Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
By Nikola Georgiev
Student ID:
07059973
2. Business Strategy
2.1. Airline Overview
2.2. Existing Market
2.3. Competitors Overview and Situation analysis
2.4. The Competitors
2.4.1. British Airways
2.4.2. Pegasus Airlines
2.4.3. Easyjet
2.4.4. Competitors products
2.4.5. Competitive advantage of Turkish Airlines.
4. Marketing Plan
4.1. Target Market
4.1.1. Market Share Estimates by Class
4.1.2. Load Factor
4.1.3. Turkish Tourism and Business segments
4.1.4. Expatriates in Turkey
4.1.5. Transit Passengers of Istanbul
5. Conclusion
7. References
1. Introduction
The objective of this marketing plan is to further develop Turkish Airlines market
share in summer 2010 and winter 2010/11 period through marketing programs and
initiatives. The task undertaken begins with overview of the company, its products for the UK
market and competitive advantage, followed by an in-depth analysis of the current situation
on the London, Manchester and Birmingham to Istanbul routes, by providing extensive
analysis of overall capacity between the city pairs and analysis of the competition. These
actions are being performed in order to better understand where Turkish Airlines should
focus its marketing campaign and how it should differentiate its product. The report also
looks at the airline internal strengths and weaknesses through SWOT analysis and identifies
the airline external operating environment through PEST analysis. Marketing promotions
highlighted in this marketing plan serve to increase market share in the short term while the
advertisements seek to increase product and brand awareness in the long term. Finally, the
report will be concluded with an overall summary of the company situation, market share and
evaluation of its future marketing activities.
2. Business Strategy
Turkish Airlines has pursued a strategy focused on growth and development for many years
and is now one of world‟s fastest rising airlines. A clear measure of Turkish Airline‟s rise is its
status as one of the world‟s 4-star airlines, as measured by Skytrax(1), which has covered
the airline sector for 18 years. Turkish Airlines now has its sights set on a 5-star rating.
Constantly seeking innovation, which it passes onto its passengers through high quality
service, Turkish Airlines is an airline that rapidly implements transformative solutions in
support of growth and development. Acting on these values, the airline will continue to build
upon its success as it advances towards becoming a global airline and a Turkish brand
name recognized around the world.
In 2008, Turkish Airlines has kept its position ranked as one of the fastest-growing airlines
among European Carriers in terms of capacity and traffic growth. When considering the
economical crisis affecting many European Carriers and leading them to decrease their
operations; Turkish Airlines has increased its annual passenger and the Available Seat
Kilometer (ASK) by 15% and 11,3% respectively. With its fleet of 127 aircraft, in 2009
Turkish Airlines carried 22, 5 million passengers and the number of transit passengers have
increased by 41, 3 % across a network comprised of 145 International and 36 domestic
destinations From Istanbul, Turkish Airlines operate various onward connections throughout
the Middle East and Central Asia. Turkish Airlines also have an extensive network of
domestic flights, with the shuttle service between Istanbul and the Turkish capital Ankara
being particularly well used. Since April 2008, Turkish Airlines became a Star Alliance
member enabling the company to offer even more destination through the code share flights
of its partners.
2.2. Existing Market
Turkish Airlines is one of the major operators connecting directly UK with Turkey (and
beyond) from London - Heathrow through its major hub in Istanbul – Ataturk Airport. Despite
there are other airlines servicing London – Istanbul route, such as Pegasus Airlines and
Easyjet, Turkish Airlines main competitor remains British Airways. Although Turkish Airlines
compete with a very strong positioned and well known operator as BA, the company remains
very stable and its market share is estimated to be 54% of the total market (Reuters 09).
Another advantage of Turkish Airlines is that the company serve the route to Istanbul
through regional airports in the UK, as Manchester (the 2nd largest airport after Heathrow)
and Birmingham. Never the less, it also operates flights to Istanbul from other airports such
as London Gatwick and London Stansted. Table 1 below shows the current flight schedule of
Turkish Airlines from UK to Istanbul.
