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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: Selling Tickets Online
Answer
Selling tickets online simplifies the purchasing process for customers and drastically reduces the costs associated with traditional ticket distribution. Spirit Airlines can minimize costs related to physical ticket sales, allowing them to either lower ticket prices or increase profit margins.
Step 2
Application: Impact on Operations
Answer
By selling online, Spirit Airlines can streamline its operations, making it easier for customers to book tickets at their convenience, thus potentially increasing sales. Online sales can enhance customer experience as they can check prices and availabilities at any time.
Step 3
Analysis: Customer Attraction
Answer
As customers become accustomed to online booking, they may prefer this method for its convenience. This could attract tech-savvy customers who are looking for competitive pricing. However, reliance on digital platforms may deter customers who are less comfortable with technology.
Step 4
Evaluation: Potential Risks
Answer
Not all customer segments may have access to the internet or be willing to pay online. This could limit Spirit's reach to a wider audience, particularly older customers or those in lower socio-economic demographics. If technical issues arise with the online system, it may lead to cancellations or lost sales.
Step 5
Potential Counterbalance: Dependency on Technology
Answer
Spirit needs to ensure a reliable online booking experience. If any issues with the platform occur, customers will have no alternative way to purchase tickets. Furthermore, there are ongoing costs associated with maintaining the online system and potentially additional support for customers who prefer to speak with agents.
Step 6
Judgement: Market Repetition and Customer Service
Answer
Exclusively selling tickets online might limit Spirit's customer service capabilities, as customers may seek personal assistance when purchasing tickets. Alternatives like live support or chat systems can mitigate this, but the absence of face-to-face interaction could still affect customer satisfaction.