Evaluate the marketing strategies used by Delta Airlines to expand their market penetration.
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Delta Airline, one of greatest airlines in the US, has been using their unique marketing strategies to gain a place in the airline industry all over the world. As Hall, D. et al.,(2010) explain, marketing strategies are sets of plans to use in marketing, designing for fulfilling the objectives of a business, and also sets of strategies to predict how a business should operate in the future (P.151). This essay will give Delta Airline as an example to evaluate its main marketing strategies, and discuss how it penetrates through the global airline industry.
According to the history on Delta’s official website (Delta.com), Delta Airline was originally founded as a crop dusting service and air mail service in 1924 and 1929 respectfully, led by Collet Everman Woolman for forty years. In 1953, Delta merged with Chicago and Southern Airline to expand its cooperation. In the next fourteen years, Delta combined with Delaware Airlines and started use the name ‘Delta Airline’ officially. After acquiring North East Airline and Western Airline in 1972 and 1986, the sales of its seats have had a dramatically increase. In 2000, Delta reached an enormous high number of passengers of 120 million and has stunned the world.
According to Netra Shetty. (Dec 17th, 2010). Marketing Strategy of Delta Air Lines ,the priory marketing strategy of Delta is called unification. An example in 2008 could explain such theory. During 2008, Delta airline and North West Airline exchanged their shares entirely to emerge as a whole company, which valued 177 billion US dollars, becoming the largest airline in the world. After merging North West Airline, the new Delta could provide customers with flights to more than 67 nations, more than 370 destinations. Thus, the new Delta has created a staggering annual revenue of over 350 billion. Since Delta has enlarged its scale, it can also provide more reasonable airline tickets and better airline services in order to meet the customer’s need.
Another great example of unification of Delta could be traced back to the 1980. According to Netra Shetty. ( Dec 17th, 2010). Marketing Strategy of Delta Air Lines, Delta’s internal growth was threatened by a general trend of its external growth. Consequently, Delta’s size shrank. In ordered to maintain its competitive edge, Delta intended to merge the Los Angeles- based Jet America. Although the 18.7 million deal has yet to be materialized, it has a significant growth in the second year from taking over another air carrier- Western Airline-- to the acquisition of 680 million purchase. Delta’s chief executive officer, David Garrett, announced that “for a merger to be worthwhile, two plus two has to equal seven”. Enlarged by Western's hubs in Los Angeles and Salt Lake City, Delta’s management was able to achieve that goal, in spite of initial difficulties in integrating Western's unionized work force into Delta's system.
Despite that Delta airline has a strong and powerful economic development, no business could escape from the effect of recessions, current affairs, and other external effects occurring in any era. According to statistics demonstrated in EIU/ATA Economic Briefing 2008, Delta found themselves immersed in the struggle of recession, rising of the fuel price, wars happening in the middle East, and the weight of Pan Am’s heavy debt (Delta’s new merging company), resulting in a net loss of 506 million for the 1991 fiscal year.
For Delta to retain the integrity of its company, it was forced to reduce its work force by five percent, cut the salaries and freez the wage. In the same year, Delta was trying to integrate Pan Am’s European routes into its airline system, in hope of recovering such heavy loss by transforming itself into an international carrier. However, the
