Research Korner: Marketing Strategies

Airline Marketing of Air Canada

Table of 	Content 	 	 TOC \o "1-3" \h \z 	 	 	1      	Executive Summary. 	PAGEREF _Toc50826264 \h 3 	 	 	 	2      	Introduction. 	PAGEREF _Toc50826265 \h 3 	 	 	 	3      	Air Canada. 	PAGEREF _Toc50826266 \h 3 	 	 	 	3.1            	Introduction. 	PAGEREF _Toc50826267 \h 3 	 	 	 	3.1.1            	Fleet 	PAGEREF _Toc50826268 \h 4 	 	 	 	3.1.2            	Route Network. 	PAGEREF _Toc50826269 \h 4 	 	 	 	3.1.3            	Service. 	PAGEREF _Toc50826270 \h 5 	 	 	 	3.1.4            	Air Canada’s Subsidiaries. 	PAGEREF _Toc50826271 \h 6 	 	 	 	3.2            	Operating Performance and Financial Status. 	PAGEREF _Toc50826272 \h 6 	 	 	 	3.2.1            	Canada Domestic. 	PAGEREF _Toc50826273 \h 7 	 	 	 	3.2.2            	Canada-U.S. Trans-border. 	PAGEREF _Toc50826274 \h 7 	 	 	 	3.2.3            	Other International 	PAGEREF _Toc50826275 \h 8 	 	 	 	3.2.4            	Cargo. 	PAGEREF _Toc50826276 \h 8 	 	 	 	4      	Environment 	PAGEREF _Toc50826277 \h 9 	 	 	 	4.1            	Market 	PAGEREF _Toc50826278 \h 9 	 	 	 	4.2            	Profitability. 	PAGEREF _Toc50826279 \h 10 	 	 	 	4.3            	Industry Outlook. 	PAGEREF _Toc50826280 \h 11 	 	 	 	5      	SWOT Analysis. 	PAGEREF _Toc50826281 \h 11 	 	 	 	5.1            	Strength. 	PAGEREF _Toc50826282 \h 11 	 	 	 	5.1.1            	Network. 	PAGEREF _Toc50826283 \h 11 	 	 	 	5.1.2            	National Carrier. 	PAGEREF _Toc50826284 \h 12 	 	 	 	5.2            	Weakness. 	PAGEREF _Toc50826285 \h 12 	 	 	 	5.2.1            	High Personnel Cost 	PAGEREF _Toc50826286 \h 12 	 	 	 	5.2.2            	Fleet Arrangement and Aircraft Dispatch. 	PAGEREF _Toc50826287 \h 12 	 	 	 	5.2.3            	Geographic Location. 	PAGEREF _Toc50826288 \h 13 	 	 	 	5.3            	Opportunity. 	PAGEREF _Toc50826289 \h 13 	 	 	 	5.3.1            	Asia-Pacific Region. 	PAGEREF _Toc50826290 \h 14 	 	 	 	5.3.2            	Cargo. 	PAGEREF _Toc50826291 \h 14 	 	 	 	5.3.3            	Low Price No-Frill Market 	PAGEREF _Toc50826292 \h 14 	 	 	 	5.4            	Threat 	PAGEREF _Toc50826293 \h 15 	 	 	 	5.4.1            	Competition. 	PAGEREF _Toc50826294 \h 15 	 	 	 	5.4.2            	High Cost 	PAGEREF _Toc50826295 \h 15 	 	 	 	5.4.3            	Fleet Arrangement 	PAGEREF _Toc50826296 \h 15 	 	 	 	5.4.4            	Oversized Organization. 	PAGEREF _Toc50826297 \h 15 	 	 	 	6      	Three Year Strategic Plan. 	PAGEREF _Toc50826298 \h 16 	 	 	 	6.1            	Marketing Planning. 	PAGEREF _Toc50826299 \h 16 	 	 	 	6.1.1            	North American Market 	PAGEREF _Toc50826300 \h 16 	 	 	 	6.1.2            	International Market 	PAGEREF _Toc50826301 \h 17 	 	 	 	6.1.3            	Cargo. 	PAGEREF _Toc50826302 \h 17 	 	 	 	6.2            	Cost Reduction. 	PAGEREF _Toc50826303 \h 17 	 	 	 	6.3            	Organization Restructuring. 	PAGEREF _Toc50826304 \h 17 	 	 	 	7      	Conclusion. 	PAGEREF _Toc50826305 \h 17 	 	 	 	8      	Reference. 	PAGEREF _Toc50826306 \h 17 	  	1          	Executive 	Summary 	 	According to IATA’s (International Air 	Transport Association) report the total numbers of distance flown, 	passengers carried, freight tons carried and the revenue of world airlines 	have steadily increased in the past decade yet the yields have a trend of 	shrink since 2001. It may be the reasons of the macro economy of the world 	and the impact of 911 to whole aviation industry. No matter whatever the 	reason might be, it obviously demonstrates what worldwide airlines facing 	now: competition, uncertainty and shrinking profit. 	 	The emergences of low cost, no-frills 	airlines and their successes point out a possible course to airline 	operators; such as Easy Jet in Europe, West Jet in Canada and Southwest 	Airlines in the U.S. for instance. These low cost airlines and their 	marketing strategies have successfully competed with their rivals in intense 	competitions and achieved admirable financial reports. 	 	