1

DE LA SALLE UNIVERSITY-DASMARINAS

College of Business Administration and Accountancy

Marketing Department

Strategic Marketing Plan for

Cebu Pacific Air

Submitted by:

Andres, Krizelle Ann Margarett

Aniel, Alyssa June

Perey, Charisse Mari

Reyes, Hannah Pamel

Submitted to:

Ms. Chona O. Bautista

December 02, 2016

2

I. Situation Analysis

A. TOWS Analysis

External Opportunities(O)

1. Rapid market growth

2. Business globalization

3. Use of technology and

social media

External Threats (T)

1. Terrorism

2. Lots of typhoons occurring

inside the Philippine are of

responsibility

3. Competitors following their

low-pricing strategy

4. Europe Blacklisting

5. Oil Price Instability

Internal Strengths (S)

1. Cebu Pacific is the biggest domestic

carrier with more than 54.66% market

share, as of September 2016.

2. Leveraging on their extensive

networks through the formation of the

world's largest low-cost carrier (LCC)

alliance – the Value Alliance

3. Acquisition of 100% ownership of

Tigerair Philippines, and 40% stake of

SO

“Maxi-Maxi” Strategy

1. Use social media to

disseminate low-cost fare

travels to netizens

2. Collaboration of Cebu

Pacific and Tigerair

accommodates greater

number of passengers

brought by market growth

3. Dominating the airline

ST

“Maxi-Mini” Strategy

1. The Value Alliance

reinforces the airline company

in terms of providing

numerous international

destinations – giving a

perception that the firm could

still generate sales and profit

even without offering services

in Europe.

3

TigerAir Group

4. Cebu Pacific offers low-cost air

travel both in domestic and

international flights.

5. They offer a truly Filipino culture of

hospitality by ensuring that passengers

enjoy their flight.

6. User-friendly websites

industry’s market share gives

a positive image to the

growing market

4. Establishing a good

relationship with the Value

Alliance opens greater breaks

through

Globalization.

2. Pricing strategy is a factor

that the consumers are

considering, hence hospitality

is an edge of Cebu Pacific.

3. Being a leading company

with dominant market share in

the industry means greater

revenue

4. The bigger the company is,

the better safety and security it

provides.

Internal Weaknesses (W)

1. Delayed flights

2. Additional costs that are being paid

by the passengers due to the website

administration fee.

3. Cebu Pacific has established their

international destination only in Asia.

WO

“Mini-Maxi” Strategy

1. Utilize internet and social

media for the announcement

of updates to reach the

stakeholders

2. Globalization enables Cebu

Pacific to have other regions

(aside from Asia) be their

international destination

WT

“Mini-Mini” Strategy

1. Offering more services and

security in exchange of

increasing fees being

collected from passengers,

which also aims to ensure

passengers’ safety against

terrorism

4

B. PEST Analysis

Political

As the new administration demand for radical change, an amass array of platform policies

were already imposed comprising which are the political regulations affecting the Aviation

industry. In relation to this, the Philippine Tour Operators Association (PhilTOA) urged the

Duterte administration to build on the gains of the incumbent Aquino administration and to build

stronger policies which comprises the:

1. Review of the Tourism Act of 2009;

2. Addressing the airport problems and airline-industry concerns to improve and enhance

the international connectivity;

3. Addressing the looming shortage and high cost of power and water;

4. Implementation of the implementing rules and regulations of the Tourism Infrastructure

and Enterprise

5. Zone Authority;

6. Development and implementation of a fully integrated branding, marketing and

communication campaign for Philippine tourism;

7. Fostering Philippine tourism competitiveness aligned with the Asean agenda;

8. Exploring and maximizing tourism programs and campaigns that can potentially provide

benefits across the tourism sectors;

9. Promotion of the “culture of tourism” through literacy programs and community

engagement for better destination marketing;

10. Streamlining procedures for travel tax, customs and immigration and licensing;

5

11. Developing/refurbishing public-recreation amenities that can encourage and promote

domestic tourism;

12. Improvement of infrastructure and facilities in selected tourism spots with the greatest

potential, such as better accessibility to improved transport system such as mass rail

transits, sea transport, etc.; and

13. Addressing hospitality and security issues (i.e., conducting an intensive drive against

extortionists and unlawful elements that prey on tourists and passengers).

According to Philippine Star, during the State of the Nation Address, President Duterte

mentioned the plan to divert domestic flights to Clark to decongest Manila. Presidential Assistant

for the Visayas Michael Lloyd Dino is asking President Rodrigo Duterte not to reroute all the

flights coming from the Visayas, including Cebu, to Clark International Airport. Doing so would

mean additional cost and travel time and inconvenience for passengers. A 50-50 scheme-50

percent of the flights from the Visayas like those from Cebu, Tacloban, Dumaguete, Iloilo and

Bacolod will be rerouted to Clark while the remainder will still be allowed to land at the Ninoy

Aquino International Airport (NAIA) were proposed by Dino in response to the plan of duterte.

Because the airports in the regional sector are congested, plans of improving and reconstructing

NAIA airports are currently being processed by the Transportation Secretary Arthur Tugade.

Tugade has identified a number of priorities that he intends to carry out in his early days of office

including:

a. Expediting the installation of ILS and night landing lights at a number of the nation's

airports in order to enable them to handle night flight operations. This will give airlines

greater freedom to schedule flights around the clock and minimise congestion at Ninoy

Aquino International Airport during daylight hours.

6

b. Making Clark International Airport a viable alternative to Ninoy Aquino International

Airport by establishing transportation links to create seamless connectivity between Clark

and Metro Manila.

c. Enhance the quality and efficiency of operations at Ninoy Aquino International Airport

by establishing another parallel runway, improving facilities, and improving services,

while a brand new airport is constructed.

d. Improve the experience in the various terminals at NAIA. Terminal 1 will see

improvements to passenger comfort and safety including the removal of a steep ramp that

arriving passengers were forced to use to access their vehicles. Terminal 2 will also be

expanded.

Moreover, Tugade wants to remove the first x-ray check at the entrance of all terminals to

help improve the flow of departing passengers. This is a practice that is not currently done at

most international airports around the world. With the removal of private and civilian aircraft at

NAIA, additional space will be made available to develop additional apron parking for aircraft

and rapid exit taxiways, which will help improve the flow of air traffic on the ground and

increase overall efficiency at the airport. The government will also implement strict flight

scheduling and slot utilization rules. The Department of Transportation also intends to

implement recommendations made by a British consultant on runway optimization and the

regulation of general aviation during peak hours, which will help improve efficiency and reduce

congestion. The potential of this initiative will be realized further once night landing capabilities

have been installed at domestic airports.

Tugade also intends to enhance services provided at Clark International Airport. With a

pending plan to eventually shift turbo-prop flights to Clark, Tugade wants to ensure that Clark is

7

equipped with the facilities to handle increased passenger traffic but also diverted flights from

NAIA. This includes the purchase of stairs used by aircraft to disembark passengers. In addition,

Tugade also intends to improve services at Clark for overseas Filipino workers to make the

airport more user-friendly for arriving and departing OFW's. This will encourage more OFW's

and airlines to use Clark as an alternative to NAIA. Tugade also promised a review of the Airline

Passenger Bill of Rights, noting that keeping passengers inside diverted aircraft for lengthy

periods of time is not only unacceptable but inhumane. He intends to revisit the rules, which

government when passengers should be provided with meals and accommodations by airlines.

However, one change that remains uncertain is if the government will rename the country's

primary international gateway back to its original name as the Manila International Airport. In a

recent survey conducted on the Philippine Flight Network website, 75% of respondents voted

that the airport's name should be changed from Ninoy Aquino International Airport to Manila

International Airport.

There is also a proposed removal of Philippine Tax Travel which is currently being

studied by the Department of Tourism. The Philippine Flight Network articulated that to date, the

Department of Tourism has removed the P200 processing fee assessed for the issuance of Travel

Tax Exemption and Reduced Travel Tax certificates, which came into effect on July 25. In

addition, the Department would like to see the travel tax incorporated into airline tickets

similarly to the passenger terminal fee at select airports in the Philippines.

The following amendments which encompass the current situation of the airline industry

could impact the company, Cebu Pacific Air, in a positive way. The Department of

Transportation as well as the Department of Tourism are collaborating to heighten the tourism

sector which could boost the sales and profits of Cebu Pacific. The company even so, would

8

have to make an effort in rescheduling their flights and assessing better customer service in order

not to be negatively affected by the planned diversion of NAIA flights to Clark. Tugade’s plan of

providing free meals to customers of long-haul flights could also serve as a cost for the company.

Economic

According to the Civil Aeronautics Board, the outlook for the Philippine commercial

aviation sector remains “positive” for the year 2016 as local and foreign carriers signaled their

intention to expand given that demand for air travel is expected to stay robust. Acting Executive

Director Carmelo Arcilla articulated that to support international traffic, the agency had been

considering holding air talks with India and Indonesia by early 2016. The positive outlook

stemmed from the announced expansion plans of domestic carriers for both their domestic and

international operations. Flag carrier Philippine Airlines and budget airline Cebu Pacific Air are

undergoing a reflecting plan. PAL is considering the acquisition of more long-haul aircraft,

which should boost passenger traffic numbers moving forward.

The articulations by CAB are then supported by the claims of Duterte’s Economic Team

verifying that the administration is setting up an economic boom. A recent article from CNN

Philippines regarding an economic hike of 7% is a good hint that the country is in a good spot. In

view of the fact that the surge in the country’s gross domestic product induces a significant

impact on the economy (low unemployment rate, wage increases, higher company profits-

meaning high stock prices), the local/domestic companies on the other hand must expedite on

their strategic or long range plan to amend the adverse effect of GDP growth. Because a high

economic profit primarily denotes a healthy economy, foreign investors follow a herd mentality

and pile into stocks with an excessive degree of optimism and invest in our country. With this,

9

foreign investors could serve as a hindrance to domestic investment as the country’s resources

might get subdued by the former (supposed to be utilized by the local companies).

Even so, it was still deduced that the expansionary policy in general (a form of fiscal

policy that involves decreasing taxes to have more disposal income to spend; Higher disposal

income increases consumption which increases GDP) could produce positive economic upshots

for domestic companies primarily Cebu Pacific Air. Since the market has more disposable

income to spend, it could eventually lead to an increase in the market demand. In any case, Cebu

Pacific Air which is showing a robust performance during the past 5 years is deemed to outshine

among the local airline with their plans on expanding their routes (aided by the current status of

the economy).

