Analyzing Competitive Market Opportunities
Think of yourself as the marketing director for Fair Skies Airlines, which provides consumers with a product and service that is well-accepted and used by millions of people each year in the United States. Several innovations are about to be incorporated into the product that will change some of its features and modify the benefits customers enjoy. These have already been decided; in fact, they are almost fait accompli.
In essence, this full-service airline is about to undergo a complete transition into a new low-fare carrier with meager accommodations and no advance seat-selection. It will charge passengers for everything extra, from coffee and soft drinks to sandwiches and even temporary use of pillows and blankets. Passengers will have to check their own baggage, but ticketing and check-in will be more automated. Fares will be exceptionally low, and there should be less wait time at check-in counters. Belatedly, upper management has asked you to obtain some feedback on this new orientation.
Part A
Using the Ashworth College Library, research the following information. You must provide an APA-formatted bibliography identifying all the sources you use.
- Research at least three (3) discount airlines describing the different services they provide as options for their customers.
- Consult at least two (2) airline industry journals and/or publications from specific airlines and provide a brief summary describing what a “discount” fare really means.
Part B
Your boss has asked you to validate the claim that the new concept will be a success. In order to do so, you need to conduct a SWOT analysis. Your boss has asked you to include a competitive component in the analysis. Refer to pages 52-56 in your text for conducting this analysis. Your SWOT analysis must include at least three (3) internal strengths and three (3) internal weaknesses, as well as three (3) external opportunities and three (3) external threats. The competitive component must include mention of at least two (2) competitors in relationship to the opportunities and at least two (2) competitors in relationship to the threats you have identified.
Part C
Your boss has asked that you interview people about the upcoming changes. Create a list stating the type of subjects you should interview. Upper management favors sampling loyal Fair Skies passengers who have flown at least three round-trips, but feel free to propose others you think should be interviewed. Name at least three (3) subjects to interview.
After creating the list above, you decide to use a focus group format.
- List and discuss two (2) considerations that you think will be important in leading the focus group.
- Compose at least 10 questions you think would be necessary for adequate input and which address the two (2) or more considerations you have identified.
Part D
Write a memo to your boss and associates explaining the following. Remember that most people rarely read memos more than two pages long, so keep it short and to the point. Don’t forget to cite your sources, however. Your list of sources and any pertinent charts, tables, and reference materials can be added to the memo as appendices. The results will provide guidance for marketing planning that may insure the survival of Fair Skies while other airlines are floundering during these difficult times.
- Explain the method and rationale you used for conducting this type of research.
- Explain how you would use input from the SWOT analysis.
- Explain how you would use the proposed questions.
- Make at least two (2) recommendations for management based on what you have learned.
PART A (1)
The section will discuss three discount airlines: Southwest, Frontier, and American Airlines. Southwest Airlines is considered the largest airline worldwide and has been a reliable and cherished low-fare airline. Further, the airline pride itself as a low-fare airline by adopting the no hidden charges strategy. Hence, clients can check two bags for free, and there are no additional charges for the aisle or window seats and are allowed to enjoy soft drinks and other snacks at no extra charge (Lagrave, 2018). Also, the airline utilizes various social media platforms in facilitating its unique offers for roundtrip travel utilizing the catchphrase ‘wanna get away.’ The airline prides itself on facilitating a comfortable traveling experience due to the no hidden fee policy and friendly staff.
On the other hand, Frontier Airlines is an ultra-low-cost carrier that mainly operates flights in over ninety towns within the U.S., Mexico, the Dominican Republic, and Canada (Bachwich & Wittman, 2017). It operates under the slogan of the ‘low fares done right,’ providing extremely cheap tickets and rewarding cardmembers who earn a mile with each fund paid. Besides the average miles accumulated, other advantages such members would receive priorities in boarding, family seating, and a free carry-on bag. Lastly, American Airlines, though not perceived as among the top low-fare airlines, provides its clients with an economy ticket option. According to Carey (2016), it has approximated that about 87% of its fliers are the travelers deemed as bargain-sensitive, that fly merely once annually or even less. Though, they produce half of the airlines’ income. The airlines’ basic economy charges offer uncharged entertainment choices, snacks, and soft drinks; however, the disadvantage of the individuals boarding last, whereas the elite status fliers are prioritized when boarding. Also, the American valued site AA.com® offers clients an accessible site to book and check rates and view individualized broadcasts, travel deals, and other information.
PART A (2)
A discount fare is mainly an approach utilized to maximize profit and beat out the competing airlines instead of merely catering to the clients. Thus, airlines effectively track early booking discounts against late sales at the full cost (Hethcook, 2018). All seats and places are the same, and the airline’s services do not vary for the higher-rate seats. Another highly technical way of describing the discount fare is to capture the client preferences by applying statistics. Determining the client’s priority routines, fare rates, and cabin types should be formulated. The rate of competition and customer requirements are crucial to this equation and the discounted amount that could be given for the particular airline to sustain its profit margin (Victor, 2016).
