Marketing Management of Delta Airlines - Essay Example

Delta Airlines Company Profile Delta Airlines is the world’s biggest airline which offers its travel services to 368 different destinations across 66 countries serving over 170 million passengers each year (Delta, 2009). The company was founded in 1924 by Huff Daland Dusters. The Chief Executive Officer of Delta who has held that position since September 1, 2007 is Richard Anderson. In fiscal year 2008 Delta Airlines achieved operating revenues of $22,696 million dollars. Between 2004 and 2008 the company achieved a yearly sales revenue growth of 9.8%. There are over 70,000 people working at Delta. The company survived the tough market conditions in the aftermath of 9/11 to become the top player in the industry. Delta Airlines has benefited from implementing innovative marketing strategies. The use of marketing alliances has enabled Delta to increase its travel destination offerings by 54%. Delta’s Vision The company’s vision is to provide scheduled air transportation for passengers and cargo for passengers throughout the United and across the world (Annual Report: Delta, 2008). Target market, segmentation, differentiation and branding Branding A branding strategy allows a company to charge a premium price for its services while retaining a higher proportion of its customers. Branding strategy develop over time. Delta has been in the industry over 85 years. Delta has been able to increase the value of its brand by being a good corporate citizen. The company has great environmental record. The company hired ENSR, a leading environmental service provider to implement a recycling program in order to reduce the amount of waste generated in its flights (Lohas, 2007). Differentiation The grand marketing strategy Delta is utilizing is a differentiation strategy. Differentiated marketing involves operating in several market segments and designing products or special service offering for each segment (Kotler, 2003). Two factors that enabled the company to differentiate itself from its competition are product variety and the quality of its service offerings. With the help of marketing alliances and partnerships the company is able offer its customer 572 different travel destinations. Target Market The company’s ability to enter into partnership agreements with other airlines allowed the enterprise to increase its target market. The marketing alliances at Delta have increased the scope of the companies market. The company’s customer profile includes both business travelers and people who travel in leisure trips. The markets the company targets are not limited to domestic travelers. The marketing alliances Delta established helped the company increase its presence in foreign marketplaces. Segmentation Delta airlines utilizes a segmentation marketing strategy. The company uses its strategic alliance as tool to penetrate different marketplaces. The segmentation strategy was an important tool that allowed to company to achieve tremendous sales growth. Global marketing alliances such as SkyTeam enabled the company to increase its customer traffic worldwide. The 4 P’s The 4 P’s is a marketing framework that is utilized to evaluate the marketing strategy of a company. They represent the base for the marketing mix of the company The 4 P’s are product, price, promotion, place (Kotler, 2003). Delta Airlines product is offering travel services to the global population. The reach of the product has been enhanced through the utilization of marketing alliances. The alliances allowed the company to offer its product in an additional 46 countries. The price strategy at Delta Airlines is to offer competitive prices to a wide variety of destinations while providing excellent services. The firm does not market itself as discount fare airline such as SouthWest Airlines, EasyJet, or Rynair. The prices of ticket sales in the airline fluctuate by season and can vary depending the on the timing of the purchase. Airline ticket prices are lower if the customer makes the order weeks or months prior to the flight date. The place variable of the marketing mix at Delta airlines includes the company’s capabilities to offer its services to 112 countries worldwide. Delta Airlines was incorporated in the state of Delaware. Its company headquarters are located in the Hartsfield-Jackson Atlanta International Airport in placed in Atlanta, Georgia. The company utilizes the promotion variable in a strategic manner to increase the company’s sales and total amount of customers served. A popular promotion program at Delta Airlines is SkyMiles. The program allocates points after every trip with the airline which can be redeemed on nearly 15,000 flights offered by SkyTeam and other partners (Delta, 2009). Community Involvement Community involvement is an important element of a balanced corporate social responsibility strategy. Social responsibility refers to a company’s obligation to behave in ethical and moral ways (Schermerhorn & Hunt & Osborn, 2003). Companies can enhance their public image by being good corporate citizens. Delta Airlines values its customers and the community and as a result they develop the Delta Force for Global Good program. The mission of this program states, “We – Delta employees, customers, and community partners – together form a force for positive local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work” (Delta, 2009). Some of the non-profit organizations the program has helped include The Conservation Fund, The Breast Cancer Research Foundation, and Habitat for Humanity. The Conservation Fund’s purpose is to offset the carbon emissions that result from flight travel by planting trees. Delta offered to match any donation to the fund up to $25,000. The matching donation program expired May, 15, 2009. The Habitat for Humanity organization is dedicated to help provide housing to people in India, South Africa, and Ghana. During the last five years in each October month Delta has fought in the battle against breast cancer by raising awareness and funding research initiatives towards a cure. The company raises funds through a variety of special sales of items such as pink luggage tags, tumbles, aprons, and pens which are sold between $2 and $16 (Delta, 2009). In 2009 the company made a special lemonade sale at $2 per cup in all its flights in the month of October with the proceeds being donated to battle breast cancer. Conclusion Delta Airlines has become the world largest provider of travel services due to its ability to negotiate partnerships with other competitors. The company utilizes differentiation and segmentation marketing strategy. The utilization of branding has allowed the company to charge a little extra money for its flight fairs. The company targets both business and leisure travels in over 112 countries worldwide. The company brand value has been enhanced by its involvement in community programs such as The Conservation Fund and the Breast Cancer Research Foundation. The future of Delta Airlines is bright as long the company continues to adjust its business practices to changes in the marketplace. Question for test with answers 1) What are the two key elements of Delta’s differentiation strategy? Two factors that enabled the company to differentiate itself from its competition are product variety and the quality of its service offerings. 2) How has Delta been able to expand its customer base? The company has been able to increase the scope of its services through marketing alliances and partnerships Discussion question after presentation 1) Do you think Delta is a socially responsible company? Why? Yes the company is a socially responsible firm. Its community involvement record is evidence of that fact. Two socially responsible programs the company sponsors are Delta Force for Global Good and the Conservation fund. 2) Does frequent flyer programs such as Delta’s SkyMiles increase customer retention? It does because a person that travels a lot receives travel miles points if they continue to purchase travel tickets from the company. There is an incentive to return to the company in order to accumulate enough points to receive a free travel ticket. References Annual Report: Delta (2008). Retrieved October 9, 2009 from http://images.delta.com.edgesuite.net/delta/pdfs/annual_reports/2008_10K.pdf Lohas.com (2007). Delta Airlines Starting On Board Recycled Program. Retrieved October 19, 2009 from http://www.lohas.com/articles/100579.html Delta.com (2009). About Delta. Retrieved October 9, 2009 from http://www.delta.com/about_delta/index.jsp Kotler, P. (2003). Marketing Management (11th ed.). New Jersey: Prentice Hall. Schermerhorn, J., Hunt, J., Osborn, R. (2003). Organizational Behavior (8th ed.). New York: John Wiley & Sons. Read More