Socio-Cultural

During 2016, Philippines population is projected to increase by 1 604 695 people and

reach 103 103 458 in the beginning of 2017. With that, there are about (50.1%) population of

male and (49.9%) population of female, 61.1% percentage of population between 15 and 64

years old, 34.6% under 16 and 4.3% 65 and above. With a 63.7% total dependency ratio of

population in the Philippines , It shows that the dependent part of population is more than a half

of the working part. It means that the working population (labor force) in Philippines must

provide goods for itself and cover expenditure on children and aged persons (this population is

more than a half of working population). The value of more than 50% shows that the pressure on

productive population in Philippines is relatively high.

In terms of travelling, According to Heller (2016), Millennials travel more frequent than

other generations for business (4.7 times each year) and leisure (4.2 times per year). In addition,

10

Young travellers of the millennial generation represent 20% of international travelers according

to the World Travel Market or WTM. Incessantly connected to social media and their

smartphones, Millennials’ admiration of technology infuses all aspects of their travel. Nearly half

(49%) search for travel on their smartphones. Millennials are vastly engrossed with social media

while examining for travel destinations (87% of Millennials use Facebook for travel inspiration,

and over 50% use Twitter and Pinterest). While traveling 97% of Millennials use social media,

and 75% post to social networks at least once a day while traveling. In place of participation

trophies, Millennial travelers count “likes,” “favorites,” and retweets on their social media

updates. While sharing their travel experiences, Millennials are also influencing their peers. They

discover new travel opportunities through peers writing on personal social media, but also

through company review sites like TripAdvisor, Yelp, and Airbnb.Millennials claim this user-

generated content (a product review, blog post, or status update written by a consumer rather

than a company) influences their decisions more so than any advertisement (84%), while 71%

typically share their opinion of a product because they think other consumers will value the

input.

Since Filipino travelers are dominated by the Millennial Market, Cebu Pacific could have

an edge among other Airline companies as it is considered a budget-airline-Offering low-cost

flight for its target market.

Technological

With forethought, the Internet which was emphatically conceded as a necessity can no

longer be superseded by any other forms of technology. Be it vast or trivial, the purpose of the

latter was set in making the fledging business present itself professionally. Studies which were

derived from both analysis and in-depth observations were conducted so as to have a clearer

11

view between the connection of technology and mankind. According to Internet live stats,

around 40% of the world population has an internet connection today. As of the most recent

reported period, the number of internet users worldwide was 3.17 billion, up from 2.94 billion in

the previous year. The Internet that is currently in abuzz is taken in out of its most beneficial way

when firms use it to create far-reaching entryways for incoming profits. To put it in the stance of

the online business industry, the Millennials and the young professionals flush the greatest

investment in expending their money online. In line with this, the American Online Inc. claimed

that likes, comments, reactions, shares have been significant to the netizens which was a way to

boost the self-esteem of the mass. Moreover, M-Commerce which is already being used by a

number of international and domestic airline companies including Cebu Pacific Air could serve

as an edge by the company as it is still not being utilized by its major competitors Air Asia and

Philippine Airlines.

C. Industry Analysis

a. Threat of new entrants

Although Cebu Pacific has already built a strong reputation, the airline is still not

exempted from the threat of new entrants. Especially nowadays, banks offer long term loans on

less interest to business sectors which obviously increased the threat of new entrants for the

existing airlines. Being a low cost airline doesn’t give the Cebu Pacific an assurance to be a

stable business. Just like in the year 2014, Cebu Pacific fall short of target passenger due to

strong competition brought by new airlines that offer lower costs than Cebu Pacific. But despite

the disadvantages, Cebu Pacific has still advantages over new low cost airlines. For it has already

a hold over slots at certain airports, making it harder for new low-cost airlines to operate

effectively. This creates difficulties for a new low-cost airline aiming to negotiate prime slots at

12

busy airports and can result in it being restricted to offering flights only at off-peak times, or

having to fly to airports further away from popular destinations. This can be a drawback to new

airlines, as customers may seek more convenient alternatives. These then give Cebu Pacific just a

moderate threat when it comes to new competitors.

b. Bargaining Power of Suppliers

Though Mr. Joey Macagga, Cebu Pacific’s Vice President for Cargo and Fuel

predominantly specified that their primary supplier is Airbus SAS, aircraft manufacturer that is

based in France and a suburb of Toulouse, its competing supplier Boeing should still be

considered as there is a strong competition between the two given that they are only aircraft

suppliers that exist. Bargaining power of suppliers are deemed to be moderate to strong as

aircraft equipment are evidently costly and vital pieces of equipment. The limited nature of this

industry gives these aircraft suppliers greater power in setting prices. Air travel is also a fuel-

intensive industry, thus making the airlines very sensitive to swings in fuel prices offered by fuel

suppliers.

c. Bargain Power of Buyers

The bargaining power of the buyers remains unchanged, it is still medium to high, as

there are price fluctuations between the airlines leaving an extensive opportunity for the buyers

to have wider selection. However, Cebu Pacific have unique product differentiation that makes

the consumers to choose Cebu Pacific as an option from The Philippine Airlines being a close

competitor as they provide similar product but different service techniques.

Buyers definitely have a very powerful influence to Cebu Pacific for it is continuously

producing promo offers for the customers to choose the said company over other airline

13

competitors. Cebu pacific already come up with its cheapest promos which is the “Piso Fare”.

Aside from this, there are still lots of relatively cheap fares that Cebu Pacific is offering to entice

possible customers.

d. Category Rivalry

Although there are a smaller number of competitors in this industry, the current category

rivalry still ranges from Moderate to Strong. Airlines primarily compete on price and service;

however, to a lesser extent they do compete on frequency of flights, frequent-flyer programs,

reliability of flights, and other amenities.

e. Substitutes

Various kinds of transportation had been discovered, which then became substitutes to

air transportation such as buses, ships, etc. Considering the several factors consumers set upon

deciding which transportation means they would take, it cannot still change the fact that it

cannot entirely interchanged by any of those substitutes in terms of the time convenience, range

of destination, and comfort ability.

Though land transportation continues to dominate the transportation industry in the

country in terms of population’s preference, airlines still cannot be overpowered by other

transportation means, as stated by the Philippines Statistics Authority. Substitutes such as buses,

cars and light rail transit systems were designed to go within the places in the same region or

country.

On the contrary, overseas transportation can still be somehow replace planes. Though,

planes and ships could bring travelers from different countries to another, they differ in terms of

the time convenience they reach their destination. A 12-hour ride on a vessel could be only a

couple of hours when it comes to an airplane ride.

14

D. Market Analysis

a. Market size

Actual Size- Base upon the data provided by Ms. Raiza Delmo, Network Planning

Specialist of Cebu Pacific, the company’s actual market size is 38,223,394 coming from the total

population of the target marketing according to age and filtered by the labor force participation

rate which is 63.4%

Potential Size- Mr. Dalanao, the Network Planning Manager of Cebu Pacific, also

articulated that the company’s market size hinges on the total population of the individual within

15-24 years: 19% (male 10,416,358/female 10,044,724) and 25-54 years: 37% (male

0,031,638/female 19,796,545). The sum of which is used to determine the penetration rate of the

company given a total of 60 289 265 individuals. The company also considers the rate of labor

participation in the country which is 63.4 during January 2016.

The potential market size is then computed as:

Total Population of Target Market base on age: 15-24 years: 19% male

10,416,358+female 10,044,722 + 25-54 years: 37% male 20,031,638 +female 19,796,545=60

289 265

Total Population of Target Market base on labor force participation rate: 60 289

265x63.4=38,223,394

Penetration rate computation: 4,395,408/38,223,394=11.50%

Potential Market Size(Untapped Market)= 39502303(Baby Boomers and population

under 15)+38223394x11.5=8,938,455.16

15

b. Market Growth rate

The IATA or the International Air Transport Association projected a growth of +6.7%

growth in 2015 and +6.9% in 2016 for domestic airlines in the Philippines. Given their actual

market size which is 4,395,408 x 6.9%, the company could pose 303,284 number of additional

passengers for the year 2016 giving us an estimated number of 4,698,692 guests in the last

quarter of 2016. The reason for the stated increase according to Ms. Delmo is that more people

and businesses are being connected to more places than ever through technology. Employment

levels are also rising and shareholders are beginning to enjoy normal returns on their investments

because of the country’s economic hike.

c. Market Profitability

Cebu Pacific’s market profitability stems out from the analysis of the aviation industry

that particularly refers to the threat of new entrants, the bargaining power of supplier and buyers,

category rivalry and substitutes. Because most travelers prefer air than land or sea travel

nowadays, the airline industry is substantially profitable in reference to the predilections of the

market. Air Travelling is much preferred by the market nowadays for it possesses a competitive

advantage in terms of convenience, range of destination and comfort ability. Cebu Pacific Air is

currently the country’s leading domestic carrier, serving the most domestic destinations with the

largest number flights and routes, and equipped with the youngest fleet. As it is, Profits for the

Asia-Pacific region are expected to grow from $5.8 billion in 2015 to $6.6 billion in 2016.

The region’s carriers will benefit more fully from the impact of lower fuel prices in 2016

as hedges unwind. The region is, however, in the front line for the impact of continued weakness

in cargo revenues. Passenger capacity growth is expected to accelerate from 6.0% in 2015 to

16

8.4% in 2016 as new aircraft are delivered largely to accommodate growth in some Asian

countries including the Philippines.

d. Industry Cost Structure

According to Ms. Delmo, the typical Airline Cost Breakdown for Cebu Pacific depends

on factors that revolves around the value chain analysis:

Figure 1. Value Chain Analysis

Inbound logistics

Cebu Pacific’s inbound logistics operations are complex and involve the timely delivery

of fleet of planes, catering products and a wide range of other on-board products. The necessities

to ensure the freshness of foods and drinks served during the flights further complicates Cebu

Pacific’s inbound logistics primary activities. Competitive advantage is achieved in inbound

logistics stage of the business by Cebu Pacific through establishing on-going relationships with

suppliers, sophisticated system for stock control and professional training.

17

Operations

Generally, operations stage of the business involves preparing goods and services to be

sold to customers. Being the country’s leading domestic airline, Cebu Pacific flies o 33 domestic

destinations and 25 international destinations in 14 countries across Asia Pacifi. Therefore, the

scope of its business operations is extensive.

Cebu Pacific has a range of competitive advantages in operations part of the business

through offering its customers increased security for their luggage, offering quick check-in

services and also offering some services such as ticket bookings and online booking of other

services.

Outbound logistics

Outbound logistics involves sending ready products to customers for consumption.

Although outbound logistics mainly relate to manufacturing companies, it is also applicable

towards service businesses such as airlines. The airline derives value in outbound logistics

primary operations via efficient handling of baggage in the point of destination and utilizing an

advanced information and communication systems.