Low cost, no-frills type operations 	will be a new model to airline business, especially in those areas with high 	competition, de-regulatory environment and anti-trust implications like 	North America and West Europe markets for example. Full service airlines 	with a broad range of service span and higher expenses are getting more 	difficulties to survive in those markets. SARS, 911, economic slump have 	worsen the situation even more but made low-cost airlines more striking. 	Elements in airline marketing are seen and well practiced in low cost 	operations. Networking, pricing, product and distribution are four major 	pillars of low-cost type operators. Aviation macro-environment, low cost 	operations will be discussed and a 3-year marketing plan will be depicted 	based on the environmental influences and low-cost concepts. 	2          	Introduction 	 	This is an application report 	assignment of AERO2174 Airline Marketing. Air Canada is the research object 	in this report. The market environment, airline performance, market forecast 	are the main areas to look at and a SWOT (strength, weakness, opportunity, 	threat) analysis is used to summarize this topic. A 3-year market plan is 	constructed based on the analysis for Air Canada as its future marketing 	strategy and an action plan is designed to carry it out; measures and 	benchmarks are included to check the achievement of the plan. 	3          	Air Canada 	3.1         	Introduction 	 	Air Canada was established in 1937 	under the name of Trans-Canada Airlines (TCA). By 1964 TCA had become 	Canada’s largest and national airline and changed its name to Air Canada 	(AC). Air Canada was fully privatized in 1989; and it merged Canadian 	Airlines International, the second largest airline in Canada. AC employs 	approximately 40,000 people worldwide and is a full service, top tier 	carrier and the 10th largest airline in the world today. 	3.1.1      	Fleet 	 	AC has 330 aircraft in service now. 	The aircraft type and number are shown as table 1 below. 	 		 			 				 				 				Wide-body jets 				 				 				   				 				 				Narrow-body jets 				 			 			 				 				 				6 				 				 				Boeing 747s 				 				 				47 				 				 				Airbus A319s 			 			 				 				 				47 				 				 				Boeing 767s 				 				 				51 				 				 				Airbus A320s 			 			 				 				 				9 				 				 				Airbus A340-300s 				 				 				13 				 				 				Airbus A321s 			 			 				 				 				8 				 				 				Airbus A330-300s 				 				 				24 				 				 				Boeing 737s 			 			 				 				 				  				 				 				25 				 				 				Canadair Regional 				Jets 			 			 				 				 				70 				 				 				Total 				 				 				160 				 				 				Total 			 			 				 				 				 				* Including the Air Canada Jazz fleet of 100 aircraft. 			 		 	 	 	Table 1: Air Canada’s fleet.     	                     Source: Air Canada website 	3.1.2      	Route Network 	 	AC has direct service to 22 domestic 	cities, 33 U.S. destinations and 51 cities in Europe, Asia, Australia, 	Caribbean region and South America. AC is also a member of Star Alliance, an 	airline alliance consisting of Lufthansa, SAS, Thai Airways International, 	United Airlines, VARIG, Air New Zealand, All Nippon Airways, Austrian 	Airlines Group, Singapore Airlines, Mexicana, bmi British midland, Asiana 	Airlines and Spanair, provides extensive global network and aggrandized 	services to 700 airports in 128 countries. Following 3 figures illustrate 	AC’s global, U.S. and domestic network. 	 	Figure 1: Air Canada’s 	Worldwide 	Network.                                                                 	Source: Air Canada website 	 	Figure 2: Air Canada’s 	U.S. 	Network.                                                                           	Source: Air Canada website 	 	Figure 3: Air Canada’s 	Domestic Network.                                                       	           Source: Air Canada website 	3.1.3      	Service 	 	Air Canada has been recognized as a 	global leader in air transportation and ranked as the safest airline in the 	world. In 2002, AC was voted the best airline in North America and its best 	frequent flyer program, Aeroplane, the best in the world. 	 	