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Promotional strategy and loyalty program of the airline companies Assignment Sample

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Assessment of the relationship between promotional strategy and loyalty program of the airline companies Assignment Sample

Introduction

1.1.Background

The research project is based on the analysis of the relationship among promotional strategy and the loyalty program utilizes by airline companies in a competitive business environment with successful marketplaces. The research project is intended to focus on a particular organisation of airline industry i.e. Employees Emirates based in Garhoud, Dubai (Mantur, 2016). Emirates is an Arabic airline organisation that was founded in 1985 on 25 march and commenced business operations from 25th October. The organisation has the main hub at Dubai international airport and it is working with a frequent flyer program known as Emirates skywards. The organisation is currently earning US$ 25.1 Billion in 2020 and working with 59519 employees in the current year. The organisation is working with present marketing campaign known as "Hello Tomorrow" which is a widely famous marketing campaign as it facilitates and focuses on the flying operations by leading minimum damage and impairment towards the environment (Schraub, 2016). The organisation has significant potential to retain customers all over the world by implementing fresh and ethical promotional strategies and marketing campaign such as “Hello Tomorrow”.

All type of business industries has a significant positive and negative impact of the global Business environment on their business operations and profitability. The marketing campaigns and promotional strategies are one of the important parts of business organisations in order to retain consumer satisfaction and their loyalty with the brand to lead business sustainability for longer (Bose, 2018). The research project will focus on the identification of issues that are facing by Emirates and developing an appropriate strategy to resolve them effectively. The research project will include the aims and objectives and research questions that will be followed by a critical literature review in terms of gaining deep understanding regarding the research project. The research project is based on the collection of data from secondary sources. The project will also demonstrate the possible risks, assumptions and the issues that may occur at the time of collecting data for the research project. The research project leads the particular findings and conclusion to inform the result of the overall project.

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1.2.Problem Statement

The Emirates is facing significant business issue align with organisational expenses and increase in business cost due to ever-fluctuating prices of fuel, loyalty programs, HR and advertisement for marketing activities. The organisation is also facing the issue of dissatisfaction at some level due to the increase in in-service charges which is the result of fluctuating cost in the business operations and required resources. It is very essential for Emirates to develop and implement the appropriate strategy in terms of promotional strategies and its relationship with loyalty programs to minimise expenditure and additional cost in terms of increasing organisational profitability and survival into the competitive business environment (Vilkaite-Vaitone and Papsiene, 2016). Due to negative impacts of COVID-19 or a current global pandemic the airline industry has negatively suffered a lot. The Emirates is required to develop the most efficient strategy to minimise Dum operational cost of the organisation for providing reasonable prices of flying services around the world as well as earning appropriate profit margins. Another problem is that, there are very few researches have been conducting in terms of explaining the relationship between promotional strategy and the loyalty programs expenses and their influence on the customer satisfaction (Steinhoff and Palmatier, 2016). The research project will focus on analysing the current to business environment of the airline industry identifying the best possible solution to reduce the business cost and increasing profitability of Emirates.

1.3.Research Justification

The research project will assess the significant relationship between the promotional strategies of the airline industry and companies aligned with loyalty programs and their expenses. The research project is essential to identify and analyse the current business situation of the airline industry in terms of Emirates to minimise the operational cost for the business cost of organisation in order to increase the profit margin and achieving better customer satisfaction by providing suitable service charges among customers. The project is essential to understand the significant influence of loyalty programs on customer satisfaction by accomplishing the requirements of targeted customers. This type of research is also essential to identify the role of loyalty programs and the promotional strategies in achieving customer satisfaction in the identification of appropriate strategy to minimise the organisational expenses in terms of the marketing campaign and promotional strategy of airline organisations (Han, Yu and Kim, 2019). The research project is also essential to analyse and conclude the influence of promotional strategies on consumer behaviour and their satisfaction that is essential for business organisations to retain customers for the longer term. The research project will provide relevant theories and suggestions to improve the emotional strategies with minimum expenses which is essential for airline organisations to achieve business profitability after a global pandemic. The research project is essential to be conducted for identifying useful strategies for improving the impact of loyalty programs and promotional strategies by minimising the addition of organisation and increasing the benefits of advertisement campaigns.

1.4.Value of the Research

Many a time   business experts question the promotional strategies and allocation of funds to the marketing operations of the company. They argue that putting a lot of funds in the aggressive marketing operations impact the business bottom line and have to be cut down. Also, loyalty programmes are considered as the wastage of resources. However, authors like O’Connelland Bueno (2018) and Alshubaily (2017) have proved the importance of marketing operations in improving sales and profitability. Also, Aluri et al (2019) have mentioned about the significance of loyalty programme for the company’s long-term sustainability. The research aims to develop the relationship between marketing strategies and loyalty programmes of the company in order to end the debate going in modern days over these two variables.

1.5.Research Stakeholders

There are two types of stakeholders of every business research, namely primary and secondary. These are illustrated below:-

  • Primary Stakeholders: employees, suppliers, investors, business partners, shareholders, subsidiaries, vendors, and customers.
  • Secondary Stakeholders: Government, community, media groups, employee unions, competitors, and pressure groups.

It is important to note here that these stakeholders hold different powers as per their interest and ability to change business decisions and strategies. This is shown in the matrix given below:-

1.6.Aims and Objectives

Aim:

The research project aims to identify the relationship between promotional strategy and the loyalty program expenses of the airline company 'Emirates' identify a best possible strategy to minimise the operational cost of organisation with relevant strategies and recommendations. The independent variable of the research project is loyalty program expenditure. On the other hand, the dependent variable is marketing expenses and promotional expenditure.

