Assignment task:
You explore the market segmentation strategy pursued by Silver Jet and speculate about the cause of its failure. Was it bad marketing, weak financing or bad timing? My assignment:
Doing business on aviation industry is always operates the opportunities and interested profits to the investor who wants to take a chance on this potential market. However, it is not only the safety invest sector but also challenge the investor with many threated and hapless when they want to be success. It is also effect by marketing strategy and business factor such as market research, market segmentation and economic situation.
This essay will discuss about the market segmentation of one well-known airline and aims to examine the possible reasons behind the company collapse.
In the modern life, the aviation industry has a rapid development. Flight has known as the most convenient transportation. There are three main of segmentation bases are economic, business and first- class typically used by global airlines. Economic class is the most popular seat in flight which target on passenger who has the usual demand as traveling. In a similar way, economic class also designed for more cost-conscious travellers who want to save money.
As a consequence, business class bases on passengers who want to rest in the flight within high-quality services to make a good preparation for their business trip. Thus, it cost more money but have much better services. Finally, first-class will bring customers to the high-end quality on flight with luxurious services and specific preferential right from booking to landing. It has the highest fare and designed for the high society.
Silver Jet Airlines was known as a British all-business class airline which created on 2006 by Lawrence Hunt. It achieved the Sunday Times award for Best Airline of Year 2007.
In the same year, it had recognized by Esquire, Condé Nast and also the Environmental Award. (Silver jet Press Release, Nov 2007). For a short term, they were known as very success airline that has performed a differentiated market segmentation strategy. They focused on business-class segment only, offering many suitable options and good customer services for their passenger. In my own opinion, Silver jet concentrated only business passenger which is belongs to demographic segmentation. They aim to become a leading on high standard segment of aviation industry. It means they were understand their customer needs, their social class and beyond it is customer’s self-actualization. They could have implemented their business as cost leadership strategy which is offer top quality service at lower price. Anderson (2007) proposed that Silver jet offers specific customer services such as $2,200 cheap price compare with $8,800 of others, own private terminal, over 30 minutes check-in and high end customer service on flight. In 2007, breakeven point of Silver jet was at 65% load factor which means they always made profits. It might be a good demographic market segmentation example for all other airlines to follow up to be success. In January 2007, Silver jet was awarded by The Institute of Transport Management of “Environmental Aware Airline 2007”. They were claimed as a first carbon neutral airline. The total fare was includes within a mandatory carbon offset contribution as $20 on every ticket (Anderson, 2007). This was a smart and creative strategy to be recognized as green airline. They were giving passengers environmental peace of mind in knowing that the “Carbon Safe” that they earn during flight time will be put back into numerous of “nature-friendly” projects which will protects the environment. Even though the right marketing strategy had been followed represents a significant success of Silver jet, the
