According themselves to customers’ needs and also increased awareness

According
to Kotler, P and Armstrong, G. (2014, p 26)
stated that any business can survive if it is profitable and manage its
customer relationship. Therefore organisation has to focus on their committed themselves
to customers’ needs and also increased awareness of globalisation. However,
competition has created to retain existing marketing share and focus on
competitors before untouched market. Johny K.
Johanson. (2009). this report will
briefly discuss Marketing strategy, segmentation, targeting and positioning in
details. It will define; discuss priori segmentation and Clustering variable and
its importance. Furthermore, it will provide two airlines and shown the
synthesis and better understanding. And how these two organisations used them
in their marketing function and various views of authors will be discussed
after fundamentally concluded.  

Segmentation
is grouping the product together for specific target and understanding of
individual needs of different customers. Dibb,
Sally et al (2012, p 212) mention that “A market segment is a group of
individual or organisation exercising on or more related qualities. However,
organisations have to offer product and service for segmentation which will
helps and decide the targeting customers. 
Therefore, needs and wants of products and services can purposely made
to indentified segment to be given to customers who are comfortable to buy as
it would satisfy their needs.

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 Graham H, Nigel
F.P et al (2017, p 189) indicated
that “Market segmentation includes dividing a market into small part of
segments of distinct needs of buyers or separated behaviours that might require
marketing strategies of marketing mixes.”  Some product and service cannot be good to
every customer therefore to target a customer is derived from better
segmentation based on what the customer wants. However, there are ways to
segment a market such as demographic, behavioural, geographic and
psychographic. The idea is to group the customers with similar needs so that
product and service can be delivered to that group. Jobber,
D. & Ellis-Chadwick, F (2013, p 596). Helps marketer to understand
in detail the important of customer segment and well modify its offering a
massage to their exact needs.

The airline
industry was characterized both by high growth rates and government regulated
protection; the liberalization of the airline industry in the EU has led to the
development of highly competitive market. The most obvious evidence for
increasing competition is the market entrance of low-cost airlines who touted
generally a simplified fare structure with lower ticket prices capturing the
significant market share.

According
to Adamantios (2014 pp 39-61) Ryanair and Easyjet
the dominant low-cost airlines in Europe, grew their customer traffic at an
average rate of over 40% per annual. However, many network airlines such as British
Airway were failing to operate profitably. Furthermore, the low-cost airline
targeted the leisure segment, there is an increase number of business
travellers flying with these airlines. The highly competitive environment leads
to customer behavioural changes. Moreover, in the past the airlines have relied
on a combination of high-paying business customers and price sensitive economy
passengers.

The
short-haul business customer found 40% of this market to be price elastic and
to make extensive use of low-cost airline ticket (Dibb
S. Et al (2012, p 212).  The
market changes have had an impact on leisure customers’ behaviour. The effects
were amplified by the establishment of the internet as a new distribution
channel. The rising of internet tore down the barriers of the availability of
competitive ticket price information. Distribution costs also decreased due to
the lower number of intermediary agents’ in the transaction processes.

Due to
a lack of focus in product policy, airlines British Airways and EasyJet or
Ryanair often aim to reach the same consumer segments. British Airways has to
revise their business model by adapting to the low-pricing strategies of
low-cost airlines, which obtained a significant cost advantage. However, the
cost reducing measures of network airline are ineffective for handling the
needs of both traditionally differentiated segments. As a consequence, business
customer buys products that do not satisfy their quality expectations and
leisure customers receive offering that surpass their quality expectation, but
not fulfil their price expectation (Kotler P.
Armstrong G 2012, p 231). According to Berne
et al (2012) distribution channels has ability to involve how
transaction costs and lower entry and exit barriers. Airline are increasingly
resorting on the web, not only as a useful tool but obtain information for the
provision of electronic tickets, online promotions, customer relationship,
management systems, social networking sites and online advertising strategies.

Essentially
approaches can be split into a priori approaches base on known characteristic
of groups are selected from a population in advance and declared as
socio-demographic. Post-hoc approaches are empirical investigate is conducted
using multivariate analysis to identify segments. Gerry
Johnson et al (2014, p, 56) However, post-hoc are clustered to their
common multivariate profile these may include, attitudinal behavioural or
personality characteristic. A priori segmentation consists
of the effects between schedule and price which estimate separate logit models
for the business and the economy class segment. Furthermore, the economy
customers are even less price sensitive than business customers. However, both
segment place a major emphasis on punctuality. Flexibility is vital for
business class customer, but also has a strong impact on choice decisions of
economy customers.