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1.Competitive Strategy and Strategic Marketing Plan Relationship
Research suggests that a business is likely to achieve superior revenue growth, market share, and profitability when there is a good fit between its competitive strategy and the strategic marketing programs of its various product or service offerings*
*Reference: From Chapter 9 Take-Aways in Mullins, J., Walker, O., & Boyd, H. (2013). Marketing management: A strategic decision-making approach. (8th ed.) New York: McGraw-Hill Irwin.
In this discussion, address the following:
- Analyze the above concept in relationship to the airlines industry: (1) how do competitive strategy and strategic marketing programs intersect in the case of airlines and (2) in what ways can this result in superior revenue growth, market share, and profitability? Give specific examples.
Part 1: Review Questions
- Writing clear and succinct positioning statements or value propositions can play an important role in ensuring the effective development and execution of a marketing strategy. Provide an example of a positioning statement for a major airline and explain why you feel their positioning statement is effective.
- Effective brand positioning decisions establish the foundation upon which successful marketing strategies and programs are built, thereby setting the stage for the creation of brand equity. Do you agree or disagree with this statement? Choose and airline and decide if they have strong or weak brand equity. Defend your answer.
- In your own words (do not copy content from the textbook), what are the differences between the defender, analyzer, and prospector business level competitive strategies.
- Do the same competitive strategies used by domestic companies work for global competitors? Provide an example from the airlines industry.
Part 2: Creating a Perceptual Map for the Airlines Industry
As a marketing manager for a major airline, you are faced with many strategic planning decisions prior to launching a new branding campaign for your company. Using the Excel data file linked below, create a perceptual map with four dimensional variables that your airline faces and compare those of your top five competitors in the industry on this same map. Provide your boss with a suggested strategic directive based on your findings (Tip: Review the You Tube video How to Make a Perceptual Map Using Excel above to help in creating your perceptual map).
- Download the following file by right-clicking on the file link, selecting Save Target (or Link) As..., and saving to your computer.
3.Ryanair - Low Prices, High Profits, but Increasing Costs
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In this discussion, address the following:
- Ryanair, Europe’s first low-fare, no-frills airline, has grown into one of Europe’s largest and most profitable airlines. Using Ryanair as your frame of reference, discuss the concept behind their pricing strategy.
- Do you agree or disagree with the LCC concept? Why or why not?
- Provide examples where appropriate.
4.Case Study Review
Access and read the following Harvard Business Review case study:
- Porter Airlines (Links to an external site.)Links to an external site. (Chatterjee, 2010) (HTML webpage file/Adobe Acrobat PDF file)
Porter Airlines is a regional airline operating out of Toronto City Airport in the Toronto Islands of Ontario, Canada. Porter operates only Bombardier Dash-8 Q400 turboprop aircraft and has flights to destinations in Canada and the United States. It targets business passengers that find the Toronto International Airport unattractive. Since its inception, Porter Airlines had successfully navigated the first few years of its existence and disproved many who thought it was doomed to failure. It tapped into unmet customer needs with a unique strategy. However, a critical question that needed to be addressed was whether this particular business model, successful thus far, would remain viable going forward. Additionally, Porter needed to decide how to expand and how aggressively it should position itself upon entering new, highly competitive markets.
Case Study Analysis
Prepare your response, addressing the following items:
- How did Porter Airlines take advantage of a transitory business opportunity in an otherwise difficult market to mitigate several critical forces that could have prevented its success?
- Identify Porter Airlines' target customer market(s) and the desired customer outcomes.
- What are the critical forces that Porter Airlines faces and how are they mitigated? Use the Five Forces Model of Competition to explain your answer.
- Identify critical resources and activities that are leveraged to meet desired customer outcomes.
Part 1: Review Questions
- Explain why the price of a good or service must be high enough to cover per unit costs, at least in the long term, but cannot exceed its value as perceived by the customer.
- A key concept in setting a price is the notion of perceived value. An essential purpose of the price set by a marketing manager should be to enable the firm to capture a fair share of the value of the product as perceived by the intended customer. Do you agree or disagree with these statements? Explain your position.
- Choose and airline and decide if they have strong or weak perceived value. Defend your answer.
- While speed to market is important in today’s fast-paced business climate, bringing the right products to market and keeping them current are far more important than seeking first-mover advantage for a product that customers don’t want. Explain how an airline marketing manager is challenged to keep their product(s) current.
- By definition, a product is anything that satisfies a want or need through use, consumption, or acquisition. Using the airline industry as your frame of reference, define the product that is being offered to consumers.
Part 2: Breakeven Analysis Using Excel
As a marketing manager for a major airline, you are faced with a pricing dilemma. Your supervisor just walked into your office requesting a pricing analysis for a new route offered by Your Airlines. Using the Excel data file linked below, your challenge is to determine your breakeven point for each enplanement and maintain at least 85% capacity of the 150 seats available. Additionally, your supervisor states that price integrity must be upheld and that no tickets should be sold below $120.00 per seat. You also know that a competitor is launching the same route and pricing their tickets at $135.00 per seat. Your challenge is to reduce fixed and variable costs, offer a competitive price, and make a profit on each flight. In this part of the activity, manipulate the spreadsheet numbers to achieve profitability and prepare a rationale for your supervisor as to why you believe this action is possible. Include a copy of your edited spreadsheet table (data tab) and chart (chart tab) (either copy and paste or include screen shots) in your Microsoft Word document. You may need to save your document in landscape orientation to fit all the content onto the page. If you encounter significant difficulty in doing this, email your instructor the spreadsheet file separately.
Download the following file by right-clicking on the file link, selecting Save Target (or Link) As...,and saving to your computer.
- Breakeven Analysis Data File (Microsoft Excel file)