Marketing Advisor Update

Sales and marketing tips, insights and advice for service businesses amd companies selling complex or technical products.

Monday, March 13, 2006

Huge sum wasted on ignorance of market

It continues to amaze me how much money people will waste on their own inflated ideas - without looking at what the market will really support. This news report highlights how the new Australian business-class-only airline OzJet failed in 4 months - and lost $10 million in the process. How disgusting is that!

What went wrong...
1) They cut prices on a business class service (not a budget product). This is a major mistake (and so basic).
2) They didn't have a distinctive value to offer. Their only route was Sydney-Melbourne, an hour-long flight. Most people don't care if they rub knees and elbows for short flight like that - as long as they are saving money.
3) They were operating with old and inefficient planes. How can you try and beat larger, smarter, more modern competitors when your equipment is old?

This failure of OzJet will probably make an interesting marketing case study - showing clearly what NOT to do.


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