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10 Step Marketing Plan Cebu Pacific

Louie Mark Quizon, profile picture
Louie Mark Quizon

Cebu Pacific's target market is business and leisure travelers seeking an affordable and fun airline experience. It competes with Philippine Airlines and other local low-cost carriers. Cebu Pacific differentiates itself by offering the most routes, the youngest fleet, and a "Fun Flight" experience. The domestic airline market size is Php 40.41 billion, with Cebu Pacific holding a Php 19.48 billion market share. Cebu Pacific uses a low-cost approach, pricing 51% lower than Philippine Airlines to attract customers. It employs marketing strategies like promotions, advertising, and online booking to promote affordable, fun flights.

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10 STEP Marketing Plan for CEBU PACIFIC AIRLouie Mark QuizonJune 20111http://louiemarkquizon.blogspot.com
This 10 Step Marketing Plan is part of the mandatory requirements of Prof. Remigio Joseph De Ungria’s AGSB marketing management class.The data included in this report are based on publicly available data such as those on internet websites, news, package declarations, public reports.When appropriate, data are “masked” so as not to create unexpected conflicts.The reports are posted and linked on slideshare, blogs and facebook so that there is easier sharing among students from different marketing classes.Disclaimerhttp://louiemarkquizon.blogspot.com
Cebu Pacific’s PTM are the business and leisure travelersWho want to be fulfilled by a low cost, no frills, and fun airline serviceCan choose PAL and other local LCCsGap is a low cost carrier who can offer many routes, has the youngest fleet, and can give a “Fun Flight” experienceThe market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 BillionSteps 1 to 5Reaching out to every “Juan”http://louiemarkquizon.blogspot.com
Cebu Pacific is a low cost carrier that offers fun in the skies Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest AirUses sales promotion, word of mouth, advertising, public relations, and events and experiences Flights are mainly booked online Uses low cost approach to winSteps 6 to 10A fun flight at a low costhttp://louiemarkquizon.blogspot.com
1. Cebu Pacific Air’s Primary Target Market (PTM) are the business and leisure travelers that want an affordable, fun, and no-frills service…Ages 21-55, male and female, social class BCD, single and marriedPrice conscious internet and technology savvy professionals and leisure tourists who want/love to travel (mostly domestic)Business and leisure travelers who travel frequently, or during vacation/holidays, and demand an affordable, fun, and “no frills” airline service http://louiemarkquizon.blogspot.com
PTM needs to travel by air at a low cost…I am fulfilled when I can travel by air at a low costI want to experience luxury so I can achieve statusReference: Maslow’s Hierarcy of Needs Marketing Management, 11th ed, Philip Kotler6http://louiemarkquizon.blogspot.com
2. PTM’s needs, wants & demands Professionals and tourists need to experience luxury, to achieve status and recognition, gain self-esteem, and to be fulfilled to attain self-actualizationProfessionals and tourists choose Cebu Pacific over other airlines because of price, service, safety, extensive distribution coverage, on-time flights, brand promise of a “Fun Flight” experienceProfessionals and tourists demand low cost with no-frills service, safe travel, easy booking, fun travelling experience, feeling of fulfillmenthttp://louiemarkquizon.blogspot.com
3a. Direct competitors in the domestic and international marketsDomesticPhilippine AirlinesAirPhil ExpressZest AirSeairInternationalCathay Pacific AirwaysPhilippine AirlinesSingapore AirlinesAsiana AirlinesOthers1Note:(1) Others include DragonAir, Hong Kong Express, Air Asia, Eva Air, etc.http://louiemarkquizon.blogspot.com
