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Aviation Management College AIRLINE MARKETING Chapter 9 Relationship Marketing

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AIRLINE MARKETING. Aviation Management College. Chapter 9 Relationship Marketing. AIRLINE MARKETING. Aviation Management College. RELATIONSHIP MARKETING. Definition: RM, A marketing Philosophy whereby a firm gives equal or greater emphasis to the maintenance and strengthening of its - PowerPoint PPT Presentation

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Page 1: Aviation Management College

Aviation Management College

AIRLINE MARKETING

Chapter 9

Relationship Marketing

Page 2: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

Definition:

RM, A marketing Philosophy whereby a firm gives equal or greater emphasis to the maintenance and strengthening of its

Relationships with its existing customers as it does to the necessary search for new

customers. Stephen Shaw 2004

Page 3: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

DEFINITION:

RM, Marketing activities executed by a firm to maintain and strengthen Relationships with its existing customers and in their search for new customers. Ashari Abu Hasan, Feb 2010

Page 4: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

BACKGROUND of RM

-Air travel market consists of small number of people who frequently fly -Average number of trip is more than 10 per person-They are partly from the Business Travel market-Mostly in mid thirties; job requires travelling-Does extensive traveling for about 20 yrs

Page 5: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

IMPORTANCE OF RM

- Gain pax loyalty- Support throughout the person’s career- Incremental business cost is low- Less follow up effort; persuading method- Refer loyalty pax to influence new pax

Page 6: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

DISADVANTAGES

- Business loss without pax loyalty- Keep on getting different/new pax- High initial costing- Difficult to change the pax mind/decision

Page 7: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

THE CONCEPT of “Advocate” & “Destroyer”

Advocate Relationship – pax not only buys from the airline but acts as the Airline Representative by strongly recommending others to buy from the same Airline

Destroyer Relationships – a potential pax who does not buy from the airline and also influence others not to do so by pointing out the airline inadequacies/shortcomings.

Page 8: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

Building Advocate Relationship

Delivering promises eg., on-time, comfortable, excellent food, warmest welcomes, etcCaring– keep inform of new service & positive response to complainAccessible – easy to contact by phone vs long computerized phone messagesGratitude – be recognized, reward, expression of thanks, etc.

Page 9: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

COMPONENTS OF RELATIONSHIP MARKETING STRATEGY

a) The Need To Know Who Are The customers

- Demographics; name, address, profession, etc- Activity; what, where, when, how, etc, travel- Feedback & comments; complaints, standards,

expectation, etc

Page 10: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

COMPONENTS OF RELATIONSHIP MARKETING STRATEGY

b) The Management of Quality

- Top down strategy- Continuous program/never-ending task- Continuous adaptation to changes

-

Page 11: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

COMPONENTS OF RELATIONSHIP MARKETING STRATEGY

c) Customer Relations

Complaint handling dept: destroyer & advocateEffective policy: - easy to make their views known- prompt action- giving apology or compensation - a follow-up letter to get feedback

Page 12: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

d) MARKETING COMMUNICATION

- Using data bases for target messages- Avoid junk mail syndrome- Make attractive offers to existing & future pax- Use to express gratitude to their pax

Page 13: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

FREQUENT FLYER PROGRAM

- American Airlines 1981- Today’s Airline Marketing Strategy- Challenge to be/stay competitive

Page 14: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

FREQUENT FLYER PROGRAM

Members Expectation

- reward structure - extensive partnership agreement - validity period - other benefits

Page 15: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

THE FUTURE OF FFP

- Difficult to change customer with collected points- Corporate prefers good discounts- Difficult for new entrants airlines- Difficult to cement loyalty due to interchangeable- Individual FFP vs. global FFP

Page 16: Aviation Management College

Aviation Management College

AIRLINE MARKETING

RELATIONSHIP MARKETING

D’END