Marketing Strategy - Air Bus - Assignment Example

Running Head: MARKETING STRATEGY Marketing Strategy Name Institution Marketing Strategy Introduction (Section One) Marketing strategies is a process by which a company or an organization concentrates its limited resources on the opportunities available with the aim of maximizing on profit and other benefits thereby sustaining competitive advantage. The company concentrates on customer satisfaction in order to sustain already acquired customers and attract more. The pricing, distribution and promotion strategies adopted have a great impact on the success of the company. It is through the marketing strategy that the target market and resource allocation are determined. According to Keith (1994), there is need to line the company’s marketing strategy with the company’s mission statement. Air Bus: Background Information Air bus is a company dealing with transportation of Europeans. It began as a result of a need expressed by the air forces in the European countries. It provides employment for a very large number of people. It serves countries such as France, Germany, Spain and China as the areas where final assembly of their production takes place. The company has been progressing day by day with the sales continuing to increase. However, the company did not pick immediately it was formed. Its success has taken determination and a change in the approach strategies for marketing and management. After the consultations through which it was founded, it did not attract customers in the first 18 years. According to Herman (1965), this could have been due to overestimation and the poor marketing strategies. The existence of Airbus can be traced back to the invention of jets. The first largest airplane was A380. It was discovered that the airplane had excessive condensation and cabin temperatures were varying and hence required tweaks to the ventilation system. The goal of coming up with such an airplane was to fly more persons far more comfortably than the aging Boeing 747. The development of the Air bus is as follows: (Del, 1996) This report is aimed at identifying the marketing strategies that made Air bus to succeed despite its failures in the past. It will also look into the possibility of the company succeeding in the future with the rising competition for the market. It also looks at special characteristics that make the company an outstanding company despite the challenge and the competition it faces from Boeing. Assumptions The report assumes that all factors will remain constant in the future. It does not consider emergencies that can occur such as accidents. It assumes that the business strategies applied are the only determinant of the success of the company. The results predicted by this report can only be a reality if the company maintains its standards of operations. It assumes that customers will be attracted to using services provided by Airbus and that there will not arise any other company offering better services than Airbus. A fourth assumption is that the company will operate independent of political influence. Problems that Faced Airbus The launch of the Air bus company was marred with a lot of challenges. Since the decision to design the postulated planes was shared by a number of European countries, each of the countries seemed to hold their own interests. A number of countries threatened to abandon the project on claims of the implicated costs. The design of the very first model of aircraft was very costly an aspect that called for various consultations between partner countries. A number of aspects implicated in the design of the first model of the aircraft made the partner countries to loose interest and at the same time doubt the outcome. The expected swift with which the project was hoped to work and deliver seemed unsuccessful. This came with the failure of the expected ordering implicated in the MoU. Most of the partner countries had invested with the hope of selling a total of a bout seventy five planes within the very first few months. The project survived on very minimal support by a few partners. One company contracted for a number of technical developments that was also a partner in the development of the Airbus seemed to hold its own interests as well. It was learnt along the way that this company was more concerned with the design of other models already in existence than the Airbus. This is a factor that greatly threatened the departure of France from the project. The decision to stay on came as a result of the realization of the impeding difficult in the recovery of its investment if the project made no sales (Del, 1996). Yet another challenge in line with the cost of the project was the withdrawal of Britain from the project. The continued membership was based on sub contract basis. Most of the problems that the company seemed to face during its very first launch were related to the protection of individual interests by partner countries. This aspect was feared for transforming the company in to a sales and marketing forum. These problems negatively implicated on the entire project making it seem very inefficient in delivering as per the expected demands of their customers. Even the companies that had been contracted for the design of a number of items seemed to heavily protect the implicated financial interests on their production. A number of analysts cited lots of other minimal challenges from both the partner countries under what was termed as the Groupement d’Interest Economique (GIE) and the companies contracted. In an effort to address the challenges posed by the protection of individual interests by member countries of the project, the chief executive officer of the company hinted on the dissolution of the GIE. This was a move that was vested at seeing the company established conventionally. This move was however delayed by as number of aspects in the legal provisions and the implicated shareholding of each of the companies. Years later, the move was made possible by the postulated merge between British Aerospace and yet another leading company DASA. The conversion of the Airbus Company was later paralyzed by Ae’rospace for fear of the implicated shareholding with the merging of the British aerospace and DASA. This resulted in to yet another crisis that negatively implicated on the efficiency of the company in the satisfaction of its customers. The crisis was resolved later with the withdrawal of the British aerospace in the postulated merger with DASA. The company resolved