The ethical dimensions of airline frequent flier programs

Arnesen, David W.; Fleenor, C. Patrick; Toh, Rex S.

doi:10.1016/s0007-6813(97)90025-2

Cited by 15 publications

(12 citation statements)

References 9 publications

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“…On the other hand, some program members may actually pay higher price premiums than rationally warranted. Arnesen et al (1997) cite and provide evidence that business travelers may take unnecessary trips, circuitous routes, or pay higher fares to build up mileage. Another avenue for research may be whether the type of the reward moderates the price response of the buyer (or purchase quantity and frequency for that matter).…”

Section: Conclusion and Discussionmentioning

confidence: 99%

Dynamics of price premiums in loyalty programs

Sayman

Hoch²

2014

European Journal of Marketing

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -A loyalty program might influence buyer behavior in several ways. Prior research offers evidence that buyers might increase the frequency of purchases and volume per occasion in a loyalty program; however, the effect on buyers' price tolerance has not been studied before. The aim of this paper is to examine buyers' willingness to pay a price premium for a firm offering a loyalty program reward. Design/methodology/approach -An analytical model of dynamic consumer choice is developed, where one of the two selling firms offers a reward for a certain number of purchases. The maximum price premium that a normatively rational buyer should be willing to pay at each level of accumulated purchases is obtained. A price tolerance in controlled settings is obtained and these are compared with normative solutions. Findings -Analytically, it is shown that the maximum price premium increases as purchases are accumulated; and the exact solutions can be found, given the price distributions and program design parameters. In the empirical studies it is found that individuals' maximum premiums are less than the normative levels. On the other hand, as buyers accumulate purchases from the reward offering firm, and get closer to the reward, maximum premiums paid increase -particularly when the reward is immediate. Originality/value -This paper contributes to the loyalty programs literature by examining the price premium, or switching barrier, aspect of buyer response. Furthermore, the paper not only models and solves the normative strategy, but also obtains actual price tolerance in laboratory settings.

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Section: Conclusion and Discussionmentioning

confidence: 99%

Dynamics of price premiums in loyalty programs

Sayman

Hoch²

2014

European Journal of Marketing

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“…These users generally tended to express their satisfaction with the e-service. The evidence suggested that the majority of the members of the wellness program were "rewards chasers," who sought to upgrade their status by exploiting the "easy" rewards instead of making "real" lifestyle changes (Arnesen, Fleenor, and Toh 1997). As noted by one of the systems architects, a new norm started holding sway in the firm: To some extent, these users did fit the characteristics of the firm's prototypical ideal user, as they wished to maintain a relationship with the firm via the cost-effective e-service channel.…”

Section: Proposition 1: Examining the Positive It Identification Pathmentioning

confidence: 99%

Who Am I Online? Examining Voluntary Use as Symbolic-Collective Action

Naidoo

2014

The Information Society

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This article reports on a test of an integrated voluntary information technology use model that draws on social identity theory to extend the functional utility model of the user. User feedback on a health care insurance firm's electronic service in South Africa was analyzed qualitatively using pattern matching to test the model's propositions. While functional utility was found to be a significant determinant of voluntary information technology use, both functional utility and symbolic needs were significant for some user segments. Information technology research can benefit from further cross-fertilization with social identity theory to explain use patterns in different voluntary contexts. Providers seeking to move beyond functional utility should consider the symbolic needs of strategically important user segments to strengthen long-term relationships.

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“…Now, typically,travelers belong to several FFPs at the same time. One count indicated that 32 million people in the US belonged to an average of 4.7 FFPs per traveler (Arnesen, Fleenor, and Toh, 1997). In 1988 revenue loss from FFPs was estimated at $1.24 billion (Toh and Hu, 1988).…”

Section: Journal Of International Consumer Marketingmentioning

confidence: 99%

Consumer Choice of Airlines in Malaysia

Oyewole

Sankaran

Choudhury

2007

Journal of International Consumer Marketing

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Competition, coupled with air travelers' worries following the 9/11 incident has made winning customers to one's side tougher in the airline industry. It thus becomes important to know what factors determine the choice of airlines by air passengers. This paper examines these factors in the context of a developing country, Malaysia. Perspectives of airlines, travel agents, and consumers were sought through a questionnaire survey. Results show that safety record of the airlines is an overriding factor mentioned by the airlines surveyed. Consumers and agents, however, rated this factor of third/fourth importance, putting it behind discounted fares, and large number of cities served by an airline. All the three groups of market participants tend to be in harmony in rating ICT (Information Communications Technology) as the least important choice factor. Finally, consumers also mentioned other factors never alluded to by either the airlines or the travel agents. Managerial implications of these findings for airlines operating in Malaysia and similar developing countries are discussed.10.1300/J046v20n01_03

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The ethical dimensions of airline frequent flier programs

Cited by 15 publications

References 9 publications

Dynamics of price premiums in loyalty programs

Dynamics of price premiums in loyalty programs

Who Am I Online? Examining Voluntary Use as Symbolic-Collective Action

Consumer Choice of Airlines in Malaysia

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