Aviation Management College

AIRLINE MARKETING

Chap 7

DISTRIBUTING THE PRODUCT

Aviation Management College

AIRLINE MARKETING

DISTRIBUTING THE PRODUCT

The airport consumer has a very attractive demographic profile

1048628 50 male 50 female

1048628 Average annual income = $95000

1048628 Dominant age group 35-54

1048628 Over 80 college graduates (USA)

Aviation Management College

AIRLINE MARKETING

PRODUCT DISTRIBUTION

The marketing links between the customers and the product are known as Distribution Channels

Airline uses various channels of distribution to reach its target market

The trend keeps on changing as the world progress with new technology and innovation

Aviation Management College

1 Types of Distribution Channel

a) Direct Route

- The airline market the product direct to the final customer - No intermediaries- Normal in B 2 B- Mostly in less costly product- With extensive advertising to target market- Using mail order or the Internet

AIRLINE MARKETINGProduct Distribution

Aviation Management College

1 Types of Distribution Channel

a) Direct Route

Advantages

No mark-ups or commission to intermediaries

Airline able to control marketing activities

AIRLINE MARKETINGProduct Distribution

Aviation Management College

1 Types of Distribution Channel - cont

b) Using Wholesalers

- Wholesalers buy in bulk from various airlines- Have the power to negotiate appropriate discounts- They sell the product direct or through retailers

Disadvantage need to give competitive discount

Advantages unsold good cannot be returned

AIRLINE MARKETINGProduct Distribution

Aviation Management College

AIRLINE MARKETINGProduct Distribution

1 Types of Distribution Channel - cont

c Using Agency

- Common with intangible goods- To offer to wide geographical coverage- Agency tend to push product with higher commission- Popular in the 1990s

Aviation Management College

AIRLINE MARKETINGProduct Distribution

Examples 1- Manufactureswholesaler relationship

General Electric Aviation buys a large number of aircraft from manufactures and leased it to airlines

GPA largest aircraft leasing company in 1990s went bankrupt because of recession

1 Types of Distribution Channel - cont

Aviation Management College

AIRLINE MARKETINGProduct Distribution

Example 2-Airlinewholesaler relationship

Airlines sales bulk seats to charter airlines or tour operators

Package it with accommodation surface transfers etc

Special package for different target group eg golfers historical tours etc

Tour operators responsible for retailing it to the final customers

1 Types of Distribution Channel - cont

Aviation Management College

AIRLINE MARKETINGProduct Distribution

Example 3 ndash Agency relationship

Using the travel agency system to sell productAgency able to provide up-to-date information on the productThe trend is declining from 90 to now 80

1 Types of Distribution Channel - cont

Aviation Management College

AIRLINE MARKETINGProduct Distribution

2 The Travel Agency

a) Advantages

- Geographical coverage- Minimise manpower structure- Reduce the cost or air travel administrations

Aviation Management College

AIRLINE MARKETINGProduct Distribution

2 The Travel Agency

b) Disadvantages

- Increased in commission rates - Customers using credit cards- Finance agentrsquos battle- Proliferation of sales outlets- Retail discounts - Loyalty amp buy clients

Aviation Management College

AIRLINE MARKETINGProduct Distribution

3 Present amp Current Distribution Channel

a) Commission structure

- Commission reduced or eliminated - Capped at a maximum- Significant reduced on expensive tickets

Aviation Management College

AIRLINE MARKETINGProduct Distribution

3 Present amp Current Distribution Channel

b) Travel Agent on Task-Based system

- Not paid on percentage of ticket price- Payment based on each task undertaken- Payment for making the bookings- Payment for issuing the tickets- Payment for dealing with payments

Aviation Management College

AIRLINE MARKETINGProduct Distribution

3 Present amp Current Distribution Channel

c) Implication on Travel Agent

- Drop in ticket sales- Airline website getting popular- Emergence of on-line Travel Agent- Commission-based to management fees

Aviation Management College

AIRLINE MARKETINGProduct Distribution

3 Present amp Current Distribution Channel

d) Future Trend

- Selling through Airline Shops at hotel shopping complexes- Selling via call centers telephone o on-line- Business using the internet- New airlines beginning to ignore the agency role

Aviation Management College

AIRLINE MARKETINGProduct Distribution

4 Distribution Channel in the Air Freight Market

a) Freight Forwarder - similar role as travel agentb) Forwarder roles in Express market ndash minimalc) Integrated Carriers dominanced) Fewer forwarder ndash mergers amp takeovere) Forwarder hold 90 of lsquoHeavy Freightrdquo marketf) Airline strategy

- buy forwarding company- set up forwarding subsidiary

Aviation Management College

AIRLINE MARKETINGProduct Distribution

5 Conclusion

a) Distribution strategy - an important agendab) Airline to control distribution channel c) Long term benefit vs short term gains

Aviation Management College

AIRLINE MARKETING

Chapter 8

BRANDING MANAGEMENT IN

AIRLINE MARKETING

Aviation Management College

AIRLINE MARKETING

Branding is not marketing

It is an integral part of your marketing strategy Its also an important part of how you interact with clients prospects vendors employees and anyone

else with whom you come in contact Branding creates an image

Aviation Management College

AIRLINE MARKETING

Branding

The American Marketing Association (AMA) defines a brand as a name term sign

symbol or design or a combination of them intended to identify the goods and services

of one seller or group of sellers and to differentiate them from those of other

sellers

Aviation Management College

AIRLINE MARKETING

The objectives that a good brand will achieve includes

Delivers the message clearly Confirms on credibility

Connects with target prospects emotionally Motivates the buyer

Concretes User Loyalty

Aviation Management College

AIRLINE MARKETING

Defining Your Brand

Defining your brand is like a journey of business self-discovery It can be difficult time-consuming and

uncomfortable It requires at the very least that you answer the questions below

What is your companys mission What are the benefits and features of your products or

services What do your customers and prospects already think of your

company What qualities do you want them to associate with your

company

Aviation Management College

AIRLINE MARKETING

The foundation of a brand is itrsquos logo

- The website- Itrsquos packaging

- The promotional materials- All should integrate with logo - It communicates the brand

Aviation Management College

AIRLINE MARKETING

Your brand is derived from

- who you are - who you want to be and

- who people perceive you to be

Aviation Management College

AIRLINE MARKETING

What constitute Brand strategy cont

- How to advertise - What to advertise

- Where to advertise- When to advertise

Aviation Management College

AIRLINE MARKETING

What constitute Brand strategy

- Who you are - Who you want to be and - People perceive you to be

Aviation Management College

AIRLINE MARKETING

What constitute Brand strategy cont

- Whom to communicate and deliver the messages

- The distribution channels - What you communicate visually and

- verbally

Aviation Management College

AIRLINE MARKETING

The Result of a Good Branding cont

- It add values to product allows to sell at premium price

- gives you a major edge in increasingly competitive markets

- branding creates loyalty

Aviation Management College

AIRLINE MARKETING

The Result of a Good Branding

- your brand is your promise to your customer

- It tells them what they can expect from your products and services

- and it differentiates your offering from your competitors

Aviation Management College

AIRLINE MARKETING

The objectives that a good brand will achieve includes

Delivers the message clearly Confirms on credibility

Connects with target prospects emotionally Motivates the buyer

Concretes User Loyalty