Sustainable Marketing of Emirates Airline - Essay Example

? Sustainable Marketing Table of Contents 1Introduction 3 2Stakeholder Analysis 4 3 Analysis 4 4Competitor Analysis 5 5Company Analysis 6 6Community Analysis 7 7Brand Positioning Analysis 7 8Bibliography: 10 1 Introduction Emirates Airline is a long-haul airline which is ranked second to Singapore Airlines in terms of profitability. It is part of the Emirates group that is wholly owned by the state of Dubai (Graham, Papatheodorou, and Forsyth, 2008). The triple bottom line (3BL) was coined by John Elkington in 1994. It has three tenets that are: people, planet and profit. These three tenets are further driven by seven sustainability revolutions, namely, markets, values, transparency, life-cycle technology, partnerships, time and corporate governance (Henriques and Richardson, 2004). As far as the triple bottom line is concerned, the airline has made a number of steps towards achieving these three requirements. According to its official website (Emirates), it has a foundation called the Emirates Airline Foundation. This foundation has the task of providing funding in a number of crucial projects within the developing world. This has thus helped to improve the livelihoods of the people living within these countries. The airline has also committed itself to follow the four pillar strategy set by the International Air Transport Association (IATA). These are aimed at ensuring that the levels of carbon emissions come down. The airline has done this through a number of strategies such as the adoption of technology that is advanced. It has also committed itself to use of efficient aircrafts that reduce the amounts of emissions, as well as, the noise in the environment. This has helped the company maintain an emission level that is 30% lower than the average airline emissions. The company has also employed a strategy of recycling and waste reduction, staff education, lower energy use and greater communication. Equally, it has the ‘environmental champions’ program, which empowers staff to be environmentally conscious at home, at work and any other place they visit (Emirates). As far as profitability is concerned, the company’s website states that it has sought to ensure this is maintained through its policy of being an ecologically efficient organization. This means that the company will try to reduce pollution and use fewer resources. This will enable it to conserve the already dwindling natural resources. As far as a customer relation is concerned, the airline has ensured that comfort throughout the travel is assured. This is ensured through a number of strategies such as the cuisine served in the plane, the seats as well as the polite staff on the plane (Emirates). An affirmation of the airlines efforts can be seen in the number of awards it has been granted. In 2010, the company won the 2010 World Travel and Tourism Council’s (WTTC) conservation award for its Emirates Hotels and Resorts. It also got the 2010 Skytrax Airline award for its airline in-flight entertainment. The steps that the company has taken have made it the second most profitable airline globally (Graham et al., 2008). In light with this, the company has been successful in maintaining itself commercially through its competitive advantage strategies. The company has, however, issued a profit warning of a 76% drop in its profit in the 2012-2013 financial years, mainly due to the cost of fuel (Emirates). 2 Stakeholder Analysis There are a number of stakeholders who relate to the Emirates airlines. These are the customers, the competition, the company itself and the community around it. Analysis of these stake holders is deliberated on in the following section in a bid to understand the company better. 3 Customer Analysis The company has three categories of customer accommodation. These are first class, business class and economy class. These three forms of accommodations represent three different types of individuals. The first class customer is the one who is willing to pay a large sum of money to get the most premier accommodation throughout their flight. The business class customer has the second best accommodations in the plane and the economy class will get the services that best suit their needs. For a person travelling in the first class, the airline targets individuals who are not worried about spending a little fortune. For example, the air fair for a round trip from Dubai to New York will cost around $ 1572 (Eckert, 2010). While this may appear to be a lot of money, the benefits are numerous. They include a comfortable seat with more leg room. It also includes more private accommodations that will give the traveler privacy throughout the journey. This also includes a chauffer drive on arrival for the customer. The air line also has showers for the customers who fly first class as well as lounges that give the customer a ‘resort like’ feel while in the air. In this regard, the airline has a target market of individuals who should be willing to spend a lot of money for the air ticket. In return, the customers’ egos will be massaged through amenities like separate booking lounges that are more comfortable. First class services are highly comfortable in comparison to the other passengers on the plane. This means that the airline targets a specific brand of high income earners (Eckert, 2010). 4 Competitor Analysis Since the company is the second most profitable airline after Singapore Airlines, this means that these companies do compete a lot in a number of crucial markets. One of these markets is the flights to Australia. The Singapore Airlines has a number of strengths and weaknesses within itself. The strengths of the company include its manpower. It has placed a high value on the staff that it has within its ranks. This is the company’s strategy for maintaining a high profit margin. It, therefore, spends a lot of its money annually to train the required manpower to work within its ranks (Drake, Gulman, and Roberts, 2005). With the manpower well trained, the company has the upper competitive edge over its competition like the Emirates Airlines. This thus allows the company to maintain its number one spot globally. This training gives the employees a picture of the need to maintain a high performing organization and giving the employees a positive work approach. The company also enjoys a competitive advantage due to globalization. At the same time, the Changi Airport is a hub and the best airport in a long while (Heng and Yam, 1998). However, there are a number of challenges to the durability of this comparative advantage that the airline currently enjoys. One of these weaknesses is the Asian economic position. This position is not a stable one, and it keeps varying with time. In fact, the earnings of the airline keeps on fluctuating in relation to this economic position coupled with the competition that the company is facing from foreign players. 