Qatar Airways Marketing Strategy - Case Study Example

 Qatar Airways Marketing Strategy and Tourism LITERATURE REVIEW To date, there are two significant studies made about marketing for the airlines industry—“The Business and Marketing Strategies of Asian Airlines” by Fok, Wai-keung of the University of Honkong in 1988; and “A Linguistic Analysis of Marketing Strategies by Airlines on the Internet” in 1998 by Tanja Dähnhardt of Justus-Liebig-Universität Gießen Deutschland. The first study by Fok makes a comparison of Singapore Airlines and Cathay Pacific of Hongkong and discusses the marketing approaches that contributed to the success of these two leading airlines in Asia. The second research by Dahnhardt focuses on a linguistic analysis of marketing strategies by airlines on the Internet. The current study aims to focus on Brand Management, particularly Nation Branding, of a particular airline (Qatar Airways) operating in the global market; together with Tourism Branding, in relation to this particular airline’s international tourism program. This same study aims to improve on the research results of the two previous studies cited above which are a decade apart. It is worth mentioning that after almost a decade also, this particular study on Qatar Airways’ nation and tourism branding will add up to the body of knowledge in marketing for the airline industry covering the 20th to the 21st centuries. The following are the current literature about Nation Branding (mostly from Western sources) and Tourism Branding (significantly Asian-sourced, as the trend is Asian tourism; Asia is an attractive tourist destination of the 21st century). Brand Management as a marketing strategy was started by Procter & Gamble. It seeks to increase the perceived value of the product or service to the customer, and effect a corresponding increase in sales. A good brand name should be-- legally protectable, easy to pronounce, easy to remember, easy to recognize; attract attention, suggest product or service benefits or suggest usage, suggest the company or product / service image, and distinguish the positioning of the product or service relative to the competition. (Wikipedia) Nation Branding In this age of globalisation, Nation Branding has become a strategic marketing approach for many industries including the airlines industry. The inventor of Nation Branding in its modern form is Singapore's Lee Kuan Yew. He defined what Singapore was, promoted it worldwide, and introduced a set of values and discipline for Singapore's citizens, using advertisements to help educate the population. Nation Branding is practised by many states, including the United States and United Kingdom (referred to as Public Diplomacy), South Africa, New Zealand, and most Western European countries. Developing economies also use Nation Branding to create a more favorable conditions for foreign direct investment, tourism, trade and diplomatic relations with other countries. (Wikipedia) Almost majority of international airlines use Nation Branding, such as— British Airways, Canadian Airlines, Singapore Airlines, Siberia Airlines, Japan Airlines, Qatar Airways, Philippine Airlines, Saudi Air, Gulf Air among others. Nations have become brands when for decades, researchers have studied “country of origin.” When there are two products labeled “Made in Mexico” and “Made in Japan,” consumers will consistently choose the “Made in Japan” product.. In 1998, a British marketing consultant named Simon Anholt took this concept a step further. He wrote an article in a trade journal, arguing that places and nations themselves are brands. Anholt received numerous calls from officials around the world seeking his services. In the world of nation branding, flags become logos, national anthems advertising jingles. When customers buy a pair of Calvin Klein jeans they are not just buying a few pounds of denim, they are buying the Calvin Klein experience. Simon Anholt said nation branding works the same way. (Weiner, 2006) According to Anhold, countries have reputations and a reputation has a tremendous impact on the destiny of the country. In a global marketplace, reputations are powerful and nations are trying to control them. Anholt said nation branding means consistent policies -- "living the brand," he called it -- and making sure that every government agency is in lockstep. He urged countries to appoint "branding ministers." According to a recent survey of people around the world, the best country brand is Australia. Australia is hardly a world power but Anholt said none of that matters when it comes to brand recognition. Branding cuts both ways. Positive brands stick for a long time. But once a country is "branded" a rogue nation, it is very difficult to undo the damage. For instance, North Korea has a branding problem. (Weiner, 2006) Strategic Nation