Econ 205: Final Group Project

Econ 205: Final Group Project - Economics 205 Final Project...

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Economics 205 Final Project Christian de Clare, Barbara Eby, Karlee Olmer, Hayden Post Pascal Courty
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Demand Segments for Harbour Air/Helijet Harbour Air divides the market into age sectors. Students (with valid ID) can fly at half price but only with the stand-by option and seniors and unaccompanied minors fly cheaper during off-peak hours. This is called direct segmentation and is used by Harbour Air because they have a strong market position and hold large amounts of consumer information. The use of stand-by tickets compared to confirmed tickets allow Harbour Air to separate those who need a guaranteed seat and those who are flexible with time. Helijet separates the market through age coupled with certain time periods in the day that are focused more on certain types of consumers. There is a student stand-by rate ($89.25), a children rate ($75) and a senior rate ($186); all of these rates are only available during off-peak hours. Substitutes for each: When bad weather such as fog and rough winds hits the Haro Strait then Harbour Air will experience delays. Helijet can fly through certain weather types that Harbour Air cannot because they have infrared radar. However, when even Helijet cannot fly the only other option is to fly through Victoria International Airport or you can take the ferry (BC Ferries). Role of Product Differentiation: We know that both these companies are offering essentially the same service so the importance of differentiating your product is massive. Helijet have a more up-scale terminal and attracts more of the business commuters, whereas Harbour Air also sees a whole range of people looking to fly around BC. Harbour Air is seen as the cheapest fast option for getting to Vancouver quickly simply
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because it is just cheaper than Helijet. Moreover, the use of Quick Tickets and certain standby rates are a way of differentiating a product without actually changing anything about the product.
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