Basic Economy ClassJosh Doiron Veronica Garcia Nicole Kuester Silvia Linares Joanna Zaki

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

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-Forces

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

SWOTStrengths

● 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

SWOTOpportunities

● 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)

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

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

Indirect Competition: Southwest AirlinesNo similar service to Basic Economy

However, very similar in price (sometimes even lower)

Target middle class, price sensitive flyers

Market Segmentation Criteria● Travel Purpose

● Travel Frequency

● Price Sensitivity

● Age

● Use of Loyalty Programs

● Urgency of flight need

Market Segments● Frequent Leisure Travelers

● Loyalty Customers

● Urgent Travelers

● Budget Conscious

● Business Travelers

Market SegmentationDemographic

● 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.

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

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.

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

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

IMC FLOW CHART

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

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

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

Control

Public Relations → Google Adwords Keyword Tracking and mentions

Personal Selling → Customer service scores

Travel Agents → Awareness surveys, educate about service

RecommendationBasic 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.

Thank You!