Airline Industry There Are Two Term Paper

One-to-one marketing allows premium pricing as well as increased sales volume to particular unique micro markets. Studies show that as customer satisfaction and loyalty increases, consumers are less sensitive to price changes. Generally, they are willing to pay more for their preferred brand because they perceive some unique value that other alternatives do not provide (Giddens, 2002).

Long-haul international business travelers and short/medium-haul domestic business travelers are the customers that are not price sensitive and are, therefore, the best market segments for the legacy carriers to target. However, as legacy airlines have tried to compete with low-cost carriers on price, they've had to cut back on things business travels value such as a large selection of destinations and flight options leg room, meal service, and airline clubs. As a result, legacy service really isn't that differentiated from the low-cost carriers. Legacy airlines need to think of inexpensive ways to set their service apart from the low-cost airlines. For example, Wi-Fi availability would be a flight enhancement that would appeal to business travelers without adding significantly to costs.

IV. Conclusion

Legacy airlines have significant barriers to lowering prices. Therefore, they have to have a different plan for competing against lower-cost airlines that offer low fares. Theories of price discrimination and premium pricing through one-to-one marketing identify ways that legacies can avoid price competition. Long-haul international business travelers and short/medium-haul domestic business travelers are the customers that make the best segments to target because they are not price sensitive. but, to be successful, the airlines will have to differentiate their services from the low-cost carriers to appeal to its target audience and understand the needs of individual consumers within market segments.

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