5_1 Milestone Five Marketing Strategy_Product_Service

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5-1 Milestone Five: Marketing Strategy—Product/Service American Airlines Deborah Russell MKT-500: Marketing Strategies Professor: Tina Brown January 13, 2024

American Airlines provides a range of services to its passengers, including boarding passes, hotel reservations, car rentals, vacation packages, sightseeing tours, and cruises. To make air travel more comfortable for customers, American Airlines has introduced the AmericanAirComfort app. This app allows passengers to order and deliver meals directly to their seats or boarding gates before departure. It also offers specialty meals catering to special dietary needs, such as dairy-free, soy-free, gluten-free, and vegetarian options. Moreover, the meals are delivered in containers to keep them warm for up to four hours. This ensures the food remains fresh throughout the journey, providing a dining experience. In addition to meals, the app also includes travel essentials like pillows, blankets, phone chargers, eye drops, and toiletries so that passengers can conveniently shop for all their airport needs in one place. The AmericanAirComfort app supports contactless payment methods for the safety of both passengers and crew members. Customers can schedule their delivery times in advance and make payments using debit/credit cards or popular payment platforms like PayPal or digital wallets. The web dashboard displays all American Airlines catering and services orders as the flight crew allows management and coordination. To ensure transactions during travel, American Airlines recommends adding credit cards to the wallet within their app. The primary objective is to enhance customer satisfaction by ensuring delivery, friendly service, and accurate order fulfillment. This eliminates concerns about traveling or working on an empty stomach and enables flight attendants to provide personalized attention and ensure a seamless experience within the cabin. Regarding service attributes, some characteristics define the app service offerings. First and foremost, services are intangible as they cannot be seen, tasted, felt, heard, or smelled before they are purchased. Additionally, services are inseparable from their providers, as production and

consumption coincide. Furthermore, services can adapt over time based on customer needs and preferences. Lastly, it is essential to note that services can be perishable. Marketers often encounter challenges when balancing supply and demand to meet customer expectations effectively. To maximize the advantages of time services, marketers must ensure quality despite variations to improve the efficiency of service providers who are integral to their products and make services more tangible and measurable (Armstrong & Kotler 2020, p.234). The AmericanAirComfort application is a solution that perfectly complements the air travel services provided by American Airlines. With a focus on catering to destinations and serving individuals from all walks of life, American Airlines strives to enhance the lives of its customers. Their mission statement revolves around three core principles. They improve lives, surpass expectations, and deliver services, highlighting their dedication to providing the best travel experience. By using the AmericanAirComfort app, customers can be confident that they will receive care and enjoy a secure and stress-free journey. Creating the AmericanAirComfort app aligns with American Airlines' mission and vision statement. These statements emphasize providing service to customers in the aviation industry while prioritizing improving lives, exceeding expectations, and offering services (Powers 2012). Providing customer service goes beyond being polite and friendly; it also entails standing out from competitors. The company's vision is "to become the world's most affordable airline" (Powers 2012). American Airlines strives to be an affordable airline that operates globally while remaining profitable. The company's core values revolve around its commitment to customers, shareholders, business partners, and employees. It emphasizes the importance of acting with integrity, respect, and responsibility. These values are the basis for American Airlines' mission and vision statements. Focusing on achieving the goals outlined in these statements and ensuring

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a customer experience leverages the corporate culture as a competitive advantage while securing long-term success for American Airlines. We are fully dedicated to expanding our operations and achieving profitability. Notably, in September 2023, American Airlines Group achieved a profit margin of 3.04%. Building upon this accomplishment, the company has announced plans to introduce the AmericanAirComfort app to increase its profit margin by 2% by 2025. Additionally, the airline has set a target to eliminate $15 billion (about $46 per person in the US) ($46 per person in the US) of its debt by the end of Q4 2025—equivalent to $4 per person in the US. These developments were reported by American Airlines News in 2023. The prudent step for American Airlines is to prioritize initiatives aimed at reducing food waste for environmental reasons and mitigating financial losses. The airline industry squanders $4 billion (about $12 per person in the US) every year on food and drinks, which amounts to $12 per person in the US. As a result, American Airlines must take measures to reduce this waste. This is particularly important for travelers who prefer airlines that align with their values. The commendable commitment of American Airlines to enhance the customer experience while minimizing its impact deserves recognition. The introduction of this application seamlessly integrates with their existing business processes. Successful service-oriented businesses prioritize their customers and staff to provide high-quality services. American Airlines acknowledges the connection between employee and customer satisfaction, leading to profitability within a service-based business model known as the "service profit chain." American Airlines has implemented a marketing strategy to elevate the flying experience for its valued customers. This strategy includes an all bundle of services such as seat selection, luggage

charges, the AmericanAirComfort app, delicious meal options, and discounted services. By offering these services as a package, American Airlines sets itself apart from low-cost carriers that charge separately for each service. Moreover, American Airlines places importance on managing customer experiences to distinguish its services from those of competitors.

References Advance Aviation. (2020, October). Marketing Strategies that Meet Travelers’ Needs. https://www.advancemediany.com/advance-aviation-the-marketing-power-of-unmet-needs/ U.S. Department of Transportation. (2023, March). Air Travel Consumer Report: December 2022, Full Year 2022 Numbers. https://www.transportation.gov/briefing-room/air-travel-consumer-report-december-2022-full- year-2022-numbers Akbar. (2022, April 7). How to Resolve These 10 Unique Challenges of Mobile Marketing Campaigns. App Samurai. https://appsamurai.com/blog/challenges-mobile-marketing-campaigns/ IATA. (2022, November 1). Convenience is the Top Priority for Passengers Post-Pandemic. https://www.iata.org/en/pressroom/2022-releases/2022-11-01-01/ American Airlines. (October 19, 2023). American Airlines Reports Third-Quarter 2023 Financial Results. https://americanairlines.gcs-web.com/news-releases/news-release-details/american- airlines-reports-third-quarter-2023-financial-results/ Rosen, R. (2020, November 27). These Are the TSA-Approved Foods You Can — and Cannot — Bring with You on an Airplane—the Points Guy. https://thepointsguy.com/guide/tsa-approved-food/ Powers, E. L. (2012). Organizational mission statement guidelines revisited. International Journal of Management & Information Systems (Online), 16(4), 281.

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Abbot, A. (2022). Top 10 American Airlines Competitors and Alternatives. Business Strategy Hub. https://bstrategyhub.com/top-american-airlines-competitors-alternatives/ Dabaghyan, S. (2022, March 11). A complete guide to mobile app marketing. Smash Magazine. https://www.smashingmagazine.com/2022/03/guide-mobile-app-marketing/ Springer, B. C. K. (2017, July 18). Watch your waste: The problem with airline food and packaging. CNN. https://edition.cnn.com/travel/article/airlines-cabin-waste/index.html

5_1 Milestone Five Marketing Strategy_Product_Service

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