Marketing Environment of Emirates Airline - Case Study Example

INTRODUCTION Emirates Airline has been chosen for this project. The paper will show a research on the company and cover an analysis of the company and its marketing environment. The company is more than just a name. It is a brand that goes beyond just offering products and services to its customers. It is one of the most popular Airline companies in the world and has a broad clientele. The paper starts off by discussing the benefits of customer analysis for the company. In today’s changing environment, customer’s needs are constantly changing. It is extremely important for every company to keep a track of the changes and adjust their offerings to fit the customers’ needs. From there onwards, the paper shows an analysis of the company’s micro-environment and macro-environment. There are many elements in the company’s internal and external environment and it is essential for the managers to understand every detail of these environments. In today’s world, it is not only the internal environment of the company that is important but also the external forces that act upon the company and influence the way it works. Therefore, Emirates Airline must understand its environment and deal with it effectively. Furthermore, a SWOT analysis of the company is done to get a holistic view of the company in order to better understand it. And finally, recommendations are made, after extensive research on the company and its environment, as to what changes the company must adopt in order to avoid failure and continue prospering in today’s challenging environment. BENEFITS OF CUSTOMER ANALYSIS In today’s era of globalization, the customer needs are ever changing. The main aim of companies throughout the world is shifting from maximizing profits to building and increasing customer loyalty. There are many benefits of doing customer analysis for Emirates Airlines. Firstly, it is important to note that Emirates Airlines operates in more than 50 countries throughout the world (Nasser, et al, 2005). This means that it encounters with a wide array of cultures in its customer base. It would be impossible for the company to manage its operations if it did not understand these cultures and did not cater to them individually. There are many changes happening in today’s world. The customers are much more informed due to technological advancements and the widespread of internet. There is increasingly fierce competition in the airline industry and the customer perceptions and preferences are changing due to the global recession and awareness. All these factors conclude to changes in the demands of the customers. By doing a thorough analysis of the customers changing needs, Emirates Airlines can tailor its marketing mix, distribution channels and offerings depending on the different geographic regions it operates in and the different cultures it deals with. Furthermore, the company can also observe the patterns in the shift of customers’ preferences, if any, to other airline companies, and change its offerings and strategies to deal with this problem and obtain the customers back. Customer analysis is a very important process in the current environment and must be carried out carefully in order to obtain customer satisfaction and customer loyalty which are essential ingredients for success. MICRO-ENVIRONMENT A company’s micro environment consists of actors that are close to the company and affect its capability to serve customers. These actors are the company itself, customers, competitors, publics, marketing intermediary and suppliers. Company Emirates Airlines, established in 1985 and based in Dubai, has grown to be one of the biggest and most profitable Airline companies in the world. It has received more than 250 awards since it was launched, including the Best Middle Eastern Airline award in 2005 (Nasser, et al, 2005). Even though the core benefit the company provides is travelling, it has moved into other sectors providing many different services to its customers such as cargo services, E-booking and E-check-in, In-flight entertainment and services, and partnerships with different hotels and resorts to provide the customer with luxurious travelling. (Nasser, et al, 2005) Management at Emirates Airlines should understand the core values of the company and its brand image and should devise appropriate strategies to maximize on profits effectively Customer Groups Emirates Airline targets men and women of all ages who belong to middle class or high class of the society. Anybody who can afford the quality travelling, for any reason, that Emirates Airlines offers is a prospect customer for the company. It offers travelling to its customers under three broad categories: First Class, Business Class and Economy Class. These offerings differ in terms of their price and services so customers with different levels of affordability are grouped under these different categories. (Emirates, 2009) Competition The industry that Emirates Airline operates in is extremely. Firstly, it has direct competition from alternative travelling means such as train, car etc. and other airlines such as Etihad, Pakistan Airlines and so on. Emirates must keep a constant check on its competition to see its prices, new offerings and strategies and should be on its toes to deal with them. Public Publics such as employees, general public, media, government etc. are all important actors in the company’s micro-environment and are to be dealt with properly. According to the report at the end of fiscal year on 31 March 2009, Emirates Airlines was reported to have 48,246 employees. Emirates must ensure the satisfaction and motivation of every one of these employees. Emirates Airlines also keeps strong ties with the media through its services and the bold steps it takes. For instance, when Emirates announced its aircraft order of $15 billion, it won air time and space, worth over millions of dollars. (Nasser, et al, 2005) Marketing Intermediaries The key players in the Marketing Intermediaries of Emirates are advertising agencies and travel agencies. The team of Emirates ensures that they have a close relationship with its travel agents because they are responsible for the biggest share of sales for the company. Apart from that, the company makes use of the travel shops and ticket offices located at airports to sell tickets. Suppliers Suppliers for Emirates Airlines would include companies that supply aircrafts, fuel, food items and in-flight facilities for the company. MACRO-ENVIRONMENT The macro-environment of a company consists of those external forces that affect the microenvironment of the company. They include demographic, economic, technological, political, natural and cultural forces. Demographic Forces There are continuous changes happening in the attributes of the customers of Emirates Airlines. There is a growing population in the third world countries which make up