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Eurosky – Marketing and Sales

5.1 Marketing Objective

Eurosky’s marketing strategy is centered around the objective to become leader in the Fractional Ownership market for business aircraft in Europe within the first five years of operation. Eurosky’s marketing and sales activities are based on a comprehensive marketing plan which details the company’s overall marketing strategy. Also, product features and pricing, as well as sales and service policies, distribution channels and advertising strategies are defined.

5.2 Launch Plan

Eurosky LLC will be incorporated in January 1998. The first two months will be used to install Eurosky’s base at Augsburg airport, including the customer database, as well as the operations and billing software. Letters, brochures and presentations will be designed in order to prepare for the initial sales effort. All founders will attend Sales School at Raytheon Aircraft Company’s training facility in Wichita, KS in February 1998 to enhance their product and sales expertise.

The sales process will start in March 1998 with the first initial contacts. The official Product Launch will be during the “ILA” trade show (Internationale Luftfahrt Ausstellung), held in Berlin/Germany from 18 to 24 May, 1998. Eurosky will be represented with an own booth and its first aircraft, co-locating with its partners Raytheon Aircraft Company and Augusta Air product launch and the initial sales effort will be supported by a press conference in Munich/Germany prior to the trade show. In addition, an advertising and public relations campaign will be started using a professional public relations agency. Eurosky’s marketing activities after launch include continuing presence at the ILA and AERO trade shows in Germany.

5.3 Growth Strategy

Marketing and sales efforts will result in significant growth of the company as soon as awareness and credibility is proven among corporate customers. Positive word-of-mouth communication between corporations and the purchase of Eurosky’s product by “reference customers” will further improve Eurosky’s sales effort and its standing in the industry. Eurosky’s growth strategy includes three dimensions: new geographic markets, new customer groups and fleet expansion.

While Eurosky’s service will initially be introduced in Southern, expansion into other geographic markets is a top priority in Eurosky’s growth plan. In order to tap other important geographic regions, Eurosky will base additional aircraft at locations other than Augsburg. Our operator partner, Augusta Air, is already in the process of setting up operations at Cologne/Bonn airport and Braunschweig. Eurosky will be able to co-locate aircraft there. The regional launch in Cologne/Bonn is planned for March 2000, and the third regional launch in Braunschweig is scheduled for January 2002.

Both launches are planned in line with the ]ILA trade show in Berlin in order to ensure adequate media coverage. With these two additional bases, Eurosky will be able to cover the Northern and Eastern German market, as well as the densely populated Western German region, The Netherlands and Belgium. These additional bases will enable Eurosky to serve customers all over Germany while the required ferry flight time is minimized (see Exhibit 9 on the facing page). The opening of bases in countries other than Germany is a part of Eurosky’s long-term strategy after year 5.

By developing a competency in identifying, researching and accessing specific target groups, Eurosky will be able to extend its service to its secondary target group, namely sports and entertainment industry, as well as high net worth individuals and government agencies.

Finally, Eurosky intends to carefully expand its fleet with the introduction of business jets, if customers demand increased flight range and speed. Eurosky’s partner Raytheon Aircraft Company currently has three different business jet models that could be incorporated into Eurosky’s fleet and Fractional Ownership Program.

5.4 Sales Process

Eurosky’s sales process consists of three steps, as depicted in Exhibit 10 on the facing page. The initial contact will consist of direct marketing mails and follow-up phone calls. This step will be supported by Eurosky’s extensive market research, which has identified potential customers including contact persons and information on the company’s specific travel needs. The mailings will include a sales brochure, press reprints and a customized part that details the exact benefits for the prospect’s travel needs. The sales brochure describes the product offer, the pricing structure and also summarizes the benefits of Eurosky’s Fractional Ownership Program.

Eurosky’s product presentation will be held at the prospect’s location. In addition to a standardized part, cost comparisons for the specific travel needs of the customer will be discussed. Depending on the interest of the customer, a demonstration flight will be performed on a route chosen by the customer. This flight will be charged to the prospect at preferred rates. This practice is industry standard and serves to identify serious customers. The charges for such demonstration flights will be reimbursed after the closing of the contract.

5.5 Sales Forecast

The sales forecast is based on careful modeling of market potential on the one hand and Eurosky’s sales capacity on the other hand. Eurosky’s Sales Forecast builds on the experience of Raytheon Aircraft Company and its network of local distributors.

According to the Sales Forecast detailed in Appendix 8.1.2, the first share will be sold in August 1998, the first complete aircraft (4 shares) in November 1998. By the end of year 5 (2002), Eurosky will have sold 35 aircraft interests, which translates to a fleet of 9 aircraft. The sales regions are centered within a 300 km radius around Eurosky’s operating bases in Augsburg, Cologne and Braunschweig, taking into account a maximum 30 minutes ferry flight (see Exhibit 9).

A total of 850 potential corporate customers were identified by Eurosky’s initial market research. These prospects are located in Germany and adjacent European Countries and have been allocated to the three sales regions. An average of 14 prospects will be contacted per month. The overall success rate of 4,6% of the initial contacts leading to a sales contract is derived from the modeling of the sales process. Eurosky expects that approximately 15% of the customers will exercise the right to return their share to Eurosky every year. This results in four shares being returned in the first five years of operation.

Table of Contents Appendices
1. Executive Summary
2. Market Analysis
3. Products
4. Company
5. Marketing and Sales
6. Operations
7. Financials
Pro-forma Financials
Resumes of the Founder Team
Board of Advisors
Key Advisors
The information and ideas herein are the confidential,
proprietary, sole, and exclusive property of Eurosky’s founders.

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