presentation on modern airlines

8/8/2019 Presentation on Modern Airlines

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A

PRESENTATIONON

MODERN AIRLINES

BY

AMIT TAMREKAR


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Profit, Profitability & BEP

Scenario 1 :- No Segmentation

SALES (240 Seats * $ 250) = $ 60,000

- V.C (240 Seats * $ 20) = $ 4,800

= Con = $ 55,200

- F.C = $ 50,000

= Profit = $ 5,200


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P V Ratio

= Contribution = $ 55,200 * 100

Sales $ 60,000

= 92



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B EP = Fixed Cost * 100PV

= $ 50,000 * 10092

Sales B EP = $ 54,347Seats B EP = 217 Seats



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Scenario 2 :- Class-wise Segmentation

ECONOMY

SALES (144 Seats * $ 250) = $ 36,000- V.C (144 Seats * $ 20) = $ 2,880

= Con = $ 33,120

- F.C = $ 16,667

= Profit = $ 16,453


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Scenario 2 :- Class-wise SegmentationECONOMY

Profit = $ 16,453

Profitability = Profit * 100Revenue

= $ 16,453 = 45.70 %$ 36,000


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Profit, Profitability & BEPScenario 2 :- Class-wise Segmentation

ECONOMY

Profit Volume Ratio

= Contribution = $ 33,120 * 100Sales $ 36,000

= 92


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ECONOMY

B EP = Fixed Cost * 100

PV

= $ 16,667 * 10092

Sales B EP = $ 18,116

Seats B EP = 72 Seats


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BU SINESS CLASS

SALES ( 72 Seats * $ 500) = $ 36,000- V.C ( 72 Seats * $ 40) = $ 2,880

= Con = $ 33,120

- F.C ( $ 50 k / 3 + $ 2500 ) = $ 19,166

= Profit = $ 13,954


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Scenario 2 :- Class-wise SegmentationBU SINESS CLASS

Profit = $ 13,954


= $ 13,954 = 38.76 %$ 36,000


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BU SINESS CLASS

Profit Volume Ratio


= 92


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BU SINESS CLASS


PV

= $ 19,166 * 10092

Sales B EP = $ 20,832



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FIRST CLASS

SALES ( 24 Seats * $ 1000) = $ 24,000- V.C ( 24 Seats * $ 100) = $ 2,400

= Con = $ 21,600

- F.C ( $ 50 k / 3 + $ 2500 ) = $ 19,166

= Profit = $ 2,433


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Scenario 2 :- Class-wise SegmentationFIRST CLASS

Profit = $ 2,433


= $ 2,433 * 100 = 10.13 %$ 24,000


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FIRST CLASS

Profit Volume Ratio


= 90


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FIRST CLASS


PV

= $ 19,167 * 10090

Sales B EP = $ 21,297



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TOTAL PROFITABILITY

1) ECONOMY = $ 16,458

2) BUSINESS CLASS = $ 13,9543) FIRST CLASS = $ 2,433

TOTAL = $ 32,845

Total Profitability = Profit * 100 = 34.20 %Sales


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D iscussion Questions

Q.1] Benefits of Segmentation to all stakeholders of the Air-Liner.Ans:- To Customers

1) Choice as per budget and comfort2) More Convenience

To Marketers1) More ease and content to create effective

marketing and advertising Strategies.2) Increase in Target market range.


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D iscussion QuestionsQ.1] Benefits of Segmentation to all stakeholders of

the Air-Liner.Ans:- To Employees

1) Generation of Newer EmploymentOpportunities by addition in fleet.

2) Salary increments and Incentives

To Suppliers1) Increasing fleet will demend new Carriers. E.gsuppliers like AIRBUS & BOEING.

2) Suppliers of Food and Beverages on board will

have more demand.


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Q.1] Benefits of Segmentation to all stakeholders of the Air-Liner.Ans:-

To Stakeholders1) Better ROI and EPS.2) Long term Investment and stability.


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Q.2] The Beneficiaries would be .Ans:-1) Customers2) Suppliers3) Stakeholders4) Employees5) The company itself


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Q.3]Ans:-

1) The Economy class and the Business Classsegments are subsidizing the First Class Segmentsince the Profitability from Business class issubstantially lower than that of the other two.

Hence, to get to a decent ROI, the other twosegments are covering up for the Business Class.


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Q.3]Ans:-2) A)Absolute Satisfaction : Refers to the satisfaction

of the customers by deriving value from the

respective/ specific services offered by the Supplier of goods or service.

B) Relative Satisfaction : Refers to the satisfaction of the customers by deriving value from the respective/specific services offered by the Supplier of goods orservice in comparison to that of others.


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Q.3]Ans:-3) There is a possibility that the Economy class

passengers may feel Relatively Dissatisfied sincethey would be treated differently on the samecarrier and hence may think of the differences inservices offered to other superior classes.

The management can prevent it by changing thename of the class from Economy to Prudent orsomething else to psychologically detach thepassenger from being an ordinary class traveler.


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Q.3]Ans:-3) On the other hand if the class are physically divided

on board and there is no access between the First &Business class and the Economy Class, then it mighthelp to prevent the Economy class passenger to seeand compare the services offered to such luxury

classes.


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D iscussion QuestionsQ.4] When can positioning go wrong ?Ans:-

1. Under-positioning:Market only has a vague idea of the product .

2. Over-positioning:Only a narrow group of customers identify with the product.

3. Puzzling positioning:Buyers have a confused image of the product as it claims too many

benefits or it changes the claim too often.

4 . Unclear positioning:Buyers find it difficult to believe the brand s claims in view of theproduct s features, price, or manufacturer.


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D iscussion QuestionsQ.5] Segmentation Variables used by .Ans:-

1. AirlinesComfortLuxuryBudget

2. RefrigeratorsApplicationNewer technology,Aesthetic designPrice

Region Urban Semi-Urban, Rural

3. Ice- Cream:Contents Fats etcEnd User Kids or adults

Price High, Medium or Low


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Segmentation variables for Ice-Cream


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POSITIONINGDifferent positioning strategies

1. Attribute positioning:The message highlights one or two of the attributes of the product.2. Benefit positioning : The message highlights one or two of thebenefits to the customer.

3. Use/application positioning : Claim the product as best for someapplication.4 . User positioning: Claim the product as best for a group of users. -Children, women, working women etc.5. Competitor positioning: Claim that the product is better than acompetitor.6 . Product category positioning: Claim as the best in a productcategory Ex: Mutual fund ranks Lipper.7. Quality/Price positioning: Claim best value for price

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