Summary Marketing Plan

0.1 Company Overview

Interlink airway was formed on the 12 of August 2009 and duly registered as a private company .The company’s head office is in New York City. The company has a mission of providing comfortable, reliable and safe low-cost air travel service. Low cost production is a concept that has been propagated from long time ago by people like Henry ford who wanted to focus on the customer satisfaction (Levitt, 1975).

0.2 Executive Summary of Marketing Plan

Marketing can be said to be social since it involves the people feelings and wants (Mullins, Walker &, 2010).Interlink airways is a new airline company currently in its shaping stages. The company has been setup to take advantage of the market segment that has not been fully utilized by the current companies especially in the domestic market. This gap has been identified in the low cost service flights out of New York, U.S.A. This opportunity coupled with the fact that there is an increase in demand for flight services for passengers exiting New York is a good predictor that Interlink’s entrance into the market will guarantee it of a good market share  

1.0 Description of the Target Market

Interlink Airways has chosen to be based in New York City because that is definitely the most populous city in the region. There are so many people moving in and out of the city at any given point in time and many of these are using commercial airlines. The decision to be based in New York was informed by an extensive research report which was compiled with the Department of Transportation O & D report data. The report gives a comprehensive analysis of the different market players with their different flight plans (ProQuest, 2010).

      The other factor that makes the New York market desirable is the research that was carried out by management on the major competitor it would have in this region. It was established, based on some inside information that the biggest player in this region was a full service airline. This meant that the segment of the low-cost travelers had not been adequately seized. It was also seen that the main competitor would not likely interfere with the market segment that Interlink had curved out since the company would prefer to maintain the status quo for fear of causing undesired effects within in its market.

      The interlink company decided to take advantage of the obvious absence of a true low-cost carrier on the New York market. Since the threat of the existing player to come to this segment was eliminated, the only other threat would be the entrance of another discount airline. Interlink would strike while the iron is still hot so that it can get the advantage of being the trend setter

2.0 Description of Competitors

      There is one major competitor in the New York City Market competition. The Delta Airline Company claims stake of up to 86% of the market share in New York Market. (IATA,2010).The company also employs a very expensive pricing policy. This will be a plus for interlink company as it will employ a competitive pricing strategy. The discounted air fares will enable interlink to curve out a significant market share.

      Delta Airline is operating in an oligopolistic environment with other international carriers and this means they will have little concern about the local market. This will enable interlink to move into the market with few hitches as far as completion form the already established Delta is concerned. The fact that we will be operating just one type of aircraft will also distinguish as from the competitors. The full-service airlines like Delta have to operate different kinds of aircrafts because of their diversified portfolio. This means they have to incur extra overheads in maintenance and training.

Interlink will have one major hub of operation which will be highly utilized on the basis of price advantage. The lack of aircrafts outside our focus means that we will have a competitive advantage over the multifaceted full-service companies like Delta. These companies have the extra costs brought about by the different market orientations across the different borders

Interlink will however concentrate on the segment it has identified thereby avoiding the overheads faced by the rest. Our concentration on our niche will also create a barrier for other competitors who may want to enter the market at latter dates. It will be counterproductive for the multifaceted all-service carriers to compete with our discounted prices.  They will mostly concentrate on greener pastures on longer routes across the borders. This will leave us in a good position to penetrate the market.

While the full-service carriers concentrate on providing extra service for their customers, interlink will concentrate on providing competitive prices. Interlink can for instance attain a target of 7 cents for every available seat mile. This can be made possible through a variety of cost saving mechanisms. One of the cost cutting mechanisms will be done through flight crew utilization. While the other the all-service providers have an average of 60 hours deployment of crew per month, interlink will have an average of 85 hours deployment per month. This will effectively save the company money through as a resulting of having a leaner staff

Consequently, Interlink intends to eliminate meal service. It is forecasts that this will save the company at least three dollars per seat per flight.  The company will also utilize airplane fleets by doing an average of eleven hour in a day and seven days in a week. Interlink will also configure the planes into a single coach. These coaches will seat 165 passengers. By and large, this will maximize the profits especially on short flights. The company will use the MD-80 series aircraft. In summary, it will be employing the pricing strategy as a tool for market penetration (Mullins, Walker & Byod, 2010).

3.0 Description of Product or Service

Interlink airways is  has entered the market of airline service with an aim of  providing low-cost, discounted air travel to an assortment of various destinations from its New York City, U.S.A. Center. The strategy in use is the competitive pricing strategy. The company cuts down on costs through various cost cutting measures yet provides a safe and comfortable means of transport.

Researchers have long established that consumers still have a preference for lower fares but this should be in an environment where they are guaranteed that their safety has not been compromised. The consumers also want to be assured of the convenience and reliability of the flights. One thing however, that customers are willing to sacrifice on the altar of cheaper fares is service. If denying them some services will cut down on some costs, then they are okay with it ( O’Connellà & Williams, 2005).

