Airline Marketing and Management  book cover
7th Edition

Airline Marketing and Management

ISBN 9781409401490
Published July 27, 2011 by Routledge
378 Pages

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Book Description

Through six previous editions, Airline Marketing and Management has established itself as the leading textbook for students of marketing and its application to today's airline industry, as well as a reference work for those with a professional interest in the area. Carefully revised, the seventh edition of this internationally successful book examines an exceptionally turbulent period for the industry. It features new material on: *Changes in customer needs, particularly regarding more business travellers choosing - or being forced - to travel economy, and analysis of the bankruptcy of 'All Business Class' airlines. * An explanation of the US/EU 'Open Skies' agreement and analysis of its impact. *The increase in alliance activity and completion of several recent mergers, and the marketing advantages and disadvantages that have resulted. * Product adjustments that airlines must make to adapt to changes in the marketing environment, such as schedule re-adjustments and the reconfiguration of aircraft cabins. *Changes in pricing philosophies, with, for example, airlines moving to 'A La Carte' pricing, whereby baggage, catering and priority boarding are paid for as extras. *Airline websites and their role as both a selling and distributing tool. *The future of airline marketing. A review of the structure of the air transport market and the marketing environment is followed by detailed chapters examining business and marketing strategies, product design and management, pricing and revenue management, current and future distribution channels, and selling, advertising and promotional policies. The reader will benefit from greater understanding of both marketing and airline industry jargon and from knowledge obtained regarding the extraordinary strategic challenges now facing aviation. Written in a straightforward, easy-to-read style and combining up-to-date and relevant examples drawn from the worldwide aviation industry, this new edition will further enhance the book's reputation for providing the ideal introduction to the subject.

