“As Peter Drucker said, well before the advent of the information age, the sole purpose of a business is to create a customer. It’s clear that brand building will only go so far.” Harvard Business Review – Marketing
If you have been asleep since 2007 or not directly involved in the marketing of a product in that time period, you might not be aware of the change in business relationship strategy in many product oriented companies, especially at the marketing level. This observation, and an intense Q&A with Panasonic after Aircraft Interiors Expo, taught us a few new lessons on the subject. In the Panasonic press briefing at AIX, Executive Marketing Director, Neil James presented a couple of these refocusing concepts that told IFExpress two things: 1. Panasonic Avionics’ marketing approach to airlines has changed to a “business for business” model, and 2. We had better study up on the new marketing analysis and processes involved to communicate them to our readers.
How does this process differ from the traditional approach to selling a product, you might ask? Panasonic no longer goes to the airline and says: “You need the next new widget we’ve built.” Instead they meet with the airline and ask questions like: “What are your business challenges, goals and objectives? What role can your IFEC strategy play in addressing these? Here is a process on how we can help you achieve your goals.” The process is a collaboration aimed at selecting the solution(s) that fits their goals and objectives… with the appropriate combination of Panasonic Avionics’ products. “The airlines know their passengers and their operating requirements better than we do. We ask them to tell us what they want IFEC to do for them, and then make a virtue of coming back with suggestions about different options for them to consider”, says Neil James.
The marketing world, as we said before, has changed at least in understanding the value of customer relationships. Due to the greater opportunity for direct relationships with customers via the web, there has been a progressive shift in value away from the brand (Brand Value) towards the value of the repeat customers themselves (Customer Value). Read the following article to get a better understanding of the timeline. Being able to understand the time-line of the relationship with customers means that the new ROI of marketing includes words like Impression, Perceptions, Opportunity, and Engagement. And yes, we are talking about new marketing measurement tools, some that focus on current monetization (Efficiency) and others that focus on the long term relationships (Effectiveness/Engagement).
The changes have been subtle, but they have been fundamental. We are speaking of the “new involvement” of businesses with their business customers, as well as the involvement of the airline customers with their travelers. Many successful businesses today have structured their customer relationships to begin by asking them (in this case, airlines) about their relationships with their own customers (passengers) to better help (the airlines) select products that will help them achieve their business goals. Got that? It could be better entertainment, it could be better connectivity to enhance customer communication, or it could be something as simple as more viewing choices on their PED’s. But, in the end, it is all about Panasonic’s understanding and enhancement of the airline’s business goals… with a built-in intent of delivering a better airline product – that is, a more goal-achieving one. In other words Panasonic is providing better Business FOR Business solutions.
That’s it in a nutshell but, as you well know, the airline marketing world is much bigger than that. Improving customer relationships brings more customers to the airline for their travel, which improves the airline’s bottom line and, with that, Panasonic’s. But the process of understanding airline objectives is not always easy. Obviously, it involves meeting with airlines, but sometimes a stated goal or product related influence involves understanding the perspective of different constituencies within the airline – operations, marketing and finance in particular. Working with airlines is key to understanding their goals and objectives and this is exactly what Panasonic Avionics has been doing. We have observed that the approach used attempts to fully determine what the airline/passenger relationship goals are, as well as how connectivity can improve operational efficiency. And since there is a process that makes this happen called PACE, we should talk about it next.
Panasonic Avionics defines their vision as being to: Delight Passengers and Enhance Airline Value. They have a roadmap to help achieve this vision; it is called PACE. It is an acronym that stands for Perspective, Analysis, Configurations, Evaluation, a four step process that they utilizes to understand and agree upon the specific airline customer goals and objectives.
PACE is about business outcomes. It is a structured, collaborative process to establish an optimal IFEC strategy, meeting each airline’s unique objectives, while taking into consideration the different IFEC configurations with their various functionalities and cost. It uses detailed modeling to establish the financial impact of the various configuration options to help the airline maximize their investment.
Let’s review the evidence for how this Business FOR Business (B4B) marketing process has been received by the airline industry by looking at the Panasonic Aero sales successes, as reported at AIX.
