Integrated Marketing Communications Plan
Industry/Company review
CBU Airlines is a company based in Riverside, California. The company has the entire infrastructure necessary to become a prominent player in the airline industry, including jets, employees and terminals. In light of this, the company needs a new integrated marketing communications plan (IMC) to enable it to compete effectively with other airlines. The U.S. domestic airline industry earns in excess of $158 billion in revenue each year. Furthermore, the industry has been experiencing growth because of increased business and consumer spending as the country recovers from the 2007-2009 recession. In addition, the growth in the industry has been supported by the collapsing global energy prices (Ramon, Moreno-Izquierdo, & Ribes, 2015). Therefore, CBU Airlines’ entry into the market has come at an opportune time. CBU Airlines intends to offer product lines that are similar to the currently existing ones in the industry, which are passenger and cargo transportation services.
Being a new entrant to the market, CBU Airlines lack a sales history, market share or brand image. However, as is with most other airlines, the primary market segments for CBU airlines include business and non-business passengers, although airlines may also segment their markets according to geographic regions. The consumer decision process varies largely according to the primary market segments. Price is the most important factor that influences brand selection by non-business passengers, while business travellers usually consider service quality as the most important factor that influences their brand selection. In the case of non-business passengers, individuals act as both the decider and the influencer of the purchase decision. In contrast, organizations are usually the deciders and/or influencers of the purchase decision for business passengers. However, the consumer buying behaviour is characterized by limited problem solving in both cases. Furthermore, the service is characterized by low-involvement purchase for both business and non-business travellers. The limited problem solving and low involvement for business passengers stems from the fact that they are habitual travellers. Consequently, business passengers require little effort to make their purchase decision. On the other hand, the limited problem solving and low involvement observed among non-business passengers is because the choice of airline has little effect on their lifestyle, which leads them to put minimal effort in their purchase decision (Baker, 2013).
Competitive Review
CBU Airlines’ direct competitors include American Airlines Group, Delta Air and Southwest Airlines. In addition, CBU Airlines face indirect competition from other airlines that ply regional routes such as Surf Air and SkyWest Airlines (Sarker, Hossan, & Zarnan, 2012). The competitive review for the direct competitors of CBU Airlines is as follows:
American Airlines Group
Sales – $122.48 billion
Market share – 19.0%
Growth - -3.89%
Key benefits – Passengers can travel to any part of the country
Positioning – extensive national coverage
Advertising and promotion budget - $60 million
Message and media strategies - high employee engagement at work and through internet/interactive media (American Airlines Group, 2015)
Strengths and weaknesses
American Airlines strength is its strong national appeal because of its wide coverage of the country. On the other hand, the company’s weakness is its susceptibility to low passenger numbers in the domestic market.
Delta Air
Sales – 117.84 billion
Market share – 17.0%
Growth – 0.85%
Key benefits – Can meet the needs of diverse clients across the globe
Positioning- Business segments include passenger and cargo transportation and refinery
Advertising and promotion budget - $50 million
Message and media strategies – Extensive use of social media to communicate with customers (Delta Airlines, 2015)
Strengths and weaknesses
A strength of Delta Air is its use of social media, which reduces its advertising budget. However, a weakness associated with the use of social media is it can exclude the older members of society that are not savvy in the use of social media.
Southwest Airlines
Sales – $109.39 billion
Market share – 18.3%
Growth – 6.53%
Key benefits – cheap airfares
Positioning – Low-cost strategy
Advertising and promotion budget - $223 million
Message and media strategies – Use of social media as a marketing tool (Southwest Airlines, 2015)
Strengths and weaknesses
The strengths and weaknesses of Southwest Airlines are similar to the ones experienced by Delta Air.
Segmentation, Targeting and Positioning
The target market for this campaign includes both business and non-business travellers. Business travellers are targeted because their high frequency of travels can provide CBU Airlines with a steady income flow. On the other hand, non-business travellers are targeted because they make up the largest segment of air travellers. Therefore, CBU Airlines must target both market segments to achieve stability and increase its market share. In light of this, CBU Airlines will use a positioning strategy of brand and price. The brand positioning strategy will target the business passengers while the price positioning strategy will target non-business passengers (Smith, Grimm, Gannon, & Chen, 2014).
Communications Objectives and Budget Request
The communication objectives of this campaign are based on the AIDA model of response hierarchy. According to the AIDA model, the communication objectives of CBU Airlines include the following:
Awareness – the cognitive stage of the communication process that seeks to gain the customer’s attention
Interest – the affective stage of the communication process that seeks to stimulate the customer’s interest in the product
Desire – the affective stage of the communication process that seeks to encourage the customer to buy the product
Action – the behavioural stage of the communication process where the customer purchases the product (Rawal, 2013)
CBU Airlines needs to spend $70 million to achieve the campaign objectives. The budgeting method that will be employed is the goal and task method. According to this approach, CBU Airlines will define specific objectives and determine the tasks necessary to achieve the objectives. This will be followed by an estimation of the costs associated with performing the identified tasks, which will provide a figure for the required budget. The monies will be allocated according to the following percentages:
Traditional advertising-40%
Sales promotions-30%
New media-30%
Creative Strategy Statement
Objectives
The only airline offering a quality and affordable travel experience.