3a. Cebu Pacific’s Indirect CompetitorsIndirect CompetitorsBus Lines (Land)Shipping companies (Water)http://louiemarkquizon.blogspot.com
3a. Variables that affect the choice of airlineVariablesPriceRoutes servedSafety RecordService and amenitiesDistribution coverageBrand promise of “Fun Flight”http://louiemarkquizon.blogspot.com
Price vs Route Matrix of Key Domestic Carriers in the Top 5 Largest Domestic Routes (based on lowest fares offered)Market share as of 2009http://louiemarkquizon.blogspot.com
Cebu Pacific dominates the domestic market and is priced lower than Philippine Airlines, its main competitorMarket share as of 2009http://louiemarkquizon.blogspot.com
Benefit Positioning vs Brand Matrix of key domestic carriersas of 2011http://louiemarkquizon.blogspot.com
Cebu Pacific’s key differentiators are the most routes per day, youngest fleet age and the “Fun Flight” experienceas of 2011http://louiemarkquizon.blogspot.com
4. Cebu Pacific is strongly positioned as the country’s premium “Low Cost Carrier (LCC)”All airlines except PAL are adopting the “low cost carrier” business modelCebu Pacific is the onlylow cost carrier that:Offers the most routes per dayHas the youngest fleet ageGuarantees a “Fun Flight” experiencehttp://louiemarkquizon.blogspot.com
4. Cebu Pacific is strongly positioned as the country’s premium “Low Cost Carrier”Traditional business model is the “network carrier”, wherein airlines:Typically pursue a service differentiation strategyFares are more expensivehttp://louiemarkquizon.blogspot.com
4. “Positioning”: brand identity from the maker“It’s time everyone flies”Or occasionally modified with humorous intent as:“It’s time ever Juan flies”Source: Cebu Pacific Air Websitehttp://louiemarkquizon.blogspot.com
5a. Based on PAL’s quarterly revenues, market size is Php 45.54 Billion2010 Passenger revenue is Php 59.32 Billion1Civil Aeronautics Board reveals PAL average market share of 32.3% for 2010Revenue contribution for the domestic market is 24.8%2Market size is (0.248 x 59.32)/0.323 = Php 45.54 Billionhttp://louiemarkquizon.blogspot.com
5a. Based on PAL’s quarterly revenues, market size is Php 45.54 BillionReferencesPhilippine Airlines Annual and Quarterly Reports 2010 http://www.pse.com.ph/Philippine Airlines Annual Report 2010 http://www.pse.com.ph/http://louiemarkquizon.blogspot.com
5b. Based on Cebu Pacific’s claimed market share, market size is Php 40.41 BillionCebu Pacific’s claimed passenger domestic market share is 48.2% for 2010Passenger revenue for 2010 is Php 24.656 BillionDomestic capacity share is 79%Market size is 0.79(24.656 Billion/0.482) = Php 40.41 Billionhttp://louiemarkquizon.blogspot.com
5c. Customer data reveals a market size of Php 41.9 BillionTotal domestic passengers for 2010: 16,539,0001Average fare of Cebu Pacific1999 = Php 235422010 = Php 2468.8 (Jan-June 2010) CAGR = 0.48% GrowthAverage domestic airline fares in 1999 = Php 25213Applying CAGR: 2521x1.048 = Php 2533.34Total domestic passengers x Average airline fare16,539,000 x 2533.34 = Php 41.9 Billionhttp://louiemarkquizon.blogspot.com
5c. Customer data reveals a market size of Php 41.9 BillionReferencesCebu Air, Inc 1Q2011 Results of Operations sourcing Civil Aeronautics Board, Company FilingsCompetition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, August 2001, Table 4. Average fare by airline per sector, 1997-1999 (PhP), Average of Cebu Pacific AirCompetition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, August 2001, Table 4. Average fare by airline per sector, 1997-1999 (PhP), Average of PAL, Cebu Pacific Air, Air Philippineshttp://louiemarkquizon.blogspot.com
