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ASPECTS OF MARKETING APPLICATION WITHIN AIRLINE TRAVELLING COMPANIES. THE CASE OF ALBANIA
 

ASPECTS OF MARKETING APPLICATION WITHIN AIRLINE TRAVELLING COMPANIES. THE CASE OF ALBANIA

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    ASPECTS OF MARKETING APPLICATION WITHIN AIRLINE TRAVELLING COMPANIES. THE CASE OF ALBANIA ASPECTS OF MARKETING APPLICATION WITHIN AIRLINE TRAVELLING COMPANIES. THE CASE OF ALBANIA Document Transcript

    • Revista de turism [Nr. 6] ASPECTS OF MARKETING APPLICATION WITHIN AIRLINE TRAVELLING COMPANIES. THE CASE OF ALBANIA Associate Professor Ph.D. Areti STRINGA, Faculty of Economy and Business, University of Tirana, Albania ABSTRACT 2. METHODOLOGY OF RESEARCH The objectives of the research were definedthrough the following tasks: The airline companies are markedly exposed to 1. To synthesise the features of daily challenges and needs for permanent differentiationmarketing activities of the airlines operating on the from their competition – the services of many airlinesAlbanian market and establish their strengths and offer similar concept of benefits as they are providedweaknesses. on the same type of aircraft and destinations. In 2. To analyse and establish if there are comparison to the competition - the services of manymarked differences in marketing activities of the airlines offer similar concept of benefits as they areairlines operating on the Albanian market. provided on the same type of aircraft and destinations. Different sources of primary and secondary In comparison to the competition, how the services aredata were used in analysis of services marketing of provided and their quality still remains the mainairlines operating on the Albanian market. The nature source of differentiation. That is why the airlines areof the research was exploratory. Primary data were among the leading service companies. The objectivesmostly gathered from expert opinion by means of of the research were defined through the followingpersonal interviews. The depth interviews took place tasks:in offices of the respondents.  To synthesise the features of daily marketing activities of the airlines operating on the Key words: airline, marketing, travel service, Albanian market and establish their strengths andmarket, customer. weaknesses;  To analyse and establish if there are marked JEL classification: M31, L93, M10. differences in marketing activities of the airlines operating on the Albanian market;  Different sources of primary and secondary 1. INTRODUCTION data were used in analysis of services marketing of airlines operating on the Albanian market. Statistical National economies of developed countries are publications, international magazines, books anddominated by the service sector. In their efforts to internal sources of some of the airlines were the mostdifferentiate and diversify from competition, the frequent sources of secondary data. Time seriescompanies in the service sector are developing yet models were used for data analysis.unknown marketing and management models. Their The nature of the research was exploratory.competitive edge is that they provide services but in Primary data were mostly gathered from expertrelation to achieved satisfaction and loyalty of the opinion by means of personal interviews. The depthcustomer as well. The features of the service sector in interviews took place in offices of the respondents.the Republic of Albania are still very different from The unstructured – undisguised questionnaire wascharacteristic features of such sectors in the developed used. Interviews were carried out with the managers ofmarket economies. Nevertheless, and as a reflection of airlines’ representative offices or members of theirmany different changes that have occurred in the past management and the purpose was to obtain, on thetwelve years in political, business, cultural and basis of their company business activities and theirlegislative environment, service companies on the experiences, opinions, views and answers to theAlbanian market are constantly faced with business questions determined by the objectives of the research.regulations and attitudes characteristics for companies Quota sample was intentional and it comprisedfrom developed service sectors. The gap is narrowing twelve world renowned airline companies: Albanianand the importance of the service sector is increasing. Airlines, Alitalia, Malev, Ada Air, Austria Airlines,Gathering of the statistical data for the service sector Olympic Airlines, Turkish Airlines, Adria Airlines,is made on the basis of the data from “Statistical Swiss, Jat, Hemus Air and Club Air.Yearbook 2004” where the service sector in 2004contributed to 64.4% of employment and 65% ofgross domestic product. 30
