How Airbus Uses Loyalty Programs in Retaining Their Customers Assignment Help
Introduction
In the increasingly competitive era of business, every business organizations are attempting to gain competitive advantage and be able to make customers satisfied. The satisfied customers are most prone to be loyal to the organization for longer period, while contributing for increasing organizational revenue, profit and market share. Considering this, several organizations in different industries are developing and utilizing loyalty programs, for developing trustworthy relation with the organization and ensures that they are retained for longer period. In this regard, the following research is going emphasize upon the key loyalty programs used in the Airbus, for retaining their customers for longer time. Airbus is an aeronautics company, based in Leiden, Netherlands. Its parent organization includes Airbus SE and the Airbus group. It currently has operations in the UK, Spain, Germany and France. Despite its annual revenue of €67 billion in 2017, it is currently in the need of aligning its policies to the demands of its customers.
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Rationale of the research
What is the issue?
The current business market is attempting to align the services with the changing customers' needs and market trends; so that the customers' desired are met and the organizations can sustain the business success in the competitive market. In order to do so, it is crucial to retain the potential customers for longer period; for which usually the organizations are introducing several loyalty programs. The company faced severe accusations in the likes of cluster bomb allegation in 2005, and the claims for bribery from Saudi Arabia and South Africa (corp-research.org, 2019).
Why it is the issue?
Like any other industries, the airline industry in UK is also utilizing several loyalty programs (Steinhoff and Palmatier, 2016). However, the effectiveness of these programs needs to be measured, for understanding where these programs need improvement, for ensuring enhanced customer loyalty. Therefore, it is imperative that Airbus builds on it.
Why is it the issue now?
In current circumstances, several cheaper flight services are emerging in airline industry, which are grabbing attention of potential customers of the key industry players (Kumarand Reinartz, 2018). Thus, it is crucial to evaluate and improve their loyalty programs, to retain the customers.Literature available on this topic will enable Airbus to become one of the key players in the airlines industry.
How does the study shed light on this topic?
The following research is shedding light on the key loyalty programs used by the Airbus. Therefore, it will give enough data about the current status of these programs and how these could be improved. Selected methodological approach has been followed in this literature review, which will help in the policy implementation of the company, and align it with the present customer needs. This will not only create a brand name of the company in the new markets, but also increase its revenue and productivity.
Research aim
The aim of the current research is to "explore the use of loyalty programs by the Airbus company for retailing their customers".
Research objectives
In order to meet the research aim, the researcher has developed the following research objectives.
• To conceptualize loyalty programs
• To explore the loyalty programs used by airlinesorganizations
• To identify the areas related to loyalty programs, which the Airbus need to improve
• To suggest ways for making more effective loyalty programs for Airbus, to retain customers for longer period
• To suggest frameworks that are most suitable to be followed by Airbus
Research questions
The following research questions would be answered through the research, for meeting the above developed research objectives.
• What are the loyalty programs?
• Why the loyalty programs are important for customer retention?
• Which types of loyalty programs are used by Airbus?
• What areas related to loyalty programs in Airbus need to improve?
• What could be recommended to Airbus for making more effective loyalty programs for Airlines, to retain customers for longer period?
Literature review
Loyalty programs
Customer loyalty has been defined by Bowenand Chen McCain (2015),as the willingness of a customer to purchase a product or service from a brand more than one time, which is the result of the positive customer experience with the organization. It has been claimed that "customer loyalty development" is not a choice for the marketer; rather, it has become the key way to develop sustainable competitive advantage". The loyalty programs can be referred to the programs, which offer rewards to the customers, who are making frequent purchases. There are different types of loyalty programs, which could be monetary or non - monetary. Implementation of loyalty programs are beneficial for the marketer, as it helps the organizations to make more loyal customers, who are continuously contribute in the organizational revenue. Current trends of the business markets, customer loyalty has become a key parameter in the business strategies, as the organizations are becoming more customer - centric and these loyalty programs are helping the organizations to grow its business faster than sales and marketing initiatives.