5 Company Analysis The Emirates Airlines has a number of key stakeholders who determine the path that the company takes in any given matter. These stake holders include the customers, the shareholders, the employees and even the competition. Looking at the role that the share holders’ play in the company, there is an indication of the company’s marketing strategy. The main aim of any company is to make profits and increase returns to its owners. In this regard, the company’s shareholders have a say as to whether the company should enter, keep or exit a market (Graham et al., 2008). This influence is displayed during the annual general meetings where the company lays its market strategies for the scrutiny of the share holders. During such meetings, the company has to answer all the issues that the stake holders raise. At the same time, the shareholders will not be pleased if the company is stagnating or loosing its competitive position and profits. The company, therefore, ensures that it has placed strategies that will allow it to maintain a profitable position (Graham et al., 2008). For example, this has seen the company market itself as both a leisure air travel airline and maintaining a piece of the business travel and freight transport markets. 6 Community Analysis Looking at the environment that the airline operates within, there are several factors and events that influence the marketing strategy of the company. One of these is the political environment around different countries. Due to the situation currently in the world, this is an important factor to bear in mind. Currently there is a high risk of travelling to some popular destinations due to insecurity in those regions (Graham et al., 2008). The Arab Spring, for example, has made all those countries affected to experience a reduction in the number of travelers as the place is not completely settled. At the same time, terrorism is a great geopolitical influence that has also made air travel quite unpopular. The airline has to contend with these challenges as it strives to market itself. It has to ensure that the confidence of the clients is assured through conducting activities like security scans as well as popularizing those destinations that are not so popular. 7 Brand Positioning Analysis As stated above, the company has done a great deal in ensuring that it has a strong brand that it has cultivated over the years. In this regard, the areas of concern include personality, appearance and reputation. The Emirates Airlines has a strong global presence. This has been has been enabled by a number of factors that have been employed by the company to allow it compete in the global aviation industry. One of these strategies has been extensive advertisement and sponsorships (Vedder, 2008). This has seen the company name and brand become a household name in the international arena. The company has branded its name to the popular Emirates Stadium in England. This has seen the company become popular since, for example, the Arsenal team that uses this stadium is quite a famous team. Since the English Premier League plays a part in England, the naming of the stadium has served to place the airline in a strong international position. At the same time, the airline’s involvement in corporate social responsibility has allowed it to gain an advantage over its competitors. This has been through its activities, for example, through the Emirates Foundation (Emirates). This foundation raises funds and then uses these funds to improve lives of the impoverished people in the third world. This allows the company to maintain a reputation of being benevolent. As a result, the airline has been able to win customers in its areas of operation due to these humanitarian activities. According to Vedder (2008), the airline has a competitive edge geographically due to its position between Asia and Europe. This means that the airline has been in a position to operate at a 30% lower cost of operation in comparison to other airlines. This has allowed the airline to cut its fares in comparison to other airlines. As a result, the airline has a reputation of having relatively cheaper tickets than other airlines plying the same routes of Europe and Asia. The airline also has an appearance that has also cemented its position. Its in-flight entertainment and comfortable seating arrangements are another important aspect (Vedder, 2008). This is because the airline has comfortable and roomy seats that allow the passengers to stretch their legs without being a bother to the person seated in front or behind them. This comfort is vital in long distance travels and has won the hearts of many travelers for this airline. Profitability of the Emirates airline in comparison to its competition Emirates Airlines (1.6 Billion dollars in profit in 2011) Singapore Airlines (1.09 billion dollars in profit in 2011). British Airways (640 million dollars in profit in 2011). Customer segmentation (International Cargo Market) Singapore Airlines (5.5%) British Airways (4.2%) Emirates Airlines (Negligible) Economy travel market Singapore Airlines (88) British Airways (77) Emirates Airlines (74) Illustrations from Hellerman (2006) 8 Bibliography: Drake, S. M., Gulman, M. J., and Roberts, S. M., 2005. Light Their Fire: Using Internal Marketing to Ignite employee Performance and Wow Your Customers. Chicago: Dearborn Trade Publishing. Eckert, J. H., 2010. Baring the Middle East Enigma: A Raucous Look at How to Live, Work and Survive in the Middle East. Colorado: Outskirts Press, Inc. Emirates, 2012. The Emirates Group Position. Committed to Making a Difference through the ‘Environment’ Program, [online] Emirates. Available at: http://www.emirates.com/us/english/about/emvironment/emirates_group_position.aspx. [Accessed 15 Oct. 2012] Graham, A., Papatheodorou, A., and Forsyth, P., 2008. Aviation and Tourism: Implications for Leisure Travel. Surrey: Ashgate Publishing Limited. Hellerman, R., 2006. Capacity Options for Revenue Management: Theory and Applications in the Air Cargo Industry. Berlin: Springer-Verlag. Heng, T. M., and Yam, T. K., 1998. Competitiveness of the Singapore Economy: A Strategic Perspective. Singapore: Singapore University Press. Henriques, A. and Richardson, J., 2004. The Triple Bottom Line: Does it all Add Up: Assessing the Sustainability of Business and CSR. London: Earthscan. Vedder, H., 2008. Strategic Alliances in the Aviation Industry: An Analysis of Past and Current Developments. Santa Cruz: Grin publishing GmbH. Read More