Table 1
Flights Per
From To
Day
Birmingham Istanbul 1
International Ataturk
International
Istanbul 2
London Gatwick
Ataturk
International
Istanbul 3/5
London Heathrow
Ataturk
International
2
London Stansted Istanbul Sabiha-Gokcen
Istanbul 2
Manchester
Ataturk
International
2.4.3. Easyjet
Easyjet is a Low Cost carrier servicing London Gatwick - Istanbul Sabiha Gokcen Airport.
The airline is not classified as a main threat to Turkish Airlines services, even though it
operates from the 2nd largest airport in London – Gatwick. Its product has a low value
compared to the full service of Turkish Airlines. The airline is better positioned with flight
services within mainland Europe and has no regional connections within Turkey.
British Airways is a full service airline that provide similar product to Turkish Airlines and
therefore is considered as the main competitor. They provide the economy (leisure traveller)
product along with the upper economy and business class experience. BA‟s main advantage
on the route IST-LHR is the onward connections they provide to the rest of the world from
their operating hub LHR or through its One World airline partners. They also operate 2-3
flights daily feeding their extensive routes worldwide.
The most important factor separating Turkish Airlines from its competitors is its success in
maintaining reliability, speed and timeliness without compromising service quality. Flying
Turkish Airlines is an experience of its own, always associated with the Turkish hospitality –
experience of comfort, quality pre-boarding and onboard services and great customer
service.
Turkish Airlines competitive advantage in UK is based on its flight operations from three
London airports and two regional operations - Manchester and Birmingham, enabling the
company to increase its market share and passenger network. Flights frequencies are
another advantage that boosts passengers flying the airline to increase enormously.
Regional connections from its main hub in Istanbul, as well as more than 145 onward
connections to the Middle and Far East and Asian countries(and further 940 destinations
with its code share partners), enables Turkish Airlines to be one of the most desirable
airlines.
The onboard product combining economy service focused to the leisure passengers,
together with the unique business passengers‟ product, providing services, such as
dedicated check-in points, exclusive security gates and effortless passport control at low
fares assign the airline as one of the most preferred among different group of passengers.
The strategic marketing plan for 2010/11 is focusing on promoting Turkish Airlines as the
most favourable airline in the UK by empowering its brand name and creating better
awareness of the airline website and its products amongst the British public, local Turkish
communities and businesses.
The main objective of the marketing plan for Turkish Airlines is to increase the generated
revenue in the business segment in order to secure the financial sustainability and future
growth of the company and its premium product in the UK market. This will primarily be
achieved in three stages; firstly by defining the market to narrow the market focus to
consumers and businesses that are qualified to or are already users of business class air
travel, secondly by further identifying the available market from London and the rest of UK to
Istanbul and finally targeting the potential market for additional leisure and business travel on
the route. Each segment of the market will be targeted to increase Turkish Airlines sales and
improve the airlines load factors. Table 2 below summarises the marketing objectives:
Table 2
Political Economical
Turkey Turkey
50.9% of the company shares - public, dynamic economy;
the rest remain state-owned ; relatively large geographical area (780,000
strong political/governmental backup; sq km);
increasing disposable income among its
UK population;
Possible political instability that could worsen
the relations between the 2 countries ; UK
Economic downturn can result in decline of
air travel – particularly for business traffic;
Sociological Technological
Turkey Turkey & UK
unique growth opportunity;
population of 75 million; New fleet ;
e-ticketing ;
UK e-services ;
Huge presence of Turkish community ; e-customer care;
Growing UK population and increasing
demand for travel products ;
STRENGTHS OPPORTUNITIES
Turkey Turkey
Expanding home market economy and A growing market, despite the economic
favourable demographic; crisis;
Strategic geographic position; A popular tourism destination;
Substantial cost advantage over rivals; Benefiting from liberalisation policies;
Rising market share;
Star Alliance membership and close UK
relationship with Lufthansa; Extend coverage into Scotland;
National Flag carrier – European Capital of
UK Culture 2010 Airline;
Substantial market share; Business customers focus;
Great flight frequency; Drawing passengers into onward flights from
3 London airports + 2 regional services; Istanbul hub;
Great product and customer services;
WEAKNESSESS THREATS
Turkey Turkey
Higher risk organic growth strategy; LCCs increasing their presence ;
Massive fleet growth to fund; Currency shifts may inhibit profitability;
Under-utilising the potential of a strong
alliance;
UK UK
Market adaptation product; LCCs increasing their presence;
Product differentiation; British Airways product differentiation;
Brand/ specific product awareness; British Airways coverage expansion;
The primary target market for the airline is corporate business air travel. The main need of
this type of customers is the corporate discount available in return for volume. The company
product will be positioned to these customers to provide significant cost savings over
competitors. Both London and Istanbul are cities with many multinational companies and
businesses, which create a vast market for corporate travel. Corporate travellers that Turkish
Airlines should be targeting include, Deutsche bank, PwC, Delloit, Shell and several other
prominent corporations with links in Istanbul and London who fly business class and has
significant volume of business travel between the pair cities.
