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Assess the consequences to a business, such as Spirit Airlines, of only selling its tickets online. - Edexcel - A-Level Business - Question 1 - 2017 - Paper 1
Question 1
Assess the consequences to a business, such as Spirit Airlines, of only selling its tickets online.
Worked Solution & Example Answer:Assess the consequences to a business, such as Spirit Airlines, of only selling its tickets online. - Edexcel - A-Level Business - Question 1 - 2017 - Paper 1
Step 1
Knowledge 2, Application 2, Analysis 3
Answer
Selling tickets online means that Spirit Airlines can drastically reduce the costs associated with distributing airline tickets. These costs, typically incurred through traditional ticketing methods, are virtually eliminated when customers purchase tickets electronically via a website or application.
This change allows Spirit to either lower the fares they charge customers for tickets or increase their profit margins if ticket prices remain stable. Furthermore, it facilitates a quicker and more convenient booking process for customers, who can access the website at any time to check prices or make purchases, potentially increasing sales volume during peak times.
Additionally, relying on online sales strategies might increase customer attraction, as they can monitor price changes and thus make informed purchase decisions to achieve optimal pricing.
Step 2
Potential counterbalance
Answer
Despite these advantages, not all potential customers may be equally comfortable with online purchasing. There remains a segment of the market that prefers the assistance of a travel agent or feels uneasy transacting over the internet. This could result in reduced sales from less tech-savvy or hesitant consumers.
Moreover, Spirit Airlines must ensure that their website and online booking system are operational and customer-friendly; failures in these areas could deter customers and harm their reputation. Potential judgments and concerns regarding cyber security could also limit market success, especially for customers wary of online payments.