Lufthansa Term Paper

Susana Perez
Dr. Predmore
MKTG 303
November 13, 2014

Lufthansa

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Table of Contents
List of Exhibits…………………………………………………………………….…page3
Executive Summary…………………………………………………………………page 4
Problem Definition
a. Background to the problem……………………………………………….page 6
b. Statement of the problem…………………………………………………page 7
Approach to the problem…………………………………………………………….page 7
Research Design
a. Type of research design…………………………………………….……..page 8
b. Data collection from primary sources…………………………………….page 8
c. Data collection from secondary sources…………………………………..page 9
d. Sampling techniques……………………………………………………..page 10
Data Analysis………………………………………………………………………page 10
Limitations and Caveats……………………………………………………………page 12
Recommendations………………………………………………………………….page 13
Results and Conclusion…………………………………………………………….page 14
Exhibits……………………………………………………………………………..page 16
References………………………………………………………………………….page 23

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List of Exhibits
Exhibit 1: Airline Survey
Exhibit 2: Correlation Tables
a. Have you ever Traveled with Lufthansa*Been on Lufthansa
b. How did you hear about Lufthansa*Been on Lufthansa
c. How did you hear about Lufthansa*Have you ever traveled with Lufthansa
Airlines
d. Do you like the fact that most of Lufthansa flights have layover in
Germany*Been on Delta
e. Do you like the fact that most of Lufthansa flights have layover in
Germany*Been on United
f. Would you recommend someone to fly with Lufthansa*Been on America
g. Would you recommend someone to fly with Lufthansa*Have you ever traveled
with Lufthansa
h. Would you recommend someone to fly with Lufthansa*How did you hear
about Lufthansa
i. Would you recommend someone to fly with Lufthansa* Do you like the fact
that most of Lufthansa flights have layover in Germany

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Executive Summary
A. Major findings
When conducting the surveys to see how Lufthansa was doing among the ages of
18-29, we were in shock to see what we had found. As a result of the survey, we found
out that 40% of the students at Manhattan College had never heard of Lufthansa prior to
receiving the survey. The ones that did were either through a family or friend (32%), the
Lufthansa website (20%), through social media (4%) or because of their own interest
(4%).
Another major finding that left us in a little bit of a shock was the amount of
people that do not like layovers. Our hubs and headquarters are all located in Germany,
which is why most of Lufthansa’s flights have a layover in there. From the survey, we
found out that 72% of those that took it do not like that Lufthansa does that. Only 24%
didn’t mind the stop that the airline makes.
B. Conclusions
After seeing what we can suggest to make the company better, Lufthansa would
have an increase in many of their areas. First, brand awareness will increase. We can’t
have 40% of students at Manhattan College not knowing who we are, especially since we
are a recognized worldwide airline. Second, Lufthansa would have reached a new target
audience, the students. With what we have plan for them, they’ll be interested in what we
have to offer. Lastly, profit and revenue will increase.

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C. Recommendations
The recommendations we have come up with to better the company are very
simple. First and for most, advertise. We have to learn how to market the company in
ways that will attract people and remember us. The student market is one of our main
targets. Lufthansa has the GenerationFly program that is made specifically for them. As
for the layover, create different hubs in different countries. We will give people the
chance of choosing where it is that they want to make a stop. Lastly, we will have to start
offering non-stop flights for those that don’t want to have layovers but still fly with
Lufthansa.

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Problem Definition
a. Background to the Problem
In the beginning of the 1920s, a small number of aviation companies had sprung
up in Germany. The only problem was that pilots had no way to communicate with the
ground to see if any planes were flying, landing or if there was any room on the ground
for them. After an all-out competitive battle with the aviation companies, only two
survived: Deutscher Aero Lloyd and Junkers Luftvserkehr. However, on January 6, 1926,
these two joined forces and found “Deutsche LuftHansa AG” and “the flight path started
to point upward” (“Lufthansa Group,” n.d.).
Since the journey began, Lufthansa has gained much popularity and achievements
among many other international airlines. According to the World Airlines Awards
website, Lufthansa is ranked among the top 10 of the World’s Top Airlines of 2014, is
the #1 World’s Safest Airlines (“Travel and Leisure,” n.d.) and is known to be the largest
airline in Europe (“Nations Online,” n.d.). Other than having an impressive award
history, Lufthansa is also a member of Star Alliance, which is the leading global airline
network that offers customers convenient worldwide reach (“Star Alliance,” n.d.). Star
Alliance was founded in 1997 with the cooperation of Lufthansa Airlines, United
Airlines, Air Canada, Thai Airways International, and Scandinavian Airlines; therefore
making Lufthansa a founding member (“Star Alliance,” n.d.).
According to the Facts and Figure of Lufthansa on the Star Alliance website,
Lufthansa has 76.30 million of annual passengers, its daily departures exceed 2,000 and
the airline serves 78 countries. Lufthansa’s frequent flyer program is called Miles &
More. This program is shared among several European Airlines and members don’t

