10 step marketing plan

1
10 STEP
Marketing Plan for
Cebu Pacific Air, Inc.
Soleil Gan
June 2011
http://taeyangxinyi.blogspot.com

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

1. Cebu Pacific’s PTM are budget-driven travelers
2. Who wants quality low cost travel experience with
friends & family
3. Can opt for Philippine Airlines, AirPhil, ZestAir,
Seair
4. Gap is there are other brands who can offer lower
cost fares and possibly better service
5. The total market is Php28.28B; Cebu Pacific share
is 48.20%
Steps 1 to 5
Shows who cares…
customers and competition

6. Budget Travel airline
7. Cebu Pacific is priced lower than Philippine
Airlines, but higher than ZestAir and AirPhil
8. Uses Discounts, Print, Experience, among
others
9. Flights can be booked anytime, anywhere
10. Cebu Pacific is a Low Cost Producer
Steps 6 to 10
Shows how Cebu Pacific is
better

1. Cebu Pacific’s target market
are budget conscious individuals
 Demographics: 21-35; Male and Female;
lower B to C; may be Single or Married
 Lifestyle: Working or starting to work; budget-
conscious/driven; comfortable with using the
internet; keen to travel (to see the world, time
away from a fast-paced life)
 Behavior: Travels during long weekend
holidays; with a friend or a group of people;
an average of 3x a year*Exclusion of a certain demographic group in PTM does not mean they do not buy the product. Some do buy, b
majority don’t which is why limited marketing resources are best focused on PTM

PTM needs have the travel
experience
6
Reference: Maslow’s Hierarcy of Needs Marketing Management, 11th
ed, Philip Kotler
I want to be recognized by my peers.
I want to belong

2. Young Adults have similar
travel needs, wants & demands
Budget-driven Young Adult Travelers need the
security when traveling, a sense of
belongingness and recognition from peers that
he/she has the (financial) capability to travel (with
them).
Budget-driven Young Adult Travelers choose CebPac
over other airlines because of regular promo
fares, all year round low(er) cost fares, &
freedom of choice on unnecessary add-ons.
Budget-driven Young Adult Travelers are demanding
quality low cost flights where they can be
comfortable when traveling.

3a. Cebu Pacific has a number
of competitors, big and small
 Direct: Philippine Airlines, ZestAir, AirPhil
Express, Seair
 Indirect: Super Ferry, Negros Navigation,
Sulpicio Lines, RORO, private cars, buses
 Variable: Fare rates, flight availability,
destination choices, airline membership,
traveler’s budget, reputation, travel packages

3b. Cebu Pacific is the Cost
Leader for local airline companies
Price vs.
Destination type
Domestic International*
High Priced
Medium Priced
Low Priced
CEBPAC
AirPhil ZestAir
PAL
Seair
As of 2011
*foreign airlines not included: Cathay 10%, Singapore Airlines 5%
PAL
CEBPAC

Cebu Pacific’s positioning is
detailed…
As of 2011
Functional Benefit
CebPac PAL AirPhil ZestAir Seair
Dom Int'l Dom Int'l Dom Int'l Dom Int'l Dom Int'l
Regular Promo Fares
Advanced quarterly promo
Destination Availability
Seat Selection
Travel Insurance
Prepaid Baggage (addtl)
No Check In Baggage
Travel Packages
Mileage Program
Comfort
Food on board (free)
Games on board

4. Cebu Pacific strongly positions
itself with a low cost strategy
Cebu Pacific is the only airline that:
 Is able to provide the cheapest rate at Php0 base fare,
 is able to provide lower rates still with regular monthly
promo fares, and
 gives the choice of having a check-in baggage as an
add-on to the fare rate
Cebu Pacific is only able to provide low(est) cost fares
when there are promos.

4. Positioning: as per the tagline
“It’s time everyone(Juan) flies”
-http://www.cebupacificair.com
where one=Juan, pertains to every Filipino, no matter
the social class, can now have the opportunity to “fly”.
The current positioning of the brand is Cost Leadership, but with
the need of the PTM for quality performance/service, there may
be a need for a mix of Cost Leadership and Service Orientation.

