Lincoln University

Marketing Management Case: Boeing

Student: Mihajlo Radojkovic (8179)

Professor: Aharon Hibshoosh

Content:
1. Introduction.3 2. The case and the problem3 3. Goals and hypotheses..3 4. Boeing..4 4.1. Synopsis...4 4.2. Analysis........4 4.3. Strengths & Weaknesses..6 5. Conclusion...7 6. Q&A8 7. Recommendations9 Resources and materials10

1. Introduction
This study details to describe the Boeing company and the way it performs in the market. We will turn our attention to the way the company functions and how it manages to stay on top. Also we will present our proposals for the possible better operation of the company and its even bigger success.

2. The case and the problem

The case study of this paper is to show the importance and impact the company has on the market. On the way it manages to retain most of the market and what new and innovative things it does to keep fresh.

3. Goals and hypotheses

The aim of this paper is to point to the way the company and its marketing department work. The hypothesis of this paper can be basic and special, thoughtful assumption about the outcome of the research problem, which suggests a solution to the problem and what can be proven in practice. Here, it would read: An understanding of how the market works, we can assist in maintaining existing and establishing new markets and expanding the popularity of the company.

4. Boeing
4.1. Synopsis
Each year the strong economic growth of the U.S. led to sustained high oil and fuel prices. Between 2003 and 2007, jet fuel expenses have increased dramatically by 15 percent to more than 30 percent of operating cost. Because of this, many airlines are demanding new aircrafts that are fuel efficient in order to help reduce their operational costs. The current trend of increasing fuel prices plays a key role in increasing the current demand for new aircrafts and commercial airplanes that are more fuel efficient. In addition of the rising, fuel prices have taken a big effect on the economy. As fuel prices affect consumer goods and spending, leisure travel is expected to decrease, thus affecting the airline industrys bottom line. Furthermore, since the economy has gradually moved into a recession from the effects of rising fuel prices many airlines that are struggling to stay out of bankruptcy, are looking for more ways to become cost effective. Thus further are in demand for new commercial aircrafts to become more fuel efficient.

In order to save on costs so that Boeing can provide lower prices to its customers Boeing and its competitor, Airbus, have both turned to outsourcing. It allows Boeing to share risks and focus on their relationship with marketing and suppliers. However there is a down side to this. When Boeing decided to outsource, engineers felt that outsourcing is not a great idea for the company. One of the reasons why engineers are against outsourcing is because they feel that their job is at stake and the economy has lost sight for bigger interests.
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4.2. Analysis
4.2.1.External analysis of Boeing:
Boeing is in duopoly when it comes to being in the large commercial aircraft industry, which means that there is one other major company that is competing with them directly in the same market, and that would be Airbus industries. Nevertheless, Boeing was the first to be in the large commercial aircraft industry until Airbus came along. McDonnell Douglas used to be another competitor to Boeing until the companies merged. Airbus entered the market with the help of launch aid, a form of government subsidies that helps a company compete and survive in industries that already have giants with established distribution networks and economies. So Airbus capitalizes the market by making planes that addressed the needs of their buyers, which were midsize cost efficient planes.
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4.2.2.Internal analysis of Boeing:

Advantages are its core competencies which help develop Boeings resources into strong competitive advantages in the airline manufacturing industry. Boeing also has operational strength internally, which allows them to better function. Boeing has many strong competitive advantages, and internal resources that help define its core value. The main source of Boeings strength is their competitive advantage in the market.

4.3.Strengths & Weaknesses

4.3.1.Competitive Advantages:
Boeing has a long list of competitive advantages that it uses to gain an advantage over its competitors, mainly Airbus. One aspect of the airline industry that is highly regarded is market share, which Boeing has consistently had an advantage of. One of the main reasons Boeing has most of the airline manufacturing industry market shares is due to its long history of excellence in designing aircrafts for over 90 years. Boeings strong name and brand allows for a strong hold on the airline manufacturing industry, which has now become a duopoly between Boeing and Airbus. As one can see, the culmination of both Boeings core competencies and operational strengths allow it to build upon different competitive advantages in the airline industry. One of Boeings greatest competitive advantages is its unique strategy to work more with both its customers and suppliers, to design and build the best aircrafts on the market. One of Boeings largest competitive advantages include its unique research and development departments which are able to design and implement better aircrafts without incurring large amounts of costs. This would allow the company to produce better aircrafts more efficiently with fewer costs than the competition, giving Boeing strong competitive advantage over its competition.

