Guidebook for Developing General Aviation Airport Business Plans (2012)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

115 CHAPTER 9 MARKETING 9.1 Introduction 9.2 Five Ps of Marketing 9.3 Airport Branding 9.4 Marketing as a Communication and Implementation Tool 9.5 Designing a Marketing Initiative 9.6 Additional Marketing Resources 9.7 Wrap-Up 9.1 INTRODUCTION In this chapter, the role of marketing will be discussed, an overview of marketing principles will be provided, and the importance of marketing will be examined. Marketing is a communications and implementation tool that can be used to achieve the goals established for the airport. Marketing provides a platform for reaching customers, stakeholders, and the community and positions the airport within the marketplace. Once strengths have been described and opportunities have been identified using the SWOT analysis (discussed in Chapter 6), a well-designed and executed marketing initiative can help achieve the goals established for the airport. For a more in-depth discussion on marketing, refer to ACRP Report 28: Marketing Guidebook for Small Airports. Only those portions of this chapter relevant to achieving the goals established for the airport need to be consulted. When examining the relevant areas, the planning team should look for opportunities to develop objectives that will help achieve the goals. Each goal can have multiple objectives. The pieces of the puzzle were really starting to come together now. The airport manager had a good handle on the elements of the airport business plan and the planning team was working through each of the relevant functional areas looking for opportunities to develop objectives to achieve the goals established. Overall, the development process was going well, excellent progress was being made, and it was making good sense until… a question was raised about the role of marketing and how it could best be used to achieve the goals established for the airport. The airport manager understood the role of marketing as a communications and implementation tool, but thought it would be good to discuss this topic with the planning team because several members had many years of successful marketing experience.

116 Guidebook for Developing General Aviation Airport Business Plans 9.2 FIVE Ps OF MARKETING The Five Ps, Product, Price, Placement, Promotion, and People, are likely the most widely recognized, proven, and adopted approach to marketing. The Five Ps focus on the customer, or more specifically, on the customer’s point of view. Being able to discern the customer’s viewpoint is absolutely critical when it comes to designing and executing marketing initiatives. In essence, marketing is the point of contact between the airport and its target audience. Marketing takes place whenever airport owners and operators are communicating with customers, stakeholders, and the community— whether this occurs through networking, advertising, or public relations. Points of contact are also commonly referred to as points of influence. The Five Ps provide the basis for the marketing portion of an action plan. The following questions provide a framework for developing a marketing initiative: • Product—what airport infrastructure and aviation products, services, and facilities are available? What is it, exactly, that is being provided at the airport? The range, level, and quality of an airport’s infrastructure and the aviation products, services, and facilities being provided at the airport typically drive the decision of based and transient aircraft owners and operators to select one airport over another. • Price—what strategy will be used to establish pricing? Will pricing be based on costs, targeted margins/returns, value, market, psychology, or some combination thereof? How will competitors respond to pricing? What incentives may be offered to attract or retain the target audience? Pricing can be an important factor in the customer’s decision- making process. • Placement—what are the points of contact between the airport and its target audience? At specific times, the target audience may be considering the airport as a home base, a fuel stop, a final destination, or a place of business. When and where to market (to the target audience) is critical to the success of any marketing initiative. • Promotion—what strategy will be used to promote the airport to its target audiences? Promotion focuses on the ways the airport sponsor will reach the target audience, such as networking, advertising, or public relations. • People—what opportunities exist to contact the target audience? Personal contact is critical to In 2005, Hurricanes Katrina and Rita made landfall along the Louisiana coast causing extensive damage. Some airports in the New Orleans area were severely damaged and the storms devastated the assets of several helicopter companies that specialized in providing services to the oil and gas industry. Airport management at the Houma-Terrebonne Airport responded by designing and executing a targeted marketing campaign to attract helicopter companies to the airport. Airport management worked closely with the Terrebonne Economic Development Authority. As a result of the combined efforts of the parties, three helicopter service companies relocated to the Houma-Terrebonne Airport. Today, these companies are recognized throughout the United States for the specialty services currently being provided at the airport. every marketing initiative and every point of contact with the target audience is a marketing moment. Typically, a marketing protocol includes making initial contact, submitting a proposal, conducting multiple follow-ups, reaching an agreement, and remaining in contact.

