Essay on As Planes Get Bigger, the Market-Place Gets More Competitive

1795 Words Oct 11th, 2010 8 Pages
CASE STUDY 3

AS PLANES GET BIGGER, THE MARKET-PLACE GETS MORE COMPETITIVE

I- INTRODUCTION

Globalisation rapidly changes marketing environment and marketplace become more competitive. It is no longer enough for company to be driven by product and technology without building customer relationship (Kotler, Adam, Denize and Armstrong 2009). Moreover, “business success is not determined by the producer but by the customer” (Drucker 1973 cited in Kotler et al. 2009, p. 4). Thus, in order to achieve organisation’s goals, marketing management needs to be flexible to adapt continuously changes of the environment.

II- DISCUSSION

Question 1: Microenvironment of air travel industry
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3- Economic environment: The demand for air travel associates with income and economic growth rate (Shaw 2004). Demand for air travel is very elasticity (Shaw 2004). In time of prosperity, people demand more for recreation and business travel. In contrast, period of an economy downturn could spell disaster for the airline industry as disposal income drops lead to demand for air travel drops (Airlines to rise above financial turbulence 2009).

4- Natural environment Airline industry depends heavily on fuel to run the business. Rising fuel prices which result many air travel companies went into bankruptcy, merge or alliance, struggling to stay afloat (Brown 2010). Moreover, the issues of environment give pressure to airline industry as a major cause of fuel emission that impact seriously the environment (air pollution, global warming).There are many concerns and control by government and public on the way airlines operate which aim to protect and reduce the harm cause by this industry to the environment. Therefore, it largely impacts marketing activities (Kotler et al. 2009)

5- Cultural environment: “People grow up in a society that shapes their basic beliefs and value” (Kotler et al. 2009, p.107). Thus, each national group has specific wants, expectation, motivation and different buying behaviours. Marketers must beware

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