Marketing and sales

Cebu Pacific’s marketing strategy is directed at the communication of the marketing

message to the target customer segment. The marketing message attempts to associate the

company’s brand with efficiency, reliability, safety and convenience. The marketing message is

communicated to the target customer segment via an effective utilization of a range of elements

of the marketing communication mix such as print and media advertising, sales promotions,

events and experiences, public relations and direct marketing.

18

Service

Generally, post-sale services involve installation of the product, handling complaints

regarding the products and services etc. Cebu Pacific recognize post-sale services as an

important ground for achieving competitive advantage in the marketplace, therefore have

initiated their loyalty club cards, and also maintain communication with their customers through

a range of channels.

e. Distribution Channel

Cebu pacific has three principal distribution channels. The first one is Cebu Pacific’s

website (www.cebupacificair.com). This website contains the flights and fares, travel services,

customer service, promos, and all the necessary information about Cebu Pacific. It is the only

website authorized to sell Cebu Pacific flights, whether on their own or as part of a package. No

other website has been authorized by Cebu Pacific to sell its flights. Next is the Cebu Pacific’s

booking sales offices and call centers which can be reached through this hotline (+632 702

0888). And last are the third party sales outlet which is composed of distributors and general

sales agents.

Cebu Pacific reserves the right to cancel any bookings made other than directly through

the aforementioned distribution channels, including any bookings made through third-party

websites such as online travel agents, and further reserves the right to carry any passenger

making such a booking.

f. Market trends

Base on the articulations of CAPA-Center for Aviation, The airline industry is delivering

solid financial and operational performance as passengers are benefiting from greater value with

19

competitive airfares and product investments. Moreover, the fact that online marketing is an end

result of technology and modernization, it is deduced according to International

Telecommunication Union (UTI) that 40% of the world population has an internet connection,

and majority of its users are the millennials and young professionals. The millennial

generation as defined by Elwood Carlson, the author of The Lucky Few: Between the Greatest

Generation and the Baby Boom, is the demographic cohort that ranges from the year 1983-2001.

The specified birth range is based on the upsurge in the number of births after 1983 and finishing

with the "political and social challenges" that occurred after the terrorist acts of September 11,

2001.

And because millennials are less impressed by luxury and more interested in finding

adventures, most of the respondents still choose to travel although their social stratification falls

under the Upper Class C(Jones-Cooper,2015). The reason for the trifling disparity between the

Cebu Pacific is that millennials spend as little money as possible when it comes to travelling.

Because Cebu Pacific manages to top overall with combined domestic and international

passenger traffic, Philippine Airlines acquired Airphil Express now PAL express to refute Cebu

Pacific’s dominance in the industry’s market shareAdditionally Heller articulated that the older

generation of the Millennials (age 22and above) travel more often than other generations for

business (4.7 times each year) while the younger generation travel for leisure (4.2 times per

year). Based on the study conducted by Jezz Condido, Cebu Pacific’s Target Market are those

travelers who prefer more travel and less comfort ability. Thus, they scrutinize or look more into

the budget conditions of the airline. They are deemed to be: Price Conscious, Savy professionals

and college students, internet and technology leisures and leisure tourists.

20

g. Key Success factors

The key success factors for the Airline Industy are the airline hubs/route system, cost and

finance management, non-stop flying, service promotions, inflight services, workforce capability

and the effective overall management of the airline company. The route system primarily denotes

the company’s flying frequency and its destinations. It is considered a key success factor as the

selected air hub links up to the accommodation range of the airline-the wider the range, the more

people to accommodate. Cost and Finance Management entails the administration of the

company’s expenses over its revenues. Without proper finance and cost management, the

company would cease to exist once the cost exceeded the company’s revenue. Non-stop flying

minimizes the time the plane takes while reaching the desired destination. If the airline company

possesses heaps of air hubs and route endpoints, the flying duration of each plane would

evidently be non-stop and it would make the market think that the airline has a lot of people to

accommodate making the brand credible and compelling as a result. Service Promotions includes

how well the marketing team entices the market to travel with the company. It also includes the

in-flight service promotions of the said company department. The workforce capability is a

significant key success factor of any airlines as the human capital is considerably a functioning

rudiment that thrives for the organization’s productivity and profitability.

E. Customer Analysis

a. Survey

21

DE LA SALLE UNIVERSITY-DASMARINAS

College of Business Administration and Accountancy

Marketing Department

Name:_____________________________________________________________

Age:________________________Gender:_________________________________

I. MULTIPLE CHOICE: Please select the preceding line that best corresponds to your answer

1. How much is your family’s average monthly income?

_____ ₱6,000 and below

_____ ₱6,000-₱15,000

_____ ₱15,001 - ₱50,000

_____ ₱50, 001 - ₱100,000

_____ ₱100,000 -₱300,000

_____ ₱301,000 and above

2. How many times do you travel per year?

_____ Once

_____ Twice

_____ Thrice

_____ More than four times

3. What is your purpose for travelling?

_____ Business

_____ Leisure

_____ Educational Tours

_____ Others (specify):_______

4. When you hear the word domestic airline what company comes first into your mind?________

5. What word comes first into your mind when you hear the word Cebu Pacific?___________

6. Which airline company do you prefer the most?

_____ Cebu Pacific

_____ PAL Express

_____ Philippine Airlines, Inc. (PAL)

_____ Air Asia Zest

_____ Skyjet

_____ Others (specifiy):________

7. How did you heard about this company?

22

_____ Website

_____ Referrals

_____ Travel Agency/Tour Operators

_____ Affiliated Companies

_____ Posters

_____ Others (specify):________

8. Which of the following marketing tools do you usually use to reach the company?

_____ Physical Grounds (Offices)

_____ Mass Media (television, radio, etc.)

_____ Social Media

_____ Telemarketing

_____ Smartphone Application

_____ Website

_____ Direct email

_____ Others (specify): ________

9. Which of the following marketing tools do you wish to use to reach the company in the

future?

_____ Referrals

_____ Mass Media (tv, radio, etc.)

_____ Print ads (billboards, magazines, etc.)

_____ Direct Marketing (telemarketing, etc.)

_____ Word of Mouth

_____ Smartphone Application

_____ Website

_____ Direct email

_____ Search Engine Optimization (Google)

_____ Others (specify): ________

10. How much do you usually allot for the aerial transportation in a domestic one-way fare when

booking online?

_____ ₱1, 000 and below

_____₱1, 001 - ₱5, 000

_____ ₱5, 001 - ₱10, 000

_____ ₱10, 001 - ₱15, 000

_____ ₱15, 001 - ₱20, 000

_____ ₱20, 001 and above

23

11.Which among the following service delivery advantages have provided you with the most

substantive benefit when booking with Cebu Pacific?

_____ Cost Effective

_____Safety and Security

_____ Time and Effort Wise

_____ Ease of Access

_____ Speed of Transactions

_____ Others (Specify):_______

12.Which among the following service delivery issues do you usually encounter when booking

offline?

______Service Delivery Fee

______Untimely

______Accessibility

______Time Consuming

______Inconvenience/Hassle

______Others(Specify):______

II. LIKERT SCALE:

14. Kindly rate the following factors according to your experience while availing the service of

PAL (5 being the highest; 1 being the lowest)

Philippine Airlines 5 4 3 2 1

Service (In-flight services quality)

Cost and Expense (Air Fare)

Communication (Promotional Mediums)

15. Kindly rate the following factors according to your experience while availing the service of

Cebu Pacific (5 being the highest; 1 being the lowest)

Cebu Pacific 5 4 3 2 1

Service (In-flight services quality)

Cost and Expense (Air Fare)

Communication (Promotional Mediums)

24

16. Kindly rate the following factors according to your experience while availing the service of

Air Asia Philippines (5 being the highest; 1 being the lowest)

Air Asia 5 4 3 2 1

Service (In-flight services quality)

Cost and Expense (Air Fare)

Communication (Promotional Mediums

17. Kindly rate the following factors according to your experience while availing the service of

SkyJet (5 being the highest; 1 being the lowest)

SkyJet 5 4 3 2 1

Service (In-flight services quality)

Cost and Expense (Air Fare)

Communication (Promotional Mediums)

16. Kindly rate the following stated factors according to the services Cebu Pacific provides you.

(4 being the highest, 1 being the lowest)

Cebu Pacific 4 3 2 1

1. Extensive Distribution

2. Customer Focus

3. Economies of scale

4. Product Innovation

17. Kindly rate the following stated factors according to the services Philippine Airlines provides

you. (4being the highest, 1 being the lowest)

25

Philippine Airlines 4 3 2 1

1. Extensive Distribution

2. Customer Focus

3. Economies of scale

4. Product Innovation

18. Kindly rate the following stated factors according to the services Air Asia provides you. (4

being the highest, 1 being the lowest)

Air Asia 4 3 2 1

1. Extensive Distribution

2. Customer Focus

3. Economies of scale

4. Product Innovation

19. Kindly rate the following stated factors according to the services Sky Jet provides you. (4

being the highest, 1 being the lowest)

Skyjet 4 3 2 1

1. Extensive Distribution

2. Customer Focus

3. Economies of scale

4. Product Innovation

b. Profile

Table 1 indicates that 65% of the respondents are travelling for leisure purposes, wherein

39 of them are young professionals, 23 belong to Generation X and 3 college students. It is then

26

followed by 32% who have divulged that they travel due to their educational tours, whereby 29

of them are college students, two young professionals and one belonging to Generation X. Other

reasons for travelling include migration purposes by which two male Class D respondents from

Generation X have answered. The remaining one percent came from a male belonging to upper

class C who is travelling for business purposes. Hence, upper class C with 58% outnumbered

other socio-economic class by which 30 of them are female, and 28 are male. 17%, on the other

hand, came from 10 female and seven male who belong to broad class C. To sum up the number

of respondents according to their age, 27 are from Generation X (ages 35-55), 41 young

professionals (ages 22-34) and 31 college students (ages 16-21) who are also considered as

millenials.