AC provides a newly designed first 	class service, International Executive Class, comfort, elegance and 	consideration with business price. 	 	AC is a full service, top tier 	airline. It offers add-value services such as: 	 	 	W   	Personalized Concierge service 	to Executive First and Aeroplane Super Elite customers. 	 	 	W   	Maple Leaf Lounge available to 	Executive First and Executive Class ticket holders, Aeroplane Super Elite 	and Elite members, Star Alliance Gold cardholders and Diners/enRoute Maple 	Leaf Club cardholders. The lounges offer a selection of newspapers, 	magazines as well as complimentary beverages. State-of-the-art business 	centers offer a complete range of leading-edge business equipment and 	computers, modern furnishings and high-speed Internet accessibility etc. 	 	 	W   	Freshing-up facility in London 	and Vancouver airports for passengers after long flight. These lounges have 	private shower rooms, valet services for clothes pressing and shoe cleaning, 	business centers, dining areas for continental breakfast and quiet, private 	rest areas. 	 	 	W   	Aeroplane, the most popular, 6 	million members, frequent flyer program in Canada. Members can earn miles 	from AC flight service, its regional and worldwide partners and Star 	Alliance carriers. Aeroplane members can also earn miles through extensive 	networks of car rentals, hotels, telephone and credit card companies. 	3.1.4      	Air Canada’s Subsidiaries 	 		 			 			 			Airlines 			 			 			Air Canada Cargo, Tango, Zip, Air Canada Jazz, Air Canada Jetz 		 		 			 			 			Internet Travel Services 			 			 			Destina.ca 		 		 			 			 			Travel Agent 			 			 			  		 		 			 			 			Maintenance Service 			 			 			Air Canada Technical Services 		 		 			 			 			Tour Company 			 			 			Air Canada Vacations 		 	 	 	Table 2: Air Canada 	Family.                             Source: Air Canada website 	 	Table 2 above shows a variety of 	business and service subsidiaries of Air Canada like airlines, travel 	agents, technical service and IT service companies. 	3.2         	Operating 	Performance and Financial Status 	 	AC’s operating performance will be 	viewed into 3 categories: domestic, Canada-U.S. Trans-border and other 	international. 	3.2.1      	Canada Domestic 	 	Before 2001 AC enjoyed continuous and 	progressive growths in domestic sector. However, after the 911 event AC 	suffered, like all other rivals in North America, a loss of passengers due 	to the fears of flying. The weak economy and war in Iraq also delayed the 	recovery. 	 	  	 	 	 	Figure 4: Domestic Passenger 	Revenue.             Source: AC website 	 	Figure 4 above shows a flat increase 	in AC’s domestic operation. 	3.2.2      	Canada-U.S. Trans-border 	 	 	 	Likewise, AC’s Canada-U.S. trans-border was affected more 	severely from the 911 event. It has been declined 8% from 2001 as shown in 	figure 5 below. Increased competition and harsh environment make this sector 	harder to recover and back to before 2001 level. 	  	 	Figure 5: Canada-U.S. Trans-border 	Passenger Revenue.        Source: AC website   	  	  	  	  	  	  	3.2.3      	Other International 	 	 	 	Other international routes comprising trans-Atlantic, 	trans-Pacific and Caribbean enjoyed strong growth because of demand and 	yield increasing even with the same disadvantageous factors in other two 	sectors. 	  	 	Figure 6: Other International 	Passenger Revenue.    Source: AC website 	 	Figure 6 above points out the strong 	growth of other international destinations in spite of the slump of North 	America market. 	  	  	  	  	  	  	  	3.2.4      	Cargo 	 	Cargo operation and revenue seemed not 	affected by 911 and economic difficulties at all. It enjoyed strong growth 	in 2001, especially in the Asia-Pacific region notwithstanding a slight 	decline in the domestic market. Figure 7 below illustrates the cargo 	operations of 2000 and 2001. 	 	 	 	Figure 7: Cargo 	Revenue.                                    Source: AC website 	  	  	  	  	  	  	  	  	 	To summarize all, AC’s recovery in 	some specific region is not powerful enough to offset the loss in others. 	