5. Annual market size for the domestic passenger market is Php 40.41 BillionCompetitor data= Php 45.54 BillionCompany data = Php 40.41 BillionCustomer Usage data = Php 41.9 Billionhttp://louiemarkquizon.blogspot.com
6a. Cebu Pacific Air’s e-commerce websitehttp://louiemarkquizon.blogspot.com
6a. Philippine Airlines’ e-commerce websitehttp://louiemarkquizon.blogspot.com
6a. Airphil Express’s e-commerce websitehttp://louiemarkquizon.blogspot.com
6a. Zest Air’s e-commerce websitehttp://louiemarkquizon.blogspot.com
6a. Seair’s e-commerce websitehttp://louiemarkquizon.blogspot.com
6a. SuperFerry’s e-commerce websitehttp://louiemarkquizon.blogspot.com
6a. Montenegro Shipping Lines’ websitehttp://louiemarkquizon.blogspot.com
6b. Cebu Pacific has the youngest fleet in the Philippines and continues to differentiate itself from other LCCsCEB operates a fleet of 25 Airbus (10 A319 and 15 A320) and 8 ATR 72-500 aircraft, the youngest fleet in the PhilippinesCEB offers the lowest year round Lite Fares for its destinationsCEB remains to be the pioneer in creative pricing strategies as it manages to offer the lowest fare in every route it operatesFrom Cebu Pacific Air websitehttp://louiemarkquizon.blogspot.com
6b. Cebu Pacific’s innovation is key to its domestic market dominanceCEB is the first local airline to introduce e-ticketing, prepaid excess baggage and seat selection in the PhilippinesThe only domestic carrier that offers fun in the skies with its games on board popularly known as Fun Flights, together with its entertaining inflight magazine – SmileFrom Cebu Pacific Air websitehttp://louiemarkquizon.blogspot.com
6b. All Fares are now “Lite Fares”Customers don’t have to pay for:Newspapers, lounges, free mealsPaper tickets, frequent flyer programsLite Fares have two variants:Year-round faresPromo faresFrom Cebu Pacific Air websitehttp://louiemarkquizon.blogspot.com
7. Cebu Pacific is priced lower than PAL but is generally higher than the other LCCshttp://louiemarkquizon.blogspot.com
7. Cebu Pacific is 51% lower than PAL but 11% and 21% higher than AirPhil and Zest Air respectivelyhttp://louiemarkquizon.blogspot.com
8a. Cebu Pacific Air uses Sales Promotion, Word of Mouth, Advertising, Public Relations, and Events and Experiences13425http://louiemarkquizon.blogspot.com
8a. Cebu Pacific’s website is the most visited e-commerce travel website from 2008- June 2010 according to Alexa Top Siteshttp://louiemarkquizon.blogspot.com
8a. Cebu Pacific leverages on their strong internet presence to advertise sales promotionshttp://louiemarkquizon.blogspot.com
8a. They also use social network sites to promote sales…http://louiemarkquizon.blogspot.com
8a. The use of social networking sites is also a form of Word of Mouth Marketinghttp://louiemarkquizon.blogspot.com
8a. Cebu Pacific’s safety demo dance even went viral…http://louiemarkquizon.blogspot.com
8a. Cebu Pacific also uses print and TV advertising, supported by radio and outdoor advertisinghttp://louiemarkquizon.blogspot.com
8a. The company uses various PR campaigns such as press releases, annual reports, and their company magazine - Smilehttp://louiemarkquizon.blogspot.com
8a. Marketing communication through Events and Experienceshttp://louiemarkquizon.blogspot.com
8b. Philippine Airlines’ internet special offers and promotionshttp://louiemarkquizon.blogspot.com
8b. Philippine Airlines’ Facebook and Twitter pageshttp://louiemarkquizon.blogspot.com
8b. Philippine Airlines’ print and TV advertisementshttp://louiemarkquizon.blogspot.com
8b. AirPhil Express’s internet promotionshttp://louiemarkquizon.blogspot.com
8b. AirPhil Express’s Facebook pagehttp://louiemarkquizon.blogspot.com
8b. Zest Air not only markets its promotions on their website but also their eventshttp://louiemarkquizon.blogspot.com
