In his book, Air Transportation, Wensveen explains each of the four Ps of marketing—Price, Promote, Product and Place—and how they are used to make up what is known as the marketing mix, which “consists of the types and amounts of controllable marketing-decision variables that a company uses over a particular time period” (Wensveen, 2011). In 2012, Lufthansa implemented a marketing strategy called SCORE (an acronym for synergies, costs, organization, revenue and execution) with a goal of increasing Lufthansa Group’s operating result up to €1.5 billion by 2015 (Lufthansa Group, 2013). This paper will explore how Lufthansa applies each of the four Ps in its own business practice, SCORE being its main instrument of success.
With the first of the Ps, price, it is commonly known in the airline industry that ticket prices are volatile primarily because of the fluctuating fuel prices. Fuel costs make up a large portion of Lufthansa’s overall operating expense at 23% (Lufthansa Group, 2013). Another factor to consider for determining the price of a ticket is the time of year in which the available seats are to be sold, namely during the holidays when the demand for travel is high. To take advantage of simple supply and demand effects on the market around the holidays, Lufthansa specifically caters to the higher holiday demands by advertising for holiday customers.
One way Lufthansa makes use of the next P, promote, is through the use of Lufthansaholidays.com, a one-stop shop for anyone wishing to put together a vacation plan (Lufthansa, 2013). The website offers deals that include air fare, hotels, and rental cars when arriving at your vacation destination. Lufthansa even has promotions that are specific to the prospective pas...
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Lufthansa Group. (2013, November 16). Christmas Market Special. Retrieved from Lufthansa: http://www.lufthansa.com/ca/en/christmas-market-special
Lufthansa Group. (2013, November 15). Investor Relations. Retrieved from Lufthansa Group: http://investor-relations.lufthansagroup.com/fileadmin/downloads/en/financial-reports/annual-reports/LH-AR-2012-e.pdf
Lufthansa Group. (2013, November 16). The four-liter aircraft. Retrieved from Lufthansa Group: http://www.lufthansagroup.com/en/press/news-releases/singleview/archive/2013/january/14/article/2293.html
Netessine, S., & Shumsky , R. (2013, November 15). Informs Transactions on Education. Retrieved from Introduction to the Theory and Practice of Yield Management: http://archive.ite.journal.informs.org/Vol3No1/NetessineShumsky/
Wensveen, J. G. (2011). Air Transportation. Surrey: Ashgate Publishing Limited.
The following value chain, which focuses on Spirit Airlines, is representative of most of the firms in the Ultra Low-Cost Airline industry. Spirit is the industry leader in many areas such as operational efficiencies/cost structure, aircraft fleet management, brand/network and growth. The firm, however, trails industry foes in areas such as customer service and operational reliability and recoverability. While most in this segment pursue the cost-leader competitive strategy, Spirit has demonstrated the most effective model to date – whether the model is the most sustainable remains to be seen.
The Lufthansa Heist was a robbery that took place at the John F. Kennedy International Airport; the people (players) robbed five million dollars at the time of the robbery. The total amount of money robbed to todays’ date is estimated to be around eighteen million dollars and three million dollars in jewelry. The heist was planned by Jimmy Burke and carried out by a number of people. A van would be used to transport the cash and another car would accompany the van to run interference should something happen.
Sheshadri, T. (2001, December 26). Student recognized for agricultural acumen. The San Diego Union Tribune, N1-4. Retrieved on March 20, 2002 from Lexis-Nexis Academic Universe (Newspapers) on the World Wide Web: http://www.lexisnexis.com/universe.htm.
Frontier airlines marketing utilizes the 4Ps within the constraints that were listed in the module slides. The product, for all intents and purposes, is the seat, in motion from one place to another. If that seat goes unfilled, it is not stored for later use, but goes bad, like fruit. This is a similar issue of production that hotels face. The unit is constantly produced and expiring, with no option not to produce it if it will not be sold (with the exception of scaling back service on, or closing, a route. Additionally, it is a consumer based product, so frontier needs to be sensitive to the desires of the customer, because there are many choices when flying into and out of Denver.
of price versus service in the airline industry as a whole, as well as, the
The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B. Because the reasons can differ greatly in the motivations for a customer wanting to fly, it can be difficult to divide the market into discrete segments, that is, there is always going to be overlap in the preferences and characteristics of any given segment. With that in mind, the commonalities that are shared between the clientele that make up the respective classes can easily withstand analysis.