Table 1. Profile of the Respondents according to their Purpose of Travelling

Purpose of

Travel

Age

₱301,000 and above

(Class A)

₱100,000 -₱300,000(Class B)

₱50, 001 - ₱100,000(Upper C)

₱15,001 - ₱50,000

(Broad C)

₱6,000-₱15,000

(Class D)

₱6,000 and below

(Class E) TotalMale Female Male Female Mal

eFemale Male Female Male Femal

eMale Female

BusinessX 0 0 0 0 1 0 0 0 0 0 0 0 1

1Y 0 0 0 0 0 0 0 0 0 0 0 0 0M 0 0 0 0 0 0 0 0 0 0 0 0 0

LeisureX 1 0 2 4 5 7 1 0 0 3 0 0 23

65Y 2 1 0 2 11 13 4 4 1 1 0 0 39M 0 1 0 0 0 1 0 0 0 0 0 0 3

Educational

Tour

X 0 0 0 0 0 0 0 2 0 0 0 0 232Y 0 0 0 0 0 0 0 1 0 0 0 0 1

M 0 1 0 2 11 9 2 3 0 1 0 0 29

OthersX 0 0 0 0 0 0 0 0 2 0 0 0 2

2Y 0 0 0 0 0 0 0 0 0 0 0 0 0M 0 0 0 0 0 0 0 0 0 0 0 0 0

Total3 3 3 8 28 30 7 10 3 5 0 0

1006 11 58 17 8 0

Table 2 shows that majority of the respondents with 53% travels once a year, wherein

both young professionals and college students contributed an equal number of 19, and the

remaining 15% belong to Generation X – a total of 32 came from the upper class C segment.

27

39%, on the other hand, came from 21 young professionals, 10 college students and eight

generation x stating that they travel twice a year, wherein 17 of them belong to upper class C

segment. Meanwhile, six of those travel more than thrice a year wherein three of them are young

professionals, two from generation x and one college student – three of them belong to broad

class C. Lastly, the remaining two respondents have said that they travel thrice a year wherein

those respondents are young professional and college student who both belong to broad class C.

Table 2. Profile of Respondents according to Travelling Frequency₱301,000 and

above(Class A)

₱100,000 -₱300,000(Class B)

₱50, 001 - ₱100,000

(Upper C)

₱15,001 - ₱50,000

(Broad C)

₱6,000-₱15,000

(Class D)

₱6,000 and below

(Class E) TotalMale Female Male Femal

eMale Female Male Femal

eMale Female Male Female

OnceX 0 2 0 1 3 9 0 0 0 0 0 0 15

53Y 1 0 2 3 4 6 0 2 1 0 0 0 19M 0 0 0 0 8 9 1 0 0 1 0 0 19

TwiceX 1 1 0 0 0 5 0 0 0 1 0 0 8

39Y 0 1 3 1 5 1 3 4 3 0 0 0 21M 0 0 0 0 4 2 0 2 2 0 0 0 10

ThriceX 0 0 0 0 0 0 0 0 0 0 0 0 0

2Y 0 0 0 0 0 0 1 0 0 0 0 0 1M 0 0 0 0 0 0 0 1 0 0 0 0 1

More than Thrice

X 0 0 0 1 0 0 1 0 0 0 0 0 26Y 0 0 0 0 1 0 0 2 0 0 0 0 3

M 0 0 0 0 0 1 0 0 0 0 0 0 1

Total2 4 5 6 25 33 6 11 6 2 0 0

1006 11 58 17 8 0

Table 3 shows that 50 of the respondents recall the brand Philippine Airlines when they

hear the word Domestic Airline, 41 for Cebu Pacific, 3 for Air Asia and 6 for others.

Table 3. Profile of the Respondents according to their Top of Mind domestic Airline Company

ParticularsCebu

Pacific

Philippine Airlines

Inc. (PAL)

Air Asia

ZestSkyjet Others Total

28

Top-of-Mindf 41 50 3 0 6 100

% 41 50 3 0 6 100

Table 4 shows that majority of the respondents with 52% have related the word low-cost,

affordable toward Cebu Pacific. It was then followed by 33% stating that they link the word

delay on Cebu Pacific, 10% on popular and the remaining 5% on good quality or high

performance.

Table 4. Profile of the Respondents according to attribution on Cebu Pacific

Particular

s

Budget

/Affordable

/Low-cost

Delay Popular

Good

Quality/High-

Performance

Total

Brand

Attribution

f 52 33 10 5 100

% 52 33 10 5 100

Table 5 shows that 36 of the respondents preferred travelling on air via Philippine

Airlines, 47 for Cebu Pacific, 11 for Air Asia and 6 for others.

Table 5. Profile of the Respondents according to their most preferred Airline Company

Particulars Cebu

Pacific

Philippine Airlines

Inc. (PAL)

Air Asia

Zest

Skyjet Others Total

Airline

Company

Preference

f 47 36 11 0 6 100

% 47 36 11 0 6 100

Table 6 indicates that most of the respondents or 41 of them were able to hear their most

preferred Airline Company through referrals. 14 of them saw the Airline on posters, 28 on travel

agencies, 1 on affiliated companies and 11 on websites

29

Table 6. Marketing Communication used for Brand Awareness of Cebu Pacific

Particulars Website Referrals

Travel

Agency/

Tour

Operator

Affiliated

CompaniesPosters Others Total

Brand

Awareness

Medium

f 11 41 28 1 14 5 100

% 11 41 28 1 14 5 100

Table 7 shows that 41 of the respondents usually use websites to reach or to communicate

with their most preferred airline company. 18 of them goes to the actual office, 1 waits on mass

media advertisements, 6 on social media, 23 on phone calls, none on smartphone applications, 41

on websites, 10 on emails and 1 on others

. Table 7. Commonly Used Marketing Communication Platform for Cebu Pacific

ParticularsPhysical

Communication

(Office)

Mass Medi

a

Social Medi

a

TeleMarketin

g

Smart Phone

Application

Websit

e

Emai

l

Other

s

Tota

l

Communicatio

n Platform

f 18 1 6 23 0 41 10 1 100

% 18 1 6 23 0 41 10 1 100

Table 8 clearly elucidated that 30 of the respondents wish to reach their preferred Airline

Company using a smartphone application, 22 of them still prefers using website, while 15 on

mass media, 10 on direct mails, 5 on location based marketing, 4 on referrals, 2 on social media

marketing, 1 on SEO and 4 on others.

Table 8. Marketing and Advertising Options for Cebu PacificParticular

s

Referral

s

Mass

Medi

a

Prin

t

Ads

Location

Based-

Marketin

Social

Media

Marketin

Smart

Phone

Applicatio

Websit

e

Direc

t

Search

Engine

Optimizatio

Other

s

Tota

l

30

g g n Mail n

Marketing

Advertising

Options

f 4 2 7 5 22 30 15 10 1 4 100

% 4 2 7 5 22 30 15 10 1 4 100

Table 9 indicates that 40 of the respondents allot an average amount of 1001-5000 airfare

budget on a domestic one-way fare when booking online while 29 of them answered 5001-

10,000, 14 with 15001-20000, 11 with 1,000 and below and five with 20,001 and above

Table 9. Average Budget for a Domestic AirfareParticular

s

₱1, 000

and below

₱1, 001 -

₱5, 000

₱5, 001 -

₱10, 000

₱10, 001

- ₱15,000

₱15, 001

- ₱20,000

₱20,001

and above

Total

Domestic Airfare Budget

f 11 40 29 14 1 5 100

% 11 40 29 14 1 5 100

Table 10 indicates that majority of the respondents – 54 to be exact – consider booking

offline due to safety and security concern. Meanwhile 19 of the respondents told that it is better

driven by cost effectiveness; and 15 of them stated that the transaction is more prompt to avail

tickets offline, followed by ease of access with 4 respondents.

Table 10.. Service Delivery Advantages of Cebu PacificParticulars Cost

Effective

Safety and

Security

Time and

Effort Wise

Ease of

Access

Speed of

Transaction

Others Total

Service

Delivery

Advantages

f 19 54 8 4 15 0 100

% 19 54 8 4 15 0 100

Table 11 makes evident that the most common problem in using offline marketing is the

service delivery fee (43%). This is followed by the inconvenience it brings to the customers

(39%), accessibility (10%), time consuming (6%) and untimeliness (1%).

31

Table 11 Service Delivery Disadvantages of Cebu Pacific

ParticularsService

Delivery FeeUntimely Accessibility

Time

Consumin

g

Inconvenience

/HassleOthers Total

Service

Delivery

Disadvantage

s

f 43 1 10 7 39 0 100

% 43 1 10 7 39 0 100

4.1.2 Particulars

Table 12 reveals that the respondents are slightly satisfied in the service quality (3.43) of

PAL, quite satisfied to their cost (3.53) and communication proper (3.51).

Table 12.Satisfaction towards Philippine AirlinesPhilippine Airlines

Service Quality

f

%

WM

17

17

85

36

36

144

28

28

84

11

11

22

8

8

8

100

100

343

3.43Slightly

Satisfied

Reasonable Cost and

Expense

f

%

WM

20

20

100

37

37

14

26

26

78

10

10

20

7

7

7

100

100

3533.53

Quite

Satisfied

Communication

Proper

f

%

WM

19

19

95

38

38

152

25

25

75

11

11

22

7

7

7

100

100

3513.51

Quite

Satisfied

Table 13 reveals that the respondents are slightly dissatisfied to the service quality (1.9)

of Cebu Pacific, quite satisfied to their cost (3.52) and neither satisfied nor dissatisfied in terms

of communication proper (2.53).

32

Table 13.Satisfaction towards Cebu PacificCebu Pacific

Service Quality

f

%

WM

8

8

40

9

9

36

7

7

21

24

24

48

52

52

52

100

100

1971.9

Slightly

Dissatisfied

Reasonable Cost and

Expense

f

%

WM

22

22

110

34

34

136

28

28

84

6

6

12

10

10

10

100

100

3523.52

Quite

Satisfied

Communication

Proper

f

%

WM

20

20

100

37

37

148

27

27

81

8

8

16

8

8

8

100

100

353

2.53

Neither

Satisfied

/Dissatisfied

Table 14 indicates that the respondents are slightly satisfied in the service quality (3.36)

of Air Asia, slightly satisfied to their cost and quite satisfied to their communication proper.

Table 14.Satisfaction towards Air AsiaAir Asia

Service Quality

f

%

WM

25

25

100

34

34

136

26

26

78

7

7

14

8

8

8

100

100

336

3.36Slightly

Satisfied

Reasonable Cost and

Expense

f

%

WM

17

17

85

36

36

144

28

28

84

11

11

22

8

8

8

100

100

343

3.43Slightly

Satisfied

Communication

Proper

f

%

WM

26

26

130

33

33

132

25

25

75

7

7

14

9

9

9

100

100

360

3.6Quite

Satisfied

33

Table 15 reveals that the respondents are neither satisfied nor dissatisfied in the service

quality (2.76) and cost (2.83) of Skyjet and slightly dissatisfied to their communication proper

(1.95).

