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Strategic Marketing Or Marketing in Aviation

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                <p>Strategic Marketing or Marketing in Aviation<br>
Effective marketing depends upon effective marketing system employed by
an industry or separate companies. Marketing as an activity is carried
out in a variety of contexts. The most obvious context is of course the
sale of goods and services to end-users. Marketing can be described as
one of the functional areas of a business, distinct from finance and
operations (McDonald, Christopher, 2003). Marketing can also be thought
of as one of the activities that, along with product design,
manufacturing, and transportation logistics. <br>
In general, aviation industry is one of the profitable industries today
which is characterized by of rapid technological and marketing changes.
Nevertheless, the present situation requires cooperation between airlines
and airports which should help them to market their services effectively
to their clients. <br>
Marketing strategies include a wide variety of techniques aimed to
deliver customer satisfaction and safety. New product and services
development, technological changes mark the main strategic activities in
this market segment. Technology, being a universal factor that crosses
national and cultural boundaries, plays the crucial role in aviation and
aerospace industry. It should be mentioned that technology is truly
"stateless"; there are no cultural boundaries limiting its applica¬tion.
Once aviation technology is developed, it soon becomes available
virtually every¬where in the world. <br>
In regional markets such as Europe, the increasing overlap of advertising
across national boundaries and the mobility of consumers have created
opportunities for aviation and airlines marketers to pursue pan-European
product positioning. For instance, in 1970s the jet airplane
revolutionized communication by making it pos¬sible for people to travel
around the world in less than 48 hours. Tourism enables people from many
countries to see and experience the newest products being sold abroad.
One essential characteristic of the effective global aviation business is
face-to-face communication among employees and between the company and
its customers. Without modern jet travel, such communication would be
difficult to accomplish (Bellis, 2001).<br>
New transportation technology significantly reduces the level of prices.
The costs associ¬ated with physical distributionboth in terms of money
and timehave been greatly reduced as well. The per-unit cost of shipping
automobiles from Japan and Korea to the United States by specially
designed auto-transport ships is less than the cost of overland shipping
from Detroit to either U.S. coast. Another key innovation has been
increased utilization of 20- and 40-foot metal containers that can be
trans¬ferred from trucks to railroad cars to ships.<br>
Another technological innovation, which helps to improve marketing
activities is the Internet and World Wide Web. Airlines and aviation can
be called boundaryless or global industries, and for this reason Internet
and Intranet services has become a driven force for them.      <br>
Today's information technology allows airline alliance partners to sell
seats on each other's flights, thereby helping travelers get from point
to point more easily while boosting revenues for companies such as United
Airlines and Lufthansa. Meanwhile, the cost of international telephone
calls has fallen dra¬matically over the past several decades. That fact,
plus the advent of new communi¬cation technologies such as e-mail, fax,
and video teleconferencing, means that man¬agers, executives, and
customers can link up electronically from virtually any part of the world
without traveling at all.<br>
When a company establishes a site on the Internet, it automatically
becomes global, at least in terms of its potential to reach global
customers with information. At present, Internet usage is heaviest in the
United States. Even as that situation changes, however, many constraints
must still be overcome before Internet merchandise purchase transactions
can become borderless (Joines, Scherer, Scheufele, 2003).<br>
Marketing departments in aviation and airline industry work closely with
R&D departments to ensure that the products which are developed are those
which cater for the changing needs of target customers and different
needs of varying customer segments. In recent years, high failure rates
in the introduction of new products have led departments to be very risk
averse, with most 'new' products emerging being merely extensions of
exist¬ing product lines and not truly new and innovative offerings.<br>
The marketer's role in aviation and airline new product development is
therefore about providing a link between the market and the design
department, with customers and R&D technicians both being involved in the
process. It also requires involving senior management, as changes in
customer demand and purchasing patterns may have serious implications for
future busi¬ness objectives and directions. <br>
The main marketing strategy in aerospace and aviation industries is to
design a product that consumers did not explicitly request. The challenge
of course is to get out in front of consumers; to extrapolate and infer
future customer needs. Yet traditional forms of marketing research seldom
seem to provide the insight necessary to engage in creative marketing.
