Marketing Mix of the Airline Company Lufthansa/Swiss Group Deutsche Lufthansa AG is referred to as Lufthansa. It is of German origins and is associated with the airline industry. Lufthansa Airlines was founded in 1953, but it was able to commence operations in 1955. It was a flag carrier and state-owned airline earlier, but in 1994, it was privatized. It is the founding member of the largest airline alliance in the world, Star Alliance. About Lufthansa Airlines: Type: Airline Industry: Aviation Founded: 1953 Founder: Deutsche Lufthansa AG Headquarters: Cologne, Germany Area served: Worldwide Key people: Carsten Spohr (Chairman) and Jens Ritter (CEO) Number of employees: 1,09,509 (2022) Lufthansa Airlines is an international airline with a fleet of over two hundred and seventy aircraft. Combined with its fully-owned and partly-owned subsidiaries, its fleet includes six hundred and fifteen aircraft. The marketing mix, often referred to as the 7Ps, encompasses various elements that contribute to Lufthansa’s success. Here’s an overview: 1. Product Strategy: a. Passenger Air Travel Services: Lufthansa’s core product is passenger air travel services. This includes Economy Class: Which is budget- friendly, offering basic amenities; Premium Economy: With more space and comfort than Economy; Business Class: Enhanced comfort with lie-flat seats, superior dining, and lounge access. First Class: Luxurious experience with exclusive cabins, gourmet meals, and additional privacy. b. Cargo Services: Lufthansa Cargo provides air freight transport for various goods, including perishables, pharmaceuticals, and general cargo, using dedicated cargo planes and the cargo holds of passenger aircraft. c. Maintenance, Repair, and Overhaul (MRO): Lufthansa Technik is a subsidiary that offers MRO services for aircraft, engines, and components. This service is not only for Lufthansa’s fleet but also for other airline clients globally. d. Catering Services: LSG Sky Chefs is another subsidiary providing in- flight catering, retail, and hospitality services. e. Aircraft Leasing: Lufthansa also leases aircraft through its subsidiaries, allowing other airlines to expand their fleets without needing to purchase aircraft. f. Frequent Flyer Program (Miles & More): This loyalty program offers frequent travelers rewards, privileges, and special offers. It’s a vital part of Lufthansa’s customer relationship management. g. Travel and Flight-Related Services: These include travel insurance, car rental partnerships, hotel bookings, and package holidays, expanding Lufthansa’s offerings beyond just flights. h. IT Services: Lufthansa Systems provides IT services and digital solutions for Lufthansa and other clients in the aviation industry. j. Training and Education Services: The Lufthansa Aviation Training subsidiary offers pilot and other flight attendants and cabin crew training. This diverse product mix allows Lufthansa to

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BANGABANDHU SHEIKH MUJIBUR RAHMAN AVIATION & AEROSPACE
UNIVERSITY
DEPARTMENT OF AVIATION OPERATIONS MANAGEMENT
MBA IN AVIATION MANAGEMENT
SEMESTER-03, ASSIGNMENT-01
MARKETING MANAGEMENT IN AVIATION
PARTICIPANT’S NAME : CHOWDHURY OMAR HAIDER
DATE IN FULL : FEB 29, 2024
Q. Marketing Mix of the Airline Company Lufthansa/Swiss Group
Deutsche Lufthansa AG is referred to as Lufthansa. It is of German origins and is associated
with the airline industry. Lufthansa Airlines was founded in 1953, but it was able to
commence operations in 1955. It was a flag carrier and state-owned airline earlier, but in
1994, it was privatized. It is the founding member of the largest airline alliance in the world,
Star Alliance.
