2. Delta Airlines Overview
- Little aerial crop dusting operation called Huff Daland Dusters in 1924
- First established in Atlanta, Georgia in 1967
- 334 Destinations; over 60 countries
- Grew into world’s largest global airlines
- More than 180 million travelers each year
- Reputation for excellent service
- Ranked one of the top Airlines by Forbes-2013
- SkyTeam global alliance
3. Basic Economy
- Wi-fi
- Free video entertainment
- Complimentary snacks & non-alc.
- Service
- Assigned seating after check-in
- No changes or refunds (after 24 hr
cancellation period)
- No paid upgrades
5. Environment
Political- Must adhere to FAA rules
Economic- Changing generations and fuel prices
Social and cultural- 9/11 and other events
Technology- New technology and expectations
6. SWOT
Strengths
● Strong market position
● Diversified geographical
presence & wide global
presence
● Modern aircrafts
● Great Reputation
Weaknesses
● High labor expenses
● Capital expenses &
worldwide operating
expenses
● High debt
Competitive Market:
● Low switching costs
● Very competitive industry
● Frequent Flyer Program
7. SWOT
Opportunities
● Fuel Efficiency
● Improving Technology
● Global Industry
● Benefits such as
complimentary upgrades
or preferential customer
service
● Improve Skymiles
Rewards
Threats
● Increases in Fuel Costs
● Terrorism
● Government Regulations
● Weather
● Bad press
● Low rated points and
miles (basing miles earned
on ticket price rather than
distance)
8. Analysis of Competitors
Various competitors in air travel industry
Direct: American Airlines
Indirect: Southwest Airlines
Final analysis of Spirit Airlines, & other
discount airlines: No competition
9. Direct Competition: American Airlines
American Airlines’ = “No benefit” service
-Rolling out in the second half of 2016
-Targeting “price sensitive” customers
-Competing with Spirit and Frontier
-Threat to Delta if prices are
comparable to discount airlines
10. Indirect Competition: Southwest Airlines
No similar service to Basic Economy
However, very similar in price (sometimes even lower)
Target middle class, price sensitive flyers
11. Market Segmentation Criteria
● Travel Purpose
● Travel Frequency
● Price Sensitivity
● Age
● Use of Loyalty Programs
● Urgency of flight need
13. Market Segmentation
Demographic
● Employed
● Working to middle class people (64% of the US)
● Trade skill and/or some higher education
Psychographic
● Price sensitive but seek quality
● Last minute planners / impulse decision makers
● Relaxed with vacation pursuits
● Hectic and in need of a value and reliability
Life Stages
● Early adults (20-35), midlife (35-50), mature
adults (50-80)
Geography
● Select Delta hubs - Atlanta, Detroit,
Minneapolis and Salt Lake City
Behavioristic variables
● Search for value, comfort, entertainment and
reliability
● Loyal customers who tend to fly shorter
domestic trips.
14. Product Positioning
● One free bag
● Non-alcoholic drinks and snacks
● In-flight entertainment
● loyalty program
● Trusted brand
● On time flights
● Parties of one or two / small groups
● Short distances of six hours or less
● Not interested in upgrades
● Confident purchase
Value, Reliability, Comfort and Amenities - Integrated Strategy
15. Positioning Statement
For leisure and business travelers, Delta Airlines’ Basic Economy strives to
be the most valuable option that offers comfortable transportation at an
affordable price, because of its excellent customer service and high quality
aircraft.
16. Marketing Objectives
Increasing Market Share
- By offering lower fares in order to compete with
low cost airlines such as American Airlines &
Southwest.
Use promotional tools to build awareness of the:
- Overall value of Basic Economy
- Reliability & Reputation of Delta
Airlines
- Comfort & Amenities that come with it
17. Product/Pricing Strategy
● Skymiles & Medallion Loyalty Members
○ Can now choose seats after check-in
● No changes to price
○ Price remains competitive in market
○ Price comparison with American Airlines
21. Marketing Strategy
Print Media
- Travel Agent Magazine
- AARP
- The National Geographic
- Time Inc.
- USA Today
- WJS
- NY Times
Message: “The most valuable way to fly in the world’s most trusted airline”
Digital
- FB, Twitter, Instagram,
Snapchat
- Website/Mobile App
- TV
- Radio
- Outdoor/Mall Posters
Delta Basic
Economy
22. Marketing Strategy
Public Relations
- Survey public on attitude & awareness (before and after trial)
- Send press release of market expansion in summer
- Work with press (positive WOM)
- Monitor social media content
- Clippings, keyword search to monitor any mentions
23.
24. Control
Advertising
1. Print Media → Unique URL
2. Social media → Impressions, likes, shares, and mentions (engagement)
3. Website → Google Analytics for website traffic
4. 3rd party websites → Redirect to Delta website, track using Google Analytics
5. Television → “Visit www.delta.com/BasicEconomy to learn more about how
you can fly for less”
6. Radio → Similar to TV, provide specific URL
7. Outdoor → Unique URL, geographic data using IP address
25. Control
Public Relations → Google Adwords Keyword Tracking and mentions
Personal Selling → Customer service scores
Travel Agents → Awareness surveys, educate about service
26. Recommendation
Basic Economy has proven successful in its first quarter on the market. We
recommend that Delta continue to offer it, while implementing our
marketing strategies to increase sales and create more lifelong Delta
customers.
