Marketing management - Emirates Airlines - Assignment Example

?Emirates Airlines – Marketing management. Table of content -----------------------------------------------------------------------------------------------3 Introduction-------------------------------------------------------------------------------------------4 Strategic option---------------------------------------------------------------------------------------5 The implementation of the loyalty program------------------------------------------------------7 Marketing Mix---------------------------------------------------------------------------------------7 1. People ---------------------------------------------------------------------------------------8 2. Physical evidence--------------------------------------------------------------------------8 3. Process---------------------------------------------------------------------------------------9 Market positioning----------------------------------------------------------------------------------10 Product life cycle------------------------------------------------------------------------------------11 Buying behavior-------------------------------------------------------------------------------------12 New paradigm of marketing communication----------------------------------------------------12 Customer feedback----------------------------------------------------------------------------------13 The correlation between the CRM and airlines management system-------------------------14 Airlines business module---------------------------------------------------------------------------15 1. FSC-------------------------------------------------------------------------------------------16 2. LCC------------------------------------------------------------------------------------------16 3. CC--------------------------------------------------------------------------------------------16 Recommended marketing communication mix-------------------------------------------------16 SWOT analysis-------------------------------------------------------------------------------------20 Conclution-------------------------------------------------------------------------------------------21 Appendix--------------------------------------------------------------------------------------------21 Resources-------------------------------------------------------------------------------------------22 Abstract: Emirates Airlines is one of the profitable airlines in the world. It is the world’s second most profitable airlines (Graham, Papatheodorou and Forsyth 157). However, it is vital to practice a proper marketing strategy for the sustainable position. The 7 Ps of marketing mix and the PLC is very much important. The CRM must be maintained, the loyal customers are the real buyers of the products in the long term basis. The airline industry is basically the hospitality industry and in this particular industry the customer relation is the most important marketing communication key. The traditional marketing mixes are very much important in most of cases and they are product, price, place and promotion. However, in case of service based industries the four Ps of traditional marketing Mixes are not enough. There are three more entities which are very much important and they are people, physical evidence and process. Among these people and process are the communicating entities which are very important for doing business. However the physical evidence is the most important for the product as the physical evidence give out the most important significance for the sales of the product. The emirates airline is among the top service providers in the airlines industry. The company is pretty much up market with the expected demand of the consumers. The hospitality industry is a very fragile industry. One mistake can create a lifelong bad impression for a particular product. So, in case of service oriented industry the customer relation management and the post sales services are pretty much important for a long term business relation with the existing customers. Marketing is the presales activities in a bigger prospective which give the extra fuel to the products to get identified in the market. The proper marketing activities would help the products to get distinguishable identity among the same kinds of products in the market. However, all the marketing activities have to be supported by the proper marketing communication processes and these communications are primarily the combination of advertising, promotion and strong public relation. The hospitality industry has become one of the major players in the service industry. With the growing disposable income the most of the people want to avail the luxury to express the monitory power or some time just to enjoy they prefer to avail the luxury out of the boarding, dining or flying. However, in the recent time all the segments of the service industry are highly competitive and most of the companies are applying different marketing thoughts to retain their existing clients and at the same time they are also very much keen to acquire new customers. The selection of the proper target group and promoting the service oriented products are very much important. To satisfy the demanding customers most of the hospitality companies are creating new ways to win the customers mind. The Emirates is among the biggest profit makers in the aviation industry, but still the fact is the sustainability of their superior customer service and the marketing approaches toward the services. Introduction: Introduction: The airlines industry is an industry where the customer speaks the ultimate word. The customer relation is the very important factor in the airlines industry. The airlines industry falls under the hospitality industry. It is very obvious that the so-called typical customers