CRITICAL ANALYSIS OF AA’S STRATEGIES FOR TARGETING LGBT SEGMENT
A market segment is defined as a group of customers who share a similar set of needs and wants (Kotler & Keller, 2009, p 208). By marketing to specific segments of valuable customers, a company can better tailor its marketing mix to satisfy the needs and wants of that group. American Airlines’ (American’s) long term targeting of the lesbian, gay, bi-sexual and transgender (LGBT) segment of the travel market is an example of successful execution of market segmentation. In 18 years, American has positioned itself as ‘the most popular airline of LGBT-choice’ (Purkayastha, 2009), and now generates hundreds of millions of dollars in revenue from the segment. American was the first airline to actively target the untapped LGBT market. Its commitment to the segment, proven through layered strategies designed to build a relationship between the airline and the LGBT community, resulted in American being in the enviable ‘first mover’ position in the market. Any competitors adopting a strategy of targeting the LGBT segment thereafter were playing catch-up — from a long way behind. Being the first airline to target the LGBT segment, which had until relatively recently been an alienated or invisible segment, gave American significant sustainable competitive advantage. One of American’s most effective strategies since the early 1990s, was to demonstrate a genuine commitment to the LGBT community. Although American used the usual marketing mix strategies to reach the LGBT, it went further. Understanding that the LGBT segment was sensitive to being exploited, American ensured that it visibly supported LGBT organisations such as the National Gay and Lesbian Chamber of Commerce, The Human Rights Campaign, and Lesbian Community Cancer Project, through sponsorship, donations, partnering and outreach programmes. American proved its commitment by adopting an internal organisational culture that recognised and valued diversity. Its LGBT human resources policies, such as its domestic partnership programme, was noticed by the wider LGBT market and helped to build trust between it and American. American has elevated the segment’s loyalty to ‘felt involvement’ where the LGBT customer feels emotional response to the brand. That trust was reinforced through a product policy that met the needs of the LGBT traveller. For instance, through research, American recognized that the LGBT segment was more tech-savvy than the average traveler. It offered in-flight internet access on some aircraft, and access to gay TV channels. Through its dedicated LGBT microsite on American’s vacations website (www.AAVacations.com) was able to broaden its product offering to individual travel packages designed specifically for LGBT travelers. American’s strategies are market leading. Targeting the LGBT segment could easily have alienated its conservative heterosexual and business market. Yet American’s LGBT strategies have given it a high profile with its intended audience, while being discrete enough to not offend conservative America.
KEY CHARACTERISTICS OF LGBT CONSUMER
LGBT customers are characterised in fairly broad terms. The generic LGBT customer is an early adopter of technology; has more disposable income than heterosexual customers — which can be used for travel; has a higher propensity to spend; is influenced to make purchasing decisions if suppliers give back to the LGBT community; and are robust travelers – in that environmental risks such as terrorism or SARS do not deter them from travelling. (Purkayastha, 2009) From a...