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only earn miles by just traveling with Lufthansa but also with any other Star Alliance
partner flights (“Miles & More,” n.d.). In total, Lufthansa has a total of five hubs
(airports) in five different German cities: Frankfurt, Munich, Düsseldorf, Vienna and
Zurich. Frankfurt is Lufthansa’s main hub and even though Vienna and Zurich are
counted as hubs, they are counted more as the home for Lufthansa’s subsidiaries,
Austrian Airlines and Swiss International Airlines (“Lufthansa,” n.d.).
b. Statement of the Problem
As a group representative of Lufthansa, our objective is to make sure Lufthansa is
doing well in all aspects of the company. Although Lufthansa has been successful in
many things, we have discovered a few problems that the company can fix. One of the
problems is that Lufthansa does not have a big demographic market that consists of the
young people. We have noticed this as a result of the lack of advertising and marketing
that specifically targets them.
Another problem that we have noticed is the decline of flight bookings. The main
reason why people aren’t flying with Lufthansa is because of the layovers. Almost all of
Lufthansa’s flights have a layover in Germany. This is a huge problem for us because all
our hubs and our headquarters are both based in Germany. Our aim here now is to solve
these two problems so Lufthansa won’t suffer anything too damaging in the future.
Approach to the Problem
Wanting to get to the bottom of the problem, we chose the age range of 18-29 and
handed out surveys (Exhibit 1) to them to see what information we can find. As a result,
we found out that most of them included Manhattan College students and more than

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half of them are also employed. We chose this age range because other than having them
as our missing market, they are the future generation. Very soon, they will be the ones
who will purchase airplane tickets and travel abroad whether it is for business, vacation
or going to study in another country. Regardless of the reason, this group will be
searching for international airlines, like Lufthansa, that will provide them with great
service, have entertainment on board, be comfortable, and serve good food and all other
factors that will not make a 7 hour flight boring.
Research Design
a. Type of research design
We decided to hand out surveys because we were aiming more for a descriptive
study research design where we will be able to interact with our participants and collect
the necessary information from them. We wanted to see the relationship this specific
target market had with Lufthansa or if one even existed.
B. Data collection from primary sources
After conducting the surveys and going over them, we have found that our
problems are slightly larger than we thought. In the bar graph shown below are the
percentages of whether a Manhattan College student, ages 18-29, has heard of Lufthansa.
32%
20%
4% 4%
40%
0%
10%
20%
30%
40%
50%
How did you hear about Lufthansa
How did you hear about
Lufthansa

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As you can see, 40% of the number of people we surveyed have never heard of
Lufthansa. Although it’s less than half, 40% is still a big percentage for us because we are
a big, worldwide company. Moreover, it is not benefitting us that the majority of the
student population doesn’t know who we are because then, the name Lufthansa won’t be
mentioned at all.
The other problem that we had found was the layover in Germany. As you can see
in this pie chart, 72% really dislike having to make a stop in Germany. All our
participants answered this question even if they haven’t traveled with Lufthansa. This is
our main problem because it just leaves us with only a quarter of students that are
actually satisfied with our service.
C. Data collected from secondary research
Aligned with our second problem, we found out that it’s just not students that
don’t like layovers or connecting flights, a lot of people prefer to arrive directly to their
destination. A company called Fare Compare polled their Facebook fans by asking which
they prefer, non-stop or connecting flights. The number that chose non-stop flights was
“overwhelming” in comparison with connecting flights. People rather go on non-stop
25%
75%
Like layover in Germany
Yes No

