Marketing Management: Azul Airlines Growth Opportunity Analysis Report

This report analyzes Azul Airlines' growth opportunities, focusing on international expansion and diversification. The author recommends investing in new markets and routes, particularly in the United States, to capitalize on high demand. The report evaluates the marketing mix, including product, pricing, and distribution strategies, considering market trends and competition. The target market includes passengers traveling from Campinas to the USA, with a focus on providing a cheaper alternative to competitors. The analysis covers the impact of the pandemic, digital channels, and the need for flexibility in ticket options. The pricing strategy is influenced by short-term supply and demand dynamics, while distribution requires local expertise and partnerships. The report emphasizes the importance of adapting to local regulations and building relationships for international success, with references to industry sources and key personnel at Azul Airlines.

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Running head: SUMMARY OF YOUR NEW GROWTH OPPORTUNITY
RECOMMENDATION
4.2 BMP
Week 4
Guilherme Calache
BUS 5093
MKT 5093: Marketing Management
Dr. Daw Olson.
January 12, 2022

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SUMMARY OF YOUR NEW GROWTH OPPORTUNITY RECOMMENDATION
Summary of your New Growth opportunity recommendation
The recommended growth opportunity strategy would be investing in their product and
also diversification. For Azul, it is essential to invest in new markets and diversify the company
abroad in international flights. Additionally, by investing in new routes, Azul can take itself to
the next level and gain a lot of recognition outside of Brazil. By evaluating these criteria, Azul
has all the skills and abilities to compete internationally with other airlines. When it comes to
new products for new aircraft, the demand is very high, and Azul needs to adapt to the aircraft
model and make some changes. One of the recommendations in order to Azul invest more in
international flights, it is necessary to invest in bigger aircraft. With that being able to attend all
demand of customers.
My recommendation of a new development opportunity is not to introduce a new
product, but to improve upon an existing product and, in this case, partnership with other airlines
is essential when it comes to international destinations. Upgrades to more extensive and more
technical aircraft it is necessary not as another opportunity but to attend to the demand of long-
distance flights. In addition, the focus on international flights, along with investing and
researching new routes, will slightly alter the company’s operating strategy, forcing higher
investments. Companies must allocate their resources to determine their best opportunities and
constantly look for new opportunities. The company’s best opportunities result from a
combination of its capabilities or what it does exceptionally well compared to its competitors and
the customer’s most critical needs. The products and services offered by the company must be
very well adapted to the client’s needs.
Brief summary/explanation of your target market for this new opportunity
For Orlando, the TAM and Gol service reflects the demand on the route, and Azul’s non-
stop service is offered at a lower price than TAM, which may be an opportunity for Azul to
encourage traffic. Like Fort Lauderdale, Azul’s position in Campinas allows it to take advantage
of opportunities to connect travelers to the United States through its national network. Oneworld
alliance partners American and TAM will continue to have an extensive network, but for
travelers looking for a cheaper alternative to the Brazilian domestic market, JetBlue and Azul
offer a strong alternative. That will be the main target for this new opportunity. Also, it will be
more convenient for the passengers who live in the interior of Brazil in Campinas since this is
Azul Hub and they desire to travel to the USA.

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SUMMARY OF YOUR NEW GROWTH OPPORTUNITY RECOMMENDATION
The idea will be to implement new destinations to the USA to target all passengers that
desire to travel to different states primarily due to the high demand in the tourism and business a
lot of Brazilians are traveling to the United States. States like California, Texas, and others are
on the main list of tourism that Azul has not started yet direct flights to those destinations.
Analysis of the Product Component of the Marketing Mix
There was an acceleration of some trends and processes that already existed. For
example, today, we have many more people boarding using only digital channels, with fewer
people going to the check-in counters. But airline digital apps and channels weren’t invented
now. A lot of things that are in evidence now in our lives, like delivery apps, video conferencing,
video streaming, are things that already existed. That is, many changes have already been made
according to needs and trends.
Furthermore, e-commerce has taken a lot of value to the customers in order to manage
their flights during the pandemic. However, in relation to Azul investing in international flights,
some changes in the regulations and on aircraft style are needed to be made. Staff with higher
experience will be required to be hired and trained for both areas in the airport and also for the
flights. Even with international flights, Azul has the idea to maintain the characteristics of the
brand known as a Brazilian low-cost airline compared to its competitors.
Another trend I believe is an appreciation of airlines’ direct communication with
customers. Due to the problems of the pandemic, such as cancellation and flight changes,
customers needed more support from companies. And these processes must improve to allow
travelers to control their journey, what they paid for and what they paid for. New ticket types
will be created where the customer will choose how much flexibility and what types of options
they want
Analysis of the Pricing Component of the Marketing Mix
Azul has different dynamics in the short and long term. In the long run, what matters is
the cost of the company. These variables point to an increase in cost. The price of oil has already
returned. At the same time, the exchange rate pressured the company brutally. In the short term,
the price depends on how much capacity (supply) there is. With airlines putting more planes to
fly, the trend is for prices to fall. If the plane is going to fly, let’s fill the aircraft. And in the short
term, we want to invite the passenger to fly. The price has to be more inviting to convince people
to travel again. Therefore, we will be more aggressive until demand returns to normal before the

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SUMMARY OF YOUR NEW GROWTH OPPORTUNITY RECOMMENDATION
pandemic. According to the author Eben Harrell he states that: “As the battle against the SARS-
CoV-2 virus takes it toll on the global economy, no industry has been harder hit than aviation.”.
(Harrel, 2020).
According to Azul president John Rodgerson: “The average tariff is expected to fall in
the coming years. Our fleet expansion with the super-efficient Embraer E2 and the Airbus
A320neo was intended to lower fares. But what determines prices is demand. And we lived
before Covid-19, a moment of very high demand. Over time, prices will drop, because more
aircraft will arrive and the supply will grow a lot.”. (Rodgerson 2020).
Analysis of the Distribution Component of the Marketing Mix.
Going to a new market, especially in a foreign country, Azul airlines will need an “in-
country” agent or a “freight forwarder” to handle all documentation, customs, and other legal
necessary requirements. Trading in foreign markets is possible if Azul is flexible enough to
operate within the guidelines of local laws and regulations. Government consistency is key to the
integrity of the contract, employee protections and rights, trademarks and intellectual property,
and many other aspects of business conduct. In this new strategy, Azul has to be sure to gain
“local” expertise on political and business factors before enjoying any overseas expansion.
Partnership and Contact Relationship Development will be necessary for Azul. Finding
guidance and opportunities by joining a “local” collaboration and partnership with an existing
local airline will help Azul grow its business internationally. Azul has a general sales manager in
the United States. Gastón Rodriguez, a native American, is the company’s employee responsible
for the commercial area. He began his professional career at Varig in 1978, where he held
several positions – including sales manager and being helping through these transitions
implementing new international destinations.

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SUMMARY OF YOUR NEW GROWTH OPPORTUNITY RECOMMENDATION
Works Cited
Freedman , M. (2021, July 30). What makes up the distribution mix? business.com. Retrieved
January 12, 2022, from https://www.business.com/articles/distribution-mix/
Harrell , E. (2021, February 1). Looking to the future of Air Travel. Harvard Business Review.
Retrieved January 12, 2022, from https://hbr.org/2020/05/looking-to-the-future-of-air-
travel
Hill, B. (2017, November 21). Business Planning & Strategy. Small Business - Chron.com.
Retrieved January 12, 2022, from https://smallbusiness.chron.com/business-planning-
strategy-2536.html
New York is Azul’s newest international destination. (n.d.). Retrieved January 12, 2022, from
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