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Airlines have forged a number of complementary strategic alliances, in part because many airlines are not profitable
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Recommended: Airlines have forged a number of complementary strategic alliances, in part because many airlines are not profitable
Gulati & Kletter (2009) stated that with the help of proper planning and their implementation the airline firm can easily enhance the level of efficiency to the utmost level. However, by merging the resources and other key elements that often use by organisations in order to execute their business operations without any disruption would definitely assist them to encourage more customers by offering high quality services. Moreover, it is important for the success of an airline that they must enhance their services in order to get the maximum market share without putting additional resources and exertions (Gulati & Kletter, 2009). 2.5.2 Low Fare Charges It is observed that most of the airline organisations are quite keen to go for a merger …show more content…
However, the marketer must act like an integrator where they must produce technical capability with the market requirements and the marketer should be invented to bring the consumer into organisations. Furthermore, the consumers associate with the firms as members for the reworking and expansion of commodities. Therefore, the associations are measured as the important point for the source of consumer choice and firm variation. It is noted that the relationship promotion comprises in using the one-on-one communication in order to getting the loyalty of clients. These relations might be simply enhanced in the organisations if the promotion is part of everyone's work picture that is beginning from receptionist to board of directors (Basole & Rouse, …show more content…
Relationship marketing can be used in customer loyalty schemes extensively because it helps the organisations in spreading awareness about their service all over the world. Moreover, the relationship marketing is the strategy through which brand loyalty as it assist in building relationships with the customers slowly. This process would help the firms in improving profit margin because through it they would able to attract and retain increased number of customers along with their
Spirit addresses “price” by attempting to get the lowest possible fair for their potential customers. They have instituted their “unbundling” strategy that essentially removes all the conveniences that other airlines afford. Fees for checked bags, fees for flight changes, and no complementary in-flight beverages are just a few of the cost-trimming techniques employed. This strategy allows Spirit to come up with impossibly low fares. It also conforms to customers who just want to get from point A to point B without paying extra for services they don’t use. This strategy, coupled with an in-your-face “promotion” ploy, has made Spirit Airlines “the most profitable airline in the U.S.” (Nicas, 2012).
Yet amidst the storm, some regional airlines such as Jet Blue Airlines have managed to focus on specific markets and maintained or increased their profits. It is no doubt that Porter’s 5 forces of competition are at play in this industry. These forces are the Threat of Substitutes, Threat of New Entrants, Competitive Rivalry, Bargaining Power of Buyers and Bargaining Power of Suppliers. Threat of Substitutes The airline industry has been plagued by rising costs resulting in poor profits.
Customer loyalty comes from the personal relationship that is developed between the customer and the business. One method used to understand the customer relationship is called customer relationship intensity and Life-cycle segmentation (UOP, 2007). This process includes classifying all the customer relationships into one of five groups.
...leader. Certainly, it has to take into account the implications of completion from both the direct and the indirect competitors. That is why EasyJet centers on the cost management strategy and the differentiation strategy (Hanlon, 2007). Through an analysis of EasyJet Airplane company strategies and performance, it is clear that they are ambitious and strive for the best. They not only survive in an industry that is intensely competitive, as shown through the analysis by Porter's Five Forces, but also succeed in terms of offering their customers the best that they have to offer in terms of value for money. The advantage this airline gains over its oligopolistic competitors stems from flexible ticketing and complete access to all primary routes. However, in keeping airline industry, there is room for improvement and growth as the analysis using Ansoff Matrix reveals.
Spirit Airlines Inc., which is primarily a smaller airline company than its competition, it is still provides the same good(s), (flights) as the other airlines. Since 2007, the company has been able to reduce its “overall ticket prices by 40 percent” (Brooks, Cox, & White, 2012, p. 45). It can be difficult to comprehend how a smaller airline company such as Spirit Airlines, Inc. could be capable
The purpose of this section of this report is to define the marketing concept; to explain what it means to be a market-orientated organisation; and to show that Tesco’s appear to be a successful, market-orientated company. Furthermore, that Tesco’s employ strategic relationship marketing to offer value to customers’; and achieve higher revenues and brand loyalty in return. Finally, to explain that being market oriented may also have some disadvantages if not carried out effectively.
The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B. Because the reasons can differ greatly in the motivations for a customer wanting to fly, it can be difficult to divide the market into discrete segments, that is, there is always going to be overlap in the preferences and characteristics of any given segment. With that in mind, the commonalities that are shared between the clientele that make up the respective classes can easily withstand analysis.