Shrinking revenues and expanding costs, mainly due to the rising insurance 	fee and fuel price, made Air Canada lost 1,315 and 828 millions in 2001 and 	2002 respectively. Figure 8 below demonstrates the income (loss) of AC from 	1998 to 2002.   	 	 	 	Figure 8: AC’s Income 1998-2002.                     	Source: AC website 	  	  	  	  	  	  	  	  	  	 	Air Canada obtained an order from the 	“Ontario Superior Court of Justice” on Apr. 1st 2003, which 	providing creditor protection under the “Companies’ Creditors Agreement Act” 	(CCAA). Under current situation, Air Canada’s future and outlook will be 	depending and determined by the CCAA and the restructuring plan. At this 	crucial moment, the success or failure of AC transforming to a leaner, lower 	cost, more efficient airline will decide AC’s tomorrow. 	4          	Environment 	4.1         	Market 	 	 	According to IATA (International Air 	Transport Association) statistics the worldwide passenger traffic and 	airline industry had a consistent growth of approximately 6 to 8 percent 	over the last three decades regardless economic cycles. The booming markets 	in Asia and the Middle East have been the leaders of international airline 	business even after the turmoil of 911 and SARS. These two regions are also 	forecasted to maintain high growth in the future 10 years. Figure 9 below 	demonstrates the average growth of the past and figure 10 illustrates the 	traffic trend categorized by regions. 	 	 	 	Figure 9: Passenger Traffic 	Growth           Source: ICAO website 	 	 	 	Figure 10: Market Trend By Region, 	2002              Source:IATA 	 	Contrastingly, regions like Europe and 	North America however suffered a business decline from 2001, and these two 	areas are not forecasted to revive very soon due to strong competition and 	the shadow of war and dispute. 	4.2         	Profitability 	 	Figure 11 and figure 12 below show a 	tendency of shrinking profit and increasing cost observed from IATA’s 	analyses too. Again it is because of the increased competition and insurance 	expenses after 911 and the uncertainty of its repercussions. Airlines are 	becoming more sensitive to international affairs and geopolitical events, 	which augments the difficulty of planning and lessening yields. 	 	 	 	Figure 11: Airlines’ 	Profitability               Source: IATA website 	 	 	 	Figure 12: Airlines’ 	Profitability                             Source: IATA   	4.3         	Industry Outlook 	 	Since 2001, airline industry has 	suffered from weak economy, excess capacity, less demand and lower fares 	from competition. Increasing security measures, insurance fees and high fuel 	prices etc. lead to inevitable costs augmentation as well. The future of 	airline industry remains uncertain resulting from the concerns over security 	and international conflicts and disputes. Several major North American 	airlines commenced bankruptcy protection in 2002. To the North American 	market, adverse conditions and unexpected events are still looming in the 	future. 	5          	SWOT Analyses 	 	SWOT (Strength, Weakness, Opportunity 	and Threat) model is an analytic tool for strategic-planning and 	decision-making. It helps managers to review current environment where 	organizations existing and self-conditions thus outside opportunities or 	threats can be identified and internal characteristics can be examined. We 	would use SWOT model to analyze Air Canada’s case as the following. 	5.1         	Strength 	 	Air Canada’s strength would be focused 	on the domestic market and the majority of Canadian public traveling in and 	out of Canada. AC is the national carrier and it would be Canadians’ first 	choice provided other considerations are same. Flying the aircraft carrying 	a logo of maple leaf, Canada’s national icon, and national flag would make 	all Canadians feel proud and home alike. 	 	