do no longer exist in this changing business environment, and that is the biggest lesson for most of the companies in the recent time. (Dyche 3). This particular paper would take an attempt to understand the ideology of the Emirates Airlines and their marketing approaches towards the betterment of the company and the customer satisfaction. For an international airlines company, the in house customer satisfaction is one of the main things. The hospitality is one of the main things in the airlines. The problem can be the customer behavior with the member of the service provider in the airlines. It must be remembered by the airlines company that for a sustainable business the recurring customers are very much important. The recurring customers are the people who generate the profit. So in flight behaviors of the air hostesses and the members are very much important. Strategic option: Most of the tourists and local travelers look for a place where they get everything under one roof and the demanding factors are boarding facility, restaurants and bars, banquette halls, and definitely the parking facilities and some other value added services like spas, amusement facilities etc. it is very true that people have money to spend but the primary question in the customer’s mind is how to spend the money at par with the value of the services provided by the service providers. The service providers in the hospitality industry must know how to distinguish themselves among the others. The proper customer relationship management and interactive marketing communication are the keys for the success. Nowadays, the environmental factors are very much important for any form of business. Emirates airlines have maintained this virtue wisely. The Emirates use airbus A380 which is one of the environmentally friendly aircraft available in the market. This is one of the most advanced aircrafts for the passengers in the industry. The fuel efficiency is remarkable of these aircrafts. In these aircraft the fuel efficiency is as low as 3.1 liter 100 passengers for one kilometer (Emirates.com). This fuel efficiency has given a great strength to the services of the Emirates airlines. The eco-friendly aircrafts are always welcome in the industry and the Emirates have taken this opportunity wisely. For strategy formulation the identification of the problems are very much important. if the problems are known then it is easy to rectify them. However, the Emirates have always identified the potential problems and they have nullified the problems with great quality of services. In the recent business environment it is very important to identify the prospective customers, mainly for the service industry like hospitality industry and the Airlines industry. It is very important to pamper the clients to make them happy about the services in the hospitality industry. Now, the Loyalty programs are basically pampering the customers. The Customer loyalty programs are found all over the economic markets and in each and every industry. These programs are basically collecting points or some other things like gifts by purchasing things from one particular shop. These points can be redeemed afterwards as money back or discount in the second purchase of the product or the service. For an example, in the field of gas station services many drivers would prefer to wait for the next Shell station in the highway rather than taking gas from some non named gas station only to gather more points for a walkman or from some other attractive gifts. (Kuhnle 1). Emirates run many kind of on board facility services. The high quality foods and extremely good service have made the airlines one of the bests in the industry. The implementation of the loyalty program: The loyalty programs are mostly effective to the middle level. These loyalty programs are very much effective in the tier where the people want to be more elite class even after being upper middle class. The status matters as the need to compare one’s self with others is very much pervasive and mostly occurs whether or not individuals intend to do so. (Gilbert, Giesler and Morris 1995). The typical marketing and promotional activates are mostly back dated nowadays, as par as the airlines industry is concern. Some of the recent philosophers think the interactive marketing concept of Peppers and Rogers’ Five Is should replace the traditional Four Ps or the Seven Ps in the information age which is basically run by the digital format. (Chaffey and Smith. 52). Once upon a time exclusive loyalty programs like status programs used to run in airlines now exists in hotel chains for an example Starwood, in casinos like Harrah’s, cruise lines like regent, spas like Spa Chakra etc. (Feeling Superior: The Impact of Loyalty Program Structure on Consumers’Perceptions of Status Nd). The traditional 4 Ps of marketing mix has no relevance in this new edge business environment as most of the products are coming up with post sales services. The airlines industry is strictly service oriented industry. However, emirates have shown a great endeavor towards the improvement of the industry. The Marketing Mix: Service marketing and the tangible product marketing are not the same. Service marketing required some more specifications as far as the marketing is concern. The traditional four Ps of marketing are very much important for the product marketing. However, Crane (1993) thinks the additional three Ps are also very much important for the service oriented business. And they are people, physical evidence and the process. People: The people are the primary part of the service delivery process and these are the main people who can influence the customer’s mind towards the product. The perception towards the products relies on these people. The person who performs the service delivery he is the most important