Airline Sky Miles
Emergence, Marketing Mix and Effects upon the Airline Industry 1. Abstract
The contemporaneous business industry is significantly different from how it used to be only a few decades ago. The primary change that occurred regarded the nature of the business. As such, in the past, business activities had a more practical and technological nature and they were generally product oriented; but today, they have become more human oriented. For instance, during the twentieth century, the focus was on the products manufactured and the technologies used, without much emphasis on the human resource or on customer satisfaction. So low was the interest towards customer satisfaction, that Henry Ford even said once that his customers could have their cars made in any color they desired, as long as this color was black.
Today however, the industrial sector places increased emphasis on both employees as well as customers. Employees have transformed from the people operating the machines into the company’s most vital resources and the customers are the forces that drive businesses.
An industry sector which is extremely relevant of this change in the nature of the businesses conducted is the airline sector. There are numerous airline companies that compete against each other on the market and strive to present customers with the best products and services. Furthermore, these companies invest millions of dollars each year in order to improve the quality of their products and increase customer satisfaction. A more and more common means of achieving this is that of offering customers the possibility to fly for free or, at least, to benefit of deductions and special offers.
2. Emergence of airline sky miles
Airline sky miles programs were first initiated in order to attract more customers. Delta Airlines was one of the first companies to ever implement these programs which were soon adopted by most national and international airline companies. The basic principle of acquiring additional sky miles is that of purchasing airline products and services, gathering value points proportionally to the fees paid and then using these value points to pay for future services. The practice has spread around the globe generally due to its benefits and its easiness. There are numerous possibilities of acquiring sky miles, but the most common one is through credit cards. By paying the airline fees with credit cards, the customer can earn air miles. The amount of miles earned per fee depends on the airline companies. For instance, Delta Airlines and Blue Airlines grant customers one mile for a dollar paid. (Dial Abroad, 2007) As such, if one pays $350 for a ticket, he will be granted the right to fly 350 miles for free. Capital One on the other hand grants customers 1.25 miles for each dollar spent. This means that for a $350 ticket, the buyer can earn 437.5 air miles, 87.5 extra miles that those offered by Delta or Blue Airlines. Among the most common credit cards that earn customers free sky miles are: Delta Sky Miles Gold Credit Card, Starwood Preferred Guest Credit Card from American Express, Hilton Honors Platinum Card from American Express, British Airways Visa Signature Card, Continental Airlines World MasterCard from Chase, United Mileage Plus Platinum Business Card or Alaska Airlines Visa Signature Credit Card. (Credit Federal, 2007)
When they first emerged onto the market, the air miles were aimed to attract more customers and could only be used for flying services. However, in time they have evolved at such a level that they are now able to significantly influence the airline industry and the customer satisfaction at unforeseen levels.
3. Marketing Mix
The marketing mix of the sky miles is composed of four features: product, place, price and promotion. The product related issues have to answer to questions in regard to brand name, functionality, quality, safety, support, services, accessories and...
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• 2007, Airline miles credit card with travel reward, Credit Federal, http://creditfederal.com/airline-miles-creditcard.html, last accessed on October 29, 2007
• 2007, The Marketing Mix, The Four P’s of Marketing, Net MBA, http://www.netmba.com/marketing/mix/, last accessed on October 29, 2007
• 2005, Lukach, T., America Supports You: Americans Donate Sky Miles to Wounded Troops, U.S. Department of Defense,
http://www.defenselink.mil/news/newsarticle.aspx?id=16941, last accessed on October 29, 2007
• 2007, Get up to 17,500 Bonus Miles with the Gold Delta Sky Miles Credit Card, American Express,
https://www201.americanexpress.com/cards/Applyfservlet?csi=24/14448/b/218, last accessed on October 29, 2007
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