In addition, the domestic market is 	dominated by AC as well due to its scale and almost monopolized routes 	structure in Canada. Canada’s small population scattering over such vast 	continent makes airlines hard to survive and new joiners higher financial 	entry qualifications to compete. This will prevent new airlines from 	entering into Canada’s relatively small market. AC’s strong points include: 	5.1.1      	Network 	 	Compared with other competitors, AC’s 	service network may be the most valuable and powerful strength over other 	rivals. AC has a full service network to Canada domestic and international 	destinations. Besides, AC has many regional partners or subsidiary airlines 	in the domestic market to form an integrated service network. Plus the 	membership of Star Alliance, AC can provide a worldwide network to 	passengers through other alliance members. 	5.1.2      	National Carrier 	 	To be the biggest, longest and 	full-scale-service airline in Canada, AC has become Canada’s national 	symbol. It would be Canadians’ first selection to fly with if fairs are 	reasonable. This would make AC more advantageous over other foreign 	competitors. 	5.2         	Weakness 	5.2.1      	High Personnel Cost 	 	 	 	Perhaps AC’s weakness comes from too much support from 	the government, which makes AC rigid, inefficient, over sized and less 	competitive. From figure 13 below we can see that personnel cost (salaries, 	wages and benefits) counts up to 31% of AC’s total cost. It is a huge 	portion! 	  	 	Figure 13: AC’s 	Cost                                           Source: AC website 	 	Unionized employees such as pilots, 	flight attendants and mechanics make AC bearing heavy personnel burdens of 	salaries, wages, benefits and pensions. High personnel expenses compel AC a 	high cost airline, which would be a serious problem from now on. 	  	  	  	  	  	  	  	  	5.2.2      	Fleet Arrangement and Aircraft Dispatch 	 	Many of AC’s airplanes are wide-body 	ones. These wide-body airplanes play a major role in domestic and North 	American markets. With the horrible business depression after 911, war and 	SARS adverseness load factors have been decreased to a record low. Many 	seats are empty and operating performance deteriorated further as passengers 	scare of flight; thus the revenue becomes less notwithstanding the operating 	cost remains the same. It turns into negative numbers on the financial 	report eventually. Nevertheless, costs and losses could be minimized and 	mitigated if flights are consolidated on some low load factor routes, or a 	better usage and management of smaller, narrow-body airplanes. However, this 	cannot be done immediately. It needs a deliberated plan for future airplane 	purchase and fleet designs. Current fleet and airplane types in AC may not 	be suitable when business goes down or any similar crises encountered. 	5.2.3      	Geographic Location 	 	Canada shares the longest peaceable 	border in the world with her neighbour in the south-U.S.A. Yet Canada’s 	population, economic scale and business energy are not comparable with the 	U.S. Locating so closely to the world’s super power means advantageous as 	well as threatened. More or less, Canada’s importance and role to the world 	is diluted by the existence of the U.S. from the south. In addition, any 	economic chills or industrial occurrences will affect Canada’s performance 	too. 911’s impact is the best example, which explains the effects of the 	close tie between Canada and the U.S. and the harm of over-dependence. The 	unilateralism and new conservatism emerge in U.S. foreign policies towards 	the world would, and have, drawn unpredictable outcomes to U.S. itself 	socially, economically and psychologically and surely hammer Canada too. 	5.3         	Opportunity 	 	 	 	There still are some opportunities although the 	environment is not friendly for airline industry, especially the North 	American market. Yet other international markets still have positive 	growths. Asia-Pacific, West Europe, South America and Caribbean regions 	experienced strong revenue growth in 2002. Figure 10 above reveals the 	potential markets waiting to be explored, in which Asia-Pacific, Latin 	America and Middle East would be most possible opportunities to AC. 	  	 	