The achievement of sustainable competitive advantage through relationship marketing

University essay from Högskolan i Halmstad/Sektionen för ekonomi och teknik (SET); Högskolan i Halmstad/Sektionen för ekonomi och teknik (SET)

Abstract:

Nowadays, the European airline market is characterized by two major different airline business models; the full service airlines and the low cost airlines. Secondary, appeared for the first time in 1985 in form of the Irish low cost carrier Ryanair. In recent days, the European low cost market stands out through its growth potential and high competitiveness. Therefore, startup companies aiming to join the wave of success as well as insolvency of newly established airlines are part of the daily occurrence. The challenge, that established low cost airlines are faced with, is to create competitive advantages against new entrants and direct competitors under the circumstances of environmental changes. In addition to the described problem a model was developed in order to picture the situation. This paper aims to provide an answer to the specific question: How do low cost airlines use relationship marketing in order to enhance, maintain and attract new customers? The second step is to figure out how those tools affect the airlines generic strategy. The purpose of this study is to find out how low cost airlines in Europe deal with tools of relationship marketing and what are the effects those tools have on generic strategies. This thesis is based on a case study within the European low cost airlines market, with a special focus on three airlines: Ryanair, EasyJet and Air Berlin. These questions are addressed using information obtained in interviews with respondents from the airlines that were recently conducted in Brussels and Bremen by personal interviews and additionally by telephone interviews and email contact. The results show that relationship marketing tools are used in a different extent by the airlines. The authors could not find evidence that using relationship marketing tools is the single solution to compete more successfully than without. It is further argued by the authors that RM is just one aspect strengthening the generic strategy in order to gain sustainable competitive advantage.

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