4.3.2.Strong global network:

- The company has strong international operations with customers in around 145 countries, employees in more than 60 countries and operations in 26 states. - Worldwide, Boeing and its subsidiaries employ close to 188,000 people with major operations in Washington State; Southern California; Wichita,

Kansas; and St. Louis, Missouri. Boeing enjoys the ownership of a brand with good and far reaching awareness on a global scale. - Boeing enjoys many strong alliances with many other globally powerful companies. In defense projects Boeing works closely with Northrop Grumman in programs such as the joint common missile program. - Boeing is also a 50-50 partner with Lockheed Martin in the United Space alliance. Boeing also works with many other organizations such as NASA in close relationships, which strengthen the companys position in other markets.

5. Conclusion:
From the above analysis, the aviation industry is overall attractive to Boeing, which is in a good position to complete and develop. However, the major competitor Airbus and threat has been increasing their market share and forming a big threat to market leader position of Boeing, furthermore, the flow of its supply is also important for Boeings production. Boeing should have held all systems and suppliers close to their assembly lines to facilitate cooperation suppliers and Boeing.

6. Q&A:
1- The market structure for the Dreamliner is that of an oligopolistic nature which
means there are few aircraft manufactures who sell large quantities to its buyers. With Boeings biggest competitor Airbus unable to compete with the Dreamliner product, Boeing has the chance to take over the market for commercial aircraft. The demand for the Dreamliner is derived demand. Due to customer demand for comfortable fair priced airline travel, the demand for the Dreamliner will increase. Customers demand comfort during air travel and the Boeing Airliner promises added luxuries that will increase customer purchases to those airlines with a Dreamliner aircraft. The chief project manager for the Boeing, Tim Cogan stated, Its not just an evolutionary step it borders on revolutionary. This statement is supported by many industry insiders.

2- What examples of the major types of buying situations do you see in the case?
Discuss the implications of each in terms of marketing strategy. The Airline industry is going through difficult times as oil prices are all time high and declining customers due to the global economic situations. At this time industry is looking for ways to reduce fuel consumption, increase safety and better service to the customer. With the launch of Dreamliner Aircraft Boeing Co facieses different kind of buying situations as being in the business market the customers that Boeing deal with are large in size but fewer in number, selling commercial aircraft involves some of the most complicated transaction of the world. Boeing client send a team to work on the deal, which consider number of factors that affect long-term operating and maintenance cost such as delivery schedule, service agreements and payment terms.

3- List the specific features of the Dreamliner. What customer benefits result from
each? The Boeing 787 Dreamliner is a long-range, mid-size wide-body, twin-engine jet airliner developed by Boeing Commercial Airplanes. Its variants seat 210 to 290 passengers. Boeing states that it is the company's most fuel-efficient airliner and the world's first major airliner to use composite materials for most of its construction. According to Boeing, the 787 consumes 20% less fuel than the similarly-sized 767. Its distinguishing features include a four-panel windshield,

noise-reducing chevrons on its engine nacelles, and a smoother nose contour. The 787 shares a common type rating with the larger 777 twinjet, allowing qualified pilots to operate both models, due to related design features.

4- Discuss the customer buying process for a Boeing airplane. In what major ways
does this process differ from the buying process of a passenger might go through in choosing an airline? A person buying an airline ticket is an individual looking for airline service which suits his requirements, and give him highest benefits with in his/her spending capacity. The customer will go through different airlines price, polices and benefits they will get in comparison to other airlines whereas buying an aircraft is and different ball game, it and complex and nerve-racking long process. Buyer and seller will have special team assigned to work on the deal. They look in to the complex details such as customer requirements, aircraft specifications, delivery schedule, service agreement, payment terms, and other support products and services and often takes years for the deal to be finalized.

5- What marketing recommendations would you make to McNerney as he

continues to resolve the problems with 787 Dreamliner program? Thou Boeing had a great product which meets the market need and also give them competitive advantage, and at the same time sales team have done a great job in making the company market leader. However frailer to complete the order in time had put the CEO Mr. McNerney in great presser, thou he continues to resolve problems but still out of 838 order only 26 plains have been delivered.

7. Recommendations:
The following are the suggestion based on the marking concept - Make a detail investigation to find out the cause of delay. - Keep in constant touch with the buyers and keep them updated about the developments. - Resolve the supply issues with the suppliers and contractors. - Develop an efficient supply chain. - Improve suppliers and sub-contractor relationship - Improve business to business relationship. - Improve vertical alignment. - Increase plant capacity to make additional units to meet up with the order

Resources and materials

Papers provided by the faculty World Wide Web