APPENDIX CLOUDCAB SMALL JET TAXI SERVICE Abbreviated Example Marketing Plan NOTE TO READER This is an abbreviated version of a marketing plan for a fictitious firm, CloudCab Small Jet Taxi Service This appendix is designed to walk you through the main steps of marketing planning. The idea is to provide you with an example early in the course so you will have a better understanding throughout the chapters of how the pieces of a marketing plan come together. Chapter 2 is devoted to the topic of marketing planning, providing a marketing plan framework and explaining the parts. That framework is used to develop this abbreviated example. Note that in practice most marketing plans contain more depth of detail than is provided here. Also, remember that each chapter ends with a Marketing Plan Exercise designed to guide you in applying the concepts from that chapter to a marketing plan. SITUATION ANALYSIS CloudCab seeks to provide solutions for the time-conscious traveler using quick, luxurious jet transportation. The small company was founded by former pilot Travis Camp and is now poised to be a first-mover into the California/Nevada/Arizona market. CloudCab will provide an alternative to frustrating waits at the airport and long car rides at a fair price for its customers CloudCab will use small, underutilized airports and a new class of Very Light Jet (VLJ) to quickly and comfortably transport customers from one city to another. Its customers will come primarily from businesses needing quick, on-demand transportation. Initially, CloudCab will not face much direct competition, so its biggest challenge will be to convince customers of its benefits over more traditional products Macro-Level External Environment Political and Legal Like all companies using the skies, CloudCab is subject to the rules set forth by the Federal Aviation Administration and other regulatory bodies. Fortunately, smaller jets have many of the same air privileges as their larger counterparts. This ensures access to needed airspace and air traffic control services The political and legal environment has the potential to become an even more positive factor for CloudCabas business expands. CloudCab uses smaler, underutilized airports, thereby drawing traffic away from congested major hubs and increasing the efficiency of the entire system. If CloudCab is successful, this may actually induce lawmakers to provide incentives for companies like CloudCab. Page 4 Furthermore, larger airports are already facing capacity strain. 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Marketing Control and Metrics Dutcowywanego neto portance turul year. The owneuded in the Objective 1: Sell 5.900 Flight Itineraries Cromwing met wie to be love and record pemenang cotos will be ind Indong to hold and he he to do the beaded to the sind bar wars reach the tage dance Cloudcab Small Jet Taxi Service Measuring Marketing Value Using the ROI Methodology Part A . Situation Cloudcab seeks to provide solutions for the time conscious traveler using quick, luxurious jet transportation in the California/Nevada/Arizona market. As a privately owned small company just enters the market, however, the company faces challenges of low customer awareness and constrained marketing budget. To better understand customer needs, the company decides to conduct market research. They first gathered secondary data on air traffic patterns, popular destinations among private jet owners, and travel frequency for business and leisure customers. Cloudcab then collected primary data on potential customers regarding where they would like to see the Cloudcab operates and what features they would like the service to offer. The market research efforts revealed the following findings: There is a greater demand for jet taxi service from business than from leisure travelers Leisure travelers plan ahead and have less need of on-demand service Business travelers have more need of one-way flights than do leisure travelers Time is the biggest priority for business travelers, while comfort is the biggest for leisure travelers Some business people, such as consultants and sales professionals, have a greater need for on-demand travel than others The Solution Cloudcab develops a marketing plan to guide its marketing efforts. For target marketing, the company identifies business travelers on assignment for mid- to large-size consulting firms as its primary target market. It uses promotion to create awareness and build interests in the benefits of its service. In order to accomplish these objectives, the marketing department launched a comprehensive marketing promotional campaign by combining targeted advertising. direct marketing, personal selling and buzz marketing. The company positions its service as fasters and more enjoyable than traditional airline flights or ground transportation, yet costs far less than private jet ownership. The first-year marketing objectives include: 1) to sell 5,500 flight itineraries, 2) to attain a rating of "highly satisfied customer satisfaction scored by 90% of customers, and 3) to achieve repeat purchase by 50% of customers. The marketing action plan for initial launch has been implemented. Specifically, Cloudcab used targeted print ads and sent out direct marketing (both social media messages and letters) to identified target consulting firms. In addition, Cloudcab hires, trains, and relies on salespeople to communicate important product and service messages to key clients. Further, PR and social media coverage are used to cover the first Cloudcab flight and create Online and Offline buzz Cloudcab Small Jet Tax Service Converting Data to Monetary Values Profcribution of increased Measuring Marketing Value Using the ROI Methodology Part 8 Program Profile Tie Claudio Marting Program Target Group Business travers Incorporated Marketing Communication Durange from 1 week to 4 months Level 1 - Selected Data Detected from where Club Relevance Importance 35 Usness 45 Costs 39 Overall rating Level 2 - Selected Data ROI Analysis Profile Post Date Collection (13) Performance Monitoring Monthly from with bunch Ouest Everythree months after launch Quarterly surveys show that 80% of target customers who received Cloudca marketing messages understand the major benefits of Cloudcial Service Isolating the Effects of the Marketing Program Level 3 - Selected Data Phone and email inquiries of Cloudab service increase by 15% on a monthly basis Cloudca webstetrale (including the number of visitors and number of webpages they viat) Increases by 30% on my basis Participant's newed Grives backup Factors Contributing to Performance improvement Targeted ads: 30% Dredning to identified de 20% - Personal segon key cu 30% - Me coverage 10 - Oras 10% -Total 100% Confidence Level: What level of confidence do you place on the above no confidence and 100%-certainty Average Confidence Level 60% Level 4 - Number of Flight Itineraries Date Collection Ahenunched in May, the total number of tights has reached 5500 by December Using an estimated price of $1,200 per fight the YTD was $6.000.000 Data Converse The operating coseduse $2.000.000 focos 31:200.000 satanes, and $700.000 outsourced system costs. So the gross profit was $2.100.000 Annualized Benefits Level 5 Data Step 1. Considering the fact that the $2,100,000 was the gross profit of eight months (from May to December), we first calculate the average monthly gross profit: 32.100.000 (eight month proft) 8 months) - $262.500 (average monthly gross profit) BCR Stop 2 We then calculate the annual gross profit 5262,500 X 12 months) 53,150,000 Step 3.53.150.000 X 90% solation factor $2.835.000 ROI * 100% Step 452.835,000 X 80% confidence level) = $1,701,000 (after adjustment, total anual monetary benefits) Notes: Cost Summary The fully loaded cost of Cloudca marketing program include: Targeted print ads $265.000 Drect marketing: 5170,000 Personal saling $210,000 Media coverage PR: 53.000 Intangible Benefits Total cost $648.000 Notes: Case 1: Cloudcab Small Jet Taxi Service Case Questions (25 points) After reading the case (both Part A and Part B), answer the following questions. 1. What are the marketing performance metrics at different levels (5 points)? Level O: Level 1: Level 2: Level 3: Level 4: 2. Which level(s) of data does the senior Cloudcab management team desire and why (4 points)? 3. Which data collection methods should be utilized for action and business impact measurement? (Level 3 and 4) Describe what the case did (4 points) 4. Which method should be utilized to isolate the effects of the Cloudcab marketing Program? Describe what the case did and discuss the pros and cons of alternative isolating method(s). (5 points) 5. What is the ROI of Cloudcab marketing program? Show your calculation and interpret the result. (5 points) 6. What are the intangible benefits of Cloudcab marketing program? (2 points)