AST 205 Chapter 3 FBO Marketing

Home Previous Next Help 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

Home Previous Next Help Why G.A. needs to advertise (the 4 th 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

Home Previous Next Help 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

Home Previous Next Help 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

Home Previous Next Help 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?

Home Previous Next Help All marketing is based on the 4 P’s: Product Price Place Promotion

Home Previous Next Help 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

Home Previous Next Help 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

Home Previous Next Help 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

Home Previous Next Help 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

Home Previous Next Help 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?

Home Previous Next Help 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

Home Previous Next Help 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

Home Previous Next Help 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”.

Home Previous Next Help 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.

Home Previous Next Help 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)

Home Previous Next Help Place/Promotion Place in the FBO realm is limited to airports and some limited online sales Promotion- previously discussed

Home Previous Next Help All of this information is gathered into your marketing plan- placed in your business plan Questions?