Branding by Landor A strong correlation exists between branding and economic development. Strategic nation branding spells increased sales and corporate success. In the airlines industry, major companies have undergone significant corporate image revitalization. For example, Tyrolean Airways began operating in 1980, flying from Innsbruck to Vienna and Zurich. Today, the airline is part of the Austrian Airlines Group, which offers an efficient network of destinations concentrated on Central and Eastern Europe. Following the brand repositioning of Austrian Airlines Group, Landor was asked to develop a product brand that would optimally express the special tasks and strengths of Tyrolean Airways and its relationship to Austrian Airlines Group. (Landor) Landor created the name "Austrian arrows" with the endorsement "operated by Tyrolean." The new name illustrates a strong link to the strengths of the Tyrolean brand and heritage, and the relationship with Austrian Airlines Group. The new identity was developed on the basis of the overall look and feel of the Austrian Airlines Group to ensure a harmonious and consistent brand experience throughout the Group's network. (Landor) Another example is Siberia Airlines. Siberia Airlines is the largest Russian domestic air carrier and Russia’s second largest airline, offering a network of flights to all major destinations in Russia and the Commonwealth of Independent States (CIS). The airline also has routes to 20 countries, providing regular service to Europe and Southeast Asia. Siberia partnered with Landor to conduct a long-term strategic rebranding initiative to better reflect its domestic leadership and transform the travel experience in Russia. The vision was to reinvent Siberia Airlines and create a relevant and differentiated brand for the people of Russia. More than ever, Russian consumers are brand savvy and familiar with Western branding and associated lifestyle aspirations. Landor’s solution had to change passengers’ existing perceptions of Russian travel as a ‘grey’ experience. The challenge was to help Siberia Airlines leave its regional origins and become a strong national brand — one that would break conventions in its sector and possibly grow into a viable lifestyle brand beyond air travel. The rebranding would also signal Siberia Airline’s intention to become more customer focused, with an improved product and service. (Landor) The new identity focuses on doing things differently and challenging the Soviet ‘anti-brand’ legacy of institutional travel in Russia. The idea of a “Changing Russia” informed the new positioning, name, identity and all other points of branding. The Cyrillic alphabet was replaced by the name S7 — from the airline’s existing IATA code — which is distinctive and understood in both Russian and English. The core belief in putting customers first is visually expressed by the use of silhouettes on key applications of the brand, such as the livery. (Landor) Still another example is the bmibaby air. After bmi completed a full rebranding program to ensure a successful and challenging market position, the airline turned its eye toward the increasing market challenge of low-cost airlines. Low-cost airline Go announced its intention to start flying from East Midlands Airport, acting as a catalyst for bmi to accelerate its entry into the low-cost market to protect its local “turf” airport and to aggressively enter the fray of this booming market sector. (Landor) The market segment is already saturated with numerous players courting attention from customers who primarily shop by price alone. One challenge was to give these customers what they want in a different yet relevant way. As this activity would also be understood in unison with the newly rebranded bmi, any proposition must positively infuse the master brand and not contradict it. If the bmi master brand was built on the brand values of “speed, charm and style,” the low-cost operation must be an economy version of this offer: “speed and charm” — basic but full of character. (Landor) The bmibaby positioning has unique value because most of the competitive set relies solely on price, resulting in a marketplace with little real personality. The bmibaby brand delivers price with attitude. The airline is represented by “Tiny,” a seven-month-old angelic baby with the attitude of a seventeen year old. Ad agency Partners BBDH created a campaign based on the definition of the personality to further bring Tiny alive in the minds of customers. The operation has exceeded all its targets and now looks to expand its UK network. (Landor) The Basics of Destination Branding What does a particular tourist destination want to be known for? How will it stand out from the crowd? What words will come to mind when people hear its name? How can a market strategist create one brand through