The research objectives to accomplish and fulfil the aim of the project are as follows-

  • To analyse the impact of promotional strategy on the consumer behaviour of airline organisations.
  • To assess the relationship between loyalty program expenses and promotional strategy of airline organisations.
  • To evaluate the influence of loyalty program on consumer behaviour and their satisfaction from airline organisation.

1.7.Research questions

Question 1- What is the relationship among promotional strategies of airline companies with a loyalty program?

Question 2- What are the influence of loyalty programs on consumer behaviour or purchasing behaviour of customers of the airline industry?

Question 3- what is the influence of the promotional strategies on the customer satisfaction and retention of the airline industry?

Question 4- how does the marketing expenses influence the expenses of the loyalty program and its influence on the business cost of Emirates?

1.8.Summary

The following research tries to cover the important aspect of the business i.e., marketing strategies and its relation with the loyalty program. If the relationship is proved to be right, then businesses can earn better loyalty just by marketing their services in the target market.

Chapter 2: Critical Literature Review

2.1. Promotional strategy and its influence on consumer behaviour in the Airline Industry

According to Seoand Park, (2018), the promotional strategies are one of the important parts of marketing activities for leading the brand equity and increasing customer response towards the products and airline services. One of the important and efficient promotion strategies is social media marketing because in present time almost everyone is connected with each other through social media. Social media is considered as one of the important promotion strategies for the airline industry because it generates economic consequences and allows better promotions of business services with conventional advertisement. Social media marketing is also the influence of the organisation to utilise fundamental data and investigate the relevant information to improve advertisement and engagement of people. The brand awareness is essential for achieving competitive advantages for the airline industry that is facilitated by social media as a promotional strategy.

In the words of Saleem, et. al., (2017), It is very essential to provide appropriate marketing techniques while performing organisational promotion and marketing activities because the customers of the airline industry are always associated with the several negative consequences or risks. The different type of promotion strategies such as emotional phrases is important to stimulate the purchasing intentions of airline service consumers. The fulfilment of safety promises and providing additional services such as rewards exclusive customers reduce the cognitive dissonance of consumers by promoting optimistic feelings with ensuring safety and security. The article demonstrates that there is a significant link in purchase intentions and positivity of consumers for promotional activities by reading customer satisfaction on the basis of providing assurance for their safety and security in the airline industry.

In the opinion of Sandadaand Matibiri, (2016), Customer loyalty is one of the important parts of consumer behaviour for each industry and leads to success for service businesses such as an airline. The loyalty schemes, reward policies and efficient promotional strategies for reaching customers effectively e influences consumer behaviour towards purchasing intentions. The customers of the airline industry are always influences from the promotional strategy of utilising loyalty programs and other marketing schemes such as rewards and policies in a better way. The promotional strategies of the airline industry are threatened the extensive usage of organisational capabilities among targeted consumers and increase the organisational performance to develop consumer loyalty and their retention with the brand. Effective promotional strategies it has a significant influence on the organisational performance and it increases the profit and revenue of the airline industry.

In accordance with Vilkaite-Vaitoneand Papsiene, (2016), The promotional strategies and airline marketing practices have a significant influence on the consumer behaviour by facilitating the dramatic growth in consumer satisfaction by increasing good influence on the passengers. The customers always prefer a more attractive and effective deal to travel with airways hence it is very essential to increase the effectiveness of promotional strategies by utilising information technology and other innovative ideas such as social media for attracting customers. The customer behaviour is also influenced by promotional strategies of the airline industry by analysing the marketing techniques and empirical consequences of different promotional policies and schemes on the comfort and security of consumers. The promotional strategies such as telecommunication support and social media advertisement are one of the significant influence of consumer behaviour towards the brand. 

Findings: Social media is one of the appropriate and trending technique of promotion that could be utilised by airline organisations to increase competitive advantages by achieving efficient brand awareness. The airline organisation faces several negative consequences in terms of consumer behaviour because it is essential for them to promote optimistic feeling and ensuring their safety and security utilising loyalty programs and other marketing schemes.

2.2. Loyalty programs and their impacts on consumer behaviour in the Airline Industry

As stated by Hua, et. al., (2020), the selling expenses and enterprise structure of the airline industry has a significant and important influence on the expenses of organisation in terms of loyalty programs. Loyalty programs have long term influence on the purchasing behaviour of consumers by increasing expandability and their interest. Loyalty programs refer to the marketing investment which is developed for improving the loyalty and consumer behaviour of targeted customers to increase the business profitability. The loyalty programs are essential to leveraging the experience of customers with the organisation and increasing their compatibility with organisational services. The loyalty programs I develop with strategic designs and they dramatically increase the organisational performance in both short and long term.Loyalty programs positively influence business sales and profitability by utilising relationship marketing.

In the views of Nguyen, et. al., (2020), there are several economic aspects of loyalty programs and their influence on the consumer behaviour to increase their long-term commitment with airline organisations. the different type of business organisations of airline industry utilizes loyalty programs for analysing the requirements of customers to develop appropriate strategies to lead their satisfaction and long-term loyalty. The positive influence of loyalty program increases the positive attitude of the brand towards relevant people and enhances customer satisfaction that eventually increases economic aspects and business profitability in the airline industry. Loyalty programs are also important for maintaining the complaints of people to efficiently perform business operations to develop positive economic aspects. The loyalty programs are an important investment of marketing department of airline industry to achieve customer loyalty at international level.

