On the German passenger market, airlines approach different business concepts in order to cope with the threats and to be successful. The case of the Lufthansa Passenger Airline and its subsidiary Germanwings has been discussed many times currently. Together they have implemented a restructuredconcept of the Low Cost Carrier Germanwings in order to overcome their weaknesses. The purpose of this paper is to evaluate the potential of economic success of this strategy change. Therefore, the papercomprises three main areas. The first one is the theoretical part, which explains the differences between Full Service Network Carriers, Low Cost Carriers, Regional Carriers and Leisure Carriers. Secondly, the analysis takes place by applying Porter s five forces model. Subsequently, the strengths and weaknessesof the Lufthansa Passenger Airline and Germanwings are highlighted and the new business concept isintroduced. Finally, all findings are put into relation using the SWOT-analysis.
Textprobe: Chapter 2, Strategic Airline Marketing: 2.2.2, Price Policy: The price policy covers all decisions that have to be made on the fare that is charged for the final product. This includes, for example, decisions on discounts as well as on payment and delivery conditions in accordance with the overall marketing strategy of the company. In most cases price policy aims to maximize the profit. However, there is a range of other objectives that companies try to achieve nowadays. These comprise objectives regarding the company itself, such as an increased cost recovery, full employment or a stable position in the market, and objectives regarding the position in the market in general, such as the winning of new market segments and new customers, or the creation of a certain image. The price policy offers a wide range of strategies and instruments to find the right price for the offered products. However, not all of them can be used at any time to the same degree for any product or service due to different characteristics. This also applies for airlines. Their products consist of typical service characteristics. They are, for example, not storable and the production and the consumption take place at the same time, which means that the core product expires after the production, which in this case is the flight. The price building process of airlines therefore is very complex and depends on many factors, such as the point-of-sale, the target group, the season, etc. However, to keep it simple, it can be said that in general the price policy process can be divided into two phases. The pricing process, which indicates the fare levels for each product, and the revenue management, which states how many seats are to be sold at every level. Since this paper looks at the status quo of airlines business concepts and its effect on the customers only, it will not consider dynamic pricing strategies and the revenue management process in detail. Furthermore, it will not take into account, whether prices are based on the costs, the competition, or the value. The pricing process of airlines can be divided into two main stages. First of all a price level has to be set. It has to be decided whether prices are supposed to be on a low, a medium or a high level. The low price strategy is also known as promotion price strategy. It is usually used to sell a simple product with a few added services only. This strategy usually does not need much promotion since the low prices are promoting the product themselves. The high price strategy, in comparison, also known as premium price strategy, requires more promotion. This strategy is mainly used for selling more complex products, which include the core product as well as a range of augmented products. All price levels in between are known as medium price strategies. Some authors argue that airlines mainly apply the two major strategies; the premium price strategy or the promotion price strategy. However, today such a strict separation is nearly impossible since the price levels vary just as the products of the airlines do. There are prices available at a low, a medium and a high price level as well. Additionally, the No Frills Concept , also known as the A La Carte Pricing , has become more important recently. It allows the airline to sell the core product (the flight from A to B) separately and to achieve additional revenues by selling further services. These revenues are called ancillary revenues. Once a decision on the price level is made, a price differentiation takes place. This means that the same product is offered for different prices at the same time. Through price differentiation, the pricing process can get very complex depending on the overall business concept of the airline. Price differentiation is done in order to skim the highest possible consumer s surplus. However, the willingness to pay varies from target group to target group depending on different factors. Thus, a differen
Autor Susanne Bölke
Größe 220 x 155 x 7 mm
Produktgewicht 190 g
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