Reference no: EM132870951

Your salesperson reported her concern over some grapevine information that she picked up during her last tour of travel agencies. A few of the agents are reporting that potential passengers seem to be booking reservations on competing airlines. The reasons given are:

-Although you run promotional fares occasionally, passengers report that the restrictions are so tight and the available seats set aside for these fares are so limited that they cannot buy tickets at the advertised fees.

-Your advertisements claim you are the "on-time airline"-the airline with the best on-time record. In actuality your record is not much better or worse than that of your competitors, but you have been advertising this slogan so long that many of the (infrequent) traveling public believe it. Frequent travelers on your airline know of your somewhat average record and joke about the ad.You are aware that airline passengers are not brand loyal. Advertising is a way of putting your name in front of the public. Most people are leery of advertising anyway, so you feel you must compete with other airlines in any way you can, as long as it is legal. Statistics from the Regional Airline Association indicate that a significant portion of passengers who request a promotional fare will buy a ticket at the regular fare if there are no discount seats available.

While you are aware of the average reliability record of your airline, your marketing manager insists that "harmless trade puffery" is standard business practice, and until someone sues the firm, it should continue using this very successful slogan.

PLEASE SELECT ONE OPTION FROM BELOW AND THAN ANSWER THE QUESTIONS AT LAST.

There are several options:

1. Run a promotional campaign to explain your promotional fare rules and why all seats cannot be sold at these low fares. This should improve your credibility with the travel agents and public somewhat. (Cost: $10,000)

2. Cease using "The on-time airline" as a motto, and replace it with something more catchy, clever, cute, honest-or all of these! (Cost: $5,000 ad agency fee)

3. Both options 1 and 2. (Cost: $12,000)

4. Do nothing. These are normal business problems and tactics.

QUESTIONS

A.  What is the purpose of advertising?

B.  How important is truth in advertising? Does the public expect corporate "puffery?"

C.  What risks do you face in changing your advertising slogan?

D.  What choice did you make? Why?