According to Hunt and Truong, (2019), The investment in loyalty programs is essential to increase the customer engagement by promoting specific messages among targeted customers. The customer loyalty program perform more efficient results with machine learning and increase customer engagement by utilising productive data analytics. The organisation also face challenges to understand the utilisation of big data analytics and co-creating the customer satisfaction and engagement by strengthening dam loyalty programs. The customer engagement is one of the significant reflection of customer satisfaction from the business organisation hence it is very essential to implement high quality loyalty programs to increase their commitment and engagement consistent. The customer loyalty is always emerging factor and the loyalty programs are essential to engage dynamic customers and influence their purchasing behaviour with personalized experience.

In the words of Chaudhuri, et. al., (2019), There are different aspects of loyalty programs and its effectiveness that influences consumer behaviour and their loyalty with organisation as different customers are motivated by different factors. The globalisation and emergence of digitalization facilitates business organisations to achieve global reach. The cultural based and the progress based model that are utilised for increasing the effectiveness of loyalty programs are utilised by organisations for increasing customer retention by improving the understanding towards consumer behaviour align with a reward and induction of culture. The rewarding strategy and loyalty programs are playing important role to stimulate the consumption and loyalty of customers by improving relationships to lead customer retention. On the other hand the digitalization and globalisation aspects are boosting the useful impacts of loyalty program to address the reward preferences of different customers.

Findings: loyalty programs are significant for leveraging the consumer behaviour of airline industry and increasing the organisational sales and profitability by developing relationship marketing tactics. The positive management of loyalty program developed a positive attitude of customers towards brand and vice versa. The organisations are facing challenges in managing big data analytics folding customer satisfaction however the rewarding strategy leads customer retention.

2.3. Impacts of marketing expenses on loyalty program expenditure

Ahmed, et. al., (2020), Stated that the loyalty programs are important marketing tactic which is significantly impacted by the marketing expenses because the set marketing budget decides the expenditure in loyalty program by the organisation. The management of loyalty program and its effectiveness is also lead some challenges becomes several business organisations are unable to understand the managing target by loyalty programs and poorly performing it. The improper and unclear strategies and targets of marketing managers leads the failure of loyalty programs within organisation. The program performance also leads the demands of theoretical framework in extended version to identify the specific linkages between marketing expenses and the expenditure in loyalty programs. Clarity of objectives and targets are essential to minimise the negative influence of marketing expenses on the loyalty program and increase the visibility of rewarding and positive effects.

In accordance with Park, (2019), there is a significant relationship and interaction among premium status and the design of loyalty programs with the revenue management of organisation and strategic buying personal and customer behaviour. The marketing expenses are important to develop cost-effective loyalty programs in terms of increasing life cycle of loyalty programs to increase its interaction with customers and lead retention of customer spending behaviour. The loyalty programs are also influences by marketing expenses on the basis of consumer specific loyalty programs that I develop for achieving customer acquisition with the increase in organisational profitability. The changes in marketing expenses or budgeting of organisation towards advertisement and promotional activities through loyalty programs impact the size and performance of loyalty programs as well as revenue management of organisation.

In the words of Han, et. al., (2020), The marketing expenses influences the capability of loyalty programs by analysing and fixing the expenditure on them. However there is both positive and negative interaction among reward dimensions of loyalty program and the estimates of different culture that believes in in important insights towards receptive and delayed rewards. For avoiding negative consequences it is essential to forfeiture the points that are provided to customers in loyalty programs. The marketing expenses are essential to be managed carefully in terms of developing appropriate rewards and Verde interactions and attractions among different customers of diverse culture to build loyalty by providing switching cost criteria.

In the opinion of Aluri, et. al., (2019), the competitive advantages of business organisations and airline firms performs mediating influence on the efficiency of promotional strategy and the marketing performance of organisation. The efficient and effective marketing performance of organisations of airline industries significantly improve the availability of funds and budget to be implemented into promotional loyalty programs. The improvement in marketing expenses management increase the performance of promotion by utilising advertisement activity is and developing competitive advantages by implementing high quality loyalty programs. The higher competitive advantage of organisations and airline industry is directly improve the marketing performance of organisation and so on the efficiency and effectiveness of loyalty programs by improving cost management. Additionally the issues in business organisation align with the marketing process negatively influence is the promotional strategy and creates improper results from the investment in loyalty programs.

Findings: The marketing expenses significantly influences the expenditure of marketing programs by linking marketing expenses to the demands and performance of loyalty program. The efficiency of finance and budgeting in loyalty programs improve the result from marketing expenses and investments in airline industry. Airline industry also faces issues of developing appropriate strategies to minimise the negative influence of marketing activities.

2.4. Challenges faced by Airline Industry in terms of Customer Loyalty and retention

As per the views of Yasa, et. al., (2020), the customer loyalty is one of the important and essential concept of different business organisations of different industry. The customer retention is essential for the airline industry to increase the business profitability and ensure the long-term sustainability of organisation into highly competitive business environment. The major problems that are facing by airline companies in terms of achieving customer satisfaction and leading long-term retention are the ineffective customer loyalty programs due to several reasons such as a voluntary switching and the ethical problems. Customer retention is one of the priority factor for organisations in terms of relation orientation and achieving significant performance from loyalty programs in order to increase the effective results from business expenses on promotional activities.

In accordance with Alshurideh, et. al., (2020), the organisations in airline industry are facing customer retention issues due to improper management of customer loyalty with the brand that is the result of short-term promotion and lack of strong influence of loyalty programs. The marketing executives of business organisations are also facing challenges in increasing the active participation of people as loyalty program initiative. The business organisations are also facing strategic disadvantages due to substantial and direct investment as well as the increase in potential cost of organisations to sell the products and services with lack of security. The poor efficiency of loyalty programs is also a result of lack of insights and Research challenges in the emerging trends to lead customer loyalty and retention in the airline industry for longer term.

