1 Aviation Management College AIRLINE MARKETING

2 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

3 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

4 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

5 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

6 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

7 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.

8 Aviation Management College AIRLINE MARKETING RELATIONSHIP MARKETING Building Advocate Relationship Delivering promises eg., on-time, comfortable, excellent food, warmest welcomes, etc Caring– keep inform of new service & positive response to complain Accessible – easy to contact by phone vs long computerized phone messages Gratitude – be recognized, reward, expression of thanks, etc.

9 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

10 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 -

11 Aviation Management College AIRLINE MARKETING RELATIONSHIP MARKETING COMPONENTS OF RELATIONSHIP MARKETING STRATEGY c)Customer Relations Complaint handling dept: destroyer & advocate Effective policy: -easy to make their views known -prompt action -giving apology or compensation -a follow-up letter to get feedback

12 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

13 Aviation Management College AIRLINE MARKETING RELATIONSHIP MARKETING FREQUENT FLYER PROGRAM - American Airlines 1981 - Today’s Airline Marketing Strategy - Challenge to be/stay competitive

14 Aviation Management College AIRLINE MARKETING RELATIONSHIP MARKETING FREQUENT FLYER PROGRAM Members Expectation -reward structure -extensive partnership agreement -validity period -other benefits

15 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

16 Aviation Management College AIRLINE MARKETING RELATIONSHIP MARKETING D’END