Strategy Two by Ella Lamptey https://padlet.com/ellalamptey13/Bookmarks Develop Non-Aeronautical Spending from a Service Marketing and Management Perspective en-us 2022-04-19 13:21:01 UTC 2022-04-27 16:42:07 UTC hello@padlet.com How did Non-Aeronautical Income come about?Deregulation ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2152574305 In this YouTube video above Greenfield (2015) explains that "before Deregulation, airlines and airports were protected by governments who owned them. Meaning these governments decided which airlines would fly particular routes and how much was charged, providing the reliance on traditional aeronautical revenue".

Due to regulation, airlines charged the same prices no matter who a customer chose to fly with. At this time airlines were to always make a profit and customers could afford to travel. But in 1973 after the American oil crisis forced the government to increase airline prices, it meant that customers could no longer afford to fly. 

With the government struggling to regulate the industry with the costs becoming more expensive then the planes themselves, the Airline Deregulation act was agreed and provided many opportunities for new airlines to emerge and compete in the sector.

As Airlines were now not protected by governmental regulations and could no longer rely on just aeronautical revenues, the aviation sector realised that they had to become more commercial in gaining revenues. This meant rather than focusing on aeronautical revenue, they would rely on income not related to the aircraft, non-aeronautical. ]]> 2022-04-21 19:18:06 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2152574305 Allocation of Space ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2152622239 A study by Manzano et al. (2018) explains that "a large retail area similar to a commercial shopping centre can subconsciously increase customers to spend money by 3.7–4.1%". In turn, the increase of spend at regional airports provides extra revenue "between £3.52 and £3.54 on average".

Ultimately, this demonstrates that the correct allocation of space within an airport will encourage customers to alter their spending habits and behaviours to achieve a bigger non-aeronautical revenue.

]]> 2022-04-21 20:02:57 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2152622239 Shop Location ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2152671390 Graham (2018) states that "the location of any commercial activity in a retail outlet has a very significant impact on an airports revenue performance". This implies that more profitable shops should be located in more accessible parts of the airports to maximise non-aeronautical revenue. It is all well and good having the opportunity to go shopping at an airport but what is the point if customers can not locate what they are looking for. 

In most airports, following the stressful trauma of clearing airport security, passengers are immediately sent to what is, in comparison, a tranquil haven: the duty-free shopping section. After the stress of standing in line, removing their belt and shoes, getting patted down by a stranger, and maybe having someone go through their baggage, passengers are more likely to be in a self-indulgent attitude and therefore increasing non-aeronautical revenue.]]> 2022-04-21 20:55:04 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2152671390 Airport Environment ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2152687482 Passengers spend more money when they are in a nice and enjoyable setting. However, if the passengers are unfamiliar with the surroundings, their spending is reduced. The interior design of the airport terminal has an effect on the performance of non-aeronautical revenue. Chen et al (2020) found that "passengers felt more comfortable in a large area with curved hallways, a curvilinear roof, light-coloured materials for the floor, shop atmospherics, and roof, as well as warm atmospheric lighting and greenery". 

With this in mind, airports might employ a variety of environmental signals to encourage passengers to spend more time and money in their retail facilities. An example of this is shown at Changi International Airport, where the terminal is now much greener and fresher than before due to the their new 'Green Wall'. "It boasts 113,000 plants with more than 50 different species" to allow their passengers a sense of comfort and refreshed beauty.]]> 2022-04-21 21:14:48 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2152687482 Virtuous Circle of Airport Activity (CAA) ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2153333810 (CAA, 2007) citied in (Yokomi et al, 2017).



]]> 2022-04-22 08:58:51 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2153333810 What is Non-Aeronautical Revenue? ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2153334103 Airports generate revenue from a variety of non-aeronautical sources, both directly and indirectly involving customers. " The most important categories, as shown in Fig. 1, are direct retail, rents, and parking, which account for roughly two-thirds of the total figure" (Graham, 2018). ]]> 2022-04-22 08:59:12 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2153334103 Airport Experience Framework ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2153338156 This study, by combining the perspectives of sociological, psychological, and service marketing/management, all of which affect the passenger experience, proposes a theoretical framework for the creation of the airport experience in correlation to an air traveller.

The airport experience has emerged as an important concept for an airports performance. This is due to the growing understanding that the airport experience can increase passenger satisfaction and potential of future visits, enhance travel, increase non-aeronautical revenue, and improve an airports competitive position. 

From a Service Marketing and Management Perspective, it is important to understand the crucial elements involved in creating a positive passenger airport experience. "One main component related to this concept involves ‘servicescape’ within the airports terminals and its application of increasing positive moods and attitudes of customers" Wattanacharoensil et al (2016). Happy customers spend money, and it is this that can have a huge impact on creating non-aeronautical revenue.