personnel in the service industry towards the customer’s mind. The people who demonstrates the product, he or she must know all the aspects of the products so he or she can explain all the details of the service. Physical evidence: For any hospitality businesses which are mostly service oriented are much tougher to sell as the customers do not get the actual feelings of the product while they are buying the product. However, they feel the product while they are availing the service and that is basically after they buy the product. For this particular reason the physical evidence of the product is very much important. The physical evidences are the actual environmental situation where the services are provided. The actual feeling of the products must be created by the sales person at the point of sales towards the customer so the customers would be feeling confident to buy the products. Process: This particular functional activity is actually the procedure or mechanism and flow of work towards the service. The proper process can be a great positive point towards the delivery of the best service. Mainly for the business like pubs, restaurants or conference halls the process is the ultimate functional activity which must be perfect to satisfy the customer. These above mentioned factors are very much important to analyze the proper way of doing the business in the hospitality industry. Before going for the expensive marketing activities these pints must be checked so the investment towards the planed marketing activity would yield a profitable business scenario. The particular business module is strictly falls under the hospitality industry and the best part is the complete package which is being provided by the company. The particular company provides a wonderful package for the people who are seeking for a place for business conferences that provides the 360 degree solution. However, even after having all the facilities sometimes the business module fails due to many small reasons which are being neglected. Most of the customers seek extra values added to their services, so that they can distinguish the specific company from the others. There are many kinds of tools in the marketing management which can be used to satisfy the existing customers and to provoke the new customers to get attracted towards the services. The information technology is pretty much high on the agenda of most of the companies for the betterment of the customer relationship management. The airlines company like Emirates work with three main parties and they are the owner of the airlines, the management team and the consumers. The customer database should be maintained to get a proper customer relation for a longer time. The information technology and the software are the integrated factors attached with the CRM within the organization like Emirates Airlines. Market positioning: Market position is a very important factor for any product and for any industry. Emirates are in the business for the last 2 decades. And they have achieved a very sustainable position in the market. However, according to the BCG (Business Consulting Group) matrix the four grids are very important and Emirates has gone through all the phases in the grids. According to the BCG matrix shown bellow According to the BCG Matrix analysis (Value based management. Net, BCG Matrix) Emirates airlines is in the star box, that is high growth and high market share, in this condition Emirates airlines should position itself in such a way so they can sustain their positioning with star in the BCG Matrix. For this they need to invest wisely. The Emirates airlines have positioned themselves as the high end flying service where the prices are high but quality of services are extremely good (Betz 286). They are not interested in the low cost services. Product life cycle: Product lifecycle is very much important for the present business scenario. The new product development is pretty much important for the sustainable positioning in the competitive market. Products are not forever. Each and every product has limited life cycle. It is a vital factor to be understood by the product manager or even the organization to understand the life cycle of a product. Cox (1967) had given a definition of the PLC as the time from the commercial birth till the commercial death of a product. (Mukherjee 84). It has been seen that consumers demand over durability depends mainly on three factors and they are (i) life cycle costs, (ii) psychological factors related to the products and (iii) factors related to the social environments. (Mukherjee 84). From the graph below the product life cycle stages are very much clear. The main four stages are introduction stage, growth stage, maturity stage and the decline stage. Well, as far as the Emirates Airlines are concern, they are going through the growth stage. Due to the new product development and excellent services they have achieved this position and it will take a long duration to go to the maturity stage. Buying behavior of the Customers: Value for money is the bottom-line for the customers. However, Emirates have positioned itself as the high end flight service and that is the reason even after the high price of the tickets most of the long distance travelling customers prefer emirates. They are basically catering to the high end customers mainly the business travelers. Due to the increase in the fuel price the ticket prices will also go high, but for the customers of emirates would be looking for some extra value-added services for the increase in the price. New paradigm of marketing communication: Hospitality industry is based on the customers. If the customers are not satisfied then the business is no longer in a profitable situation. However, the customer relation is a great factor in the service oriented business. The