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The US Airline Industry - Essay Example

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This essay describes the airline industry of the US and it's importance because of the direct and indirect GDP and employment it generates. The essay explores application of international business theories and competitive pressures with increasing power of customers on the US airline industry…
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The US Airline Industry
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Download file to see previous pages This would include a political, legal, and economic perspective. Porter Five Forces Model and four Ps of marketing would also be used. Discussion Four Ps of Marketing Product/Service The service provided by the airline industry is of air travel. However, over the years, the scope of the service provided by the airline has widened and now it is only about air travel or the core service but it about the augmented service as well. These include food, internet, TV, comfortable seats, business-class travel experience, and other benefits. Consider the example of JetBlue, which has emerged as a serious player in the industry in almost 12 years. The airline is following the same business model of low cost as introduced by Southwest and followed by Frontier Airlines, Horizon Airlines, Air Tran and others. However, JetBlue has been doing one thing different, which is that, unlike other low cost players, it has extended its augmented product to include many other amenities, which has attracted thousands of customers to JetBlue (Vasigh et al., 2008, pp. 105-106). Promotion As mentioned earlier, airline industry also faces a seasonal demand pattern where there are more passengers during the vacations and holidays to specific destinations, therefore, airlines engage in aggressive promotional activities in order to ensure that they capture the most share of the pie. Furthermore, slowing growth, saturating market and high fixed also force the airline industry to engage in active and aggressive advertising. This is also the reason why that sales promotion is common within the airline industry in an attempt to attract customers (Belobaba et al., 2009, pp. 52-54). Direct marketing and personal...
The airline industry is at the heart of US economy because of the direct and indirect GDP and employment it generates. The essay explores application of international business theories on the US airline industry. Although the core service is of air travel, the augmented service that includes secondary benefits such as food, entertainment, comfort and other have been in the spotlight lately. US airline industry actively uses dynamic pricing to ensure that it could squeeze maximum possible revenue from the customer, which they are willing to pay. The promotional mix used by the industry includes advertising, public relations and active sales promotion. Agents also engage personal selling and direct marketing to the big clients as well. In light of the Porter Five Forces Model, it appears that the US airline industry faces heightened competitive pressures with increasing bargaining power of customers, threat of substitutes and supplier power. The macroenvironmental analysis reveals that the airline industry will continue to face political legal pressures because of its economic and security importance. Although, if the current wave of mergers and acquisitions continue for a while then it highly likely that it would decrease the competition, rationalize pricing and remove the excess capacity. Nevertheless, smart players are more likely to come with the right marketing mix and positioning strategy and would leverage their strategic positioning to make profits as Southwest airlines has been doing for the past many years. ...Download file to see next pagesRead More
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