MARKETING CHALLENGES FOR AER ARANN

Marketing Challenges for Aer Arann

Marketing Challenges for Aer Arann

Question 1

A marketing audit is a systematic examination of a business marketing environment, objectives, strategies and activities, with a view to identifying key strategic issues, problem areas, and opportunities. It provides the basis upon which a plan of action to improve marketing performance can be built (Geracimos 2001 pp 23-157).

Macro Environment

Government influence: policies (open skies policy), legislations, creating domestics routes, subside for PSO

High fixed cost environment, rapidly changing environment, unstable market

Demand directly related to business cycles

Evolution of price strategy in function of the customer category (leisure, business,)

Technological revolution: online sales (disintermediation), reduction of operational costs

Evolution of the whole physical environment: weather, foreign exchange, industrial disputes, change of oil price, terrorism events

Economic

The economic environment can have a critical impact on the success of companies through its effect on supply and demand. Companies must choose those economic influences that are relevant to their business and monitor them. In booming economic times, people have more disposable income and proportionately more is spent on leisure, holidays and air travel. Unlike industry booms, there is more money spent on business travel. But during recessionary periods, less is spent on both business and leisure travel. The state of global economies influences demand for air transport. Exchange rate fluctuations can also impact on demand for air transport, with passengers choosing destinations offering good value for money (Tiernan O'Dwyer and Carroll 2005 78-96). Aer Arann's route to UK, as pound to euro exchange rate fluctuations is important to Aer Arann.

Technology can have a substantial impact on companies' fortunes. Information technology describes the broad range of processes and products within the fields of computing and telecommunication. The internet technology has allowed companies to use new channels of communication and distribution to reach consumers easier and it provides new opportunities for marketers. The online sale has revolutionized the distribution system operated by many airlines. The traditional middle link provided by travel agents has been removed. This is called disintermediation. At moment that customers can deal directly with the airline through either call centres or the internet, thereby reducing costs.

Political and legal forces can influence marketing decisions by setting the rules by which business can be conducted. (Principles ad practice of marketing, 5th Edition pg 79) In addition, it controls the tendering process for PSO routes. But now airlines have the right to operate domestic routes in another EU member state under this new legislation.

The Market

customer analysis including who they are, what choice criteria they use, how they rate competitive offerings and how the market is segmented

distribution analysis, which covers significant movements in powerbases, channel attractiveness analyses, physical distribution analyses and analysis of the role and interests of decision-makers and influences with distributor organizations

Customers are at the centre of the marketing philosophy and effort, and it is the task of marketing management to satisfy their needs and expectations better than the competition (Lindsay et al 2000 355). Customer's interest can influence the air transport, with passengers chooses different service ...