    • Journal of tourism [No. 6] The list of airlines according to their number of passengers Albanian Airlines Alitalia 2,7 2 1,3 0,8 Malev 6,7 Ada Air 0,1 28,8 7 Austria Airlines Olympic Airlines 9,6 Turkish Airlines Adria Airways Swiss 9,6 19,5 Jat 12 Hemus Air Club Air Figure 1. The list of airlines according to their number of passengers Airlines according to thier number of flights Albanian Airlines Alitalia Ada Air 3% 2% 0% Malev 5% 3% Austrian Airlines 5% 31% Olympic Airlines 6% Turkish Airlines Adria Airways Jat 10% Hemus Air 12% Swiss 11% 12% Club Air Figure 2. Airlines according to their number of flights 3. ANALYZIS OF THE AIR financial indicators in the air traffic in period 1991 –TRAVELLING MARKET 2003 show the following:  Demand for air traffic services expressed Recent profitability of airline companies has through passenger numbers shows constant growth.not been too high. The business has been limited to Only in two years an insignificant drop in the numberbare survival. Here, the airlines tend to explain the of carried passengers was recorded;causes of their problems through structural difficulties  Total operating revenues show constantthat the industry is faced with and through their growth, but their growth is not matched by adequateinsufficient size due to which they are not fully able to profit;enjoy the benefits of scale economies. Demand for air  Despite constant growth in demand and intraffic services and its permanent growth were not total operating revenues airlines recorded significantmatched by respective financial results hence losses, both operating and net, on two occasions. Losssimultaneous coexistence of high demand growth rate intervals were simultaneous to periods of greatand decline in profitability became one of the most economic crisis,important features of modern air traffic. Physical and  Strong demand, deregulation and free market entry of new airlines led to the fair that the 31
    • Revista de turism [Nr. 6]existing capacities would be inadequate. As a business premises, and accommodation prices forconsequence, orders for new aircraft rose hugely. The crew which are too high and not competitive. Theynumber of aircraft on the market grew two times faster also underline the payment problem. Late payments orthan the demand for air traffic services. The difficulty to collect payment for provided services isconsequence of this was many more seats than characteristic for entire Albania and is a result of lackpassengers. Overcapacity led to lower prices and of financial discipline. Most airlines also point to lowdecline in average yield per passenger or per flight. prices and payment benefits as dominant demand Observing business activities of the leading features of air traffic services on the Albanian market.airline companies it is possible to single out some ofthe factors that might have a significant influence on 4.2 Customer’s features on the Albanianthe successful financial results of an airline company: market  Basic features of airline’s route network;  Basic features of flight economics derived The research findings reveal that significantfrom passenger load factor, duration of flights and changes have occurred in the area of market segments.frequencies; Genuine tourist passenger segment has almost  The role of computer reservation systems, vanished while ethnic travelling (visits to relatives andFFP and concentration of flights through hubs; friends in Canada, USA, Australia, and Western  University educated company management Europe especially Italy, Greece and Germany) havewith good experience in economy; gained prominence. Unfortunately strong business  Corporate costs; passengers segment does not exist (e.g. business  The influence of deregulation and people fly in economy class or even worse, buyliberalisation of air traffic; complete package as the cost is lower than price of business class ticket). In recent years, refugees,  Disloyal competition from airlines. displaced persons and members of international forces The majority of above mentioned factors bear formed a specific segment. The main reason behindno direct relation to the size of company, except the changes in the market segmentation lies, and thismaybe ownership of computer reservation system.Namely, every company can try to fly at low costs, view is shared by most airlines, in the price which is the key element in the selection of an airline company.build an efficient route network and employ Some companies stated that the demands of Albanianexperienced management. Equally, institutionalproblems such as regulation, that is deregulation of air passengers in terms of the services standards were not much different from other markets – passengers aretraffic, allowing of airline companies to come under increasingly aware of what they can demand and thatprotection of “Chapter 11”, which entire industryfaced, could not bear all the blame for bad financial is how they behave. Some companies stated that it was easier to satisfy Albanian passengers as they still didresults. Primary causes must be sought in bad not demand details (as oppose to passengers fromplanning within companies themselves, inefficientadjustment to changes that economic crisis brought developed Western countries). Evident is also the view that Albanian passengers select airline companyabout, Gulf War, Afganistan and Iraq War and the out of “habit”, that is they are not fully informed aboutincrease in fuel cost, factors that were beyond controland could not be anticipated. full range of services offered on the Albanian market. 