American achieved its largest-in-the-industry status through a mix of pioneering initiatives and aggressive expansion. It introduced first AAdvantage frequent flyer program. AAdvantage is the frequent flyer program of American Airlines. Launched May 1, 1981, it was the first such loyalty program in the world, and remains the largest with more than 50 million members as for 2005. Miles accumulated in the program allow members to redeem tickets, upgrade service class, or obtain free or discounted car rentals, hotel stays, merchandise, or other products and services through partners. The most active members, based on the amount and price of travel booked, are designated AAdvantage Gold, AAdvantage Platinum, and AAdvantage Executive Platinum elite members, with privileges such as separate check-in, priority upgrade and standby processing, or free upgrades. They also receive similar privileges from AA's partner airlines, particularly those in one world. As for “Three-Class Transcon” was aimed at improving American’s competitive advantage in product and service, by improving 3 elements of expanded marketing mix for services: People, physical evidence and process, along with product, price, place and promotion.
New Product: More flexible travel schedule, intermediate product, in-flight service, product design, food and beverage service.
Price: Domestic Pricing
* Customers- JFK-LAX attracted some of the most influential and glamorous travelers. * People who place high value on comfort and international travel. * Employees Inside AA: Sales personnel, ticket and reservation agents, terminal staff, pilots, flight attendants, ground crew. * Employees outside AA: travel agents, corporate travel departments, AAdvantage members and security analysts.
Physical Evidence: reconfiguring the aircraft into three distinct cabins, larger and softer blankets, redesigned china, glassware, flatware, linens and menus created by some of American’s finest chefs. Improved amenity kits, bay tags etc. Personal videos for business class would be adding value.
Processes: The airline doesn’t transfer baggage to connecting flights on other airlines. In all, the process is very efficient, standardized, and low-cost, allowing for quick turnaround and low fares. In addition to all these, customers are much part of the service process, taking on their roles willingly. To accommodate the planned changes in the food and beverage service there were changes to be taken in processes. They had to provide special access from the galleys to coach class; otherwise flight attendants would have had to wheel service carts through the business-class cabin.
Gap 1- Not Knowing What Customer Wants
* Inadequate marketing research orientation- company management looked forced, and closed this gap helping “Three class” transactions.
1. Lack of upward communication- There was lack of integration between management and customers. They were trying to make better conditions for customers without understanding their needs and wishes.
2. Insufficient relationship focus- this Gap was closed by attracting new customers. They didn’t put their effort for old customers but were working for new ones who were business class customers. They make all comfort conditions for them in Business Class. 3. Inadequate service recovery- Company was trying to improve the service and satisfaction factor for their customers so they also closed this Gap.
Gap 2- Not having right service quality designs and standards
* Poor service design- as we already mentioned they were trying to make their conditions better, implemented new ideas and really were desired to offer new and better service to their customers. Because we know that they began with poor service and where developing it step by step.
* Absence of customer-driven standards- we can’t say that there was absence of setting...