Executive summary
American Airlines is the largest airline by passenger traffic in the world. A subsidiary of AMR Corporation, the headquarters of American Airlines is situated at Fort Worth in Texas next to Fort Worth International Airport. The organization operates intensive domestic and international air transport networks. The organization was formed through conglomeration of small airlines in 1930 (Conaway, 2012, p. 34), and by then its brand name was American Airways. The organization carries out flights in North America, Europe, South America, Caribbean, and even in Asia pacific. This means that the American Airlines constitutes a key icon in the air transport operation across many regions within and outside the U.S. In the situation of modern aggressive market knowing, the aspects of situation analysis and marketing strategy become more fundamental and the airline industry is a mesmerizing subject. The market share, which an airline embraces, depends mainly on how efficiently it can market its product. As an expert on the product, the American Airlines, and the airline industry where it operates, I will be giving my recommendations to the management concerning marketing strategies that American Airlines can execute to achieve competitive advantage and become successful in the market (Conaway, 2012, pp. 35-37). This paper therefore explains on situation analysis of the company coupled with describing marketing strategies that American Airlines can implement for successful operations.
Situation analysis
SWOT analysis (Jin-Long, Jung Kyu, & Wen-Chun, 2011, pp. 249-250)
Strengths
- Powerful Hub in Fort Worth
- Advantage distinguished as the best client loyalty plan
- Powerful Brand image, created numerous new routes ever since 2010
- Powerful image for onboard leisure content
- Broad reach with more than 250 places with a well-built fleet volume of 600 carriers
Weaknesses
- Financial situation is a reason for alarm
- Losing out clients to Low Cost Carriers (LCCs) in addition to other competitive players
- Unsuccessful routes
- A lot of market sections (Jin-Long, Jung Kyu, & Wen-Chun, 2011, pp. 251-252)
Opportunities
- influence on code share concurrence with numerous airlines
- Capitalization on development of High Definition Television (HDTV)
- More worldwide destinations on well-liked routes
- Encouraging wage concession climate
- Low rates on interest
- Novel fuel proficient engines
- Joint ventures with Asian airlines
Threats
- Rising Fuel Costs and Rising Costs of Labor
- Force from directive bodies and government strategies
- Low cost service givers
- Augmented air travel problem (security associated)
- Business travel waning
- Augmented rivalry from competitors
- Congestion in airline industry
Marketing strategy
Strategic planning
Strategic planning is a crucial phase in the application of standards of marketing in the airline industry. The major role of strategic planning is to emphasize for the airline on its marketing strengths that can excellently be employed to make best use of chances that might come up in the environment. Fundamentally, strategic planning will engage advance decision making with respect to courses of action that the marketing department of the American Airline will employ in the future (Kotler, & Keller, 2011, p. 62). This tactical plan is all-inclusive and long-range. The major objective of strategic planning is viewed as detection of fresh opportunities, attractive areas and the formulation of plans for building on these areas and chances. Some of the aspects included in the long range strategic planning are as follows:
- A description of objectives and aims
- An evaluation of the obtainable resources for enacting the strategic plan
- An evaluation of alternative guiding principles and the strategic choices obtainable
- Judgments concerning avenues liable to be consequently pursued
- A preparation of schemes to be carried out, that is, a strategic plan (comprising contingency preparations)
The aspects of marketing planning encompass definition of a basic policy for American Airlines with respect to aims and objectives. The best means for attaining them has to be outlined. In addition, the management should obtain a number of interconnected judgments, regarding what to do, who ought to do it, as well as the way to do it, to attain the goals. For the American Airlines, my recommendation would be for this strategic planning to cover approximately a period of one year. The function of the marketing planning is to do away with misunderstanding and confusion amid groups engaging in the marketing task, for instance, Field Transactions, Standards, Product Advancement, Publicity, Public Relations, Investigation, and Distribution. Marketing plan also serves to make sure as far as probable that all stages of the entire marketing procedure are functioning towards attaining common objectives and offer a better ground for evaluating performance and assessing variations on target (Kotler, & Keller, 2011, p. 63).
