In his book, Air Transportation, Wensveen explains each of the four Ps of marketing—Price, Promote, Product and Place—and how they are used to make up what is known as the marketing mix, which “consists of the types and amounts of controllable marketing-decision variables that a company uses over a particular time period” (Wensveen, 2011). In 2012, Lufthansa implemented a marketing strategy called SCORE (an acronym for synergies, costs, organization, revenue and execution) with a goal of increasing Lufthansa Group’s operating result up to €1.5 billion by 2015 (Lufthansa Group, 2013). This paper will explore how Lufthansa applies each of the four Ps in its own business practice, SCORE being its main instrument of success.
With the first of the Ps, price, it is commonly known in the airline industry that ticket prices are volatile primarily because of the fluctuating fuel prices. Fuel costs make up a large portion of Lufthansa’s overall operating expense at 23% (Lufthansa Group, 2013). Another factor to consider for determining the price of a ticket is the time of year in which the available seats are to be sold, namely during the holidays when the demand for travel is high. To take advantage of simple supply and demand effects on the market around the holidays, Lufthansa specifically caters to the higher holiday demands by advertising for holiday customers.
One way Lufthansa makes use of the next P, promote, is through the use of Lufthansaholidays.com, a one-stop shop for anyone wishing to put together a vacation plan (Lufthansa, 2013). The website offers deals that include air fare, hotels, and rental cars when arriving at your vacation destination. Lufthansa even has promotions that are specific to the prospective passengers with the increase of holiday travel such as the Christmas Market Special (Lufthansa Group, 2013). Another promotional aspect for Lufthansa is the four liter aircraft in its fleet, a nickname that stems from the fact that the newest Boeing 747 8i is capable of transporting a passenger 100 kilometers with only four liters of fuel (Lufthansa Group, 2013). This is a major selling point for environmentally protective agencies and passengers who appreciate Lufthansa’s efforts to reduce carbon dioxide emissions.
Lufthansa Group has a plethora of products; the company is split up into five major business segments—Passenger Airline Group, Logistics, MRO (Maintenance, Repair, and Overhaul), Catering, and IT Services. The Passenger Airline Group is the backbone of Lufthansa Group and its responsibility is the successful operation of flights which carry passengers from place to place with utmost reliability, safety, punctuality and professional service in the heart of their operations (Lufthansa Group, 2013). The other business segments essentially exist to bolster passenger airline group operations.
In terms of place, the last of the 4 Ps of marketing, Figure 1 depicts Lufthansa’s prevalence throughout the world. ...