Case: Aerosphere Airlines

Scott Schneider is the Chief Marketing Officer for Aerosphere Airlines, a Flemish company that hires private jets. He worries about how to maintain a marketing edge against his main competitors, Dynasty Airlines, Shark Airlines, and Ultra Airlines. Aerosphere, Dynasty and Ultra have similar business models, reflecting a higher concern for service, and Shark positions itself more as a low-price, low-cost carrier. The four companies operate from airports in Belgium and offer flights within Europe. The total size of the market for flights in private jets in Belgium is estimated at 20.000 customers. Mainly companies who choose to hire a private jet, rather than buying or leasing their own corporate jet. To figure out the current competitive position of the airlines, and to help set strategy, Schneider commissioned a customer equity study of the industry. This began with focus group interviews with customers to figure out the drivers of Value Equity, Brand Equity and Relationship Equity. Based on the focus groups, Schneider came up with the customer equity driver diagram shown in exhibit 1. The identified drivers and sub-drivers were:

Drivers of Value Equity

▪ Quality of cabin service (“cabserv”) ▪ Passenger compartment comfort (“passcomp”) ▪ Price (“price”)

Drivers of Brand Equity

▪ Attitude toward the airline (“aatt”) ▪ Awareness of the airlines advertising (“aad”)

Drivers of Relationship Equity

▪ Investment in the airline’s frequent flyer program (“alinv”) ▪ Preferential treatment (“alpref”)

Following the identification of customer equity drivers, Aerosphere hired a professional field service to collect survey data from a sample of airline passengers. These data were used to