Developing a Comprehensive Marketing Plan for Emirates Airlines - Term Paper Example

?Strategic Marketing Executive Summary Emirates Airline is the world’s best airline. Since its foundation the airline has grown tremendously. Emirates marketing strategy is based on its positioning as a brand. It is part of various sports and events which has increased its brand value. Emirates SWOT analysis has depicted the strengths and weakness of the company along with opportunity. Stiff competition from the competitors and substitutes makes the company both approachable and vulnerable. Marketing strategy and alternatives are the key issues that have been highlighted. A marketing-mix to support the alternative strategy for the airline has been provided. Implementation of marketing plan and its importance during emergency have well been described in the report. Table of Content Emirates Airline 6 Emirates Current Marketing Strategy 6 SWOT Analysis 7 Strength 7 Weakness 8 Opportunity 8 Threat 8 Competitive Environment Assessment 9 Porter’s Five Forces Model 9 1.Threat of segment rivalry 9 2.Threat of new entrant 10 3.Threat of substitutes 10 4.Bargaining power of Suppliers 10 5.Bargaining power of consumers 11 Marketing Issues and Alternative Strategy 11 Rationale for the alternative choice 12 Marketing-mix Strategy to support the alternative 13 a)Product: 14 b)Price: 14 c)Promotion 15 d)Place: 15 Marketing Plan 16 Reference 18 Bibliography 20 Emirates Airline Emirates Airline was founded in the year 1985. It started its first flight from Dubai which is also the Headquarter for the Airline Company. The main objective and goal of the Airline has been delivering service with world class quality and it has succeeded doing so in its journey of more than 25 years. Emirates Airline has emerged as a global Airline with its presence across 6 continents and above 60 countries and 120 destinations. The Airline has over 170 aircrafts in its fleet. Emirates have carried more than 30 million passengers and over 1 million tons of cargo (as per 2010-11) (Emirates, 2012). Emirates Current Marketing Strategy Emirates Airline current marketing strategy is largely based on its positioning itself as a global player with high quality service. Starting as a small airline company Emirates today has become the global leader and is reckoned as the best airline company in the world. Emirates have become innovative, customer-oriented and a modern airline company which provides world class service. Emirates Airlines strategy is based on leadership attribute that makes it a true global player serving the consumers across different continents. Emirates focus have always been customers and their travel experience have made Emirates the winner. The airline has made the travel more affordable and comfortable. The importance of customers is well understood by Emirates and this very reason the company strives hard to provide them value for their travel experience. Sponsorship has played a pivotal role as part of the company’s marketing strategy to establish itself as a global player. Every time Emirates explores new route it promotes itself through various media. Emirates Airline opts for sponsorship events which draws worldwide attraction. Emirates sponsorship features events in football, rugby, cricket, horse racing, etc. The biggest highlight of Emirates sponsorship deal includes the Arsenal Football Club, FIFA World Cup, Rugby World Cup, etc. SWOT Analysis Strength Emirates Airlines offer booking facilities over internet with numerous choice and other value added services. Emirates have been the first airline to offer such facilities to its customers. Apart from this it also offers facilities like self-check at the airports. Emirates are also amongst the airlines which offer long-haul flights to destinations such as Houston, San Francisco, Dallas and Los Angeles. Emirates Airline is amongst the airlines having youngest fleet of aircrafts. Weakness Emirates Airline is known for its luxury which is the reason for middle class families not being a part of the company. High invest in purchasing new aircrafts has increased the operating cost for the company. It has also tried to diversify but not all approaches in this context have been successful for the airline company. There are still many destinations where Emirates lacks its presence. Opportunity Emirates have the opportunity to enter into the untapped market to increase its market share. It can offer services which are personalized through innovation in its approach towards the customers. Lastly, offering services for the budget travelers can be a big boost for the company as it will help Emirates to serve better and to more people around the world. Threat The biggest threat for the company is from its competitors. Emirates have to continuously keep innovating and if it fails to do so it can face a major threat from the competitors who are trying to bridge the gap. Low cost carriers can also pose a threat to the company as more people would prefer travelling in low budget cost airlines. This may result in loss in terms of market share. Competitive Environment Assessment The major concern while analyzing the environment of a company is the complexity associated with it. A complex environment is not only related to the problems but also opportunities for an organization (Shermerhorn et al., 2011, p. 414). A simple environment can be defined as the environment where profitability follows the growth. Turbulent environment on the hand is uncertain and gives no surety of profitability following growth (A. Goyal & M. Goyal, 2009, p. 5). Porter’s five forces model can be used to analyze the competitive environment for Emirates. Porter’s Five Forces Model Porter’s five force model is one of the most influential analysis models to identify the competition in the business market (Johansson, 2008, p. 48). 