The secondary target market for the airline is the small business and independent business
travellers who typically fly from Heathrow to Istanbul but also from the industrial cities –
Manchester and Birmingham. The product will be positioned for these customers by
providing a FFP and a business class fare that is significantly lower than most traditional
fares (the two main needs of business travellers according to surveys). The product will also
be positioned to this target market as the one with the highest levels of service on board the
aircraft, significantly higher levels of comfort offered by the seats and a higher degree of
luxury compared to the competition.
The final target market for the airline is the luxury travel market that exists from London and
Manchester to Istanbul. The product will be marketed and positioned to these customers as
a „first class service at business class fares’. These customers are generally uninterested in
the frequency demanded by business travellers.
Table 3
Leisure 54%
Business 32%
Source: Reuters
4.1.2.Load Factor
The following table 4 shows Turkish Airlines traffic (RPK), capacity (ASK) and load factor in
% from 2005 – Sep 2009.
Table 4
Based on these figures and the growth on previous average load factors of 68%, the
marketing plan main objective will be to increase the airlines‟ average load factors to around
72% towards the start of the summer period, giving the airline a substantial 58% market
share of the total business and leisure capacity offered on the London to Istanbul route.
Through increased marketing and focused advertising campaigns, the marketing objective is
to further increase load factors by 5% over the summer period to 77% (so the airline will be
operating with very healthy, profitable load factors) and thus increasing Turkish Airlines
market share to 62.4%. (Figures calculated from Table 3 and Table 4)
4.1.4.Expatriates in Turkey
The latest statistics from TurkStat, the Turkish Statistics Institute, reveal that there has been
a steady increase in the numbers of expats going to live in Turkey year by year. Whilst exact
TurkStat figures relating to the number of expats coming from UK are not available, their
latest findings do show that now around 235,000 Britons moved to live in Turkey in the last
couple of years as the appeal of the nation grows and becomes more widely appreciated.
The main aim of the price promotions will be to reduce the number of empty seats on the
aircraft and hence to maximise revenue. Assuming that the existing target load factors are
sufficient to generate significant profit additional seats which otherwise would be empty
could be sold at significantly reduced prices, however they must still yield a profit for the
service provided. Turkish Airlines price promotion will provide significantly low prices for
customers who are able to book an anytime seat over one calendar month in advance. This
promotion will be targeted at leisure travellers as it is assumed that a majority of business
travellers book their seats close to the required date of departure as they are required to
leave on short notice.
The main aim of this promotion is to generate additional revenue while not overbooking the
aircraft or undermining the passengers who have not utilised this promotion, which would
most likely be the case if a buy one get one free promotion were offered. This promotion is
based on a consumer or group of consumers purchasing two full fare return tickets and
receiving a third one free. This promotion could enable three consumers to travel at once for
the price of two, general trends of leisure travellers, or enable a single consumer who
purchases two tickets within a month, general trend of a business class consumer, to be
offered the third one free. The free ticket will be restricted and must be used within a period
of one month. This promotion will be designed to run in May, June, July and August when
target load factors are less than 60%.
Promotional Items for On-line Bookings
All consumers who book flights in August through to December directly through
www.thy.com will be offered free Istanbul sightseeing tour cards or similar organised tours.
This is designed to increase load factors above target load factors for these months but also
to reduce distribution costs of tickets. For all business passengers on onward flights from
Istanbul, 1 or 2 free nights at luxury hotels will be offered.
Miles&Smiles is already a rewarding and generous scheme where passengers can redeem
rewards and take advantage of many benefits. In April, June and Oct, the airline will offer
triple points on all bookings made on-line.