1. InFlight Entertainment
In 2014, Panasonic Aero won some 155 IFE programs equipping some 1,134 aircraft. We note that the average program size was 7 aircraft… which seems to dispel the myth that Panasonic only gets large program orders! They also installed hardware on 1,002 planes (a 10% improvement above 2013). Additionally, there were some 12 key innovations that included Next Generation IFEC, Companion Application, Developer Programs, HD Audio, PED Integration, JAZZ and Hailstone Seat integration, and more.
2. Global Communication Services
Today, there are 56 customers with the Panasonic Ku service and some 700 aircraft installed with the capability. eXPhone now has 293 aircraft with installations. Furthermore, 205 aircraft are now offering real-time TV, and some 2,600+ airplanes are committed for Panasonic service. Note the Panasonic airline market share for global communication services which ends up being a 46% market share. Global Coverage Growth Chart.
3. Panasonic Services
It is interesting to note that Panasonic has the world’s largest MRO (Maintenance, Repair, and Overhaul) capability as there are some 37,000 aircraft turned each month! (means that 37,000 aircraft are swept and repairs if needed are done each month. Work is performed in 64 locations by some 1,300 dedicated staff and partners.
4. Key Acquisitions
ITC Global – A provider of connectivity services for business critical communications that expands Panasonic’s connectivity capabilities.
Tactel – A leading provider of software, apps and consulting services that expands Panasonic’s capabilities in user interface design.
These acquisitions underscore the value of vertical integration that Panasonic displays with pride. The company relies almost totally for the manufacture of its products from inside the company. A good example of this is their Ku band antenna manufacturing and assembly in Lake Forest, California. The antenna plate elements require precision installation and rely on robots built by Panasonic in Japan. Panasonic firmly believes that vertical integration helps develop lower lead-times and consistent products. This is one of the key strategies Panasonic uses to deliver on-time, high quality products and services.
All in all, it is pretty clear that Panasonic Avionics has hit upon a marketing solution that has present and future value for the business objectives of its customers.
First, breaking news straight from the news release: Panasonic Corporation and ITC Global announced today that they have entered into a definitive agreement for Panasonic to acquire ITC Global, a leading provider of satellite communication services for the energy, mining, and maritime markets. Founded in 2001 with regional headquarters in Houston, Texas; Sion, Switzerland; and Perth, Australia, ITC Global serves customers at more than 1,300 remote sites across 70 countries and all the world’s oceans. Panasonic, through its subsidiary Panasonic Avionics Corporation, is a leading provider of inflight communications and entertainment systems to the aviation market. By combining complementary strengths, ITC Global and Panasonic Avionics will become a new leader in global satellite services poised to support long term customer requirements as demand for bandwidth and efficient, reliable communications solutions continues to grow across the energy, mining, maritime and aviation markets. Panasonic Avionics’ satellite network already covers 99% of all airline flight hours and 98% of all maritime traffic routes, and the organization is in the process of adding High Throughput Satellite capacity that will wrap around the globe. Upon the closing of the acquisition, ITC Global will become “ITC Global, A Panasonic Company” and will operate as an independent unit of Panasonic Avionics. ITC Global will continue to execute its current strategic plan under the leadership of Joe Spytek, ITC Global’s founder and Chief Executive Officer, who will report to Paul Margis, President and Chief Executive Officer of Panasonic Avionics. ITC Global’s management team will remain in place and will continue to focus on its customers in the energy, mining, and maritime markets, while Panasonic Avionics will remain dedicated to its customers in the aviation market. “Panasonic’s acquisition of ITC Global highlights the natural alignment of customers across the aviation, energy, mining and maritime markets, all of whom require mobile broadband, high reliability, global coverage and responsive customer service,” said Margis. “ITC Global is a proven leader and we share a common passion for excellent customer service. Together, we look forward to taking satellite communications services to a new level of value and performance.”