8b. Zest Air also communicates through Facebook and Twitter. They also use celebrity endorsershttp://louiemarkquizon.blogspot.com
8b. They even have a radio commercial…http://louiemarkquizon.blogspot.com
8b. Seair’s internet promotionshttp://louiemarkquizon.blogspot.com
8b. Seair’s Facebook and Flickr pageshttp://louiemarkquizon.blogspot.com
8b. Seair, like Cebu Pacific, also has a PR campaign through its company magazinehttp://louiemarkquizon.blogspot.com
8b. To grow online brand recognition, Cebu Pacific leverages on its strong e-commerce websiteAirlines now rely heavily on e-commerce and e-marketingCebu Pacific’s main strength is their e-commerce websiteMost visited e-commerce travel website (2008-June 2010)Reinforces this by joining social networking sitesFacebookTwitterhttp://louiemarkquizon.blogspot.com
8b. Cebu Pacific’s focus is on e-commerce and e-marketingE-commerce and e-marketing are cost effectiveSome promotions are exclusive onlineLower distribution costsSuccessful internet bookingsAccounted for the highest portion of total direct sales for 2010http://louiemarkquizon.blogspot.com
9. Cebu Pacific’s main distribution channel is the internetThree principal distribution channels:InternetBooking sales office, call centres, client accountsThird-party sales outletDistributorsGeneral Sales AgentsWholesalers and Preferred sales agentshttp://louiemarkquizon.blogspot.com
10. Cebu Pacific’s generic winning strategy is Low Cost ProducerLow Cost ProducerSupply and Distribution LeverageDifferentiationNichehttp://louiemarkquizon.blogspot.com
10. The premium “Low Cost Carrier”Priced lower than its main competitor which is a “Network Carrier”Differentiates brand with other LCCsEnd result – No. 1 domestic carrierhttp://louiemarkquizon.blogspot.com
ReferencesMarketing plan outline for Southwest Airlines: http://www.grabers.com/library/imc/archives/2005/03/a_marketing_pla.phphttp://wiki.answers.com/Q/What_is_the_present_social_status_of_the_PhilippinesCebu Pacific Air Prospectus October 8, 2010Cebu Pacific Air Annual Report for year ended Dec 31, 2010Cebu Air, Inc. 1Q2011 Results of Operations Investors’ and Analysts’ Briefinghttp://louiemarkquizon.blogspot.com
ReferencesPhilippine Airlines Annual Report for the year ended Mar 31, 2010Philippine Airlines Quarterly Reports for the periods ended Sept 30, June 30, Dec 31, 2010Competition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, Aug 2001The State of Competition and Market Structure of the Philippine Air Transport Industry, Myrna S. Austria, Nov 2000http://louiemarkquizon.blogspot.com
ReferencesThe Evolution of the Philippine Airline Industry, Wilfred Manuela, The Airline Customer Loyalty Model, Master Thesis by Judith Benner, Copenhagen Business School, April 17, 2009Philippine Aircraft, Passenger, and Cargo Statistics 2001-2010, Civil Aviation Authority of the Philippines http://www.caap.gov.ph/web/downloads.htmV53 10 Step Marketing Plan for Cebu Pacific, Lenilynne Go, Feb 2011http://louiemarkquizon.blogspot.com
64SUMMARYhttp://louiemarkquizon.blogspot.com
Cebu Pacific’s PTM are the business and leisure travelersWho want to be fulfilled by a low cost, no frills, and fun airline serviceCan choose PAL and other local LCCsGap is a low cost carrier who offers many routes, has a young fleet, and can give a “Fun Flight” experienceThe market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 BillionSteps 1 to 5Reaching out to every “Juan”http://louiemarkquizon.blogspot.com
Cebu Pacific is a low cost carrier that offers fun in the skies Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest AirUses sales promotion, word of mouth, advertising, public relations, and events and experiences Flights are mainly booked online Uses low cost approach to winSteps 6 to 10A fun flight at a low costhttp://louiemarkquizon.blogspot.com
