Marketing Plan for Pan American Airlines

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Marketing Plan for Pan Am Air Revival
Introduction
Failure is a common phenomenon for most businesses and entrepreneurs. Some businesses fail during the initial stages of startup while others fail along the way due to different reasons including mismanagement, changing regulations and other unforeseen barriers such as political instability. Pan American airlines, one of the most renown airlines and United States National carrier is a perfect example of a company that failed after many years of successful operations. Pan Am airlines started off as a mail delivery service in the United States, then expanded to passenger services due to high demand. The airline failed as a result of different mistakes including mismanagement and arrogance by the airline staff. Juan Terry Trippe, the founder of the airline was known to be an arrogant individual in conducting business. He did not bother to plan for a long term and qualified successor who would take over from him after his retirement. What followed before the 1991 demise of the company was a series of deregulations, poor management, union apathy, the 1988 terrorist attack among other issues. To revive the company, its appointed marketing team needs to develop an effective marketing plan that guarantees a smooth revival of the airline and one that keeps it from repeating the mistakes that paralyzed it.
History
Pan American airways, also known as Pan Am airways is one of the oldest airlines, in the United States. The airline introduced their inaugural transatlantic passenger flights in 1939. It was United States official air carrier until it collapsed on December 1994 (Mercer & Danielle, etal., 18). The company was started in 1927 as air mail distributor and passenger service company that operated between Florida, Key West, Cuba and Havana. The airline became a symbol of international airline industry due to the numerous innovations it introduced. The innovations include the introduction of computerized reservation systems and inclusion of jet engine aircrafts in their fleet. The airline was also a founding member of the International Air Traffic Association (IATA). At its best periods, the airline succeeded in flying a Boeing 747 around the world before it ceased operation in 1991. It was after 20 years since the airline was started when they began operating jet aircraft, a move that boosted the company’s relationship with Boeing. Pan Am stayed at the helm of international travel despite stiff competition from other international airlines from European countries. The airlines history is critical to the revival marketing plan since it enables the airline management to learn from past mistakes and tactics that made it a successful airline.
Marketing Tactics that were Used
Pam American Airlines marketing tactics are some of the mistakes that pushed the company to bankruptcy and closure. Miscalculation costed the company much of its business during the tourism peak season when they were expected to record tremendous profits. The mistakes left the airline in even more treacherous conditions during the slow season which gradually lead to its demise. In March 1983, the airline suspended commission overrides that were meant to boost travel agent’s morale (Kivijärvi et al., 25). Axing the commission overrides was the first marketing mistake that cost the company travel agency’s trust and eventually cause a decline in the number of travelers in peak and low seasons. Travel agents are some of the most important individuals and companies since they are responsible for planning traveler’s schedules including ticketing, entertainment activities and trips in their preferred destinations. Removing the commissions meant that some of the most influential travel agents decided to work with other airlines that provided better working conditions and remuneration. Group business almost went down as travel agents moved on to companies that still offered them overrides.
Pan American Airlines senior vice president at the time was questioned over the decision to stop giving their travel agents override commissions, he answered that it was a necessary decision that was aimed at cutting the company’s expenses (Davies & Ronald 22). The marketing team thought that after some of their travel agents left for other companies, the number of travelers would increase during the economic upturn that was expected to kick in during the second half of the year. They expected the economic upturn to cover up for the loss of business caused by the exit of travel agents.
Quality and investing in experienced air hostesses and aircrafts was another marketing tactic that made Pan Am an iconic airline before its demise in 1991. The airline operated one of the most expensive fleet of jet airlines that not only carried large number of travelers, but were also comfortable and fast. Its revolutionary service made it a monopoly airline in the United states before the government ended their monopoly status before 1991 when other international airlines were given the green light to start competing with Pan Am.
Mission statement
The airline’s mission statement was to make travelling safer, more enjoyable and economical. Pan Am was responsible for numerous advancements and changes in the airline industry. The airline also triggered advancement in aircraft manufacturing industry including major modifications in seaplane designs for more customer comfort and economic viability. Pan Am partnered with boing for the development of aircrafts such as Boeing 6747and 6707 which were first flown by Pan American airlines. Judging by the airline’s success since its beginning in 1927 and the changes it brought to the airline and travel industry, they accomplished the goals stated in their mission statement.
Competitive Advantages and Weaknesses while Active
During Pan Am airlines successful periods, its main competitive advantage was that it was the national carrier for the United States and therefore enjoyed numerous privileges and funding from the government. The airline had the capacity to improve its fleet of aircrafts and general operations since it had the support it needed including their partnership with Boeing that lead to the development of new jet aircrafts. Similarly, their culture of providing quality services at relatively low cost made Pan Am a special airline that each American wanted to travel on.
Some of the weaknesses that affected the airline during its operational stages include the company’s inability to understand the customer’s changing needs may have affected its operations. The weakness lead to ineffective decisions including bad mix of product and service mix. Slow decision making is another weakness that affective the airline during its operational stages. The airline’s CEO Juan Trippe made or approved most of the decisions meaning that for a decision to be passed, he had to be there and this often lead to delayed decisions that caused expensive delays in instances when the airline needed to introduce new services and products and axe others (Gudmundsson & Sveinn 14). Although the company had highly trained staff including air hostesses, they were few and this lead to overworking and low morale that m...