The United States Government Accountability Office, under the title of Information Security has issued a report earlier this month giving the FAA a do-better slip for security weakness (cyber-based and other (hacker) plus natural based threats) in the Air Traffic Control Systems. IFExpress has been noting concerns and deficiencies, at least based on non-governmental system hacking, and earlier this month the GAO reported the deficiencies. The 45 page report can be found here and we note the threats from their document: “While the Federal Aviation Administration (FAA) has taken steps to protect its air traffic control systems from cyber-based and other threats, significant security control weaknesses remain, threatening the agency’s ability to ensure the safe and uninterrupted operation of the national airspace system (NAS). These include weaknesses in controls intended to prevent, limit, and detect unauthorized access to computer resources, such as controls for protecting system boundaries, identifying and authenticating users, authorizing users to access systems, encrypting sensitive data, and auditing and monitoring activity on FAA’s systems. Additionally, shortcomings in boundary protection controls between less-secure systems and the operational NAS environment increase the risk from these weaknesses.”
Further, the FAA is under pressure from the GAO for failing to implement a complete security program: “FAA also did not fully implement its agency-wide information security program. As required by the Federal Information Security Management Act of 2002, federal agencies should implement a security program that provides a framework for implementing controls at the agency. However, FAA’s implementation of its security program was incomplete.” It goes on but worth the 45 page read.
The solution, according to the GAO, lays in some 17 public recommendations that focuses on a present and future security risk management by organizations and agency management present and future decisions; while laying out some 170 security weaknesses recommendations. Stay Tuned to this one… the ramifications of a slip here could be catastrophic.
Check out this Security story on the Internet.
And speaking of data and airplanes, did you know that Routehappy, can tell you if your flight has Wi-Fi, seat power availability, seat pitch, and a basic score for the availability of services – Nice!
While we are on the Internet subject, did you know that you can find US flight times based on airline for city pairs?
On the plane, what if your batteries die – did you know that two different metal electrodes and an acid will create a battery? Here’s how you can make a lemon battery but you will need 2380 oranges for your iPhone.
So much for up, but on the ground, airport Wi-Fi Access Charts from AirFareWatchdog cover US and International destinations.
And speaking of Wi-Fi, 802.11ac is right around the corner… for aircraft too! We now have 801.11a, b, g but they are quickly being surpassed by 802.11n, at least on the ground. Last week, we linked to an 802.11n Wi-Fi router developed and just introduced to the aircraft, the VT Miltope nMap2 features 802.11n technology. Today, there are some 38 million 802.11n access points in the market (ground) so that technology is quite mature. Since June 2013, the Wi-Fi Alliance has certified some 500 802.11ac ground based products but the technology has to be some 5 years away for planes. When 802.11ac gets here for aircraft, the world will be saturated with it on the ground, but that is another story. The issue here is 802.11ac and if you want to get up to speed on this ground technology today, we have a tip – Fluke Networks. Check out this link for an intro and 7 great info programs on 802.11ac, and their test products as well.
And again, speaking of the Internet naturally brings up the subject of Wi-Fi. While our Wi-Fi experiences are at 2 Ghz and 5 Ghz for the most part, Intel has developed a 60 Ghz version called 5th Generation. But what is interesting, at that frequency, their solution can provide a wireless display, short distance wireless charging, wireless docking, and wireless data (also short range). You can read about it .
AIX Hall Growth – Senior Event Director, Katie Murphy, said: “This year will see the largest and most comprehensive global passenger experience event ever staged, as Aircraft Interiors Expo expands from five halls to seven.” And don’t forget, The World Travel Catering and Onboard
Mea Culpa: It came to our attention that last week’s reference to the Stanford Paper on inflight telephony/connectivity did not include the GEE/Row 44 as a competitor on their list. GEE has over 600 aircraft connectivity/content installations.
SkyMall lives, sorta …
Washington DC | March 16, 2015– Panasonic Corporation and ITC Global announced today that they have entered into a definitive agreement for Panasonic to acquire ITC Global, a leading provider of satellite communication services for the energy, mining, and maritime markets. Founded in 2001 with regional headquarters in Houston, Texas; Sion, Switzerland; and Perth, Australia, ITC Global serves customers at more than 1,300 remote sites across 70 countries and all the world’s oceans.
Panasonic, through its subsidiary Panasonic Avionics Corporation, is a leading provider of inflight communications and entertainment systems to the aviation market. By combining complementary strengths, ITC Global and Panasonic Avionics will become a new leader in global satellite services poised to support long term customer requirements as demand for bandwidth and efficient, reliable communications solutions continues to grow across the energy, mining, maritime and aviation markets. Panasonic Avionics’ satellite network already covers 99% of all airline flight hours and 98% of all maritime traffic routes, and the organization is in the process of adding High Throughput Satellite capacity that will wrap around the globe.