10 STEP Marketing Plan for CEBU PACIFIC AIRLouie Mark QuizonJune 201167http://louiemarkquizon.blogspot.com

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10 Step Marketing Plan Cebu Pacific

  • 1. 10 STEP Marketing Plan for CEBU PACIFIC AIRLouie Mark QuizonJune 20111http://louiemarkquizon.blogspot.com
  • 2. This 10 Step Marketing Plan is part of the mandatory requirements of Prof. Remigio Joseph De Ungria’s AGSB marketing management class.The data included in this report are based on publicly available data such as those on internet websites, news, package declarations, public reports.When appropriate, data are “masked” so as not to create unexpected conflicts.The reports are posted and linked on slideshare, blogs and facebook so that there is easier sharing among students from different marketing classes.Disclaimerhttp://louiemarkquizon.blogspot.com
  • 3. Cebu Pacific’s PTM are the business and leisure travelersWho want to be fulfilled by a low cost, no frills, and fun airline serviceCan choose PAL and other local LCCsGap is a low cost carrier who can offer many routes, has the youngest fleet, and can give a “Fun Flight” experienceThe market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 BillionSteps 1 to 5Reaching out to every “Juan”http://louiemarkquizon.blogspot.com
  • 4. Cebu Pacific is a low cost carrier that offers fun in the skies Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest AirUses sales promotion, word of mouth, advertising, public relations, and events and experiences Flights are mainly booked online Uses low cost approach to winSteps 6 to 10A fun flight at a low costhttp://louiemarkquizon.blogspot.com
  • 5. 1. Cebu Pacific Air’s Primary Target Market (PTM) are the business and leisure travelers that want an affordable, fun, and no-frills service…Ages 21-55, male and female, social class BCD, single and marriedPrice conscious internet and technology savvy professionals and leisure tourists who want/love to travel (mostly domestic)Business and leisure travelers who travel frequently, or during vacation/holidays, and demand an affordable, fun, and “no frills” airline service http://louiemarkquizon.blogspot.com
  • 6. PTM needs to travel by air at a low cost…I am fulfilled when I can travel by air at a low costI want to experience luxury so I can achieve statusReference: Maslow’s Hierarcy of Needs Marketing Management, 11th ed, Philip Kotler6http://louiemarkquizon.blogspot.com
  • 7. 2. PTM’s needs, wants & demands Professionals and tourists need to experience luxury, to achieve status and recognition, gain self-esteem, and to be fulfilled to attain self-actualizationProfessionals and tourists choose Cebu Pacific over other airlines because of price, service, safety, extensive distribution coverage, on-time flights, brand promise of a “Fun Flight” experienceProfessionals and tourists demand low cost with no-frills service, safe travel, easy booking, fun travelling experience, feeling of fulfillmenthttp://louiemarkquizon.blogspot.com
  • 8. 3a. Direct competitors in the domestic and international marketsDomesticPhilippine AirlinesAirPhil ExpressZest AirSeairInternationalCathay Pacific AirwaysPhilippine AirlinesSingapore AirlinesAsiana AirlinesOthers1Note:(1) Others include DragonAir, Hong Kong Express, Air Asia, Eva Air, etc.http://louiemarkquizon.blogspot.com
  • 9. 3a. Cebu Pacific’s Indirect CompetitorsIndirect CompetitorsBus Lines (Land)Shipping companies (Water)http://louiemarkquizon.blogspot.com
  • 10. 3a. Variables that affect the choice of airlineVariablesPriceRoutes servedSafety RecordService and amenitiesDistribution coverageBrand promise of “Fun Flight”http://louiemarkquizon.blogspot.com
