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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
Profit, Profitability & BEP
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B EP = Fixed Cost * 100PV
= $ 50,000 * 10092
Sales B EP = $ 54,347Seats B EP = 217 Seats
Profit, Profitability & BEP
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Profit, Profitability & BEP
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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Profit, Profitability & BEP
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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Profit, Profitability & BEPScenario 2 :- Class-wise Segmentation
ECONOMY
B EP = Fixed Cost * 100
PV
= $ 16,667 * 10092
Sales B EP = $ 18,116
Seats B EP = 72 Seats
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Profit, Profitability & BEP
Scenario 2 :- Class-wise Segmentation
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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Profit, Profitability & BEP
Scenario 2 :- Class-wise SegmentationBU SINESS CLASS
Profit = $ 13,954
Profitability = Profit * 100Revenue
= $ 13,954 = 38.76 %$ 36,000
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Profit, Profitability & BEPScenario 2 :- Class-wise Segmentation
BU SINESS CLASS
Profit Volume Ratio
= Contribution = $ 33,120 * 100Sales $ 36,000
= 92
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Profit, Profitability & BEPScenario 2 :- Class-wise Segmentation
BU SINESS CLASS
B EP = Fixed Cost * 100
PV
= $ 19,166 * 10092
Sales B EP = $ 20,832
Seats B EP = 42 Seats
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Profit, Profitability & BEP
Scenario 2 :- Class-wise Segmentation
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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Profit, Profitability & BEP
Scenario 2 :- Class-wise SegmentationFIRST CLASS
Profit = $ 2,433
Profitability = Profit * 100Revenue
= $ 2,433 * 100 = 10.13 %$ 24,000
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Profit, Profitability & BEPScenario 2 :- Class-wise Segmentation
FIRST CLASS
Profit Volume Ratio
= Contribution = $ 21,600 * 100Sales $ 24,000
= 90
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Profit, Profitability & BEPScenario 2 :- Class-wise Segmentation
FIRST CLASS
B EP = Fixed Cost * 100
PV
= $ 19,167 * 10090
Sales B EP = $ 21,297
Seats B EP = 21 Seats
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Profit, Profitability & BEP
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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D iscussion Questions
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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D iscussion Questions
Q.2] The Beneficiaries would be .Ans:-1) Customers2) Suppliers3) Stakeholders4) Employees5) The company itself
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D iscussion Questions
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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D iscussion Questions
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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D iscussion Questions
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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D iscussion Questions
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