As Planes Get Bigger, the Market-Place Gets More Competitive

Topics: Airline, Low-cost carrier, Southwest Airlines Pages: 7 (1779 words) Published: September 25, 2010



Globalisation rapidly changes marketing environment and marketplace become more competitive. It is no longer enough for company to be driven by product and technology without building customer relationship (Kotler, Adam, Denize and Armstrong 2009). Moreover, “business success is not determined by the producer but by the customer” (Drucker 1973 cited in Kotler et al. 2009, p. 4). Thus, in order to achieve organisation’s goals, marketing management needs to be flexible to adapt continuously changes of the environment.


Question 1: Microenvironment of air travel industry
Microenvironment of travel airlines can be divided into the following categories:

1- The marketing organization:
Even thought the role of marketing is to deal with customers, marketing management must work closely with other departments in the organization such as Accounting and Finance, R&D, Purchasing or Engineering to accomplish the goals of organisation (Kotler et al. 2009).

2- Supplier:
The main suppliers of air travel industry are dominated by Airbus and Boeing (Kotler et al. 2009). Other suppliers of airline industry could include Commercial Supplies (in-flight amenities and equipment, catering services, cleaning services, uniforms, fuel, office supplies and equipment for organization), IT Products & Services and Engineering suppliers (aircraft parts and non-aircraft parts, services to support the aircraft maintenance and operation) (Singapore Airlines Invites Tenders 2010)

3- Marketing intermediaries:
Marketing media of travel airlines could include Travel agency, Tourism board, Banks and other businesses that help to finance transaction, Insurance organisation and Marketing service agency ( media firms, marketing consulting firms, marketing research companies and other businesses that help the organisation that help to target and promote its brand) (Kotler et al. 2009)

4- Customers:
The major revenue of travel airlines is from regular and business travellers. These passengers are more likely to travel frequently and they tend to purchase premium services (Shaw 2004). In contrast, leisure travellers will less likely to purchase these upgraded services and tend to be price sensitive (Shaw 2004). Therefore, it is very importance for company to obtain knowledge to “attract new customers by promising superior value, and keep current customers by delivering satisfaction” (Kotler et al. 2009, p.4) 5- Competitor:

Travel airlines directly and indirectly compete between conventional airlines and low-cost airlines. Moreover, after “Open Skies” policies, travel airlines face more pressure on cost and quality competition between international airlines, regional airlines and domestic airlines (Taube 2009).

6- Publics:
It could be the groups interest in or impact the air travel industry such as Financial publics ( banks, shareholders, investors), Media publics (magazines, newspapers, broadcasts and television stations), Government publics, Citizen-action publics ( passengers groups, environmental groups), Local publics and General publics (local and overseas communities, charitable organisations ) and Internal publics (trade union, the broad of directors) (Kotler et al. 2009)

Question 2: Main forces in the macroenvironment of air travel industry Macroenvironment of travel airlines can be divided into the following categories:

1- Demographic environment:
People make up the markets. Thus, any changes in demography are strongly affect marketers’ targeting strategies (Kotler et al. 2009). Significant changes in demography include changing age structure of the population (slowdown birth-rate, increase in the number of people get older, increase life expectancy and immigration levels), changing household (smaller...
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