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Structure Of The Passenger Airline Market

937 words - 4 pages

Trident University International
Williams Anaab
Module 1 Case Assignment
(Airline Market)
MKT 501: Strategic Marketing
Dr. Cathy Cameron
24 November 2013

Introduction
In recent years, affected by natural disasters, emergencies, oil price volatility, the international financial crisis and other factors, especially the oil price, that is the most major factor of the airline cost, and still increasing, made the airline industry’s production decline sharply.
The main source of profit for the airline industry are passenger and cargo revenue primarily, in addition, the fuel surcharges and exchange gains constitute the major part of its profits. According ...view middle of the document...

When the change of fuel price increased, the cost burden of the airlines will decrease. Lower level of employment means fewer people who have the resources for traveling by airlines. An increase in trade regulations reduces the number of foreign business travelers.

Segmentation, Targeting, and Positioning

Segmentation refers to the aggregation of prospective buyers into segments. It is expected that the persons in a segment have common needs and will respond. In a similar manner to a marketing action. Segmentation allows airline companies to identify and target certain segments of consumers who are likely to appreciate the value of certain services provided to them.

Target marketing refers to concentrating the marketing efforts of the airlines on certain key segments. Positioning means, the firm occupies a distinct position in the minds of the consumer relative to competing brands. Firms use features, branding, and advertising to position their brands.

The major airline segments are the tourist segment, and the business segment. These are the major segments.

Target markets for various airline classes

The target markets for First Class are high income travelers who value luxury. The target market for the business class is the business traveler who gets some of the luxuries of first class. The economy class is targeted at the leisure travel segment and the low cost business travel segment.

Jet Blue vs. Southwest Airlines

The key external factors like the growth in the economy, disposable income, and fuel prices have negatively affected JetBlue. It was compelled to change its strategy several times and in 2011 had an income of $86 million down from $97 million in 2010. The growing consumer interest in leisure travel has positively affected JetBlue. The success of JetBlue has been attributed to growing consumer interest in leisure travel.

The economic factors like slow economic growth, low disposable income, and fluctuation in the price of oil have been responsible for weak performance of Southwest Airlines. There are no...

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