Term Paper on "Airtran Airways"

Term Paper 6 pages (1745 words) Sources: 6 Style: APA

[EXCERPT] . . . .

Air Tran Airways is one of the largest, most successful low-fare airlines in the United States. Founded in 1993 and Headquartered out of Orlando, Florida, this low-cost airline employs 8,000 crew members and operates approximately 700 flights every day to 56 domestic destinations. Although the airline is headquartered out of Florida, its hub is at Hartsfield-Jackson International airport in Atlanta. AirTran Airways is the second largest carrier out of this airport, which is the world's busiest airport with regards to passenger volume. The fleet utilized by this carrier includes 87 Boeing 717-200 aircrafts and 45 Boeing 737-700 aircrafts.

AirTran Airways has received several awards and recognitions for its performance and service. Recent awards received by the airline include the following: Entrepreneur Magazine's Best Airline Value in April 2006; Entrepreneur Magazine's Best Low-Fare Airline for 2005 in April 2005; Corporate Friend of Children Award from the Child Welfare League of America in March 2005; PR Week Magazine's 2005 Small Corporate Communications Team of the Year - Honorable Mention in March 2005; Aviation Week and Space Technology's Commercial Air Transport Award in 2004; Online Media, Marketing & Advertising Award for Airline Online Advertising in October 2004; and Web Marketing Association Award for "Best Airline Website" in September 2004.

The success experienced by AirTran airways is a direct result of its effective marketing strategies. These strategies address the target market through "the marketing mix." This marketing mix involves balance and control in four categories involved in successful marketing, known as the "four P's": product; price; place (distribution); and promotion (NetMBA, 2007). These four P's are the parameters that the marketing manager is able to establish control over. Also, these parameters are subject to the constraints of the marketing environment, both internal and external (NetMBA, 2007). The goal of the marketing mix is to balance and center the four P's on the customers within the target market. Doing so generates perceived value and creates a positive response among this target market.

The product being marketed by AirTran Airways is low-cost domestic flight service. AirTran Airways offers the product of safe, comfortable, efficient flight service between several destinations within the United States. This product is ensured through numerous checks with regards to function and repair of aircraft, as well as attention to customer service. "Product" encompasses the first "P" in the "four P's" of marketing (NetMBA, 2007).

The second "P" is price decision. AirTran Airways markets themselves as a low-cost airline, therefore providing the product (described above) at price that is low and competitive with other similar carriers. AirTran Airways sets prices according to seasonal standards, and discounts and incentives are offered for early bookings. This ensures customer response through a requirement of timely bookings that result in either discounts or incentives for the customer (NetMBA, 2007). AirTran is able to offer low prices to customers by cutting operational costs. An example of this is the cross-training received by AirTran employees, which meant that pilots would occasionally be required to load baggage, and ground crew members were sometimes required to work in the airport helping ticket agents check in passengers (Barrett, 2006).

The third "P" is place, or distribution. This determines how the products are delivered to the customer. In regards to AirTran Airways, "place" would refer to the means by which customer attain the product. Online booking have become extremely common as one of the foremost methods by which a customer can purchase and airline ticket. AirTran airways reported record levels of online flight bookings by customers, with the numbers increasing at a steady rate (Airline Industry Information, 2000). Phone sales as well as in-person sales at agencies also account for customer purchases. Some factors involved in "place" or distribution are market coverage, distribution centers, order processing and reverse logistics (NetMBA, 2007).

The fourth and final "P" in the "four P's" of marketing is promotion. Promotion involves the various components of marketing communication, which refers to communication regarding information pertaining to the product. The goal of this communication is the generation of a positive response on the behalf of the customer. Factors involved in marketing communication include: promotional strategy; advertising; personal selling and sales force; sales promotions; public relations & publicity; and marketing communications budget (NetMBA, 2007). AirTran Airways has effectively utilized several promotional strategies that have resulted in increased earnings and commercial success. The following is a discussion of some of these effective promotional strategies.

