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CHARGE FOR PILLOWS – YOU CAN MAKE MONEY

July 21, 2010

As a former airline marketing executive, when I heard that second-quarter profits soared at United Airlines it fascinated me. No, not because United and other airlines are final returning to profitability, but how they are doing it.  By tacking on fees for practically everything from pillows to luggage (paid toilets are being discussed by several airlines), the transformation to a commodity product is now complete.

As someone that spent years touting free champagne on every flight and running a “Three Feet for Your Two Feet” ad campaign, promising 36” seat pitch throughout the cabin, this change in the marketing heart of the airline industry is sad and should be a cautionary tale.

As I point out in my book (www.powershiftmarketingbook.com), as products/services mature they become more susceptible to the forces of commoditization (me-too products, overcapacity, and frequent price cuts). The challenge today is that the time between launch and maturity is faster than ever. So, how can you slow this process or survive in a commoditizing industry? I found some great tips from a Harvard Business School posting from Professor John Quelch. He not only outlines three ways to slow the process, but he covers four excellent ways your business can  survive. Check it out: (http://hbswk.hbs.edu/item/5830.html).

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