  • 11. Price vs Route Matrix of Key Domestic Carriers in the Top 5 Largest Domestic Routes (based on lowest fares offered)Market share as of 2009http://louiemarkquizon.blogspot.com
  • 12. Cebu Pacific dominates the domestic market and is priced lower than Philippine Airlines, its main competitorMarket share as of 2009http://louiemarkquizon.blogspot.com
  • 13. Benefit Positioning vs Brand Matrix of key domestic carriersas of 2011http://louiemarkquizon.blogspot.com
  • 14. Cebu Pacific’s key differentiators are the most routes per day, youngest fleet age and the “Fun Flight” experienceas of 2011http://louiemarkquizon.blogspot.com
  • 15. 4. Cebu Pacific is strongly positioned as the country’s premium “Low Cost Carrier (LCC)”All airlines except PAL are adopting the “low cost carrier” business modelCebu Pacific is the onlylow cost carrier that:Offers the most routes per dayHas the youngest fleet ageGuarantees a “Fun Flight” experiencehttp://louiemarkquizon.blogspot.com
  • 16. 4. Cebu Pacific is strongly positioned as the country’s premium “Low Cost Carrier”Traditional business model is the “network carrier”, wherein airlines:Typically pursue a service differentiation strategyFares are more expensivehttp://louiemarkquizon.blogspot.com
  • 17. 4. “Positioning”: brand identity from the maker“It’s time everyone flies”Or occasionally modified with humorous intent as:“It’s time ever Juan flies”Source: Cebu Pacific Air Websitehttp://louiemarkquizon.blogspot.com
  • 18. 5a. Based on PAL’s quarterly revenues, market size is Php 45.54 Billion2010 Passenger revenue is Php 59.32 Billion1Civil Aeronautics Board reveals PAL average market share of 32.3% for 2010Revenue contribution for the domestic market is 24.8%2Market size is (0.248 x 59.32)/0.323 = Php 45.54 Billionhttp://louiemarkquizon.blogspot.com
  • 19. 5a. Based on PAL’s quarterly revenues, market size is Php 45.54 BillionReferencesPhilippine Airlines Annual and Quarterly Reports 2010 http://www.pse.com.ph/Philippine Airlines Annual Report 2010 http://www.pse.com.ph/http://louiemarkquizon.blogspot.com
  • 20. 5b. Based on Cebu Pacific’s claimed market share, market size is Php 40.41 BillionCebu Pacific’s claimed passenger domestic market share is 48.2% for 2010Passenger revenue for 2010 is Php 24.656 BillionDomestic capacity share is 79%Market size is 0.79(24.656 Billion/0.482) = Php 40.41 Billionhttp://louiemarkquizon.blogspot.com
  • 21. 5c. Customer data reveals a market size of Php 41.9 BillionTotal domestic passengers for 2010: 16,539,0001Average fare of Cebu Pacific1999 = Php 235422010 = Php 2468.8 (Jan-June 2010) CAGR = 0.48% GrowthAverage domestic airline fares in 1999 = Php 25213Applying CAGR: 2521x1.048 = Php 2533.34Total domestic passengers x Average airline fare16,539,000 x 2533.34 = Php 41.9 Billionhttp://louiemarkquizon.blogspot.com
  • 22. 5c. Customer data reveals a market size of Php 41.9 BillionReferencesCebu Air, Inc 1Q2011 Results of Operations sourcing Civil Aeronautics Board, Company FilingsCompetition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, August 2001, Table 4. Average fare by airline per sector, 1997-1999 (PhP), Average of Cebu Pacific AirCompetition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, August 2001, Table 4. Average fare by airline per sector, 1997-1999 (PhP), Average of PAL, Cebu Pacific Air, Air Philippineshttp://louiemarkquizon.blogspot.com
  • 23. 5. Annual market size for the domestic passenger market is Php 40.41 BillionCompetitor data= Php 45.54 BillionCompany data = Php 40.41 BillionCustomer Usage data = Php 41.9 Billionhttp://louiemarkquizon.blogspot.com
  • 24. 6a. Cebu Pacific Air’s e-commerce websitehttp://louiemarkquizon.blogspot.com
  • 25. 6a. Philippine Airlines’ e-commerce websitehttp://louiemarkquizon.blogspot.com
  • 26. 6a. Airphil Express’s e-commerce websitehttp://louiemarkquizon.blogspot.com
