Marketing Enviorment 2

7/23/2019 Marketing Enviorment 2

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Airport Slot Allocation Slot allocation is a complex and controversial question.

Slot is defined as a pre-agreed time for takeoff orlanding to take place at a particular airport.

For a landing slot to have meaning, four differentcapacity constraints must be satisfied:

Capacity in the air traffic control system, to allo

the aircraft to approach the destination airport. !unay space must be available, to permit the

aircraft to land.

"arking and apron space, so that turnaroundprocedures can be completed.

#erminal-processing capacity must be sufficient toenable passengers to pass through immigrationand collect their bags in reasonable time.


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Airport Slot Allocation $Slot Co-ordinator$ it has been traditional for the

largest airline operator at a particular airport to carryout the function of slot allocation to airlines

%nce an airlines has been aarded a slot, therequirement is that it ill automatically receive thesame slot for the next equivalent season. #he process

of aarding slots is knon as the $&randfather !ights'.(oted that no payment is made by airlines for theinitial aard and thereafter.

&randfather !ights represent a ma)or distortion ofcompetition in the industry. #his is because they give

opportunity to long-established airlines, * deny suchopportunity for fresh, innovative carriers, ho might beable to deliver better service to consumers.

+n , the igh court in the /0 gave hat hasturned out to be a historic )udgment about question of

the buying and selling of slots.


3/14

Airport Slot Allocation #he )udgment confirmed the legality that an airline ith

a less attractive slot time ould be able to pay moneyto another carrier ith more attractive time toundertake a slot exchange

1ore convincingly, airport slots should be regarded as anational asset. +f they are, the proceeds of any sales

could go to the government and through this,hopefully, benefit everyone. #he other risk ith thebuying and selling of slots is that a greater proportionof the available slots ill come into the hands of asmall number of large airlines-2ufthansa at Frankfurt,

3ir France at "aris, 021 at Schiphol and 4ritish 3iraysat 2ondon eathro.

5espite these concerns, the movement toards a Slot3llocation system based on the buying and selling ofslots, and ith airlines pocketing the money from theslots hose &randfather !ights they sell, no appearsunstoppable.


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Economic FactorsEconomic FactorsEconomic Growth & the trade cycle

#he demand for air travel is characteri6ed by a veryhigh income elasticity. 3s the orld economy gros,so the demand for air travel can be expected toincrease too.

#his continuing groth gives both enormousopportunities and great challenges to the airlineindustry to explore the groing market.

"eriods of buoyant demand have seen airlines over-invest in additional capacity.

#he upsing of the middle and late 7s. 2argeorders for ne aircraft ere placed ith the aircraftmanufacturers, ith many of these planes actuallydelivered in 8777 and 877hen market conditions

ere much less favourable.


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Socail FactorsSocail FactorsThe Ageing Population

+n 9urope and (orth 3merica in particular, theaverage age of the population is no increasingsteadily. Feer babies are being born, and improvingmedical provision is alloing more people to live

longer.Clearly, the product that airlines offer ill have toevolve, ith more provision being made for disabledpassengers and those needing help at airports, andmedical care services ill have to be improved.

#he travel industry may have to ad)ust itspromotional policies.


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Social FactorsSocial FactorsChanging Family Structures

estern societies, the rise in divorce and increase inthe number of one-parent families are ell-established trends, hich the travel industry has so

far done little to accommodate.

#he truth is that there are very important sub-segments to the market, such as those consisting of

singles, gays or one-parent families, hoseparticular requirements from a holiday should bereflected in promotional and product-planningpolicies.


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Social FactorsSocial FactorsChanging Tastes and Fashions in Holidays

#he modern travel industry is having to ad)ust to amarked broadening in the range of requirements ofvacationers. 4etter education, groing experience of

air travel and fears about the health risks ofexcessive exposure to the sun are all meaning thatto a greater and greater degree, holidays mustreflect a lifestyle based on individual choice.

