i) Highly Perishable Product
The airlines product is extremely perishable as it cannot be stored for future sales. Once boarding is closed on a particular flight, all the unutilised seats on that flight go completely waste. Airlines profitability and success of marketing functions depends greatly on its ability to fill-up the available capacity with revenue generating traffic viz. passenger and cargo.
ii) Need for Fine Market Segmentation
An airline’s market consists of various market segments with different service expectations, different price sensitivities, different travel motivations, etc. Examples of such market segments are first class passengers, who do not care about the price of an air ticket but expect only the best and most luxurious service standards and need to be pampered by the airline’s staff every inch of the way. Another example is business traveller, who mostly travels on an expense account and expects good schedules and connections, efficient ground service and comfortable on-board service. Family holiday traffic is more concerned with discounts in air fares than the schedules or service standards, etc. For labour traffic or shoppers’ traffic, price is the most important factor. It is vital for an airlines to optimise its yields and revenue from various market segments by positioning itself correctly in the market place.
iii) Dynamic Market
Since airline’s product is a service consisting basically of an experience for the passenger, it has to result in various degrees of satisfaction or dis-satisfaction from that experience. This in turn affects perception about the product. Besides, competition among airlines is hard and the market dynamics of pricing, promotion and distribution are liable to change very rapidly.
The challenge for an airline in marketing lies in manipulating its marketing mix viz. product, price, promotion and distribution. This is done to get a passenger in front of its checking-in counter ready and willing to fly that particular airlines after paying good money; and then sending him or her away happily to the destination so that the passenger is willing to come back another time and always to the same airline on any route. This is the essence of airline’s marketing.
The airlines product is dependent on certain external factors like facilities, rules, regulations and security check ups etc. at the airports. Though these are same for the passengers of all the airlines but the customers often associate them with the airline they are flying with.
Airlines business involves heavy investments and appropriate marketing planning can bring certain benefits like:
⦁ the marketing plan provides through analysis of situations, opportunities, options, and so on as a result of disciplined thinking and commitment of ideas to paper,
⦁ it results in clearly stated objectives and well thought-out strategies in advance of the time period covered,
⦁ it demands consideration of all problems and opportunities and by anticipating events reduces the risk of having to suddenly deal with random problems,
⦁ marketing goals contained within the plan give guidelines for profitable development and provide a better basis for measuring performance than simply revenue alone, and
⦁ the marketing plan results in activities being geared towards important issues and plans are always established well in advance.