With the aim of developing non-aeronautical revenue through a service marketing and managing perspective, this strategy will explain how the said aim can be achieved.

]]> 2022-04-22 09:03:44 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2153338156 Servicescape ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2159223751 In the early 1980s, the term "servicescape" was developed to describe "the environment in which service is constructed and in which the seller and customer interact, mixed with goods that assist service performance or communication." Bitner (1992). Each business creates its own Servicescape to establish an environment that attempts to improve the customer's experience and, as a result, influence their behaviour. The model serves as a framework for organisations to understand the components that make up a servicescape and how they might start to create their own.

]]> 2022-04-26 20:24:57 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2159223751 Physical Environmental Dimensions ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2159227178 As seen from the servicescape model, there are a variety of environmental factors, or physical stimuli, that might influence a physical service environment. These dimensions are usually organized into three categories: ambience, space and/or function, and signs, symbols and artefacts.

]]> 2022-04-26 20:28:17 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2159227178 Covid-19 Servicescape Safety ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2159239272 Ambience Safety- As a result of the Covid-19 standards, businesses are keeping doors open for more ventilation, causing quick temperature fluctuations, and improved cleanliness can also affect the dominating odour in the service area.

Space Safety- In light of social distancing restrictions, businesses must now conform to a 1m distance requirement, which has a direct influence on capacity and layout. In any given service environment, the addition of screens and obstacles generates a whole distinct dynamic. One-way systems also have an influence on the service environment's operation and how consumers may move across the area.

Signage Safety- The influence of safety on the kind of signs and symbols used in service situations has been enormous. Queue indicators are likely to be visible even before entering a place, and signs directing customers to cleanse, provide track and trace information, maintain social distance, and paying by card plays a major role.

In a post-pandemic world, consumer behaviour implies that businesses will need to adjust in order to keep consumers satisfied – which gets us back to why it's all essential in the first place. Because a customer's opinion of a company and/or service has a direct bearing on whether or not they spend their money.

]]> 2022-04-26 20:39:55 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2159239272 Holistic Responses ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2159250308 When a customer walks into a location, they form an immediate impression based on the physical cues they are faced with, this is known as the holistic environment. "A customer's perception or judgement of a firm, brand, or service is formed in the holistic environment" Page (2019). . This triggers an internal reaction based on the perception, which eventually leads to a behavioural response.]]> 2022-04-26 20:50:24 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2159250308 Importance of Servicescape on Passenger Experience and Non-Aeronautical Spend ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2159286919 The passenger experience is influenced by the servicescape. It's the actual location where customers use a service or buy a product, and where the company and the customer interact. Businesses should adjust their servicescape to meet consumer expectations and shape customer impressions. Customers will be motivated to act in a specific way as a result of this view, which will ideally stimulate non-aeronautical spending. If it does not meet expectations and is poorly viewed, the consumer is unlikely to return. It is something that businesses must master. Investing in servicescape can help build stronger customer connections and increase revenue.]]> 2022-04-26 21:28:07 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2159286919 Customer Moderator, Internal Response and Behaviours ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2159291722 2022-04-26 21:34:05 UTC https://padlet.com/ellalamptey13/Bookmarks/wish/2159291722 References ellalamptey13 https://padlet.com/ellalamptey13/Bookmarks/wish/2160704461 Bitner, MJ. (1992). Servicescape: The Impact of Physical Surroundings on Customers and Employees. Journal of Marketing, vol. 55, pp. 57-71.

CAA. (2017) Air Services at UK Regional Airports (CAP 775) cited in Yokomi, M., Wheat, P., Mizutani, J. (2017) The Impact of Low-Cost Carriers on Non-Aeronautical Revenues in Airport: An Empirical Study of UK Airports. Journal of Air Transport Management 64 (Part A). pp. 77-85.

Castillo-Manzano, J., Lopez-Valpuesta, L., Sanchez-Braza, A. (2018). When the mall is in the airport: Measuring the effect of the airport mall on passengers’ consumer behaviour. Journal of Air Transport Management 72. pp. 32-38.

Chen, Y,. Wu, C.T.,; TT. Koo+Douglas, I. (2020). Determinants of airport retail revenue: a review of literature. Transport Reviews, 40:4, 479-505.

Graham, A. (2018). Managing airports: An international perspective (5th ed.). Taylor & Francis.

Greenfield, T. (2015). Airline Deregulation. [Online] Available at: https://www.youtube.com/watch?v=2KiihUHKnSI&feature=emb_title [Accessed; 16/04/2022].

Page, S. J. (2019). Tourism management (6th ed.). United Kingdom: Taylor & Francis.

Wattanacharoensil, W., Schuckert, M., Graham, A., Dean, A. (2017). An Airport Experience Framework from an Air Traveller Perspective. Journal of Hospitality and Tourism Management 32. pp. 124-135.

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