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

Park, Kwang-Sik (한국항공대학교 경영학과)
Yoon, Moon-Gil (한국항공대학교 경영학과)
Publication Information
Korean Management Science Review / v.27, no.3, 2010 , pp. 149-160 More about this Journal
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
Airlines; Frequent Flyer Program; Preference Value; Reward Program; Conjoint Analysis;
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