PART B
The section will present the SWOT analysis, which presents the strengths, weaknesses, opportunities, and threats. The strengths of Fair Skies Airlines include experience, relationships, and the low-cost fare. It offers its clients the best experience, which can be seen from its being presently well-accepted airline firm. Also, the management has created a good rapport with the clients, increasing their satisfaction. Therefore, it is preferred by millions of people and is well respected. Another strength is its low-cost fare compared to its rivals. Despite the strengths, the airline has several weaknesses: swift competition, timing, and realism. The airlines often remove certain features without prior warning to clients, which can result in losing loyalty. Also, a huge number of famous airlines apply the strategy of low fares, thus increasing the competition.
The airline’s opportunities to take advantage of are our attraction, profit, and current market trends. There is an increase in people preferring to use air transportation; hence the airline can use this opportunity to target a larger audience and increase its client base. The market trend is applying the low fare strategy to attract more customers; hence, Fair Skies Airlines can also utilize this approach to increase its market shares in the local and international markets. However, this strategy is also used by other airlines like Southwest Airlines, that boost by having special offers for roundtrip travel. Also, Frontier Airlines applies an ultra-low-cost carrier and functions within ninety cities. This substantially increases competition. The threat that the company should look forward to is the economic recession due to the pandemic, swift competition, and dynamic demands of the clients. The huge number of well-established low-fare airlines possessing stellar reputations intensifies the competition. Southwest Airlines’ clients can check two bags for free plus other advantages, while Frontier Airlines provides affordable tickets and rewards founded on their Mastercard with hospitality, among other reliable services. Overall, the dynamic nature of clients’ demands towards firms because of no warning transition in their site presents a threat to its operations.
PART C
The subjects I have selected for interviewing about the upcoming changes include leisure and business travelers and the loyal Fair Skies passengers flying at least three roundtrips. Our loyal frequent Fair Skies passengers are essential to the airline’s business; hence it is significant to evaluate the attributes and characteristics of the airlines that such passengers prefer. Leisure travels are more transient; however, their perspectives can boost the airline’s revenue sales, particularly during the holidays and summer or spring vacations. On the other hand, the business travelers can become most profitable for the airline because they are frequent flyers. Therefore, with the identified chosen subjects, ten lists of questions were compiled for the focus group to identify the clients’ issues and preferences essentially:
- How frequently do you fly per year?
- How many times have you used the Fair Skies Airline?
- What are the main attributes that you look for when selecting an airline?
- How essential is the cost when choosing an airline?
- What main amenities do you appreciate or anticipate when flying?
- Do you watch films or prefer WiFi while flying?
- How would you feel regarding paying additional fees for snacks and soft drinks?
- How essential is advance seat selection when flying?
- How significant to you is swift boarding and check-in?
- Do you prefer first-class or low-fare travel?
PART D
To: Fair Skies Airlines Corporate Team
From: Marketing Director
Subject: Fair Skies Airlines Complete Transition
Date:
Explain the method and rationale you used for conducting this type of research.
I organized an online focus group with three main participants, leisure and business travelers and individuals that frequently use the airline. The rationale for selecting an online focus group technique was for a less intrusive experience and an expenditure-saving approach for Fair Skies to determine if the transition ideologies would be either rejected or accepted.
Explain how you would use input from the SWOT analysis
I will use the SWOT analysis to combine our strengths and opportunities to build an effective transition. Also, the airline can use our respected reputation to target a huge client base by introducing novel low-fare offers. The low-fare airlines dominating the market are Frontier and Southwest, both utilizing a catchy slogan known globally. Hence, I would suggest following a similar format to attract a new client base and catch the attention of already loyal clients.
Explain how you would use the proposed questions
I would utilize the questions to recognize the client’s preferences and requirements. Also, the data collected will aid in strategizing how to sustain our present clients and increase our customer base and the firm’s revenue.
Make at least two (2) recommendations for management based on what you have learned.
The suggestion I would make is that the airline has the potential of losing client loyalty for removing veracious features with no warnings. Thus, I propose that the airline adopt a slower transition by utilizing a low-fare promotional period that would generate business from its rivals and give the firm a better analysis of its future. Also, I recommend for the airline focus on business travelers. Business trips are often paid for by organizations and are often recurrent. Firms always send their employees for frequent business travel for training, prefer low-fare rates, and not be impacted by additional amenities that the airline charges.
References
Bachwich, A. R., & Wittman, M. D. (2017). The emergence and effects of the ultra-low-cost carrier (ULCC) business model in the U.S. airline industry. Journal of Air Transport Management, 62, 155-164.
Carey, S. (2016). U.S. airlines divvy up the coach to wring more revenue. Market watch. Retrieved from: https://www.marketwatch.com/story/us-airlines-divvy-up-coach-to-wring-more-revenue-2016-09-11
Hethcook, B. (2018). American Airlines offers its cheapest no-frills fares on transatlantic flights. Dallas Business Journal. Retrieved from: https://www.bizjournals.com/dallas/news/2018/03/01/american-airlines-offering-its-cheapest-no-frills.html
Lagrave, K. (2018). Southwest Airlines Promises They Still Won’t Charge for Bags. Traveler. Retrieved from: https://www.cntraveler.com/story/southwest-airlines-promises-they-still-wont-charge-for-bags
Victor, D. (2016). United Airlines Offers Cheaper Fare, but It’ll Cost You a Carry-On. The New York Times. Retrieved from: https://www.nytimes.com/2016/11/16/business/united-cheaper-airfare-carry-on-luggage.html
