Case Study - Low Cost Airlines

Topics: Airline, Marketing, Low-cost carrier Pages: 5 (1504 words) Published: April 21, 2010
Case study - Low cost airlines
History of low-cost airlines
The idea of LCC originated in the US. Founded in Dallas Texas on June 18, 1971 by Herb Kelleher, Southwest Airlines offered tickets that worked out to be cheaper than a car or coach ride. It is the fourth largest US airline in terms of domestic customers carried annually. It has been profitable every year since 1973. Low cost airlines in India

But a booming economy, a congested and crumbling train network and the emergence of low-cost carriers similar to Ryan air have meant a slice of Indian society taking to the skies for the first time. With half-a-dozen airlines planning to launch in the next year, fares have tumbled – and more than a third of the seats will be filled with first-time flyers. Three years ago a return ticket from New Delhi, India’s capital, to Mumbai, the country’s financial hub, was fixed at 20,000 rupees. In 24 months, Air Deccan has revolutionised Indian air travel. Last year it carried 1 million passengers, this year that figure will reach 4.4 million. With 35 destinations, the fleet is already stretched and the company has ordered a further 62 aircraft. Difference between a market oriented organisation and those with a sales oriented/product oriented/production oriented organisation Market oriented With marketing orientation, a business revolves its strategic decisions around the wants and needs of the target market, including potential customers. A company that is marketing-orientated has the commitment to valuing customers and the customers’ needs. In fact, it can even contribute to the transformation of a company’s business culture. This marketing concept involves three essential steps in being customer-focused. First, the wants and needs of the customers are researched and identified. Then, the research outputs are studied by the marketers and new products are created based on the consumer needs. Finally, customer satisfaction is aimed after public awareness and introduction of the product is made.

A marketing-orientated business is characterized by various attributes. The company makes good and extensive use of marketing research, develops new and broad products, highlights product value and benefits, uses product innovation methods, and designs supplementary services or customer benefits such as delivery, installation, warranty, and credit availability. All these are geared toward customer advantage.

Product Orientation
A company believes that if the products offered in the market are of good quality and high standard, customers are sure to buy and take advantage of it. The production of these high quality products are either a response to the needs of the customers or by pure innovation.

A good example would be mobile phone companies. Let us take Apple as an example of a company that always makes sure their phones have a competitive edge over the rest of the mobile phone manufacturers.

Companies that employ product orientation invest on product innovation as a way to attract the market. But, in order to keep the competitiveness in a certain industry, a company should always highly consider the recent changes and developments in technology and customer preferences. Otherwise, it may lose its ground to other competing businesses.

Sales Orientation
Sales-orientated organizations are targeted not on the customer needs and product quality but the selling and promotion of the products to the market. Businesses that seem to have a hard time selling their available product or services are more aggressive in pushing sales, pricing, and distribution.
If the company’s product stocks have barely moved and remain stagnant on the store shelves, for example, the company will utilize sales orientation to push the sales of these stocks without much consideration for customer tastes and preferences.

As such, a sales-orientated business does not...
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