4.3 Internal marketing 4. THE BASIC FINDINGS OF RESEARCH The findings of the research show that each What follows is the presentation of the findings airline has defined staff policy, but they significantlyof the research on the marketing of services by the differ in concrete actions that are created andairlines operating on the Albanian market according to implemented in order to educate, motivate, award andindividual areas of the marketing of services. build staff loyalty. In certain number of companies the governing form of education is self – education 4.1 Specifics of operating on the Albanian through manuals prepared by companies or coursesmarket (formally not a condition for promotion, but in reality yes). Education (basic and advanced) is organised in Despite the differences in the time length and company’s headquarters or through chain processcontinuity of their operations on the Albanian market,and also in the importance that the Albanian market where the knowledge is passed from headquarters to regional centres, and finally to staff in the localhas for each respective company, it could be representative offices. Alternatively, representativeconcluded that they share common assessment aboutthe specifics of operating on the Albanian market. office in Tirana has the status of profit centre and that determines the nature of bonus for achieved results. ItGenerally they feel that it is an expensive market. is not unusual to observe declining staff loyalty inTheir arguments for such assessment are landing,cargo and passengers handling fees, prices for aircraft such companies – there is no enthusiasm, and no extra efforts are put to keep the staff. Finally there arecleaning and maintenance, catering prices, leases for 32
    • Journal of tourism [No. 6]companies that stand out for their exceptional care for 4.5 The service qualityinternal marketing and human resources management.Loyalty of staff and keeping of the best can be All companies deem the quality of services asachieved through combination of methods and the main tool in gaining and maintaining competitivetechniques and the most important ones are: team edge position on the market. Passengers compare thework and aspiration towards company’s common benefits of services provided by respective companiesgoals, continuous investment in staff education and but are not interested in how much has been investedtraining, active involvement of staff in decision in development of services. The quality of service is amaking in all levels, stimulation of self – initiative, very important area of investment and the followingremuneration by achieved results, profit sharing. investment areas should be emphasised:Among such companies it is not rare to find those that  New aircraft;are characterised by informal structure –  Improvements in aircraft comfort;personalization of relations is present, staff,  Changes in the services offer – passengerirrespective of their position in the company, is on the classes are becoming increasingly frequent: economyfirst name terms. and enhanced business class;  Enhancement of in – flight and ground 4.4 Conduct towards customers services;  New corporate identify; All airlines underlined that the market research  Strategic alliances due to changes inwas one of the fundamental functions of marketing demand (declining) and other trends on the global airand its importance for business was indisputable. traffic market (Above statements are not in the orderHowever majority does not carry out local market of importance).surveys and their main arguments are lack of staff and Consistent quality of service is necessary fortime for such tasks. Some airlines included the all markets, and there are no reasons why companyAlbanian market in customer satisfaction survey that standards should not also be applied on the Albanianwas carried out on flights where Tirana was either market.arrival or departure airport. Passenger complaints weremostly about lost luggage, check – in (here airlines 4.6 Strengths and weaknesses of the airlinehave very little say as service is provided by airport), companiesaircraft delays, unsatisfactory in – flight service – e.g.food in the economy class. In Albania lost luggage All companies are in agreement that in thecomplaints are predominant and are solved locally. creation of services to be offered to potentialMost companies have general guidelines and passengers, irrespective of their origins, particularflexibility up to a certain level is tolerated; however attention is given to spotting and emphasising ofcertain issues such as the refund level are strictly competitive advantages and constant efforts toregulated. The companies also tend to satisfy the overcome their weakness. Globally, airline companiescustomer as much as possible. If a passenger is not underline the following features as their strengths:happy with offered solution, he or she is referred to  Numerous destinations and quality timeclaims department which is