Aviation Training Program
AIRLINE MARKETING COURSE
TABLE OF CONTENTS
Introduction ................................................................................................................................................. 1
Module 1 What is Marketing? ..................................................................................................................... 5
1.1
The Role of Marketing................................................................................................................ 6
1.1.1 The Role of Marketing with Respect to the Business Environment ...............................6
1.1.2 The Role of Marketing with Respect to the Customer ...................................................9
1.1.3 The Role of Marketing within a Company ...................................................................10
1.2
Customer and Consumer Behavior.......................................................................................... 15
1.2.1 Consumer Motivation and Preferences.......................................................................15
1.2.2 Customer Decision-Making Roles and Processes ......................................................16
1.3
The Marketing Mix ................................................................................................................... 20
1.3.1 The Classical Marketing Mix .......................................................................................20
1.3.2 Service Industry Marketing .........................................................................................24
1.3.3 The Marketing Planning Process ................................................................................25
Module 2 The Marketing Environment..................................................................................................... 31
2.1
Overview of the Marketing Environment ..................................................................................32
2.1.1 Scanning the Marketing Environment .........................................................................32
2.1.2 The Travel Market Overview .......................................................................................34
2.1.3 The Marketing Environment........................................................................................35
2.2
The Macro Environment........................................................................................................... 39
2.2.1 The Political Environment ...........................................................................................39
2.2.2 The Economic Environment........................................................................................43
2.2.3 Social and Cultural Forces .......................................................................................... 45
2.2.4 Technological Factors................................................................................................. 46
2.2.5 Environmental and Ecological Considerations............................................................47
2.3
Microeconomic Factors and the Internal Environment.............................................................51
2.3.1 Microeconomic Factors...............................................................................................51
2.3.2 Internal Environment................................................................................................... 54
Module 3 Marketing Research.................................................................................................................. 61
3.1
The Marketing Research Program...........................................................................................62
3.1.1 Purpose of Market Research ......................................................................................62
3.1.2 The Marketing Research Program ..............................................................................63
3.2
The Market Research Process ................................................................................................ 70
3.2.1 Overview of Market Research Process.......................................................................70
3.2.2 Defining Objectives .....................................................................................................70
3.2.3 Research Methods...................................................................................................... 74
3.3
Research Design ..................................................................................................................... 80
3.3.1 Designing Qualitative Research..................................................................................80
3.3.2 Designing Quantitative Research ...............................................................................82
3.3.3 Choosing the Right Techniques ..................................................................................84
3.3.4 Questionnaire Design .................................................................................................86
3.3.5 The Research Plan–The Final Part of a Good Design ................................................88
Table of Contents
iii
Aviation Training Program
3.4
Analyzing and Presenting Research Results ...........................................................................91
3.4.1 Characteristics of Effective Market Research Analysis ...............................................91
3.4.2 Presenting Research Findings....................................................................................92
Module 4 Developing a Marketing Strategy ............................................................................................ 99
4.1
Marketing Strategy & Planning .............................................................................................. 100
4.1.1 The Purpose of Marketing Strategy and Planning.....................................................100
4.1.2 An Overview of the Strategic Marketing Planning Process .......................................102
4.1.3 Overview of the Marketing Process ..........................................................................103
4.1.4 The Company's Business Mission ............................................................................105
4.2
The Marketing Audit............................................................................................................... 108
4.2.1 The Market Audit Framework....................................................................................108
4.2.2 Marketing Audit of the Company's Internal Environment ..........................................109
4.2.3 Marketing Audit of the Competition ...........................................................................114
4.2.4 Marketing Audit of Customers...................................................................................116
4.2.5 Environmental Scanning–Understanding the Wider Business Environment.............120
4.3
Introducing Market Segmentation .......................................................................................... 123
4.3.1 Defining Segmentation..............................................................................................123
4.3.2 Basic Segmentation by Purpose of Travel ................................................................124
4.3.3 Limitations of Segmentation by Purpose of Travel....................................................126
Module 5 Developing the Marketing Plan.............................................................................................. 135
5.1
Market Segmentation Process............................................................................................... 136
5.1.1 Overview of the Market Segmentation Process ........................................................136
5.1.2 Market Segmentation Criteria ...................................................................................137
5.1.3 The Benefits of Segmentation...................................................................................140
5.2
Market Target Segmentation ................................................................................................. 143
5.2.1 The Purpose of Market Target Segmentation ...........................................................143
5.2.2 The Ranking Market Segments.................................................................................143
5.2.3 SWOT Analysis......................................................................................................... 147
5.3
Marketing Objectives ............................................................................................................. 151
5.3.1 Marketing Objectives ................................................................................................151
5.3.2 Setting the Marketing Objectives ..............................................................................154
5.4
Marketing Strategies and Marketing Objectives.....................................................................158
5.4.1 Marketing Strategies ................................................................................................. 158
5.4.2 Selecting a Marketing Strategy .................................................................................163
Module 6 Airline Products and Services ............................................................................................... 169
6.1
Airline Products and Services ................................................................................................170
6.1.1 Defining the Airline Product.......................................................................................170
