Samenvatting
Samenvatting boek Airline Marketing & Management Aantekeningen uit de lessen en powerpoints
Summary of 11 pages for the course Minor Business Travel & Incentives at InHolland
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Voorbeeld 3 van de 11 pagina's
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Samenvatting Airline Marketing and ManagementHoofdstuk 7 Distributing the product
7.1 Distribution Channel Strategies
7.1.1 Types of Distribution Channel
Direct route: producer direct contact with final customers.
Indirect route: with intermediaries.
Wholesalers: firms that buy in bulk from a range of producers, using their
buying power to gain appropriate discounts.
Retailers: buy from wholesalers, and sell to the final customer for the product.
Agency channel relationship: common in service industries where an intangible
rather than a tangible product is offered for sale.
Examples of producer/wholesaler relationships:
- Aircraft leasing company -> lease out planes to customer airlines
- Touroperators -> sell packagers to final customer
Travel agency system: dominant distribution channel for airlines.
7.1.2 The Concept of ‘Super Profits’
Control of distribution channels is one of the most powerful drivers of profits in
any industry,and this is especially the case in the airline business.
‘Super Profits’: over and above basic rewards. Will accrue to the intermediaries
who are able to exercise control.
It’s absolutely essential that airlines should be in control of their distribution
channels so that they can earn ‘Super Profits’ which wil give their shareholders
a fair return on their money.
7.2 The Travel Agency Distribution System
7.2.1 Advantages and Disadvantages
Advantages:
- Geographical coverage
- They were not a heavy overhead burden on airlines
- Agents undoubtedly relieved airlines of a great deal of the costly
administrative work associated with air travel. Travel agents could
therefore probably carry out this work at lower costs than would have
prevailed if airlines had done it themselves (because airline salaries are
higher).
Despite these obvious and strong advantages, the airline/travel agency
relationship was the subject of increasing disquiet during the 1990’s, and is
undergoing revolutionary reform.
The travel agency system became very expensive.
All-in all, the situation of airlines with respect to their distribution channels
was a very mixed one by the end of de 1990’s and was ripe for reform.
7.2.2 Today’s Distribution Channels
The first signs of change came from Delta Airlines (announced that for
domestic ticket sales in the US, payments of commission would be capped at a
maximum of 50 dollar, whatever the percentage calcuation of the fare might
be).
Delta’s initiative was followed by al the other major airlines in the US.
Commissions have been reduced or eliminated in many markets today.
,In many markets, agents have changed their role into being one of a travel
consultant for their clients, rather than an airline sales agent. Have been paid
management fees by their commercial clients -> can have a reverse effect.
7.2.3 The Future of Disribution
The future is going to see a greater proportion of airline seats sold using direct
distribution channels.
Most of this growth will come from a further increase in the use of airline
websites.
It is not the case that he future will see an end to the travel agents’ role in
airline distribution -> creating added value.
The use of the internet and the reform of the reward systems for travel agents
have both made useful contributions to the correcting of what was formerly a
totally unsatisfactory situation.
7.3 Global Distribution Systems (GDSs)
7.3.1 History and background
For nearly 20 years, the subject of so-called global distribution systems has
been a controversial one in the airline industry, and it remains so today.
Different systems: Apollo System, SABRE, START and BABS.
These are systems with airlines’ flights. All other flights were included because
of the agents’ requierement for a comprehensive system which would enable
the mto book all their client’s request on one of them.
Mid. 1980’s: The system owners began to charge other airlines substantial fees
foor every booking made -> effect was dramatic.
At the same time, booking fees provided American with the resources it needed
to continue to invest in SABRE, giving the system considerable power in that
market.
1990’s: European AMADEAS and GALILEO. The 4th, smallest player is
WORLDSPAN.
Today, almost all airlines have a common interest in lowering booking feest o
achieve more cost-effective distribution. Recently, too, in America at least, the
GDS industry has been deregulated, with in particular an ending of the
requirement that GDS owners must treat all airlines equally. This, together with
a reduced regulation of displays, has allowed negotiations to begin around
questions of trading display standards and content against booking fees.
7.3.2 Current Issues
Airlines have long argued that they pay a high level of total costs, whilst the
travel agency industry pays far too little. Both airlines and travel agents
benefit from the availability of a GDS.
Because the system was costing airlines more and more, they reduced their
sales through travel agents.
Travel agency firms have repositioned themselves as travel management firms.
Customers of the low fares airlines (RyanAir, EasyJet -> direct sell airline) don’t
need an high level of sophistication. Until recently the GDS industry had been
shunned by the low fare airlines.
‘Big Three’: SABRE, AMADEUS, TRAVELPORT (Galileo + Worldspan).
One final development is the rise of search engines, especialle Google.
7.4 Distribution Channels in the Air Freight Market
, Equivalent to the travel agent in air freight market is the air freight forwarder.
Concluding is that the present situation with regard to distribution channels for
air freight is unsatisfactory.
SUCCESFUL AIRLINES
Acknowledge that effective control of distribution channels is one of
the most important drivers of profitability in the airline industry, and
act to establish and sustain such control.
Hoofdstuk 9 Relationship Marketing
9.1 Fundamentals of Relationship Marketing
9.1.1 Some Definitions
Fundamentally wrong is that ‘Relationship Marketing’ is just a more impressive way of
describing an airlines’ frequent flyer programme. Relationship marketing approaches
should encompass much more thane a mileage programme.
Definition Relationship Marketing: Relationship Marketing is a marketing philosophy
whereby a firm gives equal or greater emphasis to the maintenance and strengthening of
its relationships wit hits existing customers as it does to the necessary search for new
customers.
The earlier part of the definition is the most important for airlines. Although the last part
should certainly not be disregarded. People will leave due to different reasons (dead,
retire from work, etc.).
Two remaining definitions are important: ‘Advocate´ and ´Destroyer´.
An ´Advocate´ relationship is where someone nog only buys from the firm in question,
but they act as the firm´s advocate by strongly advising other people that they should do
so too.
An ´Destroyer´ relationship is one where a potential customer does not buy from the
firm, and also does all they can to persuade other people not to do so by pointing out the
firm´s many inadequacies.
The question of building advocate relations is thus at the core of relationship marketing
for all forms, notably so for airlines.
9.1.2 Building Advocate Relationships
Important aspects of relationship-building:
1. Straight dealing eerlijke prijzen
2. Delivering promises beloftes van bijv. marketingcampagne nakomen
3. Caring geven om de individuele klant
4. Service beyond reasonable expectations verwachtingen overtreffen
5. Accessible bereikbaar/toegankelijk
6. Gratitude dankbaarheid
9.2 Components of a Relationship Marketing Strategy
The cornerstone of a relationship-building strategy is that the firm should know
who its main customers are, and the exact nature of each customer´s
relationship with the firm. This will mean substantial investment in capturing
and managing data.
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