hospitality industry is looking for customer retention than the customer acquisition which is basically pulling more new customers into the business (Smith and Taylor). The hospitality industry mostly falls under the service industry which is much more different than that of the manufacturing industry. However, the restaurants are having the touch of the manufacturing industry too. The restaurants service in the airlines can be taken as the quasi- manufacturing units as at the same time they manufacture food and in other hand they provide some value added services too. The Emirates have taken great initiatives to be among the top service providers in the country. In the recent time, the total business scenarios have changed. Today it is a highly competitive market where millions of consumers are involved and many competitors are there to grab hold of the customers. Before selling and package deal to any corporate house or any individual person the service center must find out why the customer will buy from them, how they are different than others. If these questions are answered properly by the management of the service center then it is ok to proceed for the further marketing activities. Customer feedback: Most of them are very visible and effective in the tourism industry where the hospitality industry in banking on. There are several ways to ask the opinions of the customers generally the hotels use two kinds of methods. In one hand they use more structured methods such as the questionnaires made of few fixed important questions and in the other hand they prefer professional interviews. These personal interviews are more personalized and most of the up-scale hotels prefer these interviews as they want to have a deeper interaction with the customers. For an example the hotel manager could offer a cocktail or he can also organize a party for a group of customer to understand the customer’s perception about the service. [Proceedings of the 11th Toulon-Verona International Conference on Quality in Services]. These efforts would help the managers to understand what the customer wants and according to that he can make the loyalty programs to satisfy the customers. The service triangle is a model where it can be seen how the organization keep in touch with the employee and customer at the same time to understand the service factors and employee as well as the customer satisfaction. (Kuhnle 9). It is very vital to understand why customers are so much important in the hospitality or the service industry than any other industry available in the market. In most of the other industries the products are tangible and first it is manufactured and then stored and then sold to the customer. In most of the cases the products are tangible so the selling of these products is much easier and the loyalty programs are not needed, but in case of hospitality industry such as Airlines, the products are generated and sold at the same time and these products are mainly intangible most of the time mainly for the tourism and hotel industry. Emirates airlines have a great customer support service. The customers don’t have to wait for long for their tickets. The on board service is just suitable for any customer. The Emirates airlines got the best entertainment facilities in the flights for the long distance passengers. It has won many awards for these facilities in 2010 the emirates have won the best flight for onboard entertainment from the Skytrax World Airline Awards (emirates.com). along with this award it has won many more awards in 2010 some of them are Deutsche Bahn Supplier of the Year 2010, Treasury team of the year, Emirates Hotels & Resorts - Conservation Award, Gold Annual Air Cargo Excellence Awards and many more. The correlation between the CRM and airlines management system: It is very important to understand that customer relationship management and the airlines industry are closely related to each other and they are the supplementary factors for each other for a successful business environment. It very important to understanding that service products are not the tangible product it is strictly intangible product. People don’t get the feeling of the product while they are buying the product they get the actual feelings of the product while they pursue the service and that is the reason the presales customer relation management is very much important for the hospitality industry. All the major hotels in the world follow the strict regulations of the long term customer relationship management. The loyalty is a factor which enables the customer to buy a product in repeated manner. There are some factors are related in this context to support the power of loyalty and they are trustworthiness, dependability, allegiance, devotion and excellence. The loyalty programs are the reason for the Starbucks to pull the same old customer for repeated time. The hospitality industry is surviving on these loyalty programs as the cost of acquiring new customer is high so retention of a customer would lower down many recurring costs. The Emirates have understood these factors and maintained the important factors for their customers. The reason of the growth of the emirates is the satisfying customer relation. The betterment of the business relies on a strong interpersonal relationship with the customers. The proper CRM (Customer Relation Management) should be practiced within the organization. The best customer relation can be maintained with the help of trust and commitment. To maintain a lingering relation with the customer some value addition is required only selling of product does not fetch the loyalty of the customers. There are some points to be remembered as the most important facts and they are details of the transactions made by the customer. That is, the history of the purchase details. Customer contact