1 / 32

Recite a prayer….(15 seconds)

Recite a prayer….(15 seconds). Course Contents. Content 8 chapter: Chapter 1:FUNDAMENTAL OF AM. Chapter 2:MARKET FOR AIR TRANSPORT SERVICE. Chapter 3:MARKETING ENVIRONMENT& AIRLINE BUSINESS Chapter 4:PRICING AND REVENUE MANAGEMENT

asa
Télécharger la présentation

Recite a prayer….(15 seconds)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Recite a prayer….(15 seconds)

  2. Course Contents Content 8 chapter: Chapter 1:FUNDAMENTAL OF AM. Chapter 2:MARKET FOR AIR TRANSPORT SERVICE. Chapter 3:MARKETING ENVIRONMENT& AIRLINE BUSINESS Chapter 4:PRICING AND REVENUE MANAGEMENT --------------------------------Mid-term------------------------------------------ Chapter 5:DISTRIBUTING OF THE PRODUCT AND BRANDING Chapter 6:RELATIONSHIP MARKETING Chapter 7:AIRLINES SELLING,ADVERTISING&PROMOTE Chapter 8:THE FUTURE OF AM ----------------------------------Final exam--------------------------------------

  3. CHAPTER 4 Pricing and Revenue Management

  4. Learning outcome • Know the different facets of airline marketing. • Fundamental issues pertaining the revenue management in airline marketing

  5. Who are they??????

  6. CHAPTER 4 Pricing & Revenue Management PRICE MANAGEMENT • Pricing – Part of Marketing Mix • Price Deregulation • Dissemination of Fares Information • Revenue Management System • Pricing Policies-Management of Discount Fares • Pricing Policies-The Structure of Air Freight Pricing

  7. CHAPTER 4:Pricing and Revenue Management • Pricing – Part of Marketing Mix • -The product and pricing in airline decisions must clearly • be made together. • -E.g: • -invested large sums - First and Business Class products, better seats, quality catering and improved in-flight entertainment. • -Raised the prices of First and Business Class tickets to provide a return on the investment that has been made. • -read pg:175

  8. CHAPTER 4 Pricing & Revenue Management PRICE MANAGEMENT • Pricing – Part of Marketing Mix • Price Deregulation • Dissemination of Fares Information • Revenue Management System • Pricing Policies-Management of Discount Fares • Pricing Policies-The Structure of Air Freight Pricing

  9. CHAPTER 4:Pricing and Revenue Management 2.Price Deregulation -Government regulatory policy constraint on airlines’ pricing freedom in international aviation -Fares with their respective governments for approval. -Now , airline free to price they like.!!!!! -International Air Transport Association (IATA) to run the Tariff Conferences at which fares have been agreed. Effect…. • Airline gained freedom to innovate with their own promotional prices!! • Get discount!!! Read pg:175

  10. CHAPTER 4 Pricing & Revenue Management PRICE MANAGEMENT • Pricing – Part of Marketing Mix • Price Deregulation • Dissemination of Fares Information • Revenue Management System • Pricing Policies-Management of Discount Fares • Pricing Policies-The Structure of Air Freight Pricing

  11. CHAPTER 4:Pricing and Revenue Management 3. Dissemination of Fares Information -The system for disseminating fares information precluded rapid changes. E.g: -previously: such disseminating was a printed tariff manual. -preparing these manual-would take many weeks!! -Now: the GLOBAL DISTRIBUTION SYSTEMS : travel agent have instant access to a fares database. -pages:175

  12. CHAPTER 4 Pricing & Revenue Management PRICE MANAGEMENT • Pricing – Part of Marketing Mix • Price Deregulation • Dissemination of Fares Information • Revenue Management System • Pricing Policies-Management of Discount Fares • Pricing Policies-The Structure of Air Freight Pricing

  13. CHAPTER 4:Pricing and Revenue Management • Revenue Management System • -the advent of sophisticated systems for managing the sale of seats (and, increasingly, of cargo space). • -In deciding on pricing policies which will optimize financial returns , carriers must decide on the number of seats they will sell, at what prices and in what currencies. • -Airline attempts to produce the systems which allow them to optimize revenue. • -Examples: • - Business destinations; few seats for early sales at low price, mostly for short time bookings at high prices • - Sunday, same destination; most are allocated for low price . • Pages:176

  14. CHAPTER 4 Pricing & Revenue Management PRICE MANAGEMENT • Pricing – Part of Marketing Mix • Price Deregulation • Dissemination of Fares Information • Revenue Management System • Pricing Policies-Management of Discount Fares • Pricing Policies-The Structure of Air Freight Pricing

  15. ~~WHO LOVE DISCOUNT~~

  16. CHAPTER 4 Pricing & Revenue Management • Pricing Policies-Management of Discount Fares • a) To control of discount fares is exercised in 2 ways: • I. The revenue management systems I used to decide on the number of low-fare seat available on different flight. • EG: off-peak flight, low prices or seat empty • :on-peak flight, high prices to force passenger to travel. • II. By setting condition to the discount fares, making it less attractive to the Business Traveler. • EG : Too much condition and term.