Yang, et. al., (2019), stated that customer retention is increasingly becoming a significant issue for airline industry because of polygamous behaviour of relevant customers that is creating airline industry and organisation to lose their share in market in the competitive environment. On the basis of marketing perspective dam customer retention is essential to lead aviation in industry and it is also essential for increasing the efficiency of financial performance of airline industry by engaging relevant people with effective programs and schemes. The airline industries are also facing barriers in providing appropriate satisfaction and attractive offers to achieve the loyalty of customers with particular brand and without consumer loyalty the customer retention is impossible. The analysis of appropriate promotional strategy and efficient investment in loyalty programs is another challenge that is facing by marketing executive of airline organisations.

Chun and Ovchinnikov, (2019), Demonstrated that the customers of airline industry are driven by the satisfaction of customers from the attributes of service quality and their perceived safety with the particular brand. The airline organisations are facing several challenges in retaining customers for longer term due to lack of customer satisfaction, and inappropriate management of loyalty rewards in the program. The ineffective management of relationships with customers and their commitment is also a challenge for airline industries to create customer loyalty and long term retention. It is essential for business organisations in airline industry manage the appropriate service quality and the safety of passengers by providing exciting offers and implementation of loyalty programs to minimise the dissatisfaction of customers and preventing attraction towards other brands.

Findings: The challenges that are facing by airline industry in aspects of customer satisfaction and retention is lack of effective performance of loyalty programs and management of priority factors in relation orientation management. Customer retention is most important factor of airline industry which is required to achieve by airline organisation in order to develop competitive advantages and sustain business.

2.5. Positive Aspects of the Relationship between Promotional strategy and loyalty program

According to Visentin, et. al., (2019), the rapidly changing business environment and the demands and expectations of customers from service and airline industries in context of passenger safety and cost effectiveness is creating significant pressure on the business organisations. The appropriate expenditure of airline organisations into loyalty programs has positive influence on the effectiveness and efficiency of promotional strategies to provide high customer satisfaction and develop long-term customer retention. The expenses in loyalty programs such as the utilisation of information technology in order to increase the efficiency of operational performance of organisations directly increase the benefit realisation of promotional strategies of airline industry. The operational efficiency positively influences the information technology expenditure and loyalty program expenditure to improve operational performance and directly increase the potential of promotional strategies by increasing profitability and customer satisfaction with organisational products and services.

Goodman, (2019), Illustrated that the influence of structure of selling expenses of airline enterprises has impact on the loyalty program expenditure in both positive and negative way. The effective investment and efficiency of expense structure of organisation positively influence the promotional strategy align with loyalty programs by increasing the cost-effectiveness of organisation and achieving better quality of customer service. The improper management of selling expense structure and the management of loyalty program expenditure negatively influences the promotional strategy by increasing the cost of labour and minimising the profitability margin. To achieve the positive influence of loyalty programs expenditure on the promotional strategies of airline industry they are required to spend appropriately on outsourcing and other expenses such as selling and Labour to upgrade the organisational profitability and effective performance of promotional strategies.

In the words of Steinhoffand Palmatier, (2016), the passengers or customers of airline industry preferred the low-cost services and products from airline industry. The loyalty programs significantly enhances the customer satisfaction with organisational products directly increase the efficiency of promotional strategies and the achievement of expected results from the investment in promotional strategies and loyalty programs. The customers always prefer comfortable services with appropriate convenience and basic amenities with low costing. The promotion of business products and services by utilising award and loyalty schemes and programmes such as coupons and bonus efficiently provides customer satisfaction and allows organisation to acquire a large number of potential customers with low cost services.

As stated by Sihite, et. al., (2016), There is a strategic relationship between the loyalty programs and promotional strategies of airline industries as it increases reward activity of organisation and creates more credible as well as integrated airline services to increase the customer satisfaction and sales of organisation. The loyalty programs focuses on increasing the brand loyalty of customers by attracting potential customers and retaining existing one. The loyalty programs are one of the major tool of promotional strategies of airline organisations to create the sense of benefit by taking services from particular brand among a large consumer base. As the airline organisation deals with different type of culture and background of customers due to National and international airline services that led by efficient investment in loyalty programs support airline organisations to increase the visibility of promotional activities and achieving appropriate and desired results.

Findings: These positive relationship between the emotional strategies and loyalty program of airline organisations as the efficient management of loyalty programs leads the better efficiency of promotional strategy and increase the quality of customer services. Customers are always 10 towards comfortable and convenient to services with cost effective pricing. The airline industries are required to provide efficient promotional activities and offers such as coupons and bonuses.

2.6. Negative Aspects of Promotional strategy and loyalty program of airline companies

According to Zhou, et. al., (2019), There is you significant relationship between loyalty programs and promotional strategies of business organisations however Business models also faces challenges to immune the development and sustainability of regional markets to increase the airline elusive profitability. The different promotional strategies also have negative influence as it creates marketing saturation and limits the efficiency of airline organisations among particular regional markets and Limited segment of customers. It is also a problem between promotional strategies and loyalty program to identify the loyal customers and there is no particular criteria to differentiate between the customers and repeated buyers in order to analyse their loyalty. Airline organisations also faces challenges in collecting data due to association of several constants in the process.

