1. 10 STEP Marketing Plan for Cebu Pacific Air, Inc. Avellana.Gan.Quizon.Li.Turingan June 2011 http://cebupacificairv54.blogspot.com

2. Disclaimer This 10 Step Marketing Plan is part of the mandatory requirements of Prof. Remigio Joseph De Ungria’s AGSB marketing management class. The data included in this report are based on publicly available data such as those on internet websites, news, package declarations, public reports. When appropriate, data are “masked” so as not to create unexpected conflicts. The reports are posted and linked on slideshare, blogs and facebook so that there is easier sharing among students from different marketing classes. http://cebupacificairv54.blogspot.com

3. Steps 1 to 5Reaching out to every “Juan” Cebu Pacific’s PTM are the budget-conscious young travelers. Who want affordable, no-frills travel experience. Can opt for Philippine Airlines, AirPhil, ZestAir, Seair Gap is there are other brands who can offer lower cost fares and possibly better service The market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 Billion http://cebupacificairv54.blogspot.com

4. Steps 6 to 10A fun flight at a low cost Cebu Pacific offers year-round low fares. Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest Air Uses sales promotion, word of mouth, advertising, public relations, and events and experiences Flights are mainly booked online Cebu Pacific adopts niche marketing, anticipates competition http://cebupacificairv54.blogspot.com

6. Lifestyle: Working or starting to work; budget-conscious; internet savvy; keen to travel

7. Behavior: Travel during long weekend & holidays; with friends/family/colleagues; an average of 3x a yearhttp://cebupacificairv54.blogspot.com

8. PTM needs to have the travel experience I want to be recognized by my peers. I want to belong http://cebupacificairv54.blogspot.com

9. 2. PTM wants affordable, no-frills travel experience Budget-driven Young Adult Travelers need the security when traveling, a sense of belongingness and recognition from family/peers. They choose Cebu Pacific over other airlines because of price, service, safety, extensive distribution coverage, on-time flights, brand promise of a “Fun Flight” experience They demand low cost with no-frills service, safe travel, easy booking, fun travelling experience. http://cebupacificairv54.blogspot.com

11. Indirect: Super Ferry, Negros Navigation, Sulpicio Lines, RORO, private cars, buses

12. Variable: Fare rates, flight availability, destination choices, airline membership, traveler’s budget, reputation, travel packageshttp://cebupacificairv54.blogspot.com

13. Market share as of 2009 http://cebupacificairv54.blogspot.com 3b. Price vs Route Matrix of Key Domestic Carriers in the Top 5 Largest Domestic Routes (based on lowest fares offered)

14. 3b. Cebu Pacific dominates the domestic market! Market share as of 2009 http://cebupacificairv54.blogspot.com

15. Cebu Pacific’s Positioning as detailed.. http://cebupacificairv54.blogspot.com

16. Cebu Pacific’s key differentiators are the most routes per day, youngest fleet age and the “Fun Flight” experience http://cebupacificairv54.blogspot.com

17. 4. Cebu Pacific’s Low Fare, Great Value Strategy Cebu Pacific changed the landscape of the domestic airline industry through its LOW FARE, GREAT VALUE STRATEGY Because of competition, other airlines such as AirPhil, Zest Air and SEA Air were forced to cut fares and offer promos. Traditional Positioning was based on luxury, reliability. http://sheilanorturingan.blogspot.com

19. is able to provide lowest fares when there are promos,

20. Offers the most routes per day,

21. Has the youngest fleet age,

22. Guarantees a “Fun Flight” experiencehttp://cebupacificairv54.blogspot.com

23. 4. “Positioning”: brand identity from the maker “It’s time everyone flies” Or occasionally modified with humorous intent as: “It’s time ever Juan flies” Source: Cebu Pacific Air Website http://cebupacificairv54.blogspot.com

25. Civil Aeronautics Board reveals PAL average market share of 32.3% for 2010

26. Revenue contribution for the domestic market is 24.8%2

27. Market size is (0.248 x 59.32)/0.323 = Php 45.54 Billionhttp://cebupacificairv54.blogspot.com

28. 5a. Based on PAL’s quarterly revenues, market size is Php 45.54 Billion References Philippine Airlines Annual and Quarterly Reports 2010 http://www.pse.com.ph/ Philippine Airlines Annual Report 2010 http://www.pse.com.ph/ http://cebupacificairv54.blogspot.com

