ABEL 321 (1M) 313

Airline Marketing (Traffic & Sales Procedures)

Reference: Air Transport – A Marketing Perspective (1982) by Stephen Shaw

I. General Provisions (Prelims) (Week 1)

A. Fundamentals of Marketing
a. Marketing Defined – two definitions:
i. (Remember MP-IAS-CRP) The Management Process responsible for Identifying, Anticipating and Satisfying Customer Requirement Profitably (UK
Institute of Marketing, quoted in Wilmshurst, 1978)
ii.(Remember HADS-NW-EP) Is Human Activity Directed at Satisfying Needs and Wants through Exchange Processes (Kotler, 1976)
b. The Application of Marketing Theory
i. Market Investigation – a business may employ three (3) different philosophies: (Remember PSM)
1. Production Orientation – corporate effort is directed to the manufacture of high-quality products
2. Sales Orientation – costly expenditure on advertising, trade promotions through inducements or price cuts, or high-pressure selling by a
large sales force.
3. Marketing Orientation – research is conducted to gain a thorough knowledge of the structure of [the] markets.
ii.Definition of Corporate Strategy – the following are the phases: (Remember OMP)
1. Objective
a. profit maximization;
b. minimization of environmental nuisance;
c. other social goals, e.g., to help increase employment during rising structural unemployment
2. Mission – statement of the broad area of activity with which the firm is concerned
3. Plan – aims to use market gap which can exploit the strengths of the firm whilst reducing or eliminating its weaknesses

iii. Organizing for Marketing (Remember IE)

1. Internal Organization – deployment of own (human) resources, e.g., definition of a corporate management structure, or application of
appropriate personnel recruitment and training policies
2. External Organization – defines the role to be played by outsiders in marketing and who these outsiders should be, i.e., outsourcing
iv. Designing the Product – (Remember M-GRUN)
 the ideal of product development is a phase whereby products are made of a type, and in a sufficient quantity, to allow a launch that will Meet
Genuinely Understood and Researched consumer Needs
v.Pricing the Product – decisions must be made about
(Remember GR)
1. the General level of prices of products, and also
2. about any Readjustments
[Purpose] is to give psychologically appealing and convenient prices
vi. Selling the Product
– not a synonym for ‘marketing;’
- (Remember OBC) culmination of the marketing process, where products planned on the basis of detailed market investigation are Offered
to and Bought by Consumers

Divided into two (2) parts: (Remember CpAo)

1. Communication with potential customers
2. Administration of the order through suitable procedures
vii. Distributing the Product – often takes place in advance of sale, due to customer demands for an immediate availability of goods through
point-of-sale stockholding
viii. Product Strategy (diversification) and Life Cycles (never-ending because a product moves to maturity and eventual decline, and then
introduction of a new product)
c. Marketing and Airlines – the theory of marketing can indeed indicate a logical process for airline decision-making

B. Marketing in the Air Transport Services (Week 2)

a. Techniques of Market Investigation (Remember RC-TUD)
i. Desk Research – collection of statistics
ii.Consumer Surveys – defining reaction of customers
iii. Test Marketing – mounting a campaign over only a small market area he hopes eventually to penetrate
iv. Use of Consumer Groups – setting up of committees to represent views of air travellers
v.Deduction (from easily available data)
b. Air Passenger Market Segmentation (Remember BLAP)
i. Business Travel Market
ii.Leisure Travel Market
 iii. Personal Travel Market
iv. Air Freight Market
1. Air Freight Market Segmentation (Remember pEn)
a. Emergency Traffic
b. Routine Perishable Traffic
c. Routine Non-Perishable Traffic

c. Demand Forecasting Techniques – (Remember GCM)

i. Growth Factor Method- attempts to derive a time-series of past traffic data covering a period of years prior to the forecasting base
ii.Category Analysis – divides the population of the market area into a number of categories according to socioeconomic characteristics
iii. Multiple Regression Analysis – relates changes in demand to those factors which are believed to cause such changes to arise
d. Factors Affecting Future Demand Levels (Remember PTP)
i. Price of Air Travel
ii.Trends in Air Travel Market Potential
iii. Provision of Air Transport Services