“Heterogeneity” represents one of the most important concepts in airline marketing. It’s the difference between the individuals an airline interacts with – the customers. It is also the only characteristic needed for advanced merchandising techniques to work.
At the 4th Mega Event Asia-Pacific in Singapore, I presented our research into ancillary merchandising. We have seen that it helps airlines increase customer satisfaction, be more competitive, and increase revenue – all at the same time.
The importance of ancillary merchandising is global, but some of the research discusses, in particular, the heterogeneity among Asian travelers. Amadeus has just released new research, and there’s academic research too – including that by Professor Jin-Long Lu, at the National Kaohsiung Marine University, who found that “all segments’ needs for ancillary services are quite different”. These findings are similar to research presented by Amadeus earlier in the year.
The differences of customers are relevant to how an airline creates, communicates, and prices its offers. Effective, relevant offer creation and communication result in a better customer experience. More effective price management means that the airline can better match the values of their customers. This is particularly so through designing offers and prices for groups of customers. There’s also consideration of how merchandising works as part of an airline’s brand strategy. Merchandising is consistent with brand value and with a service-oriented corporate culture.
Airlines in Asia Pacific have already taken steps to increase their merchandising and customer choice. Research by the Accenture Amadeus Alliance, published in Merchandising 2017: Trends in Airline Ancillary, shows that airlines in the region have moved ahead in some areas. These include baggage options and offers of hotels and activities that are relevant and beneficial to their customers.
The benefits for airline customers is one of the goals of airline merchandising. Sometimes that goal is overshadowed by the revenue increases the airline can enjoy. But – as the research shows – ancillary merchandising can benefit both airlines and their customers in Asia Pacific and around the world.