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Module 6 ATEM
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What is the Selling Concept?
The belief that companies need to aggressively sell their products, even if it doesn't align with customer needs.
What is the Marketing Concept?
The idea that a company's success comes from providing superior value to customers in terms of product, distribution, and communication compared to competitors.
What characterized the pre-World War II era in airline marketing?
Emphasis on carrying mail over passengers due to higher profitability and limited market demand for air travel.
Why did airline marketing face challenges after World War II?
Lack of experience in marketing the relatively new product of air transportation.
How did the airline industry transition from a sales-oriented to a consumer-oriented approach?
The shift occurred as market demand outstripped available capacity, leading to a focus on shaping services to meet consumer needs.
When did marketing principles in the airline industry start to formalize?
In the 1960s, marking the beginning of a more systematic and advanced approach to marketing.
What challenges did airlines face in the 1970s with the introduction of wide-bodied planes?
Excess capacity, leading many carriers to adopt the marketing concept to shape services according to consumer needs.
What marked the emergence of low-cost, no-frills airlines in 1971?
The demand for reasonably priced air transport, challenging traditional carriers with high fare structures.
Why did some low-cost airlines struggle initially?
Lack of amenities compared to traditional carriers, but Southwest Airlines succeeded by focusing on price and efficiency.
How has the modernization of airline marketing impacted distribution?
It shifted from physical ticketing agents to electronic systems, making distribution faster, more convenient, efficient, and accurate.
Define Marketing Mix.
The set of actions or tactics a company uses to promote its brand or product, consisting of Price, Product, Promotion, and Place (4Ps).
What does "Price" refer to in the Marketing Mix?
The value assigned to a product, influenced by production costs, market ability to pay, and other factors.
In the Marketing Mix, what does "Product" refer to?
The item being sold, which must deliver a minimum level of performance.
In the Marketing Mix, what does 'Product' refer to?
The item being sold, which must deliver a minimum level of performance.
What does 'Place' refer to in the Marketing Mix?
The point of sale or distribution, emphasizing catching the consumer's eye and making it easy to purchase.
What does 'Promotion' encompass in the Marketing Mix?
All activities undertaken to make a product or service known to users and trade, including advertising, incentives, and direct marketing.
Why is the Marketing Mix important?
It influences a company's business strategy and, when managed well, leads to success; mismanagement may take years to recover from.
What uncontrollable variables must marketers contend with?
Cultural and social differences, political and regulatory changes, economic conditions, competitive structures, and company resources and objectives.
How does the marketing team respond to uncontrollable variables?
By altering its marketing strategy, recognizing and adapting to changes in cultural, political, economic, and competitive environments.
What is the term used to describe the process by which the marketing mix is changed?
Marketing strategy.
Who controls resources and objectives in a company, affecting the marketing team's actions?
Top management, whose decisions shape the marketing team's strategy and goals.
What is the Selling Concept?
Selling concept claims that companies need aggressive selling to move products, even if it doesn't align with customer needs.
Define Marketing Concept.
Marketing concept emphasizes delivering superior consumer value to the target market compared to competitors.
What characterized the production-oriented period in airline marketing history?
Focus on carrying mail, scarcity of services, and customer acceptance of whatever was available.
What challenge did airline executives face post-World War II regarding marketing air transportation?
Lack of experience in marketing a relatively new product—air transportation.
When did marketing concepts in the modern sense begin according to Hardy (2016)?
The concepts of marketing began during the late 18th century into the 19th century, driven by inventions.
What does the term "widebodies" refer to in the context of airline marketing?
Widebodies are large-capacity aircraft developed to address market demand surpassing available capacity in the late 1960s.
What marked the consumer-oriented period in the airline business?
Transition from a shotgun approach to target market approach, identifying specific customer groups and tailoring services to their needs.
When did low-cost, no-frills airlines emerge?
The first generation of low-cost, no-frills airlines emerged in 1971, starting with Southwest Airlines.
Define Marketing Mix.
Marketing mix refers to the set of actions or tactics a company uses to promote its brand or product, encompassing the 4Ps: Price, Product, Promotion, and Place.
What are the 4Ps of Marketing Mix?
