Jan 2018 Exam Flashcards
Walk me through decade-by-decade history of airline marketing
Historically, international regulations prevented true competition; everything was regulated. Airlines didn’t need to innovate and market themselves as they were protected by the market.
In the post-war 1950s, adverts tried to show the public how aircraft have evolved and how pleasant they are.
In the 1960s, the majority of advertisements were emphasising the ease, safety and utility of air travel.
During the oil crises of the mid-1970s, the marketing message shifted towards the price of air tickets and the promotion of flexible payment options, it was hoped that it would entice new passengers into the air.
De-regulation in 1978 in US - airlines how have to innovate!
By the 1980s, in-flight service had become a key selling point and an important product differentiator. CRM began to emerge in line with the ICTs (SABRE, AA)
From the 1990s onwards, advertisements focussed on the seamless worldwide air connectivity provided by a particular airline.
What is the marketing mix / the 4Ps, in aviation terms?
1) Product - airline products are unusual in that they are not physical items but intangible services like comfort, safety and reliability. The product can’t be kept in an inventory or can’t be quality checked prior to purchase. The delivery of it can’t be guaranteed (bad weather, strikes, equipment failures etc.)
2) Price - needs to be attractive for passengers but also profitable and competitive. Tickets have to be good value, although this is subjective. Before de-reg, the governments set prices… Price is now a major competitive weapon!
3) Promotion - communication between the airline and the customer. You need to alert people to your product and encourage repeat consumption.
4) Place - where you advertise your product (billboards, online etc)
4 characteristics of airline service marketing
1) INTANGIBLE - services are performances, it’s hard to communicate intangible benefits to the public, therefore emphasis is made on things which relate to the service (eg, smiley crew, OTP)
2) HETEROGENEOUS - potential for significant variation in service performances (bad cabin crew, out of food choices etc.) there is a large reliance upon staff delivery, therefore, investment has to be made in staff training and emotional labour
3) INSEPERABLE - it’s simultaneously produced and consumed… Individual passengers are involved in the production of the service (eg, drunk/smelly pax, medical emergencies, hijackings)
4) PERISHABLE - it cannot be stored in an inventory for future use. It’s difficult to match supply with demand
Why do airlines need to build and maintain strong brands?
1) To engender customer loyalty and repeat purchase behaviour
2) Reduce vulnerability to competitive marketing
3) Improve margins
4) Manage customer responses to price increases
5) Increase effectiveness of marketing spend (eg, if you’re BA, people will know you’re an FSC - brand knowledge, brand attributes and benefits)
6) Develop brand licensing and product extension opportunities
The role of marketing / branding helps customers learn what 4 things about the company?
1) Increased brand awareness through brand recall and recognition
2) Improved brand knowledge - what does this brand stand for?
3) Promote brand attributes and benefits - what does this brand offer and how does it help me?
4) Enhance brand image and reputation - what does this brand offer, and do I want to be associated with it?
What 3 things must an airline brand feature?
1) FUNCTIONALITY - safe, reliable, convenient, cost effective, value for money (Southwest)
2) EXPERIENTIAL - comfort, safety/security, wellbeing (Dreamliner)
3) SYMBOLIC - personal career success or status, social approval, prestige, exclusivity, cool! (Virgin America, Vistara)
Why is brand equity important and what can it do to your business (4 positives)?
Most consumers just want the cheapest ticket, therefore, brand equity is important to maybe persuade them to pay a little more for your airline as they think they know they’re going to get a better service.
Positive brand equity can:
1) Increase profits
2) Make the brand more attractive to investors and take overs (not always a good thing!)
3) Drive consumer demand and increase consumer spend through ancillary revenue generation
4) Grow market share
What are the 6 building blocks of brand equity?
1) Brand salience
2) Brand performance
3) Brand image
4) Consumer judgement
5) Consumer feelings
6) Brand resonance
As all airlines offer a similar basic commodity, they have to differentiate themselves through a promotion of particular ideas, images, lifestyles and experiences to create a visual identity which is… (4 things)
1) Distinctive
2) Recognisable
3) Affordable
4) Desirable
Thurlow and Aiello (2007)…
Performed a semiotic analysis of 561 tail fins, they found that all tail designs featured at least one of the following:
1) Icons of flight (birds, wings, aircraft)
2) Icons of space and distance (blue skies, globes etc.)
3) Icons indicating direction (arrows)
4) Icons of speed (rays, stripes)
5) Icons of motion (ripples, waves, spirals)
6) Icons of nationhood (national flags, national flora and fauna)
Budd (2012)…
Did a semiotic analyis of 637 airline liveries and found that:
- White fuselages were most common
- Red and blue featured prominently
- Most liveries used three colours
- 60% of them used the airlines’ name
- The type of livery depended upon the business model of the carrier
- Upper fuselage white
- Sometimes aircraft were painted in more than one scheme
Recent re-brandings have featured what 4 things?
1) Softer, more rounded motifs
2) Logos simpler and less fussy
3) Heavy primary colours replaced by greater use of pastel shades
4) Less busy paint schemes
Gilbert (1996) identified…
2 types of marketing: transaction and relationship!
Transaction - just one purchase once,
Relationship - seeking to build longer-term relationships with customers to encourage brand loyalty and stimulate repeat custom
Shaw (2004) defines…
Customer relationship marketing (CRM) as “a marketing philosophy whereby a firm gives equal or greater emphasis to the maintenance and strengthening of its relationships with its existing customers as it does to the necessary search for new customers”
Brief history of airline loyalty schemes please x
1970s - (pre de-reg), WN distributed ‘sweetheart stamps’ with bookings which travellers could use to take a partner on a free flight. UA and AA offered discount coupons but not free flights.
1980s - Western Airlines gave $50 vouchers to pax who had flown with them more than 5 times, this was the first attempt at rewarding pax financially. Pax had to self identify and present receipts… AA’s SABRE system use d automation to establish pax who had flown with them more than twice in 6 months to join their VIP club. Launched their AAdvantage scheme in 1981
Late 1980s - FFPs from US legacy airlines were a major promotional tool against the wave of new de-regged carriers
