Monday, May 7

Delta's Refinery Purchase

I always talk about how marketing is all about making good decisions consistently over the course of time. Well I believe Delta Airlines just made a great decision in its purchase of a currently closed Pennsylvania oil refinery. A surprisingly great decision.

While the oil refinery business isn't overly profitable, when jet fuel is your biggest expense it hardly matters when for the price of a big jet you can control your own supply. Brilliant. Not to mention that by re-opening this closed refinery the brand is not only bringing new jobs to a hard-hit region, it is also opening the minds to new innovation in an industry that isn't considered overly innovative.

Certainly seems like a win-win, although the true test will be if the inherent cost savings gets passed along to travelers. Then this purchase will be a great example of a surprising brand decision made for the good of its consumers.

What's your experience? Jim.

Jim Joseph President, Cohn & Wolfe North America
Author, The Experience Effect and The Experience Effect for Small Business
Professor, NYU

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