Page 183 - DMGT506_CONSUMER_BEHAVIOUR

Consumer Behaviour

Notes aggressive promotion and soon started a 'price war' in order to outdo one another. For the
next six months, each of them offered big discounts and gifts (such as TV/audio systems)
with the return ticket on different routes. The most profitable and commercially viable
routes were the major targets of these price-related competitions. The consumer was the
ultimate beneficiary and in a short time, the companies were facing losses due to this
price-cutting.
Star Airways had so far remained out of this 'price-war' and lost its market share on the
competitive routes very rapidly. It was able to retain the clients on other routes, which
were not a part of this intense competition. Unhappy and anxious about this state of
affairs, the company vice president, marketing, developed a marketing plan with several
components. The initial part of the plan consisted of a market research done on a cross-
section of existing clients as well as the clients of competitors and the following observations
were made:
1. Star Airways was considered a quality-oriented company but many felt that it was
getting stodgy.
2. The satisfaction with crew and schedules had declined over the last 5 years amongst
regular customers.
3. The clients felt that the airline was losing its edge over customer service because it
was non-flexible.

4. The prices offered by competitors were considerably lesser though they provided
only a fraction of services offered by Star Airways. This was the main reason of
clients switching over to competitors. As many as 70 percent respondents considered
the costs as the most important factor in deciding on the airline.
5. Some deciding factors and their relative importance to clients were found to be
following this pattern.

Feature offered by airline Importance of feature as the Rank of feature in decision-
deciding factor making influence
Price 67% 1
Ambience and food 9% 3
Punctuability 14% 2
Services & convenience 7% 4
Free gifts etc. 3% 5

The second phase of the plan included a massive advertising and promotion plan. The VP
marketing, Anil Saxena, felt that the company needed to advertise its dedication to quality
and rebuild an image of being a customer-oriented airline. He began discussions with the
advertising agency to launch a campaign in the near future.
After a month, the agency came out with the following recommendations:
1. The campaign was to be completed in four months time and the budget would be 35
lakh.
2. The company would reach 85% of target audience, once in a month by direct mail.
3. Four times a month a TV commercial would be aired on a business show time. The
audience TRP is consistent and highest in this category of shows.
Contd...

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