It's A Bird, It's A Plane

All these talks about airport security reminded me of a question tossed at me during my last marketing seminar. No, dear, I am not with airline security much to the frustration of my Nancy Drew alter ego.

One of the participants asked me for my thoughts regarding that promo by Air Philippines and Cebu Pacific.

Earlier this year, 2 major airline companies had a promo. Cebu Pacific launched their P1,000++ promo to celebrate their anniversary. The deal was that round trip tickets to any destination in the country will only cost you P1,000++. Flying dates were set for August, I think. Air Philippines offered the same promo. The country's flagship carrier, Philippine Airlines (PAL), did not join the bandwagon. Very smart of them.

Nobody wins in a price war. Unless you've calculated thoroughly the risks to your bottom line, I really wouldn't advice you to go this route. Even if the impact to the other components of your marketing strategy (e.g. brand awareness by inducing trial) is very good, it's still a risk that you must think over carefully.

You engage in a price war and it is your bottom line that suffers. One day, you will wake up and discover that there's nothing left for you to operate your business with because there's no more money in the piggy bank.

If your competitors have pricing that you cannot compete with, the best way to go is to add more value to your service or products. You don't have to slash your prices because your suppliers are certainly not slashing theirs. The salaries of your employees remain the same. And I assure you that the dire state of your gas tank will have no impact to the price of crude oil in Saudi Arabia.

You are in business to make money, not lose it. Translation? ALL marketing activities should aim to benefit your profit margins. Otherwise, why are you in business? Because you're bored? When I'm bored, I watch TV as I hope the rest of the world does.

I'm guessing these promo campaigns were launched to induce trial and, hopefully, re-trial. The aim eventually is to make switchers out of PAL's current customer base to happy users of Cebu Pacific and Air Philippines. It's all the same kind of plane anyway so why choose them over us?

Hmmm...maybe because PAL was in the market first? Al Ries and Jack Trout did say in their book, The 22 Immutable Laws of Marketing, "it is better to get into the mind first than to try to convince someone you have a better product than the one that did get there first."

PAL here is so synonymous to flying that, when people want to travel to any local destination, no one bothers to ask which airline they will take. It is assumed you will fly by PAL. Sorta like toothpaste. Pabili nga ng Colgate. 'Yung Close-Up. (I'd like to buy Colgate. Close-Up, please. Something is lost in the translation so the impact is not the same but, hopefully, you get my point.)

Over the years, PAL has built a brand with a reputation for safe air travel. Oh, who cares that several of their planes slammed into mountains, lakes and trees? People forget that when they're going deaf on SeaAir planes going to Boracay. Personally, I'd rather fly than sail and I have Jaws to blame for that. I think it's so un-cinematic to die as fish food for Orca. It is more romantic, however, to blow up in flames on a plane 30,000 feet above sea level. But, that's just me.

Do I fly Cebu Pacific? Only when PAL is fully booked. Do I fly Air Philippines? No. Why? For one thing, I hate the airport they use. It's the old domestic airport with a smoking box that gives you a pretty good idea of how it must feel like to be gassed at Auschwitz. Air travel is not as glamorous as they make it out to be. Must you add to my anguish by giving me an airport with really bad toilets?!

Then, there is the matter of branding. If PAL who has been here for generations could have planes that slam on mountainsides, what more a new airline who bought second hand planes made during the heyday of Howard Hughes?

Air travel is synonymous to life. You prefer to be alive when you reach your destination, yes? Therefore, you will choose the airline with a better reputation (translation - brand) for safe air travel. Your sane mind tells you it's all the same planes and the pilots all went to the same schools. Still, branding is about an emotional connection. And my emotional connection tells me that PAL will get me there in one piece with only my business suit suffering for my choice.

I do not get the same connection from Cebu Pacific and Air Philippines. Why? Because they have not built their reputation long enough to give me that emotional connection. And therein, I think, lies their problem.

Why don't you people embark on a kick ass brand campaign first? Assure me that you will offer the same thing that PAL does for half the price. It is also probably best to point out why you're cheaper. Whatever the reason is for the cheaper price, it's not because you shortchanged on air safety but, rather, you served Granny Goose nacho chips instead of Goldilocks cake. Because, right now, I'm just thinking you're cheaper because you probably threw out some of those life vests.

Cebu Pacific has this gimmick where flight attendants wear casual outfit during certain days. They have a "Bring Me" game on board. I am clueless as to the point of all these. Cebu Pacific is a fun airline? Honey, airlines are never fun because air travel is not about fun. It is about comfort and safety. It would help your cause if you give out fluffier blankets, better reading material, enough with the hideous nacho chips and - OH YES! Assurances that there are enough oxygen masks on board.

Do I think that price promo worked? Probably.

A lot of people availed of the promo. I even asked my travel agent about it. Fully booked, that's what she said. Flights to the beach destinations were all gone in a flash.

Now, that I think about it, who wants to be in Boracay in August? The beach - precisely because it is a beach - is meant to be enjoyed at the height of summer. Not when tropical storms are hammering beach shores and ensuring certain death by falling coconuts. Then again, this is probably the best time to be in Boracay. No annoying tourists around and the sea water does not taste like Coppertone.

When you have the marketing budget and you're new to the playing field, use that budget wisely. Understand the market and analyze the best way to penetrate it. Don't just go embarking on campaigns that are price-driven. Oftentimes, you will discover that price is not always what drives them to buy a product or service.

You want your market to try your product and stay with you. Not just try it because the price fits their budget. When your price no longer does that, chances are very high that they will leave you and return to the brand they've always patronized. You will then be forced to remain at that price range to retain your customer base but at great cost to your own profit margin.

Continue reading this...

Marketing Confessions of Sunny whispered 1:59 PM
|


. . .