Marketing in Airline Industry - Essay Example

In order to attract customers and increase their loyalty, marketers today try to associate their products with an element of service attached to it. For example, when a customer buys a car, he enjoys the facility of free service for the first three years from the car manufacturer company ((ICMR)). If a goods and services are represented on a continuum with highly tangible goods on the extreme left and highly intangible services on the extreme right, the bundle of goods and services will fall somewhere along the middle of the continuum.

The industry that has been selected for discussion in this paper is the airline industry. The airline industry is regulated by the Ministry of Civil Aviation in the domestic market and by a system of bilateral service agreements in the international market. The bilateral service agreements regulate the prices offered by various airlines, capacity of the aircraft, and the routes to be served by these airlines (Sky News). The future of the airlines industry depends on the flight schedules, take-off time, in-flight and airport service, safety records, fleet capacity and efficiency, route frequency, strategic alliances with other airlines and businesses like hotels, etc.

Characteristics of the airline industry Airline industry is highly competitive. Competition is intense on the routes which are more profitable. The growth of the industry is closely linked to economic growth. An airline seat is an intangible and perishable good and hence marketers need to take special care while formulating their marketing strategies. Demand is price elastic i.e. as the price of service goes down the demand goes up, and income elastic i.e. when the income of the general population goes up, more people tend to travel by air.

The profitability of an airline increases, when the flight capacity is properly utilized and the aircraft spends less time on the ground. There has been a revolutionary increase in the number of low-cost airline which are otherwise called the budget airlines in the aviation industry over the last few years. The budget airlines are usually operators who provide low-cost travel options for the passengers. The budget airlines try and cut the indirect costs to the maximum possible extent. Passengers are not offered wet towels, meals etc.

Sometimes it may even happen that they do not even offer water to the passengers flying the budget airlines (Phillip).Marketing of Airlines Like any other industry, promotional activities play an important role in the airline industry as well. Airlines today offer attractive schemes to woo customers. These include frequent flyer schemes, special benefits, discounts, festive season offs, gifts like electronic equipment or kitchen appliances, access to club lounges, and special discounts with the alliance's business.

Quality of service can be a useful tool for airlines to gain a competitive advantage. This is because passengers expect airline crew to be efficient, friendly and helpful. Thus, proactive customer orientation is the need of the hour. Marketing Strategies Airlines must identify and eliminate non-value adding cost and use the money saved to provide better quality services. The company should find a niche market and cater to it. Identifying and flying to