Airline Product Marketing and Frequent-Flyer Programs

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Discuss why product frills rarely produce long-term gains in market shares

The current competition in the global market reduces the ability of an airline’s product to gain long term market share. Varey (2006) argues that several organizations imitate competitors’ frills and hence, consumers tend to rely more on the brand than the frills. The two considerations significantly affect competition in market share. This argument is related to socioeconomic variables. Even though frill products are not readily accommodated in an identifiable market segment, an effective product frill strategy should be based on differentiation. No-frills usually involve price reduction. According to Wirtz and Johnston (2003), no-frills have similar impacts in gaining market shares. Similar product frills can be easily imitated.

How can an efficient database cause overbooking and reservation problems for an airline?

An efficient airline database system is made up of revenue and airport accounting, ticketing as well as reservation system processes. Most of the processes provide numerous opportunities for staff members or clients to accidentally or intentionally undertake revenue leakage. Varey (2006) points out that some of the causes of such problems include abuse of reservation systems by travel agents, change processes in travel schedules, and accidental revenue abuses by poorly trained airline staff. Besides, it is worth noting that some airlines have less control over reservations, booking, and other distribution channels. Therefore, it makes it difficult to attain revenue accountability.

Discuss how fleet and schedule-related product features differ between low-cost carriers and legacy airlines

Low-cost carriers and legacy airlines have different business models. These make their fleet and schedule-related products differ and consequently allow them to enjoy the merits of market share. Low-cost flights’ (such as Southwest Airlines) themes include no-frills, reduced overall fares, and minimum comfort. On the other hand, legacy airlines (such as Trans World Airlines) provide unique products and services like in-flight entertainment and meals. In addition, it has exclusive airport lounges, frequent flyer programs as well as business and first-class seating arrangements.

Choose an airline and then discuss each stage of the product life cycle. What stage of the PLC do y ou feelthey are in? Why?

Virgin Australia Airline offers low-cost flights between major cities in Australia. The company is based in Brisbane. It is the second-largest airline by a fleet. According to Wirtz and Johnston (2003), the airline’s strategic goals are similar to the operational objectives of Southwest airlines of the United States. The latte has witnessed tremendous growth due to low-cost flight. The goal of offering low-cost flights is to hasten growth and ability to counter intensive competition in the Australian airline market.

Virgin Australia passengers

The company’s PLC is at a growth stage as demonstrated in the figure above. Its change of business brand and model has made it to be competitive with other giant airlines. Besides, it registers close to one million passengers yearly with over 35% control of the domestic market.

E-Commerce and the Airlines Industry

The growth of Virgin Australia Airline in recent years is greatly attributed to its partnerships with Singapore Airlines (SIA) and Air New Zealand (ANZ). The partnership has been of immense benefit to Virgin Australia due to codeshare agreements, creation of a global network, provision of feeder traffic, and expansion of market share. Virgin Australia has also obtained important resources and competencies alongside expediting rapid growth strategies.

Virgin Australia frequent flyer program(s)

Virgin Australia airline has a frequent flyer program known as the velocity rewards or Virgin Australia’s Velocity Frequent Flyer. Members earn velocity points and other rewards. Its benefits include reward points for pets and family pooling. The points can be redeemed and used for accommodation, car hire, and flight upgrades. The airline promotes its FFP through rewards. When a client buys a ticket, he or she earns points and consequently grows the status to bronze, silver, gold, or platinum. Data on the flyer is captured in the airline-earning table.

References

Varey, R.J. (2006). Flying high in a competitive industry: Cost-effective service excellence at Singapore airlines. Australasian Marketing Journal, 14(2), 51-52.

Wirtz, J., & Johnston, R. (2003). Singapore airlines: What it takes to sustain service excellence: A senior management perspective. Managing Service Quality, 13(1), 10-19.

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