Marketing Mix of Lufthansa and 7Ps (Updated 2024)

The Marketing mix of Lufthansa analyses the 7Ps of Lufthansa, which includes the Product, Price, Place, Promotion, People, Physical Evidence, and Process of Lufthansa. Deutsche Lufthansa AG is referred to as Lufthansa. It is of German origins and is associated with the airline industry. Lufthansa Airlines was founded in 1953, but it was able to commence operations in 1955. It was a flag carrier and state-owned airline earlier, but in 1994, it was privatized. It is the founding member of the largest airline alliance in the world, Star Alliance. Some of the mix of Lufthansa and its major rivals in the airline industry are as follows-

• Cathay Pacific
• Thai Airways
• American Airlines
• Air France
• British Airways

About Lufthansa Airlines

• Type: Airline
• Industry: Aviation
• Founded: 1953
• Founder: Deutsche Lufthansa AG
• Headquarters: Cologne, Germany
• Area served: Worldwide
• Key people: Carsten Spohr (Chairman) and Jens Ritter (CEO)
• Number of employees: 1,09,509 (2022)

Lufthansa Product Strategy

Lufthansa Airlines is an international airline with a fleet of over two hundred and seventy aircraft. Combined with its fully-owned and partly-owned subsidiaries, its fleet includes six hundred and fifteen aircraft.

Lufthansa, one of the world’s leading airlines, offers a diverse product mix catering to various customer needs and preferences.

The product mix of Lufthansa in 2024 is as follows (Source):

1. Passenger Air Travel Services: Lufthansa’s core product is passenger air travel services. This includes Economy Class: Which is budget-friendly, offering basic amenities; Premium Economy: With more space and comfort than Economy; Business Class: Enhanced comfort with lie-flat seats, superior dining, and lounge access. First Class: Luxurious experience with exclusive cabins, gourmet meals, and additional privacy.
2. Cargo Services: Lufthansa Cargo provides air freight transport for various goods, including perishables, pharmaceuticals, and general cargo, using dedicated cargo planes and the cargo holds of passenger aircraft.
3. Maintenance, Repair, and Overhaul (MRO): Lufthansa Technik is a subsidiary that offers MRO services for aircraft, engines, and components. This service is not only for Lufthansa’s fleet but also for other airline clients globally.
4. Catering Services: LSG Sky Chefs is another subsidiary providing in-flight catering, retail, and hospitality services.
5. Aircraft Leasing: Lufthansa also leases aircraft through its subsidiaries, allowing other airlines to expand their fleets without needing to purchase aircraft.
6. Frequent Flyer Program (Miles & More): This loyalty program offers frequent travelers rewards, privileges, and special offers. It’s a vital part of Lufthansa’s customer relationship management.
7. Travel and Flight-Related Services: These include travel insurance, car rental partnerships, hotel bookings, and package holidays, expanding Lufthansa’s offerings beyond just flights.
8. IT Services: Lufthansa Systems provides IT services and digital solutions for Lufthansa and other clients in the aviation industry.
9. Training and Education Services: The Lufthansa Aviation Training subsidiary offers pilot and other flight attendants and cabin crew training.

This diverse product mix allows Lufthansa to cater to a wide range of customer needs, from essential travel to luxury experiences, and to operate in various aviation-related markets.

Lufthansa Pricing Strategy

Lufthansa Airlines offers four types of products to its customers and has adopted a value-based variable pricing policy. As premium economy and economy class cater to the primarily middle-class segment of society, airlines have adopted a competitive and cost-pricing policy for those tickets.

Lufthansa’s pricing strategy uses a sophisticated blend of various approaches tailored to capture and cater to market segments while maximizing revenue. The following vital elements characterize this strategy:

1. Value-Based Pricing: Lufthansa sets prices based on the perceived value of their services to different customer segments. This approach is evident in their tiered cabin classes – Economy, Premium Economy, Business, and First Class – each priced according to the level of comfort, amenities, and exclusivity offered to customers.
2. Dynamic Pricing: Leveraging advanced data analytics, Lufthansa employs dynamic pricing to adjust fares in real time based on demand, competition, seasonality, and booking patterns. This flexibility allows them to optimize revenue on each flight.
3. Competitive Pricing: In markets with intense competition, especially on popular routes, Lufthansa often adopts competitive pricing strategies to match or undercut the fares of rival airlines, thereby attracting price-sensitive and loyal customers.
4. Segmented Pricing: Lufthansa uses segmented pricing to recognize the diverse needs of different customer groups. For instance, they offer discounted fares for students, seniors, or group bookings and premium prices for business travelers who value flexibility and additional services.
5. Ancillary Revenue Generation: Beyond ticket sales, Lufthansa focuses on generating ancillary revenue through additional services such as extra luggage fees, seat selection charges, in-flight meals, and Wi-Fi access. This approach helps in diversifying revenue streams and enhancing profitability.
6. Loyalty and Reward Programs: The Miles & More program plays a strategic role in Lufthansa’s pricing strategy. It fosters customer loyalty through rewards and exclusive offers and enables price differentiation. Frequent flyers might be more inclined to pay a premium for the added benefits and rewards points.