hundreds of partners, yet speak with one voice? These questions are at the basics of destination branding. To answer them effectively requires a carefully crafted brand identity that is motivating, special, and inspiring. (Total Destination Management) The Total Destination Management has formulated a “Visitor Readiness Checklist,” which is designed for action, contains easy to follow recommendations, practical advice and low cost solutions. It has ideas relating to attractions, infrastructure, signage, visitor services, information distribution, leadership, partnerships, and marketing communications. Asian Tourism Branding Tourism is one of the major industries for many Asian countries, attracting much-needed foreign exchange, and stimulating economic development in industries from hospitality, construction, property development, transportation, and retail, to a mass of spin-off small business areas such as currency exchange, restaurants and bars, and tour operations. Singapore, Hong Kong and Thailand remain the "stars" of the Asian tourism destination brands, but competition is high as country brands such as Malaysia, Indo-China, South Korea, China, Philippines and Indonesia move to increase their brand recognition and brand power. (Davies) While in times past, Asian destinations were able to market themselves on attributes of exotic cultures and value for money, the last decade or even last five years has seen major competitive threats, both from other Asia Pacific competitive destinations, and with the growing affordability of air travel. (Davies, 2003) At present the industry as a whole is characterised by a varied list of significant trends, suggesting many threats and opportunities. These include: The increase in perceptions of terrorist threat as embodied most graphically in Bali. Bali's tourism industry was hit badly immediately following the blast, but Bali recovered fast. China is already the largest out-going tourist market in the region, and the increase in mainland Chinese tourists to international destinations is a trend that will increase in the future. Asian countries, especially those with large populations of ethnic Chinese like Singapore and Malaysia, have increased their promotion to the mainland Chinese market. New campaigns from newcomers such as India, South Korea, New Zealand, Egypt, and the Philippines have been launched in the past few years, competing with mainstays Australia, Hawaii, Singapore, Thailand and Malaysia. International trends in eco-tourism, luxury exclusive off the beaten track tourism, and increasing grey tourism from such places as Europe, Japan and South Korea. Thailand, in the wake of it's successful "Amazing Thailand" brand faces a double edged sword, being able to boast some of the highest incoming tourist counts but the lowest expenditure per traveler of any major Asian country destination. This is dueThailand's low living costs and wage rates. A trend to "sharing" tourism, with countries cooperating in offering packages spanning several countries, increasing value and synergies both to the customer and each economy. (Examples are Singapore-Malaysia package tours.) With the complexity of the inbound tourism market increasing annually, positioning and brand image is becoming more essential to successful branding of Asian tourist destinations. (Davies, 2003) The Importance of Branding to Tourism Every tourist destination in the world has a "brand image". If developed carefully the brand serves to differentiate a destination from competing destinations. However some destinations do not have a brand strategy, and are supported by inconsistent advertising campaigns, creating a confused image to prospective customers. Image must be controlled by a clear projection of brand identity. (Davies, 2003) When consumers decide on a destination for a holiday or a business conference, several "brands" compete for their attention. A strong brand is differentiated from others, has several strong advantages when compared to others, and has an attractive appeal to consumers. In tourism, while factors such as cost of travel, convenience, and quality of facilities are important, the strongest motivator is "image". Image puts a destination on the consumer's "shopping list" and creates an emotional appeal, which enhances that destination's chances of being chosen over others.