines now offer promotions and extra services to attract buyers and therefore customers have an abundance of choice. As significant buyer power exists, industry returns can accrue to buyers through lower prices and discounts.

Small business customers and leisure travelers were the ones benefited the most from American’s new fare structure. Previously, small business customers who does not have the power and volume to negotiate with airline companies for discounted deals had to pay higher rates for first-class or coach tickets. American’s new cost structure reduced the full coach fares which allowed small business customers to purchase flight tickets at cheaper prices more conveniently. Leisure travelers, unlike business travelers, have more flexibility in terms of travel dates, thus allowing them to take advantage of the advance-purchase discounts and Saturday-night stay discounts under the new fare system.

Even if the company can have a strong position against its buyers due to the business characteristics the close relationship that the customers have with the travel agencies gives their a greater influence over the ticket price.

In the airline industry, the two major market segments that can be readily identified are, (1) the Business travelers and (2) the Leisure traveler. This two segments to a large extent help airlines decide where to focus the first segment is driven by high ticket prices which helps airlines maximize the airlines yield

Southwest’s demographic trend favors two types of travelers, the time oriented and the cost efficient travelers. The time oriented are mainly business related travelers. They are using doing a short haul type of flight. The cost efficient travelers are mainly leisure type travelers such as one’s going on vacation. Both of these travelers prove that southwest main objective is cost and time efficient traveling.

With the advent of the Internet as a convenient method for the average consumer to search for the lowest airfare and complete the transaction without an intermediary, buyer power has increased as a significant industry force. This trend coupled with the lack of differentiation by the consumer between air carriers has commoditized the industry and made price the most important factor impacting buyer behavior.

Particularly when new entrants are diversifying from other markets, they can leverage existing capabilities and cash flows to shake up competition like Apple did when it entered the music distribution business. The threat of new entry therefore, puts a cap on the profit potential of an industry. The threat to Air Asia is relatively less as the capital required to enter the industry is quite high. However, potential new entrants from full service carriers with a surplus capital could be threats in the future and long-term.

In fact, Spirit Airlines distribute tickets through both Direct and Indirect channels to exploit the profits (Tnooz, 2011). With direct distribution, the airline directly distributes tickets conventionally to the customers, using the internet as its primary disbursement channel. Whereas the indirect channel involves selling through channel intermediaries like wholesalers and retailers.

The main reason for the low-cost subsidiaries’ failure is the airlines’ corporate strategy. By launching a LCC as a unit inside the same corporate structure (e.g., single scheduling and pricing centre for United Airlines’ and Shuttle’s low–cost flights), traditional airlines limited the LCC’s flexibility and independence. By building a low-cost carrier on top of a traditional carrier cost-structure, the parent company was also tempted to think low-cost when setting ticket prices, but not trying (or being able) to reduce traditionally high costs: the airline had now two unsustainable business models instead of one!

Since the airline industry is a direct product of market conditions, it is greatly affected by all externalities. Many people noticed a decline in travel after the September 11th tragedy occurred due to safety concerns. When there is a huge increase in fares that definitely interferes with the demand for travel; it causes the price of tickets to continue to rise since a clear correlation between supply and demand exists. When the economy is doing well in terms of the employment rate, and when the dollar is strong people have the tendency to travel more (Jerram,1998).

The airline industry is a competitive method of travel and continues to grow at a rapid rate globally. In fact, the industry has doubled over the course of a decade from $369 billion in 2004 to $746 billion by 2014 per the International Air Transport Association. However, is the airline industry “hampered by slim profit margins, forcing carriers to focus on both cost reduction and revenue growth through better customer interactions?” (Industry Perspectives, 2015) With revenue growth comes concerns for airline firms like that of Southwest Airlines. Examples of these concerns are the variety of costs. Costs include: fuel, labor, professional services, food and beverage, landing fees, maintenance material, etc. Fuel costs are about 10% to 12%