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TRANSCRIPT
Aviation Management College
AIRLINE MARKETING
Chapter 9
Relationship Marketing
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
Definition:
RM, A marketing Philosophy whereby a firm gives equal or greater emphasis to the maintenance and strengthening of its
Relationships with its existing customers as it does to the necessary search for new
customers. Stephen Shaw 2004
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
DEFINITION:
RM, Marketing activities executed by a firm to maintain and strengthen Relationships with its existing customers and in their search for new customers. Ashari Abu Hasan, Feb 2010
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
BACKGROUND of RM
-Air travel market consists of small number of people who frequently fly -Average number of trip is more than 10 per person-They are partly from the Business Travel market-Mostly in mid thirties; job requires travelling-Does extensive traveling for about 20 yrs
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
IMPORTANCE OF RM
- Gain pax loyalty- Support throughout the person’s career- Incremental business cost is low- Less follow up effort; persuading method- Refer loyalty pax to influence new pax
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
DISADVANTAGES
- Business loss without pax loyalty- Keep on getting different/new pax- High initial costing- Difficult to change the pax mind/decision
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
THE CONCEPT of “Advocate” & “Destroyer”
Advocate Relationship – pax not only buys from the airline but acts as the Airline Representative by strongly recommending others to buy from the same Airline
Destroyer Relationships – a potential pax who does not buy from the airline and also influence others not to do so by pointing out the airline inadequacies/shortcomings.
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
Building Advocate Relationship
Delivering promises eg., on-time, comfortable, excellent food, warmest welcomes, etcCaring– keep inform of new service & positive response to complainAccessible – easy to contact by phone vs long computerized phone messagesGratitude – be recognized, reward, expression of thanks, etc.
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
COMPONENTS OF RELATIONSHIP MARKETING STRATEGY
a) The Need To Know Who Are The customers
- Demographics; name, address, profession, etc- Activity; what, where, when, how, etc, travel- Feedback & comments; complaints, standards,
expectation, etc
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
COMPONENTS OF RELATIONSHIP MARKETING STRATEGY
b) The Management of Quality
- Top down strategy- Continuous program/never-ending task- Continuous adaptation to changes
-
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
COMPONENTS OF RELATIONSHIP MARKETING STRATEGY
c) Customer Relations
Complaint handling dept: destroyer & advocateEffective policy: - easy to make their views known- prompt action- giving apology or compensation - a follow-up letter to get feedback
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
d) MARKETING COMMUNICATION
- Using data bases for target messages- Avoid junk mail syndrome- Make attractive offers to existing & future pax- Use to express gratitude to their pax
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
FREQUENT FLYER PROGRAM
- American Airlines 1981- Today’s Airline Marketing Strategy- Challenge to be/stay competitive
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
FREQUENT FLYER PROGRAM
Members Expectation
- reward structure - extensive partnership agreement - validity period - other benefits
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
THE FUTURE OF FFP
- Difficult to change customer with collected points- Corporate prefers good discounts- Difficult for new entrants airlines- Difficult to cement loyalty due to interchangeable- Individual FFP vs. global FFP
Aviation Management College
AIRLINE MARKETING
RELATIONSHIP MARKETING
D’END