Table 15.Satisfaction towards SkyjetSky Jet

Service Quality

f

%

WM

1

1

5

10

10

40

65

65

195

12

12

24

12

12

12

100

100

2762.76

Neither

Satisfied

/Dissatisfied

Reasonable Cost and

Expense

f

%

WM

3

3

15

7

7

28

75

75

225

0

0

0

15

15

15

100

100

3462.83

Neither

Satisfied

/Dissatisfied

Communication

Proper

f

%

WM

1

1

5

2

2

8

19

19

57

47

47

94

31

31

31

100

100

1951.95

Slightly

Dissatisfied

Table 16 indicates how Cebu Pacific possess an advantage compared to its other

competitors. It was then deduced that the extensive distribution was their company’s edge,

followed by economies of scale, customer focus and product innovation from its weighted means

of 3.20, 3.04, 2.72 and 2.53 respectively.

Key Industry Success Factors 4 3 2 1 Total Average Mean

1. Extensive Distribution

f 47 29 21 3 100

3.20% 47 29 21 3 100

WM 188 87 42 3 320

34

2. Customer Focus

f 27 35 21 17 100

2.72% 27 35 21 17 100

WM 108 105 42 17 272

3. Economies of Scale

f 32 21 33 14 100

3.04% 32 21 33 14 100

WM 128 96 66 14 304

4. Product Innovation f 17 38 26 19 100 2.53

% 17 38 26 19 100

WM 68 114 52 19 347

Table 16. Key Industry Success Factors of Cebu Pacific

The table below demonstrates the significance of each industry success factors to

Philippine Airlines. Extensive distribution contributed 3.46 average mean – having it as their

premier advantage among the entire airline industry. It was then followed by the firm’s

economies of scale, customer focus and product innovation with 3.46, 3.0, 2.33 and 1.67

respectively. Table 17. Key Success Industry Factors of Philippine Airlines

35

Table 18 shows how Air Asia possess an advantage compared to its other competitors. It

was the deduced that the extensive distribution was their company’s edge, followed by customer

focus, economies of scale and product innovation from its weighted means of 3.13, 2.93, 2.72

and 2.54 respectively.

Table 18. Key Industry Success Factors of Air AsiaKey Industry Success Factors 4 3 2 1 Total Average Mean

1. Extensive Distribution

f 45 32 14 9 100

3.13% 45 32 14 9 100

WM 180 96 28 9 313

2. Customer Focus

f 43 25 19 13 100

2.98% 43 25 19 13 100

WM 172 75 38 13 298

3. Economies of Scalef 21 42 31 6 100

2.72% 21 42 31 6 100

WM 78 126 62 6 272

4. Product Innovation f 14 37 38 11 100 2.54

Key Industry Success Factors 4 3 2 1 Total Average Mean

1. Extensive Distribution

f 57 32 11 0 100

3.46% 57 32 11 0 100

WM 228 96 22 0 346

2. Customer Focus

f 24 39 26 11 100

2.76% 24 39 26 11 100

WM 96 117 52 11 276

3. Economies of Scale

f 37 29 27 7 100

2.96% 37 29 27 7 100

WM 148 87 54 7 2.98

4. Product Innovation

f 19 27 40 14 100

2.51% 19 27 40 14 100

WM 76 81 80 14 251

36

% 14 37 38 11 100

WM 56 111 76 11 254

Table 19 intends to know the Sky Jet’s average mean as per the industry success factors

that were being stated. The airline company got its highest mean from its economies of scale,

followed by their product innovation, customer focus and extensive distribution having 2.23,

1.97, 1.88 and 1.85 respectively.

Table 19. Key Industry Success Factors of SkyjetKey Industry Success Factors 4 3 2 1 Total Average Mean

1. Extensive Distribution

f 7 13 38 42 100

1.85% 7 13 38 42 100

WM 28 39 76 42 185

2. Customer Focus

f 11 9 37 43 100

1.88% 11 9 37 43 100

WM 44 27 74 43 188

3. Economies of Scale

f 14 23 35 28 100

2.23% 14 23 35 28 100

WM 56 69 70 28 223

4. Product Innovation

f 9 18 34 39 100

1.97% 9 18 34 39 100

WM 36 54 68 39 197

37

F. Competitor Analysis

a. Competitor Profile

Philippine Airlines

Philippine Airlines (PAL), a trade name of PAL Holdings, Inc., also known historically

(until 1970) as Philippine Air Lines, is the flag carrier of the Philippines. Headquartered at the

PNB Financial Center in Pasay City,[ the airline was founded in 1941 and is the first and oldest

commercial airline in Asia operating under its original name. Out of its hubs at Ninoy Aquino

International Airport of Manila and Mactan-Cebu International Airport of Cebu, Philippine

38

Airlines serves 31 destinations in the Philippines and 41 overseas destinations in Southeast Asia,

East Asia, Middle East, Oceania, North America and Europe.

Formerly one of the largest Asian airlines, PAL was severely affected by the 1997 Asian

Financial Crisis. In one of the Philippines' biggest corporate failures, PAL was forced to

downsize its international operations by completely cutting flights to Europe and Middle East,

cutting virtually all domestic flights except routes operated from Manila, reducing the size of its

fleet, and laying off thousands of employees. The airline was placed under receivership in 1998,

and gradually restored operations to many destinations. After PAL's exit from receivership in

2007, PAL embarked on a frequent revamp of management. However, PAL's vision to re-

establish itself as one of Asia's premier carriers, is still the matter of greatest importance.

Philippine Airlines is owned by PAL Holdings, a holding company responsible for the

airline's operations. PAL Holdings is in turn part of a group of companies owned by business

tycoon Lucio Tan. PAL is the thirteenth-largest corporation in the Philippines in terms of

revenue and the twenty-first largest in terms of assets, as stated in the Philippines' Top 500

Largest Corporations of 2005. As of January 2005, PAL employs a total of 7,322 regular

employees, including 450 pilots and 1300 cabin crew.PAL is the sixty-first largest airline in the

world in terms of revenue passenger kilometers flown, with over 16 million flown for 21 million

available seat kilometers, an average load factor of 76 percent.

For the fiscal year ending on March 31, 2007, Philippine Airlines reported a net income

of US$140.3 million, the largest profit in its 66-year history. This allowed it to exit receivership

in October. PAL had forecast net profit to reach $32.32 million for the fiscal year ending on

March 31, 2008, $26.28 million in 2009 and $47.41 million in 2010, but this proved difficult to

achieve, with a large loss announced in early 2009 causing some concern.

39

Air Asia Philippines

AirAsia Inc., operating as Philippines AirAsia is a low-cost airline based at Ninoy

Aquino International Airport in Metro Manila in the Philippines. The airline is the Philippine

affiliate of AirAsia, a low-cost airline based in Malaysia. The airline started as a joint venture

between three Filipino investors and AirAsia International Ltd, a subsidiary of AirAsia Berhad.

The original Filipino group includes: Antonio O. Cojuangco, Jr., former owner of

Associated Broadcasting Company/owner of Dream Satellite TV; Michael L. Romero, a real

estate developer and port operator; and Marianne Hontiveros, a former music industry executive

and TV host. In 2013, a share-swap agreement with Zest Airways added Alfredo Yao of Zest-O

Corporation as an additional owner of the company. Zest Airways was rebranded as AirAsia Zest

and will operate as a separate brand from AirAsia.

Sky Jet

SkyJet Airlines is the country’s leisure airline. Entered in aviation industry on December

2012 launching charter flights to serve the growing numbers of tourists in Batanes Island. In

2013, it also served charter flights to the exclusive high-end and first-class resort Balesin Island.

A group of new investors last January 2014 took over and launched its full-blown

domestic commercial operations, flying to the unique and exotic island destinations in the

Philippines such as Batanes, Boracay, Busuanga and Balesin.

40

The Civil Aviation Authority of the Philippines (CAAP) has awarded Magnum Air

(SkyJet), incorporated the Airline Operator’s Certificate (AOC) as its license to operate as

Domestic and International Commercial Carrier.

SkyJet Airlines flies from Manila Domestic Airport (NAIA Terminal 4). It’s Corporate

Office is located at Aseana One Bldg Bradco Ave.,Paranaque City.

b. Competing Product Features

Table 20. Product Features of Airline Companies

Product Features Air Asia Skyjet

Guest Convenience SMS booking, GO Holiday online

programme (holiday packages

exclusive website).

Provides extra cargo space, free

snacks and drinks onboard and free

baggage allowances and spacious

legroom.

Frequent Flights +100 Flight destinations, quick

turnaround of 25 minutes

4 Flight Destinations

Nationwide call centre Fully equipped with 180 telephone

lines. The call centre now takes an

average of 6,000 calls daily.

There were 5 offices established

that are exclusive for

customers/guests accommodating

bookings and inquiries.

Ticketless service Internet booking and call centre

service.

Internet booking and call centre

service.

Easy payment channels Enabled their guests to pay for their

telephone bookings by credit card

or by cash.

All major credit cards are

accredited in paying for flight

tickets. Including 7 Eleven,

Cebuana Lhuillier and brands under

ECPAY.

41

c. Target Market Selection

Philippine Airlines

PAL’s target market is clearly a passenger that wants to maximize comfort in the air

above anything else particularly class A and B. With its premium rates, offered by the airline are

considered competitive and attractive to its target market. The fare is wise enough to correspond

to the services and facilities that it offers.

AirAsia Philippines

Low fare, no frills AirAsia’s fares are significantly lower than those of other operators.

This service targets the guests who will do without the frills of meals, frequent flyer miles or

airport lounges in exchange for fares up to 80% lower than those currently offered with

equivalent convenience. No complimentary drinks or meals are offered. Instead, AirAsia recently

introduce 'Snack Attack', a range of delicious snacks and drinks available on board at very

affordable prices and prepared exclusively for AirAsia’s guests. Guests now have the choice of

purchasing food and drinks on board.

SkyJet

SkyJet has the opposite approach from an LCC (Low Cost Carrier) as it looks to acquire

relatively cheap aircraft and have low average aircraft utilization. The cost of operating into

small airfields can be high but SkyJet’s fares are higher than average LCC fares. LCCs attract a

different customer segment as SkyJet targets package customers and offers complimentary

snacks and check-in luggage as well as commissions to travel agents.

d. Positioning Strategy

42

Based on the study conducted by Ms. Raiza Delmo from Cebu Pacific Air, the

competitors’ positioning strategy are as follows:

Figure 2. Positioning Map

Cebu Pacific

Although Cebu Pacific Air is a pioneer in imposing reasonable pricing strategies because

of its lowest year round 'all-inclusive' fares, it has the lowest service quality among its

competitors because of its constant delays.

Philippine Airlines

Although Philippine Airlines is deemed to be a little pricey, its service quality are

considered satisfactory among the aforementioned competitors.

