The importance of brand loyalty in the Airline Industry

Abstract

Brand image is an important factor for any kind of organization and good brand have some extra opportunity in the market to expand their business and Airlines are not different from it. Branded Airlines are always preferable to the customers. According to that the objective of the report is about travelers trust on Branded Airlines.

Its totally primary research and qualitative interview base report. There was a format of selected question with 10 questions including for the respondent. And the answers have been collected by face to face interview with the director of the Travel Link and two employees of Alfa Travels. There was a short discussion period as well and which was really effective for some extra information which was not included with the question paper but those information’s are basically important for the report.

According to the literature review and primary data analysis it shows that though most of the travelers are a bit price sensitive but their basically very much dependant on the branded Airlines.

There are some key factors for the travelers for which they are dependant on branded Airlines. Those are mainly reliability, availability, frequency and obviously service quality.

Chapter 1

1.0 Introduction

To understand branding is not about getting the target market to choose over the competition, but it is about getting the prospects to see the product as the only one that provides a solution to their problem. Branding is important because it builds relationships with consumers and is a guarantee that what they like about a product will be there every time.

Brands have become a critical issue in the marketing of products because it is everything of the organization do to get their business known and to enhance its reputation. It’s advertising. It putting the business name on their vehicle. It’s sending out their invoice on an attractive letterhead or invoice form. It’s an attractive logo. It’s telling the guy in line at the supermarket what business over their in. It’s passing out the business card. If organization can do their branding right they will get referrals. People will look for brand on the Internet. People will recognize brand site when they find it. They will look in the phone book for brand. They will trust t. The brand .They will buy from the that particular brand . When brands are marketing their site, business, product, service, they must be seen, heard and remembered by their audience. Consumers are bombarded with messages all day every where they travel. Branded Airlines must stand out and the most cost effective way to do this is logical domain branding. 

A good brand is a powerful thing. If done properly, a brand is much more than just an array of logos and slogans. It can conjure up magic images in the mind of the consumer and build life-long affinities. The end, there can never be too much emphasis placed on branding’s importance. Modern consumers exist in a ridiculously cluttered media environment. Anything that captures attention amidst such chaos is worthwhile. The difficulties inherent in creating a magic brand presence mean good marketers will always stay in business.

In present customers are more aware then before regarding the Brand. in addition to brand identity, customer’s are not only more willing to support best branded but they are also willing to pay for that particular product. Finally it can say that branding can be increase profit and enhance share holder value for the organization.

1.2 Problem statement

Day by day people are becomes more brands oriented and all time they are looking for branded product. This picture is not different for the airlines as well. Passengers from all over the world have made their feelings known – they prefer the branded airline not just for the very first time, but every time.

For my research paper I am going to discus about customer’s choice for branded airlines. So, my problem statement is

Travelers’ only trust on branded airline

-a study on travel agency

1.3 Research Question

Passengers are really go for branded airlines?

Why customers are looking for branded airlines?

What type of facilities they are looking for their branded airlines?

What are the main reasons for choosing the branded airlines?

1.4 Significance/scope of the research

Now a day people are more conscious about branded product because the believe that branded product only got the quality and others features based on the customers demand.the different branded airlines those are always try to satisfied and making loyal customer by us ing different kind of marketing strategy.

For my research i am going to discuss regarding why people always prefer branded airlines for travelling.this research can help the airlines industry to know customers need ,want and demand more specificly.

1.5 Research Objective

The main objective of my research is Travellers only trust on branded airlines,and there are some specific objectives are following:

Travellers prefer branded airline because of service qualities and some special facilities.

The branded airlines always try to satisfy their customers

1.6 Ethical Issue

Ethical issue is important in research, as in other field of human activity.

The principle underlying research ethics are universal: They concern things like honesty and respect for the rights of individuals. Ethical issues arise in the design and conduct of research and in the reporting of results. With regard to the design and conduct of research many codes of ethical issues in the field.

Ethical issues in a research focus on moral and responsible was required to conduct a research.

As a researcher I must find out some methodological theories and its feasibility from practical point of view. Following are the ethical issue I will consider:

Data protection:

I will keep my information in a locked place. I am not going to open my information to irrelevant people.

Confidentiality:

I will keep all the information of my participant confidential. It will not show to any other participant.

Anonymous:

It should be anonymous.

Ambiguity:

When surveying an questioning my participant I will ensure that all the information provided by them is ambiguous, Like I am not going to ask about their gender, name or nationality.

Plagiarism:

I will not use others data or ideas with out due acknowledgement.

1.7 Hypotheses

Traveller only trust on branded airlines

Because of the quality service travellers trust on branded airlines.

