ALASKA AIRLINESMarketing Plan

Daniel NaslundEmily Petersen

Company Description

• Originated in 1932 as McGee Airways• Became known as Alaska Airlines in 1944• Owned by Alaska Air Group• Based in Seattle, Washington• 7th largest US airline as far as passenger

traffic• Partners with Horizon Air

Alaska Airlines 2

Business Mission

• “At Alaska Airlines, our employees share an uncommon blend of integrity, professionalism, caring, resourcefulness, and spirit. Every day we strive to bring these values to life through behaviors and deeds that go above and beyond the ordinary - what we call "North of Expected" and Alaska spirit in action. “

• “To the people of Horizon Air, the Pacific Northwest is more than a place to do business -- it's our home. Because of this, we have an innate interest in the welfare of the region and its people, and in doing all we can to make it an even better place.”

Alaska Airlines 3

Situation Analysis• Industry Analysis- Trends

Alaska Airlines 4

Survive Adapt Recover Rethink1995

2000

2005

2010

2015

The Global Airline Industry

Industry State

Tim

e

Frustrations in Aviation:

• Fuel/Oil• Pollution control• Personnel

cutbacks• Global economic

woes• Recurring safety

lapses

• Competitiors:• Many airline competitors such as:• Southwest Airlines- offers low-fare flights• MarkAir (from 1980-1995)• Delta• United Airlines• Frontier Airlines• American Airlines

• Customer Profile• Market is made up of business users,

families, and independent travelers• Many customers are “low fare searchers”

Alaska Airlines 5

• Technology• Boeing 737-900- Bigger, faster, larger range

(3,197 mi)• Home computer self check-in• Self check-in kiosks at airport• State of the art flying systems• Book tickets and log miles on internet

Alaska Airlines 6

SWOT Analysis• Strengths

• Committed employees• Reliable service• Environmentally friendly and energy efficient• Positive company image• Financial resources• Strong market research

• Weaknesses• High production costs (especially fuel/oil)• Costly training• High “spoilage” rate • Hard to make quick schedule changes

Alaska Airlines 7

• Opportunities• Continual expansion opportunities for both

leisure and business destinations• Fuel efficient aircrafts- cost savings• Added in-flight technology to generate revenue

(Wi-Fi, Digi-players, etc.)• Link-ups with other carriers to coordinate

schedules

• Threats• A global economic downturn negatively affects

leisure, optional travel, as well as business travel.• Price of fuel• Terrorist attacks and plagues can negatively

affect air travel• Government can impose new costly rules

Alaska Airlines 8

Marketing Objective• The marketing objective is to receive

customer satisfaction values of 95 percent on the 2012 annual customer satisfaction survey, and to have 75 percent of those customers as repeat customers in 2013.

• 2. Our objective is to increase our market share by 5 percent by increasing advertising by 10 percent during the 2012 year.

• Our objective is to have a 90 percent on-time average (not weather related) in the 2012 year so that customer satisfaction value will be at our goal of 95 percent.

Alaska Airlines 9

Marketing Strategy

• Target Market Strategy• Geographically, Alaska Airlines directs

marketing and sales efforts within the US, Mexico, and Canada

• Alaska Airlines focuses on the lifestyle of their target customers. The offer vacations, for those who need a break, and a good mileage program, to encourage repeat flying, which is great for business people too.

• The target market is made up of approximately 235,016,000 people with a growth rate of 14.4%

Alaska Airlines 10

• Marketing Mix• Product:• Flights to and from many US cities and

destinations in Mexico and Canada. Includes checking baggage, refreshments on the plane, and the flight to the destination.

• Service for the consumer• Services differ based on length of the flight

(possible in-flight movie) and cost of the seat (first class seats are served free beverages and food)

• Product marketing focuses on quality of the service

• A major weakness of the service is flight tardiness which can be because of weather or many different factors

Alaska Airlines 11

• Place/Distribution• Headquarted in Seattle, Washington with hubs

there, in Portland, and in Anchorage• Flights are offered through AlaskaAir.com, but

also Travelocity, Orbitz. etc.• Customers can buy tickets in the comfort of

their home on their computers (even flights that are the same day)

• Price• Prices of flights vary from destination to

destination and how far ahead the ticket is booked

• Prices are competitive with the other airlines in the industry

• Strategy is to charge the lowest possible fare that still enables the airline to make a profit

Alaska Airlines 12

• Promotion• Customers find out about flights on Alaska

Airlines from other customers, email, advertising, and the website (AlaskaAir.com)

• Not much reliance on direct selling anymore (results in less customer service)

• Frequent Flier Mileage Plan- encourages customers to accumulate miles from flights on Alaska Airlines and then redeem those miles for flights with a 50% discount or free flights

• MVP flier’s (25,000 miles in a year) and MVP Gold flier’s (75,000 miles) receive special perks such as boarding the plane first and receiving free Digi players

Alaska Airlines 13

Implementation, Evaluation, and Control

• Must strive to understand their clients and their ongoing needs

• Need to keep rethinking ways of how to improve service and stand out from competitors

• As a company that has experienced success and has received many awards, including several Freddies, the most prestigious service award for airlines, Alaska Airlines must think of new ways to become more environmentally and energy friendly and to stay profitable

Alaska Airlines 14

Financial Projections

• The financial objective is to become more profitable over the next year.• With the goal of increasing our market share

by 5%, we expect our profits to raise by 5% from $1.2 billion per year to $1.26 in the coming year

• Keep the cash flow positive and gross margin higher than 90%

Alaska Airlines 15

Summary

• Alaska Airlines plans to continually monitor customer needs in order to provide them with the best service possible

• The goal is to attract new customers because of the superior service they receive and retain satisfied customers

• The ultimate goal is to increase Alaska Airlines market share in order to overcome the rising cost of flying and to increase revenue

Alaska Airlines 16