to merge with Marconi electronics. The process was further softened with the merging of a number of partner companies a move that led in to the formation of the EADS Company (Del, 1996). The current ownership of the company by EADS has made it very efficient with respect to customer satisfaction. Comparison between Boeing and Airbus Boeing unlike Airbus concentrates on efficiency instead of the large size of an airplane. The company criticizes Airbus saying that providing large airplane would only inconvenience the clients and is not cost effective. It finds it more cost effective to offer more flights and carrying fewer passengers per flight. It has thus developed a medium sized plane for its operations. This plane will not require modification and is one of the most fuel efficient planes in the sky. The competition in Boeing and Airbus is based on their products and services. Airbus A380 has a capacity of double that of Boeing. This enables it to carry many customers at the same time and it also transports luggage. The new developments in airbus give it a better market than Boeing. Boeing 787 is selling fast and Airbus proposed A350XWB to compete with it. This competing model will enhance its success in the business. However, the delays in A380 have resulted to some customers opting for Boeing 747-8. Currently Airbus has been able to win over 50% orders. The ratio of customers is 3:1 and thus Airbus is still on the lead (Del, 1996). Strategies Adopted By Airbus Marketing should be a daily routine. The aim of offering services on a daily routine is to ensure consistency hence customer satisfaction and trust. This will help increase sales. There is loss of potential sales where business is not opened consistently. This limits the growth of the business as the business is overtaken by other competitors. The income remains low and can even reduce to the point of making losses. Customers loose confidence and interest if they are used to finding a business closed more than just occasionally. They may move to the competitors who ensure efficiency and consistency in product and service delivery. Air bus has improved its services by ensuring that services are available through out the year. Customers have different needs and Airbus offers a variety of services (Joan, 1999). The second strategy is development of marketing consciousness. Skills necessary for marketing should be enhanced every day through reading, attending seminars and getting ideas from the web. One should also be tuned to marketing strategies by other business persons especially those with a similar business. Air bus has been keen in this area. It has consistently offered trainings to its workers to enhance service delivery. The third strategy is being flexible and asking questions concerning the company. Airbus allowed its customers to pinpoint on their weaknesses and they are taking time to correct them. Improving on a weakness gives the business a better market to thrive. Airbus has freely welcomed criticism hence can easily identify the area that need improvement. It has also customised its services through the internet hence gaining more customers. Airbus has been devoted to improving its services day after day (Joan, 1999). Airbus has been winning more than 50% of the total contracts to the airplanes. It has improved on its advertisement and has been seeking for opportunities wherever possible. It has also been operating in and out of season thus its clients do not miss services when need arises as was the case before. Its cooperation with other organisation adds to marketing advantage. It is able to capture these companies and offer services to them thus replacing the former service provider. Airbus has been utilising professional engineers to make its products hence reducing on plain crash incidents. Its services and products are wide giving the customer a chance to choose on what they want. The media has been of great help in creating awareness. This awareness has increased it sales remarkably. The managerial system for the company has improved and it has had less political interference. The management follows up for clients who do no want to use their services to identify the reason behind this. Their concerns are then addressed in a confident, deliberate and clear way. If other customers are satisfied, they market the goods and services by their compliments. These testimonies increase the number of sales made. The attendance of conferences and seminars has helped the company identify better markets for their goods. The company has also reduced on delays by the inclusion of other engineers and staff empowerment. Airbus has also been carrying out a market research to enhance its services. This has involves the analysis of available market, film’s performance as rated by other people and the staffs, growth strategy, and the search for unexploited opportunities. After identifying the opportunities, it has acted to providing the required services. The company has joined Jet Blue Airways and Honeywell in reduction of pollution and oil dependency. There is a proposal to come up with a proposal of a fuel that would not interfere with food resources. Sustainability of the Marketing Strategy Air bus operates in Spain, U.K, France and Germany. The subsidiaries are Airbus China, Airbus Japan, Airbus North America and Airbus Transport International. The company has four training centers where it trains its staff. The centers where training takes place are Miami, Florida, Beijing and France. The marketing strategy used by airbus can go on for a long period. Even in the coming years, it may remain as the leading company. This is because of its aim to diversify its products. The company airplanes A380 carries a lot of people which is an added advantage. This is because the number of people traveling by air is increasing every year by at least 4%. Airbus can thus meet the needs of the growing society through its capacity to carry more people. The company’s involvement in environmental preservation will add to the awareness to different persons and companies. This will add to gaining of more customers. The production strategy emphasizes on designing commodities among planes while aggressively using the technology that is advanced. This company identified a marketing strategy before Boeing thus it thrived more. The company also benefited from grants and loans from the government, for product development and to cover the cost of production. Air bus is in operation in many countries with the last assembly being made