Segmenting the air travel market
As a major global airline prepared to emerge from bankruptcy and reinvigorate growth in a challenging and hyper-competitive environment for air travel, it set its sights on a new strategy built off of insights into the market and make-up of current-day travelers. While the business understood the basics of its customers, it lacked a deeper and more meaningful understanding of them required to make critical resource allocation decisions and guide brand, marketing, and experience design efforts. Specifically, it did not understand how key purchase drivers were correlated or the relative opportunity sizing of different groups.
To gain critical insights into the purchasing behaviors of these customers, extensive qualitative research was done in multiple forms, including one-on-one interviews, group discussions, and ethnography, to observe how these travelers went about their activities and decision processes while uncovering unmet needs. The insights gained through this effort helped shape the design of a robust survey instrument with a carefully selected sample that represented the addressable market and allowed for discrete analyses of particular consumer types of interest.
Multiple analyses were conducted to provide rich and robust profiles of five distinct and sized segments, determine bottlenecks within the purchase funnel, and perceptions of the client’s and key competitors’ brands. Through this work, the organization gained critical knowledge into how large segments were from overall size and spend potential perspectives, as well as how underlying purchase drivers statistically correlated including needs, categorical attitudes, brand perceptions, and purchase occasions. All this information provided the content and context necessary to determine which segment to target, how to target them (offers and selling approaches), and how to position the brand to win with them.
The segmentation and targeting strategy provided an empirical foundation for brand, marketing, and sales efforts. It also helped guide alternative delivery channel development efforts to optimize the way the organization served lower volume customers through self-directed, digital means.