     |
American Airline reservations systems for bying tickets"AMERICAN AIRLINE RESERVATIONS"
Can't find what you need? Try a Google Web Search in the box below!
Catching up to the electronic marketplace The question of how electronic markets can add strategic advantage for direct marketers has long been pondered by suppliers of these networks. Simply defined, an electronic market is a system through which buyers and sellers exchange goods and services. The electronic american airline reservations market can serve the business-to-business marketplace or it can focus on consumers. It can be accessed via personal computer, touchtone telephone or public kiosks. In all cases, the value that the electronic marketplace adds above traditional buying and selling methods must exceed the cost of operating the market for it to survive and prosper. American airline reservations systems are good examples of successful electronic markets. American Airline's Sabre system currently services more than 15,000 travel agents worldwide. Sabre began as an inventory management system and evolved into a way for American Airlines to gain strategic advantage over its competitors. Given the volatility of american airline reservations, the added convenience and speed the travel agent gains through the system is easy to appreciate. Until recently, American Airlines would list its cheap flights at the top of the electronic screen so that the travel agent would be more inclined to select the parent carrier. Of course, other airlines also offered reservation systems. TWA introduced Pars; United had Apollo, etc. Each jockeyed for travel agent acceptance and each was biased toward its parent. Over time, the revenue of these electronic american airline reservations systems began to exceed the strategic value of offering a narrow, biased pipeline to the parent carrier. In "The Logic of Electronic Markets," an article that appeared in the December/ January 1989 issue of the Harvard Business Review, the author argues that electronic markets conform to a defined logic. This logic is illustrated by the transformation that the american airline reservations systems made from narrow airline tickets inventory services to unbiased electronic markets that cover not only airline reservations, but almost every other element that can be bought and sold in the travel category. The emphasis here is on the word "markets" because it is this buying and selling activity that adds value: Value that grows directly from the attributes of computing technology. The logic of Sabre and other electronic markets dictate that users of the marketplace, those businesses or consumers who pay for the service, will participate to the extent that the service offers options unavailable in other market structures. This is well illustrated by CompuCard, a company that promises the lowest price by aggregating 2,000 manufacturers and distributors of consumer goods in the marketplace. Like Sabre, CompuCard is unbiased. It is set up to offer the maximum number of cheap airfares purchase options available to the user. Under these circumstances the strength of a particular brand is all-important. Can't find what you need? Try a Google Web Search in the box below!
For example, as a subscriber to CompuCard, I may be in the market for a personal stereo. There are several manufacturers of these devices, but few would doubt the strength of Sony's brand in this category. My primary interest as a participant in CompuCard's electronic marketplace is in getting the best price on the brands I want - in this example, a Sony. After all, Sony will guarantee the merchandise as long as it is not a "gray market" product. So CompuCard serves to "search" for the best price in a highly comprehensive manner. I pay CompuCard for this service and save money on the back end each time I make a purchase. "We don't make money selling goods," says Mark Walsh, vice president of CompuCard's online division. "We ask for our gross margin up front in the form of a $30 membership fee." In essence, CompuCard truly represents the consumer's interest, because, as Walsh asserts, they are "vendor neutral." In other words, they make the same money on a large screen projection television as they do on a $40 Walkman. And they guarantee the best price. Brands are important in the electronic marketplace because the aspect of choice is heightened. If I'm looking down a list of brands and models on a screen, it is equally convenient for me to choose any brand and any model. It is also relatively easy to get marketplace information on these brands. In CompuCard, there is a link between the purchasing function of the marketplace and Consumers Guide, a product review service. In this case, I get expert advice on a brand or model before I purchase. For anyone who has tried to do this in the non-electric marketplace - the retail marketplace - the experience of bringing along the magazine in which the product or service is reviewed, and then matching this exact model to the models available on the retailer's shelf is a formidable challenge. Again, the logic of the electronic american airline reservations market comes into play. For the electronic market to add value over the retail market, its information must be up-to-date. The model numbers offered for sale in the electronic american airline reservations marketplace must match the model numbers in the online reference section. Otherwise, the information component of the marketplace loses value. Finally, we need to understand the added value offered by videotex services such as Prodigy and CompuServe. Both these services offer Sabre (in its consumer form, EaasySabre) and CompuCard. Prodigy also offers Consumer Reports. In this regard, these services act as "gateways" to a range of american airline reservations electronic marketers, each representing a different category. In particular, Prodigy offers a user-friendly "interface" that makes access to these electronic markets less daunting for the personal computer user. They also offer enormous marketing muscle, which can get the word out on services such as CompuCard and EaasySabre. What does all this mean to the direct marketer? Let's look at the numbers. According to Bob Smith, executive director of the Videotex Industry Assn., a trade group, about 1.6 million consumers currently have access to electronic marketing services in the United States. This represents less than 1 percent of all consumers over the age of 18. The number of american airline reservations electronic markets operating in the business arena is difficult to track, but the market is tiny in the context of all business-to-business transactions. So we are at the very beginning of this move toward electronic marketing. That's good news, because as direct marketers, we would not want to find ourselves in a world where our customers make purchase decisions based on perfect market information and exchange. The balance of power would be shifted completely in the consumer's direction, away from our clients. Can't find what you need? Try a Google Web Search in the box below!
The question, now, is how we can insinuate ourselves into these emerging networks. Prodigy, for example, allows direct marketers to place screens of advertising in the service so that users are directed into marketers' databases where they can shop, receive electronic information, or request brochures, floppy disks and other forms of collateral through the mail. But this structure is not typical of electronic market activity. As the fundamental value to the consumer or business person participating in any american airline reservations electronic market is comprehensive access to the best price and information, the role of the manufacturer in such an environment is tenuous. But it can be made central. The Prodigy model is an excellent one. In the not-too-distant future, one can certainly imagine an electronic market that fluently links unbiased product reviews and reports, the manufacturer's market information, and an array of direct marketing services. Let's take one concrete example: First, electronic markets can allow the marketer to be intrusive so that the marketer's role in motivating the all-important impulse buy is not lost..... Compare american airline reservations here /cheap airfares home |