in France. It has many employees as indicated in the appendices. The Aerospace Aerospace refers to industries that deal with the research, design, operation, manufacture, and maintenance of vehicles that move through space and air (Herman, 1965). It has a lot of commercial, industrial and military application. In the world, aero scope is among the largest industries. It has a wide coverage of products. This industry penetrates tourism and travel, telecommunications, electronic, logistics, capital goods, defense supply, manufacturer and design (Joan, 1999). Airbus has been a great beneficiary. It was the first in using composite to put up primary structures. There has been a mainstream acceptance of the composite material in the manufacture of civil aviation worldwide. Aerospace has done and come up with materials that are cheaper but good for making air crafts. This has greatly reduced on the cost of production of the airplanes. The development of other structure technologies that are smart, is promising too the industry. The implementation of this will lead to the reduction of weight on aircrafts and improved quality hence reducing the maintenance cost. The aerospace has been dominated by private businesses and large firms that get contracts with the government. “Its purpose is reduction of production cost by speeding up the production of goods” (Keith, 1994, p. 23). It has thus reduced the time required to develop an aero plane drastically. The industry uses teams composed of engineers, production workers and customers to give ideas and make decisions at every phase concerning the aircraft development. The involvement of the main stakeholders reduces the chance for failure in the use of aircraft. The industry also provides trainings that keep the company up to date. These trainings are for capacity building and improving employee performance. Effects on Competition on the Industry Aerospace industry has maintained a high competition. It has been involved so much in improving its products. The industry has enabled Airbus gain a good market through the training of its staffs, giving incentives, improvement of product and service delivery, production of cost effective aircrafts among others. The production of cost effective plain has been enabled by the professionals in the aero scope industry. The have devised strategies to reduce on the weight of A380 by reducing the wiring. The Marketing Strategy A business marketing plan is created to minimize on business weaknesses and maximize on opportunities and strengths. Possible remedies to business threats and weaknesses should be identified. Other factors should also be considered such as available marketing tools, analysis of target market, pricing strategy, promotion, media strategy and the distribution decisions. Air bus has been good in identification of potential market and products on demand. Web marketing is very effective. The web should be utilised to the maximum as it is powerful lasting means of marketing. Linking the site for the business with other sites enhances advertisement as a means of marketing. This is termed as getting incoming links or back links. This happens especially if the other sites are selling well or are termed as “authority” sites. Air bus has its information online for access by anyone (Njambic, 1998). Conclusion Marketing strategies have to be considered to ensure the success of any business. This can be achieved through a market research on other competitors, staff empowerment, enhancement of good customer relations, proper pricing strategy, adopting effective advertisement and product promotion strategy. A good market research should be done before putting up the business with clear identification of the target population or available market. Any firm that wants to succeed must have defensive strategies for the identified threats. It should also identify characteristics that will make it distinctive from the other competitors thus thriving in the market. These are the characteristics that make the good for the company to be preferred to same goods and services from other companies. A good marketing strategy attracts attention, arouses people’s interest, triggers a desire for the products and motivates people to purchasing the product or service. Air bus has been in a position to satisfy its client and thus attaining their trust. To penetrate full in to the market, creating awareness is vital. Integrated marketing is a strategy that allows one to achieve this successfully. As people familiarize with the business, there are high chances for success. This is because the company acquires recognition of the brand, credibility and an increased market share. As awareness is created in more people, the business becomes cost effectiveness. More customers are attracted in the trade hence making more sales. The efficiency and frequency of supplies creates confidence in the target audience hence creating a good name for the business. Persons that engage in the daily running of the company are in a position to predict its success or failure. This is in regard to the perceived threats, problems facing the business and sales made per day. Sincere enthusiasm is transferred from the workers to the customers. Those operating the business should thus be optimistic about its success, believe in the services and products, and be passionate about operating the business. Persuading and influencing customers requires good communication skills. The tone, listening skills, facial expressions, eye contact, speech rate and the overall responsiveness determine the impact on customer influence (Herman, 1965). Air bus will succeed in its activities because it has effective business strategies. References Del, Roger. (1996). The Aerospace Industry: World wide Enterprise. New York: Twayne Publishers. Joan, L. (1999). NASA and the Space Industry. Baltimore: Johns Hopkins. Glenn, P. (1996). Engineering the aero scope. Annapolis: Naval Institute Press. Keith, K. (1994). The Aerospace Industry World wide: Competition. London: Duckworth. Retrieved August 9, 2009, from http://www.guardian.co.uk/business/2006/oct/05/theairlineindustry.travelnews Njambic, Donald T. (1998). Putting parts together: the Aircraft Industry. Ann Arbor: University of Michigan Press. Raedol, Johtn B. (1968). Climb to Greatness: The American Aircraft Industry. Cambridge: MIT Press. Herman, N. Osike (1965). The Aerospace Industry: performance and management. Berkeley: University of California Press. Appendices (Keith 1994) (Njambic, 1998) Read More