BE200 – Marketing Management

Tutor Marked Assessment

Fall 2018-2019

Question 1: (25 Marks)

a- Define Marketing environment. (5 Marks)

b-Explain how changes in the demographic, cultural, and economic environments affect united airlines
decision. (20 Marks)

Word count: 300 words

Question 2: (35 Marks)

a- Define Market Segmentation, Market Segment, Targeting and positioning. (30 Marks)

b- Explain how united airline use segmentation to grow. (5 Marks)

Word count: 300 words

 BE200 – Tutor Marked Assessment –Fall2018-2019

Question 3: (40 Marks)

a- Define SWOT analysis. (5 Marks)

b-Talk about its components. (20Marks)

With the respect to the article above

c- As a united airlines owner or manager, apply SWOT analysis to your business. (15 Marks)

Word count: 450 words

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Read carefully the following instructions and both cases study, and then answer each question
in an essay format. To support your analysis use relevant material from BE200 covered so far
and other resources such as AOU e-library articles.

United Airlines

Using segmentation to grow a business

United Airlines was formed in 1927 from four airlines - Boeing Airplane Company, National
Air Transport, Varney and Pacific Air Transport. From its roots as a USA domestic carrier,
United Airlines expanded into international routes to become the world's second largest air

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carrier. With hubs in Chicago, Denver, Los Angeles, San Francisco, Washington D.C. and
key international gateways in Tokyo, London, Frankfurt, Miami and Toronto, United flies to
117 destinations in 26 countries. These schedules are obviously subject to change. United
employs more than 80,000 people worldwide and carries more than 210,000 passengers
every day. Its customers have access to more than 729 destinations around the world
through Star Alliance, the leading global airline network.

By offering a range of customer-focused products and services, United has become an

industry innovator. In a service-based industry, customers and the services they require are
at the center of any marketing strategy. Besides offering convenient scheduling throughout
its domestic and international routes, United seeks to attract high-yield customers and to
earn their preference and loyalty. It does this by providing a comprehensive network and an
attractive frequent-flyer programmer with enhanced product/service offerings.

Within markets, not all customers are the same - they have different tastes and want
different things. As a result, particular markets can usually be further divided into discrete
segments. Each group consists of people with similar needs and requirements. The
organization then develops strategies that are closely aimed at satisfying each customer
group. This process is known as market segmentation.

Through segmentation, United Airlines can identify market opportunities and meet its
marketing objectives. Segmentation gives an airline a better understanding of its customers,
the services they require, where and when they want those services and how they would
prefer to pay for them.

United Airlines segments its market so that it can:

Identify consumer needs and the proportion of customers who have those needs

Develop products and prices to meet these needs

Target communications at customers within each segment

Allocate funds to support and develop each market opportunity.

Market segmentation therefore enables United Airlines to maximize the efficiency of its
marketing efforts by moving the company to use a different strategy for each market
segment.

Segmentation involves dividing a whole market so that products and services can then be
developed for each part of the market. Some companies divide a market geographically,
while others divide markets according to demographic details such as age, gender or
occupation. The criteria used to divide the market is known as the segmentation base.

United Airlines uses a form of psychographic segmentation to divide the market for its
services. This involves identifying the social class, lifestyles, opinions, interests, behavior and

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attitudes of customers. Modern communication systems play a major part in this

information-gathering exercise. With the help of questionnaires, United Airlines classifies its
customers by their motivations. For example, some customers choose United Airlines
because of price, while others choose the airline because of schedules, frequent flyer
programmers or other forms of service.

For United Airlines, successful segmentation enables targeting to take place. Targeting
provides the focus for the activities of the business.

It enables promotions and services to be aimed only at those who are most likely to respond
positively to them. Passengers are communicated with through email, which is becoming a
focus for closely targeted marketing.

The United Airlines business model can be compared to the classic 80:20 rule in Pareto's
Analysis. Based on experience of the airline industry, the model assumes that, for airlines
offering a high level of service, 80of profit comes from 20of customers. The profit-generating
customers are the ones who are prepared to pay a premium price for a premium service.
They are the ones that the airline most needs to attract.

United Airlines recognizes that airlines need to be able to respond rapidly to changing
customer requirements in what is a complex service industry. The company understands the
role of technology in enabling it to amass the data it requires about customer requirements.
In a heavily regulated and increasingly competitive market place with good prospects for
long-term growth, United Airlines successfully uses market segmentation to target distinct
customer groups from whom growth opportunities can be developed.

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