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AST 205 Chapter 3

AST 205 Chapter 3. FBO Marketing. What we’ll cover. The need for marketing in G.A. Ways the FBO’s market The 4 P’s of marketing The world’s natural markets How to achieve market growth What is a market niche? Pricing- Cost plus and Demand.

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AST 205 Chapter 3

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  1. AST 205 Chapter 3 FBO Marketing

  2. What we’ll cover • The need for marketing in G.A. • Ways the FBO’s market • The 4 P’s of marketing • The world’s natural markets • How to achieve market growth • What is a market niche? • Pricing- Cost plus and Demand

  3. Why G.A. needs to advertise (the 4th P- Promotion) • Product- FBO’s are unique because they sell both Products and Services. • FBO’s compete with other modes of transportation • Competes with other hobbies for peoples time, money, and interest • Must relate to a wide range of clientele- corporate executives to the casual flyer

  4. The worlds 3 natural markets: • Those with any discretionary income- up to 80% of the population- • Young Professionals- 25 – 35% of those with discretionary income- + $55,000 per year • The wealthy- 2% - 4% of the population with discretionary income

  5. Marketing Defined • Why an FBO needs to market- unique aspects • Competes with other modes of transportation • Competes withother hobbies for people’s time and $ • Must sell both products & services • Must accomodate corporate execs. as well as the casual flyer

  6. Marketing ctn. • What are some ways that FBO’s market? • Yellow pages • Limited T.V. • Signage • Websites (their own and others) • Newspaper • Fly-ins • Others?

  7. All marketing is based on the 4 P’s: • Product • Price • Place • Promotion

  8. The world’s 3 natural markets: • Those with discretionary income- 80% of the population • Young Professionals- up to 25% of pop. and growing • The wealthy- less than 2% of the population

  9. Aviation Stats. • Aviation related statistics of this population- • Roughly .002% of the population are pilots • 1 person in 1,500 owns an aircraft • Non-pilots use G.A. for traveling 25% of the time

  10. CURRENT & FUTURE TRENDS • Modern FBO’s need to become more customer oriented- find unique ways to attract and maintain customers. • Technology and the economy will drive the market • Pilots/aircraft will need to become more neighbor friendly- Noise • 1988 FAA 10 year G.A. activity forecast- • Said society was experiencing a fundamental shift in tastes and preferences- away from aviation

  11. Economic characteristics of FBO products/services • -Air travel is an incidental need- dependant on another purpose • -Follows the economy in greater cycles • Products/services should be counter recessionary: • Used Aircraft • A/C Refurbishments instead of new • Engine overhauls instead of new or rebuilds • Avionics repair instead of new • Recurrent training instead of new students

  12. Good Marketing begins with a good self-assessment • What is the local economic condition? • What is happening to the local market? • What has been my past performance? • What are my future plans for sales?

  13. There are only 4 ways to grow your market- Sell: • New Products to Existing Customers • Existing Products to New Customers • New Products to New Customers • More Products to Existing Customers

  14. The 4 P’s- Product • Choose the best mix of products and services based on: • Past performance • Local market demands- research-based • A market you create

  15. The 4 P’s- Price • A. Cost Based- “cost plus” or wholesale plus an added margin for profit • requires you know your fixed and variable costs • For example: Fuel sales- • Fixed- Those that don’t change with volume sold such as equipment lease payments etc. • Variable- those that change with the level of volume sold such as your cost of fuel and any additives such as “Prist”.

  16. Pricing ctn.- demand-based • Demand Based-Charging what the market will bear. More complicated as it requires you to know the concepts of: • Scarcity- goods that are scarce or “in demand” will bring a higher price • Q) What are some items that have been in demand recently? • Elasticity- For most goods, as price goes up, demand goes down and quantity available goes up and visa versa.

  17. Other Pricing Policies • One price or flex pricing- peak or off peak • Price w.r.t. perceived value • Product life style pricing • Promotional Pricing • Geographic Pricing/-Market channel (distributors)

  18. Place/Promotion • Place in the FBO realm is limited to airports and some limited online sales • Promotion- previously discussed

  19. All of this information is gathered into your marketing plan- placed in your business plan • Questions?

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