In general, AirTran Airways at its start-up attracted customers through the advertisement of low air fares, and expansion strategy that was aggressive, and a promotion that allowed customers between the ages of 18 and 22 years old to purchase flights very cheaply by flying stand-by (Barrett, 2006). Successful promotional strategies resulted in AirTran Airways being one of only a few airlines that recorded profit after the terrorist attacks of September 11, 2001 (Barrett, 2006). Furthermore, AirTran Airways has reported steady increases in its annual revenue over the past years since its inception. This revenue grew to a figure of $1.45 billion in 2005 (Barrett, 2006).

What core factors have contributed to the immense success of AirTran Airways? This airline is rational and reasonable in its operations, not letting ego interfere with business (Barrett, 2006). Moreover the focus of AirTran is to provide an understandable and rational deal for customers. Promotional strategies greatly targeted business travelers. Promotional incentives included upgrades to leather seats at the front of the plane which did not cost much, but often markedly increased the comfort and the satisfaction of the customers (Barrett, 2006). Overall, AirTran Airways has a decent brand presence, a good product, and their business class certainly has a good reputation (Barrett, 2006). The airline has invested a large amount into advertising. An example is in Milwaukee, where in their first year there, AirTran Airways spent $750,000 on advertising (Barrett, 2006). Moreover, AirTran Airways is an airline that has used its promotional strategies to improve performance over time. Overall, AirTran could certainly be considered a fiscally intelligent and aware company (Barrett, 2006).

AirTran Airways has taken measures to ensure that their marketing strategies are highly effective. Effective marketing strategies would result in increased profits for the company while still providing low-cost, quality service to customers. For example, in 2004 AirTran Airways hired Judy Graham-weaver as public Relations Manager (Business Editors, 2004). With 16 years of public relations and marketing experience, AirTran gained a valuable asset for marketing with the acquisition of Weaver in this important position.

AirTran Airways conducts several promotional campaigns in order to provide low fares and attract customers. For example, AirTran has promoted 48-hour fare sales, targeted at beating the cost of driving to any destination (Airline Industry Information, 2006). This promotion was aimed at winning over customers by convincing them that flying is economical with regards to both time and price. Certain target markets are focused upon, like youth and business travelers, through particular promotional campaigns.

One interesting promotional campaign launched by AirTran involved the Airline teaming up with Indy Car driver Danica Patrick in the creation of an online game. In the game, which is called AirTran Raceway, Patrick is featured as a race car driver, and players attempt to complete races in the fastest time possible (airline Industry Information, 2007). This strategy raises awareness for AirTran airways, and the airline rewarded online players with the best scores with free airline tickets. This promotional strategy was effectively targeted at youth, who would be attracted to online video games as a source of entertainment.

Another promotional campaign launched by AirTran Airways involved their frequent flyer or "A+ rewards" members. The airline announced in 2006 that they would be teamed up with EarthLink, an Internet service provider. The joint promotional campaign launched by the two companies involved a+ rewards members receiving roundtrip tickets when they purchase either Internet or voice services from EarthLink (Airline Industry Information, 2006). This offer was only available for a limited time, but it certainly would have been an effective means of increasing awareness and business for the airline and EarthLink, as well as providing the customer with a great deal. In another promotional campaign involving a+ members, AirTran announced a promotion in which double credits would be offered to members when they travel to and from selected United States Airports (Airline Industry Information, 2006). This promotion was targeted at the business traveler market, which often traveled extensively between the cities included in the promotion.

In another marketing strategy, AirTran Airways teamed up with AEGON Direct Marketing Services, a company that is known for offering the highest value and most comprehensive travel protection product available in the travel market. In this particular promotion, travel protection would be available for a very low cost to customers that purchase a AirTran Airways flight through the company's website (Airline Industry Information, 2005). This marketing strategy is effective, because it offers something to the customer of that is of direct use and relation to the service provided by AirTran. Meanwhile, the Airline gains traffic to the website, and costs… READ MORE

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