LYING VALUE : SURVIVING THE COMMODITY TRAP

I request your assistance to complete chapter 1 and 2 of my MBA dissertation. (7000 words, total 28pages at 250 words per page).

This dissertation is titled FLYING VALUE : SURVIVING THE COMMODITY TRAP”

The dissertation will make reference to a small full-service airline (12 Airbus 320 in fleet) which is currently being challenged by the continuous changing market trends and forces that are making the airline business marginally profitable, costs such as fuel rising, and low-cost (and low fare) competition on the increase. The brand equity/name of this airline is NOT strong, the main airline base is situated in a country which is leisure destination and is therefore also in continuous competition with other countries as a product. Furthermore, the airline is a PLC, 99% owned by local government. Employees stand at 1500 which is a high ratio compared to other airlines when considering only 12 aircraft.

In my opinion, despite the unique conditions and operating environment of this particular airline, there is a global challenge the full service carriers have in avoiding the airline transport product from entering into the commodity trap. I therefore believe that differentiation is a main strength which full service carriers must develop in order to remain competitive. One objective which this airline must develop is the creation of additional value, here referred to as FLYING VALUE.

I am highlighting some items that should make up chapters 1 and 2:

CHAPTER 1INTRODUCTION (1500 words)

The airline industry challenges: (500 words)
 The challenges for full-service carriers in a new business environment.
 Discuss how full-service airlines should best react to these airline industry challenges in order to remain competitive in an environment where the market is increasingly price sensitive.
 Discuss the ways low cost carriers are at advantage and therefore provide a threat to traditional full-service airlines.

The research questions: (1000 words)
 In what ways is segmenting price sensitive markets a challenge?
 In today s airline business environment, can the market be segmented?
 To what extent has airline transportation service become a commodity?
 Can full-service carriers remain competitive through strengths other then price? (ie value)
 Can full-service carriers and low cost carriers exist in the same environment?
 How can full-service carriers survive?




CHAPTER 2REVIEW OF EXISTING LITERATURE (5500 words)

Chapter 2 should form the basis for the research that is required for this project. This chapter should also provide a critical evaluation of the literature on how other industries have challenged the commodity trap. This chapter will also review and evaluate previous research work that was carried out with regards to:

 Challenges to effectively segment the (price sensitive) market
 The forces of a commodity versus segmentation need to be discussed deeply.
 Links between segmentation and customer relationship management (CRM).

Just for your information:
(1)The ”Journal of Revenue and Pricing Management, Volume Two, Number One, April 2003had published a paper designed to enable the segmentation of customers in four main quadrants based on projected lifetime profitability as recommended by Reinartz and Kumar (2002)  Butterflies/True friends/Strangers/Barnacles.
(2)Sabre airline solutions also published an article  saving the relationship in their ASCEND magazine for airline executives issue number 1 for 2007 making reference to value-based customer segmentation.
(3)The Institute for Business Value (IBM) published an article The future of CRM in the airline industry: A new paradigm for customer management by Declan Boland, Doug Morrison and Sean ONeill


-
Additional notes:
My dissertation will also include the following chapters:

Chapter 3Methodology....The methodology being suggested consists of a lifetime profitability approach/analysis of airline customers, therefore understanding better the needs of different customer segments. A questionnaire will be carried out to enable the clustering of customers based on 2 variables: frequency of travel, monetary value.

Chapter 4Research Findings and Analysis

Chapter 5Conclusions

Chapter 6Recommendations