#hey are on holiday, ith inter sports, golf, history

and trekking holidays all no ell-established sub-segments of the market.


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Social FactorsSocial FactorsThe Uncertain, eregulated !a"our #ar$et%

+n many societies most )obs ere seen as beingsecure for a lifetime.

#oday situation could be more different. !edundancy* )ob seeking occurs in may people;s career.

"ressure at ork are far greater as people battle tokeep their )ob

orking lives are no busier than ever before.orking hours are often longer rather than shorter,ith orking at home commonplace in the evenings

and at eekends.3lso many people are reluctant to take their fullalloances because of a $presenteeism'

#he above deregulations bring changes in 4usiness

and 2eisure segment


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Social FactorsSocial Factors

#he Female 4usiness #raveller+n the /S3, still more than 7=. +t isexpected that a third of the (orth 3merican

business travel market ill consist of omen bythe year 877.

%nly recently has it become common forseparate bags made up for female as ell as

male travellers to be offered. omen are morelikely than their male colleague to check in holdbaggage, * less likely to carry large amounts ofbaggage on board on aircraft


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Technological FactorsTechnological Factorsideo'con(erencing%

?ideo-conferencing posed a significant long-termthreat.

&iven the nature of the threat, a progressivelygreater response ill be required from airlines in

their marketing policies.&reater emphasis ill be required on convenience toenable business travellers to fly ith the minimumimpact on their orking time, alloing the benefitsof a face-to-face meeting to outeigh the timerequired to travel to such a meeting.

3dvertising ill be needed hich promotes thebenefits of face-to-face meetings as opposed toconducting these meetings via video-conferencing or

conference calls.


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Technological FactorsTechnological Factors#he +nternet

#he mid-7s sa the possibilities opened up by the+nternet. Since then, the groth in its use has beenastonishing.

3lmost all ma)or airlines have ebsites hich they use for

promotional purposes, ith these sites supplying timetableand product information and also often allos people makebookings.

Frequent Flyer "rogram members check their mileageaccount

+n the field of air freight, firms such as /"S and Federal9xpress allo customers to track their consignments asthey move through the system using the +nternet.

Future role of the +nternet in airline marketing concern its

use as a distribution channel.


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Technological FactorsTechnological FactorsSur(ace Transport )n*estment

#oday, many countries have seen a resurgence of interest insurface-especially railay-transport investment.

!ailay operators have largely on the battle to be vieed asthe most environmentally acceptable form of transport. (otablyso to China, ith plans no in place for the construction of a

high speed rail link beteen 4ei)ing and ShanghaiSurface transport investment provides both problems andopportunities in 3irline 1arketing.

#he problems come from a city-centre to city-centre )ourneyhere surface transport provide efficient services. Surfacetransport ill share the demand ith its efficient services

Surface transport come ith the option to cooperate airtransport rather compete by providing feeder services to long-haul pax flights


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Climate chagne & Gloa"al warming

&lobal arming does, no seems to be certain that infuture, average temperature ill continue to rise, itharmer climate 6ones being progressively displacedtoards the "oles

+f this happens, the effect on both extent * pattern ofair transport demand could be substantial one. Forexample, the summer of 877@, in /0, as exceptionallyhot * settled. +n 877@, demand for air-based packagedholiday to 1editerranean resort fell by 7= as it as

idely assumed that 4ritons had decided to take holidayat home instead of doubtful pleasure of a long flight byair

3ir transport is blamed for arming the orld;s climateby emissions of carbon dioxide * other gases


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Shortage o( in(rastructure capacity

%ver the last three decades, airlines industry hasmade important progress in ensuring to have muchquieter aircraft. /nfortunately, the result has notbeen an easing of the environment pressures

opposing aviation infrastructure investment

+Tourism Saturation

%ver-exploitation of a tourism area can mean thatthe reasons for people going there are oftendestroyed. #hey ill, though, have a substantialeffect on its geographical distribution, * provide achallenge for all managers of resort areas

Marketing Enviorment 2

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