Price sensitive customer always goes with price not with brand.

Loyal customers never care about price.

Chapter 2

2.0 Literature review

2.1 Branding

Brand is the personality that identifies a product, service or company (name, term, sign, symbol, or design, or combination of them) and how it relates to key constituencies: Customers, Staff, Partners, Investors etc.

Some people distinguish the psychological aspect, brand associations like thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand, of a brand from the experiential aspect.

The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people and consists of all the information and expectations associated with a product or service.

People engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called and managementbr. Orientation of the whole organization towards its brand is called brand orientation.

Careful brand management seeks to make the product or services relevant to the target audience. Brands should be seen as more than the difference between the actual cost of a product and its selling price – they represent the sum of all valuable qualities of a product to the consumer. There are many intangibles involved in business, intangibles left wholly from the income statement and balance sheet which determine how a business is perceived. The learned skill of a knowledge worker, the type of mental working, the type of stitch: all may be without an ‘accounting cost’ but for those who truly know the product, for it is these people the company should wish to find and keep, the difference is incomparable.

A brand which is widely known in the marketplace acquires brand recognition. When brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present. For example, Disney has been successful at branding with their particular script font (originally created for Walt Disney’s “signature” logo), which it used in the logo for go.com.

Consumers may look on branding as an important value added aspect of products or services, as it often serves to denote a certain attractive quality or characteristic (see also brand promise). From the perspective of brand owners, branded products or services also command higher prices. Where two products resemble each other, but one of the products has no associated branding (such as a generic, store-branded product), people may often select the more expensive branded product on the basis of the quality of the brand or the reputation of the brand owner.

2.2 Brand awareness

Brand awareness refers to customers’ ability to recall and recognize the brand under different conditions and link to the brand name, logo, jingles and so on to certain associations in memory. It helps the customers to understand to which product or service category the particular brand belongs to and what products and services are sold under the brand name. It also ensures that customers know which of their needs are satisfied by the brand through its products(Keller). Brand awareness is of critical importance since customers will not consider your brand if they are not aware of it.

‘Brand love’, or love of a brand, is an emerging term encompassing the perceived value of the brand image. Brand love levels are measured through social media posts about a brand, or tweets of a brand on sites such as Twitter. Becoming a Facebook fan of a particular brand is also a measurement of the level of ‘brand love’. Brand is a name,sign,term symbol or combination of them intend to identify single term or group of term…

2.3 Brand promise

The marketer and owner of the brand has a vision of what the brand must be and do for the consumers.

A global brand is one which is perceived to reflect the same set of values around the world. Global brands transcend their origins and create strong, enduring relationships with consumers across countries and cultures.

Global brands are brands sold to international markets. Examples of global brands include Coca-Cola, McDonald’s, Marlboro, Levi’s, Shell etc. These brands are used to sell the same product across multiple markets, and could be considered successful to the extent that the associated products are easily recognizable by the diverse set of consumers.

2.4 Brand loyalty

Brand loyalty, in marketing, consists of a consumer’s commitment to repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy.

Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints (such as vendor lock-in), a lack of viable alternatives, or out of convenience. Such loyalty is referred to as “spurious loyalty”. True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm.For example, if Joe has brand loyalty to Company A he will purchase Company A’s products even if Company B’s are cheaper and/or of a higher quality.

2.5 Brand Influence

Prior research suggests that brand may influence consumer preference for differentiated products. However, the extant literature does not measure how brand value affects product similarity and consumer choice. This paper examines demand response to the proliferation of personal computers (PCs). Using both the central processing unit (CPU) and brand as segmentation variables, I construct a two-level nested generalized extreme value (GEV) discrete choice model to estimate the brand values and product similarities of a set of PC vendors. With these estimates, I infer the relative efficacy of product variety for firms which possess different degrees of brand values. My results suggest that consumers treat PCs from the same firm as close substitutes, and the proximity of the PCs correlates positively with the firms’ brand values. This finding suggests that there are decreasing demand returns to product variety for branded multi product firms. I discuss a few possible drivers of brand value and explore the significance of product line extension in building long-term brand reputation.

Chapter 3

3.0 Methodology

3.1 Overview of the research

In to day’s world people are so brand conscious. Their first choice to go for a branded product even though the price is high but they only care about the image of the brand. So for this particular research is regarding the same issue which is related to the Airlines industry.

3.2 Source of data and data collection procedure

Its totally primary research and qualitative interview base report. There was a format of selected question with 10 questions including for the respondent. And the answers have been collected by face to face interview with the director of the Travel Link and two employees of Alfa Travels. There was a short discussion period as well and which was really effective for some extra information which was not included with the question paper but those information’s are basically important for the report.