Air Asia

Air Asia which recently bought Zest Air is positioned as a low-cost air carrier with

excellent customer service

43

SkyJet

Because SkyJet’s flights are limited to certain routes and regions only, its prices are a bit

higher as compared to average domestic airline prices with low quality as perceived by the

respondents.

e. Competitors’ Marketing Mix

Air Asia Philippines

The table below shows Air Asia’s marketing mix, mainly the product, price and

promotion features of the said airline company.

Table 21. Air Asia’s Marketing Mix

Air Asia Marketing Mix

Product

1. Guest Convenience

2. Frequent Flights

3. Ticketless Service

4. Easy-Payment Channels

Price

1. Low Fare

Place

1. Internet Channel

2. Physical Offices

3. Travel Agents

Promotion

1. Sales Promotion:

2. Air Asia Red HOT 1 centavo promo

3. Voucher, Coupons

44

4. Self Check-In kiosks

Philippine Airlines

The table below shows Philippine Airlines’ marketing mix, mainly the product, price and

promotion features of the said airline company.

Table 22. Philippine Airlines’ Marketing Mix

Philippine Airlines Marketing Mix

Product

1. International and Domestic Flights

2. Philippine Airlines Boutique (In-flight and

online website)

3. PAL Learning Center

Price

1. Premium Fares

Place

1. Internet Channel

2. PAL Mobile Site (myPAL)

3. Physical Offices

4. Travel Agents

Promotion

1. Mabuhay Miles Travel Card

2. PALmazing Deals (Flight deals)

3. Collaboration with credit cards (Citi

Card)

4. Star Cruises Fly Cruise packages

5. Billboards, Print Ads, Magazines

6. Sponsorships

SkyJet

The table below shows Skyjet’s marketing mix, mainly the product, price and promotion

features of the said airline company.

Table 23. Skyjet’s Marketing Mix

45

SkyJet Marketing Mix

Product

1. 80-seater aircraft manufactured in the

United Kingdom

2. Short Take-Off/Landing

3. free snacks and drinks onboard

4. offers free baggage allowances and

spacious legroom.

Price

1. packages which include round trip airfare,

three days/2 nights accommodation

2. For Manila – Batanes trip, P20, 298 per

person, for Manila - Boracay, P8, 993 per

person and for Manila - Busuanga, P9, 549

per person

Place

1. Manila – Ninoy Aquino International

Airport

2. Batanes – Basco Airport

3. Coron – Francisco B. Reyes Airport

4. Boracay – Caticlan Airport

Promotion

SKYJET offers 15% discount on base fares to

Batanes, Boracay, and Coron using EastWest

credit card.

0% interest on installment for 3 months is also

available at SKYJET’s ticketing offices.

SKYJET has also travel seat sale where there

promo fares to Caticlan, Busuanga, and Basco

at lower prices. Selling period is from

September 15 – 22, 2016 and the travel period

is from October 1, 2016 – March 31, 2017.

SKYJET offers P100 discount which is

applicable to all one-way or round trip flown

passenger/s.

SKYJET has also a raffle, Samsonite raffle to

46

be specific where there is a chance to win a

round trip airfare ticket to Boracay and the

transaction is from August 1 – September 30,

2016.

SKYJET has Aseana seat sale where

passengers can avail endless summer caravan

to Caticlan, Busuanga, and Basco at lower

prices at Aseana Ticketing Office. Selling

period is from August 22 -23, 2016 and the

travel period is from September 1, 2016 –

March 2017 except embargo dates.

f. Differential Advantage Analysis

The table below intends to elucidate the airline companies weighted mean which

resemble the rating of each industry success factors. The researches agreed to give an equal

rating of 3 to both extensive distribution and economies of scale, which was then followed by

ratings of 2.33 and 1.67 to customer focus and product innovation respectively – substantiating

the advantages of each airline company compared to others.

Furthermore, upon considering the factors that were being stated, PAL was positioned

being the utmost company among the entire airline industry for having an overall weighted of

11.69 – possessing the extensive distribution as the main advantage with 3.46 weighted, and

product innovation being the lowest with 2.51.

Table 24. Key Industry Success Factors of Airline CompaniesKey Industry Weighting CebPac CebPac PAL PAL Air Asia Air Asia Sky Jet Sky Jet

47

Success Factors Rating Weighted Rating weighted Rating Weighted Rating Weighted

1. Extensive

Distribution3 4 3.20 4 3.46 4 3.13 1 1.85

2. Customer

Focus2.33 2 2.72 2 2.76 3 2.98 2 1.88

3. Economies

of Scale3 3 3.04 3 2.96 2 2.72 4 2.23

4. Product

Innovation1.67 1 2.53 1 2.51 1 2.54 3 1.97

Total 10 10 11.49 10 11.69 10 11.37 10 7.93

G. Market Target’s Description

G.1 Customer Profile

The company targets the Urban Young Professionals and the Millennial

Generation which income ranges between four to ten times the poverty line (on the

average of 6,312 pesos to 15,779 pesos per person which goes under the Middle Class

segment.)

G.2 Consumer Preference and Buying Habits

These demographic sectors are deemed less impressed by luxury and are more

interested in finding adventures hence, focusing on the cost of the flight more than the

other generations. It was also articulated by Kuusela, Mikko (2012) that the young leisure

travellers are travelling more frequently, further and visiting more areas of the world with

the motivation of learning, the desire to explore and the opportunity to experience

different norms and cultures. The 'internet generation' are also said to be increasingly

48

taking advantage of the Internet to arrange travel plans and was also found to use the web

to research travel products prior to making a booking.

G.3 Size and Growth Estimates

According to the World Youth Student and Educational (WYSE) Travel

Confederation, Young professional and student travel is one of the fastest growing and

most dynamic segments of global tourism with young travellers attracting more attention

from destinations looking to diversify their markets. A 6.9% estimated number of

additional passengers are believed to add up to the current market size of the company

belonging in the specified segments for the succeeding years to come.

G.4 Distribution Channels

Because Young Travellers (Young Professionals and Millennials) are considered

budget-travellers, they prefer a zero level distribution channel where the airline sells the

airfare directly to the consumers instead of selling it to the intermediaries. This is in

reference to the fact that there would be no excessive incremental expenses of selling the

airfare to the middlemen which reduces the total cost of buying it in return.

G.5 Analysis of key competitors

After conducting a survey to a total of 100 respondents, it was then found out that

the company’s market base are mostly satisfied with the services and cost provided by

Philippine Airlines (where quality meets cost) and the communication efforts of Air Asia.

G.6 Guidelines for Positioning Strategy

A perceptual map was established in order to develop the current stance of the

company in the local aviation landscape. As it is, Philippine Airlines was positioned as a

company that provides quality performance with a relatively high cost, Air asia- with a

49

high performance and a low cost, Cebu Pacific with a low cost and low quality service

and Skyjet with a low service performance yet a higher cost.

H. Objectives

1. To dominate the market share of the entire airline industry through implementing long-

term marketing plans that would subsequently enable Cebu Pacific to be the pioneer

airline company and be the customer's top-of-mind

2. To reposition the Cebu Pacific's brand image concerning their poor customer service as

perceived by their customers

3. To heighten the sales of Cebu Pacific through executing marketing strategies which are

purposively designed to establish customer relations and gain customer loyalty and trust

4. To increase profits inasmuch as the economies of scale are efficiently utilized, and the

sales are subsequently escalating after earning the market share

I. Marketing Program Positioning Strategy

Because Cebu Pacific Air tends to become a low-cost airline company that provides

impeccable service to its target market, the proponents created a positioning strategy that is

directly aligned to the aforementioned objective:

For young professionals and millennial travellers who have a strong desire to wander and

explore, Cebu Pacific Air is an airline company that provides extensive routes and flexible flight

schedules to both domestic and international destinations.

Unlike Philippine Airlines, the company combines fun, comfort and impeccable service

at an affordable price.

50

J. Marketing Mix Strategy

As Cebu Pacific aims to become an airline company that provides both price and

performance benefits, the following strategies that are directly aligned to their conferred

positioning statement are then specified:

J.1 Product Mix Strategy

To date, the organization with over 50% market share has the most number of

local and international routes in the entire domestic aviation landscape. Given the

sizeable quantity of its current market base, Cebu Pacific shifted its aim from getting the

biggest market pool to providing affordable yet impeccable service. The product mix

strategy would include both service and product innovations that are customary to the

needs of Cebu Pacific’s target market: Young and active travellers that are techie and

always attached to their smartphones.

Figure 3. Ansoff's Matrix

51

Figure 4. Hierarchy of New Service Categories

With this, the company should integrate both Product Development Strategy (Ansoff’s

Matrix) as well as the Supplementary Service Innovation (Hierarchy of New Service Categories)

which would primarily focus on the Hospitality Services that falls under the enhancing

supplementary elements as well as the Information Services that lies beneath the facilitating

supplementary elements of the company:

1. Information Services: Launch a new flight scanning feature on the company’s mobile

app which would allow passengers to track down real-time flight traffic and air craft

flow for both domestic and international passengers. This would enable the customers

to understand the reason why delayed flights are happening as they would get to

know the aircraft’s route, speed, type, altitude, distance travelled and total distance

via an in-app map.

2. Hospitality Services: Install sleeping pods with power outlets on the company’s

waiting lounges to cater to tired travellers after a vigorous tour. A wifi-connection

52

would be made available as well so that they can freely browse and surf the net while

waiting for their flights

3. Hospitality Services: Introduce a SkyStatus service offering which would allow

passengers to automatically share their locations on different social media sites while

they are on-air. This means that an internet-router would be of full-availability while

on-board.

4. Hosipitality Services: In-flight entertainment screens would be provided particularly

on Cebu Pacific’s long-haul flights. This would offer a wide selection of movies, tv

shows, games etc.

5. Hospitality Services- Offer transportation vehicles for flights that are diverted to

Clark

6. Improved Service Performance- Conduct an exclusive six to twelve months training

course for their potential and existing ground and flight attendants

J.2 Pricing Strategy

Cebu Pacific being the Philippines' largest domestic low-cost carrier uses the

value based pricing strategy and definitely has great fare scheme offering to its

customers. The famous “Piso fare” and “seat sale” promos give consumers right and just

benefits that are in accordance to the amount paid.

To further maximize the great benefit experience brought by the value-based

pricing strategy, Cebu Pacific could lessen the expenses of the consumers by using direct

channel. Instead of spending too much on costly intermediaries, the airline could make

the most out of its website, sales offices and mobile app when it comes to promoting and

53

booking. Eliminating the middlemen would reduce cost and at the same time help the

company be more hands on and precise in conducting the company’s services.

Aside from using direct channel, Cebu pacific could add more bundling scheme

such as the “Buy 3 take 1” promo that would be perfect for families. Promos could also

be a package that would entitle the customers a roundtrip ticket, hotel accommodation,

and tour packages.

