Many companies have started developing their brands in order to appeal to more target segments to capture more market share. Aeroplan’s loyalty program is a good example of this; their rewards now include tuition.
In the past, Aeroplan loyalty points were only used to pay for flights. Nowadays, points can pay for necklaces, song downloads, as well as tuition. In an attempt at extending their product life cycle, Aeroplan is constantly trying to find new users and reasons for consumers to continue using their program. By including tuition in their package, Aeroplan is able to effectively target students. Students are at a young age where brand loyalty is still developing. Aeroplan has taken this into consideration, but also saw that none of their competitors were targeting this consumer segment.
Market development is a good way of testing potential target segments without much risk. Aeroplan has identified a consumer need; students nowadays are having trouble paying for their high tuition rates. Although Aeroplan points may not pay for a student’s full tuition, students feel that “every little bit helps.” A study showed that 90% of Canadians were enrolled at least one loyalty program. By targeting consumers at an earlier age, Aeroplan is able to develop brand loyalty and attract new potential advocates to strengthen their future brand presence.
Currently, Aeroplan’s biggest challenge is in finding corporate partners as well as universities that will endorse this program. However, Aeroplan’s value-based marketing will certainly attract potential partners. Universities care about their students. That’s why they provide financial aid and scholarships. Aeroplan’s loyalty program can be seen as a type of financial aid that will make a student’s life much easier. As a student that shops for his own groceries, I feel like this program would definitely benefit me.