In the words of Ou and Verhoef, (2017), the promotional activities of organisation by utilising loyalty programs is also form negative relationship in the business profitability and management of personal data and statistics of organisation. The loyalty programs is highly representative regarding the loyalty data and the customer panel that creates biasness among loyalty card and creates issues in management of member’s data. Furthermore, the representation of loyalty data and membership data of customers also orphans a range of customers and make them uncomfortable in the process of sharing information and sensitive data to get incentives from loyalty program negatively influences the promotional strategies and efficiency of organisation.

In the view of Jarach, (2017),the business organisations of airline industry also faces the negative relationship between promotional activities airline with loyalty programs due to conversion from generation z to the millennial generation. The airline industries utilizes creative marketing strategies such as I'm loyalty programs to attract a large number of customers by creating buzz. However the utilisation of different platforms and schemes in a particular marketing campaign creates a negative influence on the cost structure of organisation and also increase the requirement of resources. Airline organisations also faces the negative influence of loyalty programs and modern promotional strategies because the customers are always available on social media and mobile phones if that create several justified and unjustified controversies.

In the opinion of Wever, (2017), The economic aspects of loyalty programs and promotional strategies significantly increases the business opportunities to achieve better market share and sustainable business growth in the industry. However along with the economic aspects of the airline organisation so also faces several challenges such as the involvement of government of different nations that create major impact on the economic benefits of promotional strategies in terms of achieving better results from loyalty programs. The airline industry faces intense competition that creates challenges and negative relationship between promotional strategies and loyalty programs because due to increase in competition the organisation is required to save cost and provide low cost services but on the other hand the organisation is also required to invest in loyalty programs to attract and retain customers for longer term.

Findings: The airline industry also faces negative relationship among promotional strategy and loyalty programs of airline organisations lack of investment in promotional strategies and marketing programs and negatively influence is the efficiency of loyalty program and its results. Organisations also face the issues of customer resistance towards sharing personal data for getting incentive and reward from loyalty programs.


Chapter 3: Research Methodology

3.1. Analytical Framework

According to Ahmed et al (2020), the analytical framework is the diagrammatical representation of the complete analysis of the research work. In other words, it can be defined as the framework that underpins, directs, and supports the collection and analysis of research-related data by determining key outputs and product at every stage of the analysis. Furthermore, it also facilitates a way to collect and analyse data. Moreover, it is a communication tool and a mode of collaboration between humanitarian actors and is taken into account as the reference all across the process (Alshurideh et al., 2020). This stage of the research is divided into two different phases, namely the initiation and analytical phase. During the initiation phase, the topic approval, draft preparation, problem identification, setting up research aim and objective, literature analysis, and secondary data sources search is done. In the analytical phase, the data collection, data analysis, recommendations, and conclusion of the overall research are worked out.

Figure 1: Research Analytical Framework

3.2. Research Approach

The research onion methodology is followed here as shown in the picture given below given by Saunders (2014). It is important to note here that the scope of the work is to determine the relationship between promotional strategy and the loyalty programof Airline Company. This study is based on the secondary data. Once the relevant data is collected during the phase 2 of the research, the analysis begins. The analysis yields some useful outcomes.

Figure 2: Saunders Research Onion

3.3. Research Design & Philosophy

Research philosophy explains the nature of the beliefs used in the research for the analysis of sources and concluding. The research philosophy can vary depending on the objective of the research, and on the method of investigation (Sahay, 2016). The current research would be based on epistemology research philosophy which is used in the research to address the facts and knowledge relevant to the research topic. Rigorous testing is the method used in the epistemology research philosophy. The research questions are tested based on positivism; it uses the scientific method for the research. Interpretivism which is a principle in the research philosophy is used to interpret the results into meaningful conclusions. There are two variables involved in this study, namely promotional expenditure and loyalty program expenditure. The former one is the independent variable and does not get affected by the change in other factors. On the other hand, the loyalty program expenditure is the dependent variable.

Research Strategy

The research strategy used for the work is the systematic data collection from the public sources. The source of the data needs to be authentic so as to build a degree of reliability among the key stakeholders of this research work. Secondary data-based research is the most common method used in quantitative research. The variables of the research are analyzed with the use of different data and the ideas, philosophy, and conclusion of journals, articles, and other sources include in the systematic literature review.

Research choice

The research is entirely based on the quantitative method for the analysis of the topic. Therefore, the research choice of the author is the mono method. There are two variables in the research, marketing expense and loyalty program expenditure. Both the variables are measurable and thus the relations between the two can be easily identified with the use of data (Watson, 2015). The data is collected using secondary research and the collected data is analyzed to predict the future changes and trends that would be useful in building strategies of the airline companies. 

3.4. Time Horizon

The research has been completed as per the set deadlines. The data collection process is provided 3 weeks and referring the annual reports of the company and financial documents of Emirates airline.This consumed a lot of time and since there is a time constraint for this particular study, some simpler approach was taken. The amount of financial data was massive and this needed to be filtered in order to get the data related to the selected variables. The analysis was provided four weeks as the researcher learned the basics of the statistical analysis.

3.5. Techniques and Procedures

Sampling

The secondary data collected is quantitative in nature.For better understanding of the research problem, past 11 years of data is collected. It is important to note here that the selection of Emirates in this particular research study is based on the judgment sampling. It is a type of sampling method which is also called authoritative sampling approach wherein the researcher choose samples based on the professional judgement and existing knowledge (Alshurideh et al., 2020). It is a type of non-probability sampling approach. ‘Emirates’ is one of the biggest airline companies in the world and is the key entity of the Middle-East region. It is operating in majority of countries around the world.

