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All Nippon Airways

Essay by   •  May 6, 2012  •  Case Study  •  1,685 Words (7 Pages)  •  1,450 Views

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All Nippon Airways

(ANA)

Marketing Strategies

Abstract

"Product and service quality is both an integral part of an airline's marketing strategy and a significant cost determinant." (Ref. 4) An airline has only so much control over its marketing strategies. The control will vary depending on the market being serviced. In the domestic market they may have a better market share, therefore not as much capital must be spent on marketing. Whereas in the international market they may face much tougher competition and have less control over their marketing strategy, therefore being a costlier venture. Different factors affecting marketing strategies include, but are not limited to; market share, domestic and international markets, routes flown, competition (both domestic and international) and services provided.

There are multiple ways an airline markets itself and its services. They provide promotions for cheap tickets, highlight services provided, expound on the routes serviced, participate in frequent flyer programs that reward customer loyalty with free flights or other promotional giveaways, and whatever else is required to satisfy customer needs.

Marketing is so much more than just selling your product, it's a matter of deciding what will be sold and how. The key to marketing is to find what the customer wants and how much they'll pay for it. The airline cannot just go blindly ahead with a strategy unless they have researched customer wants and needs, then focus on fulfilling those wants and needs. A good example that is cited in the text is the case of the Concorde Supersonic passenger jet. The jet was built and put into service with no real market research conducted. It cost hundreds of dollars more to fly the Concorde and few were willing to pay the extra cost to save 2 -3 hours. The program was never a commercial success and heavily subsidized by the French and British government. By not investigating customer desires and to see if there was enough people willing to pay for this expensive service, it was doomed to failure.

Price discrimination has different degrees of application. First degree is charging the customer the maximum price the customer will pay, thus generating the highest profits and deals directly with the customer. One example is the customer buying directly from the airlines, not through a discount agency or travel company. There is even a case of a couple trying to buy tickets from Japan to Los Angeles. When the Japanese customer spoke with an ANA representative in Japanese the cost was 57,000 yen. When the representative heard the Japanese customer relay the cost in English to her boyfriend, who the ticket was for, the representative asked if the ticket was for her or the other person. When she replied it was for her Canadian boyfriend, the cost went up to 70,000 yen. When asked why, the representative said there were no more Japanese tickets and the price for non Japanese was 70,000 yen. (Article 1)

Second degree is restricting consumer's choices by the cost of the seat and the quantity available. For example below is a search of ANA's website. You can see the seat prices for coach and business, but no first class seats available. Therefore I surmised the demand for first class makes it cost prohibitive to offer them during this specific search window, allowing more business and coach seats for use. You can see below the day's traveled make a difference also. Peak travel leaves on a Monday, hence the higher price to fly that day, 7th and 8th. But leave on a Tuesday and you save over $600.00! Same is true when you depart on a weekend or holiday. There is a $2200.00 cost increase flying over the weekend of the 11th. (Ref 1)

Coach Nov 17th (TH) Nov 18th (FR) Nov 19th (SA) Nov 20th (SU) Nov 21st (MO) Nov 22nd (TU) Nov 23rd (WE)

Nov 7th (MO) 1,583.90

1,983.90

1,576.80

1,576.80

1,576.80

1,576.80

1,583.90

Nov 8th (TU) 900.90

1,300.90

893.80

893.80

893.80

893.80

900.90

Nov 9th (WE) 900.90

1,300.90

893.80

893.80

893.80

893.80

900.90

Nov 10th (TH) 900.90

1,300.90

893.80

893.80

893.80

893.80

900.90

Nov 11th (FR) 1,004.90

1,404.90

997.80

997.80

997.80

997.80

1,004.90

Nov 12th (SA) 1,004.90

1,404.90

997.80

997.80

997.80

997.80

1,004.90

Nov 13th (SU) 900.90

1,300.90

893.80

893.80

893.80

893.80

900.90

Business Nov 17th (TH) Nov 18th (FR) Nov 19th (SA) Nov 20th (SU) Nov 21st (MO) Nov 22nd (TU) Nov 23rd (WE)

Nov 7th (MO) 4,711.80

4,711.80

4,711.80

4,711.80

4,711.80

...

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