Tourism and Hospitality Marketing
Group Assignment
(Case Study on Frequent Flyer Programmes)
Group Members: Mary Tan Seok Gek
Date: Sep 09, 2009
[pic]
Introduction to Airline Frequent Flyer Programmes
Two events contributed to the emergence of Frequent Flyer Programmes (FFPs) in the airline industry. First, deregulation of the industry in 1978 created a more customer- oriented marketing strategy. Second, the growth in information technology precipitated the ability of the airlines to process and store large amounts of data on their frequent travellers. ( Winship, Tim, 1999).
Today there are over 70 FFPs in existence worldwide. Large carriers such as American, United and Delta have
…show more content…
Frequent Flyer Programmes in Achieving Brand Loyalty
“Loyalty is mutual, it is something that cannot be acquired; it has to be earned”. (Razo, 2005, p.189).The main objective of FFP is to entice the passengers to stay with a particular brand or group of brands.
In order to succeed, it is imperative for FFP to have a set of well defined objectives or it will be impossible to plan and organize a well-executed programme. A set of defined objectives may include customer retention, reduction of attrition, brand differentiation, increasing the share of customer, increasing the market share and attracting new customers. (Razo, 2005).
Two of the key elements of any loyalty programme are member benefits and rewards. In the airline FFP, these may include upgrades, free tickets, higher class check-in, excess baggage allowance, exclusive gifts, and exclusive access to first and business class lounges for a particular number of miles accrued. In order for an airline to gain a competitive advantage, it has to create rewards and benefits which are compelling enough for members to remain loyal and yet economical enough to be financially viable.
“Customers’ tastes, needs and wants changes over time. Thus, it is wise to conduct a market research and collect feedback from current and potential members to determine what would constitute compelling benefits. These benefits must possess genuine value for members and at the same time be unique
In this way, both the individual consumer and the business customer have the same basic factors motivating their decision, but with very different reasons for doing so. By looking at the customer analysis, it is apparent how Enterprise has tailored its services to satisfy the needs of the consumers.
The purpose of the report is to critically review the appropriateness of the services in Jetstar (JS) for the target segment which is identified as leisure travelers. Through extensive research, this report evaluates ideas of
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.
Having this information from the previous two methods we will have solid information about customers' preferences, taste, behavioral and attitude in the future. Which will enable us to take the right decisions for strategic planning which will enhance our performance in the coming future.
The cost of operating such a scheme are greatly reduced due to the shared cost of having multiple partners involved.
Goals in the company are to find the right product for the customer’s particular needs and build a relationship with the customers
In order to succeed, it is fundamental that businesses satisfy consumers’ needs (and desires) for goods and services. Appropriate market research provides the data necessary to understand those needs and respond to them effectively and profitably. Kudler Fine Foods (KFF) has performed market research in the past. Some of that research has been helpful; some has not. Additional market research is needed for KFF to reach a larger share of the market and increase profitability.
To truly understand the consumer’s needs one must listen to what the consumer wants and desires, it takes very little effort on the part of Company Q to understand the needs of its consumers. The effort we make can be the difference between a store’s success and a store going bankrupt. Insuring that Company Q's stores standout amongst its competitors in the marketplace will help give Company Q a competitive edge.
“To give our customers the best food and beverage values that they can find anywhere and to provide them with the information required for informed buying decisions. We provide these with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit” (Crafting and Executing Strategy: Concepts and Readings, 2016, p. 24).
Identify what consumers might want in the future, thus making more informed choices to be one step ahead of their competitors.
Market structure can be defined as patterns of behaviour by enterprises in an effort to adjust to the markets in which they operate (buy or sell). Pricing strategies and collusive behaviour mergers are a few dimensions of market conduct. It is the industry norm for a legacy carrier to offer service to most popular destinations; Delta reducing routes to a similar schedule as the low-cost airlines is not an option in the multi-billion dollar industry. In order to gain market share from low-cost airlines, Delta must create a value proposition that differentiates itself from its competitors. Many customers will pay a premium if the level of service provided is higher than the low-cost, no-frills
United Airlines used questionnaires to classify their potential customers by their motivations and identified nine motivational segment profiles which are: global executives, schedule optimizers, corporate troopers, mile accumulators, reluctant travelers, tour takers, quality vacationers, travel seekers, and frugal flyers (The Times 100, 2003, p. 2). The reasons why travelers choose to fly United varies. For example, some may choose this airline because of price, while others choose it because of their frequent flyer program, schedules, or other services.
ABSTRACT The obligation to provide free or reduced-fare travel to passengers who redeem their accrued frequent flyer program (FFP) benefits represents a significant liability on every major U.S. airline’s balance sheet. Major U.S. airlines employ one of two methods to account for the liabilities they incur when issuing mileage credits to traveling passengers. The Deferred Revenue Method recognizes a liability for the fair
The airline industry can be considered an imperfect oligopoly. There are several large carriers that dominate long distance flights, and many small carriers that compete for short distance flights. Competition is fierce, and the return for most carriers is very low. Some airlines are trying to differentiate themselves, like JetBlue for example, by offering superior services at low prices. Other low cost airlines, like Southwest, offer low costs with no frills. Most airlines offer a frequent flyer programs in order to develop brand loyalty. In recent years there has also been several alliances formed between airlines. These alliances enable
result of this, no other airline in the industry’s history has enjoyed the customer loyalty and