6.1.2 Product Hardware ..................................................................................................... 171
6.1.3 The ‘Soft’ Side of Airline Products.............................................................................172
6.2
Managing the Product Life Cycle ...........................................................................................177
6.2.1 Overview of the Product Life Cycle ...........................................................................177
6.2.2 Product Design ......................................................................................................... 178
6.2.3 Competitor Product Grid ...........................................................................................181
iv
Airline Marketing Course
Aviation Training Program
6.3
6.4
Brands ................................................................................................................................... 184
6.3.1 Defining Branding and its Role in Marketing .............................................................184
6.3.2 Brand and Value ....................................................................................................... 186
6.3.3 Brand Management .................................................................................................. 188
Frequent Flyer Programs and the Airline Schedule ...............................................................191
6.4.1 Purpose of Frequent Flyer Programs........................................................................191
6.4.2 Benefits of FFPs for Airlines and Passengers...........................................................192
6.4.3 What Makes an Effective FFP?.................................................................................194
6.4.4 The Airline Schedule................................................................................................. 196
Module 7 Pricing...................................................................................................................................... 203
7.1
Price and Demand Elasticity .................................................................................................. 204
7.1.1 Impact of Internal and External Factors on Pricing....................................................204
7.1.2 Market Types ............................................................................................................ 207
7.2
Pricing Strategies, Demand and Revenue Management .......................................................210
7.2.1 Pricing Strategies...................................................................................................... 210
7.2.2 Low Cost Carriers and Traditional Carriers Pricing ...................................................213
7.2.3 Conditions of Sale.....................................................................................................215
7.2.4 Revenue Management..............................................................................................215
Module 8 Promoting Airline Products and Services ............................................................................223
8.1
The Role of Promotions, Promotional Objectives ..................................................................224
8.1.1 The Role of Promotions ............................................................................................224
8.1.2 Promotional Objectives .............................................................................................224
8.1.3 The ‘AIDAS’ Concept ................................................................................................ 225
8.2
The Promotional Mix .............................................................................................................. 229
8.2.1 The Purpose of Promotional Mix...............................................................................229
8.2.2 Personal Selling ........................................................................................................ 229
8.2.3 Advertising ................................................................................................................ 230
8.2.4 Advertising & Public Relations–How to be Effective .................................................234
8.2.5 Sales Promotion........................................................................................................ 236
8.3
Social Media and Interactive Marketing .................................................................................239
8.3.1 The Internet as a Communication Channel...............................................................239
8.3.2 The Internet as an Advertising Medium.....................................................................240
8.3.3 The Impact of Social Media Applications on Marketing & Marketing
Communications ....................................................................................................... 241
8.3.4 Social Media Marketing.............................................................................................244
8.3.5 Designing a Promotional Mix ....................................................................................249
8.3.6 The Promotional Campaign ......................................................................................250
Module 9 Distributing Airline Products & Services..............................................................................255
9.1
Distribution–An Overview ...................................................................................................... 256
9.1.1 Defining Distribution Channels..................................................................................256
9.1.2 Electronic Ticketing and its Impacts..........................................................................257
9.1.3 Classification of Distribution Channels......................................................................257
9.2
Direct and Indirect Channels.................................................................................................. 261
9.2.1 Direct Channels ........................................................................................................ 261
9.2.2 Indirect Channels ...................................................................................................... 264
9.2.3 Types of Travel Intermediaries..................................................................................265
Table of Contents
v
Aviation Training Program
9.3
GDS and Choosing a Distribution Strategy............................................................................268
9.3.1 The Benefits and Limitations of GDS in the Distribution Process..............................268
9.3.2 What is the Right Distribution Strategy?....................................................................271
Module 10 Airline Alliances & Marketing Strategy ...............................................................................279
10.1 Alliances–an Overview .......................................................................................................... 280
10.1.1 Defining Airline Alliances ..........................................................................................280
10.1.2 Development of Major Airline Alliances.....................................................................282
10.2 An Airline's View of Alliances ................................................................................................. 285
10.2.1 An Airline's Perspective on Alliances ........................................................................285
10.2.2 Stages in Alliance Development ...............................................................................289
10.2.3 Alliances–Pros and Cons..........................................................................................290
10.2.4 Do Alliances Benefit Customers?..............................................................................291
10.2.5 Joining an Alliance–a Potential Member's Perspective.............................................292
Module 11 Marketing Management in Practice ..................................................................................... 299
11.1 The Challenge of Effective Marketing and the Marketing Plan...............................................300
11.1.1 Significance of the Marketing Plan for an Airline .......................................................300
11.1.2 The Elements of a Marketing Plan ............................................................................302
11.1.3 Format of the Marketing Plan....................................................................................303
11.2 Controlling the Marketing Effort .............................................................................................309
11.2.1 Marketing Planning Control.......................................................................................309
11.2.2 The Strategic Marketing Review ...............................................................................311
11.2.3 Creating a Marketing-Oriented Organization ............................................................312
11.2.4 Applying Your Learning at Work ...............................................................................313
Conclusion............................................................................................................................................... 319
Glossary................................................................................................................................................... 321
vi
Airline Marketing Course