The core benefit of this service is that it's a cheaper way to travel and it began in the USA mainly to maintain a low cost structure compared to the competitors. Their main aim is to have the lowest cost structure and they charge for the food ordered during the flight. The actual product includes the packaging, branding, quality, features and design. The low cost airlines are a service so it does not have packaging but branding is essential for any company to instigate brand loyalty and to attract customers. Branding is essential to create high brand equity in the market since the more powerful and valuable a brand is the more will increase the market share. Quality can be an issue in this case because all they provide is a safe flight and food that might not be up to higher standards. When they do not provide passenger services then quality is of question here but people mainly come to them for cheap fares and they are not concerned with the other services. These airlines provide single passenger class only. Finally, the augmented product includes delivery, warranty and after sales services. Low cost airlines deliver at cheap prices without much of services to attract the masses and they do not provide much of the after sales services but the delivery of the product is equal to the expectations of the consumers since they want cheap fares.
On the other hand, scheduled airlines are e...
e core benefit of this service is the choice of traveling in comfort with innumerable choices to be in luxury and bliss, plus it also allows people to travel on a cheaper price compared to business class and it provides lesser services or choices to travel in luxury. They charge enough on the ticket to provide food and other luxurious services. The actual product is about branding without which these airlines can not survive and make a name in the market. They need high brand equity to achieve a huge market share. They have to maintain good quality to maintain high brand equity. The augmented product is about delivery and after sales services. They deliver according to the customer's expectations and they do give after sales services like car service on landing in the destination.
The low cost airlines provide low fares. Their main pricing goal is current profit maximization. In this case they estimate what demand and costs will be at different prices and they choose the best option to attract more customers and earn high profits. But they also aim to achieve market share leadership through lowest costs, lowest prices and highest long-run profits. They have mainly stressed on competition based pricing that is setting prices based on what the competitors charge. The main aim is to have a lower cost structure compared to competitors in order to attract more customers.
The scheduled airlines provide expensive fares that range between business class and economy class. These airlines have product quality leadership as their main pricing goal. They charge high prices to cover high performance quality and other costs. These airlines have value-based pricing approach that is setting prices based on the buyer's perceptions of value rather than on seller's cost.