American Airlines is the market leader with about 18% market share, if you measure it by RPKs. They have held basically steady in recent years, although it doubled its net income from 2006 to 2007. Still, it recorded a net loss in the fourth quarter of ’07 and posted a $328 million loss in first quarter ‘08, which the airline attributed to rising fuel costs. And, like many of its competitors, it recently announced it would be charging passengers for checked luggage.
Its basic steady nature is reflected in its branding. It’s basic. It is not positioned against the competition and instead is focused on the reasons we all want to fly (instead of why we would want to fly American). It’s theme line, “We know why you fly,” is the idea driving its branding campaign. American demonstrates the reasons why customers are flying: unexpectedly making a business meeting in London, surprising your wife with dinner out of town, etc. The TV spot below encapsulates this position most accurately.
American Airlines "Home"
The position doesn't address the issues most passengers face. The question is, “OK. I do want to sample Grandma’s cobbler. But at what cost to my personal inconvenience?” AA has always had a kind of “American” feel, much like Bank of America in banking.
The American/We Know Why You Fly position is also reflected in its print advertising.
But American is still marketing category benefits that have only minor impact because it is not positioned against the competition. It’s similar to saying you are the “best,” which isn’t believable because no one claims to be the “worst.” Best is only believable to those who have already decided a competitor is “worst” for one reason or another. In this case, do you believe the competition won’t get you to those “big honkin’ trees”?
One note, however, before we move on. Selling category benefits is a common strategy for market leaders. If, for example, you sell the category benefits in beer (great taste, have fun, etc.), that helps Budweiser, the market leader, because more people drink Bud than any other beer. Consumers simply default to the market leader. And more fly American than any other airline.
This is strictly a defensive position designed to protect market share (which it’s doing) but not designed to steal market share.
Stealing Share is a brand development firm that arms its clients with the tools they need to drive competitive advantages. We conduct research and provide corporate strategy, positioning, training and brand design with one goal in mind: To steal market share for our clients.
Our experts are all about the science of persuasion, and have proven it with brands and companies all across the world. We uncover the fears and belief systems of your target audiences so your brand can align itself with them and create preference. It’s how we steal market share.
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