In summary, Lufthansa’s pricing strategy is a dynamic and multifaceted approach to ticket prices that balances competitiveness, profitability, and customer value proposition in a highly volatile and competitive market.

Lufthansa Place Strategy

Lufthansa is the largest airline in Germany and, after including its subsidiaries, is the largest in Europe in terms of fleet size and number of passengers carried. Its services have extended to one hundred and ninety-seven international destinations and eighteen domestic destinations spread over seventy-eight countries in Europe, Asia, the Americas, and Africa.

Lufthansa Airlines has its corporate headquarters base and registered offices in Cologne, Germany; its secondary hub is at Munich Airport, and its primary hub is at Frankfurt Airport, where its flight attendants, ground staff, and plots are based at the Lufthansa aviation center. Several departments of Lufthansa Airlines, including Media Relations, Investor Relations, and Corporate Communications, are located at Frankfurt Airport in Lufthansa Aviation Center.

Lufthansa’s place strategy is as follows:

1. Global Hub System: Lufthansa operates a hub-and-spoke system, focusing on significant hubs like Frankfurt and Munich, which allows efficient connectivity for international flights and streamlines passenger transfers.
2. Extensive Route Network: They offer a wide-reaching route network, covering critical destinations across Europe, Asia, America, Africa, and the Middle East, ensuring a global presence.
3. Strategic Alliance and Partnerships: As a founding member of the Star Alliance, Lufthansa collaborates with various international airlines to expand its reach and offer more destinations through code-sharing and partnerships with international airlines.
4. Multi-Channel Distribution: Lufthansa utilizes various distribution channels, including online and social media platforms, travel agencies, and corporate bookings, to reach different customer segments effectively.
5. Focus on Emerging Markets: The airline actively explores and expands in emerging markets, adapting its route network to changing travel patterns and economic developments to tap into new customer bases.

Lufthansa Promotion Strategy

Lufthansa Airlines has adopted several promotional policies to increase its brand visibility. It realizes the impact of sponsorship deals on a company and the marketing mix of Lufthansa. It has become a sponsor of Bundesliga Clubs Eintracht Frankfurt and Bayern Munich. German Sports Aid Foundation is also sponsored by Lufthansa Airlines. Lufthansa Airlines has launched several informative ad campaigns focusing on its various services and products to increase brand visibility.

The company believes in promotional advertising and offers incentives to its customers, like promotional codes, loyalty programs, and discounts. Ad campaigns have been launched by Lufthansa Airlines through digital media in television and social media platforms like its own website, portals of travel agents tied up with this airline company, and Twitter and Facebook accounts. Officials also engage with clients via the company and mobile app.

Lufthansa’s promotion marketing strategy is as follows:

1. Integrated Marketing Campaigns: Lufthansa employs a mix of advertising, public relations, and digital marketing to reach a broad audience, emphasizing quality, reliability, and global connectivity in its messaging.
2. Loyalty Programs and Partnerships: The Miles & More program incentivizes repeat business, while partnerships with other companies expand their promotional reach and offer bundled services.
3. Targeted Offers and Personalized Marketing: Utilizing customer data, Lufthansa creates personalized offers and targeted promotions to engage different customer segments effectively.

Some Recent Video ads and Print ads of Lufthansa are:

Lufthansa’s New Ad Campaign Features Its Orchestra Under An A350 (simpleflying.com)

https://youtu.be/uK-BKZKAh_k

Lufthansa People Strategy

The “People” component of Lufthansa’s service marketing mix is crucial for Lufthansa Airlines’ belief in building strong customer relationships and enhancing the overall customer experience. Here are key points regarding Lufthansa’s focus on “People” in its service marketing mix:

1. Employee Training and Development: Lufthansa strongly emphasizes comprehensive training for its employees to enhance their skills. The training is job-specific and focuses on management and organizational skills. This approach helps in personal growth and aligns employee development with business goals?.
2. Diverse and Skilled Workforce: The airline’s workforce comes from diverse backgrounds, encouraging out-of-the-box thinking, broadening skills, and fostering a culture of respect and commitment. This diversity and skill set are integral to providing top-notch service to customers?.
3. Organizational Ownership and Commitment: Lufthansa works towards building organizational commitment among its employees, enhancing employee loyalty, and ensuring that employees reflect their best work. This includes sharing reward programs like stock sharing to foster a sense of ownership and involve employees in decision-making processes?.
4. Motivation and Appreciation: Motivating employees through an exciting organizational culture, rewards, bonuses, and appreciation programs is a key strategy. Lufthansa recognizes that motivated employees lead to happy and satisfied customers?.
5. Succession Planning: The airline focuses on succession planning at all managerial levels to prepare for future challenges and ensure the organization remains resourceful. This involves internal promotions and external recruitment based on job needs.

Lufthansa Process Strategy

The “Process” component of Lufthansa’s service marketing mix emphasizes systematic, efficient, and customer-friendly procedures. Here’s a breakdown of the key aspects of Lufthansa’s process promotion mix:

1. Systematic Operations: Lufthansa’s operations are clearly defined and communicated to employees, ensuring they are well-trained and knowledgeable about all operational processes. This focus on systematic operations aims to maintain a high-quality level and standard of service at every stage??.
2. People Management: Clear processes for managing human resources are in place, including recruitment, training, compensation, and performance appraisal. These processes create organizational transparency and trust, contributing to a motivated and satisfied workforce?.
3. Quality Maintenance: Lufthansa has established policies and processes for managing and maintaining quality across all services. This includes multiple quality checks to ensure that customers receive the best possible product and service, demonstrating the airline’s commitment to high standards?.
4. Streamlined Customer Service: The airline prioritizes service quality and has implemented a responsive system for addressing complaints and queries. This includes a dedicated team for social media interactions and a comprehensive help and contact facility on their website, ensuring quick and effective resolution of customer issues?.
5. Use of Technology: Lufthansa has embraced technology to streamline its processes, from booking to customer service. The airline’s website allows for easy scheduling, rescheduling, and cancellation of flights. It also offers features such as online check-in and baggage tracking, making the travel process more convenient for customers???.
6. Feedback and Continuous Improvement: The airline regularly collects customer feedback through various channels, including social media, and incorporates it into its service improvement processes. This approach helps Lufthansa continuously enhance its service quality and customer satisfaction.
7. Safety and Security Procedures: Lufthansa strongly emphasizes safety and security, with rigorous procedures in place to ensure the well-being of passengers and staff. This includes regular safety drills, security checks, and compliance with international aviation standards?.

Lufthansa Physical Evidence Strategy

The “Physical Evidence” component of Lufthansa’s service marketing mix refers to the tangible and intangible elements of first-class services that customers experience, which help to make the service more concrete and assure quality. Here are key aspects of Lufthansa’s physical evidence:

1. Aircraft Fleet and Interiors: Lufthansa’s modern and well-maintained aircraft serve as a primary form of physical evidence. The interiors, including seating comfort, cleanliness, and in-flight entertainment systems, reflect the airline’s commitment to quality and passenger comfort?.
2. Lufthansa Lounges: The design and facilities of Lufthansa lounges at airports around the world offer passengers a luxurious and comfortable environment. These lounges provide a tangible reflection of the brand’s premium service quality?.
3. Uniforms of the Staff: The professional appearance of Lufthansa’s staff, including pilots, flight attendants, and ground staff, through their uniforms, is physical evidence of the airline’s brand standards and professionalism?.
4. Ticketing and Branding Materials: Physical materials such as tickets, boarding passes, and promotional materials carry Lufthansa’s branding and design elements, contributing to the overall brand experience and serving as reminders of the airline’s services?.
5. Website and Mobile App: Lufthansa’s website and mobile app’s design, functionality, and user experience provide digital physical evidence of the airline’s focus on customer service and technological innovation?.
6. In-flight Meals and Amenities: The quality and presentation of in-flight meals and amenities (like amenity kits) are physical evidence of Lufthansa’s service quality, catering to different passenger needs and preferences?.
7. Check-in Counters and Boarding Gates: The design and efficiency of Lufthansa’s check-in counters and boarding gates at airports provide physical evidence of the brand’s operational excellence and customer service focus?.
8. Safety and Cleanliness Measures: Especially relevant in the context of health and safety standards, the visible cleanliness of aircraft and the implementation of safety measures reassure passengers of Lufthansa’s commitment to their well-being?.

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