Marketing Audit for Boeing Marketing Management 586 Spring 2006 By: James Parker, Kellie Logan, Sally Wencel, Barry Corum, Jeff Thul

History of the 787 Dreamliner Started assembly in Designed due to declining air travel after the attacks on September 11, Increase fuel costs

The 787’s Features

The 787’s Production Process Boeings new streamlined production process.

The Macroenvironment Global population growth in developing countries. Increase in average life expectancy in western civilization. Increase of disposable income in developing countries.

The Macroenvironment World Trade Organization (WTO) litigation between U.S. and Europe Response to customer wants and needs Energy and material conservation Increasing world wide demand for commercial airlines.

The Macroenvironment 20 Year Market Potential

The Macroenvironment Competition –Airbus Industries of Europe Formed in 1970 From a Fledgling to a Formidable Opponent Since 2000 Airbus has been the number 1 in sales In 2005, achieved a 51% share of global market Market, sales, and delivers to end user.

The Macroenvironment Differences between Boeing and Airbus –Airplane size –Point-to-Point vs. Hub-to-Hub “It’s more accurate to say that we have two distinct views of the market. We believe that airlines ultimately respond to what passengers want… more opportunities to fly where they want to go, when they want to go.” Randy Basler – VP Marketing

Boeing SWOT Analysis Strengths –Innovation and Technical Expertise –Strong reputation of quality and industry leadership –Long-standing customer relationships –International customer base –Supplier-Component Manufacturer Networks –Commercial Aircraft is one of six business divisions

SWOT – Continued Weaknesses –Development Costs for new products: $8-10 Billion –Reliance on Suppliers-Component Manufacturers (both strength and weakness) Opportunities –New technologies to build lighter, longer range aircraft –New airline customers in Asia and Pacific market –Airline travel pattern changes supporting Boeing product line

SWOT - Continued Threats –Aggressive Airbus Price Discount Practices WTO dispute regarding EU subsidies –Changing economics Domestic airline bankruptcies –Changing governments, politics and business partners based in those countries Example: Dubai Port management controversy –Air travel vision could be wrong

Mission Statement “The Commercial Airplanes segment is involved in developing, producing and marketing commercial jet aircraft and providing related support services, principally to the commercial airline industry worldwide.”

Market Strategy Three prong strategy –Establish international partners in production –Use light weight materials –Develop new midsized aircraft Sales department overhaul What are the results?

Market Strategy Payoff Confirmed Orders

Marketing Productivity Objective: Profitability Expects to earn almost 57% of the revenue for the 787 Competitor: Airbus’s A350

Product Line Objective Program to replace 737 “Derivatives R Us” Price: 737 lower than A350 Differentiating their product Marketing Function Audits

Differentiating their product Central themes of advertising –Technology –Cost Effectiveness International Air Show Randy’s Journal – Scott Carson Marketing Function Audits