Figure 14: Passenger Revenue Change By 	Region.  Source: AC website 	 	Figure 14 above shows the passenger 	revenue changes classified by region. Non-U.S. international market revenues 	bounced the highest number from 2001. It is worth to give it a shot!            5.3.1      Asia-Pacific Region IATA has forecasted that the Asia-Pacific region would be the fastest growing market in the next 15 to 20 years. Areas like Mainland China, India and South East Asia are future’s locomotives of world economy. Canada just happens to receive huge numbers of immigrants from these areas. The economic ties, passenger traffic and cargo transportation between Canada and these areas are promising opportunities to Air Canada. The biggest west coast city, Vancouver, would become the transportation hub to the Asia-Pacific region and the demand increasing would be foreseen as well. 5.3.2      Cargo Cargo operation has always been lucrative and stable relatively regardless of external interferences. AC still had cargo revenue growths in 2001 and 2002 in spite of passenger business drop then, for example. IATA also predicts the world’s freight traffic average growth of 5.3% from 2002 to 2006 as figure 15 shows. The highest rate of growth was forecasted to be within Asia and on Trans-Pacific routes. Again, it points out potential market and opportunities to Air Canada. Figure 15: IATA’s Freight Forecast.                               Source: IATA 5.3.3      Low Price No-Frill Market Low fare, no-frill operations may be another option for Air Canada. There are several successful examples of this kind of operation around the world, for instance, Easy Jet in Europe, VirginBlue in Australia, Southwest Air in the U.S. and WestJet in Canada. The secret of the success is very low cost, compared to full-service, top-tier airlines. By the utilizations of IT, Internet technology, spoke-to-spoke hub operation, appropriate airplane type (usually narrow-body, short to medium range aircraft), flexible revenue and price management and slim organization make this type of airlines profitable, pliable and very competitive in regional markets. They can lower the ticket prices to a level that full-service airlines cannot possibly offer. North America’s vast continent and scattered metropolises in Canada and the U.S., with ranges vary from 2 to 6 flight hours, is suitable for this type of operation. 5.4         Threat Air Canada is facing imminent threats under present conditions, both from internal financial pressure and externally industrial environment. 5.4.1      Competition North America is a totally deregulated, liberalized and free competitive market. Canada and the U.S. also impose anti-trust regulations on enterprises to protect consumers’ interests. Airlines cannot practice any forms of associated, consolidated or pre-agreed behaviour to manipulate, control or monopolize the market. Therefore, competition is fierce in this free market as well as those areas and countries with similar “open sky” agreements and regulations. AC has difficulties to compete with those lower cost airlines from Asia, Europe and the U.S. to win the market shares. 5.4.2      High Cost AC’s operating cost is high, especially expenses in salaries, benefits and pensions. Unionized work force makes AC strenuous to downsize the organization and reduce personnel expenses. For example, employee benefits expenses rose $80 million or 15%, and future benefits rose $44 million in 2001 due to higher pensions and increased health care costs. Workers’ compensation liability rose $23 million in 2002 as well. With lessening revenues but increasing cost, AC is encountering tremendous challenges ahead. 5.4.3      Fleet Arrangement As mentioned before, AC needs to adjust its fleet and aircraft type in order to meet the requirements of load factor and efficient aircraft usages. Fly a wide-body airplane to the less-demanded routes will not do any good to the company but decreases the load factor and economic efficiency instead under recent turbulence. However, most AC’s fleets are wide-body airplanes excluding its subsidiary airlines. This would put AC into an adverse position during demand and business downed. 