Published on: Mar 4, 2016
Transcripts - Pricing strategy-and-jetblue
Pricing Strategy and JetBlue
Posted by admin On May 19, 2007 3:34 AM
Service strategy refers to comprehensive planning, decision making and implementation of strategic selection
of particular methodology which may include service offering, marketing and segmentation, as well as
advertising in order to maximize market penetration and ultimately advance the organizational universal goal
of creating the greatest possible profits for stakeholders.
In essence, a service strategy can be either referring to the overall strategy or as a part of marketing and advertising a product.
However, service strategy in general is associated with service providers rather than tangible consumer goods.
One of the rather interesting examinations in failed service strategy is in the Airline industry. In spite of past decades of turbulence in
Airline industry consumer have witnessed many ups and downs including great changes in prices, offspring of new low budget
competition, local and regional small competitors, governmental bail outs, reduction in perceived and actual services including in flight
services, arrival and departure delays and cancellations as well as lost of luggage.
Additionally the public relations aspects of the Airline industry have farther complicated matters by allowing the public to perceived the
Airline industry as one particular odd yet constantly governmentally protected private industry which is in real and philosophical
conflict with the free market concept.
However, many proponents and even some segments of public have accepted the blame of terrorist attacks as well as national
security interests as justifiable reasoning to offer public funds to protect a private industry. Similarly there has been a comparative
linear argument that Airline industry has received less protection than some other industries such as automobile manufacturers or the
All of the above point to only one conclusion: the airline industry with its tremendous assets, debt, political influence and revenues has
miserably failed to create even the most basic condition to be self sufficient as well as massive failure to be at least perceived as
private business. Nonetheless, the specifics of individual members such as Jetblue are not comforting either.
Jetblue has been celebrated as one of the rather relatively successful newcomers to the airline industry. Its service model of operating
at lower cost yet offering low cost fairs that are attractive to both price conscious shoppers as well as low budget travelers has been
hailed as successful.
The complements that have been made to JetBlue are based on theoretical assumptions such as it pricing strategy devised to attract
a segment that is price conscious; market segmentation that is devised to attract the greatest possible subset of consumer;
differentiation efforts tailored to maintain better than industry standards of service, predictability and punctuality, as well as positioning
efforts to be perceived as a viable alternative to aging giant competitors.
All of the above theoretical strategic decisions appear to be viable, yet all of those efforts did not help in preventing one of the most
publicly embarrassing and humiliating episodes of organizational failure combined with greed and incomprehensible incapability?s
and incompetence during the Valentine day episode.
Considering such massive failures in spite of the theoretic attempts, it is hard to suggest short term fixes for such a failed industry as
well as its individual members such as JetBlue. The most obvious yet avoided issue is certainly positioning. JetBlue, for instance
could build on their earlier less successful attempts to position itself as the service provider with customer oriented business model.
This would certainly be a new concept to airline industry; it has not been tried yet.
Additionally, a company such as JetBlue could assist its overall market penetration by appealing and attempting to penetrate markets
that are otherwise either entirely ignored or at best neglected. Taking a lesson from the mortgage industries play book to penetrate
the minority segment of the market, JetBlue would certainly make its mark if it is able to become attractive to particular minority
segments such illegal immigrants.
Moreover, the current pricing strategy implemented by JetBlue that is designed for differentiation purposes as well as position JetBlue
as the low cost service provider can be improved on. Nowadays it is not enough to have just low cost, rather than offer equal or
greater value combined with low prices. Taking an example from Wal-Mart?s play book which just recently started to offer the same
generic drugs for as low as $4 for 30 day prescription, JetBlue could and should offer greater customer service including in-flight free
movies and phone calls, additional gratuities such as alcoholic and non alcoholic beverages, and with proper technology even may
include free internet access.
Ultimately, it is obvious that the above analysis and recommendations are theoretic and may not be particularly suitable after cost
benefit analysis as well as potential conflicts in technology or federal regulations. Yet the greatest lesson from the above analysis
should not be the details rather then the overall troubled environment in a private industry that has been protected by federal
government which has not resulted in any visible improvements or benefits to consumers. Maybe it is time to allow the free market
economy to sort out the weak and incompetents; yet allow the most business and consumer minded enterprises to survive and grow.
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