As Planes Get Bigger, the Market-Place Gets More Competitive

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CASE STUDY 3

AS PLANES GET BIGGER, THE MARKET-PLACE GETS MORE COMPETITIVE

I- INTRODUCTION

Globalisation rapidly changes marketing environment and marketplace become more competitive. It is no longer enough for company to be driven by product and technology without building customer relationship (Kotler, Adam, Denize and Armstrong 2009). Moreover, “business success is not determined by the producer but by the customer” (Drucker 1973 cited in Kotler et al. 2009, p. 4). Thus, in order to achieve organisation’s goals, marketing management needs to be flexible to adapt continuously changes of the environment.

II- DISCUSSION

Question 1: Microenvironment of air travel industry
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Thus, marketers must adjust and adopt these changes in their promotional policies to target on the broader range of requirements.

2- Political and legal: give both opportunities and challenges ← Law: Regulation is enforced by government to protect passengers, the interests of society from business practices and prevent unfair competition (Kotler et al. 2009). ← Deregulation: Government regulates domestic marketplace. Recently, international “Open-Skies policies” between many countries have established more competition for airline companies (Taube 2009). Increasing deregulate marketplaces greatly affect the business and marketing strategies. It gives more opportunities as well as increases market competition between international airlines, regional airlines and low cost airlines. ← Terrorism: The effect of terrorism in air travel industry is catastrophic (Shaw 2004). A terrorist attack could seriously decrease in demand for air travel due to safety and security concern (Graham 2006). Similarly, instability policy also is a major challenge for airline marketing which is usually sudden and out of their control (Shaw 2004). ← Privatization: According to Shaw (2004), under privatization, the objective of an airline company is to maximize their profits for the sake of shareholders. However, under government ownership, besides profits, the carrier

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