United And Delta Airlines Essay
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UNITED AND DELTA AIRLINES
Factors Affecting the Airline industry:
After the world war, the airline industry is tended to increase more rapidly. Because of its successful exposure around the globe there are many external factors that have affected the evolution of the airline industry over the period. Some of the external factors of the airline industry are discussed below:
The air industry provides its most of the input in the political process however the change in the political forces has also changed the global environment in both ways either for good or worse (Button, 2008). The airline industry is usually regulated by the political environment. Because of the safety of the passengers, the air industry has to follow the strict regulations. In this time of global era where the threats related to politics are increasing, the airline industry is also impacted by the political factors. These political factors include terrorism, war, and occurrence of the diseases (e.g. Ebola). The political situation can decline the profitability of the airline industry, for instance, after the 9/11 attack; the airline industry faced a severe decline in the year 2001.
Financial Impact of September 11, 2001 Terror Attack
The legal factors also impact the airline industry. According to the Airline Deregulation Act of 1978, all laws regarding the directing the airfares, routes, entry and exit of the all commercial lines has been removed. The consolidation has reduced the competitors in the airline industry. The laws are preventing the anti-competitive surroundings of the airline industry. The airlines are merging with each other which reduced the competition, bargaining power of consumers and increased the fares.
The economy of the country has a huge influence on the growth of the airline industry. Just like other industries, this industry has also got impacted through peaks and decline of the economy. The growth of the airline industry in the developed countries and its economics has brought the confidence in the industry. When the economy of the country is weak, the businesses choose inexpensive means of transportation because of the weak demand. In the year 2013, the airline industry of U.S had enjoyed the growth because of the revenue of the well-known airlines such as Delta Airline, Southwest Airline, United Airline and American Airlines.
Technological and Environmental Factors:
The advancement in the technology has improved the operations and efficiency of the airline industry. With the help of technology, the airline industry can get connected and enhance the traveling experience of the consumers. With the help of advanced technology, the airline industry can reduce the noise footprint and CO2 and bring improvement in the fuel efficiency (Cederholm, 2014).
Airline Segmentation, Targeting and Positioning:
The information related to the market of the airlines is essential to gather so that the customers need, and demands could be identified (Addante, n.d.). The branding experts of the Airline industry set the price structures in a way that convince the customers that the airline is doing in a right way (Φράγκος, 2014). As the marketing is a broad topic, which includes traditional techniques of the segmentation regarding the variables of the socio-demographics. In the airline industry, the segmentation is done into two passengers such as business class and economy class passengers. Moreover, these segments are further divided into four different target group including resident non-business, resident business, non-resident non-business and non-resident business.
The Airlines exclusively depend on the flights class. Therefore the customization of the product and the product offering cannot be done in this industry (Teichert, Shehu, & von Wartburg, 2008). The airlines are required to position the brands in the consumers’ mind in order to maintain the competitive advantage. The price is not the only factor that should be considered. For positioning the airline in the mind of the consumers, there are other factors like the schedule of flights, cleanness, comfort, services and the on-time performance. These factors can set the positioning of the brand in the minds of the consumers. Moreover, for positioning first the consumers need to determine what the consumer preferences are and then offer the services according to it. The route based positioning is also getting an important element because of the rise in the competition of the airlines because of the route to route variation (Wen, & Yeh, 2010). Following are the some airways that positioned their products by keeping all these preferences of the consumers in mind.
(Jagan Nemani, 2011)
United Airline Market target market and positioning
The United Airline Inc. is a well-known airline company who has the most comprehensive global network (United Continental Holdings, 2010). The target audience of the United on the basis of age is from 35 to 34. On the account of professional occupations, adults from the management, business or professional occupations are the main target audience of the United Airlines. As these professional travel in the business class, and therefore United Airline generates more revenue from these audience. However, by analyzing the age and the occupation, it is estimated that almost 58% of the passengers are those who have completed their college graduate degree. Therefore, the college graduate demographic has become the target of the United Airlines. By the assessment of the target audience, it can be determined that the United Airlines has positioned its brand image as an airline that is highly preferable by the business and professional travelers. The United Airlines set its target audience and positioned itself by focusing on its strategy of target audience objective through various media campaigns. The objective of the United Airlines is to target the 8 to 10 million of adults who are married and are from the age 35-54. These people are graduated and are professionals with the income of $75000 or above. Moreover, the company uses the census data to estimate the population size of the target. The estimation of population which is done by the United Airlines is demonstrated below:
Delta Airline Target Market and Positioning
The Delta Airline is a Georgia based Airline company which as compared to other airlines is more considerable. Unlike the United Airline, the Delta Airlines targets the customers of almost every demographics. For the people who belong to an upper class, Delta provides them the service of private jets as well. Delta targets those people who are leisure travelers and who are business travelers. Around 70% of the people who are leisure traveler prefers to travel in Delta Airline particularly because of the outstanding services. With the help of demographics data, Delta Airline provides the customize customer service to its every customer (Schaal, 2013). Delta collects the information of its customers through SkyMiles members such as income, gender, home airport, etc.
Addante, E. (n.d.). Air Travel Market Segments A New England Case Study. Market Sense, Retrieved April 10, 2015 from http://onlinepubs.trb.org/onlinepubs/circulars/ec026/13_addante.pdf
Button, K. (2008). The impacts of globalisation on international air transport activity. Organisation for Economic Co-operation and Development, Retrieved April 10, 2015 from http://www.oecd.org/greengrowth/greening-transport/41373470.pdf
Cederholm, T. (2014). Must-know: The role of technology in the airline industry. Market Realist, Retrieved April 10, 2015 from http://marketrealist.com/2014/09/must-know-the-role-of-technology-in-the-airline-industry/
Jagan Nemani. (2011). Airline Industry Customer Experience. Retrieved April 10, 2015 from http://www.jagannemani.com/airline-industry-customer-experience/
Schaal, D. (2013). How Delta mines data to build passenger profiles and better target customers. Skift, Retrieved April 10, 2015 from http://skift.com/2013/01/25/how-delta-mines-data-to-build-passenger-profiles-and-better-target-customers/
Teichert, T., Shehu, E., & von Wartburg, I. (2008). Customer segmentation revisited: The case of the airline industry. Transportation Research Part A: Policy and Practice, 42(1), 227-242.
United Continental Holdings. (2010). Corporate Fact Sheet. Retrieved April 10, 2015 from http://newsroom.unitedcontinentalholdings.com/corporate-fact-sheet
Wen, C. H., & Yeh, W. Y. (2010). Positioning of international air passenger carriers using multidimensional scaling and correspondence analysis. Transportation Journal, 7-23.
Φράγκος, Κ. Χ. (2014). Proceedings of the 2nd international conference: quantitative and qualitative methodologies in the economic and administrative sciences.
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