5.4.4      Oversized Organization The organization has been expanded and oversized after Air Canada acquired Canadian Airlines International in 2000. Yet the operating performance has not been multiplied after the merge. Moreover, AC either had to pay extra compensations to layoff Canadian Air employees or kept their positions preserved to prevent labour disputes. This causes AC overweight and carrying heavy cost loads. 6          Three Year Strategic Plan To cope with the business crisis and save Air Canada from bankruptcy, a strategic plan is needed to deal with: W   Market Planning W   Cost Reduction W   Organization Restructuring These three elements are actually aiming at the same target and strive for the same goal: redefine the airline market after those strikes and reduce operating costs to compete. 6.1         Marketing Planning Airline business has been totally changed after Sep 11, 2001. Passengers become suspicious to take air travel, depressed economy makes passengers more sensitive to prices and reduces business travellers, and, minute and complicated security measures are time and patience consuming to passengers. Airlines cannot do much about the security examination procedures because governments have managed most examination and check jobs since 911. Therefore, airlines can only lower their fairs and initiate market incentives and stimulants to attract more passengers, and persuade general public that airplane still is the safest, fastest and most comfortable vehicle for transportation. Low –cost and no-frill airlines have been popular among the public, especially during market recession periods. This type of airline is fitting in deregulated, liberalized and high competition markets such as North America and Europe. The operating cost is at least 1/3 lower than full-service airlines. Low-cost airlines can use flexible and low fair pricing strategies to fill up every seat. They also encourage passengers utilize direct Internet access for seat booking, ticket purchasing and other services requests. Hub-to-hub, spoke-to-spoke type routing structures provide airlines better airplane usage and enhance dispatch efficiency. All these operating features can reduce the costs further thus ticket prices can be lowered more. 6.1.1      North American Market At this crucial moment, Air Canada should transform its market targets to and focus on low-cost, no-frill sector to vie the market share particularly in the North America. Actually Air Canada has noticed the popularity of low-cost airlines and launched no-frill subsidiary ones like Tango, Jazz, Air Canada Jets, and Zip. Air Canada should continue to enhance this low-cost airline operations and work on prices reducing. 6.1.2      International Market Air Canada should grasp the growth opportunity and explore the Asian market, and introduce more flights and services to the booming areas such as China, South East Asia, Japan, India and Korea. AC also can take the advantages of the large number of Asian immigrants and their ties in the region to expand its business. 6.1.3      Cargo Cargo operations can be gradually shifted from the weak North American area to the promising Asia region. Based on previous statistics and future forecasts from IATA, Asia has the highest demands and growth rate in the world. This giant economic plate must not be ignored at all. 6.2         Cost Reduction 6.3         Organization Restructuring 7          Conclusion 8          Reference Air Canada, <http://www.aircanada.ca/>, July 2002 Accessed Airline Business Magazine, <http://www.airlinebusiness.com/>, July 2003 Accessed ICAO, <http://www.icao.int/>, Aug 2003 Accessed IATA, <http://www.iata.org/index.htm>, Aug 2003 Accessed

Airline Marketing of Air Canada

Table of Content TOC \o "1-3" \h \z 1 Executive Summary . PAGEREF _Toc50826264 \h 3 2 ...