(Davies 2003) In a survey in 1998 commissioned by the Malaysian Tourism Promotion Board, Singapore was seen, by a broad selection of travelers and tourist agents from the US, Japan, India, Germany, Australia, UK and Sweden as "clean, modern and safe". China's dominant image and attraction was "culture". Malaysia was seen as "multicultural with many beaches". Thailand had a brand image of "exotic, fun, and friendly people" (Davies, 2003) Formal advertising and promotion of a country as a tourist destination in other nations can also have an effect. If that image is unfocused or not clear, the destination will have difficulty competing with images created by competing countries. Advertising, PR and promotion must complement informal information obtained through word of mouth and personal recommendations, by either building upon the latter or correcting negative perceptions that may be incorrect. (Davies, 2003) Developing a strong image for any brand requires a carefully planned brand strategy based on: 1. A well defined and unique brand personality 2. Selection of the correct positioning strategies 3. 'Themed' product development 4. Consistent and appropriate advertising and promotion 5. Careful brand guardianship All the above must be built on a thorough understanding of consumer needs. Above all, the success of brand image development will depend on how the perceptions of consumers can be encouraged to believe that one destination is different and better than its competitors. This encourages consumer acquisition and retention, including extending length of stay. (Davies, 2003) Brand Recognition and Recall Interesting to note is the high level of mind recall for Thailand as the first destination recalled. Over 50 percent of the respondents recalled a Thailand destination first, either as the country itself or one of Bangkok, Phuket or Pattaya, reflecting strong awareness for Thailand as a destination. Singapore, Hong Kong and Bali were the top three destinations in terms of awareness. (Davies, 2003) Interviewing travel agent counter staff is a cost-effective way of estimating brand awareness for tourist destinations as they are "gatekeepers,” and likely to emphasise their own "top of mind" awareness to customers. They are also more able to summarise the perceptions of their customers due to their daily duties, to a larger extent than supervisors or managers, who are more distanced from the customers. However their perception can also be affected by specific current industry-to-agent promotions and the scope and commercial interests of their employers. (Davies, 2003) The survey was conducted at the peak of Thailand's "Amazing Thailand" campaign. The actual question was "Could you let me know what destination comes to your mind first when I ask you to think of tourist destinations in the Asia-Pacific?”The wording of the question would suggest that destinations in Asia, rather than the more vague "Pacific" would come to mind first, so Hawaii, Guam, Australia, New Zealand, and other "non-Asian" destinations may have their "awareness" underestimated. (Davies, 2003) In this case, the "top of mind" dominance for Thailand destinations was not as pronounced, though Thailand (as a country destination only) did move up to third place following Singapore and Hong Kong as a member of the dominant group. Also interesting was the stronger brand recall for China. (Davies, 2003) Unaided brand recall data, especially when segmented by country of origin, gender, type (single, family, honeymoon) and usage category such as travel expenditure, travel frequency and travel duration can provide useful basic data for estimating competitive positioning and developing market segmentation strategies. (Davies, 2003) The foregoing literature review gives a general profile of studies already done in the recent past about marketing for the airlines sector, and the current information available on nation branding and tourism branding which are distinct marketing approaches in the 20th-21st century timeline. This research will analyse how effective these approaches are when applied to a particular airline, Qatar Airways, which is the focus of the study. References Airline Branding. Retrieved March 25, 2007 from http://www.landor.com/?do=cPortfolio.getClientsByIndustry&industryid=1 Branding. Retrieved March 25, 2007 from http://en.wikipedia.org/wiki/Category:Branding Dahnhardt, Tanja. 1998. “A Linguistic Analysis of Marketing Strategies by Airlines on the Internet,” Justus-Liebig-Universität Gießen Deutschland. Retrieved March 25, 2007, from http://www.diplomica.com/db/diplomarbeiten2213.html Davies, Rod 2003. “Branding Asian Tourist Destinations,.Asia Market Research. Retrieved March 25, 2007, from http://www.asiamarketresearch.com/columns/tourism-branding.htm Destination Branding. Retrieved March 25, 2007 from http://www.destinationbranding.com/pages/7A_brand.cfm Fok, Wai-keung 1988. “The Business and Marketing Strategies of Asian airlines,” Hongkong University. Retrieved March 25, 2007 from   http://sunzi.lib.hku.hk/hkuto/record/B31264050   Nation Branding. Retrieved march 25, 2007 from http://www.sourcewatch.org/index.php?title=Nation_branding Weiner, Eric 2006. “Consultants Develop Notion of Branding Nation.” Retrieved March 25, 2007 from http://www.npr.org/templates/story/story.php?storyId=5149506 Read More