Loyalty programs used in Airlines
A range of loyalty programs is used by the airline organizations, like any other industries, to ensure that the customers are highly valued and getting benefits from their services. Some organizations are offering monetary and some others are offering non - monetary loyalty programs for the customers. Mostly, the organizations are offering membership of specific loyalty programs in the organizations, based on which the frequent passengers get discount or other types of monetary benefits on flight tickets. In addition, some frequent flyers are offered with free tickets, coupons, free meal pass or other types of non - monetary or complementary benefits, while travelling with the flight. For instance, the "frequent flyer program (FFP) is a loyalty program, which is offered by an airline with some specific benefits. Several airline agencies are utilizing frequent flyer program, for encouraging the airline customers to enroll in the program, gather points, which are further redeemed for the further flights or other types of rewards. One such example of "frequent flyer program" is the "Executive Club" program by "British Airways". This program was launched in 1995. Later, following a merger with Iberia, a unique reward currency was established, which is "Avios". It is a "coalition program", offering the clients "frequent flyer programs" within a range of airlines; including "British Airways, Iberia, FlyBe and Meridiana". Not only in flights, this programis offering rewards for hotels and other travel experiences (Terblanche, 2015).
Relationship between customer loyalty and customer retention
Vilkaite-Vaitoneet al., (2016) defined that "customer retention" is referred to the procedure of making the customers satisfied with the organizational activities; so that they could develop the intention of keeping long - term relation with the customers. Nowadays, developing loyalty with the key customers has become a key marketing objective of the organizations. Therefore, the commitment of continuing business exchange with a selected organization is indicating satisfactory nature of the customer. On the other hand, business in ongoing basis is indicating that the customer is having trust on the organizational service, having good experience with the organization, which is reflecting his or her loyalty towards the organization. The customer loyalty program of Airbus aims to provide various services to maintain customer loyalty. These services include timely take-off of flights, providing quality refreshments and accompaniments during the flight, and other minor options like providing adequate leg space. On the other hand, Airbus makes sure it retains its customers, by adhering to their market needs, and providing value-services in a better, more efficient manner than its competitors. Therefore, customer loyalty and customer retention are two processes, which occurconcurrently.
Methodology
Research methodology is a crucial part of the organization, which is important for determining the success of the research outcomes. In this regard, the researcher must identify the research methods, aligning with the purpose of the research. In this context, it has been revealed that the current research is attempting to explore the key loyalty programs used by Airbus within the UK airlines industry. It is indicating that there is a need for collecting primary data from the organizational participants, so that it would be easier to explore the actual organizational situations. Considering this, the following methods would be selected, aligning with the primary research methodological frameworks.
Research philosophy
In the following research, the "positivism research philosophy" would be selected, as this is helping the researcher to collect "primary empirical data" from the resources and then analyze those with the existing scientific theories.
Research approach
Within two types of key "research approaches", the current research is following the "deductive approach" (Kumar, 2019). It is because, the "deductive approach" is promoting development of the hypothesis from existing knowledge, and then it is justified with the collection and analysis of empirical data from the resources. In addition, unlike the "inductive approach", it is supporting the primary study.
Research Design
Among the three types of "research designs", the current research would follow the "descriptive designs". It is because, this "research design" helps the researcher to consider all the research variables and analyze in an in - depth way. In addition, this "research design' is also helping the researcher to collect both quantitative and qualitative data at a time, which would be done in the following research work.
Data collection method
There are mainly two types of "data collection methods", "primary and secondary". In this regard, the researcher would select the primary data collection method", as it would help to collect data from the "first handed resources", who are directly related to with the research issue. In this regards, two types of methods are used in research, based on the type of data, i.e. "quantitative and qualitative". "Survey" is the mostly used "quantitative data collection method", from primary participants, which would be used in the current study (Mackeyand Gass, 2015). On the other hand, "focused group discussion, meeting or interview" are used as "qualitative data collection method". In this study, interview method would be utilized.
Sampling method and sample size
The primary data has been collected from a sample of fifty employees, employed within the Airbus company. The probability sampling method has been used to determine the constituents of the sample population. In addition, the secondary sources of data include literature based on the airline companies of UK. The joint contribution of the primary and secondary data has helped in the methodological research of this study.
Data analysis method
Aligning with the "data collection method", the researcher would utilize the "primary data analysis method". The "quantitative data from survey" would be analyzed through the "statistical analysis methods"; whereas, the "qualitative data from interview" would be analyzed through the "managerial transcript analysis method".
Ethical considerations
The researcher would also follow all the ethical considerations for conducting the research in an ethical manner. For instance, the "ethical approval" would be collected from "ethical committed", before the research is started. Further, the "Data protection act 1998" and the "Human rights act 1998" would be followed, for ensuring that the personal and professional data are kept confidentially and the participant's rights are promoted through the research process (Flick, 2015).
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