Airline industry experienced difficulties in the 1990s that led many companies to close down. However, the industry has now become profitable and is becoming increasingly competitive, thus massive growth is expected as new markets like China, India and the Pacific Rim come up. In response to the competition, companies are rebranding and improving their services in order to increase their market share. Competition is increasing from all corners, and airlines have to shape up or shape out. They must continually find a way to adapt to competition or collapse. Investing in lifestyle associations with their clients and creating customer loyalty could be lead the airline companies to success. Survival for the fittest applies to carriers too (Temporal, 2015). To build brand and customer loyalty, airlines invest in new liveries, aircraft interior decors, flight services and technologies. This paper discusses different strategies that airlines are adopting to improve their brands and respond to competition.
Creating a meaningful and winning brand comes with a lot of efforts. The past decade has proved futile for multiple airlines around the world dwindling their chances to take off. Growing and thriving in a highly competitive market faced with soaring fuel and maintenance costs, and labor unrests has not been their regular challenge. In addition, prices have experienced downward pressures, as well as fluctuating consumers demand. Far from sustaining growth, the majority of airlines have not been able to break even. Nevertheless, the past two years necessitated airlines to restructure their offers in order to cover costs and run profitable business.
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Part of this strategy was “unbundling” the flying experience. It is done by making customers pay for services included previously. Product differentiation has become the new front to unlock profits. Towards the end of 2014, fuel prices fluctuated significantly across the world. Moreover, oil prices continue to decrease by day and airlines are expected to take full advantage. High fuel costs have been a key factor in blurring branding strategies of many companies (John & O’Connell, 2012).
Turkish Airlines provide a characteristic case study where successful branding is concerned. In this case, the airlines have managed to increase the number of passengers, as well as destinations thereby realizing high revenues. Conspicuously, the airline won the best airline title in Europe for three consecutive years. Operating in an industry popular for consolidation, government bailouts and bankruptcy rather than prosperity, this is a tale worth telling. In order to keep up with the industry momentum and outdo companies boasting larger destination networks, higher recognition and newer planes, Turkish Airlines had little choice other than enhancing its brand, customer relationship and value proposition. Looking at a branding strategy, the airline realized the importance of aligning the entire operation on a creative path towards standing out from the competition. In essence, Turkish Airlines began by examining the company’s culture, and ensuring its human resources ranging from back to front office (pilots, air hostesses, and engineers) through to the chief executives play more contributory role in steering the business forward and out of industry woes. At this point a branding strategy comes in (Lovegrove, 2000).
What Is a Brand?
A brand is beyond a logo and name. Rather, it is a solid promise by an organization to deliver to its customers the exact pledge made by the brand. It is a delivery of not only functional benefits but also self-expressive, emotional, and social advantages. Therefore, brand development is a long and treacherous journey walked by visionaries rather than mere missioners. It entails evolving a personal relationship founded on experiences and perceptions that a consumer always finds a connection with the brand.
A brand is a reflection of organization’s heritage, values, personality, culture, and programs. The image of an organization is core as it mirrors the brand promise thereby creating a relationship that surpasses any value proposition and functional benefit. It is a human characteristic to want to bond with a brand that is far beyond practical boredom. A brand bond or relationship gains strength and sustainability where there is an identifiable personality, worthy of respect, charming, admirable, fun, exciting and represents a unique thing different from competitors. When an airline succeeds in acquiring and emitting features of this nature, it will undoubtedly earn a position in the market, and favorite itself among flight consumers. It is undeniable that brands are extremely powerful (Temporal, 2015). They are primary to customer relationship, a force that influences financials, and a platform for strategic choices.
Airlines have found an expedient for customers’ constant demands for lower prices. Entice and then trick them to pay more. Critics would argue that it is not customer friendly, but it is a mode to compete. Changing competitive models comes with consequences. One of the outcomes is that as the product continues to become less valued, service come at a cost. Currently, airfare does not merely amount to the price of a seat. If one craves comfort, class, convenience, decent food and more, then they should expect more. Trend is also changing where customers merely consider the airfare but what the carrier has to offer in form of luxuries.
Airline Brands and Low Profits
American Airlines merged with U.S Airways leaving only four major airlines in the US. None of the two would be termed as stronger or commanding more substantial market base than the other but may be consolidating which would lead to improved business results and customer satisfaction. Airline business is sensitive and, often, airlines suffer challenges that make it tough to operate a successful business. It is important to understand the reasons why airlines suffer financially more often than not. Reasons include high fixed and variable costs that make adjusting to prevailing market conditions challenging, events beyond carrier control that impact heavily on demand, for instance volcanic dust and bad reputation that airlines have (Temporal, 2015).
Bankruptcy has led many businesses to shut down for good. To airlines, however, they use it plan, and do upgrade efficiently which they could not otherwise afford. After bankruptcy, they emerge with bloated expectations of improved market performance and more so, financially without customer service improvement. Irony is doing the same thing over and over expecting different outcomes.
Compared to other industries, airlines score lowly on customer service satisfaction. Failure to make a meaningful difference from competitors leads many brands to fail. The brands are well and equally known but are unable to establish positive and unique perceptions of their brand particularly among its consumers. Two smaller airlines, JetBlue and Southwest continue to score higher than major airlines like Delta and US Airways (John & O’Connell, 2012). These airlines are seen to set trends and beat their rivals hands down in customer service satisfaction.