The basic aerospace initiative include: <br>
"Re-invigorate basic and applied research in aeronautics and aviation.
<br>
Develop aviation/aerospace technologies that will significantly lower
noise, emissions and fuel consumption. <br>
Address the cost, frequency and reliability of entering space, and
increase its economic viability. <br>
Fund revolutionary, not just evolutionary, changes to the air
transportation system to obtain greater capacity, safety, traffic flow
and automation" (U.S. Aviation and Aerospace Industries, 2003). <br>
It is easy to see the rationale for presenting the marketing department
as the linchpin in the new product devel¬opment process. They are the
conduit of information between the market, and the firm and the various
departments involved in the new product development process. Taking on a
pivotal role means broader involvement of various stakeholders which can
be further facilitated by project teams which bring members of all groups
together at the same time to discuss and attempt to solve mutual
problems. "Infrastructure and air traffic management issues will be a new
topic to address both on behalf of aerospace manufacturers and service
providers and the SBAC airports segment" (UK aircraft and aerospace
industry, 2005).<br>
The above apparently suggests that new product development is purely
finding out what customers want and then delivering it. It is possible to
suggest, however, that cus¬tomers do not always know what they want, or
at least cannot articulate it in concrete terms.       <!--INFOLINKS_OFF-
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David Kiley expresses an interesting idea supposing that Airlines "are
not marketing even if they think they are". He explains that "consumers
are, for the most part, choosing based on where their frequent flyer
miles are (that they collect through their jobs) and price. The typical
leisure traveler these days is checking online via Orbitz, Expedia or one
of the other services for prices and schedules. When the selection of
options comes up from United, Northwest, Delta, American, Air France,
Virgin Atlantic--how many people are choosing based on how they feel
about the airline?" (Kiley, n.d.). On the other hand, it is difficult to
deny the role of advertising in airline marketing which has a great
influence on consumers preferences and choice. <br>
Today, customer service in airlines relies on reputation and
trustworthiness and this no less true in the new forms of system-service.
In fields such as package delivery and money management, consumers are
seeking indications that their risks will be minimised or eliminated. For
these kinds of consumer acts, customer service plays an essential role in
assuaging the fears of consumers by projecting an image of
trustworthiness and expertise (Johnson, Scholes, 1998). <br>
The Choice of Press issues is based on readership. It refers to the total
number of people who probably will read the publication. For example
trade and technical publications are often read by people other than the
purchaser at the purchaser's place of work. Sunday newspapers and colour
supplements are invariably passed around the family for reading.
Therefore, readership figures may be several times larger than
circulation figures and help to tell us how many people may read the
publication. The readership profiles usually indicate the demographic
characteristics of the readership, such as age, sex, income and, in
particular, socio-economic grading of readers, quintessential to the
effective targeting of a company's advertising. For instance, "Delta has
recently kicked off a new campaign, themed "Good Goes Around." American
has been running sentimental TV ads with the slogan, "We Know Why You
Fly." (Kiley).<br>
For maximum penetration it may help to select primary (first choice)
media that interlock or cross support each other. If deeper penetration
into the same target market, for example, is required, then vertical
advertising in the media that reach the same target market will be
sought. For example, advertising on commercial television may be linked
with advertising in the magazine that provides the program schedules for
viewers, or local radio advertising in a particular area may be
accompanied by direct mail or press advertising. "The airline industry
has literally fought for deregulation that has made each company nothing
more than a commodity" (Kiley). <br>
Without new qualitative service airlines companies will not be capable to
achieve the overall objectives, that is why the main objective of a
company is to maintain the level of service quality and develop
strategies to improve its services. Service concepts are based on
understanding the unique environment in which a particular firm operates.
