Air France KLM

Marketing Audit
August 15th , 2009

presented by Jeet Das

mentor: Mr. Gianni Burzi
Term 1- Marketing Management
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 2
 Towards smart leadership

Koninklijke Luchtvaart
Maatschappij voor Nederland en Jeet/MKT/Term 1
15-Aug-2009

Koloniën Slide 3
Peter Hartman (President and Chief
Executive)
Jeet/MKT/Term 1
15-Aug-2009

Slide 4
Jeet/MKT/Term 1
15-Aug-2009

Slide 5
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 6
 Productivity and growth with Safe
Efficient
Service oriented
Mission statement operations
• Strive to optimize services and add new destinations
• To facilitate network expansion
• To serve passengers efficiently and address problems
pragmatically
• Price and comfort, punctual arrival and departure times and
reliable baggage handling
• No compromise with security standards
• Leverage technology to bring in operating efficiency
AIM
“KLM’s works to achieve profitable growth that contributes to its own
corporate aims as well as to economic and social development.”

Jeet/MKT/Term 1
15-Aug-2009

Slide 7
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 8
Jeet/MKT/Term 1
15-Aug-2009

Slide 9
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 10
 Firm Infrastructure
Strong management, focused planning and financial control
HRM - Kick start quality assurance programme
Technology Development
CRS system, streamlined booking, research and market analysis

MARGIN
Procurement - diversification of fleet, outsourcing maintenance,
shared facility arrangements
Inbound Operations Outbound Marketing and Services
Logistics Internet Logistics Sales Frequent
competi- booking, good routes & quality brand, Flyers
tive cost scheduling, market access, alliance North program
levels Wave System, Open Skies, 1st West, ancillary
hub & spoke, mover adv’tage, sales,
diffination of cargo customer
fleet focus

Jeet/MKT/Term 1
15-Aug-2009

Slide 11
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 12
Logistics Operation
• In bound
• Tracking s
• Long haul • Alliance Business
• Schiphol focus partnership with • Member of Sky
Air France Team
• Mission to be • Diversifying
the top five products
Passenger lasting aircraft
• Long haul companies
• Less transit time • Quality
• Special care for the programs for
loyal customers staff
• Easy transfers • Internet
accessible both
for cargo and
Passenger Jeet/MKT/Term 1
15-Aug-2009

Slide 13
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 14
Segment

Jeet/MKT/Term 1
15-Aug-2009

Slide 15
 Business
Short Haul

Long Haul
Economy
Jeet/MKT/Term 1

Segment servicing 15-Aug-2009

Slide 16
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 17
 Brand position
High priced
★★★ Airline
Business and
Qatar
Economy
Seat Comfort ★★★

Luxurious Service
Airways  Service Efficiency★★★★
Basic Service

Kingfisher
Air France
KLM Lufthansa
SAS British Cabin Condition ★★★
JAT Airways
Jet Airways Swiss  Language Skills ★★★★

Ryanair Meals Quality ★★★

Air Slovakia Attitude ★★★
Transfer Service ★★★
 Baggage Delivery ★
Low priced
Consistency ★★★
Jeet/MKT/Term 1
15-Aug-2009

Slide 18
 Passenger flights
“satisfactory" standard
★★★ star of core Product across
most travel categories
airline

Service Quality

Punctuality

Product
Quality

Brand Value
Slide 19
15-Aug-2009
Jeet/MKT/Term 1
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 20
Jeet/MKT/Term 1
15-Aug-2009

Slide 21
 Product

Adopters
Early

Later Majority
Innovators

Earls Majority
Long First
long haul
connecting
Europe and

Lagers
America
Chasm
194
6

Long Haul Flights Jeet/MKT/Term 1

15-Aug-2009

Slide 22
 Passenger Transport

Long and Medium Haul Travel

Three Star Airlines: Satisfactory Service

Economy & Business

Price ranges: Loyal customers to one time

flier
Jeet/MKT/Term 1
15-Aug-2009

Slide 23
 Product line Pricing
Lower Price, High Retention, Loyal Customers

Private Customer Corporate

• Flying Blue
• Platinum
Customer
• Gold
• Silver • ONE Global Travel
• Ivory Solution
• Economy • Corporate Account
• Business • Blue Biz

High Price, Low Retention, Switchers

Jeet/MKT/Term 1
15-Aug-2009

Slide 24
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 25
Innovation
Process

Jeet/MKT/Term 1
15-Aug-2009

Slide 26
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 27
Pricing
Strategy
•Address shift of demand in time
space:
“On-peak or Off-peak”

•Differentiate product and

generate additional demand for
addressing consumer surplus

• Selective selling

Jeet/MKT/Term 1
15-Aug-2009

Slide 28
Pricing
Implementation

Jeet/MKT/Term 1
15-Aug-2009

Slide 29
Fuel and Price
relation
Hedge fuel
2008-09 2009-10

Forecasted Spot 83 79
Price ($/Barrel)

Hedge 67 51
consumption
(%)
Average Hedge 61 68
Price ($/Barrel)

Final Average 68 73
price Jeet/MKT/Term 1
($/Barrel) 15-Aug-2009

Slide 30
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 31
 Multi Channel
Marketing
Integrated VMS Horizontal

Jeet/MKT/Term 1
15-Aug-2009
Marketing Channel

Jeet/MKT/Term 1
15-Aug-2009
 Distribution Structure

Interested in the internet

channel
• Be competitive
• Reduce OP-EX
KLM is promoting the
transavia.com Jeet/MKT/Term 1
15-Aug-2009
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 35
Communication
Strategy

Jeet/MKT/Term 1
15-Aug-2009
Communication
Implementation

Jeet/MKT/Term 1
15-Aug-2009
Communication
Implementation

Jeet/MKT/Term 1
15-Aug-2009
Communication Mix

Jeet/MKT/Term 1
15-Aug-2009
 Agenda
Company Introduction
Mission Statement
Business Strategy
Value Chain
Value Creation
Segments
Position
Product
Innovation
Pricing
Channel
Communication Jeet/MKT/Term 1
15-Aug-2009

Discussion Slide 40
 Thank you!

Boeing 747-400ER Jeet/MKT/Term 1

15-Aug-2009

Slide 41