should be recorded and filed properly and the customer care department should be in touch with the clients. Customer preferences should be given a great importance. The proper customer database would give the better picture towards the improvement of the marketing approaches towards the better customer relation. The airlines business model: According to the recent time the airlines business is consist of three main business module and they are Full-service Carrier of FSC, low-cost carrier or LCC and chartered carries or CC (Cento 18) Full service carrier FSC: The FSC has some specification within it and they are the core business like passenger, cargo and maintenance. It is having a full coverage for their vast customer base. The hub and spoke network is the main characteristics for the FSC. These airlines like Emirates are basically global players in the airlines industry. The customer relation services and the allied other services play a vital role in these airlines. Low cost carriers LCC: The low cost carriers are the domestic airlines who can travel with high fuel efficiency. The low cost carriers evolved in United States during the 1970’s. however, emirates have maintained their price level and the quality of services and for that reason the Emirates cannot be taken as the low cost airlines. But, the cost per service in the Emirates is very efficient and most of the customers love it. The frequent flyers have given a great opportunity to the Emirates airlines. Chartered carries or CC: Chartered carriers are strictly personalized carriers. These are basically out of scheduled aircrafts operated for the business class. However, the Emirates are known for their high class service in their all normal flights. This award winning luxury airline has a great viewpoint among the customers for the great service. Recommended marketing communication mix: The marketing communication is among the most important factors in the business environment. Advertising, media, customer relation are the core area of the marketing communication. Being airlines, Emirates has a great marketing communication status in the industry. Few of the major marketing communication factors are stated bellow. Strong customer service: Customer service is one of the main functions in the service oriented industry. Without a proper customer service the growth in this competitive market is impossible. Soft spoken customer executives have become the voice of the industry. The customer service not just handling the transactions properly it is about creating a positive bond with the customers who are very much essential for the business. Customer service can be managed by emails, phones and fax. Most of the cases the telephonic customer service is the main functional communication process. The customer executive of any hospitality industry should be trained as such that they pick up the customer’s call within the first three rings. And the listening power of the executive should be very good. The query solving ability must be there within the behavioral traits of the executive. The main motto must the ultimate satisfaction of the customer’s query. Maintaining a strong relation with the prospective clients is very important for the betterment of the business. Facility Cards: One of the most important questions in the industry is how to retain the existing customers. Many companies have tried many options. However, the facility card is one of the most appreciated initiatives taken by many service based companies in UK and in the other part of the world. These facility cards are sometimes developed by some third party organizations that develop the bonding between many companies to provide facility to the customers. Nectar is an example of the facility card. It is basically a loyalty card where a customer will get many offers and discounts in many top grade service stations like Debenhams, Sainsbury’s, and many other hotels and restaurants. Shoppers need to register with the specific schemes to get the facility in many hotels, spas, restaurants and in many other retail stores. As per this facility card the customer accumulates points every time he or she pursue the services from the specific hotels or restaurants, and these Nectar points can be converted to many offers and discounts. These cards provoke the customers to spend more towards the specific products. And the associated brands and company get competitive advantages over the other competitors for providing some value added services to their customers. Emirates can introduce such cards where people can get extra facilities along with the services. Loyalty programs Loyalty programs are basically to stimulate the frequent buying habit of the customers. The loyalty cards are basically the cards which generate sales with ultimate customer satisfaction. Most of the Airlines Company and other companies in the hospitality industry use loyalty card for their frequent buyers. However, sometimes loyalty cards does not work to generate new customers as some of the customers are very much loyal to their existing brands and they don’t look for any discounts but the best quality and services. Emirates provide car service to all of their business class passengers (Perrault and McCarthy) The main objective of the loyalty programs is to retain the customers and to build a long term relation with the customers. Advertising: The emirates airlines are among the top airlines which provide more than 100 destinations within the six continents. However, without proper advertising it is not possible to grab hold of the target customers. The Emirates uses the 360 degree advertising and communication process where all the mass Medias are involved. The television advertisements are selective in nature. The Emirates display their television advertisements in very few selective business and