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Essay / Research Paper Abstract
Creating loyalty in a customer base can create a great deal of value of an airline. This 8 p page paper looks at how marketing departments can create and use loyalty schemes to increase sales from both existing passengers and use them to attract new customers. The paper looks at a number of examples including British Airways, Delta and Virgin Atlantic. The bibliography cites 7 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEairloyal.rtf
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Unformatted sample text from the term paper:
and the perceptions that it creates increases exponentially. The airline/aviation industry is one of these. Overheads are very high, it costs almost the same to run an aircraft that is
either half full or full, the marginal cost per extra passenger is minimal, therefore airlines seek to maximise their revenue by selling as many of the seats as possible, often
using models of economic efficiency in order to maximise the revenue per seat. A battle they had faced for many years was how to increase value to the firm by
increasing loyalty, as this would cost less to attract the customers. Estimates have indicates it may cost 5 time more to attract a customer as to keep a customer that
is loyal (Hooley et al, 2003). Traditionally airlines would market themselves based on characteristics that they believed the passengers, or the passengers of the market segment they were
trying to attract would respond to, usually competing with a strategy of differentiation (Porter, 1985). As only one airline can have the cost advantage and in general terms the physical
service, therefore it is the way the service that is offered that is left open to differentiation in order to create a competitive advantage. Airlines have sought to do this
in different ways, for example, Singapore Airlines used the smiling air hostess and gave the impression of hospitality, British Airways transformed itself form an airline with a poor reputation to
one with perceived very high service standards, others have used different images, Southwest, the first low cost airline markets on value, all of which have been sources of differentiation (Kotler,
2003). The differentiation in the way the airlines were marketed helped attracts customers, but switching costs were low, so this meant that customers had to be attracted each time
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