QUIZ 5 - ATECOMMAN

Marketing

• is a crucial activity in airlines, involving reservations, ticketing, customer service, baggage handling, and market research.

• The goal is to satisfy customer needs while achieving company objectives like profitability, return on investment, and market share.

Production-Oriented Period (Pre-WWII)

- Airlines focused more on mail transport than passenger services.

- Carrying mail was more profitable than transporting passengers.

- Market demand for air travel was low; people preferred trains and automobiles.

Sales-Oriented Period (Post-WWII – 1960s)

Airlines started actively selling air transportation.

- Industry lacked marketing experience; services were based on airline capabilities rather than customer needs.

- Marketing efforts focused on convincing people to fly instead of using other transportation.

Consumer-Oriented Period (1970s – Present)

- Airlines shifted focus to shaping services based on customer needs.

- Introduced target marketing, identifying specific customer groups to appeal to.

Transition to the Marketing Mix (4Ps in Airlines)

- Airlines moved from general promotion (shotgun approach) to targeted strategies.

- Developed specific marketing activities to attract and retain customers.

Product

includes:

- Safety and reliability.

- Seat availability, flight frequency, airport proximity.

- Ground services (ticketing, baggage handling).

- In-flight services (meals, entertainment, seating class).

- Unique Characteristics:

- Airline services cannot be stored.

- Passenger experience varies per flight.

- Quality cannot be tested before purchase.

Price

depends on:

- Demand factors – Willingness and ability of customers to pay.

- Supply factors – Number of seats available and operating costs.

- Operating costs – Fuel, crew salaries, landing fees, maintenance.

Demand factors

Willingness and ability of customers to pay

Supply factors

Number of seats available and operating costs.

Operating costs

Fuel, crew salaries, landing fees, maintenance.

Promotion

- Airlines use various promotional activities to increase sales, including:

- Advertising – Print, TV, digital, and social media campaigns.

- Sales promotions – Discounts, special fares, and limited-time offers.

- Frequent-flier programs – Rewards for loyal customers.

Advertising

Print, TV, digital, and social media campaigns.

Sales promotions

Discounts, special fares, and limited-time offers.

Frequent-flier programs

Rewards for loyal customers.

Place

- Airline tickets are sold through different distribution channels:

- Airline offices (field ticket offices, city ticket offices).

- Travel agencies and third-party vendors.

- Online booking systems and mobile apps.

Cultural and social differences

Varying preferences across regions.

Political and regulatory environment

Government policies and airport regulations.

Economic conditions

Recessions, fuel prices, and overall market trends.

Competitive structure

Rival airlines and their pricing strategies.

- Cultural and social differences

- Political and regulatory environment

- Economic conditions

- Competitive structure

External factors that impact airline marketing

Market Segmentation

- Process of dividing potential customers into smaller groups based on characteristics.

- Helps airlines identify target markets and develop tailored marketing strategies.

Business travelers

Need flexible schedules and premium services.

Leisure travelers

Price-sensitive, look for discounts.

Military travel

Frequent official and personal travel.

Religious and funeral travel

Special needs and travel protocols.

Educational travel

Students and academic group tours.

- Business travelers

- Leisure travelers

- Military travel

- Religious and funeral travel

- Educational travel

Common Market Segments

- Market penetration

- Product development

- Market development

Intensive Growth Strategies

Market penetration

Filling more seats with promotional fares.

Product development

Improving in-flight services (WiFi, better seating).

Market development

Expanding to new customer groups and destinations.

Computerized Reservation Systems (CRS/GDS)

- Airlines use Amadeus, Galileo, SABRE, and WORLDSPAN for ticket sales.

- Helps travel agencies and customers book flights efficiently.

Frequent-Flier Programs

- Introduced in 1981 to build customer loyalty.

- Business travelers benefit the most from these programs.

Code Sharing

Two airlines share flight codes, expanding their networks.

Interactive Marketing Agreements

Airlines promote each other’s services online.

Hub-and-Spoke System

- Airlines use hub airports to efficiently connect flights.

- Allows airlines to serve more destinations at lower costs.

Pre-Deregulation Advertising

- Focused on service quality and reliability.

- Pricing was controlled, so competition was based on amenities.

Modern Airline Advertising

- Focuses on a mix of price, destination, and frequency.

- Airlines compete heavily on ticket prices and promotions