4.0 Marketing Budget.

 The market segment to be reached is local. This means that the company doesn’t have to do extensive media campaigns in other countries to make the company known. The company will use the billboards campaign as one of its key forms advertising. The company will however also employ other forms of advertising like Local TV ads, radio and also in the dailies

4.1 Distribution Strategy

To effectively reach out to the market, the company will establish a robust web application that will have ease of use for the convenience of the customers. They will be able to make reservation and payments online.

4.2 Promotion Strategy

The Promotional campaigns will be targeting the local markets. This will therefore make the television ads, radio commercials and newspaper classifieds very key in the promotional exercise. The company will also use strategically placed billboards as another form of promotional campaigns. The target is the business traveler as well as the leisure traveler.

Interlink will also employ the services of an outsourced Publics relations company. Interlink will set aside 16% of its sales for this entire exercise. This means that the projected expenditure for the first year in this exercise will amount to 16.5 million dollars. Private Jet’s experience is proof that this amount is enough to launch the airline company in a single hub.

4.3 Sales Strategy

Interlink intends to make direct contact with the business community.  It is expected that the travel departments in this firms will be attracted by the good prices. New York City is arguable the business hub of the country. It is also among the leading cities in conference tourism. We therefore project that close to 50% of all our revenue will emanate from the business community. These projections are inclusive of the relevant personnel and salaries.

4.4 Sales Forecast

We project very an interesting first year with good annual returns. The second year is expected to yield even more revenue since there will be less costs in advertising as the company will have already penetrated the market. We therefore forecast a increase by at least 50% in the second year of operation. The Assumptions we are making for load factors are 55% the first year and 62% the following.

The increase in year two is because we will be adding more flights and aircrafts to the routes. This will lead to a maximization of profits in the market segment. These profits will be without having to incur additional costs of opening new markets.   The other advantage is that there will be more controlled growth thus eliminating uncertainties and risks that are bound to occur with incremental growth. The chart below shows these projections:-

NOTE: Numerical values are in thousands (000's).

5.0 Description of Location

Location is one of the important factors for any business. The Interlink Airways Company will be located at the heart Of New York City. New York is a business center with most companies having their head offices there while those that don’t have a major branch of the company there. The city is also one of the leading cities in the world as far as tourism conferencing is concerned.  New York is also one of the major connector cities in the world from where destinations to many other parts of the globe are routed. These among many other factors make New York a very convenient location for an airline company since it’s a city full f travelers.

6.0 Pricing Strategy

The low costs of operation will enable Interlink to have an attractive pricing strategy. Our prices will be almost 50% less of the industry service rates. Here is a list of some of our projected fares to some assorted destinations.

ROUTE	ADVANCE	WALK-ON	SAME DAY.
Atlanta	$59.00	$89.00	$167.66
Dallas	$99.00	$159.00	$222.15
Boston	$99.00	$159.00	$185.25
Chicago	$89.00	$129.00	$184.99
Orlando	$79.00	$119.00	$141.69
Phil	$79.00	$119.00	$180.08
Detroit	$89.00	$129.00	$165.55
D.C.	$79.00	$109.00	$188.95
Ft. Lauderdale	$79.00	$119.00	$148.70

Key

Column one is for advance reservation for 2 weeks. The fares are not refundable and the flights can not be cancelled. Column two fares are is for fares purchased within a time span of less than 14 days. Column three is for purchases of made on the same day of travel

7.0 Summary and Implementation Plan

Interlink’s penetration and subsequent market presence will be realized through its strategy of identifying and segmenting a market which it will then focus on.  This market segment will further be locked through the strategy of competitive pricing. The pricing policies which will see the fares set at almost 50% below the industry rates will not only attract but also retain the customers. Interlink will also employ various measures to ensure the company continues to maintain a competitive advantage. This will mainly include the following:-

·         Media campaign through local media like TV ads, Radio, Newspapers and billboards

·         Centralized operations will make the process cost effective.

·         Cost cutting mechanisms will make the company save a lot of money

References

IATA. (2010). Scheduled Passengers Carried. Retrieved on 23 September, 2010, from http://www.iata.org/ps/publications/Pages/wats-passenger-carried.aspx

Levitt, T. (1975, September-October).Marketing Myopia. Harvard Business Review, p.8.

Mullins, J., W.,Walker, Jr., O., & Boyd, H. W. (2010). Marketing Management: A Strategic Decision Making Approach (7th ed.). Boston: McGraw-Hill

O’ConnellÃ, J & Williams, G. (2005). Passengers’ Perceptions Of Low Cost Airlines And Full Service Carriers: A Case Study Involving Ryanair, Aer Lingus, Air Asia And Malaysia Airlines. Bedfordshire: Cranfield University.