4.3.1. Product
Turkish Airlines product is providing economy and business class travel between London,
Manchester, Birmingham and Istanbul. The airline method of providing its services is what
differentiates its product and allows it to offer vast benefits, such as space, seats, comfort
and in-flight services, as well as genuine gestures such as Istanbul sightseeing cards and
chauffeur services to the existing economy and business class passengers.
Turkish Airlines product must be positioned to the target market as one that meets and
exceeds the needs of both leisure and business class travellers, who would normally fly with
LCC like Easyjet or Pegasus (leisure passengers) or British Airways (business
passengers), through increased product innovation and quality. The product focused
towards business travellers allows them to hold in flight meetings in comfort and order meals
and services to suit their timetable and specific needs. Although business class travel is not
a new product, Turkish Airlines product has improved to the highest level possible, to
compete with its major competitors mainly based on price differentiation.
4.3.2.Price
Table 5 below shows the online published fares of THY versus BA.
The main pricing strategy of the company is to maintain price leadership. While Turkish
Airlines pricing allows the company to achieve its financial goals, i.e. make a profit, it
undercuts the realities of the marketplace for the product and service offered by its
competitor operating out of London Heathrow. Based on competitor pricing customers would
be willing to buy at Turkish Airlines prices. Turkish Airlines pricing strategies support the
products positioning, as the low price does not act as a substitute for lack of product quality,
and are consistent with the other variables in the marketing mix. The type of promotions and
advertising used will affect the price, however in order to keep prices low, the product will not
be supported by extensive marketing campaigns such as T.V. adverts, which can cost up to
£130,000 for a single advert in a prime time slot (4).
4.3.3. Promotion
Turkish Airlines promotional strategy will be carried out with the target customer in mind
preventing the waste of time and money on ineffective promotional activities such as TV ads.
Other methods of creating awareness of the airline product will include sales promotions and
presence at business trade shows, promoting the airlines directly to the target audiences, as
well as social websites like Facebook, Twitter, etc.
4.3.4. Place
A Multi-level marketing strategy will be employed to distribute the product. That is a
combination of direct sales and indirect sales through the internet, Business trade shows
and corporate travel agencies.
Turkish Airlines will have a comprehensive premier presence at Business Travel Trade at
Excel, London. Prior to the event the trade show will provide significant media exposure that
will feature Turkish Airlines brand. The trade show will provide the airline with on site
marketing and promotional exposure.
Internet
In order to attract UK leisure and business travellers, Turkish Airlines will market and make
direct sales via its web site. This allows for cheap and efficient distribution costs and reaches
a wide consumer base. The website allows customers to make reservations for flights and
provides purchase and payment capabilities, as well as comprehensive information on
offers. Social websites like Facebook and Twitter could create brand awareness and can
be used as a marketing tool for promotions of the airline.
In order to attract large corporations and medium sized businesses, Turkish Airlines will
directly contact the travel departments of corporations and businesses in UK with links in
Turkey. To do this, the airline will manage a team who will build relations with corporations.
These direct sales will allow for a greater degree of product differentiation to be established
in the minds of corporations and allow Turkish Airlines to demonstrate and highlight the
benefits of its products compared to its competitors. Also direct sales and product
recommendation to corporations which currently fly with British Airways will increase the
airline share out of the total market share.
Often PA‟s and secretaries are required to book flights for managers. Turkish Airlines must
target these secretaries with direct mail so that they are aware of the Turkish Airlines
product. The first class service will appeal to small to medium business managers who can
afford to fly with British Airways.
This has the advantage of offering customers a distribution channel they may prefer in
making their reservation.
Important part of Turkish Airlines marketing strategy will be focused on advertising with
leading corporate and travel magazines, as well as outdoor advertising, such as billboards,
bus and underground posters.
Textbooks:
Shaw S. (2004), “Airline Marketing and Management”, 5th edition, Ashgate Publishing Ltd.,
UK
Doganis R. (2006), “The Airline Business”, 2nd edition, Routledge Publishing, USA
Doganis R. (2009), “Flying off course – Airline economics and marketing”, 4th edition,
HarperCollins Academic, USA
Web sites: