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Strategic Marketing or Marketing in Aviation
By andrew sandon
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.
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.
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.
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).
New transportation technology significantly reduces the level of prices. The costs associ¬ated with physical distribution—both in terms of money and time—have 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.
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.
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.
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).
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.
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.
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:
• “Re-invigorate basic and applied research in aeronautics and aviation.
• Develop aviation/aerospace technologies that will significantly lower noise, emissions and fuel consumption.
• Address the cost, frequency and reliability of entering space, and increase its economic viability.
• 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).
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).
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.
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.
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).
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).
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).
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.
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.
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