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Paper Topic:

Challenges of delivering superior value in the airlines industry

Running Head : Challenges of Delivering Customer Value

The Challenges of Delivering Superior

Customer Value in the Airline Industry

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Abstract

Creating and delivering value for customers in the industry pose some challenges . These challenges include identifying the market segments building customer loyalty , and reducing costs . The tight competition within the airlines industry and varying needs of customers has become a problem in identifying the market segments and creating customer value Determining the customer value that can enhance customer loyalty is also one of

the challenges that hinder delivery of superior customer value Finally , the financial turmoil caused by the aftermath of 9 /11 tragedy made it difficult for airlines to create and deliver customer value at a reduced cost

The Challenges of Delivering Superior Customer Value in the Airline Industry

The various services offered by every airline and the presence of several major players in the airline industry have caused tension and competition to increase . Thus , for an airline company to survive the tight competition , it is of utmost importance to gain competitive advantage . To achieve this , airlines need to deliver superior customer value . The biggest challenge , however , is how to define , measure , and create customer value , i .e , the worth of the products and services of a firm in the eyes of the customer (Anderson , 2007 . This is why customer value management has become a crucial part of strategic marketing specifically in the management of business markets (Anderson , 2007 Duby Renaghan , 1999a cited in Minghetti , 2003 . By managing customer value airlines would be able to create and deliver superior value for their customers

Identifying the products and services that customers look for in an airline can help in creating and delivering customer value . The International Civil Aviation Association (Appendix A , 2003 ) enumerated the common factors and services that airlines should provide

offering the lowest fare available allowing reservations to be held or cancelled providing prompt ticket refunds advising passengers regarding an airline 's commercial and operational conditions ensuring good customer service from code-sharing partners providing notification of delays , cancellations , and diversions assisting in case of delay including long on-aircraft delays handling passengers denied boarding with fairness and consistency delivering baggage on time responding to customer complaints and properly accommodating disabled and special needs passengers (cited Scheraga , 2004

These are the services that determine most of the customers preferences , which , in turn , affect customer value . How to provide them therefore , is the challenge for airlines

This aims to discuss the challenges of delivering value for airline customers . Based on the author 's research , some of the hindrances to delivering customer value include : getting to know the customers to identify the market segments within the target market creating value that can build customer loyalty and delivering value while reducing costs

Challenge 1 : Identifying Market Segments

The tension brought by the tight competition in the airline industry calls for the need to get to know the customers better , to understand them , and to respond to their needs and...

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