Decision Factors Affecting Online Flight Tickets Booking. Can Loyalty Programme Effects Be Observed?

MSc in Social Science in Service Management Copenhagen Business School Decision factors affecting online flight tickets booking. Can loyalty programme effects be observed? Master’s Thesis Number of pages/Number of characters: 80 / 163.039 Author: Michalina Zofia Rokita Date of submission: 7.09.2016 Supervisor: Ioanna Constantiou, Department of IT management Michalina Zofia Rokita Abstract This thesis’ aim was to identify the customers’ decisional factors when booking a flight ticket online and to search the loyalty programme effect on the path to purchase. The study was based on the Consumer Decision Journey model proposed by Edelman (2010). The need for this research was identified to challenge the classical decision making model and marketing principles, where a customer is able to identify and choose always unambiguously best alternative and obediently follow the marketing efforts of the company. The study was centred around the main research question ‘What decision factors are important to consumer when booking flight tickets online?’ and the sub-question ‘What is the influence of a loyalty programme membership and the perception of its benefits on the Consumer Decision Journey?’ The theoretical background of this search was grounded in theories on decision making, loyalty, loyalty programmes and online environment and presenting the uniqueness of the case of online flight tickets booking. Generation Y participants were interviewed and went through hypothetical search scenarios combined with think-out-loud technique which provided a deep insight into their online behaviour, with commentary on the aspects that are considered important when booking the flight tickets. The findings of the thesis showed that customers overall value mostly the convenience of the flight-in a matter of duration and schedule, and they are willing to trade-off price, which was of equal importance as convenience, for the more suitable connection. Other factors making customers more prone to book certain airlines over other appeared to be: past experience with the airline (not necessarily a positive one) and trustworthy design of the website. Loyalty programme effect on the path to purchase was unnoticeable, which makes a loyalty programme and loyal customer link strikingly weak, or exposes the inapplicability of the model due to the wide availability of the comparison websites-intermediaries, which provide the customer with the transparent comparison of the prices, and diminishes the loyalty effect. 1 Michalina Zofia Rokita Table of contents Chapter 1: Introduction ..................................................................................................................................................... 4 1.1. Research Question .......................................................................................................................................... 7 1.2. Delimitation .................................................................................................................................................... 7 Chapter 2: Literature review and theoretical framework .................................................................................................. 8 2.1. Consumer behaviour....................................................................................................................................... 8 2.2. Loyalty ......................................................................................................................................................... 12 2.3. Loyalty programmes..................................................................................................................................... 14 2.4. Sharp’s new marketing view ........................................................................................................................ 16 2.5. Online environment and its impact on decision making ............................................................................... 17 2.6. The Consumer Decision Journey model ....................................................................................................... 20 2.6.1. Consider ...................................................................................................................................................... 21 2.6.2. Evaluate ...................................................................................................................................................... 22 2.6.3. Buy ............................................................................................................................................................. 25 2.6.4. Enjoy, Advocate and Bond ......................................................................................................................... 25 2.6.5. The loyalty loop .................................................................................................................................. 27 2.7. The uniqueness of booking flight tickets service.......................................................................................... 28 2.8. Presentation of the researched environment ........................................................................................................ 30 Chapter 3: Methodology ................................................................................................................................................. 32 3.1. Philosophy of science ................................................................................................................................... 33 3.2. Data analysing method ................................................................................................................................. 33 3.3. Methodological choices ................................................................................................................................ 34 3.4. Data collection ............................................................................................................................................. 35 3.4.1. Sampling method ......................................................................................................................................... 35 3.5. Time- horizon ............................................................................................................................................... 36 3.6. Research techniques ..................................................................................................................................... 36 3.7. Limitations ................................................................................................................................................... 41 3.8. Validity and reliability of the research ................................................................................................................ 42 Chapter 4: Research findings .......................................................................................................................................... 43 4.1. Initial consideration ...................................................................................................................................... 43 2 Michalina Zofia Rokita 4.1.1. Price .................................................................................................................................................... 45 4.1.2. Price/convenience trade-off ................................................................................................................. 45 4.1.3. Price/luggage price trade-off ............................................................................................................... 46 4.1.4. Loyalty programme importance in frequently travelled destination .................................................... 46 4.2. Active evaluation .......................................................................................................................................... 48 4.2.1. Loyalty programme influence on the decision journey ....................................................................... 49 4.3. Buy ............................................................................................................................................................... 50 4.3.1. Decision factors when flying to London ............................................................................................. 51 4.3.2. Decision factors when flying to Barcelona.......................................................................................... 52 4.3.3. Decision factor overall trends ...................................................................................................................... 53 4.3.4. Loyalty programme influence signs in purchase ............................................................................ 57 4.3.5. Way of booking tickets ............................................................................................................................. 57 4.4. Enjoy, Advocate and Bond ........................................................................................................................... 57 4.5. Loyalty loop ................................................................................................................................................. 60 4.5.1. Enjoy Advocate and Bond of Loyalty Loop ........................................................................................ 61 Chapter 5: Discussion ....................................................................................................................................................

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