Marketing 117 Identifying the points of influence is the first step in the development of a marketing initiative. After identifying the points of influence for each target audience and for each of the Five Ps (Product, Price, Placement, Promotion, and People), the most important P for the target audience and the points of influence likely to have the most significant impact need to be identified. Figure 9-1 depicts the relationship between the Five Ps and the target audience. Figure 9-1: Five Ps and the Target Audience 9.3 AIRPORT BRANDING The whole point of marketing is to influence behavior or choice. As airports compete for customers, establishing a clear airport identity, also known as branding, is a well-recognized and proven method of influencing customer choice and an essential aspect of marketing that should be considered by the planning team. The Internet, social media, and other types of digital communication have created opportunities for many different types and sizes of organizations to develop some form of branding. When crafting an airport brand, it can be helpful to investigate branding at comparable and competitive airports. Do these airports have a website, a logo, a tag line, or a key message? Do these airports use social media? Is the brand consistently conveyed in collateral materials? Does the brand clearly reflect the airport’s identity? Is the airport’s identity closely tied to the community it serves, the type of market, or its location? The results of such an investigation can help facilitate discussion among planning team members about the airport’s identity or brand. An airport’s identity encompasses (1) the mission and vision for the airport; (2) the assets, amenities, and attributes of the airport; and (3) the values of the organization. Identity shapes the way the airport is portrayed to the customers, the stakeholders, and the community it serves. Product Placement Target Audience Price Promotion People

118 Guidebook for Developing General Aviation Airport Business Plans Figure 9-2 illustrates the way an airport’s brand is defined, developed, delivered, and nurtured. As indicated, branding is an ongoing effort. Figure 9-2: Defining, Developing, Delivering, and Nurturing an Airport’s Brand 9.4 MARKETING AS A COMMUNICATION AND IMPLEMENTATION TOOL Figure 9-3: Marketing—as a Communication Tool Brand Definition •Mission •Vision •Values •Attitude Brand Development •Assets, amenities, and attributes •Value proposition •Positioning Brand Delivery •Identity •Messaging •Initiatives •Action Plans Brand Nurturing •Check progress and results •Make adjustments •Revisit and update Development •Discuss the current and future direction of the airport •Solicit input •Gain support for the airport Action Plan •Broadcast mission, vision, goals, and key messages •Increase awareness •Influence target audiences Implementation •Launch marketing initiatives •Publicize successes Marketing is a communication and implementation tool that can be used to achieve the goals established for the airport. Chapter 3 identified several points during the development and implementation phases of the process when it is important for airport management to communicate with policymakers, staff, planning team members, and stakeholders. Figure 9-3 illustrates the role and importance of marketing as a communications tool.

Marketing 119 Another example is based on the objective of increasing fuel flowage fee revenues by 2.5% within 12 months without raising the fuel flowage fee in order to keep the price of fuel at the airport competitive in the marketplace. Based on the findings of the SWOT analysis, suppose the planning team decided to focus on formulating an action plan for increasing transient—as opposed to based—aircraft operations with the idea that an increase in transient operations would lead to an increase in fuel volumes and fuel flowage fee revenues. In addition, suppose an analysis of the market revealed that approximately 50% of transient aircraft handled by the FBO were being fueled by the FBO. Therefore, to achieve the objective, the planning team determined that it would be necessary to increase transient aircraft operations by 5% within 12 months. To increase transient aircraft operations, the following marketing tactics could be used: • Attend NBAA’s Scheduler’s and Dispatcher’s Conference • Advertise in AOPA Pilot magazine • Hold a fly-in Figure 9-4 illustrates how a goal, an objective, and a marketing-oriented action plan work together. Figure 9-4: Example: Marketing—as an Implementation Tool The objectives set forth in the airport business plan will drive the development of specific marketing tactics. In combination, the tactics identified provide the framework for the marketing-oriented action plan for accomplishing a particular objective. Goal The airport will be financially self- sustaining within 5 years Objective Increase fuel flowage fee revenue by 2.5% within 12 months without increasing the fuel flowage fee Action Plan For increasing transient aircraft operations by 5% within 12 months Tactic 1 Attend NBAA's Scheduler's and Dispatcher's Conference Tactic 2 Advertise in AOPA Pilot Magazine Tactic 3 Hold a fly-in Implementation of the airport business plan Marketing tactics Chapter 4 outlined the process for formulating an action plan and provided an example of a marketing-oriented action plan for accomplishing the objective of leasing five vacant T-hangars within 6 months. This example is one of many that could help an airport achieve the goal of becoming financially self-sustaining.