the middle and upper middle class of the society demanding lesser luxury and more economical packages for travelling. There is increasing diversity in the environment also. Moreover, because of urbanization and industrialization, the standard of living, on a broader scale, is increasing, resulting in a more educated customer base with increased levels of income. Emirates Airlines must make sure that it takes all these changes into considerations and adapt its offering to fit the changing needs. Economic Forces The world is in a state of global recession. Customers today are demanding less of luxurious and more of economical travelling. This fall in demand caused a fall of profits by 72% for Emirates in the year 2008-2009 (BBC, 2009). Also, the distribution of income is changing. Emirates Airlines adapt its strategies to counter these changes. Technology Today, in the era of globalization, there are massive technological advancements experienced in every industry. Every company must adapt to these changes, and use technology to its advantage. Same is the case with Emirates Airlines. The airline industry spends a significant amount of budget into building more and more cost effective and efficient processes in order to gain a competitive edge over the competition. Emirates Airlines is also using the internet to its advantage. With 85,100 web page visits from all over the world, the company uses its highly customized and updated website to cater to customers from all over the world (Emirates, 2009). Political Forces Emirates Airlines has pressure groups and organizations influencing its operations. In the current environment, there is a green movement, where a shift to alternative energy is being taken place to reduce emissions in the atmosphere and reduce pollution. Governments have customer and environment related policies set up that the company has to abide by, such as Consumer Product Safety Act of 1972, National Environment Policy Act of 1969 and so on (Kotler & Armstrong, 2008). The company also has to make sure that its aircrafts are efficient and do not add to the climate change Natural Forces These include shortage of raw materials (such as oil), increased pollution through emissions, and increased government intervention with policies and standards. Cultural Forces Emirates Airlines is a global brand. It operates in more than 55 countries and interacts with a wide variety of cultures (Emirates, 2009). It is very important for the company to respect every type of culture and deal with it in an accepting manner. Culture includes society’s basic values, perceptions and preferences (Kotler & Armstrong, 2008). The company must understand what the people’s views of organizations, society and nature are. For example, in today’s environment, there is more health care awareness and people’s preference is changing to organic food. Emirates Airlines should respond to this by offering meals with organic food in the flights. SWOT ANALYSIS Strengths A strong and supportive financial background. It has a strong support from the Emirate of Dubai which is a prospering business, especially in terms of tourism and luxury. It has a strong brand image that is recognized throughout the world. The Dubai-Hub, located midway between the continents of Europe and Asia serves beneficial in terms of transportation and trade and connects the continents. It has been a pioneer in innovation. In-flight internet, low prices services and BBC World news updates were all introduced by Emirates. It has partnerships with leading hotel and resort chains such as Marriott Hotels to provide customers with more value. Weaknesses Entry into the United States market had been difficult because of extremely low priced competitors such as Southwest, America West and US Airways. Short haul competition. Opportunities The growing economy of Asia. Higher frequency of flights into Asian destinations. Economies of scale due to the vast global network of the company. Threats Competition by Gulf Air and Etihad Airways Air-crashes Political instability in countries especially the gulf areas Current global recession Natural disasters affecting flights Increased global competition due to globalization and technological advancements in the Western countries Alliances can be formed to compete against the company RECOMMENDATIONS Emirates Airlines has been a staunch believer in its brand values and has adopted expansion strategies in the past. So much so that when most of the airline companies were laying off workers and cutting down on the services, Emirates Airlines was still following its expansion strategies. Even though this does not seem to be a wrong plan, there are some issues that need to addressed by the company The environment is changing. The world is hit by global recession and the average household’s income has decreased. This, in turn, has reduced the demand for luxury items and has changed the way most of the Airline companies operate. Airline companies are undergoing major alterations in order to deal with these environmental changes. They are coming up with cheaper and cheaper offerings which are making Emirates’ customers to shift. This reduction in demand caused Emirates Airlines to report a drop in profits by 72% in the year 2008-2009 (BBC, 2009). If Emirates Airlines does not act effectively, it might lose its customers and go out of business. It is also because of the increasing population in the third world countries that demand for economical packages is further increasing and the demand for luxurious travelling is going down. Emirates Airlines would need to change its marketing strategy and tailor its offerings to fit these “low-frill” needs of the customer in order to gain a competitive edge over competition and increase profits. BIBLIOGRAPHY Book Cateora, P & Graham, J. International Marketing. Twelfth Edition Kotler, P & Armstrong, G. (2008). Principles of Marketing. Pearson Education. India Twelfth Edition. Pearson Education Kotler, P. & Keller, K. (2005). Marketing Management. Twelfth Edition. India. Prentice Hall Journals and Websites BBC (2009). Emirates Airline Profits Down 72%. BBC. Available from http://news.bbc.co.uk/2/hi/business/8063581.stm [Accessed December 4, 2009] Emirates (2009). About Emirates. Emirates Website. Available from http://www.emirates.com/english/about/about_emirates.aspx [Accessed December 4, 2009] Nasser, A., Nguyen, H., Boelke, L., & Yu, W. (2005). Strategic Management in A Global Context. Available from http://74.125.153.132/search?q=cache:HQBsnm2ir7EJ:amernassar.googlepages.com/Emirates.pdf+emirates+marketing+filetype:pdf&cd=8&hl=en&ct=clnk&gl=pk [Accessed December 6, 2009] Scoop. (2006). Emirates Honored for Global Marketing. Business.Scoop. http://www.scoop.co.nz/stories/BU0608/S00045.htm [Accessed December 6, 2009] Wall, S., Minocha, G., & Rees, B. (2010). International Business. Financial Times Press. 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