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flights for many reasons. A very common one is the less time you spend in airports,
running around making sure you don’t miss the other flight. Some flights offer more than
one connection and maybe at a lesser price but the more connections a flight has, the
greater the risk of people losing or not receiving their luggage on time, flights get delayed
or cancelled depending on the weather and other uncontrollable factors (Williams, 2012).
D. Sampling Techniques
With the first few surveys that we handed out, we went into the field wanting to
do a stratified sample. Our focus was on getting the surveys out to only the international
student body of Manhattan College. It didn’t matter where they were from we just
assumed that they would more likely have heard of us from traveling around. After some
surveys, we decided to go for a random sampling approach giving it to all the students
that we were able to find. If we would have kept on giving the survey only to the
international students, then our results would have been a bit unbiased. We changed our
technique because we wanted to know how the real market was with non-international,
American students.
Data Analysis
Once we gathered all our data, we wanted to know what it meant and if there were
any other relations that we were missing. For the data analysis, we used the SPSS
software to help us gain this information. Given the problems that Lufthansa has, we
narrowed down to 9 pairs of variables.
According to the correlation table (Exhibit 2), there are 5 Pearson Correlations
that are close to 1. This means that changes in one variable strongly correlate with

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changes in the second variable. These variable pairs are the following: have you ever
traveled with Lufthansa with have you been on Lufthansa, how did you hear about
Lufthansa with have you ever traveled with Lufthansa, would you recommend someone
to fly with Lufthansa with have you been on America Airlines, would you recommend
someone to fly with Lufthansa with how did you hear about Lufthansa and would you
recommend someone to fly with Lufthansa with do you like the fact that most of
Lufthansa flights have a layover in Germany. From this, we can conclude that a strong
relationship exists with these variables.
Out of the 9 pairs of variables, only 4 had Pearson’s Correlations that were close
to 0. With this, we were able to tell that changes in one variable are not correlated with
the changes in the second variable. An example will be with how did you hear about
Lufthansa and have you been on Lufthansa.
Correlations
Been on Lufthansa
How did you hear
about Lufthansa
Been on Lufthansa Pearson Correlation 1 .433*
Sig. (2-tailed) .039
N 23 23
How did you hear about Lufthansa Pearson Correlation .433*
1
N 23 25
*. Correlation is significant at the 0.05 level (2-tailed).
As you can see, this pair has a Pearson’s Correlation of 0.433. Having one close to 0, a
weak relationship exists between the two and the variables are not strongly correlated.
An important feature that we saw in the Correlation Table was that all of the
Pearson’s Correlations are positive. When they are positive, that means that as one
variable increases, the second variable also increases. Also on the table, there is a Sig.

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(2-tailed) row for all the variables. When the Sig. (2-tailed) is greater than .05, then we
can conclude that there is no significant correlation between the variables. If it’s less than
or equal to .05, our conclusion will be that the variables are significant. Lucky for us, all
the same variables that have a Pearson’s Correlation close to 1 are also significant
because they each have a Sig. (2-tailed) that’s less than .05. For instance, the variables
would you recommend someone to fly with Lufthansa and do you like the fact that most
of
Lufthansa flights have a layover in Germany are significant at .002.
This means that when an increase or decrease occurs, it significantly relates to the same
movement in the other variable.
Limitations and Caveats
Going into this research for Lufthansa by handing out surveys we knew that we
will have many limitations. Reliability and accuracy of the data is a big one. We aren’t
sure if what the students filled out is true or false. On some of questions are open ended
questions and sometimes they either fill it out or not and if they do, they’ll leave an
Correlations
Would you recommend
someone to fly with
Lufthansa
Do you like the fact that
most of Lufthansa
flights have a layover in
Germany
Would you recommend someone to fly
with Lufthansa
Pearson Correlation 1 .585**
N 25 25
Do you like the fact that most of
Lufthansa flights have a layover in
Germany
Pearson Correlation .585**
1
N 25 25
**. Correlation is significant at the 0.01 level (2-tailed).