Upon the closing of the acquisition, ITC Global will become “ITC Global, A Panasonic Company” and will operate as an independent unit of Panasonic Avionics. ITC Global will continue to execute its current strategic plan under the leadership of Joe Spytek, ITC Global’s founder and Chief Executive Officer, who will report to Paul Margis, President and Chief Executive Officer of Panasonic Avionics. ITC Global’s management team will remain in place and will continue to focus on its customers in the energy, mining, and maritime markets, while Panasonic Avionics will remain dedicated to its customers in the aviation market.
“Panasonic’s acquisition of ITC Global highlights the natural alignment of customers across the aviation, energy, mining and maritime markets, all of whom require mobile broadband, high reliability, global coverage and responsive customer service,” said Margis. “ITC Global is a proven leader and we share a common passion for excellent customer service. Together, we look forward to taking satellite communications services to a new level of value and performance.”
“Panasonic Avionics’ global capabilities and leadership in satellite-based communication will enable ITC Global to enhance our core service offerings to all of our customers,” said Spytek. “This combination assures ITC Global’s long-term access to next-generation satellite technology resources and strengthens our ability to deliver optimal value and service to meet our customer’s current and future mission requirements.”
Boston-based private equity firm, Riverside Partners, has owned ITC Global since 2011. During that time, the company experienced an exciting period of expansion, quadrupling sales through a combination of organic growth, new customer wins, and successful acquisitions.
The transaction is expected to close after customary conditions have been met and regulatory approvals have been obtained. Centerview Partners acted as Panasonic’s exclusive financial advisor. Weil, Gotshal & Manges LLP and Thompson Hine LLP acted as Panasonic’s legal advisors on the transaction. Choate, Hall & Stewart acted as ITC Global’s lead legal advisor.
ITC Global and Panasonic Avionics will be available at booth 5109 to discuss the announcement during the SATELLITE 2015 Conference and Exhibition, being held March 16-19 at the Washington Convention Center in Washington, D.C.
- Ground-to-Ground Satellite Communication Specialists to Enable Connectivity at Every Stop along the Solar Impulse Journey
Luxembourg and Yverdon | February 26, 2015 | Intelsat S.A. (NYSE: I), the world’s leading provider of satellite services, and ITC Global, the leading provider of satellite communications to remote and harsh environments, announced today that the companies will provide ground-to-ground satellite communication services to Solar Impulse during its first round-the-world solar flight.
The Round-the-World Mission Flights will take place over five months from the beginning of March to the end of July 2015. Abu Dhabi, capital of the United Arab Emirates, has been named Host City of Solar Impulse for the First Round-The-World Solar Flight, and will be the departing and landing destination.
As Specialized Partners of the Solar Impulse project, Intelsat and ITC Global will enable the ground crew and support teams to communicate from anywhere to anyone in the world. Using a 1.8 meter, quick deploy antenna, the crew will leverage Intelsat’s global satellite network for broadcasts, webcasts, email, phone, data and video communications during its 35,000 km (22,000 mile) journey which is expected to take approximately 550 flight hours to complete. Intelsat and ITC Global will also provide 24×7 operations center support during the trip around the world.
“At Intelsat, we value the spirit of innovation that underlies the Solar Impulse adventure. We know what it means to push the limits of technology,” said Jean-Philippe Gillet, Vice President, Europe, Middle East & Africa Sales, “and are pleased to be able to help the Solar Impulse team share its remarkable journey with the world.”
“At ITC Global, we appreciate the commitment to renewable energy that underscores the Solar Impulse initiative,” said Roland Loos, COO and EVP. “With expertise in the energy markets, we are excited about the challenge of flying an airplane around the world with zero fuel on board, and proud to be a Specialized Partner to this pioneering feat.”
'Future–proofing' the IFE installation means providing an onboard network with sufficient bandwidth that the airline will never have to tear apart their airplane to re-wire to install upgrades. Fiber-to-the-Seat™ provides a fiber optics network running at a gigabit per second – High-definition video is only the beginning – who knows what the hot, killer apps will be 10-20 years from now?!”