Key benefits
Excellent customer service
Comfortable flight experience
Low airfares
Safety
Support
Staff are well trained in customer service
Planes have ample leg room for enhanced customer comfort
CBU Airlines is categorized among the ultra-low cost airlines in the country
The company only hires pilots with extensive flight experience
Claims and promises
Once customers fly with CBU Airlines, they will never choose another airline
CBU Airlines promises to refund its customers fully in case they encounter problems that originate from a fault with the company
Reassurance
CBU Airlines is a fully certified by the Federal Aviation Authority
IMC Mix
The major program elements of the IMC campaign include advertising, sales promotion, public relations, internet and social media, direct marketing and personal selling. The specific objectives for each element and rationale for the recommended mix as provided as follows:
The advertising – objective is to create awareness about the airline and the rationale is that the airline is a new entrant in the U.S. domestic airline industry
The sales promotion – objective is to build a customer base for CBU Airlines and the rationale is that the company currently has no share of the market
Public relations – objective is to create a good image of the company among the public and rationale is that CBU needs a strong corporate image to attract customers
Internet and interactive media – objective is to reach a wide target market that includes the youth and the rationale is that young people are the heaviest users of the internet and social media in society
Direct marketing – objective is to reach organizations and the rationale is that organizations cannot be easily swayed through the conventional advertising channels
Personal selling – objective is to create a viable sales force for the organization and the rationale is that CBU Airlines needs competent sales personnel to engage potential customers
Specific Media Objectives/Mix
CBU Airlines’ marketing campaign intends to have a national reach at least four times a week for six months. The message weights sought will be gross rating points (Chang & Kinnucan, 2013). The geographical allocation of the media budget will be 60% for the western part of the U.S. and 40% for the eastern part of the U.S. This because the CBU Airlines intends to build a strong presence in its region first, which is the western U.S. The media used will be national television stations and regional television stations in the western U.S. In addition, the advertisements will be featured in both national and regional newspapers in the western U.S. This will serve the purpose of reaching a national audience while creating a strong imprint in the western region of the U.S., where CBU Airlines has its headquarters. The scheduling pattern employed will be the pulsing model (Dube, Hitsch, & Manchanda, 2005). In this case, CBU Airlines will use low-level advertising during off-peak periods and heavy advertising during peak periods such as holidays. The media rationale statement about the proposed media plan is CBU Airlines will concentrate its advertising efforts in the region and during the time in which it can achieve the maximum efficiency and effectiveness of the advertisements.
Evaluation Program
The evaluation program involves the measuring of the effectiveness the IMC program elements used. In this case, the evaluation will be done as follows:
Advertising will be evaluated by testing the comprehension and reaction of customers. The tests will occur one month after the start of the advertisements, and they will be done at CBU Airlines headquarters and other designated locations in the country, preferably airports.
Sales promotion will be evaluated by examining the company’s sales revenue after one month of operations. The evaluation will be done by the company’s accountants at its headquarters.
Public relations will be evaluated by testing the perspectives of customers towards the company. This will occur two months after the start of the public relations campaign through the use of questionnaires.
Internet/interactive will be measured through the number of visitors to the company’s website and the company’s ranking on internet search engines. This will occur immediately after the start of the marketing campaign and will be done by the company’s IT department.
Direct marketing will be evaluated by the number of business passengers that use the airline after being prompted to do so by their organizations. This will occur 2 months after company begins its operations. The tests will occur at the company’s headquarters.
Personal selling will be evaluated by the number of passengers that fly CBU Airlines because of the direct efforts of the company’s sales personnel. This will be done 3 months after the start of the airlines’ operations, with the tests taking place at various airports in which the company operates.
References
American Airlines Group. (2015). United States Securities Exchange Commision. Retrieved from https://www.sec.gov/Archives/edgar/data/4515/000119312516474605/d78287d10k.htm
Baker, D. (2013). Service Quality and Customer Satisfaction in the Airline Industry: A Comparison between Legacy Airlines and Low-Cost Airlines. American Journal of Tourism Research, 2(1), 67-77.
Chang, H.-S., & Kinnucan, H. W. (2013). Measuring exposure to advertising: A look at gross rating points. Agribusiness, 8(5), 413-423.
Delta Airlines. (2015). United States Securities Exchange Commision. Retrieved from https://www.sec.gov/Archives/edgar/data/27904/000002790416000018/dal1231201510k.htm
Dube, J.-P., Hitsch, G. J., & Manchanda, P. (2005). An Empirical Model of Advertising Dynamics. Quantitative Marketing and Economics, 3(2), 107-144.
Ramon, A., Moreno-Izquierdo, L., & Ribes, J. P. (2015). Growth and internationalisation strategies in the airline industry. Journal of Air Transport Management, 110-115.
Rawal, P. (2013). AIDA Marketing Communication Model: Stimulating a purchase decision in the minds of the consumers through a linear progression of steps. International Journal of Multidisciplinary Research in Social and Management Sciences, 1(1), 37-44.
Sarker, A., Hossan, C., & Zarnan, L. (2012). Sustainability and Growth of Low Cost Airlines: An Industry Analysis in Global Perspective. American Journal of Business and Management, 1(3), 162-171.
Smith, K. G., Grimm, C. M., Gannon, M. J., & Chen, M.-J. (2014). Organizational Information Processing, Competitive Responses, and Performance in the U.S. Domestic Airline Industry. Academy of Management Journal, 34(1), 60-85.
Southwest Airlines. (2015). United States Securities and Exchange Commission. Retrieved from https://www.sec.gov/Archives/edgar/data/92380/000119312512049647/d293991d10k.htm
