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The Global Industry, with the help of globalization, has been connecting the world for the past few years, and have been the missing link to a global economy that is slowly but steadily dominating the world. Over the past 30 years, statistics have shown an average 5% increase of World Air Travel, with the statistics constantly fluctuating up and down, varying due to the economy influence all over the world but it is unquestionable that there has been a steady improvement of demand. Airlines have been increasingly gaining popularity from across the world. According to the International Air Transport Association (IATA), statistics has shown that the airline industry has been generating a lot of profit for the global growth of the economy, with …show more content…
Although they were active on Facebook with 568,869 likes on their page, it was not sufficient enough to make an impact on the consumers. At the same time, Air Canada, American Airlines and Alaska Air were very reliant on using traditional forms of media such as outdoor advertisements to market their brands. With WestJet identifying itself as a customer-oriented airline, they saw their brand positioning as a strength that made the brand stand out from the rest of its competitors, and decided to take a consumer-centric approach to act upon its slogan. What inspired WestJet to start a fresh campaign with a new resolution was the fact that the advertisements and marketing strategies deployed by companies were used again and again as if they were being recycled. The monogamous tactics no longer appealed to its consumers; they knew that the people were looking for something new and they knew that if there was a company that cared for them and made their well-being and welfare as the company’s priority, they would be able to feel them reaching out to their heart. Of course, words were insufficient. They wanted to establish its standing as an airline that distinguishes itself through its fun, friendly and caring corporate culture, and also bringing its brand international recognition since WestJet is relatively not as well known as it is in other parts of the world outside …show more content…
The most powerful way to build a brand is to connect with customers on an emotional level. Consumers respond to human, emotionally driven content, and they’re likely to share that kind of content with others. WestJet took a big leap out of its boundaries to show that it was a company that prioritized the customers, and it was not afraid of showing that to the world. Passengers, employers, employees and the general public all have the campaign imprinted deeply into their minds, and when their brand is mentioned, the first thing that strikes the mind of the people would be the ‘Christmas Miracle’ campaign that brought its passengers to tears of joy. Not only did WestJet make lasting memories for those passengers, but they made their brand memorable. Millions of people are now talking about WestJet, and that’s something that cannot be bought with by money. To an extent, WestJet’s succeeded in providing itself a positive brand perception, and also established goodwill with the publics, but only with the help of the integration of the new media in this
The U.S. airline industry experienced year-over-year growth in passenger revenues, in 2013, driven by strong demand for air travel.2 Additionally, on average, fuel costs were down in 2013 as compared to 2012.2 The U.S. airline industry is also a very competitive market. Due to government deregulation in 1978 there are few regulatory barriers to new entrants in the market, although there are other barriers to consider. Starting a new airline is very capital intensive. Purchasing a commercial airplane from Boeing can cost anywhere from $76million to over $300million.4 Another barrier to entry is risk in the industry. Airlines tend to experience volatile costs such as fuel prices, which can be difficult to predict in the long run. A regu...
The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B. Because the reasons can differ greatly in the motivations for a customer wanting to fly, it can be difficult to divide the market into discrete segments, that is, there is always going to be overlap in the preferences and characteristics of any given segment. With that in mind, the commonalities that are shared between the clientele that make up the respective classes can easily withstand analysis.
According to the International Air Transport Association, 2001 was only the second year in the history of civil aviation in which international traffic declined. Overall, it is believed that the IATA membership of airlines collectively lost more than US$12 billion during this time (Dixon, 2002).
International and domestic aviation industries exhibit large changes in political environments, affecting mannerisms of customer travel (asse.org, 2017). Aviation bodies, including International Air Transport Association (IATA , 2017), regulating international air transport, and Civil Aviation Authority (CASA, 2017), regulating Australian air services, have authority in ensuring execution of the correct practices and procedures. The Australian Competition & Consumer Commission (ACCC, 2017), ensures government regulations, trade agreements, and taxation laws are executed. International political trade relationships, affect passenger numbers travelling between countries, and political instability affects Qantas revenues (Kaivanto & Zhang, 2017).