3.3 Interview Section

Interview section has been conducted for not more than one houre.There was a formal interview part and a short discussion part with the same respondent. It was a very helpful and important section for the report.

4.0 Finding and Analysis

Importance of Brand equity for Airline Industry

Although branding management is important to an airline company, the existing literature on brand equity within the airline industry is sparse. This study proposes an airline brand equity model from the customer’s perspective and operationalizes the airline brand equity with four dimensions: brand awareness, brand image, perceived quality, and brand loyalty. In addition, the inter-relationships among four dimensions and their influences on brand equity are investigated empirically. Using an interview survey data of of two travel agencies’, the results reveal that brand loyalty, among other brand equity components, is the main determinant of brand equity, and a causal relationship between perceptual and behavioral dimensions is confirmed in terms of inter-relationships among brand equity components. Managerial implications in brand management and customer relationship management to the airline industry are provided. The importance of brand equity to the service industry in terms of marketing and business management has been addressed recently by both academics and practitioners, but the research of brand equity on the airline industry is still sparse and requires more attention.

Despite airlines making great efforts to establish and maintain their brand equity in practice, an appropriate measurement of brand equity for the airline industry lacks a general consensus. This is especially so as the interrelationships between the components of airline brand equity and the effects of components on overall brand equity are of great importance.

Brand image help the organization to drive revenues

While ordinary airlines have also pursued good service/quality brand strategies but none has been able to match with the branded airlines in consistency, commitment, and true permeation of the brand in every facet. Branded airlines have been able to maintain their brand advantage by not wavering from their brand strategy. This is a particularly difficult position to maintain in a highly cyclical industry where the competition seems to react on a daily basis to changes in performance. This type of commitment takes dedication from the board, CEO and senior management team, and strong faith in the brand’s ability to pull through bad times. The management team and shareholders must maintain a longer term outlook to avoid making short-term, reactionary decisions which dilute the brand.

For example, pressure on US airlines stemming from low-cost carrier competition has caused a number of the full-service airlines to begin charging for on-board services which used to be free. Historically, business travellers were willing to pay a premium for full-service airlines, essentially because they provided these services. By abandoning their customer service strategy, even on restricted flights, the premium US airlines are diluting their brand in search of short-term profitability. This is creating a circular effect where the premium airlines are losing cost-sensitive customers to low-cost airlines, which causes them to reduce price to retain these customers. This in turn creates more cost pressure. This cost pressure causes them to start reducing the premium services which made them distinct from the low-cost airlines in the first place.

Branded Airlines has been able to deliver some of the best results in the industry by avoiding this type of reactionary behaviour.

Cost advantages for the Branded Airlines

Branded Airlines’ brand strategy is, in theory, a relatively high-cost strategy. Each brand benefit requires significant investment, careful management and detailed implementation programs to live up to the brand promise. Branded Airlines has carefully built a financial and fixed cost infrastructure which allows them to continue investing to support the brand while challenging the competition on costs.

First, the strong cash position allows Branded Airlines to internally fund purchases of new equipment and airplanes, and limit interest costs. Which is not locked into long-term leases, and can easily accommodate newer, more efficient equipment which minimizes maintenance costs and avoid aircraft downtime.

A second benefit of Branded Airlines infrastructure is the age of their fleet. Maintaining the youngest generation of aircrafts provides with some of the lowest fuel costs in the industry.

Finally, the financial and cash position has allowed Branded Airlines to weather the short-term dips in the industry better than the competition.

Result of the Branded Airline

Emirates Airline has maintained its position as one of the best-known and best-performing brands in Asia, and remains one of the few consistent performers in an industry where established brands are struggling to stay alive. It has followed a very simple management formula to achieve outstanding results:

Revenues: Command a price premium through consistent brand benefits and avoid reactionary pricing behaviour in order to condition the customer not to wait for price matching.

Costs: Tight control of costs though ownership of the most cost-efficient aircrafts, hedging against fuel price increases, and agile management of the entire company etc.

Profits: Run the business with a long-term outlook. Be consistent. Stay true to the brand.

5.0 Recommendation and Conclusion

According to the research it is clearly viewed that there are a big numbers of airlines in the market, from those some are operating with good brand image and some are very ordinary.

Good branded airlines like emirates’ is totally following the differentiation strategy and ordinary airlines are following cost based strategy which is for price sensitive customers.

Though most of the customers are price secisitive but for the safty of life they are going for branded airlines because branded airlines got the high quality service, flexibility, reliability, availability and safety and sequrity for there customers.There is one more factor which is influencing the customer to go for branded air lines ,is frequency of the flight.