Marketing Strategies of Computer Companies

Marketing Strategies of Computer Companies                 An enterprise will not establish its name on its own. Word of mouth among   consumers not enough in reaching the wider market. Extensive promotions are   necessary in catching the attention of the public and getting a larger base of   customers. Thus, marketing strategies are needed to have a more systematic   way of seizing the opportunities for the business.               Marketing strategy is the method of allowing the organization’s limited   resources to concentrate on a course of action that will lead to increased sales   and dominance of a targeted market. Marketing strategy basically identifies the   business’s objectives and goals and how they will be achieved in a specific   period of time. Also, a marketing strategy is a combination of processes such as   product development, promotion, pricing and distribution. It determines the   choice of targeted market sections together with its positioning, marketing mix   and allocation of resources.               It is important to realize for an enterprise particularly for those starting   ones that marketing strategy is one of the biggest factors that would determine   the success or failure of the business. The size and nature of the enterprise is   irrelevant, what only matter is getting the right marketing strategies and the   business will prosper. However, there is confusion between marketing strategy   and advertising. Advertising mainly concerns on attracting possible customers   through commercials and promotions, while marketing strategy encompasses   every aspect on running the business, not only focusing on the behavior of the   market but also on organizational efficiency.               On the other hand, marketing strategies are changing through the times   because of the changing industries as well. Not all marketing strategies of the   traditional industries are applicable to the revolutionary digital industries of the   21st century age. Due to the modern living that is technologically heavily   dependent, the computer industry has been booming ever since. But, the   competition grows as well. Thus, different marketing strategies are developed to   be more efficient in running the business while attracting more customers and   surviving in the tight competition.               Apple Inc. has been one of the most popular computer brands across the   globe. Known for its Macintosh line of computers and related software, Apple has   emerged to dominate the market in the recent decade. The consumers of   electronic industry have been awed by its product such as the iPod, the digital   music distributor iTunes Music Store, and the incredible smart phone iPhone.               Apple is notable for its branding strategy that is about lifestyle,   imagination, innovation, passion and power-to-the-people through technology.   The Apple brand is about simplicity and removal of complexity from life through   people-driven product design.               Also, there is brand architecture viewpoint that maintains a monolithic   brand identity that automatically connotes association with the Apple name. The   prefix “i” is used for consumer products such as iTunes, iPod, and iPhone. While   the “Mac” is used for a large number of Apple’s products referring to computers   such as MacBook and Mac Mini.               On one hand, Dell had different marketing strategy that helped the   company to engrave its name in the industry.               Dell is among the world’s leading computer manufacturers that   transformed and diversified the business industry spanning for over 20 years.   Dell has gained market leadership through its unique approach of separate   manufacturing processes so that the company is not reliant on singular   production for supplier’s chain for equipment. By assigning each regionalized   production, there would be a center for particular computer components to   increase the organizational efficiency and maximize the business infrastructure.               Also, Dell’s product pricing mostly reflects on the affordability of the local   customers. A good example is the production plants based on Xiamen, China   that has been able to provide products and services without incurring additional   costs to price. Location strategy largely affects the aspect of marketing   campaign. The so-called “local Dell” offers cheaper products because it has no   additional costs of distribution. Dell has not concentrated on extensive marketing   campaigns until 1999, when customers from UK filed complaints for the company   not following the guidelines and promises of the Dell’s promotional campaign.   Thus, it moved the firm to adapt the “Be Direct” attitude in dealing with   customers.               Surviving in the tight market competition is a tough fight. But, it would be   easier if the organization is ready and armed with definite plans particularly its   marketing strategies. However, besides the knowledge that is necessary in   running the business smoothly, dedication and commitment is far more important           References:   Marketing Strategies to Sell Computer Monitors, August 2010, http://www.ehow.com   Business Marketing Strategy Essentials, http://www.bizrave.com/   Apple's Branding Strategy, http://www.marketingminds.com.au

Marketing Strategies of Computer Companies

Marketing Strategies of Computer Companies An enterprise will not establish its name on its own. Word of mouth among...