Assignment and Reflection about Principles of Marketing

MKTG 3723 – Penghao Wang

Assignment 3 (Chapter 8) 1. Go to the American Airlines website and explore the American Airlines Advantage loyalty program. This link will take you directly to the loyalty program page, but you will likely to need to click around and visit other pages for all the relevant information.

a) List and briefly describe the target market segments you see, as they pertain to the loyalty program.

The advantage of being a member of the loyalty program is that one is able to earn miles when they fly on American oneworld® and other participating airlines. The target segments are indicated by the what one can use with the miles earned. The following are some of the target segments that can be identified:

1. Business travels-One can also use the miles earned to fly to nearly 1,000 destinations worldwide. 2. Use miles to upgrade to first or business Class on American and select partner airlines. 3. Tourists-One of the things that an individual who has earned miles can use the miles for is on

vacation packages, car rentals and hotel stays. 4. Online shoppers-one can also use the miles earned to purchase retail products.

b) What bases for segmentation is American Airlines using?

Demographic segmentation Psychographic segmentation

c) Why do you think so? Provide specific details that link the loyalty program to the bases in your explanation.

Demographic has been used because there is specific type of American Airline that one has to use to earn miles under the loyalty programs. In particular, one has to use American oneworld®. The loyalty program target people engaging in travelling such as on business trips and tourist which goes into psychographic segmentation. This is evidenced by the way one can use the earned miles.

MKTG 3723 – Penghao Wang

2. Look at the American Airlines ads below, continue to browse their website, and take a look at some of their recent press releases.

a) How do you think they are trying to position American Airlines?

Safety and security-On October 03, 2018 the Airline lauded the Congress for passing the FAA bill that would provide needed certainty, enhance safety, and help the company better serve their team members, customers and airports throughout their network.

Meals-In a press released on September 24, 2018 the airline announced a partnership Zoes kitchen to introduce a new food-for-sale menu for customers seated in Main Cabin that will; offer delicious, light and healthy choices onboard. The aim is to elevate the inflight dining experience.

Convenience-In October 2, 2018 the airline announced the enhancing of 2019 schedule by increasing the number of destinations covered in Mexico, the Caribbean and Latin America from United States.

Comfort-In a press released September 25, 2018 explain how American Airline was named a “Five Star Global Airline” by Airline Passenger Experience Association (APEX). The rating is based on customer overall rating based on comfort, cabin service, food and beverage, entertainment and WI- FI.

b) What positioning base(s) are they using? Price and quality Product class Product user

c) Why do you think so?

This is because most of the activities that Airline is engaged in is aimed towards making the quality of the service superior to those of its competitors, through focusing on the needs of the user. For example, improving on meals, luxury and safety goes to the fact that the Airline is focused on product quality by investing in the user. Naturally, quality attracts class, therefore, product quality brings about class.

MKTG 3723 – Penghao Wang

3. Now, create a positioning map featuring American Airlines and 4 of their closest competitors. You may choose the competitors and the dimensions for your map. See Exhibit 8.3 on page 151 for an example. How you create your map is up to you – you can use Word’s shapes tools, create it in PowerPoint, or draw it by hand – but please put your image directly into this document.

Price Market Position

. United Airlines

American Airlines

Delta Jet Blue

South West

High

Low

QualityLow