About Lufthansa Airlines:
Type: Airline
Industry: Aviation
Founded: 1953
Founder: Deutsche Lufthansa AG
Headquarters: Cologne, Germany
Area served: Worldwide
Key people: Carsten Spohr (Chairman) and Jens Ritter (CEO)
Number of employees: 1,09,509 (2022)
Lufthansa Airlines is an international airline with a fleet of over two hundred and seventy
aircraft. Combined with its fully-owned and partly-owned subsidiaries, its fleet includes six
hundred and fifteen aircraft. The marketing mix, often referred to as the 7Ps, encompasses
various elements that contribute to Lufthansa’s success. Here’s an overview:
1. Product Strategy:
a. Passenger Air Travel Services: Lufthansa’s core product is
passenger air travel services. This includes Economy Class: Which is budget-
friendly, offering basic amenities; Premium Economy: With more space and comfort
than Economy; Business Class: Enhanced comfort with lie-flat seats, superior
dining, and lounge access. First Class: Luxurious experience with exclusive cabins,
gourmet meals, and additional privacy.
b. Cargo Services: Lufthansa Cargo provides air freight transport for
various goods, including perishables, pharmaceuticals, and general cargo, using
dedicated cargo planes and the cargo holds of passenger aircraft.
c. Maintenance, Repair, and Overhaul (MRO): Lufthansa Technik is a
subsidiary that offers MRO services for aircraft, engines, and components. This
service is not only for Lufthansa’s fleet but also for other airline clients globally.

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d. Catering Services: LSG Sky Chefs is another subsidiary providing in-
flight catering, retail, and hospitality services.
e. Aircraft Leasing: Lufthansa also leases aircraft through its subsidiaries,
allowing other airlines to expand their fleets without needing to purchase aircraft.
f. Frequent Flyer Program (Miles & More): This loyalty program offers
frequent travelers rewards, privileges, and special offers. It’s a vital part of
Lufthansa’s customer relationship management.
g. Travel and Flight-Related Services: These include travel insurance, car
rental partnerships, hotel bookings, and package holidays, expanding Lufthansa’s
offerings beyond just flights.
h. IT Services: Lufthansa Systems provides IT services and digital solutions
for Lufthansa and other clients in the aviation industry.
j. Training and Education Services: The Lufthansa Aviation Training
subsidiary offers pilot and other flight attendants and cabin crew training.
This diverse product mix allows Lufthansa to cater to a wide range of customer needs, from
essential travel to luxury experiences, and to operate in various aviation-related markets.
2. Pricing Strategy:
Lufthansa Airlines offers four types of products to its customers and has adopted a value-
based variable pricing policy. As premium economy and economy class cater to the
primarily middle-class segment of society, airlines have adopted a competitive and cost-
pricing policy for those tickets.
Lufthansa’s pricing strategy uses a sophisticated blend of various approaches tailored to
capture and cater to market segments while maximizing revenue. The following vital
elements characterize this strategy:
a. Value-Based Pricing: Lufthansa sets prices based on the perceived
value of their services to different customer segments. This approach is evident
in their tiered cabin classes – Economy, Premium Economy, Business, and First
Class – each priced according to the level of comfort, amenities, and exclusivity
offered to customers.
b. Dynamic Pricing: Leveraging advanced data analytics, Lufthansa employs
dynamic pricing to adjust fares in real time based on demand, competition,
seasonality, and booking patterns. This flexibility allows them to optimize revenue
on each flight.
c. Competitive Pricing: In markets with intense competition, especially on
popular routes, Lufthansa often adopts competitive pricing strategies to match or
undercut the fares of rival airlines, thereby attracting price-sensitive and loyal
customers.

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d. Segmented Pricing: Lufthansa uses segmented pricing to recognize the
diverse needs of different customer groups. For instance, they offer discounted
fares for students, seniors, or group bookings and premium prices for business
travelers who value flexibility and additional services.
e. Ancillary Revenue Generation: Beyond ticket sales, Lufthansa focuses
on generating ancillary revenue through additional services such as extra luggage
fees, seat selection charges, in-flight meals, and Wi-Fi access. This approach
helps in diversifying revenue streams and enhancing profitability.
f. Loyalty and Reward Programs: The Miles & More program plays a
strategic role in Lufthansa’s pricing strategy. It fosters customer loyalty through
rewards and exclusive offers and enables price differentiation. Frequent flyers
might be more inclined to pay a premium for the added benefits and rewards
points.
In summary, Lufthansa’s pricing strategy is a dynamic and multifaceted approach to ticket
prices that balances competitiveness, profitability, and customer value proposition in a
highly volatile and competitive market.
