Effective Marketing Strategies For International American Airlines In Competitive Market
Introduction and Background
Companies with unique marketing policies understand the behaviour of the market and its customers and are able to produce products and services that can fulfil the needs of the customers. Effective marketing policy includes distribution promotion pricing and reaching to the potential customers with uniqueness of the product and services. In today’s world, no business organisation would be able to survive or sustain in the market without proper planning of effective marketing. Development growth and economic triumph of an entity depends largely on effective marketing (Armstrong, Adam, Denize and Kotler 2014).
In this study effective marketing strategy of the three big International American carriers named Delta airlines American airlines and United Airlines will be discussed. These are line Agencies have earned a huge reputation and brand value in the market over the years as they control 80% of transatlantic seats. but now the market has become very competitive as some Norwegian and other airline companies are entering the market providing lowest fare on board experiences to the customers. The fare provided by these Norwegian airline agencies is 5 times lower than and the fair provided by International American airline agencies. In the market customers always have a tendency to switch to other organisation which are providing services at cheapest fare. The sales of these three big International American careers has been dropped. In this study the learner will discuss how these three big International American Agencies should adopt proper marketing strategy in order to maintain the brand value and reputation in the market.
Marketing in competitive business is not a part of business activity rather it would be better to say that marketing is the business. The term marketing includes all types of business activity for example promotion advertising the product and the process of making the unique product and the services in order to fulfill the needs of the customers (Gebauer, Saul, Haldimann and Gustafsson 2017). The main role of the process of marketing in competitive business is consumer research through advertising the products and services to the customers and reaching out to the customers in order to get the full view of customer’s behavior in the market. Consumer research is the process to identify the need for a products and services in the market and to monitor the sales pattern of the similar products closely. Effective marketing policy should focus on reaching out to those potential customers and making them aware of the new or modified products and services and making them purchase their offerings. International American airline agencies- Delta airlines American airlines and United airlines should focus on the strategic marketing policy in order to regain their brand value.
According to (Jr et al. 2015), the term marketing includes all types of business activity for example promotion advertising the product and the process of making the unique product and the services in order to fulfill the needs of the customers. According to (McDonald and Wilson 2016), the process of marketing includes all kinds of business actions for example planning and fixing a price and promoting or advertising the products and the services to the customers or to the potential customers and the distribution process. Marketing is a kind of business action that delivers to the living standards of a community or a group of population. Many experts have also given a broader definition of marketing and defining marketing as an art of practice through which an organization is able to provide the value of goods and services to the customers. Some experts would argue that the marketing is an effective strategic practice and art of selling the products to the consumers. According to (Gebauer, Saul, Haldimann and Gustafsson 2017), an organization undertakes the process of marketing in its business operation in order to create deliver or communicate with the customers through selling a new or modified product. The process of marketing is done in order to create a huge customer base and to reach to the potential customers which ultimately benefit the organization and its shareholders. Companies with unique marketing policy understands the behavior of the market and its customers and are able to produce products and services that can fulfill the needs of the customers. In today’s world, no business organization would be able to survive or sustain in the market without proper planning of effective marketing. Development growth and economic triumph of an entity depends largely on effective marketing. According to Pearson (2016), the main function of strategic marketing is to build an awareness of the products and services among the customers and making the customers more knowledgeable about the merchandise which would ultimately lead to an increased sale.
Role of Marketing in Competitive Business Context
In today’s world market has become very competitive and same products and services are offered by many business entities. According to Armstrong, Adam, Denize and Kotler (2014), there are some basic goals of marketing for example how a product or a service offered by a business organization is different from the others, what qualities and features of a product or service makes it superior to those product or services offered by other business organization, why the customers would buy a product or service from one business organization and not from the others. Effective and strategic marketing process would allow an organization to create a huge customer base making new customers and achieving maximum market share in the process and also improving customer loyalty and the brand value of the organization.
There are various business analysis models that help an organisation to understand its organisational environment and analyse the business strategically and critically (Wheelen, Hunger, Hoffman and Bamford 2017). In this section, strategic analysis of American airlines will be discussed through some business analysis framework like PESTLE analysis, porter’s five forces framework and SWOT analysis.
In order to understand the impact of some external forces on the business of American airlines pestle analysis is discussed. PESTLE stands for political, economic, social, technological, legal and environmental forces.