  • 27. 6a. Zest Air’s e-commerce websitehttp://louiemarkquizon.blogspot.com
  • 28. 6a. Seair’s e-commerce websitehttp://louiemarkquizon.blogspot.com
  • 29. 6a. SuperFerry’s e-commerce websitehttp://louiemarkquizon.blogspot.com
  • 30. 6a. Montenegro Shipping Lines’ websitehttp://louiemarkquizon.blogspot.com
  • 31. 6b. Cebu Pacific has the youngest fleet in the Philippines and continues to differentiate itself from other LCCsCEB operates a fleet of 25 Airbus (10 A319 and 15 A320) and 8 ATR 72-500 aircraft, the youngest fleet in the PhilippinesCEB offers the lowest year round Lite Fares for its destinationsCEB remains to be the pioneer in creative pricing strategies as it manages to offer the lowest fare in every route it operatesFrom Cebu Pacific Air websitehttp://louiemarkquizon.blogspot.com
  • 32. 6b. Cebu Pacific’s innovation is key to its domestic market dominanceCEB is the first local airline to introduce e-ticketing, prepaid excess baggage and seat selection in the PhilippinesThe only domestic carrier that offers fun in the skies with its games on board popularly known as Fun Flights, together with its entertaining inflight magazine – SmileFrom Cebu Pacific Air websitehttp://louiemarkquizon.blogspot.com
  • 33. 6b. All Fares are now “Lite Fares”Customers don’t have to pay for:Newspapers, lounges, free mealsPaper tickets, frequent flyer programsLite Fares have two variants:Year-round faresPromo faresFrom Cebu Pacific Air websitehttp://louiemarkquizon.blogspot.com
  • 34. 7. Cebu Pacific is priced lower than PAL but is generally higher than the other LCCshttp://louiemarkquizon.blogspot.com
  • 35. 7. Cebu Pacific is 51% lower than PAL but 11% and 21% higher than AirPhil and Zest Air respectivelyhttp://louiemarkquizon.blogspot.com
  • 36. 8a. Cebu Pacific Air uses Sales Promotion, Word of Mouth, Advertising, Public Relations, and Events and Experiences13425http://louiemarkquizon.blogspot.com
  • 37. 8a. Cebu Pacific’s website is the most visited e-commerce travel website from 2008- June 2010 according to Alexa Top Siteshttp://louiemarkquizon.blogspot.com
  • 38. 8a. Cebu Pacific leverages on their strong internet presence to advertise sales promotionshttp://louiemarkquizon.blogspot.com
  • 39. 8a. They also use social network sites to promote sales…http://louiemarkquizon.blogspot.com
  • 40. 8a. The use of social networking sites is also a form of Word of Mouth Marketinghttp://louiemarkquizon.blogspot.com
  • 41. 8a. Cebu Pacific’s safety demo dance even went viral…http://louiemarkquizon.blogspot.com
  • 42. 8a. Cebu Pacific also uses print and TV advertising, supported by radio and outdoor advertisinghttp://louiemarkquizon.blogspot.com
  • 43. 8a. The company uses various PR campaigns such as press releases, annual reports, and their company magazine - Smilehttp://louiemarkquizon.blogspot.com
  • 44. 8a. Marketing communication through Events and Experienceshttp://louiemarkquizon.blogspot.com
  • 45. 8b. Philippine Airlines’ internet special offers and promotionshttp://louiemarkquizon.blogspot.com
  • 46. 8b. Philippine Airlines’ Facebook and Twitter pageshttp://louiemarkquizon.blogspot.com
  • 47. 8b. Philippine Airlines’ print and TV advertisementshttp://louiemarkquizon.blogspot.com
  • 48. 8b. AirPhil Express’s internet promotionshttp://louiemarkquizon.blogspot.com
  • 49. 8b. AirPhil Express’s Facebook pagehttp://louiemarkquizon.blogspot.com
  • 50. 8b. Zest Air not only markets its promotions on their website but also their eventshttp://louiemarkquizon.blogspot.com
  • 51. 8b. Zest Air also communicates through Facebook and Twitter. They also use celebrity endorsershttp://louiemarkquizon.blogspot.com
  • 52. 8b. They even have a radio commercial…http://louiemarkquizon.blogspot.com