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answer that’s irrelevant to the question. Then from the information that we get from the
survey can be completely different than from what we expected.
Although most of our information came from the Lufthansa website, other
information might not be as accurate as we expect it to be. There is always a chance that
the information we get can be from the past and not up to date. Making sure everything is
up to date is also very time consuming and can take a while.
Recommendations
After going over all our data and making sure everything is correct, we as a group
have come up with solutions that will benefit the company in the long run. For the first
problem about not a lot of the people hearing of Lufthansa, we believe that the company
should advertise more. Lufthansa has to get its name out there especially to the younger
crowd, people around 18-29 because, as mentioned before, they are the ones that will
soon be buying airplane tickets and we want Lufthansa Airlines to be one of their choices.
This year for the FIFA World Cup in Brazil, Germany won; they came in on
1st place
, and are known everywhere that they are the champions of football as of now.
Lufthansa is one of the sponsors of the team, and even if someone doesn’t watch soccer,
the photo of the German National team will be everywhere because this event is
international so just by taking a picture of the German team in front of a Lufthansa
airplane will increase the company’s brand awareness.
Another recommendation we have is to target more the students. On their website,
Lufthansa has a link called GenerationFly. The reason why we created this website is for
you, the student traveler on a budget who is interested in exploring the world. Therefore,

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Lufthansa created GenerationFly to give students traveling a place to go to find
affordable travel on a world class airline. It has many great benefits but one of the great
things about GenerationFly is that you don’t have to be a U.S Citizen or a German
Citizen. All it requires is that the travel must originate from the USA, you must be a full-
time student enrolled in a college or university, have a valid school ID and an email
address that ends in .edu, which we know all the students have here at Manhattan College
(“GenerationFly,” n.d.).
For the last problem, about the layover, we came up with Lufthansa having to
create more hubs. A great way to start is by placing some in the popular destinations like
Tokyo, Mumbai, London, Paris, Madrid and Rome. These are only a few of the popular
destinations that Lufthansa flies to and if hubs are open in these cities, people are more
likely to fly with Lufthansa. They’ll have the option to choose which hub they want to
land for the layover and also it can be more convenient because their destination can be
close to one of these places.
In addition to creating more hubs, the company will also have to start offering
non-stop flights. As mentioned before, layovers or connecting flights are time consuming
and have an overall greater risk.
Results and Conclusion
In conclusion, three results will come from all the suggestions and
recommendations we gave to the company. First, brand awareness will increase. With the
advertising ideas, people will hear more about Lufthansa. Second, Lufthansa would have
reached a new target audience, the students. The students will be interested with the

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GenerationFly program that Lufthansa offers them. Lastly, profit and revenue will
increase. These two will come mainly by offering nonstop flights, people are willing to
pay the extra cash in order to get to their destination sooner and it’s an overall
convenience to them due to some of the examples mentioned already.

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Exhibit 1
Airline Survey
1. Which of the following airlines have you been on:
a. Virgin b. Delta c. America d. United e. Lufthansa f. Qatar
g. Emirates h. Singapore
2. Which of the following do you prefer when traveling internationally:
a. Virgin b. Delta c. America d. United e. Lufthansa f. Qatar
g. Emirates j. Singapore
3. Other than the U.S, what are other countries that you traveled to?
a. South America b. Mexico c. Spain d. Portugal e. France f. Germany
g. Italy h. Turkey i. U.K j. Asia
4. How many people do you travel with for vacation:
a. 1 b. 2 c. 3 d. 4 e. 5 f. 6+
5. When traveling for vacation, do you travel in:
a. First Class b. Business Class c. Economy Class
6. How many times do you travel for vacation:
a. once a year b. twice a year c. 3 times a year d. more than 4 times a year
7. Are you enrolled in a flyer mileage program: Yes No
8. Is ticket price a determining factor in choosing airline: Yes No
9. Do you prefer an airline that has an entertainment system like a TV or internet? Yes
No
10. Is leg room an important factor to you? Yes No
11. Do you order food from the menu provided? Yes No
12. Have you every traveled with Lufthansa Airlines? Yes No
13. How did you hear about Lufthansa?
a. friend/family b.website c.social media d.other _______ e. never
14. Do you like the fact that most of Lufthansa’s flights have a layover in Germany?
Yes No