30. Passenger revenue for 2010 is Php 24.656 Billion

31. Domestic capacity share is 79%

32. Market size is 0.79(24.656 Billion/0.482) = Php 40.41 Billionhttp://cebupacificairv54.blogspot.com

34. Average fare of Cebu Pacific

35. 1999 = Php 23542

36. 2010 = Php 2468.8 (Jan-June 2010)

37. CAGR = 0.48% Growth

38. Average domestic airline fares in 1999 = Php 25213

39. Applying CAGR: 2521x1.048 = Php 2533.34

40. Total domestic passengers x Average airline fare

41. 16,539,000 x 2533.34 = Php 41.9 Billionhttp://cebupacificairv54.blogspot.com

42. 5c. Customer data reveals a market size of Php 41.9 Billion References Cebu Air, Inc 1Q2011 Results of Operations sourcing Civil Aeronautics Board, Company Filings Competition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, August 2001, Table 4. Average fare by airline per sector, 1997-1999 (PhP), Average of Cebu Pacific Air Competition in the Domestic Air Transport Industry: Can it be sustained without competition policy?, Myrna S. Austria, August 2001, Table 4. Average fare by airline per sector, 1997-1999 (PhP), Average of PAL, Cebu Pacific Air, Air Philippines http://cebupacificairv54.blogspot.com

43. 5. Annual market size for the domestic passenger market is Php 40.41 Billion Competitor data= Php 45.54 Billion Company data = Php 40.41 Billion Customer Usage data = Php 41.9 Billion http://cebupacificairv54.blogspot.com

44. 6a. Cebu Pacific’s websitehttp://www.cebupacificair.com http://cebupacificairv54.blogspot.com

45. 6a. Competitors’ Website http://www.zestair.com.ph/ http://cebupacificairv54.blogspot.com

46. 6a. Competitors’ Website http://www.airphils.com/ http://cebupacificairv54.blogspot.com

47. 6a. Competitors’ Website http://www.flyseair.com/ http://cebupacificairv54.blogspot.com

48. Cebu Pacific, Philippine Airlines, Super Ferry http://cebupacificairv54.blogspot.com

49. 6a. Indirect Competitor (SuperFerry’s) website http://cebupacificairv54.blogspot.com

50. 6a. Indirect Competitor (Montenegro Shipping Lines’) website http://cebupacificairv54.blogspot.com

52. Earlier booking gets the lower fares

53. Options for prepaid baggage at the time of booking (15,20,25,30 kg) http://cebupacificairv54.blogspot.com

54. 6b. Cebu Pacific’s Promotional Seat Sale http://cebupacificairv54.blogspot.com

55. 6b. Cebu Pacific’s Tour Packages http://cebupacificairv54.blogspot.com

56. 6b. Cebu Pacific’s On-Time Performance Global Standard 77% Internal Standard 85% http://cebupacificairv54.blogspot.com

57. 7. Cebu Pacific is priced lower than PAL but is generally higher than the other LCCs http://cebupacificairv54.blogspot.com

58. 7. Cebu Pacific is 51% lower than PAL but 11% and 21% higher than AirPhil and Zest Air respectively http://cebupacificairv54.blogspot.com

59. 8a. Cebu Pacific Air uses Sales Promotion, Word of Mouth, Advertising, Public Relations, and Events and Experiences 1 2 3 4 3 5 http://cebupacificairv54.blogspot.com

60. Both screenshots are taken on 06/09/2011. These promos came out right after the Php0 fare promo. 8a. Cebu Pacific has regular seat sale promos http://cebupacificairv54.blogspot.com

61. 8a. Cebu Pacific always has at least a 1/3 spread in the newspapers for its ads http://cebupacificairv54.blogspot.com

62. 8a. Cebu Pacific came up with the Fun Flights program And a dancing cabin crew while explaining the safety procedures! Games and prizes http://cebupacificairv54.blogspot.com

63. 8a. Cebu Pacific uses Interactive Marketing by… Sending emails Posting on Facebook http://cebupacificairv54.blogspot.com

64. 8a. The company uses various PR campaigns such as press releases, annual reports, and their company magazine - Smile http://cebupacificairv54.blogspot.com

65. 8a. Cebu Pacific’s Press Releases: The airline with flying colors WWF Award Changi Award: ISO 9001:2008 Certificate: Marketing Communication Effectiveness Awards 2007 http://cebupacificairv54.blogspot.com

66. 8a. Cebu Pacific’s Online Press Releases CEB breaks 1M passenger record in one month CEB flies 2.8 million passengers in Q1, posts 12% increase CEB pilot best in the country; wins Airline Pilot of the Year award CEB website most popular travel site in the Philippines http://cebupacificairv54.blogspot.com