1. Threat of segment rivalry The competition is very intense as compared to other industries. Though company is enjoying remarkable market share but still competitors like ETIHAD Airways, Air Arabia, Qatar Airways, etc. can pose threat. This force has moderate affect on the company. 2. Threat of new entrant Emirates Airline is an established brand with strong market share and strong financial status. The operating cost will be very high for new entrants in this industry. Emirates have a global presence which again makes new entrant vulnerable in the industry. This force has low affect on the company. 3. Threat of substitutes Substitutes for Emirates Airlines product can be train, cruise ship which also offers travelling experience to passengers. Though the travelling experience in the substitutes can match to the Emirates services but time is a big factor which provides Emirates with an edge over the substitutes. This force poses moderate threat to the Emirates Airlines. 4. Bargaining power of Suppliers Emirates procure its aircrafts from selected suppliers namely Airbus and Boeing. This factor can be a threat as the bargaining power of suppliers will be more in comparison to Emirates. This force poses high threat. 5. Bargaining power of consumers Emirates have unique products for its customers such as in-flight entertainment system, lounges, chauffeur drive, loyalty programs, ground services, rewards, etc. The technology and features offered by Emirates are different from its competitors which is the biggest reason for its success. This has made the company acquire significant market share across the globe and has eventually reduced bargaining power of consumers. This force has moderate impact on the Emirates. Marketing Issues and Alternative Strategy The overall goal of Emirates Airline is to serve its customers with the best service and emerge as the top Airline Company globally. There is a stiff competition amongst different airlines in the global arena due to the fact that Airline industry has entered into the maturity phase. The operating cost of Emirates Airline is increasing because of huge investments in buying aircrafts and offering the best service. Though ultimate goal of the company is to be the best, but in the race it is also losing out on the profit margin. Moreover rise in the fuel prices has also increased the concerns for the airline. Maintaining the status of luxury airline, neglecting the large customer base in the middle class section and lack of strong domestic presence are some of the key issues related to the Emirates current marketing strategy. The company can adopt a different marketing strategy to overcome these key issues. Emirates is required to reduce it operating cost by reducing the purchase of new aircrafts as it already has a huge fleet of latest aircrafts which includes Airbus & Boeing. Secondly, the airline should focus on a more effective scheduling of flights to draw more customers. Technology and its implementation across the distribution channels can help the airline to cut down its cost as workforce costs will be minimized. The airline can install more self-service check-in system at various airports across the globe. Low cost airline have become a big threat for the Emirates as large part of the domestic customers prefer travelling through these low budget airline. Emirates Airline is required to diversify itself in the segment of low budget airline to increase its market share. Low budget does not mean to compromise on the service offered as it will deteriorate Emirates image in the international market. The new low cost airline can be set up as a new subsidiary of the airline which will cater to the needs of those customers who prefer travelling in low budget airlines. Extension of routes by exploring the untapped market can be an alternative for the airline in expanding its market share. Rationale for the alternative choice The three major issues associated with the Emirates i.e. high operating cost, lack of diversification and presence in important destination of the world. These issues can be associated with the goal and objective of the airline. These issues though are of major concern for the company but there are alternatives which can be implemented by the airline to find a solution to the major issues associated with the company. High operating cost can be tackled by reducing the budget to buy new aircrafts; rather the company should maintain its existing aircrafts which are amongst the youngest fleet if aircrafts in the airline industry. This will not only reduce the operational cost but will also ensure a rise in profit margin for the airline. Maintaining the existing aircrafts will enhance their longevity. Diversification would mean a whole new subsidiary of low cost airline to meet the needs of middle class passengers both domestic and global. This will ensure Emirates a new height of success with increased market share and revenue and moreover a strong presence in the low budget airline segment as well. Entering into new market with its world class service will boost the presence of Emirates in the global circuit. It will not only make the airline most sought after but will also help the Emirates Airline to have an edge over its competitors. Emirates Airline could also include many rewards for its customers such as discount on certain day to a certain destination. Loyalty program which will enable customers to avail extra benefits from the airline and also special offers. Marketing-mix Strategy to support the alternative The marketing policies of any firm depends on certain factors such as segmentation of the market, then analyzing and targeting the desired market, and lastly would the positioning of the products & services offered by the organization. This success of Emirates and its marketing policies can be analyzed through the main driving force