Murillo_5.3 - Assignment_Case Study - Marketing in Action (PLG1)

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5.3 - Assignment: Case Study - Marketing in Action (PLG1) 5.3 - Assignment: Case Study “Marketing in Action (PLG1)” Oscar E. Murillo 14 NOV 2021 Embry-Riddle Aeronautical University MKTG 311

5.3 - Assignment: Case Study - Marketing in Action (PLG1) 1)Objective To identify three different airlines and evaluate the various price methods that have been implemented while studying the advantages that airline consumers seek when purchasing airline tickets, with a particular emphasis on the external and internal variables that influence airline pricing choices. 2)Identification of Airlines for Analysis a) United Airlines b) Delta Airlines c) American Airlines 3)Introduction Competition among airlines is continuous; a race to offer the best level of service while keeping competitive pricing and destinations often has an impact on the result in terms of sales and profit for all involved parties. Today, there is a new threat to contend with: the COVID-19 pandemic. Due to the implementation of new health and safety standards, it is possible that the consequences of the pandemic in the aviation sector have lost airlines enough money to equal decades of profit. [Josephs, L. 2021] To mitigate the pandemic's impacts, airlines must adapt to the changing operating environment and create new tactics while retaining their competitive position in the marketplace.

5.3 - Assignment: Case Study - Marketing in Action (PLG1) 4)Evaluation and comparison of pricing strategies A statistical analysis of Delta, American and United Airlines by an expert reveals that, in 2020, United Airlines, Delta Air Lines, American Airlines, and Southwest Airlines will be the top-ranked airlines in the United States based on their domestic market share, respectively. (Mazareanu, 2021). Because of their successful pricing tactics throughout the years, American Airlines has been able to retain a competitive edge over its rivals. According to an internet article on the topic, a major element in the plan is that "American Airlines Group Inc. would "definitely, certainly" match cheap prices from low-cost rivals, CEO Doug Parker said, indicating that an end to the industry's summer-long pricing war is not in the cards." "We price our goods competitively," Parker said to reporters at a Fort Worth, Texas, conference. "We have done so throughout history and will continue to do so in the future." [Siving, M. 2017] This is a technique that many businesses use. The strategy's success stems from "taking" the edge from the competition by immediately matching airline prices and offering extra benefits such as class upgrades, access to VIP lounges, and so on. To contrast this particular strategy with another effective method, Delta prefers to focus on fuel economy. As prices change in response to trends and seasons, fuel costs fluctuate as well, and Delta examines these patterns. Delta developed a fuel hedging program in order to minimize the risk of changes in changing fuel costs in order to take advantage of these shifts in the marketplace. "Delta Airlines

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5.3 - Assignment: Case Study - Marketing in Action (PLG1) provides unique services at various pricing points in order to meet the needs of a diverse spectrum of customers. Delta One TM, First Class, and Delta Comfort+ TM are premium services, and as a result, they are also quite expensive. The Main and Basic classes are the most inexpensive; however, travelers may upgrade to a higher class if they need more facilities. Discounts are also available to customers who participate in Delta's frequent flyer program." [MBA Skool Team. 2020.] United, on the other hand, likes to modify their rates using a hybrid pricing strategy, which includes competitive-based pricing as well as temporary discount pricing. United has the ability to optimize sales, boost profits, and attract new customers by using both methods. United's capacity to adapt, on the other hand, is what keeps them on the cutting edge of their rivals. This allows the airline to create appealing goods such as their rewards programs, which helps them to retain a competitive position in the marketplace. The following is an excerpt from an internet essay on the subject: “When it comes to pricing, the most important consideration is to ensure that the product can compete on the worldwide market. Because of this, it should not have come as a surprise when United Airlines announced that it will be detaching its published Mileage Plus chart and introducing a more dynamic flexible pricing scheme, in which reward levels would "fluctuate depending on a number of variables." United Airlines' pricing strategy, which considers demand”. [NKA. 2021]

5.3 - Assignment: Case Study - Marketing in Action (PLG1) Customers' wants and expectations, such as the level of service provided, the level of comfort provided, and the entire experience are taken into consideration by airlines as they strive to minimize their expenditures. Aside from that, points or "miles" are often sought-after benefits since returning customers who participate in loyalty programs may exchange these types of "money" for more perks and services. It is essential to note that pricing strategies are influenced not only by the components listed above, but also by additional factors known as internal and external factors, which influence price decisions. As an example, the cost of operations, corporate goals, promotional activities, and other internal variables may all be considered important considerations. All of these considerations must be considered when deciding on the best course of action to follow when deciding on tactics that will provide the best possible outcomes for the organization. Another set of equally significant components, referred to as external factors, is any element outside of the control of the airlines, such as customers, regulatory bodies, competition, the economy, and even problems such as the current epidemic in the United States. [Chand, S. NKD].

5.3 - Assignment: Case Study - Marketing in Action (PLG1) References 1. Kotler, P. T., Armstrong, G. 2018. Principles of Marketing. Pearson Education. 17 th ed. Kindle Edition. 2. Josephs, L. 2021. “U.S. airlines’ 2020 losses expected to top $35 billion as pandemic threatens another difficult year.” CNBC. Retrieved from - https://www.cnbc.com/2021/01/01/us-airline-2-losses-expected-to- top-35-billion-in-dismal-2020-from-pandemic.html 3. Mazareanu, E. 2021. “Domestic market share of leading U.S. airlines from November 2019 to October 2020*”. Statista. Retrieved from - https://www.statista.com/statistics/250577/domestic-market-share-of- leading-us-airlines/ 4. Stiving, M. 2017. “American Airlines Deters Competition with Price Strategy”. Pragmatic Institute. Retrieved from - https://www.pragmaticinstitute.com/resources/articles/product/americ an-airlines-deters-competition-with-price-strategy/ 5. NKA. 2021. “UNITED AIRLINES PRICING STRATEGY”. Business and Marketing / Business Essay. Essays USA. Retrieved from - https://www.essaysusa.com/article/united-airlines-pricing-strategy 6. Chand. S. NKD. “Factors Affecting Pricing Product: Internal Factors and External Factors”. Your Article Library. Retrieved from - https://www.yourarticlelibrary.com/marketing/pricing/factors- affecting-pricing-product-internal-factors-and-external-factors/32313

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