3. Place (Distribution):
Lufthansa is the largest airline in Germany and, after including its subsidiaries, is the
largest in Europe in terms of fleet size and number of passengers carried. Its services
have extended to one hundred and ninety-seven international destinations and eighteen
domestic destinations spread over seventy-eight countries in Europe, Asia, the Americas,
and Africa.
Lufthansa Airlines has its corporate headquarters base and registered offices in Cologne,
Germany; its secondary hub is at Munich Airport, and its primary hub is at Frankfurt Airport,
where its flight attendants, ground staff, and plots are based at the Lufthansa aviation
center. Several departments of Lufthansa Airlines, including Media Relations, Investor
Relations, and Corporate Communications, are located at Frankfurt Airport in Lufthansa
Aviation Center.
Lufthansa’s place strategy is as follows:
a. Global Hub System: Lufthansa operates a hub-and-spoke system, focusing
on significant hubs like Frankfurt and Munich, which allows efficient connectivity for
international flights and streamlines passenger transfers.
b. Extensive Route Network: They offer a wide-reaching route network,
covering critical destinations across Europe, Asia, America, Africa, and the Middle
East, ensuring a global presence.
c. Strategic Alliance and Partnerships: As a founding member of the Star
Alliance, Lufthansa collaborates with various international airlines to expand its reach
and offer more destinations through code-sharing and partnerships with international
airlines.
d. Multi-Channel Distribution: Lufthansa utilizes various distribution
channels, including online and social media platforms, travel agencies, and
corporate bookings, to reach different customer segments effectively.

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e. Focus on Emerging Markets: The airline actively explores and expands in
emerging markets, adapting its route network to changing travel patterns
and economic developments to tap into new customer bases.
4. Promotion Strategy:
Lufthansa Airlines has adopted several promotional policies to increase its brand visibility.
It realizes the impact of sponsorship deals on a company and the marketing mix of
Lufthansa. It has become a sponsor of Bundesliga Clubs Eintracht Frankfurt and Bayern
Munich. German Sports Aid Foundation is also sponsored by Lufthansa Airlines. Lufthansa
Airlines has launched several informative ad campaigns focusing on its various services
and products to increase brand visibility.
The company believes in promotional advertising and offers incentives to its customers, like
promotional codes, loyalty programs, and discounts. Ad campaigns have been launched by
Lufthansa Airlines through digital media in television and social media platforms like its own
website, portals of travel agents tied up with this airline company,
and Twitter and Facebook accounts. Officials also engage with clients via the company and
mobile app.
Lufthansa’s promotion marketing strategy is as follows:
a. Integrated Marketing Campaigns: Lufthansa employs a mix of
advertising, public relations, and digital marketing to reach a broad audience,
emphasizing quality, reliability, and global connectivity in its messaging.
b. Loyalty Programs and Partnerships: The Miles & More program
incentivizes repeat business, while partnerships with other companies expand their
promotional reach and offer bundled services.
c. Targeted Offers and Personalized Marketing: Utilizing customer data,
Lufthansa creates personalized offers and targeted promotions to engage
different customer segments effectively.
5. People:
he “People” component of Lufthansa’s service marketing mix is crucial for Lufthansa
Airlines’ belief in building strong customer relationships and enhancing the overall customer
experience. Here are key points regarding Lufthansa’s focus on “People” in its service
marketing mix:
a. Employee Training and Development: Lufthansa strongly emphasizes
comprehensive training for its employees to enhance their skills. The training is job-
specific and focuses on management and organizational skills. This approach helps
in personal growth and aligns employee development with business goals?.
b. Diverse and Skilled Workforce: The airline’s workforce comes from diverse
backgrounds, encouraging out-of-the-box thinking, broadening skills, and fostering
a culture of respect and commitment. This diversity and skill set are integral to
providing top-notch service to customers?.

