Korean Management Science Review (경영과학)

The Korean Operations Research and Management Science Society (한국경영과학회)
권호 표지

Analysis on Preference Values for Reward Services of FFPs by Intention of Mileage Accumulation

항공사 마일리지 적립의도에 따른 FFPs 보상서비스 선호가치 분석

  • 박광식 (한국항공대학교 경영학과) ;
  • 윤문길 (한국항공대학교 경영학과)
  • Received : 2010.04.02
  • Accepted : 2010.04.17
  • Published : 2010.11.30
Download PDF
⟨ Previous Next ⟩

Abstract

This paper focuses on frequent flyer programs (FFPs), which have long been used by most airlines as a powerful marketing tool. Since the preference for FFPs reward services and the customer perceived values of mileage points differ among FFPs members, airlines should design a customer-oriented reward service based on customer preference to motivate the use of mileage points. The intention for using mileage points is affected by various kinds of attributes such as reword items, consuming mileage points for rewards and time of usage. In this paper, we focus on evaluating customer perceived values of attributes of FFPs reward services. A conjoint analysis model is applied to get the preference value of each attribute. Some empirical experiments are conducted in relation to Korean customers. From the empirical survey, the preference values of attributes are evaluated for different scenarios with respect to the number of mileage points. With the preference values of attributes, we can find several implications for airlines regarding the development of various FFPs strategies.

Keywords

References

  1. 성연영, "항공사 마일리지 정책의 변화 필요성", 항공진흥, 제33호(2003) pp.190-211.
  2. 윤문길, 이휘영, 윤덕영, 이원식, 항공운송 서비스 경영, 한경사, (2008) 서울.
  3. Browne, W., R. Toh, and M. Hu. "Frequent flier program : the Australian experience," Transportation Journal, Vol.35(1995) pp.35-44.
  4. Caminal, R. and A. Claici, "Are loyalty-rewarding pricing schemes anti-competitive?," International Journal of Industrial Organization, Vol.25(2007) pp.657-674. https://doi.org/10.1016/j.ijindorg.2006.07.004
  5. Chin, T.H., "Impact of frequent flyer programs on the demand for air travel," Journal of Air Transportation, Vol.7(2002) pp.53-86.
  6. Driver, J.C., "Developments in airline marketing practice," Journal of Marketing Practice, Vol.5, No.5(1999) pp.134-150. https://doi.org/10.1108/EUM0000000004571
  7. Green, P.E., A.M. Krieger, and Y. Wind, "Thirty years of conjoint analysis : reflections and prospects," Interfaces, Vol.31(2001), pp.S56-S73. https://doi.org/10.1287/inte.31.3s.56.9676
  8. Gudmundsson, S.V., E.R. de Boer, and C. Lechner, "Integrating frequent flyer programs in multilateral airline alliances," Journal of Air Transport Management, Vol.8(2002), pp. 409-417. https://doi.org/10.1016/S0969-6997(02)00043-1
  9. Klophaus, R., "Frequent flyer programs for European low-cost airlines : Prospects, risks and implementation guidelines," Journal of Air Transport Management, Vol.11(2005) pp. 348-353. https://doi.org/10.1016/j.jairtraman.2005.07.001
  10. Morison, S.A. and C. Winston, "Enhancing the performance of the deregulated air transportation system," Brookings Papers on Economic Activity : Microeconomics, Vol.1 (1989) pp.61-112.
  11. Nako, S.M., "Frequent flyer programs and business travelers : an empirical investigation," Logistics and Transportation Review, Vol.28, No.4(1992) pp.395-414.
  12. Sharp, B. and A. Sharp, "Loyalty programs and their impact on repeat-purchase loyalty patterns," International Journal of Research in Marketing, Vol.14, No.5(1997) pp.473-486. https://doi.org/10.1016/S0167-8116(97)00022-0
  13. Stephenson, F.J. and R.J. Fox, "Corporate attitude towards frequent flier program", Transportation Journal, Vol.27(1987), pp.10- 22.
  14. Suzuki, Y. and C.K. Walter, "Potential cost savings of frequent flyer miles for business travel," Transportation Research Part E, Vol.37, No.6 (2001) pp.1-14. https://doi.org/10.1016/S1366-5545(00)00008-9
  15. Suzuki, Y., "A heuristic method for effectively using frequent flyer miles for stochastic business trips," Transportation Research Part E, Vol.38(2002) pp.335-349. https://doi.org/10.1016/S1366-5545(02)00011-X
  16. Suzuki, Y., "Airline frequent flyer programs : equity and attractiveness," Transportation Research Part E, Vol.39(2003) pp.289-304. https://doi.org/10.1016/S1366-5545(03)00003-6
  17. Toh, R.S. and M.Y. Hu, "Frequent-flier programs : passenger attributes and attitudes," Transportation Journal, Vol.28(1988) pp.11-22.
  18. Uncles, M.D., G.R. Dowling, and K. Hammond, "Customer loyalty and customer loyalty programs," Journal of consumer marketing, Vol.20, No.4(2003) pp.294-316. https://doi.org/10.1108/07363760310483676
  19. Whyte, R., "Frequent flyer programs : is it a relationship, or do the schemes create spurious loyalty?," Journal of Targeting, Measurement and Analysis for Marketing, Vol. 12(2004) pp.269-280. https://doi.org/10.1057/palgrave.jt.5740114