Tourism and Hospitality Marketing: Case Study on Frequent Flyer Programs
Tourism and Hospitality Marketing
Group Assignment
(Case Study on Frequent Flyer Programmes)
Group Members: Mary Tan Seok Gek
Date: Sep 09, 2009
[pic]
Introduction to Airline Frequent Flyer Programmes
Two events contributed to the emergence of Frequent Flyer Programmes (FFPs) in the airline industry. First, deregulation of the industry in 1978 created a more customer- oriented marketing strategy. Second, the growth in information technology precipitated the ability of the airlines to process and store large amounts of data on their frequent travellers. ( Winship, Tim, 1999).
Today there are over 70 FFPs in existence worldwide. Large carriers such as American, United and Delta have FFPs with about 20 million members each. About 10 million awards are given out each year, which translates into 5 percent of all seats being occupied by award winners. ( Winship, Tim, 1999). The first programme was introduced by American Airlines in 1981. Its immediate success was soon followed by all the other major airlines in the USA. (Shaw, 2004).
“As a marketing tool FFPs have proved highly successful. Mainly aimed at the business traveller, they attract the high-yield passengers which are the profit-generating ones. They also enable seats on low-load flights, which would otherwise remain empty, to be filled as rewards to frequent flyers”. (Seaton, Bennett, 1996, p.387).
Star Alliance Vs Oneworld Alliance
Frequent Flyer as Tactical Marketing
Tactical marketing is concerned with short-term programmes. These are usually either reactive in nature or may focus on a specific segment of the market. The frequent flyer programme in the airline industry is a main tactical marketing programme that is supposedly solves the problem of customers ' brand loyalty.
Each airline developed a unique core set of tactical marketing materials in their frequent flyer program scheme to address each member of a target market. In
Group Assignment
(Case Study on Frequent Flyer Programmes)
Group Members: Mary Tan Seok Gek
Date: Sep 09, 2009
[pic]
Introduction to Airline Frequent Flyer Programmes
Two events contributed to the emergence of Frequent Flyer Programmes (FFPs) in the airline industry. First, deregulation of the industry in 1978 created a more customer- oriented marketing strategy. Second, the growth in information technology precipitated the ability of the airlines to process and store large amounts of data on their frequent travellers. ( Winship, Tim, 1999).
Today there are over 70 FFPs in existence worldwide. Large carriers such as American, United and Delta have FFPs with about 20 million members each. About 10 million awards are given out each year, which translates into 5 percent of all seats being occupied by award winners. ( Winship, Tim, 1999). The first programme was introduced by American Airlines in 1981. Its immediate success was soon followed by all the other major airlines in the USA. (Shaw, 2004).
“As a marketing tool FFPs have proved highly successful. Mainly aimed at the business traveller, they attract the high-yield passengers which are the profit-generating ones. They also enable seats on low-load flights, which would otherwise remain empty, to be filled as rewards to frequent flyers”. (Seaton, Bennett, 1996, p.387).
Star Alliance Vs Oneworld Alliance
Frequent Flyer as Tactical Marketing
Tactical marketing is concerned with short-term programmes. These are usually either reactive in nature or may focus on a specific segment of the market. The frequent flyer programme in the airline industry is a main tactical marketing programme that is supposedly solves the problem of customers ' brand loyalty.
Each airline developed a unique core set of tactical marketing materials in their frequent flyer program scheme to address each member of a target market. In
References: Raza Ivo, 2005, Heads In Beds Hospitality and Tourism Marketing, Pearson Prentice Hall, New Jersey. Anisuddin Syed, 2007, “Frequent Flyer Programmes critical to the success of airline CRM strategies” [online]. Available from: www.airlineinformation.org/ffponline/Edition8/contribution_mercator_Syed.html. A.V. Seaton and M.M. Bennett, 1996, Marketing Tourism Products: Concepts, Issues and Cases, 1st edition, International Thomson Business Press, London. Winship, Tim, 1999, “ Frequent Flyer Programs, History, Economics, Issues.” [online]. Available from: www.frequentflier .com/ffp-005.html. [13 Aug 2009]. Stephen Shaw, 2004, Airline Marketing and Management, 5th edition, Ashgate Publishing Ltd, Hants, England. Rick Ferguson, 2009, “Loyalty Marketing, Reward Programs and Customer Loyalty: Colloquy” [online]. Available from: www.colloquy.org. [10 Aug 2009].