either located in the table;regional office or in headquarters. Some companies  Punctually, reliability and safety (particularhave very elaborate complaints systems (as a part of characteristic of top ranking airlines in terms ofcompany’s general standards manual); if complaint service quality);type and how – to – handle – it guidelines are not  Strategic alliances that result in greatercovered by the system, managers in the regional centre market coverage and synergy effects by joint use ofor company headquarters are contacted. The loyalty of company’s individual strengths;Albanian passengers is not on the level that thecompanies would wish. Loyal passengers do exist but  Professional conduct towards passengersmost of them will explore competition’s offer and will (e.g. relaxed or even friendly conduct towardspurchase the ticket from those that offer better passengers, prompt reaction in the case of customer’spayment conditions. Economy class passengers are complaint);underlined as the most interested in the programme.  Professional conduct of staff;Most of these programmes are characterised by  Air craft comfort (on long haul flights incollection of air miles (including hotels, car hire) and particular);large and versatile selection of awards (free flight  In – flight service (catering, entertainment);tickets, free package tours).  Good airport service;  New and modern aircraft;  Corporate image and identify;  Attractive prices;  Attractive loyalty programme. 33
    • Revista de turism [Nr. 6] In fierce and uncompromising competition, the The research results reveal that day to daystrengths of one company often become the weakness marketing activities on the Albanian market areof its competition. As stating of individual strengths clearly not different from standards and practices usedand weaknesses would be beyond the objective of this on other, domestic and international markets.research, these issues have not received detailed Albanian market has its specifics but requiredconsideration. Among particularly conspicuous adjustments by airlines operating on the Albanianstrengths for the Albanian market the companies market should not demand drastic divergence fromindicate; good timetable that offers daily connections company’s global marketing strategy.even with the most distant destinations, attractive In conclusion, the major task for theprices, good relations with agents – which serve as management of airlines operating on the Albaniandistribution channels, professional conduct of staff in market should be to learn lessons from hitherto crisisthe representative office, interesting offer of “stopover and to respond with adequate business strategy. It isprogramme” with possibility to stay in one of the necessary to find means for more efficient control ofdestinations that is neither passenger’s departure point operating costs and to improve load factors. Profitnor final destination. The companies recognise certain should not be increased through price increases at theweaknesses present on the Albanian market and not expense of passengers. On the contrary, throughelsewhere; price policy on the market that demands restructuring of existing flight network and increasedattractive prices and payment conditions is not productivity significant cost reduction could becompetitive; potential customers are not informed achieved and that could lead to lower prices forabout company’s offer (they a priori consider customers. I recommend better forecasting ofcompany as expensive or attribute the image of economic trends, planning, and more cautions andcompany exclusively catering for business class prudent decisions in the development of the companypassengers). exposure to destabilising effects of economic crisis. 5. CONCLUSIONS ANDRECOMANDATIONS REFERENCES Considering that internalisation of Albanian 1. Bateson, John E.G. (1989) Managingeconomy is necessity, and that Albania intends to Services Marketing. Text and reading, Dryden Pressexport through tourism, the air traffic services become 2. Christian Gronroos (May, 1983), Strategickey element in developing and maintaining of Management and Marketing in the Sector, Cambridge,Albania’s competitive edge in a service sector but of MA, Marketing InstituteAlbanian economy in general. All airlines that took 3. Coivell, Donald (1984). The Marketing ofpart in the research are characterised by their very Services, London: Heinemannhigh level of international business. Because 4. Heskett, J.; Sasser W.E. (1990): Serviceknowledge about their marketing practices and Breakthroughs- Changing the Rules of the Game, Newperformance in Albania was not extensive, the York, NY, the Free Pressexploratory research was carried out. As stated earlier 5. Wells, A.T., (1989) Air Transportation: Ain the paper, the general objective of the research was Management Perspective, Wadsworth Publishingto gain insights and ideas about similarities and/or Companydifferences among marketing practises and 6. Belmont CA. Statistical Yearbook 2002 &performance of surveyed airline companies regarding 2003Albania and other markets of their operations. 34