Usually, airline companies find specific marketing strategies and then
translate them into a detailed plan of action which foresee an efficient
marketing effort. Implementing a customer oriented strategy is more
important than any other techniques. It also means impressing upon the
entire staff the importance of customer service because a satisfied
customer is the best marketing tool available. <br>
All customers have some expectation of the quality of services which have
to be provided. Present day situation is marked by two factors
specification, which is to do with the 'design quality' of service, and
conformity, which is to do with the 'process' quality which is achieved
are of particular importance to customers. Ultimately they are the two
factors which deter¬mine the quality levels provided by a companies to
their customers. These two factors however are themselves determined by
other factors. <br>
Specification in the airline industry is determined as a result of an
organization's pol¬icy, which in turn resulted from decisions on its
market policy, and consideration of the market or customer needs and
requirements, and the activ¬ities of competitors. This is the process of
designing quality into the service (Ennew, Reed, Binks, 1993). For
instance, "Airlines are scrambling to fill seats and make their customers
happy, that's clear. British Airways just this week signed a deal with
the Worldwide Travel Exchange (WWTE) hotel-booking arm of Expedia inc
company Travelscape, enabling the airline's passengers to book rooms at
more than 40,000 hotel properties" (Cox, 2002). <br>
Proof of customer contact improvement includes measuring customer
satisfaction, establishing new performance standards, and thereby gaining
greater control over, and routinisation of, professional service work. At
the same time, quality improvement through self-directed project teams
has evolved into a practice whereby task forces adopt goals and use
methods that are centrally determined. In this manner, 'success' is
evaluated by others through institutionally defined performance
improvement measures (Mascarenhas, Kesavan, Bernacchi, 2004).<br>
Today, a wide range of Web services are adopted by airlines and aviation
to contact with the customers and to ensure customer satisfaction. It is
not a unique and a new form of service but still it is one of the most
beneficial areas for attracting a new customers and providing new
services for target customers. For instance, "Travelocity provides
Internet and wireless reservations information for more than 700
airlines, but it doesn't have special marketing relationships with all of
them. It did sign a similar deal with Continental in January and has
deals with British Airways, JetBlue and America West, among other
airlines" (Cox, 2002). <br>
For airlines companies, Internet rationalizes the expensive and
cumber¬some proposition of large-scale customer service. Second, the
system serves to reduce at least the appearance of risk associated with
time-space distanciation and the opacity of the expert system. <br>
In only a short time, online finance has become immensely popular around
the world. This might have something to do with the fact that in climates
of risk, especially those involving investments, many customers prefer a
'hands-on' approach. Indeed, online services and trading has several
advantages for customers. The main, it is available around the clock.
There are, of course, risks for customers associated with online trading
(Mascarenhas, et al, 2004).<br>
In aviation this approach includes maintenance of high standards which is
a key factor in effective customer contact. The purpose of maintenance is
to attempt to maximize the performance of service by ensuring that it
performs regularly and efficiently. Service, however complex or simple,
however cheap or expensive, is liable to breakdown. The effective
operation of any system is dependent on the maintenance of all parts of
the system, e.g. buildings, services. Indeed, company welfare or
personnel practice is designed partly as a maintenance activity, e.g.
training and retraining to maintain the availability of appropriate
skills, facilities to maintain human capacity, counselling to maintain
interest and motivation (Joines et al, 2003).<br>
The audiences may be geographically dispersed in time, but they share
common interests that are perhaps difficult to serve profitably though
other international media. The online airlines sites (www.bluejet.net.tc
or www.britishairways.com) thrive because they offer their participants
the following: a forum for exchange of common interests; a sense of place
with codes of behaviour; a meeting place for specialists; the development
of stimulating dialogues leading to relationships based on trust;
encouragement for active participation by more than an exclusive few.