In order to ensure profitability for long term period in airlines market, it is important to address those political factors that can impact those three big International American carriers. The three big International American carriers- Delta airlines, American airlines and United Airlines are operating in more than 15 countries and these organisations are exposed to the political environment of these countries (Iatrou and Oretti 2016). There are some political factors that need to be addressed in order to enter into a certain market
- Political stability
- The level of bureaucracy and interference by government
- Taxation and corruption
- Protection for intellectual property
- Pricing Regulations in the service sector
- Wage legislation in employee benefits.
There are various macro environment factors such as foreign exchange rate level of inflation savings rate etc that affect the business of International American airlines (Hamilton and Webster 2015). The economic factors that should be considered by delta airlines American airlines and United airlines are as follows
- Stability of economic system in the countries of operation
- The level of government intervention in the service sector
- Stability of foreign exchange rate in those countries.
- Skill and competency level of the workforce
- Growth rate of the economy of those countries
- The level of unemployment, inflation and interest rate
The culture of the society, social beliefs and attitudes place a significant role in order to understand the behaviour of the population in a certain market. International American airlines should analyse the following social factors
- Class and power structure and hierarchy of the society.
- Skill competency and education level in the market.
- Attitudes of the population towards health and environmental consciousness.
the impact of technological factors over transportation industry like airlines industry is huge. International American airlines shoot consider technological analysis that has following effects
- Technological diffusion rate
- how Technology impacts value chain structure
- How cost structure is affected by why recent technological advancements.
International American airlines should consider some legal factors while entering into a new market. Those are as follows
- Intellectual property laws like copyright patents etc
- Employment and health protection law (Shaw 2016)
- Data protection
- Laws regarding e-commerce.
While entering into a new market, International American airline agencies should consider and analyse the stability of environmental standards in those areas and its surroundings where they are going to operate. The environmental factors that affect the business of those American airline Agencies are
- Climate change
- Attitude of the government towards renewable energy
- Waste management
- Laws and regulation regarding air pollution
in order to understand the competitiveness of the airline markets International American airline Agencies should analyse porter’s five forces framework.
As there are plenty of suppliers that provide service to Delta, American and United airlines, these suppliers don’t have any bargaining power over the business process. This airline agents are in a position to demand quality service and make this suppliers agree to their own rules. There are fewer suppliers like Boeing airbus who have some bargaining power for the technological innovations size of the organisation and financial stability (Moreno-Izquierdo, Ramón-Rodríguez and Perles-Ribes 2016).
Literature Review
Customer loyalty is a key thing to success of any business and in case of airline business, the bargaining power of the customer is very high as the customers have the tendency to switch to the alternatives if they are not getting the Quality Services. International American airline agencies should make some strategy in order to keep their customers happy and stay with them by giving discounts or by keeping the price as low as possible.
The threats from other substitute products mainly come from other brands. Delta American and United airlines are competing with other international airline Agencies like British Airways France airlines etc. But rates from other airline agencies are moderate as these three big International American carriers have a huge brand name, technological strength and popularity (Hannigan, Hamilton III and Mudambi 2015).
The threats of new entrants in the airlines market have made it difficult for Delta airlines American airlines and United airlines. The threat of new entrants is very high nowadays in in American international airline market. Some knowledge in airline Agencies are providing loafers to the customers and customers are switching to those Agencies while travelling.
The level and the intensity of competitive rivalry in international airline market in America is very high as there are plenty of small and large players in the market who are competing for the same market share (Holloway 2017).
Strengths
- American international airline Agencies have strong tie ups and Alliance Bass with other various International Agencies like British Airways Pacific Airways air Berlin etc (Clopton 2017).
- Extensive operational network secured bye by International American airlines agencies
- These agencies have a huge brand loyalty and on a great reputation for onboard entertainment.
Weaknesses
- Products and services provided by the suppliers are not as good as it was before which has made it very difficult for these International American agencies is to provide better service to the customers (Lovelock and Patterson 2015).
- The number of low fare carriers are steadily growing in the market affecting the revenues and market share.
Opportunities
- After 2008 economic recession global tourism sectors are growing rapidly on breakneck pace giving opportunities to American international airline agencies to expand.
- Air freight sectors are growing rapidly in the market giving opportunities to this agency is to boost its revenue and market share (Laudon and Laudon 2016).
Threats
- The threats of new entrants in the market is high as there are plenty of small and large carriers providing low fares are growing rapidly.
- Safety concerns is one of the biggest threats in the airline industry.
- The task of complying with the Global rules and regulation regarding environment and law is hard for these airline agencies (Percival, Schroeder, Miller and Leape 2017).
Along with the opportunities being created while expanding the airline business into entirely a new market, it creates new challenges too for the companies. an airline agency cannot make all the decisions about what to do to grow their business as those decisions are largely affected by the other organisations and entities.
