Dreamliner 787 Discuss the nature of the market structure and demand

Tara Lentini Week 3 Case Assignment Boeing: Dreamliner 787 Discuss the nature of the market structure and demand for the Dreamliner. What are the implications for Boeing and its customers? 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, “It’s not Just an evolutionary step… it borders on revolutionary. ” This statement is supported by many industry insiders. Kotler & Armstrong, 2010, p188) With such support, the emotions of the airline companies umped at the chance to place an order even with the understanding that the estimated time for delivery was at least 4 years and there was little research to support some of the added luxury amenities. 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? A new-task purchase is seen with the Dreamliner due to the fact that it is a new product being sold by Boeing.

The buying team is comprised of numerous members and the team must decide on specifications regarding the product. The marketer (Boeing) “tries to reach as many key buying influences as possible but also provides help and information. ” (Kotler & Armstrong, 2010, pl 73) The amenities of the Dreamliner will assist the buying team in making a decision whether or not the Dreamliner would be a good investment for the company and if so, how many to order. A straight rebuy is also seen in this case.

Boeing listed the airliner at a price of $162 million with few customizable options for its buyers. (i. e. seating arrangements). Many aircraft buyers may have already been customers f Boeing and are familiar with their business. A straight rebuy is defined by Kotler and Armstrong as the buyer reorders something without any modifications. Once the buyer purchases the aircraft the straight rebuy buying situation will result in a quicker sale with fewer individuals making a decision on options and product specifications.

List the specific features of the Dreamliner. What customer benefits result from each? PASSENGER BENEFITS: 60% quieter than other planes in its class – It is always nice to sleep on a plane however, when seated near the engine it is difficult to rest due to the noise. Many corporate travelers will enjoy this benefit with the late and early morning travel legs. With the added legroom there will no longer be a need to specifically sit in the isle and more options that will equal the comfort of isle seats will come available.

Lighting that automatically adjusts to time zone shifts – Changing time zones can be difficult for anyone Circadian rhythms, which are the internal clock we all have which tells us when we it is time for bed and when it is time to rise. These “clocks” are not easily adjusted when changing time zones. The Dreamliner will posse lighting that imulates “sunrise and twilight which will assist its passengers adjust to the change in time zones. ” (Micke, 2010) Higher cabin pressure and humidity – reducing common flying symptoms such as headaches, dry mouth, and fatigue.

All of these symptoms are not what most passengers look forward to; knowing the Dreamliner decreases these symptoms will make it a preferred aircraft for many passengers. Large overhead storage bins – It is always daunting not knowing if your carry on will fit into the overhead storage bins. We have all witnessed a passenger beating their luggage esperately hoping it will pop in before the flight attendant comes by to take it to be stored in the cargo area. 19 inch self-dimming windows – This is a wonderful feature for those who prefer a window seat but have to fght the sunlight to enjoy their flight.

Wireless internet and entertainment system – many travelers use the internet to stay connected while away. This option will give business travelers the ability to complete business while on the road. Time sensitive information can be conducted in-flight and travel will no longer be a burden for business travelers. The non-business travel can stay connected with family and friends to inform of flight status and arrival time. Also, wireless access will assist the passenger with passing the time during air travel. AIRCRAFT BUYER BENEFITS: For the buyer of a Dreamliner Aircraft, the marketing aspect will be a breeze.

Passengers are always looking for comfort when flying and this aircraft offers many luxury amenities. Airlines with a Dreamliner in their roster will have the ability to sell luxury air travel to its passengers without the luxury cost. The Dreamliner will offer a ighter aircraft resulting in less fuel needed for flights. This aircraft could replace outdated aircrafts that are no longer economically fit. The 787 will expand non-stop markets for its customers with a “fuel range of 8,500 nautical miles and a maximum speed of Mach . 5. ” (Kotler & Armstrong, 2010, p187) Also, the Dreamliner offers passenger capacity of 210 to 330 depending on seating arrangement ordered by the customer. With multiple configurations, the buyer of the aircraft has the option to decide what seating confguration would best meet their airline needs. For example, Southwest Airline only offers economy class, so they would order a Jetliner with one type of seating confguration. There is no need for Southwest to order a Jetliner with first or business class on a Dreamliner.

Other airlines may find it necessary to order multiple aircrafts with different seating arrangement to best meet its marketing and customer needs. Discuss the customer buying process for a Boeing airplane. In what major ways does this process differ from the buying process a passenger might go through in choosing an airline? The buying process for an airline placing an order or a Dreamliner would first have to recognize a need for a new aircraft offering the retire due to age may look at the Dreamliner as good solution to add new innovative products to their fleet.

Next the buyer would have to recognize the general specifications and quantity needed of an item. Here a buyer of the aircraft would consult engineers and technical personnel to discuss the options available on the Dreamliner Aircraft. For example, the technical staff should be consulted regarding the wireless entertainment system on a Dreamliner. The control tower may need odifications to ensure interference will not be an issue with this type of system. Product specifications needed to meet the airlines customer and marketing needs would have to be listed.

In this process, “the team decides on the best product characteristics and specifies them accordingly. ” (Kotler & Armstrong, 2010, p177) As for the Dreamliner, the airline would specify the seat options available. For example, Southwest Airlines only offers economy seating for their passengers. If Southwest chooses to purchase a Dreamliner, they would specify one seating option or their aircraft. Once the order is placed for a Dreamliner, the buyer should conduct a performance review to ensure the product will be delivered on time and to ensure they are aware of any problems that may arise.

At this “stage of the buying process the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement. ” (Kotler & Armstrong, 2010, p179) Most passengers choosing an airline are looking for the least expensive direct flight to their destination. The buying process for an airline ticket for a few hundred dollars is ess complex than that of purchasing an aircraft for over one hundred million dollars. Many travelers have a preferred airline and do not shop around for deals.

They use the preferred airline and earn air miles towards free flights. As for me, I do not have a preferred airline, however I do enjoy Southwest because of first come first serve seating. Yet, most travelers will look at price first, direct flight possibilities, and airport location before booking a flight. There is little thought that goes into aircraft options when a ticket is purchased. What marketing recommendations would you make to McNerney as he continues to try to resolve the problems with the 787 Dreamliner program?

McNerney needs to stay fully involved in the operations of the Dreamliner to ensure all suppliers and manufactures are completing production on time. Performance reviews of the suppliers must be taken seriously and the decision to drop or modify the arrangement must be made in a timely fashion. With 70 percent of the work being outsourced to dozens of partnering firms, he cannot be blinded by incomplete or inaccurate production. The longer it takes to assess the supplier performance the longer the delay in production and delivery will be for the Dreamliner.