Using the value-based pricing strategy Cebu Pacific would be able to offer its

customers the right combination of quality and good service at a fair price. This way, the

customers will enjoy perks and benefits, and feel that the services provided by the airline

are worth paying for.

J.3 Place Strategy

Cebu Pacific Air announced a partnership in 2008 with Amadeus, the leading

global technology and distribution partner when it comes to the travel industry. Amadeus

in particular uses a Global Distribution system which allows automated transactions with

travel agencies and service providers.

This Global Distribution system unfortunately has drawbacks that lessen the

benefits perceived by the consumers. GDS having booking agents and third parties as

intermediaries add excessively high fees which causes the fares to be of a higher amount

than it is supposed to be. As an alternative to this, Cebu Pacific could use the New

Distribution Capability system developed by the International Air Transport Association.

NDC allows carriers to distribute a full range of products through travel agents via

greatly improved communications.  This new system guaranteed to give airlines control

54

over its exact product or product suite offer, at any given point in time, to any given

traveller.

Aside from the New Distribution Capability system, Cebu Pacific could also

focus on utilizing the direct channel of distribution. Using direct channel will provide not

just the airline but also the consumers benefits that are far greater than the benefits given

by the Global distribution system. Disintermediation would allow Cebu Pacific to have

more direct contact with the clients and it could erase the doubt about the ability of the

travel agents to influence the customers’ choice. Aside from that, fares would decrease

due to the elimination of Global Distribution system’s high fees which cost the airlines

billions of money per year. According to the Business Travel Research Centre, the airline

could reduce its operating cost up to 20% by using direct channel.

Improving the sales offices, call centres, website and corporate travel website

through the help of technology especially made for airlines such as the new direct

connect technology would also help in decreasing the airline fares.

In line with the reducing of fares, Cebu Pacific could also minimize one of its

biggest problems which is the flight delay. The company would be able to reduce the

possibility of flight delays on the travelling public with the help of Nextgen technologies.

Nextgen technologies is a company that offers collaborative decision making that would

assist aviation industries with the use of enhanced data that would help in scheduling

flights. The collaborative data sharing will provide a more precise arrival and location

information which will make the air traffic controlling as well as the managing of moving

of hundreds of flights along runways much easier. This will not just bring reduction of

flight delays but it will also enhance the safety around the airline.

55

J.4 Integrated Marketing Communications

J.4.1 Advertising

Title: Travel Bucketlist

Type of Advertisement: Print Advertisement

Objective:

To let the target market know that Cebu Pacific has the ability to

accommodate their market’s travel bucket list

To communicate to the target market that the airline company could make the

latter’s dreams turn into reality by attending to their travel needs

To promote the brand in such a way that the mode of advertising used is

aligned to the primary reason as to why the indicated target market travels:

Gain experience

Description:

Travel Bucketlist is an interactive type of print advertisement containing the travel

bucketlists of every millennial and young professionals where 10 print ads are located on

different areas within a particular location. A copy sample for this would be: a tick box with

the goal-To try cliff diving in boracay, Snorkeling in Palawan, Parasailing in Mactan and so

on so forth where the last would indicate “To travel with Cebu Pacific” in order to advertise

the brand. This idea was created to conform with the fun and energetic personality of the

target market as well as their primary reason for flying which is to “travel and gain

experience”. This print advertisement will be posted on the country’s central business

districts including Binondo, Bonifacio Global City, Makati Central Business District and

Ortigas Center where most young professionals are working. The ad would also be posted on

56

U-belt, Taft Avenue and Intramuros for the benefit of the company’s another target segment

which are the college students.

Table 25. Travel BucketlistOutline of Strategies

Promotional

MarketingTimeframe Methodology

Resource

s

Person/

Department

Responsible

BudgetTarget

Audience

1. Travel

Bucketlist

Print

Advertiseme

nt

April 2017

(4 months)

Shoot for

background

and sceneries

to be used for

the

advertisement

Edit the layout

Create a copy

Have the

advertisement

printed

Post it on the

desired

locations

Technica

l

equipme

nt:

Camera

Lights

etc.

PhotoEdi

tor/

Software

Printer/T

arpaulins

/Poster

sheets

Advertising

Department

Art Illustrator

20,000,00

0

Young

Professio

nals from

CBD

Millenial

Market

particular

ly college

students

from

various

universiti

es in

Manila

J.4.2 Personal Selling

57

Title: Travel Knows No Expensive Amount

Objective:

To generate more sales through stimulating the impulse buying behaviour of

the passengers who are waiting for their flights

To sustain the loyalty of their customers through providing flight tickets at

cheaper prices

Description:

The company will provide agents inside the airport who would offer low-cost

airfares to the current and potential passengers of Cebu Pacific which are scheduled

for the next 5-10 months. The purpose of which is to curtail the consumer buying

process and stimulate impulse buying behaviour which is plausible for the

aforementioned target market. This will also allow the company to determine their

loyal customers as well as the segment who are most probable to buy as they would

be compensated after a certain amount of time.

Table 26. Travel Knows No Expensive AmountOutline of Strategies

Promotiona

l Marketing

Timeframe Methodology Resources Person/Department

Responsible

Budget Target

Audience

1. Travel

Knows No

Expensive

Amount

June 2017

(6 months)

Hire agents who

has the most

appropriate skill

for the job

Ticket Human Resource

Department

Agents

500,000 Passenge

rs inside

the

airport

58

Train the agents

better and prepare

guide sheets to

serve as cues

J.4.3 Sales Promotion

Title: Hunt the Ticket Competition

Objective:

To strengthen the relationship of the participants with their respective circles

To give an opportunity to those who cannot afford to travel on-air to go to

different destinations with their peers

To engage wide variety of people to experience a unique and a challenging

activities, and at the same time boost the participants’ health

Description:

Cebu Pacific would hold a competition wherein a group of 3-5 people would tour

around Pasay in search for Cebu Pacific’s Airfare tickets which would be given to

whom found it first for free. There will be cues and clues around Pasay and they

would be challenged for different stages to post a fun experience that they had with

Cebu Pacific, talk with various people to get to know the company more etc.

Table 27. Hunt the Ticket CompetitionOutline of Strategies

Sales

Promotion

Timeframe Methodology Resources Person/Department

Responsible

Budget Target

Audience

59

Hunt the

Ticket

Competition

May 2017

(5 months)

Hire an

events’

organizer

Post

publicities

and

advertisement

s

Technical

Equipment

Print Ads

Marketing

Collaterals

Logistics

Events Organizer

Marketing

Department

Advertising

Department

7,000,00

0

Millenial

s

Young

Professio

nals

J.4.4 Interactive Internet Marketing

Title: CEBlog

Objective:

To prove to the target market that the entire information being divulged on the

company’s website is packed with authenticity

To allow the Cebu Pacific’s actual market the freedom to share their travelling

experiences with the airline company

To let the actual market have a deep affiliation with Cebu Pacific –both

parties promoting the airline company

Description:

Since Cebu Pacific’s website contains almost everything including their press

releases, annual reports, etc. An additional feature to make it look more pre-emptive

is a blog section. CEBlog would enable the passengers to share their positive stories

about Cebu Pacific including their travel inspirations, travel tips and Cebu Pacific

Service Feedback. This would serve as a way for both the company and the customers

to hold hand-in-hand in promoting the product.

60

Table 28. CeBlogOutline of Strategies

Interactive

Internet

Marketing

Timeframe Methodology ResourcesPerson/Department

ResponsibleBudget

Target

Audience

CEBlog December

2017

(12 months)

Appoint an

individual to

focus on

organizing the

blog

Create a

CEBlog

Announce to

audience that

they are free to

submit their

stories on the

blog

Company must

post blogs too

Technical

Equipment

Marketing

Collaterals

Social Media

Department

300,000 Internet-

users

J.4.5 Direct Marketing

61

Title: Cebu MailPac

Objective:

To build a mutual relationship between the company and the customer by

strengthening the company’s competitiveness

To inform the customers about company updates, promos and discounts with a

sense of being special.

To promote Cebu Pacific’s customized deals through email

Description:

Direct mails are typical nowadays, so Cebu Pacific made it more special and

different among other airline companies. The company would design an animated

electric mail which helps to separate their emails from all the immobile emails in the

recipient's inboxes. This design intends to pop up on the screen whenever the

recipient opens his mail – regardless of the time it was being sent to him. This allows

the recipient to read the Cebu Pacific’s mail first.

Also, the firm leverage exclusivity by framing the promotion as a "private" sale.

With this, the recipient would feel like they're specially chosen - encouraging them to

take advantage of the special opportunity they've been presented with.

Aside from this, Cebu Pacific would send their actual consumers greetings during

holidays or their special days (birthday, anniversaries, or celebrations as to what they

have stated on the forms they have submitted on various forms) which will make

them feel that they really matter.

Table 29. Ceb MailPac

62

Outline of Strategies

Promotional

Marketing

Timeframe Methodology Resource Person/

Department

Responsible

Budget Target

Audience

1. Ceb

MailPac

November

2017(11 months)

Design a database

which links the

customer’s

information to a

separated one

concentrating on

the dates they

have specified on

their forms.

Send direct mails

to the actual

consumers during

holidays or

individual’s

special days.

Design an

animated electric

mails which

makes the

recipient read it

first compared to

other immobile

mails.

DFA

Applicati

on Forms

Bank

Cards

Internet

Public Relations

Department

Network

Specialist

Department

Web Designer

1,500,0

00

Existing

consumers

J.4.6 Ceb Pac, Text Us

63

Objective:

To reach the customers via SMS/text messages.

To make a special contact number that customers can text whenever they have

queries.

To have a more convenient way on responding with Cebu Pacific's consumer

promotions.

Description:

Cebu Pacific would be sending text messages to their consumers for them to convey

the company updates – including the discounts and promos, the news that has to do

with the industry, and the corporate events that are going to happen. Since majority of

the people especially yuppies have their own smart phones, SMS is a boundless

immediate means of their communication to the latter anywhere and anytime. With

this text messages, anyone could promptly receive what the corporate desires to

disseminate. Furthermore, the company would use a definite four-digit network

number to avoid scams, yet they are giving a specific contact number (according to

the carrier network of the receiver) where the consumers could send their queries or

responses.

Elaborately, the firm could gather contact numbers to their actual consumers who had

filled up their flight forms, or those who had availed ticket flights through their bank

cards, etc.

Table 30. Ceb Pac, Text UsOutline of Strategies

64

Promotional

Marketing

Timeframe Methodology Resource Person/

Department

Responsible

Budget Target

Audience

Ceb Pac,

Text Us

March

2017

(3 months)

Appoint persons

who are to focus

on responding to

the market’s

queries or

responses

through SMS.

