Customer+Perspectives

<- here is my part.....finally

Market Share reference: [] [] Number of orders and Delivers: []

** Customer Perspective ** __ Target Market & Market Segmentation __

Boeing designs and manufactures commercial jetliners, military aircrafts, rotorcrafts, electronic and defense system, missiles, satellites, and advance information and communication system; therefore, its target markets are airlines all over the world, National Aeronautics and Space Administration (NASA), and the U.S. government. Since we do not have the ability of accessing detail co-operative information between Boeing and NASA/U.S. government, the target market analysis will focus on discussing Boeing's civil commercial market. Boeing civil commercial market includes one main participator: the airlines. The airlines from all geographic regions generally use the following criteria to evaluate aircraft suppliers in order to make a purchase decision between choosing Boeing and its biggest competitor, Airbus:

__Needs and Goals Analysis:__ Boeing is mostly a B2B business, so airlines would consider the profitability and affordability of their own company before making a purchase decision. Although some components of the airplane are pre-manufactured by outsourced contractors, it still takes at least four months to go through the entire building and testing process; therefore, airlines need to predict the projected gross revenue growth before placing an order.

According to Scott Hamilton’s article (2005), “Airbus-Boeing market share: More than just marketing”, Boeing has the capacity to build about 55 aircraft a months in 2005, which is about 15% more than Airbus; moreover, the promised delivering date is averagely 15% sooner than Airbus. This gives Boeing a competitive advantage over Airbus because client’s consideration plan can be shortened and the unexpected future event factor can be minimized by 10%. Footnotes: Scott Hamilton’s Article: []

__ Market Trends __ While the price of fuel is continuously rising, the demand of large aircraft, like Boeing 747, is decreasing. According the Boeing’s website, in 2010, only one 747 was ordered and none was built and delivered to client. This proves that the industry’s trend is aiming for a better fuel economy solution, like Boeing 737and 777. Throughout 2010, 435 of Boeing 737 and 49 of Boeing 777 was ordered; in addition, 316 of Boeing 737 and 10 of Boeing 777 was delivered to consumer. Footnotes: Net order of 2010: [] Net delivered of 2010: [] __ Objective 1- Increase Market Share __ Boeing and Airbus dominate the commercial aircraft market; therefore, if Boeing wants to increase its market share in this industry, it must gain it from Airbus’s share. The following tables show the variation of Boeing and Airbus market share in orders and deliveries of the last 5 years: ** Orders ** ** Deliveries ** **Data is gathered from Boeing and Airbus Official Website**
 * || 2010 (3 quarters) || 2009 || 2008 || 2007 || 2006 ||
 * Boeing || ** 484 (51%) ** || 142 (34%) || 662 (46%) || ** 1413 (51%) ** || ** 1044 (57%) ** ||
 * Airbus || 465 (49%) || ** 271 (66%) ** || ** 777 (54%) ** || 1341 (49%) || 790 (43%) ||
 * || 2010 (3 quarters) || 2009 || 2008 || 2007 || 2006 ||
 * Boeing || 386 (48%) || 481 (49%) || 375 (44%) || 441(49%) || 398 (48%) ||
 * Airbus || ** 417 (52%) ** || ** 498 (51%) ** || ** 483 (56%) ** || ** 453 (51%) ** || ** 434 (52%) ** ||
 * Market share of the two aircraft manufacturers can be determined by comparing their order and deliveries rate. According the tables, both companies’ orders and deliveries rates are about 50:50. If Boeing wants to increase its orders and deliveries rates, it can invest on manufacturing technology and increase marketing/promotional campaign. By investing more on manufacturing facilities, Boeing can increase its production capacity, which means that the constructing time per aircraft can be shorten; in addition, by increase performing marketing activities, Boeing can attract/appeal to more potential customers in order to increase the order rate. Since the competition between Airbus and Boeing is intensive, our expected market share gain is 1% in 2 years. **
 * __ Objective 2 - Gain Expand into new target market segment __ **
 * While the current target market of traditional major national airlines is saturated, Boeing needs to expand and appeal to newer airlines. First of all Boeing needs to find out which geographic regions have the greatest growth in aircraft orders. In order to do this, Boeing can look through the past sales record and identify them. Then a detail demographic and geographic marketing analysis on those regions is needed because a new market entry strategy may be needed. According to the orders information form Boeing’s website, we have constructed the following table to illustrate the demographic distribution of orders through November 23, 2010: **