Southwest Airlines has effectively used a variety of promotional elements in its integrated marketing communications, making it one of America’s largest airlines with 3,300 flights a day to 72 domestic cities. Southwest Airlines has used all four possible elements of the promotion mix: advertising, public relations, personal selling, and sales promotion, but has focused primarily on advertising and public relations to add value to the product offered to customers. Its focus on advertising and public relations is directly related to its large size and it’s nationwide reach. Also, advertising and public relations are the most cost-efficient methods of promotion, and an airline as large as Southwest is forced to have promotional elements that benefit from economies of scale.
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
Lufthansa, one of the world’s biggest airliners, has divisions handing maintenance, catering and air cargo. Since the World War II the airline industry has never earned its cost of capital over the business cycle (Hitt, 2010). Most of the airline companies have either filed for bankruptcy or are being bailed out by their government. Lufthansa had also gone through these tough times, but had resurfaced to become one of the worlds most profitable airline company. The company adapted a transnational strategy, seeking to achieve both global efficiency and local responsiveness. Lufthansa’s monopoly in Germany came to a halt with the creating of the European Union. All the EU member countries become one regional and therefore the European competition became, an increasingly a local competition. Lufthansa created its regional Hubs, to cater for its domestic market. But the availability of substitutes such as bullet trains and the Euro tunnel, made is necessary for Lufthansa to create short traveling time, customizations and quality standards in the region to achieve a competitive advantage. But outside the EU there are no substitute to air travels as such all the flag carriers are competing in the market, the international airline industry is a highly competitive environment. A new force has also emerged in the world of air travel, in the form of three Gulf airlines with jumbo ambitions. Within a decade Dubai’s Emirates, Qatar Airways and Eithad from Abu Dhabi have between them carried the capacity of two hundred million passengers (Micheal, 2010). The company had to go global and therefore adopted the international corporate-level strategy, where Lufthansa will ope...
Tom, Y. (2009). The perennial crisis of the airline industry: Deregulation and innovation. (Order No. 3351230, The Claremont Graduate University). ProQuest Dissertations and Theses, , 662-n/a. Retrieved from http://search.proquest.com/docview/304861508?accountid=8364. (304861508).
Brand Image / Loyalty: Coke and Pepsi have a long history of heavy advertising and this has earned them huge amount of...
The International Air Transport Association (IATA). 2014. Airline Cost Performance. IATA Economics Briefing. [report] IATA, p. 31.
This method is used to “gain mutual understanding and find a win-win common ground” between brand and consumers, and develop a more long-term relationship beyond just sales (Straubhaar, 300). From Facebook posts and Tweets to Youtube videos, each channel offers a distinct venue for brands to share its content with consumers on platforms they frequent. Each of these social channels help develop the brand’s overall aesthetic and personality, giving consumers a more personal connection with the brand. In return, social media provides consumers with the ability to engage directly with the brands they take interest in, 24/7. Consumers can “favorite” or “like”, share, and post comments on brand posts which can increase brand awareness and spread their message. PR teams have taken advantage of the move from “business hours
Macroeconomic environment: The airline industry has proven particularly sensitive to phenomena such as terrorist attacks, wars, outbreaks (SARS), drastic currency fluctuations, and the like. These phenomena tend to have a significant impact on the cost of fuel, overall demand for air transportation, tourism, etc.
The practice of brand management is a key component of marketing and performs an integral function by motivating the wants and needs of consumers. It is known that marketing can shape consumer needs and wants, however, consumers today appear to be more knowledgeable about the information regarding products. Consumers lead busy lives and have therefore gone to the internet as one of the many channels to learn about products in order to make informed decisions. This paper will discuss the argument that marketing should reflect the needs and wants of consumers rather than shaping these attributes. Due to the speed and ease of obtaining information, consumers do not take at face value strong marketing efforts that appear to be overly aggressive and push a brand rather than just being informative. Brand managers have to be aware of these changing dynamics and carefully craft brand management practices to meet the demands of consumers.
Without a doubt air travel is one of the most important aspects of international travel. It allows not only for the movement of both people and goods in and out of a country, it also opens up a country to other aspects of development such as trade. Arguably, next to the internet, air travel is seen as one of the main driving forces of globalization. Cheap, accessible air travel has indeed made the world a tight-knit society encouraging growth, discovery, integration and progression in different spheres.
To buttress the implication of the model, Porter explained why the airline industry is the least profitable amongst industries owing to the high threat of the competitive forces. The airline industry players compete heavily on price. Most custom...