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

DISTRIBUTING THE PRODUCT AIRLINE MARKETING DISTRIBUTING THE PRODUCT Aviation Management College

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.

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

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

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

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

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

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

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%

- 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

- 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

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

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

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

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

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

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

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

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.

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.

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

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

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.

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.

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

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

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

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.

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'

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