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    Study of Price, Product and Promotion of Boeing

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    Neha Goyel
    1) Boeing manufactures several variants of its wide-body 747 jet aircraft in the United States, including the original 747-100 through the most recent 747-8 models. 2) The key advantage for aircraft manufacturers is creating a broad product line to satisfy different airline needs, and the 747 models provide a variety from smaller to larger sizes. 3) While Boeing lists high prices for its aircraft, they are commonly discounted 18-40% from list prices when sold.

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    Study of Price, Product and Promotion of Boeing

    Uploaded by

    Neha Goyel
    47 views29 pages
    1) Boeing manufactures several variants of its wide-body 747 jet aircraft in the United States, including the original 747-100 through the most recent 747-8 models. 2) The key advantage for aircraft manufacturers is creating a broad product line to satisfy different airline needs, and the 747 models provide a variety from smaller to larger sizes. 3) While Boeing lists high prices for its aircraft, they are commonly discounted 18-40% from list prices when sold.

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    Boeing FINAL

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    1) Boeing manufactures several variants of its wide-body 747 jet aircraft in the United States, including the original 747-100 through the most recent 747-8 models. 2) The key advantage for aircraft manufacturers is creating a broad product line to satisfy different airline needs, and the 747 models provide a variety from smaller to larger sizes. 3) While Boeing lists high prices for its aircraft, they are commonly discounted 18-40% from list prices when sold.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    47 views29 pages

    Study of Price, Product and Promotion of Boeing

    Uploaded by

    Neha Goyel
    1) Boeing manufactures several variants of its wide-body 747 jet aircraft in the United States, including the original 747-100 through the most recent 747-8 models. 2) The key advantage for aircraft manufacturers is creating a broad product line to satisfy different airline needs, and the 747 models provide a variety from smaller to larger sizes. 3) While Boeing lists high prices for its aircraft, they are commonly discounted 18-40% from list prices when sold.

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    Download as PPT, PDF, TXT or read online from Scribd
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    of 29

    IM Group – 2 Presentation Group 9

    STUDY OF PRICE, PRODUCT AND


    PROMOTION OF BOEING
    Boeing 747 – Jumbo Jet
    Manufactured by Boeing's Commercial
    Airplane unit in the United States, The Boeing
    747 is  wide body commercial airliner and
    cargo transport. It is among the world's most
    recognizable aircraft, and was the first wide
    body ever produced.
    Variants
    Family concept and commonality

    The key to long-term survival for any


    manufacturer of commercial aircraft is the
    creation of a broad product line that satisfies
    the various needs of airlines.

    The most obvious advantage of the aircraft


    family is that a manufacturer can offer a variety
    of models to satisfy the myriad needs of
    airlines.
    Unit cost of the 747 Series
    MODELS US $ Millions
    747-100 24

    747-200 39

    747-300 83

    747-400 228-260

    747-8I 317.5

    747-8F 319.3
    Facts about Pricing the VLA
    Firstly, Boeing post list prices for their entire product
    lines. – on websites

    Secondly, it announces nominal changes to their


    price list annually. Price changes are tied to an
    explicit formula that places a 65 % weight on labor
    costs and a 35 % weight on Producer Price Index.

    Thirdly, planes sell at large discounts to list price


    18-40%
    Clientele of Boeing 747
    • Private Airline companies
    Lufthansa
    Garuda Indonesia
    Air China
    Korean Airlines
    Air India
    Around 70 operator worldwide

    • Government and Military


    Domain of Boeing
    • Boeing’s not just about commercial jetliners. It is also
    one of the largest makers of military aircraft and a
    leader in the aerospace business. It has capabilities in
    Defense systems
    Missiles
    Satellites
    Launch vehicles
    Communication systems.
    The Jumbo Jet Segment
    • Projects of high strategic intent
    • High impact on the aviation industry
    • Cost of product launch exorbitant
    • High risk where many players in the industry doomed
    with failure
    • Oligopolistic market
    • Only two major manufacturers currently
    Boeing Advantage
    • Boeing 747 present since 1970
    • Has subsequently produced various versions
    • 747 a trusted marquee over the world
    • Boeing has the ability to innovate at “zero costs”
    • Market leader/ Monopolistic
    • Airbus is a new entrant
    • Competitive pricing prevails
    • Threats can be absorbed thus, by strengths
    • One of the largest defense contractors and exporters in the
    US
    Deterrence to Airbus A380
    • Rumored attempts to collaborate with Daimler- Benz
    (then) and British Aerospace

    • Private negotiations with Airbus

    • Collaboration with Airbus in 1993 only to end in 1995

    • Boeing Sonic Cruiser


    One partnership, Endless Opportunities
    • It’s a tag line which Boeing used in their five India
    centered advertisements.

    First Ad :  focuses on the


    commercial aviation business. 
    Second Ad: conveys that while your
    children are playing, its planes are
    there to protect them, highlighting
    partnerships in the defense arena.
    With the improvement in Indo-US
    relationship, Boeing has had a door
    opened in the defense business. 
    • Third Ad : About suppliers. During the Kerala boat
    races, the team that has the best chance of winning
    is one which rows in unison. It shows the synergy
    effect.
    Boeing’s suppliers in India are marquee companies
    like state-owned Hindustan Aeronautics and Bharat
    Electricals on the defense side. The company is also
    working with Tata Consultancy Services and other
    Tata companies, besides HCL, Infosys and Wipro.
    • Fourth Ad: About research and technology,
    young men stand on top of each other to
    reach the dahi handi. The point the
    company is emphasizing is the effort that
    goes into it, but once you get there, you get
    a big reward.
    • Fifth Ad: Its an educational advertisement.
    Again it is about teamwork, helping someone
    fly a kite. Broadly, the full concept is of
    helping one another, growing together, having
    fun. Boeing works with all the Indian
    Institutes of Technology and has a strategic
    partnership with Indian Institute of Science,
    Bangalore.
    v/s
    Which one flies better ?
    We are comparing 2 products
    Big is more...
    • The bigger size and higher capacity of the A380 makes it possible
    to integrate more features and flexibility in layout and
    customization;
    • The A380 requires important modifications of the airport
    terminals. The runways have to be modified, but the boarding
    bridges, the luggage handling etc. do also have to be adapted to
    the large number of passengers. Compared to the B747, where
    the embarkation and disembarkation time is shorter.
    • The airspace on major routes is saturated with airline traffic.
    Where Airbus’ answer to this is bigger aircrafts, Boeing’s answer
    is direct point-to-point flights with an aircraft that gives a higher
    operating flexibility. Direct routes between smaller airports can
    help to reduce the load on the big hubs.
    Value Curve Comparisons of A380 and B747
    Economies
    Aircraft manufacturing thus displays three
    important economies:
    1. Static economies of scale (design,
    development, and tooling)
    2. Dynamic economies of scale (learning by
    doing)
    3. Economies of scope (learning transferred to
    derivative models)
    Breakeven of A380 vs. B747
    • Due to its higher productivity, the break-even load
    factor of A380 is 58% instead of the B747’s 70%
    (operating risk).
    • For the A380, 323 seats must be sold to break-even
    and 290 for the B747.
    • With the A380, the remaining 232 seats represents a
    profit potential, whereas this number is only 126 for
    the B747.
    • This means that the airline has a higher chance of
    breaking even with a A380 than with a B747 on
    routes with high demand.
    Thank you !

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