The Perceived Effectiveness of the Relationship Marketing Program of Philippine Airlines in Building Customer Loyalty

Abstract

An airline is an important part of air transportation. It caters to millions of air passengers on a daily basis. A passenger may avail of a flight, fly to his destination, and never purchase another traveling ticket again. Because of its transitory nature, airline industries are coming up with ways on how to keep current customers longer and attract potential fliers along the way. Relationship marketing is a marketing communication concept that specializes in maintaining positive, long-term relationships with customers. As for airline industries, they keep customers through frequent flier programs. The organization in focus in this study is the Philippine Airlines. Currently, PAL is employing a frequent flier program called, Mabuhay Miles. It is the relationship marketing program of PAL. It has currently 1.5 million members, and it follows the standard guidelines for airline relationship marketing programs. Frequent flier programs such as PAL's Mabuhay Miles aim at building customer loyalty. There had been studies showing that a frequent flier program helps in building'customer loyalty through frequency of flights and accumulating mileages. Because of studies showing that loyalty may come from relationship marketing programs, the study is proposed and aims to answer the question: "Is the perceived effectiveness of the relationship marketing program of Philippine Airlines building customer loyalty?" This seeks to answer the following sub-problems: (1) What constitutes the relationship marketing program of Philippine Airlines?; (2) How does the relationship marketing program of Philippine Airlines influence customer loyalty? and; (3) Are the frequent fliers loyal to Philippine Airlines? In answering the questions posed, the researcher used an interview schedule for the PAL management, and survey questionnaires for PAL employees and PAL passengers. An interview was conducted to have an accurate profile of Philippine Airlines and its relationship marketing in promoting loyalty. Ten (10) employees were asked to participate in the study since they directly interact with the frequent fliers of PAL. Eighty (80) passengers were given questionnaires to rate their perceptions on the relationship marketing of PAL, which is the Mabuhay Miles, and to understand the measures from which they base their loyalty or the lack of it towards PAL. This study revealed that The PAL management is employing both marketing and communication. PAL utilizes marketing communication strategies according to its objectives and goals. The whole Mabuhay Miles program was designed to attend to each loyal customer's specific need. PAL recognizes the importance of building relationships with customers through Mabuhay Miles. The objective of the Mabuhay Miles program is to increase its membership, customer retention, and to have more program partners. In relationship marketing, expectations of both parties should be met through a mutual exchange and fulfillment of promises. A relationship marketing program such as Mabuhay Miles is a strategic way to stay on top of business. Caution must also be applied by airlines when planning relationship marketing programs. The two elements involved in relationship marketing are trust and commitment. At PAL, mutual trust should be present between the airline and the customer in order for the relationship to last. Passengers also agreed that they are committed to PAL. To be committed to PAL means that passengers have an enduring desire to maintain the relationship. Nowadays, airlines are realizing that mere transactions with customers are not enough if it wants to stay in the business longer. The use of a database system must be treated only as a strategy in building relationships, and only as a helpful means to an end. Passengers perceive the emotional aspect of relationship marketing programs as important and significant in their relationship choices. As it appears, both concepts of relationship marketing and customer loyalty received favorable response from the passengers.