Pitch

Political, legal, and ethical. All firms operate within certain rules, laws, and norms of operating behavior. For example, JetBlue has

myriad regulations administered by the Federal Aviation Administration, the National Transportation Safety Board, and the

Transportation Security Administration. In the airline industry, the regulatory environment is a particularly strong external influence

on firms’ marketing planning.

Sociocultural/demographic. Trends among consumers and in society as a whole impact marketing planning greatly. Many such trends

are demographic in nature, including changing generational preferences and the rising buying power of minority groups domestically

and consumers in developing nations in the global marketplace. Speaking of generational preferences, JetBlue jumped on the video

game trend among children and teens by providing in-seat games, much to the delight of parents who no longer have to entertain the

kids for the duration of the flight.

Demographic factors influence a company’s marketing strategy. In a time when so many images of women used in marketing materials

are photoshopped and retouched, Dove broke out of that mold with the Dove’s Real Beauty campaign. It was a really smart (and

grossly overdue) move within the consumer products industry. More than half of women globally agree that, when it comes to how they

look, they are their own worst critic. Dove and other companies like Aerie (by American Eagle) broke the mold and began focusing on

real women. The results have been incredible, with exponential growth for Dove and a proliferation of similar ad campaign shifts under

way by other brands.

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Burger King gained sensational headlines with the debut of its Impossible Whopper, a burger made with a plant-based, protein-filled patty. BK benefitted from its early entry within the major quick-serve competitors, solidifying its position as a sort of “alt- McDonald’s.” Tada Images/Shutterstock

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Technological. Constantly emerging and evolving technologies impact business in many ways. The goal is to try to understand the future

impact of technological change so a firm’s products will continue to be fresh and viable. As JetBlue has grown, it has put into service

more and more of the new downsized “regional jets,” planes that carry about 100 passengers and allow for entry into smaller,

underserved markets. The airline is banking on these attractive, comfortable new aircraft to provide a market edge over the

competition.

Economic. The economy plays a role in all marketing planning. Part of a marketing plan is a forecast and accompanying budget, and

forecasts are impacted by the degree to which predicted economic conditions actually materialize. Fuel prices are a major economic

cost element for any airline. JetBlue was a pioneer in hedging against rising fuel prices—that is, making speculative long-term purchase

commitments betting on fuel prices going up.

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Natural. The natural environment also frequently affects marketing planning. JetBlue’s highly publicized winter weather fiasco at JFK45

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Competitive Environmental Factors The competitive environment is a particularly complex aspect of the external environment. In his milestone book Competitive Advantage,

Michael Porter identified several factors, or forces, that comprise a basis for assessing the level and strength of competition within an

industry. The forces are portrayed in Exhibit 3.9 and summarized next:

airport some years ago prompted immediate changes in the way the company communicates with its customers. And on a broader

scope, the concept of environmentally friendly marketing, or green marketing, has been a growing trend in socially responsible

companies. Sustainability, which refers to business practices that meet humanity’s needs without harming future generations, has

evolved into a part of the philosophical and strategic core of many firms.

Threat of new entrants. How strong are entry barriers based on capital requirements or other factors? A cornerstone of JetBlue’s initial

market entry success was the fact that it was exceptionally well-capitalized. Not many new airlines are.

Rivalry among existing firms. How much direct competition is there? How much indirect competition? How strong are the firms in both

categories? JetBlue’s industry contains a number of firms that are much larger, but based on JetBlue’s unique value proposition, few of

them can deliver the same customer experience at reasonable prices that JetBlue can.

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Threat of substitute products. Substitutes appear to be different but actually can satisfy much or all of the same customer need as another

product. Will teleconferencing device-to-device reach a point in the near future such that business travel is seriously threatened, thus

impacting JetBlue and other airlines? Given the incredible growth in usage of platforms like Zoom, Microsoft Teams, and WebEx for

business meetings during the COVID-19 crisis, the key question is to what degree business travel will ever return to 2019 levels. For

most of the “legacy airlines” (American, United, and Delta, for example), business travel historically has counted for a majority of their

profitability.

Bargaining power of buyers. To what degree can customers affect prices or product offerings? So far, JetBlue has not been in

much head-to-head competition with Southwest, Spirit, Allegiant, Frontier, or other ultra low-cost carriers (ULCCs) in its primary

markets. Should this change, passengers will have more power to demand even lower fares and/or additional services from JetBlue.

Bargaining power of suppliers. Suppliers impact the competitive nature of an industry through their ability to raise prices or affect the

quality of inbound goods and services. Jet fuel literally fires the airline industry’s economic engine. Also, few manufacturers of

commercial aircraft still exist. Both of these factors point to a competitive environment with strong supplier power.

