The Global Market of Aviation Services - Essay Example

Question 1: Using relevant services marketing theory, analyse and evaluate the service encounter experienced by Jack and John.

To begin with, one of the most important factors in improving the competitiveness of air travel in the transport market is the service which is dealt with by the services marketing. Competitiveness in this sphere of activity is directly related to the concept of efficiency. Moreover, the efficiency of this concept is wider and has a more dynamic and volatile nature. Basically, the link between competitiveness and efficiency is straight (Hoffman & Bateson 2010). However, this connection may be indirect, in particular, in the conquest of market share in the new transport route, or in the case of the return of the lost positions on a particular segment (e.g. tourism), or on the whole transport market, that is, to solve the problem of attracting passengers on air transport (Shaw 2011).

Air transport is one of the most important sectors of the global economy. The market of civil aviation is an extremely dynamic and is subject to the great influence of the global economic situation. The contribution of the civil aviation market of services in the local, regional and global economy is made up of direct and multiplier effect of its associated industries. According to the International Civil Aviation Organization (ICAO), the contribution of the sector, including the infrastructure and the design industry, now is about 3 trillion dollars, equivalent to 8% of the world GDP (Forsyth, Niemeier & Wolf 2011).

In the current climate of the industry and the world economic crisis, falling demand for air travel, the airlines are forced to operate in a maximum cost reduction mode, to build their strategy in view of the focus on maintaining and strengthening the customer loyalty. The overall situation in the aviation market is complicated by the oil price shocks (Park 2007). Perhaps, the current situation will affect the development of scientific and technical progress, in particular, new developments in the field of alternative fuels based on hydrogen or solar energy. If these developments are completed successfully, the airlines will be able to maintain and improve competitiveness in the global market will have to be updated fleet (Fitzgerald 2013). The costs of fleet renewal are great, and cooperation in the framework of alliances or forms of consolidation (merger) will allow companies to reduce the costs of procurement by placing large orders. In the modern period, the activities of companies operating in the industry air traffic are to be characterised by the new approaches, which would be based on the rapid development of the sphere of the information technology, as well as the impact of various marketing factors.

The influence of environmental factors gives a general characteristic and the main trends of the global market of aviation services, determines the features of the industry, identifies the most important factors of competitiveness of airlines and, thus, give the opportunity to analyse the macro impact on the functioning of the airlines (Halpern 2010). This includes crisis situations, the liberalization of the aviation market and trends change structure airline owners, the possibility of mergers and acquisitions in the market, which lead to changes in performance measures for aviation services companies in the world market, create an opportunity to improve their competitiveness as a whole.

Having regarded the case, which is devoted to Jack and John, their experience at the airport and during the flight itself, it becomes possible to analyse the numerous points and apply several service marketing models. To begin with, a number of scientific papers offer a variety of methods and model optimization of technological processes at the airports. Partially, this field of expertise is proper to service marketing, partially – to technical departments of any airport. According to the thesis of Angelle, Arlestig & Norberg (2015), in their work the authors provide a mathematical modeling of technological processes at airports. It means that the airports should include three main areas in order to make their services (from the point of view of service marketing) better and more comfortable for the customers. Thus, as a consequence, on the one hand, there should be modeling of processes, which would be related to air passenger behavior; on the other hand, there should exist modeling of technological processes in the civil aviation system; and finally, there should be the formation of passengers' service technology.

The main importance in regards to the case of Jack and John is the training model of the aircraft to take off. This model will hypothetically allow linking to a single system of air passengers as a service process and other production factors in the airport. The process of passenger service is supposed to be divided by into two node versions. The first node simulates the process of passengers arriving at the airport (Gummesson 2007; Halpern & Graham 2013; Forsyth, Niemeier & Wolf 2011). Moment of applications' registration is recognized to be the moment the passengers arrive at the airport. The second generation of the node applications is the need for baggage handling of the passengers after the process of registration.

Turning back to the case study of Jack and John, it is possible to note that the objective function, from the point of view of services marketing, of such constructed models indicates the need for selection of parameters for which the mean residence time of the passenger at the airport deviates to a minimum from the calculated one.

As a consequence, it is possible to regard the opinion of Juiz and Toomey (2015) who have a strong conviction that there should be a number of possible criteria for assessing the efficiency of the airport identified. Firstly, Juiz and Toomey (2015) make an emphasis, it is a social criterion, considering the uniformity of various artists who are involved in conducting the same operations for each service of the airport. This criterion of effectiveness, as the authors believe, can be used to determine the number of performers and the need for different variations of the airport's operation during maintenance of the aircraft, passengers, cargo, etc (Juiz & Toomey 2015).

The second criterion, as Dyer (2015) shows, is the possible (to the fullest extent possible) minimization of the technical facilities, which are (and would be) required for the performance of the process steps in the operation of the airport. The criterion of efficiency of the use of mobile facilities – which is the third criterion – was determined by the minimum value of the total mileage. In this case, Kinney (2016) makes an emphasis on the fact that the application of this criterion should help reduce the fuel consumption, reduce wear rubber apron and cover. Also offered criteria such as minimal economic losses are to be incurred by the airport because of a delay of the flight for some time, and maximizing revenue load.

Thus, the service marketing is necessary to deal with the economic compound of the airport in question. Paying the more precise attention to the case study about John and Jake, it is extremely important to note that the listed criteria are quite reasonable, but the simulation is made in part because of the not identified limitations of the model, a means of resolving the constructed models and assessment of the adequacy.