Send SMS to

those who had

divulged their

contact numbers

through some

forms they had

filled up before,

or those who

availed ticket

flights

previously.

Network

Carriers

Human

Resource

Department

Network

Specialist

Department

500,000 Actual

consumer

General

Audience

J.4.7 Public Relations

65

Type of Public Relation: Publicity

Title: Let’s go, Juan! Fly with 5J!

Objective:

To promote the brand by using an effective yet affordable medium(Publicity

which is free)

To strengthen the company’s current slogan “Why everyone flies” as Cebu

Pacific would showcase their philantrophic activities on a particular video

Description:

As Cebu Pacific passengers make themselves comfortable during their fun and safe

flight, there will be a promotional video flashed on the screens in front of their seats.

The promotional video is all about the corporate social responsibility of Cebu Pacific

Air, Inc. which will serve as a publicity medium for the company

Table 31. Let’s go, Juan! Fly 2017 with 5J!Outline of Strategies

Public

RelationsTimeframe Methodology Resource

Person/

Department

Responsible

BudgetTarget

Audience

Let’s go,

Juan! Fly

with 5J!

Septembe

r 2017

(9

months)

After all the safety

precautions and

measures has been

demonstrated, CEB

PAC promotional video

is going to be played on

the TV screens placed

in front of the

passengers’ seats.

Televisio

n

Screens

Video

Presentat

ions

Flight

Attendants

Public Relations

Department

Network

Planning

Department

2, 000,

000

Existing

and loyal

customers

J.4.9 Integrated Marketing Communication

66

Prior to the Hunt the Ticket Competition, there will be various print advertisements in the

form of a travel bucketlist and personalized email/sms invitations sent to the market to garner an

ample number of participants. While on the event, there would be sales agent who would sell

piso fare tickets to the audience as well as personalized CEB merchandise and would be asked

for a fee of P30 which is correlated to the 30th anniversary of the company (event would happen

in the year 2017). The fee would be donated to the OFW victims of human trafficking and

violence to provide for legal assistance. After the event, the participants including the audiences

are encouraged to create an account on the CeBlog and share their stories while they were on the

competition.

Marketing Implementation

The table below shows the implementation that will be utilize for the proposed marketing

mix strategies of Cebu Pacific..

Table 32. Marketing ImplementationSpecific Tactical Activities Person/Department

Responsible

Required

Budget

Completion

Date

Product Activities

1. Launch a new flight

scanning feature on the

Cebu Pacific’s mobile app,

highlighting the aircraft’s

route, speed, type, altitude,

distance travelled and total

distance via an in-app map

Software Developer

Apple and Android

Application Store

20, 000, 000 December 2018

67

2. Install internet

connections, and sleeping

pods with power outlets on

the firm’s waiting lounges

to accommodate travellers

Network Company

Interior Designer

Purchasing Department

Facility Maintenance

3, 000, 000 June 2017

3. Establishing an internet

router providing internet

connection while on-board

to enable location sharing

through SkyStatus service

Network Company

Aircraft Engineers

Software Developer

15, 000, 000 January 2019

4. Providing in-flight

entertainment screens which

offer a wide selection of

movies, tv shows, games,etc

Purchasing Department

Aircraft Engineers

Equipment Company

Electronic Device Installer

30, 000, 000 August 2017

Pricing Activities

1. “Book 3, Take 1”

Bundling scheme during

off-peak seasons

Promotions Department

Finance Department

2, 000, 000 December 2017

Distribution Activities

1. Utilize New Distribution

Capability System

Network Department

Corporate Affairs Department

60, 000, 000 January 2018

2. Focus on Direct Channel,

eliminating the middlemen

involved

Website developer

Affiliated Bank Firms

100 , 000 January 2017

68

3. Collaboration with

Nextgen Technologies,

which provides data sharing

with various airline

companies, to perhaps

control the air traffic and

avoid flight delays

Nextgen Technologies

Local Airline Companies

Corporate Affairs Department

Board of Directors

60, 000, 000 June 2018

Promotion Activities

1. Travel Bucket list Print

Advertisement

Advertising Department

Art Illustrator

20,000,000 April 2017

2. Travel Knows No

Expensive Amount

Human Resource Department

Travel Agents

500, 000 June 2017

3. Hunt the Ticket

Competition

Logistics

Event Organizer

Marketing Department

Advertising Department

7,000,000 May 2017

4. CeBlog Social Media Department

Software Developer

Website Developer

300, 000 December 2017

5. Ceb Mail Pac Public Relations Department

Network Specialist

Department

Website Designer

1, 500,000 November 2017

69

6. CebPac, Text Us Human Resource Department

Public Relations Department

Network Specialist

500, 000 March 2017

7. Let’s go, Juan! Fly with

5J!

Flight Attendants

Public Relations Department

2, 000, 000 September 2017

Monitoring and Controls

Table 33. Marketing Goals and Associated Metrics

Goals Possible Metrics

Brand Awareness

Website views, official social media accounts visits/views,

mobile application (in-app map), promotional videos and

print advertisements

Engagement

SkyStatus (location app service), promotional contests to

win plane tickets and customer feedbacks from

surveys/blogsites

Lead Generation

Online booking completions, e-mail subscriptions and

downloaded forms

Revenue Online sales, offline sales and Annual reports

Customer retention/loyalty Retention and renewal rates (seat sale)

Upsell/cross-sellSales for new products/services (Bundle promos &

merchandise)

Table 34. Key Marketing Metrics

70

Marketing Collateral Metrics (2017) Year 1

Overall Marketing Efforts Revenue 69,241,430,360

Distribution Efforts: Direct

Channels

Leads: Online Booking Completions

(Company Site)

40%

Distribution Efforts: Indirect

Channels

Leads: Online Booking Completions

(Middlemen)

25%

Promotional Efforts:

CebMailPac

Leads: Email Subscriptions 30% more

subscriptions

Promotional Efforts:

CEBlog

Website views/ official social media

accounts visits/views

10% increase

Service Efforts:

In-app map/SkyStatus

mobile application (in-app

map/skystatus) views

20% increase

Pricing Efforts: bundling Sales for bundles promos 130,360

Forecasts and Budgets

Table 35. Cebu Pacific’s 2017 Sales ForecastCebu Pacific’s Sales Forecast for the Year 2017

Years Sales % increase 2016 Quarterly Report2010 29,088,798,959 0% Quarter Sales2011 33,935,402,775 14.28 Q1 16,105,973,0512012 37,904,453,623 10.47 Q2 33,093,057,0542013 41,004,096,281 7.56 Q3 46,690,789,6152014 52,000,018,310 21.14 Q4 (FS) 61,983,197,8972015 56,501,654,516 7.96

2016 (FS) 61,983,197,897 8.842017 (FS) 69,241,430,360 11.71 7,258,232,743

Sales Forecast ComputationsIncrease in Sales

F %Q1-Q2 16,987,084,003 48.66873745Q2-Q3 13,597,732,561 70.8770559Q3-Q4 15,292,408,282 88.91818941

16,987,084,003 Rate of Increase13,597,732,561

Table 36. Marketing Mix Budget

71

Marketing Mix Budget For Cebu Pacific AirMarketing Mix % Amount

Service Activities 68,000,0001. Flight Scanning Feature Device 100 20, 000, 000 Global Positioning System Satellites 15 3,000,000 GeoLocator 40 8,000,000 Installation Works 25 5,000,000 Navigation Database 10 2,000,000 Radio aids 10 2,000,0002. Improvement of Waiting Facilities 100 3,000,000 Sleeping Pods 82 2,460,000 Power Outlets 0.003 900 (2) LED Screens 5 150,000 Wifi Router 0.05 15,000 Electric Power Circuits 12.997 36,0003. SkyStatus Service 100 15,000,000 (2) Wifi Router 0.01 30,000 GeoLocator 53 8,000,000 Software Device 11.33 1,700,000 Installation Works 33 5,000,0004. Inflight Entertainment Screens 100 30, 000, 000 LED Screens 90 27,000,000 Iflix Device 6 1,800,000 Software Games 4 1,200,000Pricing Activities 2,000,0001. Bundling (Hotel+Roundtrip Fare+Tour) 100 2,000,000 Transportation Fees 2.75 55,000 Promotional Tools 89 1,780,000 Food Allowances 2.75 55,000 Hotel/Accomodation fees (agents) 5.5 110,000Distribution Activities 120,100,0001. New Distribution Capability System 100 60,000,000 Software Device 86.66 52,000,000 Installation Works 13.3 8,000,0002. NextGen Technology 100 60,000,000 Software Device 86.66 52,000,000 Installation Works 13.3 8,000,0003. Improvement of Direct Channels 100 100,000 Software Updates 100 100,000Promotional Activities 28,300,0001. Travel bucketlist-Print Ad 100 20,000,000 Technical equipment 1.25 250,000 Tarpaulins 58.5 11,700,000

72

Other fees(permits) 0.25 50,000 Installation Works 40 8,000,0002. Personal Selling 100 500,000 Printed Tickets 70 350,000 Commission Fees 30 150,0003. Hunt the ticket Competition 100 7,000,000 Technical Equipment 71.4 5,000,000 Print Ads 14.28 1,000,000 Marketing Collaterals 14.28 1,000,0004. CEBlog 100 300,000 Technical Equipment 50 150,000 Marketing Collaterals 50 150,0005. CebuMailPac 100 500,000 DFA Application Forms 50 250,000 Bank Cards 50 250,0006. Let’s go, Juan! Fly with 5J! 100 2,000,000 Television Screens 0 0 Promotional Video (talent fees,techs etc) 100 2,000,000Total 100 218,400,000

Bibliography:

https://www.cebupacificair.com/

73

https://www.cebupacificair.com/about-us/Annual%20Reports/2014%20Annual%20Report-

CebuPacific.pdf

http://www.philstar.com/business/2015/05/02/1450087/cebu-pacific-soars-above-competition-

think-tank

http://www.aseanbriefing.com/news/2015/05/21/philippine-aviation-industry-sees-strong-

growth.html

http://www.cab.gov.ph/retrieveMandates.php?id=37

http://www.philippineflightnetwork.com/2016/09/philippine-airlines-adjusts-flight-schedule-

clark-airport.html

http://business.inquirer.net/204935/airlines-seen-further-expanding-in-2016

http://www.tourism.gov.ph/pages/industryperformance.aspx

http://www.euromonitor.com/airlines-in-the-philippines/report

http://www.aseanbriefing.com/news/2016/05/06/asean-aviation-2016.html

http://centreforaviation.com/analysis/philippines-aviation-part-2-renewed-domestic-capacity-

growth-impacts-cebu-pacific-pal--airasia-257862