¶ … session long project. Thank ! Case 1 Let's start assignments class examining structure passenger airline market. Market structure analysis requires a supply demand side market, case, airline passengers airline companies.
Airline industry
Identify key external factors that affect the passenger airline industry and explain how that impact occurs
The airline industry is affected by a number of cultural and economic factors. The price of fuel has an obvious impact upon the input costs of airlines, and will affect their ability to slash prices. Cultural factors include the fears about travel after 9/11 and also seasonal variation in demand, such as the sharp upturn in travel during holidays and vacations vs. slow seasons. Other cultural factors include changes in technology: business travelers are traveling less because they can often conduct their operations online, versus in face-to-face meetings. Environmental factors like major weather events also affect the airlines. Internal factors such as labor disputes have had a major impact upon many airlines. And regulation, most notably the deregulation of the 1980s, substantially expanded competition in the marketplace (Structure of the airline industry, n.d., avjobs).
Briefly explain segmentation, targeting, and positioning
Many different market segments travel. Traveler profiles span from the ultra-wealthy who are capable of traveling first class, to economy travelers who are very budget-conscious. Segmentation is also affected...
Frequent business travelers must travel on specific dates, often during the week, while vacationers have more flexibility. Price-focused marketing when engaging in 'target marketing' is obviously more impactful upon specific segments such as a family seeking a budget vacation, versus an image of comfort and luxury which might attract someone who is very wealthy or whose corporation is paying for the trip with a deep-pocketed expense account. The image and positioning of the company will be affected, based upon the client base they wish to serve. The frequency of travel of the consumer will also determine the degree to which marketing campaigns are based upon frequent flyer programs. But segmentation can be very idiosyncratic. "Certain airlines possess a unique service quality profile and are not strongly associated with other airlines; such unique firms appear as isolated points on the perceptual map" (Wen & Yeh 2010).
Identify the major airline market segments
The 'major' market segment includes large, dominant international carriers like American and Delta. Nationals are more regionally-based but still provide a great deal of cross-country and international service such as Aloha and Midwest Express. Regional airlines are almost entirely regionally-based and serve specific communities (Structure of the airline industry, n.d., avjobs).
What are the target markets for first class vs. business class vs. economy class?
First class targets passengers…