Price, Product, Place, Promotion.
Explain the significance of Product in the marketing mix.
Product refers to anything offered to the market that satisfies a want or need, encompassing tangible (goods) and intangible (services) offerings.
What is the Core Product in airline marketing?
Air transportation is the core product in airline marketing.
What are Augmented Products in the context of airline marketing?
Augmented products in airlines are additional services meant to enhance efficiency in serving customers.
Name three levels of airline products.
Core Product, Tangible Products, Augmented Products.
What factors make marketing the airline product unique?
Personalization, inability to keep inventory, difficulty in checking service quality before purchase, and unpredictability
Name three levels of airline products.
Core Product, Tangible Products, Augmented Products.
What factors make marketing the airline product unique?
Personalization, inability to keep inventory, difficulty in checking service quality before purchase, and unpredictability of delivery.
What are the three types of seating configurations historically offered by major airlines?
First, Business, Economy.
What is Duty-Free and when does it apply to airlines?
Duty-Free applies to international flights, allowing passengers to purchase goods on board without paying duties.
Define Cartelized Pricing.
Cartelized pricing involves a group of producers, like airlines, cooperating to fix prices and avoid competition on price.
What determines the level of prices in the airline market?
Prices are determined by the interplay of demand factors (customer willingness to pay) and production/marketing costs.
What does the timeliness of pricing in airline marketing refer to?
Timeliness involves disseminating decided price levels to all network segments promptly to avoid losing market share.
What is the significance of the marketing mix, and why is it crucial for airlines?
The marketing mix is crucial for airlines as it represents the set of strategies (4Ps) to promote their brand or product, influencing consumer perception and satisfaction.
In the airline industry, what are some tangible products beyond air transport mentioned in the module?
Tangible products include computer reservation systems, crew control packages, VIP lounges, and ground equipment.
How do airlines handle the challenge of the service being personalized, leading to different opinions from passengers on the same flight?
Airlines address personalization challenges by intensifying efforts in offering better qualitative and quantitative services, focusing on courtesy and efficiency.
What are some challenges associated with marketing the airline product that are not commonly faced by sellers of physical goods?
Challenges include the inability to keep inventory, difficulty in checking service quality before purchase, and the unpredictability of delivery due to mechanical problems or weather.
How have major airlines adapted their seating configurations in response to changing market dynamics?
Major airlines are moving towards two-class configurations by removing first class and increasing business and economy class seating.
What role does entertainment play in the evolving definition of the airline product, and how has it changed over time?
Entertainment is an additional service offered on planes, and historically complimentary, but today many airlines charge extra for in-flight entertainment.
How do low-cost carriers differ from no-frills carriers in terms of their cost management strategies?
Low-cost carriers offer reasonable airfares with cost-effective management strategies, while no-frills carriers use extreme low-cost strategies, providing only a seat with no in-flight services.
What factors should an airline consider if planning to offer cargo or freight services?
Considerations include height and weight restrictions, impact on primary revenue (passenger travel), and the type of aircraft required for cargo and freight.
How do airlines generate additional revenue through excess baggage fees?
Airlines charge passengers checking in baggage beyond specified limits an excess baggage fee, contributing to additional revenue.
In the context of airline pricing, what is the role of the IATA (International Air Transport Association) today?
While no longer involved in price setting, IATA continues to act as
In the context of airline pricing, what is the role of the IATA (International Air Transport Association) today?
While no longer involved in price setting, IATA continues to act as a vital link among airlines, particularly in areas like interlining and account settlement through the IATA clearinghouse.
What does "Promotion" refer to in the context of the airline marketing mix?
Marketing communications, including Advertising, Public Relations (PR), Direct Marketing, and Sales Promotion.
What are the marketing decisions associated with Promotion in the airline industry?
Promotional mix, message strategy, channel\/media strategy, and message frequency.
Why is promotion important in the airline industry?
To inform the target market about the product's existence, features, availability, and pricing.
List seven common methods of marketing communication in the airline industry.
Advertising, Public Relations (PR), Personal Selling, Sales Promotion, Direct Marketing, Digital Marketing, and Guerrilla Marketing.