There is a belief that firms have a different marketing approach depending on if the firm is trading services or goods. Service firms are assumed to have a more relational approach where they manage the whole buyer-consumer communication process while the goods firms are transactional. The main purpose of this study is to find out how firms relate to their markets and what the relative emphasis of these firms on transactional and relational aspects of marketing are.The study distinguishes the firm type by the most dominant type of product offered and the most dominant of customer
5. Rubin, R.M. and Joy, J.N. (2005), “Where are the airlines headed? Implications of airline industry structure and change for consumers”, The Journal of Consumer Affairs, Vol. 39 No. 1, pp. 215-228.
As a continuation of the discussions in Assignment 1, the cost structure and evolution of American Airline is analyzed here. It is worth noting forehand that American Airline bankrupted in 2011; nevertheless, the bankruptcy did not disturb the airline’s operation significantly, that continuous curves in cost could still be observed. American Airlines also merged with US Airways in 2015, therefore, the costs of US Airways and American Airlines are summed before the year of 2015 to avoid confusion. One part of the total cost is the operating cost. The operating cost includes fuel, crew (pilots only), maintenance, and ownership cost.
It discusses broadening the concept of marketing and new approach to marketing, which emphasises on social and relationship marketing. Then, the government/public sector has been introduced and it proceeds with whether traditional marketing principles can be applied to the marketing of organisations in this sector. It concentrates on issues of relevance-how marketing mix fits to it, what are the benefits and constraints. 1.1 The Marketing Concept and the Marketing Mix: Before proceeding further, it is essential to define what marketing is: Kotler (1991) defines marketing as “a social and managerial process by which individuals and groups obtain what they want and need through creating, offering, and exchanging products of value with others.
Management must build a culture in which co-worker are trusted, quality interfunctional communication is a norm, social network between marketing is common and tacit knowledge exchange between sales and marketing is valued. To create this environment, two mechanisms are suggested. First, managers should increase the opportunities that sales and marketing personnel have to develop social connection. Second, managers, especially top management’s managers, must provide support for the development and maintenance of such culture.
In these days, there are many people who prefer to go out their countries and explore the world. It is because people recently seek for a better life; they motivate themselves by having fun experiences or traveling. According to IATA (2013), “by 2017 total passenger numbers are expected to rise to 3.91 billion — an increase of 930 million passengers over the 2.98 billion carried in 2012.” As the number of tourists increases, therefore, many airline organizations are created during last few years to offer transportation to tourists. Because there are many airline companies that provide similar products and services, each airline needs to have competitive advantages to survive in the tourism industry.
For instance, global economic downturn aircraft leasing costs were reduce by about 40%. Creating an environment with lesser competition and enabled AirAsia to lease their aircraft at a cheaper rate and it will leading to cheaper ticket prices for customers. Last several year, economic growth rapidly resulted in a burgeoning middle class within Asia’s large population. Demand for air travel increased together with increased. More people were willing to compromise on food and other services in exchange for lower prices. The attractiveness of budget airlines is primarily their lower ticket prices, which can be as low as 10-20% of those charged by full-service airlines. This presents AirAsia with opportunities to differentiate itself with competitors by adding customer services or operation as full service airline with low fare. It give it a competitive advantage and corporate travel services with its own branded credit card by further increasing brand awareness and value for
Both from the customer and the company point of view, each customer interaction is part of an iterative learning process (Ballantyne, 2004). Further, Yau et al. (2000) advocated that the relationships between business firms and its customers have been constantly encouraged as successful business practices worldwide. The strategy of relationship marketing is of high relevance particularly in the service industries because of the intangible nature of service and their high level of customer interaction (Al-Hersh, Aburoub, & Saaty, 2014). Relationship marketing is defined as the process of engaging in proactively creating, developing and maintaining committed, interactive and profitable exchanges with targeted customers (Haker, 1999). Furthermore, Gronroos (1990) asserted that relationship marketing is to establish, maintain, enhance and commercialise customer relationship so that the objectives of the parties involved are met which can be done by a mutual exchange and fulfillment of promises. Moreover, the implementation of the relationship marketing concept at the operational level refers to relationship marketing orientation (Hau & Ngo, 2012). Relationship marketing orientation indicates the firms’ philosophy of doing business concerning relationship building by propagating developing trust, empathy, bonding, and reciprocity between a firm and its customers (Sin et al., 2005a, b; Tse et al., 2004). Trust is an important element for a successful relationship between the firm and its customers (Berry, 1995). First, trust is an essential component for a successful relationship between the firm and its customers (Berry, 1995). Trust It refers to a willingness to rely on an exchange partner in whom one has confidence (Morgan & Hunt, 1994). Empathy, as a dimension of business relationship, enables the two parties to see the situation from