  • 53. 8b. Seair’s internet promotionshttp://louiemarkquizon.blogspot.com
  • 54. 8b. Seair’s Facebook and Flickr pageshttp://louiemarkquizon.blogspot.com
  • 55. 8b. Seair, like Cebu Pacific, also has a PR campaign through its company magazinehttp://louiemarkquizon.blogspot.com
  • 56. 8b. To grow online brand recognition, Cebu Pacific leverages on its strong e-commerce websiteAirlines now rely heavily on e-commerce and e-marketingCebu Pacific’s main strength is their e-commerce websiteMost visited e-commerce travel website (2008-June 2010)Reinforces this by joining social networking sitesFacebookTwitterhttp://louiemarkquizon.blogspot.com
  • 57. 8b. Cebu Pacific’s focus is on e-commerce and e-marketingE-commerce and e-marketing are cost effectiveSome promotions are exclusive onlineLower distribution costsSuccessful internet bookingsAccounted for the highest portion of total direct sales for 2010http://louiemarkquizon.blogspot.com
  • 58. 9. Cebu Pacific’s main distribution channel is the internetThree principal distribution channels:InternetBooking sales office, call centres, client accountsThird-party sales outletDistributorsGeneral Sales AgentsWholesalers and Preferred sales agentshttp://louiemarkquizon.blogspot.com
  • 59. 10. Cebu Pacific’s generic winning strategy is Low Cost ProducerLow Cost ProducerSupply and Distribution LeverageDifferentiationNichehttp://louiemarkquizon.blogspot.com
  • 60. 10. The premium “Low Cost Carrier”Priced lower than its main competitor which is a “Network Carrier”Differentiates brand with other LCCsEnd result – No. 1 domestic carrierhttp://louiemarkquizon.blogspot.com
  • 61. ReferencesMarketing plan outline for Southwest Airlines: http://www.grabers.com/library/imc/archives/2005/03/a_marketing_pla.phphttp://wiki.answers.com/Q/What_is_the_present_social_status_of_the_PhilippinesCebu Pacific Air Prospectus October 8, 2010Cebu Pacific Air Annual Report for year ended Dec 31, 2010Cebu Air, Inc. 1Q2011 Results of Operations Investors’ and Analysts’ Briefinghttp://louiemarkquizon.blogspot.com
  • 62. ReferencesPhilippine Airlines Annual Report for the year ended Mar 31, 2010Philippine Airlines Quarterly Reports for the periods ended Sept 30, June 30, Dec 31, 2010Competition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, Aug 2001The State of Competition and Market Structure of the Philippine Air Transport Industry, Myrna S. Austria, Nov 2000http://louiemarkquizon.blogspot.com
  • 63. ReferencesThe Evolution of the Philippine Airline Industry, Wilfred Manuela, The Airline Customer Loyalty Model, Master Thesis by Judith Benner, Copenhagen Business School, April 17, 2009Philippine Aircraft, Passenger, and Cargo Statistics 2001-2010, Civil Aviation Authority of the Philippines http://www.caap.gov.ph/web/downloads.htmV53 10 Step Marketing Plan for Cebu Pacific, Lenilynne Go, Feb 2011http://louiemarkquizon.blogspot.com
  • 65. Cebu Pacific’s PTM are the business and leisure travelersWho want to be fulfilled by a low cost, no frills, and fun airline serviceCan choose PAL and other local LCCsGap is a low cost carrier who offers many routes, has a young fleet, and can give a “Fun Flight” experienceThe market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 BillionSteps 1 to 5Reaching out to every “Juan”http://louiemarkquizon.blogspot.com
  • 66. Cebu Pacific is a low cost carrier that offers fun in the skies Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest AirUses sales promotion, word of mouth, advertising, public relations, and events and experiences Flights are mainly booked online Uses low cost approach to winSteps 6 to 10A fun flight at a low costhttp://louiemarkquizon.blogspot.com
  • 67. 10 STEP Marketing Plan for CEBU PACIFIC AIRLouie Mark QuizonJune 201167http://louiemarkquizon.blogspot.com