Spirit addresses “price” by attempting to get the lowest possible fair for their potential customers. They have instituted their “unbundling” strategy that essentially removes all the conveniences that other airlines afford. Fees for checked bags, fees for flight changes, and no complementary in-flight beverages are just a few of the cost-trimming techniques employed. This strategy allows Spirit to come up with impossibly low fares. It also conforms to customers who just want to get from point A to point B without paying extra for services they don’t use. This strategy, coupled with an in-your-face “promotion” ploy, has made Spirit Airlines “the most profitable airline in the U.S.” (Nicas, 2012).
A. “Farm Policy.” CQ Researcher 10 Aug. 2012: 693-716. Web. The Web. The Web.
United’s Marketing Determining the marketing strategy for a massive airline, like United Airlines, is fairly difficult and extremely complex. Why? Because each city, season, route, and time of day will have some minor to major difference in how the airline presents itself. The difficulty in marketing and advertising for an airline is harder than other industries because each airline is selling thousands of different products. At first glance, United is selling flights, and that seems to encompass one product.
Southwest Airlines has effectively used a variety of promotional elements in its integrated marketing communications, making it one of America’s largest airlines with 3,300 flights a day to 72 domestic cities. Southwest Airlines has used all four possible elements of the promotion mix: advertising, public relations, personal selling, and sales promotion, but has focused primarily on advertising and public relations to add value to the product offered to customers. Its focus on advertising and public relations is directly related to its large size and it’s nationwide reach. Also, advertising and public relations are the most cost-efficient methods of promotion, and an airline as large as Southwest is forced to have promotional elements that benefit from economies of scale.
One of the many influences that affect Qantas is the presence of globalisation, which has heavily affected the airline both positively and negatively. Globalisation is a process which refers to the increased integration between different countries and economies as well as the increased impact of international influences on all aspects of life and economic activity. Globalisation is responsible for the removal of many trade barriers and the increased level of competition that Qantas has been exposed to. The increased levels of competition has increased consumer sovereignty and forced Qantas to implement strategies to gain a competitive advantage in order to redirect consumers towards their business. Qantas has implemented a cost leadership strategy as a response to globalisation and the influence of cost based competition. One way that Qantas achieved this was by using Globalisation itself to the business’ advantage. Globalisation ha...
It has stayed relevant to the market through its propelled philosophy of relationships to generate profits in the business. Since its establishment in Monroe, Louisiana the once tiny airline has stretched to greater heights serving in 6 continents. It has also established a distinguishable name among its competitors with a reputation of leading customer services. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand in to new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. This alternatives are meant to act as a strategic guidance to the company in order to enhance growth. The strategic recommendation provided will improve and enable the business to cope with the competitors while the implementation of the strategy section will outline the way to go about achieving these alternatives in the business setting. Lastly, we put up a discussion on the evaluation procedures and necessary controls for the
When a business aims to be as successful as possible in selling its products and services, it must examine in detail whether or not the products will be attractive and necessary; if the price is optimal; if the product is being distributed in the best locations; and finally, how interest and awareness can be created for the products. In order for a business to target all of these elements to the right people at the right time, it must employ the right type of marketing mix: Product, Price, Place and Promotion. In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customer’s needs, and is succeeding because of this approach.
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ...
Product Strategy of the British Airways 1.1 Introduction to product strategy Product is the most important component in an organization. Without a product there is no place, no price, no promotion, and no business. Product is anything that can be offered to a market to satisfy a want or a need. It is the core ingredient of the marketing mix and is everything favorable and unfavorable, tangible and intangible received in the exchange of an idea, service or good (Kotler 11th edition, 2003). British Airways is a business offering service products, flights across destinations, in the transportation industry.