American Airlines Mass Customizes Using the Internet

American Airlines has the capability to build customized web pages creating the potential for each of the airline's two million registered users to have a unique experience when visiting the site. After logging on to the site's home page, members of American's frequent flyer programme can create profiles based on home airport, preferred destination, preferred destination types (e.g. family, beach, golf, Europe), hub airports, hotel and car rental preferences, preferred class of service, and seating preferences. Credit card details, names of travelling companions and contact details can also be stored on the site. This level of personalization means that customers can be offered a special deal on holiday travel to the type of destination preferred, during the week when their children are off school from the school district where they report that they live. The site is fully transactional, meaning that itineraries can be reviewed, changed, priced and reserved, all online. As director of interactive marketing John Samuel says, 'prior to the Internet, there was no cost-effective way to tell millions of customers about a special fare available only this weekend. [Now] thanks to the interactive capability of the web, we can do exactly that and without having to tell everyone about every special fare.'

Positioning

So far, our discussion has taken us through market segmentation and on to target market selection. The next step in developing an effective marketing strategy is to clearly position a product or service offering in the marketplace.

Positioning is the choice of:

• target market - where we wish to compete;

• differential advantage - how we wish to compete.

The objective is to create and maintain a distinctive place in the market for a company and / or its products.

Target market selection, then, has accomplished part of the positioning job already; but to compete successfully in a target market involves providing the customer with a differential advantage. This involves giving the target customer something better than the competition are offering. Briefly, it involves using the marketing mix to create something special for the customer. Product differentiation may result from added features that give customers benefits that rivals cannot match. Promotional differentiation may stem from unique, valued images created by advertising, or superior service provided by salespeople. Distribution differentiation may arise through making the buy situation more convenient for customers. Finally, price differentiation may involve giving superior value for money through lower prices.

A landmark book by Ries and Trout suggested that marketers are involved in a battle for the minds of target customers. Successful positioning is often associated with products and services pos­sessing favourable connotations in the minds of customers. McDonald's, for example, is associated with cleanliness, consistency of product, fast service and value for money. These add up to a differential advantage in the minds of its target customers whether they live in London, Amsterdam or Moscow. Such positioning is hard won and relies on four factors, as shown in Fig.5.3.

There are four keys to successful positioning.

1. Clarity: the idea must be perfectly clear, both in terms of target market and differential advantage. Complicated positioning state­ments are unlikely to be remembered. Simple messages such as 'BMW- The Ultimate Driving Machine', 'Carlsberg- Probably the Best Lager in the World' and 'L'Oreal- Because I'm Worth it' are clear and memorable (see Exhibit 5.4 a and b).

2. Consistency: because people are bombarded with messages daily a consistent message is required to break through this noise. Confusion will arise if this year we position on 'quality of service' and then next year change this to 'superior product performance'.

3. Credibility: the selected differential advantage must be credible in the minds of target customers. An attempt to position roll-your-own cigarette tobacco as an upmarket exclusive product failed due to lack of credibility. Similarly, the attempt to position Lada as an exciting, sporty car by showing it charging through dirt tracks in Africa failed because of the lack of consonance between image and reality.

4. Competitiveness: the chosen differential advan­tage must possess a competitive edge. It should offer something of value to the customer, which the competition is failing to supply. For example, the success of the Apple Macintosh computer in the educational segment was based on the differential advantage of easy-to-use software programs, a benefit that was highly valued in this segment. Because of its different system architecture, IBM was unable to match the Macintosh on this feature.

E xhibit 5.4 a Adslogans.co.uk's top 10 advertising slogans of all time

Exhibit 5.4 b As these examples show, the phrase 'It's all about ...' is much overused and therefore unlikely to be effective in creating a clear position in the minds of customers