Another point which is expected to be concerned with the services marketing is the norms of technological designing of air terminals. They are expected to have presented the criteria for assessing the level of mechanization and automation of work on the basic technological processes of passenger service. According to the aforementioned authors, both Dyer (2015) and Kinney (2016), and supported by Fodness and Murray (2007) the level of mechanization and automation of labor for the airport capacity must not be less than 65% and the productivity of personnel which is engaged in basic technological service of passengers should be equal to 18,000 passengers per person. These theoretical guidelines can be used for approximate calculation of compliance of the passenger service processes' automation to the certain standards, not allowing to determine the optimal characteristics of the service system as a whole.

Question 2: Make recommendations as to how the service providers in the case study might measure and manage service quality and customer satisfaction

Having concerned the case study, it is necessary to state the only feature, which unites the essential points in the case is the constant necessity in new technologies to be applied in order to ensure the customers' satisfaction and comfort (Halpern & Graham 2013; Forsyth, Niemeier & Wolf 2011). In accordance with Lubbe, Douglas and Zambellis (2011), all the possible innovations in the field of airport services are to be targeted to the changes, which would be deliberately included into the process with a view to best meet the needs (demands) on airport services. In addition to this, Yuan, Low and Tang (2010) believe that the innovation is also to be widely used in the development of non-aeronautical activities of objects of airport infrastructure. The purpose of the introduction of innovative technologies is, first of all, as Yuan, Low and Tang (2010) note, in improving the quality of customers service and increase of the efficiency of airports and airlines. With regard to the areas of implementation and further use of innovative technologies in the field of airport operations in accordance with the case study, nowadays there is a wide range of the recommendations to be proposed (Wilken, Berster & Gelhausen 2007). First and foremost, the recommendations are to be focused on the improvement and optimization of existing production processes of passenger services (Vargo & Lusch 2008). Secondly, they are supposed to offer innovative services which are based on increasing mobility level, self-service, and personalization (Halpern & Graham 2013; Forsyth, Niemeier & Wolf 2011). Thirdly, the airport in question is supposed to experience the modernization and further integration of complex security systems and safety. Fourthly, there should be the expansion of the range of aviation services, the integration of the IT infrastructure, the modernization of airport equipment and vehicles, the development of new approaches to the development of the route network and the coordination of slots, the improvement of aviation marketing mechanisms (Sindhav et al. 2006; Hoffman & Bateson 2010). Furthermore, it is possible to make the airport be engaged into the development of innovative concepts in the field of commercial interaction with the concessionaires, to attract passengers and visitors, outsourcing optimization of the non-core activities, offering new non-aeronautical services (Halpern & Graham 2013; Forsyth, Niemeier & Wolf 2011). Along with this, there should be a process of optimization of management processes, as well as improving airport management mechanisms through the introduction of an automated system (Park & Se-Yeon 2011). Finally, (however, this is not directly related to the case study) there should be established the use of advanced energy-efficient and environmentally friendly technologies.

These recommendations are based on the analytical approach of the marketing theory. In accordance with Grönroos (2012, p. 1522), “to emphasise the importance of activities by firms and customers (and possibly other actors in a network) to ensure value for the customer ultimately, without addressing the specific roles of the actors involved, this metaphorical usage of the expression ‘value co-creation’ works well.” This theory helps evaluate the customer's needs in their correlation with the company's opportunities.

Taking into account the positive trend of growth in demand for airport services organizations around the world, the need to improve passenger service and thereby increase operating efficiency, management of foreign airports as priorities has set the task of optimizing the use of available resources and efficient people flow management through the use of the concept of “intelligent airport.” This term is supposed to be the essential approach of the services marketing of the airport in the question of the case study.

It is also necessary to concern the management and organisation theory when regarding the airport functioning. The key problem of the functioning of the airport is the fact of overload, which can be solved through the introduction of innovative technologies based, primarily, on the geo-location marketing services (Hoffman & Bateson 2010; Park & Se-Yeon 2011). The use of these services is expected in the following areas: information services for passengers, reducing flight delays and improving the technological operations of airport services by improving the efficiency of the airport personnel and airfield equipment.

Applying the concept of loyalty of a customer and customer's satisfaction, it is necessary to state that the use of navigation systems can track not only the movement of passengers at the airport but also the time spent in each process area, which is significantly important for the case study in question (Berne 2005). Upon receipt of the information on exceeding the normative values, the airport staff can optimize the available resources by adopting the additional production capacity that will reduce service time in the major technology areas of the airport and, thus, will improve the quality of airport services.

In addition, passenger traffic allows differentiating the value of advertising spaces in the terminal depending on the population of billboard placement area (Hoffman & Bateson 2010). Concessionaires (duty-free shops, cafés, restaurants, etc.), which are located in the terminal, can not only track the number of visitors but also help analyse their preferences, as well as the effectiveness of the advertising. It is obvious that the above technology provides a number of advantages for the management of the airport, the organizations involved in the servicing of passengers and users of airport services (visitors, passengers and airlines).

Being based on the concept of loyalty of a customer and customer's satisfaction, it is possible to assure that the airport complexes' benefits are to improve service, increase the bandwidth of the basic technological zones and, as a consequence, the possibility of increase in passenger traffic by rising the number of additional flights, including by attracting new airlines (Smart 2013). In addition, it should be noted that obtaining timely information about the movements of the passengers, their preferences may be used to develop non-aeronautical businesses (Schmidberger et al. 2009).

As noted above, the use of navigation systems can not only optimize the management of the airport's own activities, but also will have a positive impact on consumers, therefore, for the passengers the main effect is achieved in reducing the time ground handling and preparation of operational and personal information about the airport services (Hoffman & Bateson 2010). As for the airlines, they are able to reduce the number of flight delays and, consequently, the time reversal of the aircraft at the airport (Schmidberger et al. 2009).

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