Data collection

The data related to the variables in the following research study is found in the annual business reports of Emirates. The marketing expenditure of the company for a particular financial year and the expenditure of the company on loyalty program in the same year is gathered and recorded in the MS Excel. The data can also be seen in the financial report of the company. The data related to both variables is recorded in the spreadsheet for further analysis. To search for the data, the search term used are ‘Sales and marketing’ and ‘Deferred Revenue.’ Point to note here is that the loyalty program expenditure of Emirates is included in the liability section under the heading of deferred revenue. According to Ahmed et al (2020), deferred revenue is defined as the payments received by the organisation for services which haven’t been provided or performed or goods that are undelivered. The organisation has to provide the services to customers for till the date of subscription of the scheme. Loyalty program is one such service provided by Emirates Airlines to customers.

Data Analysis

The secondary data once recorded from different annual reports of Emirates. The data is arranged in the form of two columns, one for each variable in this study. To determine the nature of the relationship between the variables and its strength, the correlation analysis is suggested. According to Han et al (2020), correlation analysis is the statistical approach that is widely used for discovering the relationship between datasets or research variables. The researchers can also be able to analyse quantitative data to determine the patterns, connections, or trends between the two variables.

The primary motive of the using the correlation analysis approach here is to determine if the marketing expenditure of an organisation increases, then what impacts it would have on the loyalty programme. The value of the correlation coefficient analysis lies in the range of -1 to 1. Different value of the correlation coefficient has different meaning. These are given as follow:-

  • Coefficient of correlation less than 0 (the relationship is indirectly proportional)
  • If the value of coefficient lies between 0 and -0.45, this means the inverse relation is weak
  • If the value of coefficient lies between -0.45 and -0.7, this means the inverse relationship is moderately strong
  • If the value of coefficient lies between -0.7 and -1, this means the relationship is very strong.
  • Coefficient of correlation value equal to 0 (There is no relationship between the variables)
  • Coefficient of correlation value greater than 0 (the relationship is positive and directly proportion)
  • If the value of coefficient lies between 0 and 45, this means the positive relation is weak
  • If the value of coefficient lies between 0.45 and 0.7, this means the positive relationship is moderately strong
  • If the value of coefficient lies between 0.7 and 1, this means the relationship is very strong.

Based on the important information, the further investigation for accomplishment of the research aim and objectives is carried out. This is done in the next section.

3.6. Action Research Cycle

There are four phases of the action research cycle followed in this research. These are elaborated below:-

Planning Phase

Planning begins from the examination of the issues affecting an organisation and preparing a framework to resolve them. This phase is characterised by brainstorming and problem-solving (Han et al., 2020).

Action Phase

The plan developed in the planning phase is required to be executed in this phase. The interventions are required to be made based on the inputs and suggestions from the stakeholders (Ballantyne et al., 2015).

Observing Phase

Both unintended and intended outcomes of the actions are evaluated and observed to check whether they fitted or fulfilled the need of the research. The outcomes of the research would be observed in contrast to the expected parameters.

Reflecting Phase

In this phase, all stakeholders of the research begin to engage themselves in constructing their argument about the issues with actions and research processes planned in the phase 1 of the AR cycle. The arguments keep changing their forms with iterations of the cycle. These changes are required to be recorded here only (Ballantyne et al., 2015).

3.7. Meta Learning

A reflection action research coexists with the core AR cycle. This means that the researcher can plan, act, evaluate, and reflect on the whole AR process along with his/her learning during every stage of the project being taken into considerations (Ballantyne et al., 2015). The Meta learning can be bifurcated into three phases. It is important to note here that the content emphasises on the problem statement of the research, process targets the processes and approaches along with the underlying assumptions made in the project, and at last, on the perception of the AR study (Arif et al., 2013).

Chapter 4: Data Finding and Discussion

In the following section, the marketing expenditure and loyalty programme expenditure Emirates had done as a part of its different loyalty programme between 2009 and 2019 are provided. Moreover, a statistical analysis called “correlation analysis” is carried out to determine the actual relationship between the two variables.

Table 1: Marketing Expenditure and Loyalty Program Expense of Emirates Airline

Year

Marketing Expenditure (AED)

Loyalty Program Expense (AED)

2009

3,455

827

2010

3020

1178

2011

3862

1483

2012

4381

1722

2013

5270

1989

2014

5,421

2607

2015

6,098

2,894

2016

5893

2906

2017

5698

2465

2018

6,404

2243

2019

6,137

2009

 

As a general observation that can be made from the graph given above, it can be seen that as the value of the marketing expenditure and loyalty programme of Emirates follow almost the similar trend. Hence, this can be said that both of these might be having a positive relationship. This means that increasing the value of the marketing expenditure would increase the success of the loyalty programme. However, this is just a prediction only and the actual relationship between them is determined in the latter part of this research work.

Table 2: Analysis summary of Emirates

Groups

Count

Sum

Average

Variance

Marketing Expenditure

11

55639

5058

1395289.291

Loyalty Program Expense

11

22323

2029.36

465069.8545

 Table 3: Correlation Analysis for Emirates

Correlation

   

 

Marketing Expenditure

Loyalty Program Expense

Marketing Expenditure

1

 

Loyalty Program Expense

0.85

1

 

Referring to the table 3, it can be seen that the value of the correlation coefficient in the case of Emirates is 0.85 which is close to 1 and is positive. This means there exists a positive relation between the marketing and loyalty programme of the company. Moreover, the bond is very strong and improving marketing efforts would lead to increase in the loyalty programme expenses. This means more and more customers would join with the loyalty program of the company and Emirates would have to spend more in providing services to customers, thereby increasing the loyalty program expense of the company. This is the final outcome of the research.

