A Study on Brand-Switching Behaviour in High-End Airline Flight Services

Abstract:     
Even though there are several companies that provide high-end airline flight services, two service providers, namely Kingfisher Airlines and Jet Airways, control the student segment in Karnataka. In order to attract customers, both companies offer several special promotional schemes, month to month. Some of these promotional schemes are: ‘free ticket,’ ‘cash-back,’ and ‘Fly-500.’ Notwithstanding these promotional strategies, a high level of brand-switching behaviour prevails in the high-end airline flight services segment.

The study analyses the effect of each combination of promotional strategies adopted by the two companies using the Markov brand-switching model. The optimal mixes of promotional strategies for the two companies are then found using game-theoretic techniques. Finally, as the analysis above is based on sample data, sensitivity analysis is performed to assess the effect of sampling/estimation error on the results.

Number of Pages in PDF File: 7

Keywords: promotional strategies, brand-switching behaviour, Markov brand-switching model, game theoretic techniques, sensitivity analysis

JEL Classification: L89

working papers series