120 Guidebook for Developing General Aviation Airport Business Plans 9.5 DESIGNING A MARKETING INITIATIVE Based on the Five Ps, the following steps can be used to design a marketing initiative: identify the target audience, craft the message, choose the tactics, and select the tools. Each step is explained in detail in this section. STEP 1: IDENTIFY THE TARGET AUDIENCE Identifying the target audience is a fairly straightforward process. The target audience can be defined by a number of attributes including • Geographic location—at the airport, in the community, at competitive airports, beyond the community (in the region, the state, the nation, the world). • Customer groups—aircraft owners, pilots, passengers, businesses, tenants, etc. • Demographics—age, income, occupation, etc. • Psychographics—interests, attitudes, opinions, etc. Continuing the example, flight-tracking software can be used to identify transient aircraft using competitive airports. This type of software tracks aircraft by registration or flight number and destination airport. If a registration number is available, the aircraft owner can be identified through the FAA’s aircraft registration database. STEP 2: CRAFT THE MESSAGE Crafting the message to the target audience is a critical step in implementing a marketing initiative. Although the message can be directed at a narrowly defined group or a broad audience, it is important to remember the message is a direct communication. It must be consistent and it counts. The following questions can be helpful for formulating a message for each target audience: • Who is the target audience? • What aviation product, service, or facility is being marketed and what are its features? • How will the target audience benefit? • Why is the product, service, or facility better than the competition? It is a good idea to pre-test the marketing message with select members of the target audience. To continue with the example, the message could indicate that (1) the airport is located close to major centers of business and industry; (2) aircraft do not have to enter Class B airspace; and (3) aviation products, services, or facilities are competitively priced. Sometimes target audiences can be sequential. For example, in the case of mineral exploration on airport property, the first target audiences would be the airport sponsor and the FAA to gain initial approval. Once approval is obtained, the second target audience would be the oil and gas industry and the focus would change from gaining initial approval to soliciting interest in exploring for minerals at the airport.

Marketing 121 Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in private and public life have been the consequence of action without thought. - Bernard M. Baruch STEP 3: CHOOSE THE TACTICS This step is focused on choosing the tactics for communicating with the target audience. In most cases, there are several ways to accomplish an objective. Therefore, this step begins by brainstorming the possibilities. After that, based on available resources (time, people, and funding), the tactics believed most likely to be successful should be selected. Using the previous example of increasing transient aircraft operations by 5% within 12 months, several potential tactics were identified including (1) attending NBAA’s Scheduler’s and Dispatcher’s Conference, (2) advertising in AOPA Pilot magazine, and (3) holding a fly-in. STEP 4: SELECT THE TOOLS This step is focused on selecting the marketing tools for accomplishing the objective. To continue with the example, suppose the decision was made to attend NBAA’s Scheduler’s and Dispatcher’s Conference. At the conference, how will the target audience be reached? Some possibilities include (1) exhibiting on the trade show floor, (2) having a hospitality room, (3) sending direct mail or e-mail before the conference, (4) providing brochures and flyers, (5) distributing giveaways or prizes, (6) using social media during the conference, and (7) meeting face-to-face with existing and prospective customers. Social media, in its various forms, can be a useful marketing tool, provided the airport’s target audience is participating in social media. If this is the case, airport management and staff need to be able to commit the required resources to this arena of marketing. Social media is a fast-paced form of communication which needs to be proactively monitored throughout the day. If information and comments become stale, social media users may abandon the connection to the airport, rendering this marketing tool unproductive. 9.6 ADDITIONAL MARKETING RESOURCES PLANNING TEAM FUNDING General aviation airport managers may need to identify creative ways to fund marketing initiatives. Figure 9-5 identifies sources of funding, contributions (pro bono or in kind), and cost sharing that may be available. Many general aviation airport managers wrestle with the challenge of having so much to do and limited resources to get everything done in a timely, efficient, and cost-effective manner. As identified in Chapter 3, internal and external stakeholders can be engaged to help develop an airport business plan. Ideally, the members of the planning team would have a wide range of airport and business experience and planning expertise, as well as a comprehensive understanding of the operating environment. Preferably, a full spectrum of airport and business perspectives would be represented as well. As an anciliary benefit, the same stakeholders who help develop the plan can help implement the plan.

122 Guidebook for Developing General Aviation Airport Business Plans Funding Contributions Cost Sharing Figure 9-5: Sources of Funding, Contributions, and Cost Sharing for Airport Marketing Initiatives 9.7 WRAP-UP Marketing is an important aspect of an airport business plan. By way of the development process, channels of communication can be established with customers, stakeholders, and the community. Such channels can help facilitate the development and implementation of an airport business plan and the design and execution of marketing initiatives. It is important to ensure each marketing initiative is targeting the intended audience, the message is clearly and consistently being communicated, and the required resources are available to support the initiative properly. The Five Ps—Product, Price, Placement, Promotion, and People—provide the framework for targeting the audience and crafting the message. Grants o State aviation agencies o Economic development organizations o Local, regional, and state bureaus (e.g., tourism) Donations o Individuals o Organizations o Associations o Businesses (on and off the airport) o Fund raising events Local government Governing and advisory body members Educational institutions Advertising agencies Newspapers Industry publications Radio and television Chambers of commerce Economic development organizations State aviation agencies Local, regional, and state bureaus (e.g., tourism) Businesses (on and off the airport) Other airports