Table of Contents

Introduction -- The Fundamentals -- What is Marketing? -- Definition -- The ‘MarketingMix’ -- Stages in the Application of Marketing Principles to Airline Management -- Benefits of a Marketing-Based Approach Successful Airlines ... -- The Market for Air Transport Services -- What Business Are We In? -- Transportation -- Communication -- Leisure -- Logistics -- Information -- Selling Services -- Who is the ‘Customer’? -- Definitions -- ‘Apparent’ and‘True’ Needs -- Industrial Buying Behaviour -- The ‘Customer ’ in the Business Air Travel Market -- The ‘Customer ’ in the Leisure Air Travel Market -- The ‘Customer ’ in the Air Freight Market -- Market Segmentation: Air Passenger Market -- The Concept -- Segmentation Variables in the Air Passenger Mark -- Customer Requirements: Business Travel Market -- The Business Travel Market: Demographics and Psychographics -- The Leisure Segment of Demand -- Segmentation of the Air Freight Market -- Differences between the Air Passenger and Air Freight Markets -- Segmentation Variables: Air Freight Market -- Successful Airlines ... -- 3 The Marketing Environment -- The Theoretical Basis: PESTE Analysis -- PESTE Analysis: Political Factors -- Terrorism Fears /Political Instability -- Deregulation and ‘Open Skies’ -- Marketing Policies for a Deregulated Environment -- Privatisation -- ‘State Aid’ -- Airport Slot Allocation -- PESTE Analysis: Economic Factors -- Economic Growth and the Trade Cycle -- PESTE Analysis: Social Factors -- The Ageing Population -- Changing Family Structures -- Changing Tastes and Fashions in Holidays -- The Uncertain, Deregulated Labour Market -- The Female Business Traveller -- PESTE Analysis: Technological Factors -- Video-Conferencing -- The Internet -- Surface Transport Investment -- New Aircraft Developments -- PESTE Analysis: Environmental Factors -- Climate Change and Global Warming -- Shortages of Infrastructure Capacity -- ‘Tourism Saturation ’ -- Successful Airlines ... -- Airline Business and Marketing Strategies -- Porter’s ‘Five Forces’ and their Application to the Airline -- Industry -- Rivalry amongst Existing Firms -- Substitution -- New Entry -- Power of Customers -- Power of Suppliers -- ‘Disintermediation ’ -- Strategic Families -- Cost Leadership, Differentiation and Focus: -- The Principles -- Cost Leadership in the Airline Industry: Background -- ‘True Low Cost’: Fundamentals of the Business Model -- ‘Hybrid ’Low-Cost Carrier Models -- Cost Leader Airlines: Current Issues -- Cost Leader Airlines: The Future -- ‘Differentiation ’ in the Airline Industry -- Airline Alliances -- Airline Industry Consolidation: The Latest Developments -- ‘Differentiation’ Airlines: The Future -- The Concept of the ‘Legacy Airline ’ -- ‘LegacyAirlines’: Strategic Options -- ‘Focus’ Strategies -- Types of Focusing in the Airline Industry -- ‘Value Added’Focusing: ‘Integrated Carriers ’ -- ‘ValueAdded’Focusing: ‘AllBusiness-Class’Airlines ' -- ‘Low Cost’ Focusing: Charter Airlines -- ‘Lost-in-the-Middle ’ -- Airline Business and Marketing Strategies: Common Mistakes -- Objectives -- Diversification vs Specialisation -- Pace of Expansion -- Competitive Response -- ‘Control’ -- Over-Optimism /Fall-Back Position Successful Airlines . -- 5 Product Analysis in Airline Marketing -- What is the ‘Product’? -- The Theory of Product Analysis and its Application to the Airline Industry -- The Product Life Cycle -- Product Life Cycles in the Aviation Industry -- Managing a Product Portfolio: The ‘Boston Box’ -- Balancing Risk and Opportunity: The ‘Ansoff Matrix’ ' -- Fleet and Schedules-Related Product Features -- Cabin Configuration and Classes of Service -- Network, Frequencies and Timing -- Punctuality -- Customer Service-Related Product Features -- Point-of-Sale Service -- Reservations and Overbooking -- Airport Service -- In-Flight Service -- Controlling Product Quality -- 5.6 The Air Freight Product -- Air Freight Capacity -- Successful Airlines . -- Pricing and Revenue Management -- Building Blocks in Airline Pricing Policy -- Pricing - A Part of the Marketing Mix -- Deregulation -- Revenue Management Systems -- ‘Willingness-to-Pay’ and ‘Capturing the Value’ -- ‘A La Carte ’Pricing -- ‘Uniform’ and ‘Differential’ Pricing -- The Principles -- Differential Pricing: Arguments in Favour -- Differential Pricing: The Case Against -- The Management of Discount Fares -- Pricing Response and Pricing Initiatives -- The Structure of Air Freight Pricing Successful Airlines . -- Distributing the Product -- Distribution Channel Strategies -- Types of Distribution Channel -- The Concept of ‘Super Profits’ -- The Travel Agency Distribution System -- Advantages and Disadvantages -- Today’s Distribution Channels -- The Future of Distribution -- Global Distribution Systems (GDSs) -- History and Background -- Current Issues -- Distribution Channels in the Air Freight Market -- Successful Airlines ... -- Brands Management in Airline Marketing -- ‘Brands’ and ‘Commodities’ -- What is a ‘Brand’? -- Why Brands? -- Brand-Building in the Airline Industry -- Foundations for Brand-Building -- Positioning Brands -- The Brand-Building Process -- Brand Strategies Successful Airlines ... -- Relationship Marketing -- Fundamentals of Relationship Marketing -- Some Definitions -- Building Advocate Relationships -- Components of a Relationship Marketing Strategy -- The Management of Quality -- Customer Relations -- Marketing Communication -- Loyalty Schemes -- Frequent Flyer Programmes -- History and Current Status -- FFPs: Programme Member Requirements -- FFPs: Airline Requirements -- The Future -- Successful Airlines -- Airline Selling, Advertising and Promotional Policies -- The Anatomy of a Sale -- The AIDA Model and the SPIN Cycle -- Sales Planning -- The Sales Budget -- The ‘CommunicationsMix’ -- Marketing Communication Techniques -- Sponsorship Policy -- Database Marketing -- Media Relations -- The Field Sales Team -- Airline Advertising -- The Functions of Advertising -- Advertising Decisions -- What are the Features of ‘Good ’Airline j -- Selling in the Air Freight Market -- The Sales Task in the Air Freight Market -- Marketing Communication Methods -- Successful Airlines ... -- The Future of Airline Marketing -- Glossary of Aviation Terms Glossary of Marketing Terms Index

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Stephen Shaw is Managing Director of SSA Ltd, UK, a firm specialising in providing courses in marketing and economics to airlines and aerospace firms, located at Chinnor, Oxford, England.


'For airlines throughout the world, the major issue over the last few years has been the achievement of profitable revenue. Stephen Shaw's excellent book is now updated in its seventh edition to cover the difficulties of the last few years and demonstrable solutions. It is a most valuable read for those who are involved in increasing sales and income in every aspect of airline activities.' Roger Wootton, City University, London, UK 'Steve Shaw’s book is an invaluable source of information for both those who are entering the industry and those who are seasoned professionals. It is as much relevant to those who are making policy as to those who are implementing an organisation’s strategy. It provides a thorough insight into best practice as well as reasoned approaches to marketing management and therefore becomes an effective check-list for managers at all levels in how to approach the aviation market. There is little doubt that managers who attend education programmes in the field of marketing will find this book a very useful companion long after the teaching has finished.' Richard Hill, Head of International Training at Rolls Royce plc ' excellent foundation into the dynamic world of aviation marketing. The focus on both low cost and schedule airline marketing operations brings the reader up to date with the latest insights in the airline business. The book is not just educational but provides the reader with the tools to become an effective airline marketeer ' Brendan Noonan, SVP Learning & Development, Emirates Airline Group ’This, the seventh incarnation of Airline Marketing and Management, is a welcome addition to the Stephen Shaw stable. It remains great at getting down to the basics of both marketing and management by breaking topics down in a unique and interesting way that illuminates the topic rather than fragment it. Shaw is great at taking the reader to more advanced concepts quickly. He is able to do so by spending a good chunk of the boo