Star Alliance in the field of Marketing Essay Example | Topics and Well Written Essays - 3000 words

Star confederacy in the field of Marketing - Essay usageAlliances were an appropriate response to the market change by the leading airlines. Star Alliance is the largest with a market sh atomic number 18 of 23.6 percent followed by Sky Team, Oneworld and locomote (Czipura & Jolly, 2007). This paper will discuss how at Star, the benefits are reaped both by the customers and the airlines, the route placeup and the basis, the problems and pitfalls encountered and how Star Alliance differentiates itself from other airline leagues.The Star Alliance started as a joint marketing effort between United Airlines and Air Canada in 1992 and was formed on the premise that each could derive benefits from expanding the represent of cooperation. They wanted to increase the membership and devolve authority towards a more centralized and independent organization structure (Anslinger & Jenk, 2004). By 1997 Scandinavian Air trunk (SAS), Deutsche Lufthansa, Thai Airways International had joined th e alliance. These five members signed bilateral agreements regarding code sharing, joint marketing activities, and flight schedule coordination (Czipura & Jolly, 2007). The alliance wanted to exploit the benefits of a worldwide network. By 2006, there were 18 full members in addition to several regional members and member candidates. Today it has 24 members and has a centralized set of activities and functions. The Star Alliance serves 855 airports in 155 (StarAlliance.com, 2007) countries and expects to achieve substantial savings through rationalizing their operations and in the process squeezing out competitors (Boyd, 2001). Airlines have petty(a) control over fixed expenditure like aircraft and equipments and the labor costs account for almost one-third expenses in the industry. As such most airlines are looking for saving expenditure in other areas.In 2001, Star Alliance created a new and more stable management structure. Prior to this, the alliance was driven by the individua l