5a. Based on Press Releases, the
Airline market is at Php28.28B
December 2010: Market Size for aviation
market (domestic)
 Cebu Pacific 48.20%
 Philippine Airlines 32.10%
 Air Philippines 11.20%
1st
Q 2011: Domestic passengers
 Cebu Pacific Php2.45M
 Philippine Airlines Php2.34M
as of 2010

 http://www.centreforaviation.com/news/2010/09/03/philippine-airline
 https://onlinebooking.philippineairlines.com
References

5b. Based on Cebu Pacific’s data, its
market share is at 48.20%, where total
market size is Php29.814
Cebu Pacific claims its market share for 2010 is at
48.20%
Given that the average domestic price of a Cebu
Pacific one way ticket is at Php1,799:
Php1,799 x passengers of 5 local airlines = Php29.814
Cebu Pacific’s 2010 combined passenger revenues
is at Php24.656
http://www.cebupacificair.com/aboutus

5c. Consumer data shows that
market size may be Php28.259B
With a total of 16.56mil
passengers for 2010:
16.56mil x Php1,706.46
= Php28.259B
http://www.abs-cbnnews.com/business/02/13/11/
domestic-tourism-cheaper-fares-hike-2010-airline-
passengers-12

5. May be concluded that
passenger airline market is at
Php28.28 Billion
1. Competitor/Industry data= Php28.28B
2. Company data = Php29.814B
3. Customer Usage data = Php28.259

6a. Booking for a travel is easy with
the available online booking feature
Philippines Airlines
Super Ferry
Cebu Pacific

Cebu Pacific, Philippine Airlines,
Super Ferry

6b. What is Cebu Pacific to
the public?
Cebu Pacific offers year round Lite fares for
all destinations.
Known for its Fun Flights—fun & games while
onboard.
Cebu Pacific airplanes may be the youngest
(currently) in the industry.
http://www.cebupacificair.com/aboutus/index.html

 16 international flights: China, Hong Kong, Japan, Macau, South
Korea, Taiwan, Brunei, Indonesia, Malaysia, Singapore,
Thailand, Vietnam
 33 domestic flights: Bacolod, Calbayog, Catarman, Caticlan,
Cebu, Dumaguete, Iloilo, Kalibo, Roxas City, Tacloban,
Tagbilaran, Busuanga, Cauayan, Clark, Laoag,Legazpi, Manila,
Naga, Puerto Princesa, San Jose, Tuguegarao, Virac,Butuan,
Cagayan de Oro, Cotabato, Davao, Dipolog, General Santos,
Ozamiz, Pagadian, Siargao, Surigao, Zamboanga
Cebu Pacific offers the
following destinations…

7. Cebu Pacific is truly priced
competitively vs its competitors
Davao 1,799 2,638 1,596 793 n/a
Cebu 999 1,638 757 695 n/a
Caticlan 1,399 2,025 1,150 n/a 2,455
GenSan 2,099 2,738 n/a n/a n/a
Puerto
Prinsesa 1,299 1,838 1,239 891 n'a
In Php; one way base fare for the period of July 2, 2011;
Checked on the night of June 9, 2011

7. CebPac is around 45% lower than
PAL but is 15% higher than AirPhil and
40% higher than Zest Air
Davao 100% 146.64% 88.72% 44.07% -
Cebu 100% 163.96% 75.78% 69.57% -
Caticlan 100% 144.75% 82.20% - 175.48%
GenSan 100% 130.44% - - -
Puerto Prinsesa 100% 141.49% 95.38% 68.59% -
total base 145.46% 85.52% 60.74% 175.48%
It must be noted that the prices used were regular fares, not promo fares.
Although Airphil and ZestAir may be cheaper at the moment, CebPac may
come up with a promo sometime soon.

 Cost Leadership
 CebPac can counter the prices of ZestAir
and AirPhil with their regular promo fares
7. Pricing Strategy is…

8a. Cebu Pacific uses Sales
Promotion, Advertising, Fun Flight
experiences
1
3 4
5
2

 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

8a. Cebu Pacific always has at
least a 1/3 spread in the
newspapers for its ads

8a. Cebu Pacific came up with
the Fun Flights program
Games and prizes
And a dancing cabin crew while
explaining the safety procedures!

8a. Cebu Pacific uses
Interactive Marketing by…
Sending emails
Posting on Facebook

 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

8b. AirPhil empasizes on the
“free” check-in baggage

8b. Philippine Airlines has a
“lowest fare” search engine

8b. Seair has the fastest flight
to Boracay—at 35mins!
Number of flights
to Boracay is
even increased!

8b. ZestAir has a membership
card that acts like a discount
card

2 to 4 advertising methods are implemented
at the same time!
8b. Cebu Pacific’s
communication stand out
because..

8b. And no one has yet to
do the…
Php0 fare!

9. Cebu Pacific flights can be
booked individually or through
an agent
 Company website; travel agent; over the
counter Cebu Pacific Agents
 Company website: Global
Travel/OTC CebPac Agent: Nationwide
 Print-your-own itinerary ticket
 Cash and Credit Card Transaction, Over
the Counter, ATM, Online Banking,
(Mobile) Phone Banking

10. Cebu Pacific is a Low Cost
Producer
Cebu Pacific’s main strategy is to get more
passengers through offering of low cost promo fares.
It benefits from the current inflation concern as
people would tend to be more budget-conscious
when buying.
A very basic but relatively good service provided by
low cost producer—we get what we paid for.

39
SUMMARY

10 step marketing plan

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