One other competitive force not directly addressed by Porter is the relative power of other stakeholders. This force is becoming more and

more relevant in assessing industry competitiveness. The level of activity by unions, trade associations, local communities, citizens’

groups, and all sorts of other special-interest groups can strongly impact industry attractiveness. Founder David Neeleman established

JetBlue as a non-union shop with the goal of keeping it that way by hiring the very best people and treating those people right. The union

environment in the airline industry adds multiple complexities to the ability to stay competitive.

EXHIBIT 3.9 Forces Driving Industry Competition

Source: Porter, Michael E., Competitive Advantage: Creating and Sustaining Superior Performance, New York, NY: Free Press,

1985.

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Internal Environmental Factors The internal environment of an organization represents elements that the firm can largely control. These are critically important in

marketing planning, especially because the people inside the organization can directly do something about improving any deficiencies!

Major categories for analysis in the internal environment include:

JetBlue historically has performed better than almost all the competition on all these resource dimensions.

Summarize the Situation Analysis into a SWOT

Firm structure and systems. To what degree does the present organizational structure facilitate or impede successful market-driven

strategic planning? Are the firm’s internal systems set up and properly aligned to effectively serve customers? David Neeleman had his

organizational chart right on the company website and talked openly about being a lean and mean operation. It’s hard to find much

evidence that JetBlue’s structure and systems offer impediments to its marketing planning.

Firm culture. As discussed previously, successful marketing planning requires a culture that includes customer orientation as a core

value. If a firm’s culture does not value and support a customer orientation and customer-centric approach to the overall business,

marketing planning will likely disappoint. Although every airline has its detractors, overall, JetBlue scores high points for its

communication with customers as well as the generally positive tone of social media chatter. This provides evidence that customer

orientation is a core value at the company.

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Firm leadership. Of course, the CEO must believe in and continuously support (financially and otherwise) the structure, systems, and

culture necessary for market-driven strategic planning. JetBlue’s employee-friendly—and customer-friendly—approach epitomizes such

leadership and commitment.

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Firm resources. Finally, internal analysis involves taking an honest look at all aspects of a firm’s functional/operational-level resources

and capabilities and how they play into the ability to develop and execute market-driven strategies. Key resources for study are:50

Marketing capabilities.

Financial capabilities.

R&D and technological capabilities.

Operations and production capabilities.

Human capabilities.

Information system capabilities.

Summarize the Situation Analysis into a SWOT Upon completion of the situation analysis, a convenient way to summarize key findings is into a matrix of strengths, weaknesses,

opportunities, and threats—a SWOT analysis. Exhibit 3.10 provides a template for a SWOT analysis. Internal analysis reveals

strengths and weaknesses, while external analysis points to potential opportunities and threats. Based on the situation analysis and

SWOT, it is now possible to begin making decisions about the remainder of the marketing plan.

Besides helping a marketing manager organize the results of a situation analysis, the SWOT analysis template is also useful in beginning to

brainstorm marketing strategies that might be appropriate depending on which of four possible combination scenarios predominate in a

firm’s situation: internal strengths/external opportunities, internal strengths/external threats, internal weaknesses/external opportunities,

or internal weaknesses/external threats. During the situation analysis, it is essential to begin to critically and realistically examine the

degree to which a firm’s external and internal environments will impact its ability to develop a marketing strategy. The more honest and

accurate the portrayal provided by the SWOT analysis, the more useful the remainder of the marketing planning process will be.

EXHIBIT 3.10 SWOT Analysis Template

Source: Weihrich, H. “The TOWS Matrix—A Tool For Situational Analysis,” Long Range Planning 15, no. 2, 1982, p. 60.

Additional Aspects of Marketing Planning Additional elements of marketing planning are identified next. Because they derive their content primarily from future chapter topics,

reference is made where relevant to the chapters from which the content can be derived.

Perform Any Needed Market Research Part Two of the book focuses on using information to drive marketing decisions. In those chapters, you will learn about collecting and

analyzing market information; gain insights on CRM, Big Data, and marketing analytics and dashboards; and discover how to best

understand consumer and business markets—all focused on making better decisions as a marketing manager. JetBlue has an effective

CRM system that is supported through its TrueBlue loyalty program and other means. The firm also engages in ongoing market and

consumer research to pinpoint trends and opportunities to better enhance the customer experience.

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Establish Marketing Goals and Objectives What is expected to be accomplished by the marketing plan? Based on what is learned from the situation analysis, competitor analysis,

and market research, goals and objectives can now be developed related to what the marketing manager intends to accomplish with the

marketing plan. JetBlue’s marketing goals focus on enhancing the safety, comfort, and fun of customers’ travel experience, building high

satisfaction and loyalty among JetBlue users, and attracting new users to the brand.

Develop Marketing Strategies