CONSUMER BEHAVIOR

(MID TERM ASSIGNMENT)

TOPIC: -

Export Left Over Consumer Behavior

PROGRAM:

MBA WEEKEND 3rd SEMESTER

SUBMITTED TO:

Sir Shah Gul Ghani

SUBMITTED BY: -

Ammad Latif
MBEW-S19-007

History & Introduction:-

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AirSial is a rising star in the Pakistani Aviation Industry. An initiative by the Sialkot Chamber of
Commerce; the founding body behind the success of Sialkot Dry Port and International Airport.
AirSial was launched to by the Sialkot Chamber of Commerce & Industry to improve air travel to
and from the Sialkot region, which is a major industrial city in the state of Punjab. The airline
plans to initially serve domestic destinations within Pakistan from their main hub at Sialkot
International Airport, using a fleet of Airbus A320 aircraft, and fly to other major airports within
Pakistan and then back to Sialkot[3]. AirSial plans to further expand to destinations within
the Middle East at a later date.

1-Potential Consumer:-
In the highly competitive airline industry, customers become the most important factor of the
whole producing process. Besides flight safety, enhancing service quality, and therefore
customer satisfaction, is the most crucial strategies of the airlines. Customer complaints serve
as a critical dimension of service quality and customer satisfaction. Both the great affect that
complaint handling has on customer retention and the beneficial usage of complaint information
for service quality improvements have been widely recognized by the airlines and evaluative
institutions.
The Airlines have made their operations better so they were able to reduce operational costs
and can give better fares with respect to other airlines. Airlines have started customer
relationship programs so as to have better relations with customers so they can travel on the
same airline again and again. But there were many airlines that went bankrupt because of high
operational costs and low revenues even majors airlines were failed to make profits.

2-Potential Competitor:-

These days Airlines are in fierce competition with each other and they are trying to gain each
others market share by using different strategies some are giving cheap tickets some are giving
extra weight and so forth. The point here is no matter what strategies airlines are using the thing
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that matters is if they are satisfying the customers or not. Getting market share from other
airlines might be easy but retaining that share is very difficult to retain.
Nowadays people are highly price sensitive and they will switch the airlines for a minor
difference too. So now the airlines really have to work on something so that they can retain the
customer while satisfying them too. In Pakistan there wasn’t any survey which was precisely on
Airline industry. So that is why this topic was chosen so as to provide better insight in this
industry regarding the customer satisfaction. The Airlines really have to do something extra to
attract more and more customers as the biggest problem airlines are facing are the economic
problems like fuel prices and very tough competition from other carriers and getting very strict
regulations from governments.

3- Marketing Mix:-

The analysis of the expanded marketing mix for services is performed by considering literature
dealing with service management in general and by reviewing marketing mix analyses which
have already been developed especially for the airline industry. In this sense it is possible to
clearly distinguish the airline product from goods and from other services.

a) Product

Analysis typically starts with product dimension as the service product is the heart of a
company’s marketing strategy. Even if all other dimensions of the marketing mix were designed
and executed in an excellent manner, a company could not be successful with a poorly
developed core product. The core service that customers purchase when they book a flight is
simply getting from point A to B. The airline product further consists of aspects like safety,
reliability in terms of punctual departure and arrival, services provided prior to the flight which
are mostly experienced at the airport, in-flight services including food and beverages, In-Flight
Entertainment and Communication, convenience regarding the seat itself and the available seat
pitch, handling baggage, type of aircraft and equipment and the interaction with staff.
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b) Price

Price is the most flexible element of the marketing mix and also the most problematic one.
Market price is the main competitive element for any airline. The price basically reflects the
costs which arise for delivering a certain service. Marketers in general choose between various
pricing strategies which follow a cost-based or value-based strategy. Following a cost-based
approach, the price is determined by investigating the costs that occur for the company, a value-
based strategy is not solely concerned about production costs, but takes the perceived value
that customers have of a product or service 14 into consideration for making pricing decisions.
As customers are very price sensitive, airlines might find a cost-based strategy more
appropriate. When customers evaluate whether a service is “worth” buying they might however
not solely consider the monetary outlay but also consider time and effort. Therefore marketers
should consider how much time a passenger has to spend and which efforts are linked to
purchasing and experiencing the service of his or her company when setting prices. The pricing
process is actually among the most complex tasks to be handled in nowadays airline industry.

4- Product Placement:-
In the airline industry this dimension covers the selection of the right distribution channels which
enable the company to reach their target market selling air transport tickets online is among the
most successful e-commerce activities. The introduction of the first computer reservation
system (CRS) in the 1950s by American Airlines set the beginning of the development of
general distribution systems, which revolutionized the distribution of tickets. General distribution
systems enable intermediaries as travel agents to access information and to book various
touristic products like airline tickets and hotel rooms word-wide. The internet created countless
new opportunities to maximize the performance and minimize costs by enabling customers to
directly book on the company’s website. Airlines try to support this development by constantly
increasing the attractiveness of their electronic services. To increase the profitability airlines try
to switch business from indirect to direct channels. Moreover, they pay lower commission to
intermediaries to save money. Besides trying to switch sales from indirect to direct channels
airlines tend to lower commissions rates paid to travel agents significantly in order to increase
profits. The process of selling tickets directly to customers without having to pay commissions to
intermediaries or GDS providers is called disintermediation.

5-Consumer Attention
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The airline industry is extremely competitive, with companies offering very similar products vying
for business from the same customers. Airlines have gotten creative with their marketing
strategies to generate buzz and attract customer attention. Companies are using social media,
non-traditional advertising methods, loyalty programs and offering enticing perks to market their
airline.

a) Social Media:-

Airlines connect with customers on social media, working to deepen the relationship by
humanizing the brand. Companies use social media accounts in a variety of ways, including to
provide customer service, offer updates on sales and promotions, and give customers a fun
glance at what goes on behind-the-scenes. For example frequently shares Facebook updates
on community initiatives the company participates in and stories of employees going the extra
mile to satisfy a customer.

b) Unique Advertising:-

Many airlines are working their way into the daily lives of customers with non-traditional
advertising methods. These creative advertising strategies work to further develop the brand.
Instead of simply limiting marketing efforts to frequent flyers, these methods reach the public at
large, building a favorable brand image with people who may not already have a preferred
airline.

c) Loyalty Programs

Airline loyalty programs encourage flyers to book repeat flights with the same company. Many
airlines charge similar fares for identical trips, so this is a way to gain an advantage. When a
customer earns a certain number of points or reaches a specific tier status, he becomes eligible
for perks like free flights, seat upgrades, passes to airport lounges, complimentary Wi-Fi, foods,
beverages drinks at no charge, discounted parking and more. Loyalty program members often
book flights exclusively with one or two airlines to earn benefits at a rapid pace.

Distinctive Flight Perks

Many airlines have gained a customer advantage by marketing an entertaining in-flight

experience. This includes features like in-seat entertainment systems programmed with current
television shows, movies, music and games. Some airlines, including OpenSkies, a subsidiary
of British Airways, are even offering passengers iPads stocked with entertainment on select
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flights. Companies incorporate these perks into their marketing strategies, enticing a customer
to choose the airline the next time he flies.

Thank you!!