4.1. Discussion

From the complete data analysis, the outcome is that the company must increase its marketing expenditure and strategy to reach more and more customers and persuade them to avail the services of the company. Businesses have to spend some funds in order to provide more values to their loyal customers and this is what Emirates has been doing from the past two decades. The outcomes of the research have very effectively answered the following research questions that have been asked in the earlier part of this report. These are:-

Question 1- What is the relationship among promotional strategies of airline companies with loyalty program?

From the research, it can be said that there is a positive relationship between promotional strategies of the airline companies and their loyalty program. The correlation coefficient value of 0.85 evidence the existence of a strong and a directly proportional relation between the variables involved in this research work.

Question 2- What are the influence of loyalty programs on the consumer behaviour or purchasing behaviour of customers of airline industry?

The loyalty programs persuade customers to buy or avail services of the company. In this case, Emirates’s loyalty programs are quite significant in persuading travellers to travel with Emirates. As mentioned by Han et al (2020) that the loyalty programs significantly enhances the customer satisfaction with organisational products directly increase the efficiency of promotional strategies and the achievement of expected results from the investment in promotional strategies and loyalty programs.

Question 3- what is the influence of the promotional strategies on the customer satisfaction and retention of airline industry?

The promotional strategies of the airline company help customers in getting knowledge about the loyalty programmes, their features, characteristics, and other information. Customers with enough information about the service can make decisions about purchasing or availing it (Hua et al., 2020). In other words, promotional strategies can increase the sales of the company as they help in persuading customers and changing their buying decisions.

Question 4- how does the marketing expenses influences the expenses of loyalty program and its influence on business cost of Emirates?

From this research, it is revealed that marketing strategies and efforts of an organisation have direct and indirect impact on the sales of the company. According to Hua et al (2020), when a company promotes its services, it is intentionally providing information to the target customers. With an improved understanding of the product or service, the customers can be able to make sound decisions regarding the product or services. In case of Emirates, the promotion strategies help businesses in improving information about the loyalty programmes, their perks, and benefits. These would increase the sales of the company and more and more customers would join with the loyalty programme. In order to improve the value to the customers, Emirates has to spend some amount of money. Hence, this would increase the expenditure. This is proven by the outcomes of the correlation analysis.

Chapter 5: Recommendations & Conclusion

As the relationship between marketing and loyalty programme has come out to be positive and very strong as the value is close to 1, here are some recommendations for Emirates. Following them would help the company in making the best out of this relationship and formulate future business strategies to gain sustainable growth in the future. These are:-

Jarach (2017) recommended that airlines’s loyalty program needs to innovate for value. The current loyalty programme of Emirates is based on the number of miles travellers get on the distance they flew. A person travelling in the economy clas would get the similar amount of miles as the business class travellers who paid higher for the same deal. It needs to change this approach and shift towards offering reward points based on the price of the ticket (Nguyen et al., 2020). Also, the airlines need to make customers more satisfied and engaged and it needs to rethink redemptions. However, the company needs to invest more in innovation practices for the loyalty programs regain the loyalty and affection of customers (Saleem et al., 2017).

Hua et al (2020) mentioned that the airline companies need to go way beyond the airline seats. The redemptions can be a great way to provide value for customers. The airlines are willing to accept a lower price for avoiding any seat to go unsold. The organisation can evaluate its internal process for cost cutting measures. This can be very useful in lowering down the cost of tickets to increase profit even after selling tickets at low prices (Seoand Park, 2018).

The marketing program needs to reflect about the openness of the loyalty & reward program of the company and should emphasis on how the loyalty program is different from that of other companies’ loyalty schemes. Chaudhuri et al (2019) mentioned that customers value openness, especially the existing ones. The loyalty rewards should be allowed to be exchanged with other programs of the company. Saleem et al (2017) believed that marketers make use of the loyalty programme to determine customer preferences and choices. The marketing campaign needs to focus on those choices and services need to be developed based on the input from such insights. Transferable points and loyalty schemes offering rewards and benefits in the long-term can be effective in gaining earnings. Moreover, marketing campaign needs to showcase that the company values its customers more than its profits and convey this message to the right customers through a right medium (Nguyen et al., 2020).

The loyalty programme of the airlines company needs to be integrated with the relationship management system for quickly facilitating services and benefits to customers. According to Seo and Park(2018), the marketers should focus on aligning the goals of the loyalty program with the company’s goal by assigning a segment of customers to a particular manager. The team under those managers would measure the positive impact of the loyalty programme on customer buying behaviour (Visentin et al., 2016).

Chaudhuri et al (2019) have mentioned that business strategy regarding loyalty programme, marketing, and customer satisfaction must go hand in hand. This means a successful loyalty program strategy should be the one that persuade those customers that make specific efforts to align their actions with the company’s corporate goals. If such measures and practices are put in focus, the loyalty program and marketing strategy both can improve customer experience, loyalty, retention. This would ultimately drive the business sales and growth in the market.

Apart from these strategies, Han et al (2020) have given some inputs on improving the loyalty programme of Emirates in order to get the best out of the company’s investment. These include offering new customers incentives on their first booking or a signing up bonus that can be redeemed while booking. Moreover, the omni-channel marketing campaign is very much important. The marketing expenditure needs to be optimised and focus should be more on digital marketing rather than traditional marketing. This would be very effective in reaching out more customers in limited resources (Visentin et al., 2016). Moreover, more loyalty benefits should be provided to older customers for interacting with the brand in a better way. Emirates needs to create a process for engaging and growing the loyalty of new patrons.

