Using global segmentation to grow a business
An United Airlines case study

Page 1: Introduction

Today we live in a global community as global citizens where we have become increasingly conscious about sharing the planet with people from other cultures and backgrounds. In this global community where so many technologies are shared, distances and time barriers have shrunk. Not only can we use information technologies to e-mail, phone or fax friends, family and colleagues in other parts of...
Read full page

Page 2: United Airlines

United Airlines was formed in 1927 from four airlines - Boeing Airplane Company, National Air Transport, Varney and Pacific Air Transport. From its roots as a USA domestic carrier, United Airlines expanded into international routes to become the world's second largest air carrier. With hubs in Chicago, Denver, Los Angeles, San Francisco, Washington D.C. and key international gateways in Tokyo...
Read full page

Page 4: The need for segmentation

Within markets, not all customers are the same - they have different tastes and want different things. As a result, particular markets can usually be further divided into discrete segments. Each group consists of people with similar needs and requirements. The organisation then develops strategies that are closely aimed at satisfying each customer group. This process is known as market...
Read full page

Page 5: The base for segmentation

Segmentation involves dividing up a whole market so that products and services can then be developed for each part of the market. Some companies divide up a market geographically, while others divide markets according to demographic details such as age, gender or occupation. The criteria used to divide the market is known as the segmentation base. United Airlines uses a form of psychographic...
Read full page

Page 6: Global segmentation and growth strategies

There are clear differences between domestic segments and global segments. For example, international segments might differ by hours rather than minutes in the US, and the cost of domestic travel is also significantly lower. In global segments United Airlines identifiednine motivational segment profiles. These are:Global executives: face frequent business travel and enjoy it because of the high...
Read full page

Page 7: Meeting customer needs

In an industry in which the service provided is a major form of competition, the most successful airlines will be those who most accurately identify what different segments of their customer base want and are willing to pay for, and then provide it, usually within one aircraft. The end product is complex. For example, United Economy International provides services such as multi-course meals...
Read full page

Page 8: The service life-cycle

In general, depending on the size of the company, service providers can modify their offer more quickly than manufacturers can alter their products. United Airlines' ability to fine-tune its services rapidly in response to changing customer needs enables it to retain its market position. Growth strategies also depend on a capacity for 'rapid response'.Service adjustments may involve, for...
Read full page

Page 9: Conclusion

United Airlines recognises that airlines need to be able to respond rapidly to changing customer requirements in what is a complex service industry. The company understands the role of technology in enabling it to amass the data it requires about customer requirements. In a heavily regulated and increasingly competitive market place with good prospects for long term growth, United Airlines...
Read full page

Related: United Airlines
Case studies in Business Case Studies