American Airlines Value Pricing Case Study

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American Airlines Value Pricing
In 1992, the American Airlines (AA) was ranked as one of the biggest commercial carriers in the United States. The industry included advancements with inflight technology along with new and approved software application that pioneered the introduction of electronic airline advance booking systems. On the contrary, it may have exceeds technology expectations, the airlines and the industry as whole, was not able to meet or gain profit margins and meet customer’s requirements and expectations for the early 1990’s. A main concern for the transportation industry’s failure to deliver overall needs was caused in large part by the economic decline in the turn of the century. The specific industry chronicled huge losses,
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Also, differentiate services despite the approach of utilizing an innovative pricing method accompanies certain drawbacks. A wider and a constant marketing strategy should be used to entrench the policy of the value pricing policy (Bryan, 2006). One core objective of the value pricing policy begins with simplifying fares. An approach of providing prices into key segments should be put in practice because it will spawn a reduction of CRS costs and increase a better interpretation of ticket charges by the customers. Alternatively, certain limitations set on the discounted cost should be condensed in order to avoid the customers searching for other airline companies offering better rates. Another suggestion related to policy involves a creation of barrier on the dissimilar charges to protect the clients from shifting from the higher price fares to the cost with discounts through the differentiation of services, not only for the conveyance and a little bordering limitation (Crandal, 2011). American Airlines main objective was growth, the ability to expand their operations into further markets will enable the company to increase market share and increase long-term returns for investment. Lastly, the expansion in the market space will also prevent the decline in the profitability of the other competing airlines and prevent competitive pricing among its

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