BUS 620: Managerial Marketing
Professor David Kalicharan
February 20, 2012
Marketing Plan for United Airlines
Airline companies are becoming more and more competitive as the low budget discount airlines are becoming popular. It is key for airlines to differentiate themselves among the various airlines to choose from, and United Airlines wanted to ensure that it offered products and services for all marketing segments. “United realized that it needed to develop a customer-centric future strategy and galvanize its organization to improve the customer experience for its most valued customers” (Prophet, 2012, para. 1). This paper discusses the marketing plan for the newly merged United Airlines. It will cover all elements of a marketing plan such as the company overview, executive summary, target market, competitors, product and services, and location. It will also go into detail of the marketing budget, pricing strategy, and the summary and implementation plan for the company.
United Continental Holdings, Inc. was created by the recent merger of United Airlines and Continental Airlines as of October 1, 2010. The new company operates under the name United Airlines, using the former Continental's logo and color schemes. The combined company has about 86,000 employees (United Continental Holdings, Inc., 2012, p. 2).
“United and Continental transport people and cargo through their mainline operations, which utilize full- sized jet aircraft, and regional operations, which utilize smaller aircraft that are operated under contract by United Express, Continental Express and Continental Connection carriers” (UAL, 2011, p. 4).
Standard & Poor’s recently released the stock report for United Continental Holdings, Inc. giving some key facts on the overview of the recently merged United Airlines: As of December 31, 2011, the company had about $7.8 billion in cash. The company targets $1.0 billion to $1.2 billion in merger-related synergies by 2013, which includes $800 million to $900 million of incremental revenues. The combined company operates approximately 5,656 flights per day to more than 376 U.S. domestic and international destinations (2012, p. 2).
United Airlines is also part of the Star Alliance which includes other alliance partners such as Air Canada, Air China, All Nippon Airways, Lufthansa, Singapore Airlines, TAM and US Airways.
United and Continental Airlines recently merged to create United Continental Holdings, Inc., operating under the company title of United Airlines in 2010. This company is considered a high-end, full service airline, offering more products and services to their customers versus the no-frill budget airlines. There are three classes of services offered in its international and mainline flights to try and cater to the different types of market segments. “United tries to generate a revenue premium to the rest of the U.S. airline industry by utilizing a market segmentation strategy intended to optimize margins and costs by offering the right service to the right customer at the right time” (United Continental Holdings Inc., 2012, para. 2).
United Airlines does offer a frequent flyer program called Mileage Plus, that has more than 58 million enrolled members, while Continental's loyalty program, called OnePass, has 41 million enrolled members. The frequent flyer program is designed to help the company attract and retain high value customers. In 2010, award redemptions on United represented 7.5% of United's total revenue passenger miles, versus 8.3% in 2009. OnePass redemptions represented 5.7% of Continental's revenue passenger miles, versus 5.9% in 2009 (United Continental Holdings Inc., 2012, para. 2).
United Airlines mission statement is to be recognized worldwide as the airline of choice (Scripophily, 2012), and with the merger of Continental this makes the...