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How would you rate the following for Lufthansa: (1=Least Satisfied/5=Very Satisfied)
15. Comfort 1 2 3 4 5 N/A
16. Punctuality 1 2 3 4 5 N/A
17. Staff Service 1 2 3 4 5 N/A
18. Would you recommend Lufthansa to others? Yes No
19.Gender? Male Female
20. Age Group:
a. 20 and younger b. 21-25 c. 26-33 d. 33-40 e. 41-47 f. 48-57
g. 58-67 h. 68+
21. Which best describes you:
a. Student b. Employed c. Student & Employed d. Homemaker d. Retired
22. Where are you from: City_______________ State__________________
23. Income: a. 0-$20,000 b. $20,001-$40,000 c. $40,001-$60,000
d. $60,001-$80,000 e. $80,001-$100,00 f. $100,001+
24. Marital Status: ________________________
25.Do you have children: Yes No
26. How many children ? a. 0 b. 1 c. 2 d. 3 e. 4 f. 5+

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Exhibit 2
Correlation Tables
a. Have you ever Traveled with Lufthansa*Been on Lufthansa
Correlations
Have you ever
traveled with
Lufthansa Airlines Been on Lufthansa
Have you ever traveled with
Lufthansa Airlines
Pearson Correlation 1 .795
**
N 25 23
Been on Lufthansa Pearson Correlation .795
**
1
N 23 23
b. How did you hear about Lufthansa*Been on Lufthansa
Correlations
Been on Lufthansa
How did you hear
about Lufthansa
Been on Lufthansa Pearson Correlation 1 .433
*
N 23 23
How did you hear about Lufthansa Pearson Correlation .433
*
1
N 23 25

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c. How did you hear about Lufthansa*Have you ever traveled with Lufthansa Airlines
Correlations
How did you hear
about Lufthansa
Have you ever
traveled with
Lufthansa Airlines
How did you hear about Lufthansa Pearson Correlation 1 .555
**
N 25 25
Lufthansa Airlines
Pearson Correlation .555
**
1
N 25 25
d. Do you like the fact that most of Lufthansa flights have layover in Germany*Been on
Delta
Correlations
Do you like the fact
that most of Lufthansa
flights have a layover
in Germany Been on Delta
Germany
*
N 25 23
Been on Delta Pearson Correlation .434
*
1
N 23 23

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e. Do you like the fact that most of Lufthansa flights have layover in Germany*Been on
United
Correlations
that most of
Lufthansa flights
have a layover in
Germany Been on United
Germany
*
N 25 23
Been on United Pearson Correlation .476
*
1
N 23 23
f. Would you recommend someone to fly with Lufthansa*Been on America
Correlations
Would you
recommend
someone to fly with
Lufthansa Been on America
Would you recommend someone to
fly with Lufthansa
**
N 25 23
Been on America Pearson Correlation .580
**
1
N 23 23

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g. Would you recommend someone to fly with Lufthansa*Have you ever traveled with
Lufthansa
Correlations
Would you
recommend
someone to fly with
Lufthansa
Have you ever
traveled with
Lufthansa Airlines
Would you recommend someone
to fly with Lufthansa
*
N 25 25
Lufthansa Airlines
*
1
N 25 25
h. Would you recommend someone to fly with Lufthansa*How did you hear about
Lufthansa
Correlations
Would you
recommend
someone to fly with
Lufthansa
How did you hear
about Lufthansa
**
N 25 25
How did you hear about Lufthansa Pearson Correlation .589
**
1
N 25 25

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i. Would you recommend someone to fly with Lufthansa* Do you like the fact that most
of Lufthansa flights have layover in Germany
Correlations
Would you
recommend
someone to fly with
Lufthansa
that most of
Lufthansa flights
have a layover in
Germany
**
N 25 25
Germany
**
1
N 25 25

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References
GenerationFly . Retrieved from http://www.generationfly.com/
Lufthansa . Retrieved from http://www.lufthansa.com/
Lufthansa Group . Retrieved from http://www.lufthansagroup.com/
Miles & More . Retrieved from http://www.miles-and-more.com/
Nations Online . Retrieved from http://www.nationsonline.org/
Star Alliance . Retrieved from http://www.staralliance.com/
Travel and Leisure . Retrieved from http://www.travelandleisure.com/
Williams, A. (2012, June 14) . Connecting Flights vs. Non-Stops . Retrieved from
http://www.farecompare.com
World Airline Awards . Retrieved from http://www.worldairlineawards.com/

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