Define "Pipeline" or "Place" in the airline marketing mix.
Providing customer access and considering their convenience.
What are the typical marketing decisions associated with "Pipeline" or "Place" in the airline industry?
Strategies like intensive distribution, selective distribution, exclusive distribution, franchising, market coverage, channel member selection, assortment, location decisions, inventory, and transport, warehousing, and logistics.
How do airlines strategically place their products closer to customers?
By strategically placing products in locations that are easily accessible to the target market.
Name the various channels through which customers can buy airline tickets\/services.
Purchase through the headquarters office, travel agency, airline counter at airports, and directly through airline websites via computer or mobile phones.
What is market segmentation, and why is it important in airline marketing?
Market segmentation is dividing potential customers into meaningful consumer groups. It is important for identifying target markets and tailoring marketing strategies to specific groups.
What are intensive growth strategies in the airline industry?
Market penetration, product development, and market development.
How does the airline industry utilize guerrilla marketing, and what characterizes it?
Guerrilla marketing involves unconventional, innovative, and usually low-cost tactics to engage consumers, generate attention, and achieve maximum exposure for an airline, its products, and\/or services.
What are the key elements of the promotional mix in the airline industry, and why is finding the right balance important?
The key elements are advertising, public relations, personal selling, sales promotion, direct marketing, digital marketing, and guerrilla marketing. Finding the right balance is important for effective communication and engagement with the target audience.
In the context of "Pipeline" or "Place," why is the proximity and accessibility of airline products crucial for successful marketing?
Customers often prefer immediately available goods and may not go out of their way for a product if it's not easily accessible. Strategic placement and accessibility are significant marketing elements.
How do airlines use market segmentation to tailor their services to specific customer groups?
Market segmentation involves dividing potential customers based on characteristics like trip purpose, traveler characteristics, trip characteristics, and length of stay. Airlines then tailor their services to the identified market segments.
What role did market research play in the transition from a production sales orientation to a consumer-oriented approach in the air transportation industry?
Market research became vital during the consumer-oriented period, helping airlines understand customer needs, design responsive services, and focus on increased market segmentation and more intensive growth strategies.
How have airlines adapted their advertising strategies since deregulation?
Advertising has shifted from emphasizing service to a combination of price, destination, and frequency as airlines compete for passengers in a deregulated market.
What are some examples of interactive marketing agreements in the airline industry?
Interactive marketing agreements involve airlines promoting each other. An example is one airline encouraging passengers on its website to click through to another carrier's website for certain destinations.
How do airlines use code sharing to expand their market reach, and what advantages does it provide?
Code sharing involves two airlines sharing identification codes on schedules, allowing them to advertise flights to a larger market area and expand their market at relatively low cost.
What advantages does code sharing provide?
Code sharing involves two airlines sharing identification codes on schedules, allowing them to advertise flights to a larger market area and expand their market at relatively low cost.
Why have frequent-flier programs been successful in the airline industry, especially for retaining business travelers?
Frequent-flier programs are successful because they help build customer loyalty, particularly from business travelers, who are less inclined to take advantage of discount fares and more interested in loyalty benefits.
How does the hub-and-spoke system work, and why do airlines find it appealing?
The hub-and-spoke system involves concentrating on high-density routes connected to a central hub airport. Airlines find it appealing as it allows them to serve a larger number of city-pairs without a commensurate increase in cost.
What are some examples of sales promotion tactics used by airlines to boost temporary sales of their products or services?
Sales promotion tactics may include \
What is the role of market segmentation in identifying a target market, and how does it help airlines tailor their services?
Market segmentation involves dividing potential customers into groups to identify a target market. It helps airlines tailor their services to specific consumer needs and preferences.
How have airlines adapted their advertising strategies since the shift from a production sales orientation to a consumer-oriented approach?
Advertising has shifted from emphasizing service to a combination of price, destination, and frequency to compete effectively in the deregulated marketplace.
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Module 6 ATEM flashcard deck summary: Overview of marketing concepts and historical airline industry marketing transitions.
Marketing
Airline Industry
Pricing Strategies
Consumer Behavior
Marketing Mix
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