a New B2B for an Airline [2 of 2]

One consumer-centric B2B Market Segment


Among the variety of business-to-business opportunities available to the airline industry what would seemingly be the most obvious are the services currently being provided by a separate tier within the industry, charter services. So well developed is this alternative tier within the industry that it would make no formal sense for legacy airlines to attempt any inroads in any meaningful way short of simple business alliances (or they would already have done so).

An alternative to this is to market fungible packages to corporate purchasing departments of its commuter lines. One expects that this is already variously established (corporate accounts), and continues to evolve as circumstances dictate. That is to say, that various carriers have likely already played in this arena and where it deemed to be working, they are still working it.

One market segment that in some form or another smaller carriers and charters have had success with that the larger airlines seem to have left on the table involves the opportunity to partner with event providers, in this case the most logical target would be a database of business conference creators. Historically, this is a niche that either travel agencies have pursued or the conferences themselves have (with general, modest success)(University at Sea, 2009). However, to approach this from the comparative powerhouse that is a major airline is a different matter.

Suddenly the idea has networks, marketing capabilities and efficiencies the neither the travel nor conference industries could afford.

The ability to know in advance, sometimes as much as a year or more, of the given event carries financial reward. To network proactively marketing said event to the key corporate individuals who would make best use of the event, make a decision as to who would go to such an event and/or have decision-making authority to pay, calls for a number of considerations. Firstly, with such lead time the ability to "offer a deal" as well as secure advance payment are both attractive enough for any legacy carrier to consider pursuing this idea. As for whom to target with such marketing this sensitive area needs to a corporate by corporate consideration. One has to assume legacy airlines have maintained corporate consumer histories and other related databases (for buying center targeting, etc.), and must therefore already have a focus on where their strengths and weaknesses lie (with regards to which conferences to seek out … by subject matter, by distance, by frequency, etc.).

Beyond pairing that which is already in place, a parallel pursuit could seek to inspire coordinators of certain conferences to custom develop content for a legacy airlines preferred corporate alliances. Other developmental insights that the larger carrier can leverage with conference coordinators (beside obvious considerations like volume discounts, coordination of nearby accommodations and the like) should include seeking to pool best time periods (whether this be an optimal time period for the airline itself, or an optimal time period for the industry generally, or even a prized corporate alliance).

This would constitute a Blue Ocean of systems buying (for likely a very brief period of time)(Kim & Mauborgne, 2005). It seems the only way to elongate the period of competitive advantage is to make the pursuit of such a project operationally strategic intellectual property, maintain secrecy and roll it out with a parallel marketing campaign so it all hits at once. For other carriers to catch up they’re likely to make various errors in their rush, compromising competitiveness as they approach a semblance of parity, giving the initial carrier an opportunity the establish (if only relative) superior brand presence.



Concluding Thoughts - Measuring the Return on Marketing

A legacy airline could approach ramping up such a project in seeming innumerable ways. As such, committing any measurement model in particular seems presumptuous. Is there a need to measure (?) – Absolutely; and one would recommend in every way they can think of. Nonetheless, until a full roll out is worked up thoroughly, the larger measurements cannot come in.

Still, let us take, say, American Airlines. Consider a pilot project in conjunction with INSEAD to offer CEUs for Accountants who seek to maintain a designation (CPA, CMA, CIA, etc.). Something like this could be completed start to finish as a rouge AA project without drawing attention to the other carriers. All aspects of this tentative expression are measureable. In addition, one could contrive a variety of other ways to “test the waters”.

Whichever carrier ran with such an idea would simply have to understand that they would be creating a business unit under the parent corporation’s umbrella, and pursue whatever steps they felt prudent.



References

Kim, W. C., & Mauborgne, R. (2005). Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant. Boston, MA: Harvard Business School Publishing.

Kotler , P., & Keller, K. L. (2009). A Framework for Marketing Management, Managing Marketing in a Global Economy (4th ed.). Upper Saddle River, NJ: Prentice Hall .

University at Sea. (2009). University at Sea / Travel Max Northeast (Service Provider). Retrieved from University at Sea: http://www.universityatsea.com/