67. Promo fare advertisements sent via email are late at times Individuals could just learn about it through friends Or perchance they’ve come upon an ad on the newspaper 8a. Word of Mouth http://cebupacificairv54.blogspot.com

68. 8a. The use of social networking sites is also a form of Word of Mouth Marketing http://cebupacificairv54.blogspot.com

69. 8a. Marketing communication through Events and Experiences http://cebupacificairv54.blogspot.com

70. 8b. AirPhil empasizes on the “free” check-in baggage http://cebupacificairv54.blogspot.com

71. 8b. Philippine Airlines has a “lowest fare” search engine http://cebupacificairv54.blogspot.com

72. 8b. Seair has the fastest flight to Boracay—at 35mins! Number of flights to Boracay is even increased! http://cebupacificairv54.blogspot.com

73. 8b. Seair, like Cebu Pacific, also has a PR campaign through its company magazine http://cebupacificairv54.blogspot.com

74. 8b. ZestAir has a membership card that acts like a discount card http://cebupacificairv54.blogspot.com

75. 8b. Cebu Pacific’s communication stand out because.. 2 to 5 advertising methods are implemented at the same time! http://cebupacificairv54.blogspot.com

76. 8b. And no one has yet to do the… Php0 fare! http://cebupacificairv54.blogspot.com

77. 9. Cebu Pacific’s main distribution channel is the internet Three principal distribution channels: Internet Booking sales office, call centres, client accounts Third-party sales outlet Distributors General Sales Agents Wholesalers and Preferred sales agents http://cebupacificairv54.blogspot.com

78. 9. Cebu Pacific has many payment options Cash and Credit Card Transaction, Over the Counter, ATM, Online Banking, (Mobile) Phone Banking http://cebupacificairv54.blogspot.com

79. 10. Cebu Pacific’s generic winning strategy is Niche Low Cost Producer Supply and Distribution Leverage Differentiation Niche http://cebupacificairv54.blogspot.com

80. 10. Changing the game by finding a niche Niche market is price conscious young professionals who want a no-frills service and prefer a “Fun Flight” experience Differentiates brand with other LCCs End result – No. 1 domestic carrier http://cebupacificairv54.blogspot.com

81. Looking Forward: Recent Market-changing Event Operations will begin Q3 2011 Joint venture between Air Asia & Filipino investors Promises low fares to compete with Cebu Pacific & PAL Travel to both domestic & international destinations with Clark as its hub 5 brand-new A320 planes this year with target of 20 by 2015 http://cebupacificairv54.blogspot.com

83. Flights to/from 10 countries

84. 49 total destinations (incl. domestic)

85. RP’s leading domestic carrierhttp://cebupacificairv54.blogspot.com

86. Adapting to Change Air Asia is a rookie in the Philippine Market Cebu Pacific should continue offering promos that connect to the public, using their tag-lines such as “for every Juan” to capture that sense of Pinoy ownership Air Asia is a more experienced airline CP should improve on customer service and timely schedule of flights so that users will not switch to Air Asia http://cebupacificairv54.blogspot.com

87. Adapting to Change Air Asia is no-frills and no-fun Air Asia also follows the no-frills flights model. However, they also don’t have additional activities such as the Fun Flights, an advantage when capturing the Filipino market. Air Asia will be directly competing with CP and PAL for domestic & international destinations CP should increase their destinations to include up & coming tourist attractions, thereby widening their lead against old & new competitors (Batanes, Marinduque, etc) http://cebupacificairv54.blogspot.com

88. 61 SUMMARY http://cebupacificairv54.blogspot.com

89. Steps 1 to 5Reaching out to every “Juan” Cebu Pacific’s PTM are the budget-conscious young travelers. Who want affordable, no-frills travel experience. Can opt for Philippine Airlines, AirPhil, ZestAir, Seair Gap is there are other brands who can offer lower cost fares and possibly better service The market size is Php 40.41 Billion. Cebu Pacific Air’s market share is Php 19.48 Billion http://cebupacificairv54.blogspot.com

90. Steps 6 to 10A fun flight at a low cost Cebu Pacific offers year-round low fares. Is priced 51% lower than PAL and 11% and 21% higher than AirPhil and Zest Air Uses sales promotion, word of mouth, advertising, public relations, and events and experiences Flights are mainly booked online Cebu Pacific adopts niche marketing, anticipates competition http://cebupacificairv54.blogspot.com

91. 10 STEP Marketing Plan for Cebu Pacific Air, Inc. Avellana.Gan.Quizon.Li.Turingan June 2011 64 http://cebupacificairv54.blogspot.com