news channels and in some travel and living channels. The investments in the advertisings are pretty high for the emirates. However, the advertisings are fruitful in nature as the brand equity of emirates is pretty high and most of the customers believe in the strategy of advertising. The in-flight advertising is also a great initiative taken by the management of the emirates airlines (emirates.com). Public Relation PR: Public relation is also very strong in the Emirates. The proper public relation can fetch very valuable brand equity. The Emirates have a great public relation. The word of mouth promotion via most of the public relation representative is very strong. Online facilities: In the new era the online business and online communication are must. Emirates have a great website which tells all the important factors related to the airlines. The destinations, flight timings and flight numbers and booking process everything is available online. This particular service saves lots of time of the customers (emirates.com) SWOT analysis: Before the starting of any business activities the SWOT (Strength, Weakness, Opportunity, and Threat) analysis is very important to understand the potentiality of the market. The SWOT analysis is having two factors, one is the internal factors and another one is the external factors. The internal factors are totally dependent on the company itself and the external factor comes from the market. Strength:. The company is having a brand equity which connects to the consumers. The company is there in the market for more many years and every year it has won many awards. It is having its own online portals where they sell their products exclusively. The company is equipped with well trained research team who are monitoring the new trend in the market. And the main strength is the trust it has built among the consumers. The emirates airline is having flights for all the six continents and it covers more than 100 destinations. Weakness: Weakness is a factor which is most of the time invisible but it is visible after something goes wrong. However, the main weakness is the product range and the business module the FSC is pretty strong but, LCC and CC are not too strong among the modules. Opportunity: the market is soaring, and the opportunity in huge in the global market. The per capita income s rising and with that the purchasing power of the people are also rising. Most of the people are travelling these days for many reasons. For the global exposure of the businesses most of the companies are operating from many different countries and that is the reason most of the company representatives are traveling abroad for their business meet. The business segment is booming very fast for the airlines industry. In other hand for global education many students are flying abroad every year. Threat: threat is always a part of a business. The competition is always there and some people take as a threat and some take it as an opportunity to change. However, British airways and the Singapore airlines are among the main competitors. Conclusion: From this study it can be concluded that Emirates airlines have emerged as the finest airlines company in the world. The best quality marketing and communication and the great strength have made the company real strong to hold a sustainable situation in the industry. However, threat is always there and rectifying and nullifying of the threat is the main factor to be taken care of. Appendix: 1. The worldwide economic crunch had given a great punch to the airlines industry (Shanmugasundaram (ed.), Shanmugasundaram S. 224) however, emirates had a sustainable position during this time. 2. Emirates is the world’s second largest and profitable airlines after Singapore airlines (Graham, Papatheodorou, and Forsyth 157). 3. The emirates routs have become extensive and now they are operating globally (Hanlon 141). Work sited Betz F. “Creating and Managing a Technology Economy”. Singapore: World Scientific, 2010. Chaffey D and Smith Paul R.” eMarketing eXcellence: planning and optimizing your digital marketing”. Massachusetts: Butterworth-Heinemann 2008 . Crane F G. “Professional services marketing: strategy and tactics”. London: Routledge 1993. Dyche J. “The CRM handbook: a business guide to customer relationship management”. Boston: Addison-Wesley 2002. Gilbert, Daniel T., R. Brian Giesler, and Kathryn A. Morris (1995), “When Comparisons Arise,”Journal of Personality and Social Psychology, 69 (2), 227-36. Graham A, Papatheodorou A and Forsyth P. “Aviation and Tourism: Implications for Leisure Travel”. Surrey: Ashgate Publishing, Ltd., 2010. Kuhnle T. Customer Loyalty Program - Tourist Destination and Bonus Card System. Munich: GRIN Verlag 2007. Mukherjee. Product Management: Text And Cases. New Delhi PHI Learning Pvt. Ltd. 2009. Perrault William D and McCarthy E J. “Applications in basic marketing: clippings from the popular business press”. New York: McGraw-Hill/Irwin, 2004. Smith P R and Taylor J. “Marketing communications: an integrated approach”. London: Kogan Page Publishers. 2004. Nd.“Emirates.com”.Available at: http://www.emirates.com/in/English/about/emvironment/emirates_a380.aspx. Accessed on 20 January 2011. Nd.“Emirates.com”.Available at: http://www.emirates.com/in/English/about/emvironment/emirates_a380.aspx. Accessed on 20 January 2011. Nd.“Emirates.com”.Available at: http://www.emirates.com/in/English/about/inflight_advertising.aspx . Accessed on 20 January 2011. Nd. Feeling Superior: The Impact of Loyalty Program Structure on Consumers’ Perceptions of Status. Available at: http://www.emirates.com/in/English/about/awards/2010_awards.aspx Accessed on 20 January 2011. Nd. “Value based management. Net, BCG Matrix”. Available at: http://www.valuebasedmanagement.net/methods_bcgmatrix.html. (Accessed on 21 January 2011. Read More