- American international airline Agencies need to follow those rules and regulations set by the government of the countries they are going to operate in. It is important to abide by those rules and regulation and the air space they are going to use. Airline agencies need to make compliances with the government it rules and regulations as there are various entities inside the government who monitor the activity of airline agencies regarding safety measures, work time etc (Mills, Koliba and Reiss 2018).
- American international airline carriers like Delta airlines American airlines and United airlines need to take care of the contracts they have agreed upon with the airport authority they are going to operate on.
- Customers point of view should also be taken care of while operating in different countries. Flight scheduling should be done n a considering customer convenience and it is also important to make sure that the customers are happy with the provided-on board facilities (Leong, Hew, Lee and Ooi 2015).
- In order to expand the network coverage and to increase sharing of resources with other airlines it is important for these American international airline agents is to participate making alliances.
- American international airline agencies need to make good relationship with the suppliers of those countries where they are going to expand their business as airline business mostly rely on and its suppliers as they provide important equipment maintenance catering cleaning etc. These services should be taken care of very carefully as these are directly linked to the customer experiences and loyalty.
Various opportunities open up for American international airline agencies while entering into a new market.
- Without any doubt the biggest advantage for companies entering into a new market is to have a whole set of new customers. Not only it allows companies to offer it services to the new customers but also it allows companies to diversify the market. with a larger customer base, the company would be able to achieve and maximize profit margin.
- Expanding the business into new markets would obviously improve the knowledge and behaviour of the company. That knowledge and information regarding the behaviour of the population of the country would help the company to understand how to expertise and adapt to the New Market by implementing innovative business strategy and technological advancement (Horner and Swarbrooke 2016).
- Entering new markets not only give advantages to the company but also improve the market structure as it would give customers a wide range of alternative to choose from. then the customer would be able to know which company provides better Quality Services.
The three American international airline carriers named Delta airlines American airlines and United airlines are already operating to more than 15 countries and now they are trying to expand their services to other countries. Expanding their businesses to the other countries
The marketing strategies of American international airline agencies like Delta airlines American airlines and United airlines should be built on some cornerstones for example implementation of information and electronic Technologies in the business operation, ensuring convenience comfort and safety to the customers and providing customers with the best possible services giving them best onboard experiences.
Pricing strategy is one of the key aspects to build a proper marketing strategy for American international airline agencies. Price is one of the most important factors that drives the market and these airline Agencies should aim to be the lowest priced competitor in the market. These companies should make a proper marketing strategy by giving the customers the best possible onboard experiences at a fair and predictable price. These Agencies should also provide discounts for early reservation and buying tickets a long before the journey. they should also give discounts to the customers for purchasing ticket online. Sometimes customers cancel tickets and most of airline Agencies charge high cancellation fee to the customers. These Agencies should charge the customer as low as possible.
Key Factors in Business Analysis
Proper promotional strategy always helps a business organisation to reach to a large new customer base and achieve larger revenue high profit margin in future. Delta Airlines American airlines and United airlines should make a proper promotional strategy to strengthen public relations by reaching directly to the customers with well-designed and unique advertisement. These airline Agencies should build Rock solid highly functional and user-friendly official website where the customers would be able to get all important information regarding their journey. Customers always look for information regarding e ticketing and reservation. User friendly website would give customer a pleasure experience and it would be simpler for the airline agents to make the process more efficient and economical.
American international airline agencies should make proper sales strategy in order to make the customers purchase ticket from their own reservations and ticketing services. Sometimes customers don’t want to purchase tickets on their own or they don’t know how to book tickets online. So, they approach to other travel agencies who purchase tickets for the customers. In this process the revenue is shared in the form of commissions. In order to make the customers buy tickets from their own ticketing services, these Agencies should provide proper discounts to the customers and make the process of e-ticketing, e-reservation and e-check in convenient for the customers.
Conclusion
Effective and strategic marketing process would allow an organisation to create a huge customer base making new customers and achieving maximum market share in the process and also improving customer loyalty and the brand value of the organisation. An organisation undertakes the process of marketing in its business operation in order to create deliver or communicate with the customers through selling a new or modified products. The process of marketing is done in order to create a huge customer base and to reach to the potential customers which ultimately benefit the organisation and its shareholders. In this study the learner has discussed how the three International American carriers Delta airlines American airlines and United airlines will be able to retain their brand value and reputation in the airline market. In this study, strategic analysis of American airlines has been discussed through some business analysis framework like PESTLE analysis, porter’s five forces framework and SWOT analysis.
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