The strategic plan for the American Airlines should study the entire market before segmenting it into sections emphasized as being latently the most beneficial to enter. After doing this, the management should decide on the positions to occupy in these sections. This process is called marketing positioning. For American Airline to have an exceptional or a first-rate airline product is not adequate, should it be wrongly situated in its target market section (Frances, 2011, pp. 8-9). At its most fundamental stage, market positioning ought to involve efficient communication of the corporate image of American airlines to the clients recognized as major contributors to market advancement. It must as well make sure that clients value the advantages of the service of the airline more than the one of its competitors. Similar to every other marketing action, market positioning must contribute to the attainment of the entire goals of the American airlines. It accomplishes this by emphasizing the most suitable areas of venture and identifying the market section that will yield utmost return on venture.
Marketing Efficiency
American Airlines must assess its marketing efficiency. Devoid of system for assessing and interpreting the influences of the marketing endeavors of the company, it may continue to employ outdated policies that do not assist the company in achieving its marketing and corporate goals. The marketing manager ought to be accountable of the daily marketing operations. He should as well e accountable of the control and planning tasks, and should seldom have the freedom to consider casually the efficiency of the marketing endeavors of the airline. Marketing efficiency is not essentially disclosed by the present marketing act. Opportunity aspects or economic situation for instance, being in the correct position at the correct time might influence outcomes. Of course, there should be carrying out of the assessment of marketing performance (Frances, 2011, pp. 10-11). There should also be establishment of objectives and gauging of performance in opposition to objectives regularly. With reference to American Airlines, its marketing efficiency is reflected in the extent to which it displays five major qualities of marketing direction. These qualities comprise client attitude, integrated and efficient association, sufficient information, tactical orientation, and effective operation.
Client attitude
This aspect is the capability of management and workforce to distinguish the primacy of assessing the market situation, that is, they should be able to recognize the different sections, the existing varying opportunities, and the ones to take up. In carrying out the practice of market segmentation, American Airlines should group clients whose requirements are mostly alike. Managers differ in their focus. For instance, some may be expertise-oriented, but might fail to take into consideration the capacity to control this expertise by the airline or needs of the clients. Other managers might be motivated by cost effectiveness. That signifies that they might place unwarranted highlight on price as the influential factor of demand (Frances, 2011, pp. 12-13). American Airlines should hire or train its manager to focus on all factors without over-concentrating on some areas and ignoring others.
Integrated and efficient association
Total amount can be attained if every operating section has an apparent view of client requirements and recognizes that the client is vital. The employees of American Airlines ought to internalize this view and it should be revealed in their provision of service. There is need for free flow of information between the dissimilar working sections because information communicated by one section might be vital to the function of another, and might have an impact on the activity that will be carried out by that section. For American Airline, I would propose that efficient channels of communication be in position to permit the free flow of information. Communication should subsist from the booking clerk to the management. This flexibility will permit American Airline to offer superb service to individual client who will see the airline as a caring association (Jin-Long, Jung Kyu, & Wen-Chun, 2011, pp. 253-254). Each individual and each progression in American Airlines either instantly or eventually influences the product and the client, thus, client satisfaction is the accountability of all. There is therefore the need for pro-active instead of reactive management to implement the entire quantity idea and all employees from bottom to top should be engaged. Progressively, it is becoming apparent that if American Airlines fails to put the whole quality idea into practice, there is danger of its lagging behind.
Sufficient Information
Marketing managers should evaluate whether they have appropriate, up to date knowledge on aimed markets (Jin-Long, Jung Kyu, & Wen-Chun, 2011, pp. 255-256). The managers should make sure that information regarding the excellence of client service is obtained from all useful divisions that involve the service.
Tactical Orientation
The American Airlines should evaluate whether it has a definite core policy towards its marketing. It should examine if there is a proper structure of yearly and long-range, preparation alongside contingency preparation if needed. American Airline requires that the future strategy is under regular analysis and that they at all times contain a particular contingency factor (Jin-Long, Jung Kyu, & Wen-Chun, 2011, pp. 257-258). A contingency preparation will arrange to handle problems.
