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AST 205 Chapter 3 FBO Marketing What we’ll cover Home Previous • The need for marketing in G.A. • Ways the FBO’s market Next • The 4 P’s of marketing Help • The world’s natural markets • How to achieve market growth • What is a market niche? • Pricing- Cost plus and Demand Why G.A. needs to advertise (the 4th PPromotion) Home Previous Next Help • Product- FBO’s are unique because they sell both Products and Services. • FBO’s compete with other modes of transportation • Competes with other hobbies for peoples time, money, and interest • Must relate to a wide range of clientelecorporate executives to the casual flyer The worlds 3 natural markets: Home Previous Next Help • Those with any discretionary income- up to 80% of the population• Young Professionals- 25 – 35% of those with discretionary income- + $55,000 per year • The wealthy- 2% - 4% of the population with discretionary income Marketing Defined Home Previous Next Help • Why an FBO needs to market- unique aspects – Competes with other modes of transportation – Competes withother hobbies for people’s time and $ – Must sell both products & services – Must accomodate corporate execs. as well as the casual flyer Marketing ctn. Home Previous • What are some ways that FBO’s market? – Yellow pages Next Help – Limited T.V. – Signage – Websites (their own and others) – Newspaper – Fly-ins – Others? All marketing is based on the 4 P’s: Home Previous • Product • Price Next • Place Help • Promotion Home Previous Next Help • The world’s 3 natural markets: – Those with discretionary income- 80% of the population – Young Professionals- up to 25% of pop. and growing – The wealthy- less than 2% of the population Aviation Stats. Home Previous Next Help • Aviation related statistics of this population• Roughly .002% of the population are pilots • 1 person in 1,500 owns an aircraft • Non-pilots use G.A. for traveling 25% of the time CURRENT & FUTURE TRENDS Home Previous Next Help • Modern FBO’s need to become more customer oriented- find unique ways to attract and maintain customers. • Technology and the economy will drive the market • Pilots/aircraft will need to become more neighbor friendly- Noise • 1988 FAA 10 year G.A. activity forecast– Said society was experiencing a fundamental shift in tastes and preferences- away from aviation Economic characteristics of FBO products/services Home Previous • -Air travel is an incidental need- dependant on another purpose • -Follows the economy in greater cycles Next Help • Products/services should be counter recessionary: – Used Aircraft – A/C Refurbishments instead of new – Engine overhauls instead of new or rebuilds – Avionics repair instead of new – Recurrent training instead of new students Good Marketing begins with a good selfassessment Home Previous Next Help • What is the local economic condition? • What is happening to the local market? • What has been my past performance? • What are my future plans for sales? There are only 4 ways to grow your marketSell: Home Previous • New Products to Existing Customers • Existing Products to New Customers Next • New Products to New Customers Help • More Products to Existing Customers The 4 P’s- Product Home Previous Next • Choose the best mix of products and services based on: – Past performance – Local market demands- research-based Help – A market you create The 4 P’s- Price Home Previous Next Help • A. Cost Based- “cost plus” or wholesale plus an added margin for profit – requires you know your fixed and variable costs – For example: Fuel sales• Fixed- Those that don’t change with volume sold such as equipment lease payments etc. • Variable- those that change with the level of volume sold such as your cost of fuel and any additives such as “Prist”. Pricing ctn.- demand-based Home Previous Next Help • Demand Based- Charging what the market will bear. More complicated as it requires you to know the concepts of: – Scarcity- goods that are scarce or “in demand” will bring a higher price • Q) What are some items that have been in demand recently? – Elasticity- For most goods, as price goes up, demand goes down and quantity available goes up and visa versa. Other Pricing Policies Home Previous • One price or flex pricing- peak or off peak Next • Price w.r.t. perceived value Help • Product life style pricing • Promotional Pricing • Geographic Pricing/-Market channel (distributors) Place/Promotion Home Previous • Place in the FBO realm is limited to airports and some limited online sales Next Help • Promotion- previously discussed All of this information is gathered into your marketing plan- placed in your business plan Home Previous Next Help • Questions?