Intersect Benchmarketing

Marketing Introduction Paper

Business people know that the ability to gratify the changing demands of customers has become increasingly important in recent years. The aspect of change has been very noticeable in the airline industry. I have taken the interview of John Samuel, who is the Managing Director for Interactive Marketing for American Airlines. During the interview I inquired about the importance of marketing and how the company is using marketing tool for increasing the sales. In this paper, I will discuss John's thoughts about the importance of marketing.

According to John, consumers pick the airline who most completely meets their needs. These customers may then grow to rely on that airline if they find their needs are being met consistently. Thus, those companies best able to satisfy customer needs will become the most successful in the marketplace. And the needs are constantly changing in the market. Anticipating future market needs and managing the necessary changes is as important as satisfying current markets. New technology, growing international trade, improved communications and increasingly sophisticated and demanding buyers have all contributed to the increased the pressure on the airline industry to make continuous improvements in their products and services.

With so much competition in the airline industry, what separates AA from other airlines?

The basic products are the same with every airline. The key factor is the servicing. It is the way the product is customized as per the needs of the customer - the ease in booking flights, and call center experiences are where the back end process is simplified and what differentiates us from others.

Which advertising media are you planning to take to?

Over the next six to twelve months we plan to be on mass media, including press, outdoor and TV. Alternative channels such as the Internet, direct marketing, events and exhibitions are also being looked at.

What are the challenges in developing marketing strategies?

The first challenge is cope with the competition and marketing the best product. Other challenges include reaching our target audience efficiently and cost effectively, while keeping our budget in check. Furthermore, they are an audience that is frequently targeted by advertisers - it's a constant challenge to reach them with a message that stands out enough to grab their attention and interest.

What are the marketing challenges faced by airline companies, American Airlines in general?

Technological changes - Accelerating technological change threatens companies that fail to keep up with developments, but creates opportunities for those that do. As technology developing every day, it is hard to keep up with the market.

Social trends - Ultimately, all marketplace demand derives from the spending power of people. Companies selling direct to consumer markets will be quickly affected by demographic and lifestyle changes. Companies in the business-to-business markets will eventually be affected by the same trends. Market challenges are local; our global structure gives us the flexibility to do things differently in each market, whether it's a small rural or a large metropolitan area. It is important for American Airlines to be better than our competitors; sometimes it's better to be different. A fundamental, continuous marketing task for all companies is to scan the total business environment in which they operate. The objective is to analyze trends or market drivers, which create good marketing opportunities. Our goal is to gain attention and get customers where they need to go. After all, at American "We know why you fly".

Increased Competition is the biggest challenge for airline companies. Since 911 there have been several companies who are currently in the insurance business. Companies such as: Orbitz, Expedia, Travelocity, and Priceline have given larger airlines a run for their money by offering below average costs for airline tickets. A world of continuous change means markets grow, mature and disappear much faster now. American Airlines must continually assess the value of the markets they are in, planning, if necessary, to enter new ones for growth or even survival.

Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries (Jenkins, 1995). Despite this, the airline industry has proceeded along the path towards globalization and consolidation, characteristics associated with the normal development of many other industries. It has done this through the establishment of alliances and partnerships between airlines, linking their networks to expand access to their customers. Hundreds of airlines have entered into alliances, ranging from marketing agreements and code-shares to franchises and equity transfers.

The outlook for the air travel industry is one of strong growth. Forecasts suggest that the number of passengers will double by 2010. For airlines, the future will hold many challenges. Successful airlines will be those that continue to tackle their costs and improve their products, thereby securing a strong presence in the key world aviation markets. E-ticketing, or online ticketing, is the wave of the future (Esler, 2003). By providing this service, companies will save money and customers will save time and effort (Gountas & Shaw, 2001). There are also many improvements being made on how passengers purchase tickets and check-in for their flight. Since the beginning of the e-revolution, companies have been selling tickets online. Customers no longer need travel agents to plan or purchase a flight; they can now be purchased through various websites. Another very important aspect for the industry is shortening lines in airports.

The advances in technology have enabled this to happen. Some airlines are even beginning to allow boarding passes to be printed at home (Leonhardt, 2003). Airports need to be able to handle the overcrowding they experience. "There's a lot of strain on the system, and technology can be very helpful in easing that" (Leonhardt, 2003). Air carriers, with the help of technology, need to be able to shorten lines and enable customers to buy tickets more conveniently. This will increase customer satisfaction and keep the industry constantly improving itself. The rise of online ticket sales has been attributed to the airline's lower costing tickets and is expected to replace the need for travel agents.

The online travel market is expected to be worth between