Effective Operation
The American Airlines must make sure that there is connection of enough significance to its marketing section and that suitable resource (human, monetary, and technical) are made obtainable to perform the different marketing actions. There is necessity for clarity regarding the application of resources to attain efficient functions. For instance, from the viewpoint of human resources, American Airlines personnel should be circumspectly hired, assigned, guided, and developed. Various marketing policies will necessitate managers with dissimilar personalities and expertise. Here, an investigation is necessary of how personnel view the company, themselves, the service that the company offers, and the general value of the client (Conaway, 2012, pp. 38-39). The American Airlines must also distinguish that the different marketing activities are done. The marketing section should be allocated suitable funding if they are to realize optimum effectiveness. Technical sections, for instance, reservations, within American Airlines as well require sufficient funding. Inspecting performance alongside set targets should engage qualitative evaluation and checklists could be applied to check such things like sales shop look, client contact, and personnel attitudes.
Advertising
Advertising has an exceedingly high significance and is the most striking of all the tools in promotion. To be efficient, it must achieve the target markets of American Airlines and concentrate on their requirements and needs. It generates understanding of American airlines and draws the attention of the clients to it. The plan of the advertising operation is an intricate process and some of the treads that require to be followed include creating advertising goals, deciding the advertising financial plan, selecting an appropriate media, and choosing a marketing agency. Another step that requires to be followed is timely decision making (Conaway, 2012, p. 40). For example, the finest time to set the campaign. The decisions outlined should be prosperous in reaching the target markets of American Airlines, notify the client concerning novel or developed product attributes, latest directions being sewed and inform the clients of existing product qualities, and routes served.
Personal Selling
American Airlines should employ individuals to serve as sales representatives. The main task of the sale representatives is to give service to travel agents by visiting them to offer material and information, responding to their questions, and assisting them to respond to the questions and grievances of their clients. This way, personal selling helps to fill the gaps left by advertising and other means of non-personal selling. If good and well designed, personal selling can be triumphant as the client receives an individualized contact (Conaway, 2012, p. 41).
Sales Promotion
American airlines should use sales promotions to give support through the launching stage of a novel route or service. Sales promotion actions are generally short-term and are planned to both encourage and persuade the client into purchasing from the airline.
Sales promotion incorporates numerous direct marketing actions such as direct mail promotions. Sales promotion comprises such actions as contribution in exhibitions and travel marts, special offers, competitions, free samples, advertising displays as well as funding of cultural events, and sports (Conaway, 2012, pp. 42-43).
Public Relations/Publicity
If Public Relations (PR) is applied effectively, it can assist to endorse corporate image of the airline, improve its reputation, and arousing requirement of its services. Public Relations build chances for publicity, whereas publicity creates use of every opportunity that comes up. Different from publicity, PR has a cost involved, arising from the application of competently planned materials, designing PR campaigns, policies, and events (Frances, 2011, pp. 13-14).
Conclusion
Marketing strategy for the American Airlines is a difficult assignment. Bearing in mind the kind of airlines product, the management team of the American Airlines has to prepare an excellent marketing strategy. In the marketing strategy, the management has to clarify the significance of preparation, distribution routes, pricing, and the suitable promotional policy to be an efficient marketing expert (Frances, 2011, pp. 15-19). To sum it up, the management should stipulate a good comprehension of the market by taking into consideration the services provided by their challengers and accordingly implement any recommendations to gain a competitive edge in the market.
References
Conaway, D. (2012). American Airlines: Who’s Flying the Plane? Business Credit, 114 (5), 34-43.
Frances, R. (2011). American Airlines increases P.R. flight frequency. Caribbean Business, 39 (48), 8-19.
Jin-Long, L., Jung Kyu, C., & Wen-Chun, T. (2011). Determinants of passengers’ choice of airline check-in services: A case study of American, Australian, Korean, and Taiwanese passengers. Journal of Air Transport Management, 17 (4), 249-258.
Kotler, P., & Keller, K. (2011). Marketing Management. Upper Saddle River, NJ: Pearson/Prentice-Hall.