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Text 2. Airline marketing.

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Buying, selling, market research, transportation, storage, advertising - these are all parts of the complex area of business known as marketing. Marketing means the movement of goods and services from manufacturer to customer in order to satisfy the customer and to achieve the company's objectives.

A definition of marketing might be "Getting the right services in the right quantity to the right place at the right time and making a profit out of the operation". It is concerned with what is to be sold, how it is to be sold, when it is to be sold and where it is to be sold.

Marketing can be divided into four main elements that are popularly known as the four P's: product, price, placement and promotion. Each one plays a vital role in the success or failure of the marketing operation. The product element refers to the goods or services that a company wants to sell. A company next considers the price to charge for its product or service. Placement involves getting the product or service to the customer. Communication about the product that takes place between buyer and seller is known as promotion.

The combination of the four P's is known as the marketing mix. The elements of the marketing mix focus on the customer. The group of customers or consumers who will probably buy the product is known as the target market. The company directs its marketing efforts towards this group of potential customers who form the target market. A success of marketing mix depends on the knowledge about consumers and their buying habits gained through market research as well as correct identification of the target market.

In order to be successful a company must adapt its marketing mix to trends and developments in the market environment which is divided into two sections the macro-environment and the micro-environment. The macro-environment (external environment) consists of social forces, which affect the whole micro-environment: demographic, social, economic, technological, political, cultural and natural. The micro-environment (internal environment) consists of forces close to the company itself, forces which will affect its ability to serve its customers.

The macro-environment includes economic, political, cultural, technological and competitive environment. The micro-environment includes capital structure, fleet, management and staff, company's aims and objectives and marketing intermediaries.

The major components of the airline product are as follows: 1) aircraft type; 2) schedule; 3) price; 4) customer service. The different elements, which comprise the overall feature of customer service, are as follows:

• customer service at the point of sale;

• customer service at the airport (home and destination);

• in-flight service;

• post-flight service.

Many airlines are now moving away from the practice of treating the elements of the airline's product separately. Instead, they are trying to achieve total quality throughout the entire company - this is known as the total-quality concept.

One of the most important functions of the airline marketing manager is to formulate and implement policies, which will gain the maximum profit per unit of capital invested in business. These policies are affected by the cost of the product. The airline cost structure includes:

1. Direct operating costs (aircraft related and traffic related DOCs),

2. Indirect operating costs (aircraft standing charges, flight crew pay, cabin crew pay, maintenance labour, etc.).

3. Overheads (sales costs, administration, accounts, general management, employment /personnel departments).




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