See Your Ad Here Airline Economics Because of all of the equipment and facilities involved in air transportation, it is easy to lose sight of the fact that this is, fundamentally, a service industry. Airlines perform a service for their customers - transporting them and their belongings or their products, in the case of cargo customers from one point to another for an agreed price.
However, given the unique nature of services, the implications of these are slightly different in case of services. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance.
However, too much customization would compromise the standard delivery of the service and adversely affect its quality.
Hence particular care has to be taken in designing the service offering. Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs - such as labor and overhead costs - also need to be factored in.
Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark up for an adequate profit margin.
Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought to where the service would be provided.
Thus, a fine dine restaurant is better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away from the rush and noise of a city. Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer.
Thus, service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings.
We now look at the 3 new elements of the services marketing mix - people, process and physical evidence - which are unique to the marketing of services.
People are a defining factor in a service delivery process, since a service is inseparable from the person providing it.
Thus, a restaurant is known as much for its food as for the service provided by its staff.
The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today. The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff.
Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn.
Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests.After 33 years, Piedmont Airlines retires planes that revolutionized regional industry On July 4, Flight will depart from Charlotte Douglas International Airport at p.m.
and touch at. The Top 20 took into consideration safety factors including airlines’ fleet age, crash and serious incident records, audits from aviation’s governing bodies and industry associations, and.
Airline industry 7 ps 1. AIRLINES INDUSTRY KINGFISHER AIRLINES 2. GROUP MEMBERS 3. The 7 Ps – price, product, place, promotion, people, process and physical evidence comprise the modern marketing mix that is particularly relevant in service industry, but is also relevant to any form of business where meeting .
The Airline Quality Ratings report, released April 7, shows that United Airlines is finally beginning to recover from its merger with Continental Airlines, which took place in But that.
Aug 28, · "It's a very competitive marketplace, even for the Chinese airlines," said Peter Harbison, the executive chairman of research firm CAPA - Center for Aviation in Sydney.