<br>
"Customers can book on-line at www.CanJet.com through CanJet's
Reservations Sales Centre" (Cox, 2002). Service, however complex or
simple, however cheap or expensive, is liable to breakdown. Another
alternative is to deliver ads via third-party ad-server companies which
can serve ad messages simultaneously to multiple Web sites, measure
results, produce consolidated reports, report on the success of the
entire campaign, and analyze these results immediately, enabling
advertisers to quickly assess the ongoing effectiveness of the campaign.
<br>
In traditional markets, dual distribution systems are not uncommon; there
are numerous examples of companies using more than one channel of
distribution to sell to different groups of customers. However, the
process of managing multiple distribution systems can be both tricky and
risky. While electronic commerce is creating new opportunities for
differential pricing, it can also make such pricing strategies more
difficult when it is used to provide customers with better information
about their choices. Indeed, customer ignorance -about prices, features
and relative product performance - has traditionally been a source of
profit for companies. The relationship marketing process involves an
iterative cycle of knowledge acquisition, customer differentiation and
customization of the entire marketing mix. This process is sometimes
referred to as a learning relationship (Johnson, Scholes, 1998). A
learning relationship between a customer and an airline comapny gets
smarter and smarter with each individual interaction, defining in ever
more detail the customer's own individual needs and tastes. <br>
"The leadership position of the U.S. aviation and aerospace industries is
being eroded by foreign competitors who benefit from extensive government
subsidies" (U.S. Aviation and Aerospace Industries, 2003). In aerospace
services is creating new flexibility for consumers and for business,
government markets. And innovation is also occurring through
experimentation with new approaches to market development in emerging
markets There appears to be a mismatch between the technology
incorporation cycle and the technology introduction cycle. Just when the
customer feels comfortable with a given technology that they have
acquired, a new version comes along making the earlier one obsolete.<br>
A problem with aerospace industry is that although there are only a few
major companies, these companies have a majority of the control over the
market, requiring an extremely unique spin off of this already
established product to have a chance at success. There are many
innovative products that enter the sector every year. A talented company
management could definitely add these product to the list if they are
willing to work hard, think outside of the box, and put their heart into
their company (UK aircraft and aerospace industry, 2005)<br>
Competitive pressures have prompted many airlines and aerospace
companies to involve marketers in design, manufacturing, and other value-
related decisions from the start. This approach is known in some circles
as boundaryless marketing. Rather than linking marketing sequentially
with other activities, the goal is to eliminate the communication
barriers between marketing and other functional area's. Properly
implemented, boundaryless marketing ensures that a marketing orientation
perme¬ates all value-creating activities in a company (McDonald,
Christopher, 2003).<br>
A partnership marketing strategy is the quickest and cheap¬est ways to
develop a global strategy in aviation. It allow share control over
assigned tasks, a situation that cre¬ates management challenges.
Partnership in aviation is attractive because high product development
costs in the face of resource constraints may force a company to seek
partners and the technology requirements of many contemporary products
mean that an individual company may lack the skills, capital, or know-how
to go it alone (UK aircraft and aerospace industry, 2005). <br>
It is possible to conclude that aerospace and airline industries mature,
fragmentation is overcome and the industry tends to become a consolidated
industry dominated by a small number of large companies. Although
industries begin by being fragmented, battles for market share and
cre¬ative attempts to overcome local or niche market boundaries often
result in a few com¬panies' obtaining increasingly larger market shares.
When product standards become established for minimum quality and
features, competition shifts to a greater emphasis on cost and service.
Slower growth combined with overcapacity and knowledgeable buyers put a
premium on a firm's ability to achieve cost leadership or differentiation
along the dimensions most desired by the market. <br>
The increasing opportunities of the Internet offer another area of
strength for airlines marketing stretagy. Customers want more help with
the Internet, airlines in a better position to give it to them. In the
traditional brand relationships, communication flows between the marketer
and the consumer. The key to airlines successful relationship marketing
program is information. The better information that a company can propose
to a particular customer, the more value that firm will potentially be
able to provide that customer.<br>
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