Service and Relationship Marketing in Australian Airline Industry

EXECUTIVE SUMMARY

Currently there are a lot of companies operating in the airline industry. There are some companies that focus on delivering good service to the customers while others focus on charging low cost fare to customers. In the Australian market, major players such as Qantas, Virgin Blue, Jet Star, and Tiger Airways have managed to survive in this highly competitive industry.

Tiger Airways is one of the budget airliners that occupy a decent market share in its targeted market. The airline is well known for economical price but suffers a reputation for delivering unsatisfactory service. Inadequate operating structure which may cause flight delay and other service failures are common frustrations for Tiger's customers. In fact "Chasing the Tiger" case study is an extremely appropriate illustration of a common mishandling of customers' experience and how the inadequacy leads to dissatisfaction.

Generally, our report would be analysing and evaluating the different pricing strategies whilst providing linkages to the customers' expectations and the companies' market position. While Qantas uses satisfaction based pricing, Virgin Blue mainly focuses on efficiency pricing concurrently incorporating several elements from the satisfaction based pricing. In contrast, Jet Star and Tiger Airways being budget airlines use efficiency pricing. By large, pricing strategies influence consumers' expectations indirectly. Customers in general are , when price is higher that they expect the services to be better.

Moreover this report also discuss about different supporting positioning strategy that undertaken by different airlines. Airlines can alter their positioning strategy by manipulate the level of divergence and complexity of the services. The evaluation on each airlines indicates that Qantas and Virgin Blue focus on mass market or penetration strategy by increasing the level of complexity of its service. Qantas is the most complex one because it enhance current services and add different range of services to capture more people in the market. Moreover, Jet Star's low complexity address that they use specialization positioning strategy. This strategy help Jet Star to focus in serving narrow segment which is the low cost segment. Furthermore, Tiger Airways has also reduce the level complexity by only have limited range of services and it indicates that they are using specialization positioning strategy. They also have element of volume oriented positioning strategy because cut the level of divergence by only having one class. This strategy help them to deliver lower cost for customers.

Finally the report evaluate the blue print of Tiger Airways services and identified how the blue print creates problem in the "Chasing the Tiger Case Study". The finding shows that the most probable service failure would occur