1. Chap 7 DISTRIBUTING THE PRODUCT
AIRLINE MARKETING
Aviation Management College
Chap 7
DISTRIBUTING
THE PRODUCT

2. DISTRIBUTING THE PRODUCT
AIRLINE MARKETING
DISTRIBUTING
THE PRODUCT
Aviation Management College

3. AIRLINE MARKETING
Aviation Management College
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.

4. Types of Distribution Channel Direct Route
AIRLINE MARKETING
Product Distribution
Aviation Management College
Types of Distribution Channel
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

5. Types of Distribution Channel a) Direct Route Advantages
AIRLINE MARKETING
Product Distribution
Aviation Management College
Types of Distribution Channel
a) Direct Route
Advantages
No mark-ups or commission to intermediaries
Airline able to control marketing activities

6. Types of Distribution Channel - cont
AIRLINE MARKETING
Product Distribution
Aviation Management College
Types of Distribution Channel - cont
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

7. 1. Types of Distribution Channel - cont
AIRLINE MARKETING
Product Distribution
Aviation Management College
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

8. 1. Types of Distribution Channel - cont
AIRLINE MARKETING
Product Distribution
Aviation Management College
1. Types of Distribution Channel - cont
Examples 1- Manufactures/wholesaler 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

9. 1. Types of Distribution Channel - cont
AIRLINE MARKETING
Product Distribution
Aviation Management College
1. Types of Distribution Channel - cont
Example 2-Airline/wholesaler relationship:
Airlines sales bulk seats to charter airlines or tour operators,
Package it with accommodation, surface transfers, etc.
Special package for different target group e.g., golfers, historical tours, etc.
Tour operators responsible for retailing it to the final customers

10. 1. Types of Distribution Channel - cont
AIRLINE MARKETING
Product Distribution
Aviation Management College
1. Types of Distribution Channel - cont
Example 3 – Agency relationship:
Using the travel agency system to sell product
Agency able to provide up-to-date information on the product
The trend is declining from 90% to now 80%

11. - Geographical coverage - Minimise manpower structure
AIRLINE MARKETING
Product Distribution
Aviation Management College
The Travel Agency
Advantages
Geographical coverage
Minimise manpower structure
Reduce the cost or air travel
administrations

12. - Increased in commission rates: - Customers using credit cards
AIRLINE MARKETING
Product Distribution
Aviation Management College
2. The Travel Agency
Disadvantages
Increased in commission rates:
Customers using credit cards
Finance agent’s battle
Proliferation of sales outlets
Retail discounts,
Loyalty & buy clients

13. Present & Current Distribution Channel Commission structure
AIRLINE MARKETING
Product Distribution
Aviation Management College
Present & Current Distribution Channel
Commission structure
Commission reduced or eliminated
Capped at a maximum
Significant reduced on expensive tickets

14. 3. Present & Current Distribution Channel
AIRLINE MARKETING
Product Distribution
Aviation Management College
3. Present & Current Distribution Channel
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

15. 3. Present & Current Distribution Channel Implication on Travel Agent
AIRLINE MARKETING
Product Distribution
Aviation Management College
3. Present & Current Distribution Channel
Implication on Travel Agent
Drop in ticket sales
Airline website getting popular
Emergence of on-line Travel Agent
Commission-based to management fees

16. 3. Present & Current Distribution Channel Future Trend
AIRLINE MARKETING
Product Distribution
Aviation Management College
3. Present & Current Distribution Channel
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

17. 4. Distribution Channel in the Air Freight Market
AIRLINE MARKETING
Product Distribution
Aviation Management College
4. Distribution Channel in the Air Freight Market
Freight Forwarder - similar role as travel agent
Forwarder roles in Express market – minimal
Integrated Carriers dominance
Fewer forwarder – mergers & takeover
Forwarder hold 90% of ‘Heavy Freight” market
Airline strategy:
- buy forwarding company
- set up forwarding subsidiary

18. Distribution strategy - an important agenda
AIRLINE MARKETING
Product Distribution
Aviation Management College
5. Conclusion
Distribution strategy - an important agenda
Airline to control distribution channel
Long term benefit vs. short term gains

19. Chapter 8 BRANDING MANAGEMENT IN AIRLINE MARKETING
Aviation Management College
Chapter 8
BRANDING MANAGEMENT IN
AIRLINE MARKETING

20. Branding is not marketing.
AIRLINE MARKETING
Aviation Management College
Branding is not marketing.
It is an integral part of your marketing strategy.
It's 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.

21. AIRLINE MARKETING
Aviation Management College
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.

22. The objectives that a good brand will achieve includes:
AIRLINE MARKETING
Aviation Management College
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

23. What is your company's mission?
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 company's 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

24. The foundation of a brand is it’s logo - The website - It’s packaging
AIRLINE MARKETING
Aviation Management College
The foundation of a brand is it’s logo
- The website
- It’s packaging
- The promotional materials
- All should integrate with logo
- It communicates the brand.

25. Your brand is derived from: who people perceive you to be.
AIRLINE MARKETING
Aviation Management College
Your brand is derived from:
who you are,
who you want to be and
who people perceive you to be.

26. What constitute Brand strategy cont:
AIRLINE MARKETING
Aviation Management College
What constitute Brand strategy cont:
- How to advertise,
- What to advertise
- Where to advertise
- When to advertise

27. What constitute Brand strategy: - Who you are,
AIRLINE MARKETING
Aviation Management College
What constitute Brand strategy:
- Who you are,
- Who you want to be and
- People perceive you to be

28. What constitute Brand strategy cont: Whom to communicate and deliver
AIRLINE MARKETING
Aviation Management College
What constitute Brand strategy cont:
Whom to communicate and deliver
the messages.
- The distribution channels
What you communicate visually and
verbally

29. The Result of a Good Branding cont:
AIRLINE MARKETING
Aviation Management College
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.

30. The Result of a Good Branding: your brand is your promise to
AIRLINE MARKETING
Aviation Management College
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'

31. The objectives that a good brand will achieve includes:
AIRLINE MARKETING
Aviation Management College
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