 * North America ||  South America  ||  Europe  ||  Africa  ||  Australia  ||  Middle East  ||  Asia  ||  Other  ||
 * Alaska Airlines - 2 ||  GOL Airlines - 20  ||  ALC - 54  ||  Ethiopian Airlines - 10  ||  Virgin Blue Airlines - 41  ||  Azerbaijan Airlines - 3  ||  Air Austral - 2  ||  Business Jet / VIP Customer(s) - 3  ||
 * American Airlines - 35 ||  LAN Airlines - 1  ||  Luxair - 2  ||   ||   ||  Emirates - 30  ||  Air China - 24  ||  FedEx - 8  ||
 * Continental Airlines - 7 ||   ||  Norwegian Air Shuttle ASA - 15  ||   ||   ||  Qatar Airways - 2  ||  BOC Aviation - 8  ||  GECAS - 40  ||
 * Midwest Airlines - 1 ||   ||  Turkish Airlines - 20  ||   ||   ||  Royal Jordanian - 3  ||  Cathay Pacific Airways - 6  ||  Unidentified Customer(s) - 25  ||
 * Southwest Airlines - 25 ||   ||   ||   ||   ||  Saudi Arabian Airlines - 20  ||  Okay Airways Company Limited - 10  ||   ||
 * United Airlines - 25 ||   ||   ||   ||   ||  Somon Air - 2  ||  Russian Technologies - 50  ||   ||
 * ||  ||   ||   ||   ||   ||  SpiceJet - 30  ||   ||
 * ||  ||   ||   ||   ||   ||  Xiamen Airlines – 10  ||   ||
 * 95 ||  21  ||  91  ||  10  ||  41  ||  60  ||  140  ||  76  ||


 * Based on the table above, Asia seems to have the greatest potential growth in orders in the future. Boeing may consider invest more in searching and marketing in Asia in order to achieve the growth of sales. **


 * __ Objective 3 – Increase the number of repeat customer __ **
 * Many airlines may have large demand in additional aircrafts, but they do not have the significant fund to do the purchasing, so Boeing offers leasing and other financial methods to finance its aircrafts. In order to keep transform current customers into future/repeat customers, a customer loyalty program is needed. We suggest the customer loyalty program will offer lower finance rate and additional after sales service/warranty to clients if they are loyal to continue using Boeing’s products and services. Our target is to increase the customer return rate by 5% in 3 years. The target return rate is low because the commercial aircraft manufacturing market is competitive. If Boeing loyalty program is not attractive, customers are most likely going to choose Boeing’s competitor – Airbus **
 * __ Objective 4 – Increase customer satisfaction level __ **
 * Customer satisfaction level can directly affect Boeing’s brand image, its reputation, and the rate of return customers; therefore, Boeing should consider carrying out a detail quantitative and qualitative analysis to its customer. The examination group should include not only the top management of airlines, but also personals that work closely or use extensively of Boeing’s end product. Basically, the analysis involves two targeted groups: the airlines’ staff and the customers of the airlines. **
 * We suggest analyzing the airlines’ staff because they are the first group of people that work with Boeing aircraft. By gathering feedback from them, Boeing can increase its understanding toward the satisfaction level of the after sales service of the company is providing. For the airlines’ customers, Boeing needs to know how they feel about Boeing’s aircrafts in order to gain improvement in products’ development. The customer satisfaction level analysis will start at the beginning of 2011 and continue until the next year. When the result of the first year is gathered, the after sale service support & training program will take place. By comparing the result that will be collected after performing the program, Boeing will see if there is improvement in between the two years, and our targeted rate of increased satisfaction level is 5% over the two years. **
 * __ The balance score card __ **


 * Objective || Measure || Target || Initiative ||
 * Increase market Share || Compare Boeing’s New order and Deliver Rate with Airbus || Order and Deliver Rate increase by 1% in 2 years || Invest on Manufacturing Technology and increase marketing/promotional activities. ||
 * Expand to New Customer Group || Identify which Geographic Region has the Highest Growth in Sales || Find out new target segment then focus on it || Detail Demographic and Geographic Marketing Analysis ||
 * Increase the number of repeat Customer || # of repeat customers || Customers return rate increases by 5% in 3 years || Customer Loyalty Program ||
 * Increase Customer Satisfaction Level || Compose Detail Quantitative and Qualitative Consumer Analysis || Increase Customer satisfaction level by 5% in 2 years || After Sale Service Support & Training Program ||


 * Reference **


 * Objective ||  Measure  ||  Target  ||   Initiative **  ||
 * Increase market Share || Compare Boeing’s New order and Deliver Rate with Airbus || Order and Deliver Rate increase by 1% in 2 years || Invest on Manufacturing Technology and increase marketing/promotional activities. ||
 * Expand to New Customer Group || Identify which Geographic Region has the Highest Growth in Sales || Find out new target segment then focus on it || Detail Demographic and Geographic Marketing Analysis ||
 * Increase the number of repeat Customer || # of repeat customers || Customers return rate increases by 5% in 3 years || Customer Loyalty Program ||
 * Increase Customer Satisfaction Level || Compose Detail Quantitative and Qualitative Consumer Analysis || Increase Customer satisfaction level by 5% in 2 years || After Sale Service Support & Training Program ||