Marketing Consumer Behavior: Segmentation, SWOT Analysis, and United Airlines
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This article discusses the marketing environment, market segmentation, SWOT analysis, and how United Airlines uses segmentation to grow. It also applies SWOT analysis to United Airlines, highlighting its strengths, weaknesses, opportunities, and threats.
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Marketing consumer behavior1 Marketing consumer behavior Name Student ID Institutional Affiliation
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Marketing consumer behavior2 Question 1 a-Define Marketing environment The marketing environment refers to the internal factors (distributors, retailers, shareholders, customers and employees, etc.) and the external factors (economic, technological, social, legal and political) that influence and surround operations of marketing. b-Explain how changes in the demographic, cultural, and economic environments affect united airlines decision A marketing environment consists of various elements that affect the way individuals and organizations sell and buy their services and products. The elements usually vary by markets, products, industry and location, but they are also inclusive of social influences like economic, cultural and demographic factors that have affected the marketing decisions of the United Airlines. The demographic factors include age affect the demand for air travel which has significantly increased over time which has resulted in a change in travel preferences among the current generation. In addition, the demographic, cultural and economic environments play a significant role in forecasting demand by United Airlines. For example, in the tourism and travel future of the United States will be defined by the millennial generation growth which includes the 16-34-year-olds (baby boomers). The spending on air travel by people who were born is anticipated to decrease significantly. Research byDotson, Clark and Dave (2008 p.665)shows that in the United States, the millennial generation is the future of the tourism and travel industry. Currently, the baby boomers’ needs are driving the travel industry in the United States. In the next 5 – 10 years, it is expected that the baby boomers will enter their traveling, spending and earning years. Therefore, there is an expected increase in their business travel by a growth of fifty percent by 2020. However, in the next fifteen years after that, it is
Marketing consumer behavior3 expected to remain strong. Since the baby boomers are currently the active customers, their spending on business travel is expected to decrease to sixteen percent by 2020 (Greer, 2008 p.421). Therefore, the high scores of customer satisfaction of major United States Airlines, their decisions in segmenting the market and the demographic, cultural and economic environments have increased the focus on the satisfaction of dynamic customer travel preferences so as to remain successful. Question 2 a-Define Market Segmentation, Market Segment, Targeting and positioning A market segment refers to a group of individuals, organizations or groups who may share similar characteristics, traits and interests (Dolnicar, 2008 p.134). The segments of consumers may have the same expectations, wants and needs. Therefore, organizations should strive to understand the particular market segments they should serve by first determining the ways which are most appropriate to differentiate and distinguish their segments. On the other hand, market segmentation is the actual process of the identification of market segments and the process of dividing a large base of customers into smaller consumer sub-groups that consist of prospective and existing customers (Natter, Mild, Wagner & Taudes, 2008 p.603). Market segmentation is a process that is consumer oriented and is applicable to almost all types of markets. In the segmentation and division of markets, organizations typically look for characteristics that are shared including similar demographic profiles, lifestyles and needs. Therefore, market segmentation assumes that different market segments require different programs for marketing since many customers are usually targeted through various combinations of market variables, distributions, promotions, prices and offers.
Marketing consumer behavior4 Market targeting commences after the completion of market segmentation, whereby the organization identifies all untapped marketplace needs since various customers may not be adequately being served by competitors. The final stage is product positioning, which refers to the specification of the position in which the company wishes to occupy in the minds of their target customers relative to the services and products of competitors (DeSarbo, Grewal & Scott, 2008 p.288). b- Explain how united airline use segmentation to grow The United Airlines has used market segmentation to grow through the offering of diverse ranges of services and products that are customer focused. Since the airlines operate in a service-based industry, the services required by the customers have been placed at the center of their marketing strategy through segmentation. Besides offering convenient scheduling throughout its international and domestic routes, United Airlines has sought to attract customers who are high-yielding in order to earn their loyalty and preference. Question 3 a-Define SWOT analysis According to Helms and Nixon (2010 p.215) SWOT Analysis is a widely known tool for analysis and audit of the overall environment and strategic position of an organization. It’s widely used for the purpose of identification of business strategies for the creation of a business model which is specific to a particular firm for the alignment of the company’s capabilities and resources to the requirements of the environment in which the business operates.
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Marketing consumer behavior5 b. Talk about its components SWOT stands for Strengths, Weaknesses, Opportunities and Threats. According to Bull et al. (2016 p.103) strengths are the qualities that enable businesses to accomplish their mission, which are the factors through which an organization can make and sustain continued success. Weaknesses refer to the qualities preventing organizations from accomplishing their mission to achieve maximum potential. Opportunities refer to aspects presented by the environment within an organization’s operation. Threats are conditions that arise in an organization’s external environment and which place the reliability and profitability of an organization in jeopardy. The United Airlines faces threats of failure in meeting its financial targets and geopolitical upheaval and trade wars due to poor market segmentation strategies. With respect to the article above c-As a united airlines owner or manager, apply SWOT analysis to your business The United Airlines strengths include favorable investor metrics, whereby among the three largest global networks in the United States, the airline is the only one that has posted an increased share price through late July 2018. In addition, the airlines have an operational performance which is improving, through its market segmentation strategies. The airline also earned a four-star ranking due to its timely performance between June 2017 and May 2018 (Quinn & Worline, 2008 p.502). The United Airlines has the opportunity to successfully executing its market segmentation strategy to capture specific groups of customers which will assist in the company’s profitability. Additionally, the airline has an opportunity of instilling a cultural change which is lasting by engaging in employee training programs for better customer services.
Marketing consumer behavior6 United Airlines has weaknesses due to challenges in sustaining a positive brand image through the battling of negative passenger events of high profile. The airlines also have uncertainties over scope which has been a great weakness. The United Airlines faces threats of failure in meeting its financial targets due to poor market segmentation strategies and geopolitical upheaval and trade wars. However, the company has assured of its flexibility of addressing trade wars or a recession through retiring aircraft that are older and returning aircraft off-lease.
Marketing consumer behavior7 References Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework.Ecosystem Services, 17thed., Netherlands: Elsevier, pp.99-111. DeSarbo, W.S., Grewal, R. and Scott, C.J., 2008. A clusterwise bilinear multidimensional scaling methodology for simultaneous segmentation and positioning analyses.Journal of Marketing Research. AMA Publications: America, pp.280-292. Dolnicar, S., 2008. Market segmentation in tourism.Tourism management, analysis, behaviour and strategy, pp.129-150. Dotson, M.J., Clark, J.D. and Dave, D.S., 2008. Travel motivations and destination activities of young travelers of different ages: An empirical study in the united states.International Journal of Management, 4thed. Proquest: United States, p.665. Greer, M.R., 2008. Nothing focuses the mind on productivity quite like the fear of liquidation: changes in airline productivity in the United States, 2000–2004.Transportation research part A: policy and practice, 2nded. Netherlands: Elsevier, pp.414-426. Helms, M.M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review of academic research from the last decade.Journal of strategy and management, 3rded., Emerald group Publishing: United Kingdom, pp.215-251.
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Marketing consumer behavior8 Natter, M., Mild, A., Wagner, U. and Taudes, A., 2008. Practice Prize Report—Planning New Tariffs at tele. ring: The Application and Impact of an Integrated Segmentation, Targeting, and Positioning Tool. Marketing Science. 4thed. Informs publications, pp.600-609. Quinn, R.W. and Worline, M.C., 2008. Enabling courageous collective action: Conversations from United Airlines flight 93.Organization Science, 4thed., Informs publications, pp.497-516.