Airlines are changing their market strategies radically. So far, the ‘classic’ airlines knew four market segments, where they positioned their products: The Luxury, Premium and Economy segments, with their products 1st class, business and economy class. And then there were special offers for the ‘mass market’. This is all a thing of the past.

The new strategies are based on SchmidPreissler’s view of the market with the Luxury, PremiumEconomy and Economy segments. The Premium segment is losing significance rapidly in favor of the PremiumEconomy segment. The Luxury segment lingers due to its prestige, but without ambition. The Luxury segment does not offer
any real future for classic airlines, because those traveling in this class of service are becoming increasingly customers of charter businesses or are traveling with their own planes and in the scope of time-sharing; due to time and security reasons.

Classic airlines give their whole attention with their products to the PremiumEconomy segment.With a business class leaving nothing to be desired but in price geared towards the consumers looking for a keen price.

And due to the flourishing mass tourism, the classic airlines draw their market share openly and directly from the Economy field of the new view of the market through a rigid pricing competition with no-frills airlines.

Medium-term, meaning a time frame of three to five years, the classic airlines are going to make their money with a two-class-concept: With the business class in the PremiumEconomy segment and the tourist class in the Economy segment. The market segments Luxury and Premium as we know them today will no longer exist.

Even the automotive industry is restructuring its offer anew and seizing its chances in the PremiumEconomy segment of the new view of the sales markets, the Waisted Rectangle©2004. What has been seen as middle class segment is being newly positioned. The range of products has either been upgraded to the Luxury segment of the market or is now settled with a keenly calculated price/performance ratio without a luxury touch in the PremiumEconomy segment. In the end, the ‘middle class’ is going to be left behind. Manufacturers who used to hold leading positions in the past with this field of the market are in Europe and especially in Germany stuck in deep existential crisis: Opel and Ford, for instance. BMW recognized the problem of ‘the middle’ in time and is trying to create its own PremiumEconomy segment with the BMW 1 Series and the Mini. Toyota positioned itself the best by far. With Lexus in the Luxury segment and a broad range of products of small Premium models in the PremiumEconomy segment.

It is interesting, that the automotive industry is discovering the mass market for itself globally. Renault took its first concrete step in that direction in these past few weeks. The 5,000-Euro-Car is going into production; at first for the Second and Third World. The introduction into the First World isn’t going to take long, because the demand for cars in the 5,000 Euro price range is quite strong, more than the “3-liter-car”. In the foreseeable future countries such as China and India are going to produce cars globally for the Economy segment of the market and will bring them to market. These cars are going to be safe and inexpensive means of transportation, without a lot of electronics, modest, simple exchangeable parts and able to be repaired in any repair shop. These cars are going to be sold by discounters such as Aldi. The luxury these cars are going to offer is going to be the fact that most people are going to be able to afford one of them.

The European and American automotive industry is going to have to expect heavy seas ahead. While the Europeans are in a severe competition with each other and they have to deal with the Japanese in the PremiumEconomy segment, the Americans are going to lose their role as largest supplier. And possibly, the big three, GM, Ford and Chrysler are going to turn into businesses where the car manufactured in the US is only playing a minor role.