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c. Organizational Ownership and Commitment: Lufthansa works towards
building organizational commitment among its employees, enhancing employee
loyalty, and ensuring that employees reflect their best work. This includes sharing
reward programs like stock sharing to foster a sense of ownership and involve
employees in decision-making processes?.
d. Motivation and Appreciation: Motivating employees through an
exciting organizational culture, rewards, bonuses, and appreciation programs is a
key strategy. Lufthansa recognizes that motivated employees lead to happy and
satisfied customers?.
e. Succession Planning: The airline focuses on succession planning at all
managerial levels to prepare for future challenges and ensure the organization
remains resourceful. This involves internal promotions and external recruitment
based on job needs.
6. Physical Evidence:
The “Physical Evidence” component of Lufthansa’s service marketing mix refers to the
tangible and intangible elements of first-class services that customers experience, which
help to make the service more concrete and assure quality. Here are key aspects of
Lufthansa’s physical evidence:
a. Aircraft Fleet and Interiors: Lufthansa’s modern and well-maintained
aircraft serve as a primary form of physical evidence. The interiors, including
seating comfort, cleanliness, and in-flight entertainment systems, reflect the
airline’s commitment to quality and passenger comfort?.
b. Lufthansa Lounges: The design and facilities of Lufthansa lounges at
airports around the world offer passengers a luxurious and comfortable environment.
These lounges provide a tangible reflection of the brand’s premium service quality?.
c. Uniforms of the Staff: The professional appearance of Lufthansa’s staff,
including pilots, flight attendants, and ground staff, through their uniforms, is physical
evidence of the airline’s brand standards and professionalism?.
d. Ticketing and Branding Materials: Physical materials such as tickets,
boarding passes, and promotional materials carry Lufthansa’s branding and design
elements, contributing to the overall brand experience and serving as reminders of
the airline’s services?.
e. Website and Mobile App: Lufthansa’s website and mobile app’s design,
functionality, and user experience provide digital physical evidence of the airline’s
focus on customer service and technological innovation?.
f. In-flight Meals and Amenities: The quality and presentation of in-flight meals
and amenities (like amenity kits) are physical evidence of Lufthansa’s service quality,
catering to different passenger needs and preferences?.
g. Check-in Counters and Boarding Gates: The design and efficiency of
Lufthansa’s check-in counters and boarding gates at airports provide physical
evidence of the brand’s operational excellence and customer service focus?.

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h. Safety and Cleanliness Measures: Especially relevant in the context of
health and safety standards, the visible cleanliness of aircraft and the implementation
of safety measures reassure passengers of Lufthansa’s commitment to their well-
being?.
7. Process:
The “Process” component of Lufthansa’s service marketing mix emphasizes systematic,
efficient, and customer-friendly procedures. Here’s a breakdown of the key aspects of
Lufthansa’s process promotion mix:
a. Systematic Operations: Lufthansa’s operations are clearly defined and
communicated to employees, ensuring they are well-trained and knowledgeable
about all operational processes. This focus on systematic operations aims to
maintain a high-quality level and standard of service at every stage??.
b. People Management: Clear processes for managing human resources are in
place, including recruitment, training, compensation, and performance appraisal.
These processes create organizational transparency and trust, contributing to a
motivated and satisfied workforce?.
c. Quality Maintenance: Lufthansa has established policies and processes for
managing and maintaining quality across all services. This includes multiple quality
checks to ensure that customers receive the best possible product and service,
demonstrating the airline’s commitment to high standards?.
d. Streamlined Customer Service: The airline prioritizes service quality and
has implemented a responsive system for addressing complaints and queries. This
includes a dedicated team for social media interactions and a comprehensive help
and contact facility on their website, ensuring quick and effective resolution of
customer issues?.
e. Use of Technology: Lufthansa has embraced technology to streamline its
processes, from booking to customer service. The airline’s website allows for easy
scheduling, rescheduling, and cancellation of flights. It also offers features such as
online check-in and baggage tracking, making the travel process more
convenient for customers???.
f. Feedback and Continuous Improvement: The airline regularly
collects customer feedback through various channels, including social media, and
incorporates it into its service improvement processes. This approach helps
Lufthansa continuously enhance its service quality and customer satisfaction.
g. Safety and Security Procedures: Lufthansa strongly emphasizes safety and
security, with rigorous procedures in place to ensure the well-being of passengers
and staff. This includes regular safety drills, security checks, and compliance with
international aviation standards?.