PRODUCT MODIFICATION AND PRICING STRATEGY

Product Modification and Pricing Strategy

JetBlue Airways

MKT/GM 571

October , 2011

Instructor

Product Modification and Pricing Strategy

Introduction

JetBlue is an American based international airline company. The company is looking to expand its operations in Mexico and the United States. The airline will have to revise its policies if it wants to be successful in these two countries. The characteristics of both the countries differ a lot which the airline will have to consider before launching its business. The company will have to assess the airline industry in both the countries. It will give the company an idea what strategies it should adopt and what pricing strategy will be best in the country. The industry assessment will also help the company to prepare for the competiton that exists in the industry. JetBlue will have to examine the different factors that will affect its business and performance in the two countries. Researching the market will give it an idea on how to approach the market and what to expect from it (Bennett, Et. al, 2011). This paper will suggest product modifications and pricing strategies based on the industry analysis of both the countries.

Marketing Position Statement

A marketing position statement defines the target market, the key benefit of using the product or service and the reason for choosing this service or product. JetBlue needs to develop a strong positioning statement for both the countries, so that it can capture strong position in each market.

Positioning Statement for Mexico

'JetBlue is the airline that will provide you with the lowest cost because we believe in making quality affordable for everyone.'

Positioning Statement for UK

'JetBlue is the airline that makes travelling an experience that lasts a lifetime.'

Industry Assessment

Porter's five forces are the best way to analyze an industry. JetBlue will have to consider these forces in each country that it is entering (Porter, 2008).



Mexico

Market Competitors

The airline industry in Mexico consists of cheap airlines. The market growth rate in this industry is not very high, but the structure of costs is very low.. The differentiation in the quality of services is not much because the service is offered at a low rate which makes it difficult to increase the quality of service. The switching cost is not very high, because all the national airlines in the country offer low rates. (Luigi, 2011).

Suppliers

The suppliers in the industry do not exist in huge numbers. There are a few number of suppliers who provide the raw materials to the airlines at a low cost. The products that these suppliers offer are not unique or differentiated. The threat of forward integration is not huge; however, the threat of backward integration does exist. The airlines can buy its suppliers of raw materials of food etc. The bargaining power of suppliers is average in this industry; therefore, it is favorable.

Buyers

There is no threat of backward integration because the buyers cannot start producing this product themselves. The services they use in this industry are standard and a number of sellers of this service exist in the ...