  17. Pricing and Revenue Management • Pricing Policies - Management of Discount Fares • b) The Major Types of Discount Fares Conditions • Minimum Stay Conditions • Maximum Stay Conditions • Advance Purchased • Standby • ‘Preferential’ Fares • Fares As Part of a Tour Package

  18. Pricing and Revenue Management • 5. Pricing Policies-Management of Discount Fares • b) The Major Types of Discount Fares Conditions • Minimum Stay Conditions • - need to stay for a specific number of days • - going home early will require paying the • full fare price • - short-haul; a stay until the weekend, • - long- haul; about about a week stay • - most effective conditions. • Page:183

  19. Pricing and Revenue Management 5. Pricing Policies-Management of Discount Fares b) The Major Types of Discount Fares Conditions ii. Maximum Stay Conditions - a maximum length of time, pax can stay - if they stay longer, have to pay full fare - less effective method

  20. Pricing and Revenue Management • 5. Pricing Policies-Management of Discount Fares • b) The Major Types of Discount Fares Conditions • Advance Purchased • - must book and pay for their ticket in advance • - penalty for cancellation or changes • - help to improve cash flow • - force the low yield traffic to come forward • - not encouraging Business Traveler to buy

  21. Pricing and Revenue Management • 5. Pricing policies-Management of Discount Fares • b) The Major Types of Discount Fares Conditions • Standby • - can be booked at any time • - seats are not guaranteed • - money returned or wait for next flight

  22. Pricing and Revenue Management • 5. Pricing Policies-Management of Discount Fares • b) The Major Types of Discount Fares Conditions • v. ‘Preferential’ Fares/Discriminatory Fares • - divided into 2 groups • 1st , Stage of life fares : offered to children. • Young people and senior citizen • 2nd, Occupation related fares: given to • seamen, military personnel and diplomats

  23. Pricing and Revenue Management • 5. Pricing Policies-Management of Discount Fares • b) The Major Types of Discount Fares Conditions • Fares only available As Part of a Tour Package • - this is inclusive of accommodation and other features of holiday package., golf, spa, sigh-seeing, etc • - mostly offered through the travel agents • - not popular among Business Traveler

  24. CHAPTER 4 Pricing & Revenue Management PRICE MANAGEMENT • Pricing – Part of Marketing Mix • Price Deregulation • Dissemination of Fares Information • Revenue Management System • Pricing Policies-Management of Discount Fares • Pricing Policies-The Structure of Air Freight Pricing

  25. Pricing and Revenue Management • Pricing Policies-The Structure of Air Freight Pricing • Factors of consideration • Varies in size from small packages to 30,00 kilos of consignment • Fixed documentation and customs clearance cost • Commodity types vary special costing for extra services, e.g.., security, refrigeration, fragility, etc • Density-airline must charges shipper of low density freight on a volumetric basis.

  26. Pricing and Revenue Management • Pricing Policies-The Structure of Air Freight Pricing • ii. 2-Types of Freight Pricing • General Cargo Rates • - high minimum charges for smaller shipments • - discount for larger consignment • Specific Commodity Rates • - rates, commodity and routes define by IATA • - too complex and not being followed

  27. Pricing and Revenue Management • 6. Pricing Policies-The Structure of Air Freight Pricing • iii. Express Market • - urgent shipment • - integrated carriers • - UPS, FedEx, DHL, TNT • - guarantee next morning delivery

  28. Pricing and Revenue Management • 6. Pricing Policies-The Structure of Air Freight Pricing • Express Market-cont • - slower but time define delivery • - peak to off peak cargo • - door-to-door • - followed by pax airlines

  29. Pricing and Revenue Management • 6. Pricing Policies-The Structure of Air Freight Pricing • iv. General Freight Market • - rates based on negotiation • - rates based on supply and demand • - discounts for deferred delivery

  30. Q-bank • Please explain how the airline can control their discount fares? • Please explain 3 of Major Types of Discount Fares Conditions that you know. • What the factor of consideration for the Structure of Air Freight Pricing? • Explain the meaning of Discount Fares and give 2 example from the major type of Discount Fares offered by airlines? • What are the characteristics of the Express Market in Air Freight business?

More Related