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Aviation History
1964
1964 - 2208.PDF
FLIGHT International, 6 August 1964 223 Beechcraft Ways and Means —OF SELLING BUSINESS AIRCRAFT: AND A NOTE ON PRODUCTION METHODS THOUGH Beechcraft market analysis and product develop-ment is inevitably fairly similar to that of Cessna (describedin Flight International for July 9) their approach is coloured by their significantly different line of aircraft. Beech began system- atic market research in the analytical sense in 1959. They first classified all the existing types of business aircraft according to price, load, range, speed, horsepower, types of pilot and so on and determined ten different classes of aircraft. Class 1 is the single- engined two-seater; class 2, the light single-engined four-seater, with cruising speed between 130 and 145 m.p.h. and a price of from $10,500 to $14,500; class 3 is a slightly larger four-seater; class 4 is the "heavy" four-seater, now spreading into the six-seat bracket (Debonair and Bonanza); class 5 is the light, owner-flown twin (Travel Air and Baron); class 6 the more "professional" twin (Twin Bonanza); class 7 the professionally flown twin (Queen Air 65 and 80 and Super 18); class 8 is the turboprop (King Air); classes 9 and 10 are the jet categories. Using the US Department of Commerce County Business Patterns survey and the Standard Industrial Classification, Beech applied five qualifying factors to the 5£m business organizations in the US and determined that there were 390,000 companies or businesses qualified to operate an aircraft in classes 2 to 10—a figure which tallied almost exactly with Cessna's conclusions from their own surveys, to the mutual satisfaction of both companies. But Beech discovered that, of the 3,000 largest companies in the US only 10 per cent operated aircraft, representing no more than a 10 to 11 per cent penetration of the potential market. Of the 390,000, 60,000 were potential multi-engined users. Beech had arrived at their estimate by applying to each company within the geographical borders of the 3,074 counties within the 49 continental states five qualifying factors: (1) geographical location of potential prospects, (2) size or financial strength of potential prospects within each of the eight major industry classific- ations, (3) the aircraft buying patterns of business aircraft users in each industry group, (4) the travel patterns of business travellers, defined by industry group and income level in each industry, and (5) the acceptance of business aircraft by specific geographical areas. Factor (1) was a straight geographical analysis. Factor (2) was a derivation from various business aircraft studies of a size pattern in business aircraft users, together with Department of Commerce data on company size. This immediately eliminated 4|m firms, leaving lm as able to buy an aircraft. The next three qualifying factors were, therefore, aimed at assessing the need for an aircraft of those firms able to buy. From various travel studies, and particularly from the work done by the University of Michigan, business travel patterns were assessed for the various industry groups. Factors influencing business flying include concentration of industry, availability of other transport, climate and terrain, journey distance and frequency and adequacy of aviation facilities. No numerical values can be put on these factors, but Beech arrived at a valid estimate of an "aircraft acceptance factor" by determining the ratio of existing aircraft in an area to the number of firms already "qualified to buy." Thus New York has 10.6 per cent of the USA's total "suspects," but an acceptance factor indicating that it has only 3.2 per cent of the US single-engined potential. Kansas City, on the other hand, has 0.9 per cent of the "suspects," but 1.3 per cent of the potential, because of the greater need for aircraft in business and consequently greater acceptance. Beech additionally defined 100,000 prospects who, by virtue of financial limitations, lower load factors and non-profes- sional pilot operation, fell between the single- and twin-engined markets and qualified for a small twin. Continued overleaf PERCENTAGE DISTRIBUTION OF BEECHCRAFT SALES IN USA, 1963 Major industry classification Agriculture, forestry, fisheriesMining and petroleum extractionContract construction [Manufacturing ... Transport, communica tions, public utilitiesWholesale trade Retail trade Finance, insurance, rea estate ... Service firms* ... Medical ... Government Miscellaneous (inc. manu- facturers' representa-tives and flying clubs) Unclassifiable (insufficient data) Queen AirSuper 18 3 85 37 144 3 2 8 0 13 1 2 Baron TravelAir 8 514 18 59 10 II 8 5 1 1 5 Bonanza Debonair 7 413 17 S9 12 7 9 6 1 3 7 Musketeer 3 1II 7 105 8 6 14 9 0 7 19 All Beach-craft 6 412 19 77 9 7 10 5 2 3 9 * Defined as "professional, self-employed, technical, entertainment, non-profit membership organizations and repair services." "Flight International" photograph Beechcraft's Plant I on their airfield at Wichita. The Super HI8 is a high- density eleven-passenger version just returned from a South American tour
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