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Thursday, August 26, 2004 9:23 AM
What's Your Differentiator?
Kevin Salwen on Travel

Northwest Airlines announced this week that it is adding a surcharge for passengers to talk to a reservations agent instead of buying tickets online. It's the latest erosion of the line between the traditional big carriers and the group once derided as 'the discounters.' As the larger players have struggled in the post-Sept. 11 recession economy, they slashed, they burned, they pinched.

I remember, several years back, a comedian joking that on the discount airlines 'in the case of emergency, please use the person next to you as a flotation device.' Now, in the wake of Northwest's move, the Atlanta Journal-Constitution is running a humorous item about the 'Pay As You Go' Skies, in which there are 'coin-operated oxygen masks' and 'pay toilets: $2 the first minute, 25 cents each additional minute' and a '$20 deplaning fee.'

Clearly, the blurring game is on. Everyone wants to be a discounter (buy a sandwich, anyone?). The only factor that seems to matter to the carriers is price. But where is the differentiation? Where's the higher quality service? Won't anyone pay a premium for that? What would you pay for?


Mindwalker - 8/27/2004 10:34:13 AM
If you will allow me to link to a competing publication, check out this article about the designer Michael Graves in Fast Company.


'In the mid-1990s,' he tells the assembled designers and educators, 'products based on design didn't exist for everyday people with everyday budgets.' Johnson had long admired Graves's Alessi teakettle, the world's best-selling designer teapot at the time. But its $150 price tag limited sales to the well-heeled. When the two finally met, Johnson suggested that Graves try designing for a broader audience. He jumped at the chance. His biggest frustration, Graves told Johnson, was that his students at Princeton couldn't afford to buy his products. 'I would love to democratize design,' he said.

Part of the point of the article was that when he made the decision to 'democratize' and design products the ordinary folks could afford at Target, revenues for the Michael Graves Design Group increased tenfold.

People are willing to pay for good service (and good design). Why? Well, after a while, it becomes obvious that cheap crap is still cheap crap. The differentiator that Michael Graves brought was that cheap doesn't necessarily have to mean shoddy. Why not bring a highly evolved design aesthetic to otherwise cheap products? It then elevates the bar for everyone.
Tim Harding - 8/26/2004 12:11:49 PM
Have you read about the 'trading up' phenomenon where people are choosing luxury in those few areas they really care about because of the savings they make in day to day living by buying really cheap staples and necessities at mass merchandizers - Target, Walmart, Northwest etc.

Perhaps that lead to a segmentation in the flying population between those that charter private jets and those that fly Air Wally.

http://www.findarticles.com/p/articles/mi_m0DGM/is_7_26/ai_113933776 - that's an article about this sort of consumer extremism. Either you buy luxury or you buy cheap crap. There'll be no middle ground.
Matt - 8/26/2004 11:11:10 AM
Sure, people will pay more for higher quality service. But the big carriers can't even get the basics right (like getting there when you say you will).

I buy a ticket to get from point a to point b in a certain amount of time; if you can't do that for me, I really don't care if I have DirecTV, airborne WiFi, or my own personal masseuse.


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