Spreading the word as a part of the marketing campaign is an effective approach. Organisation needs to ensure that the benefits of the scheme should be informed to all employees in the organisation (Seo and Park, 2018). Moreover, creating a business-wide plan is very effective. From the entry-level workers to large shareholders, everyone must know about the loyalty plan.

Conclusion

After the complete discussion on the relationship between promotional strategies and loyalty program of the airline company, many important points have been discovered that were untold. The research report revealed that company must focus on its promotional strategies if it wants to have loyal customer base who avail services of the company regularly. Since there is no way to quantify loyalty program efforts made by the company, it has been done indirectly by making use of the expenditure on the loyalty program. In the following research, numerous literature works have been reviewed to explore different aspects and sides of the relationship. These revealed both positive as well as negative sides of the promotional strategies and loyalty programs that were not discovered in earlier researches. For better analysis, secondary data has been taken into account and statistical analysis using correlation approach has been used. The data has been collected using annual reports of the company that provided reliability and authentication to the data. The outcomes of the research revealed that there is a positive relationship between the two variables and increasing promotion would increase the loyalty expenditure of the company. At the end, some recommendations have been enlisted. For instance, it is recommended that the marketing program needs to reflect about the openness of the loyalty & reward program of the company and should emphasis on how the loyalty program is different from that of other companies’ loyalty schemes.

Chapter 6: Reflection on Learning

6.1. Learning from the Major Project

Undertaking this researcher was a very learning experience for the researcher. Before this assessment, the researcher had a little knowledge or idea of carrying out the research work. This resulted in some issues in the beginning but during the proposal stage, the guidance from the tutor has helped in improving the final report. In the very beginning, the researcher faced issue in formulating objectives and research question. Also, the methodology was very vague and the expected outcomes were not cleared. The feedback from the tutor has helped very much in updating objectives and choosing company for the research. This has reduced a lot of frustration and confusion. I got to improve my writing skills, problem-solving abilities, and most importantly, I learn correlation analysis especially for this work. I knew that for carrying out this work, I need to establish a relationship between the variables and one of my friends had advised me to use correlation analysis. I got to know that it is very simple. Therefore, I learned it and used it in the data analysis.

6.2. Limitations of the Research Work

One of the primary limitations of this research work is that it is totally based on the secondary data collected from different annual reports. This was done as there was limited access to the information. Moreover, free databases were referred for this research work. This was done here because the researcher did not have many funds to subscribe to some paid journal or databases. This might have affected the potential to carry out quality literature review analysis. Also, due to less amount of time, the quality of literature review might have got affected.

6.3. What went well?

Everything happened in a planned manner as expected and within the deadline. During the proposal phase, the Gantt chart was prepared and the main target was to achieve the deadline. Another positive thing is that the past 20 years report was available and the data that the researcher was looking for was published in the financial reports. The data collection from the reports became too easy once it was understood that the data was available in which part of the financial statement. Moreover, the data analysis proved the hypothesis that there is a positive relationship between the two variables.

6.4. What didn’t go well?

The primary notion at the time of choosing the research problem was to get the data related to loyalty program of the airline company. The historical data was expected to explore and 10-15 years data would be taken into account. However, during the data collection stage, the researcher got to know that company’s annual reports do not have any data related to number of subscribers. Moreover, the researcher tried reaching the company’s management to get some insights about the loyalty programme but the reply didn’t come. Therefore, the indirect approach was taken into account for this research work.

6.5. What would you do differently next time?

The next time the researcher would make use of both primary and secondary data to getter better insight into the research problem. Moreover, the real data related to the loyalty program like number of subscribers would be collected instead of relying on the loyalty expenditure. This would provide better depth to the research and the outcomes would be based on real-time data. Furthermore, the researcher did not take into consideration about the manager’s viewpoint about the research study. Next time, their perception would also be studied and a new direction would be provided to the research work.

6.6. Development of Your Entrepreneurial Competencies

This dissertation has helped the researcher in honing his development needs. This is shown in the table given below:-

Strength

·         Good writing skills and communication skills

·         Sound decision-making skills

·         Problem-solving skills are good

·         Better management and leadership skills

·         High motivation and better performance under pressure.

Weaknesses

·         Poor creativity

·         Time management issues

·         Financial knowledge is below average

·         Statistical skills are also not up to the required level.

Opportunities

·         Putting all the learning to benefit the company

·         Promotions in future   

Threats

·         People having similar skills and experience level and are competing.

 

Areas for Improvement

Reason for Improvement

Ways to Improve Weaknesses

Review Date

Poor Creativity

To provide innovative and unique ideas and stay creative

Solving case studies

Online videos and modules

Group Discussion and learning to work under constraints

Getting performance reviews from colleagues

December 2020

Time Management

To complete task within the deadline and manage time effectively.

Learn to prioritise tasks as per deadline

Learn to use scheduling software

Dividing complex task into smaller tasks

February 2021

Financial Knowledge

To understand the financial aspects, cash flow, and financial performance of the company

To study financial reports

Learning financial ratios from online lectures and videos

Understanding each and every term related to business finance

March 2021

Statistical Skills

To improve my prediction abilities based on some data related to the problem or company

Learning statistical approaches from the internet

Solving statistical problems on daily basis

Learning statistical tools and software

April 2021

 

6.7. What’s Next?

The researcher might explore new areas related to businesses that might lead to some innovation or new solutions that could improve the overall productivity of business, profitability, employee efficiency, marketing approach, or business strategy. The idea is to implement the knowledge gained from this activity and whole MBA study to provide benefits to organisations. 

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