BUS 330 Principles of Marketing
JUNE 17, 2012
Delta Airways (DELTA) is the US’s largest airlines; it operates both internationally and domestically along with chartering air services for the carriage of passengers, cargo and mail. The airline flies to over 900 destinations globally and is considered to be a leader within the industry with almost 770 aircrafts in service. Starting back in 1924 as a crop dusting company down in Louisiana, merging with several airlines and rising through bankruptcy to become one of the strongest airlines in the business today. With Delta Airlines being one of the most successful airlines in the industry it currently has its own marketing strategies which makes it unique from its other partners. Its most current market strategies are “Building a better airline not just a bigger one.” Delta is focusing on the 4p’s and they put these ideas to practice every day when they market their product. The major marketing mix tools are classified into four broad groups, called the four Ps of marketing: product, price, place, and promotion (Armstrong 2011). If market research is carried out effectively, a company can plan a promotion for the right product, at the right price, and to get it to their chosen market in the right place. Product is the most important of the components in an organization. Without it there is no place, no promotion, and no price, therefore there is no business and the company goes under. Product serves as a purpose to satisfy a want or need which makes it the core ingredient of marketing mix and everything favorable and unfavorable, tangible and intangible received in exchange for an idea, service or good. Delta is a business that offers a service as its product, flying across destinations in the transportation industry. It is obvious that the product strategy is vital for an organization to succeed and it needs to be well developed and manage carefully. Delta’s product strategies include quality of flight, flight services, various destinations across globe, executive class, business class, speed, security, good customer service and many years of experience. On the heels of its 2008 acquisition of Northwest, Delta’s consumer rankings suffered as passenger complaints increased. Airline mergers and their associated integration activities typically impact negatively on its customer satisfaction. However, Delta’s response to that in the form a USD 2 billion dollar investment program which was put in place to improve the quality of its products and services deserve particular attention in our view. No matter how good the product is, it is unlikely to succeed unless the price is right. This doesn’t just mean being cheaper than competitors. Most people associate a higher price with quality, so you would expect to pay more for a first class seat versus a seat in coach. Therefore price is the value of what has been exchange during marketing process. The consumer exchanges his or her money in return for the satisfaction of either being taken care of in first class or riding like a standard customer in coach. Delta has set its pricing strategies in a manner that customers can choose how much from the extra the airline is providing. For instance, someone can buy a ticket for $650.00 to fly from San Diego to Atlanta in the economy class which will include the basic product they offer. While someone else might pay $1000.00 in the first class section which include extra services including selection of meals in order to satisfy their needs. The simplest method of all is cost-plus pricing, where a firm adds a profit mark-up to the unit cost. Aperfect example of great pricing is what Delta Air Lines did in 2005. The company announced a restructuring of ticket fares across its route system which ended up lowering many unrestricted fares often used by business and capping ticket prices at $499 one-way ($599 in...