behind any marketing strategy, i.e. 4 P’s of marketing mix. 4 P’s is a strong and recommendable model to analyze the marketing policies of an airline company behind its success (Shaw, 2011, p. 6). a) Product: The hospitality factor both in flight and on ground needs to be of great quality. It should continuously keep striving hard to offer something new and better in its product section. Emirates, to further please its customers should add new aircrafts to offer special services apart from In-flight entertainment system, lounges, chauffeur drive and ground services (Emirates, 2012). b) Price: Price is a factor which is variable for any sector and aviation is no exception. Emirates Airline has always branded itself as a luxury airline, but, its services should also be open to people who look for reasonable option. It services are required to be unique and based on the target market. Emirates should offer different luxury classes as per customer’s choice and spending capacity; thereby making price factor out of the context or in other words, price will be substituted by world class service (Thomas, 2011, p. 148). c) Promotion Sponsorship can play a major part in Emirates promotional strategy. It promotes various sports and cultural events around the globe which makes it a global based local player known to everyone. Amongst the most popular sponsorships that Emirates has bagged are that of FIFA World Cup 2006 and the main sponsors of Arsenal Football club. Apart from this the airline should also promote itself through Loyalty program which will provide its customers some extra benefits for being loyal to the airline. d) Place: Emirates may have started with few locations for its journey but as time as passed the airline company has grown into a major global player in terms of its presence around the world. It is present in several countries offering laudable services. Apart from this distribution channel can play a key role in the success story of Emirates. The distribution channel system which ranges from the traditional travel agents to the direct airline ticket sales through countries can all be a part of the marketing policy of the company. The places where the company cannot be the other distribution channels can fill in the gap (Buhalis & Laws, 2001, p.246). Also GDS which stands for Global Distribution System is an online reservation system used by airlines for ticket reservation. The company needs to pay a certain fees to the distribution system and in return they will provide the service on behalf of the company so that the company can cater to the customers who are otherwise not able to avail Emirates service because of unavailability of company location at the specifies location (Doganis, 2006, p. 205). Marketing Plan Emirates Airlines alternative strategy implementation can be possible through a well defined marketing plan which can be drawn on the basis of SWOT analysis of Emirates Airline. Emirates Airline marketing plan should be based on certain important elements such as- marketing objective, target market, promotional activities, diversification, correct strategic approach and finally the budget determination. A proper study and approach to all the above mentioned parts of marketing plan adopted by the company can lead Emirates Airline to being a front runner in the Airline industry in the coming years. Emirates Airline is required to set its objective in case of diversification. Also the most important aspect of the marketing plan is the budget determination for the company. Emirates has to draw a graph as to how it will be going ahead with the marketing plan and what will be the budget required for the marketing-mix and other activities and thus accordingly should design the marketing plan (Planonline, 2001). The marketing plan to be implemented should be such that it is applicable even during emergencies. In case of some emergency the marketing plan should act as a backup for the company by minimising the damage and successfully assuring the scheduling of flights on time. There may be times that certain airports may not be well equipped for the landing of certain aircrafts. Considering this the company should also possess aircrafts which can be easily accommodated across all the major airports. Secondly, the marketing plan should ensure hassle free journey for the passengers in case of emergency. The airline needs to have good amount of workforce to handle the rush during peak season. On ensuring these elements of the marketing plan, it will become an easy process for the company to implement the same. By doing this Emirates Airline will face minimal problem or no problem and also with its balanced act Emirates Airline can further expand its reach in context to market share. Reference Buhalis, D., & Laws, E. (2001). Channels:Practices, Issues & Transformation. USA: Cengage Learning EMEA. Doganis, R. (2006). The Airline Business. New York: Routledge. Emirates. (2012). Flying with Emirates. Retrieved from http://www.emirates.com/in/English/flying/flying_with_emirates.aspx. Emirates. (2012). The Emirates Story. Retrieved from http://www.emirates.com/in/English/about/the_emirates_story.aspx. Goyal, A., & Goyal, M. (2009). Business Environment. New Delhi: FK Publications. Johansson, J. K. (2008). Global Marketing. New Delhi: Tata McGraw-Hill Education. Planonline. (2001). A market plan format. Retrieved from http://www.planonline.org/planning/marketing/mkplanformat.htm. Shaw, S. (2011). Airline Marketing and Management. England: Ashgate Publishing Ltd. Shermerhorn, J. R. et al. (2011). Organizational Behavior. USA: John Wiley & Sons. Thomas, R. A. (2011). Soft Landing: Airline Industry Strategy, Service, and Safety. USA: Apress. Bibliography Goel, S. (2009). Airline Service Marketing. New Delhi: Pentagon Press. Study marketing. (No Date). 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