Airline Branding Strategies
Focus on Market Groups
Once an airline takes the bold move to design a unique brand for women only, they should not alienate men. Shortly after introducing the women airline, they should embark on collecting views and conducting research to find the curiosity levels from other groups on what they thought about the move. The airline should then immediately launch another brand for different group of people, i.e. men. Curiosity would lead many to try the new brand even if once. Men branded planes may have an onboard satellite TV and a few male favorite channels. They could also incorporate trivia games where customers can play and compete irrespective of seat positions in the plane.
Differentiating and Airline
Whether an airline goes bankrupt or not, it will be remembered for the services it offered, cost and how different its brands were compared to others in the same market. People will talk about the brand despite the length of the period it was in the market. Various airlines have started occupying different niches in the market and product differentiation is slowly shaping up (Temporal, 2015). A low-cost airline will appeal to the common man against the traditional expensive ones for the well-heeled clients. Such an airline operates on the scheme that every person should be able to fly. The umber-expensive airlines make it hard for people to fly and serve only a few people in the market. It has few customers in the and ultimately shuts down.
Other differentiation techniques include humor, for instance, Southwest Airlines attendants, ultra-low airfare, for example by Spirit Airlines in which case the passenger must be ready to pay for everything else including the toilet. Others may decide to make flying a lifetime experience for its customers but at a cost.
Fighter Brand Strategy Options
It is one of the oldest branding strategies. Fighter brand strategy tackles threats head on but with some level of class. To respond to price wars, an organization comes up with a cheaper brand to protect their slightly higher priced brands. Traditional brands come up with brands targeting particular consumers in the market. Fighter brands are launched to counter a competitor’s threat to steal a share of the market from the company’s main brand. They are also referred to as classic recession strategies (John & O’Connell, 2012). As the number of competitors grows and private airlines become stronger, many marketers opt for fighter brands to protect and rescue sales lost while maintaining the value of their premium brands.
If the fighter brand is successful, it beats even the lowest priced brands in the market and creates a new market for that particular commodity. Intel Celeron provides successful case study of fighter brand application. The company enjoyed success from its Pentium chips but faced massive threat from AMD’s K6 chips. AMD’s was cheaper and appealed to low-cost PC users. Intel had to protect its brand and premium chips and bar ADM from controlling the lower-end customers. To counter ADM’s K6 chips, Intel came up with Celeron chips that were cheaper and less powerful than the Premium chips with the aim of serving low-end PC users and ultimately pushing ADM out of the market. Subsequently, Intel was found to command 80% of global PC market, a testimony that its fighter brand strategy helped control competitors from entering the market and opened up additional new markets for their brand (Temporal, 2015).
For every successful case study of fighter brands, there are many more total failure cases. General Motors planned to attack Japanese car imports only to lose millions and crumbling General Motors. Song airline designed to appeal to women was to counter low-cost carriers Southwest and Jet Blue, but three years down the line, it cost the airline millions of dollars. Before settling on fighter brand strategy, an organization must take into account hazards that they will have to negotiate and emerge victorious from the raging low price wars in the market.
To come up with a fighter brand, the organization must answer several questions like does the organization need an additional brand, is it financially worth to invest in a low price brand instead of focusing on adjusting the already existing ones and if the company is ready for distraction. Less could always mean more at times (John & O’Connell, 2012).
If a company answers these questions and all answers lead to a fighter brand, then cannibalization should be the next consideration. While the primary aim of a fighter brand is to win back customers that may have switched to a cheaper rival, some annoyingly pull customers from an organization’s premium brand. Analysis carried out to justify fighter brand products always favors competitor reasons to cannibalization. The best fighter brand methods reduce with significant degrees levels of cannibalization. A fighter and premium brand should include features that attack the competitor rather than appear to be fighting with each other (Temporal, 2015). For instance, P & G introduced Luv diaper brand, removed all creative aspects from it, and invested in their Premium Pampers diapers to ensure that the two survive in the market more as sisters than competitors.
Consumers should also be an essential factor when coming up with a fighter brand. Instead of maximizing on a competitor’s strength’s and a company’s deficiencies, organizations should target consumer segments in the market. A fighter brand created out of consumer needs is successive than that created out of threats that a competitor poses to an organization. Qantas airline succeeded when others failed because of its fighter brand JetStar was secretly researched, planned for and targeted all groups of people in Australia (Temporal, 2015). Instead of trying to match competitors, JetStar focused on consumers. Airlines should also be versed in the knowledge that consumer brands are slowly becoming clogged up. Their mind is like a sponge that can only absorb very little information about products and services. There is too much that the customer should know and digest in the market. Solution would be to transmit any brand improvement to the mind of the consumer direct.
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Fighter brands are created to counter competition, but they should also make profits. A long term fighter brand campaign can only be successful if the brand is making profits. General Motors learned this lesson the hard way. Post-it Notes fighter brand version cost 3 million dollars. Highland is its fighter brand product that comes with fewer formats, low-quality adhesive and is a basic commodity, in general. However, low quality means low costs of production and, for this reason Highland is highly profitable for a 3M product (Lovegrove, 2000). The profits have ensured that its long term and effective stay in the market. Anytime a fighter brand strategy comes into mind, it is likely that many organizations will be tempted to use it to counter competitors’ threats from lower priced commodities while at the same time trying to open up new markets at the lower-end customer segment. To get it right, an organization should consider the concerns addressed in this essay.
Finally, competition in the service and other industries is not fading. To clinch a niche in the market, an organization should realize that competition is not handled by quality or good brands only, but also by customer care skills, and whom they will choose as their representatives. It is of no use for an airline to brand its planes but have the worst customer care or agents. Change must all round from planes to all other products and services that the carrier offers. This way, an airline company can brag of market commanding brands.