Frontier and United Airlines: Competition Heats Up in Denver Frontier Airlines u
ID: 392717 • Letter: F
Question
Frontier and United Airlines: Competition Heats Up in Denver
Frontier Airlines understands its customers and competitive situation very well. Frontier accepts that it cannot compete effectively against United Airlines for business travelers flying in and out of Denver, Colorado. United is simply too big, has far more planes, and flies to too many destinations multiple times throughout the day. So who are Frontier's primary customers? Frontier's primary customers are the price-sensitive, nonbusiness travelers who purchase plane tickets for vacations or to visit friends and family. Who purchases the tickets for these types of trips? In a word, women. These same women often have kids in tow who can also have a say in airline ticket purchase decisions. Never underestimate the influential power of children. It has been estimated that 4- to 12-year-olds influence the spending of nearly $700 billion a year in the United States.
Based on Frontier's understanding of its consumer decision-making processes, the airline focuses on what it calls “one comfortable class of service”—coach. To begin, most of Frontier's jets are much newer, on average a decade newer, than those of its competitors. As a result, the interiors of the aircraft are in excellent condition, which positively influences passenger safety perceptions. Second, Frontier offers one inch to two inches more legroom than most other airlines, which might not sound like much, but it truly makes a difference, especially when traveling with children. Third, Frontier's in-flight entertainment system offering 24 channels of live DIRECTV in each seatback is a life saver when it comes to keeping the kids occupied. Finally, Frontier's Emmy-award winning advertising campaign featuring unique animal images such as Grizwald the Bear, Jack the Rabbit, and Larry the Lynx that adorn the tails of 60 different Frontier aircraft were intentionally designed to be very family friendly.
In fact, the airline has video that documents mothers and children peering through terminal jetways to catch a glimpse of which one of Frontier's namesake animals is proudly displayed on the tail of today's flight. Further evidence of the success of Frontier's use of animal mascots was provided during a five-week advertising campaign that allowed customers to vote on a name for a new animal mascot. The company's website collected over one million votes that were cast online, which netted increased traffic to the airline's site by 50 percent compared with the previous year.
Frontier further caters to its customers now by offering three different classes of coach seating: Economy, Classic, and Classic Plus. Economy seating offers the lowest price for passengers if the customer is willing to make some concessions. For example, passengers flying economy receive seat assignments at check-in, are charged $20 for their first checked bag and $30 for their second checked bag, and DIRECTV is available for purchase. In contrast, Classic seating offers advanced seating assignments, first and second checked bags are free, free DIRECTV, 125 percent EarlyReturns Mileage, and a two-for-one lift ticket at Winter Park or Copper Mountain ski resorts. Finally, Classic Plus offers a fully refundable ticket, advanced seat assignment, stretch seating (where available), priority boarding, first and second checked bags are free, free DIRECTV, free snacks and beverages, 150 percent EarlyReturns Mileage, and the two-for-one lift ticket at Winter Park or Copper Mountain. Ultimately, the three classes of seating allow customers to customize their own decisions about price and service options as opposed to being offered a standardized service product from the airline.
For its efforts, Frontier Airlines has been voted the “Best Low Cost Carrier” by the readers of Business Traveler magazine, and one of the Top Five Domestic Airlines by readers of Travel & Leisure magazine. Given Frontier's understanding of its customers and the adaptations it has made to its service product to suit the needs of its target market, the airline truly lives up to its marketing slogan, “A Whole Different Animal.”
As a major competitor to Frontier Airlines in the Denver market, United Airlines flies to more than 200 domestic and international destinations and operates more than 3,300 flights a day. Although the airline's hubs are strategically located in Chicago, Denver, Los Angeles, and San Francisco, United's 47,000 employees live in every U.S. state and in many countries throughout the world. According to United.com, “The company's portfolio of products offers the right service to the right customer at the right price.”
United Airlines dominates the business travel market that flies in and out of Denver. United's major strengths are the number of destinations served, multiple flights to single destinations throughout each day; different types of aircraft that offer first-class, business class, and coach seating classes; and a dedicated and professional staff, including gate personnel, pilots, flight attendants, and baggage handlers.
United also benefits from the lower price sensitivity of its business travelers. Business travel is typically not paid for by the passenger but by the passenger's employer. Consequently, price is often not the most important criterion for selecting an airline, whereas flight schedule and timeliness become more important decision-making criteria.
Despite United's success in the business traveler market, it has not been as successful in the nonbusiness market as the airline would like. After sitting down with several focus groups to determine how nonbusiness travelers purchase their airline tickets, the following multi-attribute matrix was developed:
Consideration Set of Airline Alternatives for Nonbusiness Travelers
Timeliness
question:
After reading Chapter 4 on MindTap, what do you think is the relationship between customer expectations and customer satisfaction? How did Frontier Airlines demonstrate this in the case?
Decision-Making Criteria United Airlines Frontier Airlines Southwest Airlines American Airlines Importance Weights Price 8 9 9 8 9 Flight Schedule 9 7 7 9 8 Destination 10 10 10 10 10 Baggage Fees 8 8 10 8 8 Leg Room 8 9 9 8 7 In-Flight Entertainment Options 7 9 8 7 8Timeliness
question:
After reading Chapter 4 on MindTap, what do you think is the relationship between customer expectations and customer satisfaction? How did Frontier Airlines demonstrate this in the case?
7 9 9 8 8Explanation / Answer
Ans:
Customer expectations refer to the expectations and experiences with which a customer approaches a product or service to satisfy his needs and/or wants. It is the perceived value and benefits with which a customer purchases a product or avails a service. These expectations can hold significant influence in the decision-making processes of the customer. Customers hold both explicit and implicit performance expectations for attributes, features, and benefits of products and services.
Customer Satisfaction is a measure of how products and services meet or exceed customer expectations. Customer satisfaction gives an understanding of how much the product or service meets the expectations of the customer while loyalty is influenced by product or service quality and other factors.
Customer satisfaction represents the feelings of a customer when a product or service meets the customer’s expectation. When the attributes of a product or service outplay the expectations of a customer, the customer is left really satisfied but if not, then the customer is left dissatisfied. Dissatisfied customers may discourage others from trying the products or services of that company. Negative word-of-mouth by a dissatisfied customer of products or services of a company has the most damaging effect to the image of that company. Satisfied customers are more likely to repurchase, lower their price sensitivity, engage in positive word-of-mouth, recommendation and become loyal customers.
According to the case, Frontline Airlines has always been at the forefront of meeting customer expectations and in some cases exceeding them. The primary customers of the airlines are price-sensitive and non-business travellers. Frontier airlines provide low-cost tickets and even have been voted 'Best Low-Cost Carrier'. Also, it has successfully exceeded customer implicit expectations by providing more leg space than its rivals, comfortable service on the airplane and even provides in-flight entertainment playing several videos for kids as they constitute a large part of travellers. Also, as the planes are newer, they are in excellent condition which positively influences passenger safety perceptions.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.