Global Marketing Of Emirates Airlines - Case Study Example

Global Marketing Of Emirates Airlines This paper discusses the marketing mix of Emirates Airlines. It starts off with a brief background of the company and then goes on to talk about its product and service offerings in the global environment and the marketing mix that it uses. The paper then discusses the limitations in the current strategy of Emirates Airlines and the changes that it is likely to make, and should make, in its marketing mix to cater to the changing needs of the customers in today’s environment. Emirates background Emirates Airlines was established in 1985. Based in Dubai, the airline today is one of the largest in the world. It has managed to create its brand image, globally, through its high quality service and elegance. It has received more than 250 awards since the time it was launched because of its unmatchable customer service that it provides. Today, it operates in 55 countries throughout the world with 77 destinations to offer to its growing list of customers. The list of countries it operates in includes the Middle East, Asia, Africa, Australia, Europe and New Zealand (Emirates, 2009). Amongst the various awards it has received over time are, the Best Middle Eastern Airline award in 2005. (Nasser, Nguyen, Boelke, & Yu, 2005) According to the World Airline Rankings in 2005, Emirates Airlines was rated to be the second most profitable airline in the world, having its name in the top 20 international carriers in the world. Marketing in the Global Environment To understand how the company deals with marketing in the global environment, we will look at the marketing mix that it uses to meet the demands of the customers worldwide. It is important to note that Emirates Airlines uses a standardized mix to a great extend to deliver consistency in quality to its customers throughout the world. Products and Services Routes The country has a huge and diverse human resource, with employees numbering as much as 15,800 that help provide the quality service to the customers in the 54 countries that the company operates in. It has 81 jets running in Europe, Middle East, Asia, Africa, New Zealand and Australia (Nasser, Nguyen, Boelke, & Yu, 2005). The destinations that are catered by Emirates Airlines and the frequency of visits to the destinations increase with time. Cargo Emirates Airlines also has a division called Emirates SkyCargo, through which it offers cargo business. Soon after its launch in 1985, it built its reputation as a leader in terms of innovation, flexibility and high quality that Emirates is known for. They offer excellent air freight services to their customers. Included in their offerings is general freight, carrier and P.O. mail (Emirates, 2009). E-booking and E-check in This service provides the customers with the comfort of checking in through online means instead of going through the typical hassle at the airport. This service is not offered throughout the world yet, though Emirates is planning to offer it to its customers globally to maintain consistency of service. (Emirates, 2009) In-flight entertainment and service Emirates has been known to provide excellent services, both inside the plane, and outside. It has been a pioneer in introducing innovative in-flight services. Emirates Airlines was the first to introduce wireless laptop service, BBC World news updates, low priced telephone services and emails and SMS services to its customers. All this is done to add value to the customer’s journey and to enhance the in-flight experience of the customer. (Nasser, Nguyen, Boelke, & Yu, 2005) Other Services and facilities Emirates has cooprated with Marriott Hotels and Resort and helps in providing the facility of hotel bookings to its customers as well. It has chefs of high caliber working to provide the customers with quality food and wines. It has an ever increasing array of services both in the flight and outside to cater to the demanding needs of the customers. It also has facilites for children, elderly and disabled people to show them that Emirates cares about its customers. Price Emirates sets its price for the tickets based on the target market that it caters to. It has three basic levels of offerings for traveling for its customers. They are i. Economy Class, ii. Business Class, and iii. First Class with Economy Class being the cheapest and with the least luxury and First Class being the most expensive offering the highest levels of luxury and quality. Like every other airline, the ticket prices are based on the costs that the airline incurs, mainly fuel costs. However, Emirates usually sets its prices lower than its competitors. It offers discounts and packages based on the demand for certain destinations. If the demand for a destination is low, Emirates offers discounts to boost sales. Club – Skywards Skywards is a club for the Emirates customers. It includes customers who fly Emirates frequently and are loyal to the brand. The members add points to their profiles everytime they use the airline, based on the distance they travel. The points can be redemmed to get exclusive services such as special meals, fast track through customs, an access to the exclusive Emirates lounge at the airports or even a free air ticket. It helps build loyalty for the brand within the customers to get them to choose Emirates over all its competitors. Promotion Advertising The marketing campaigns use the Television, print, out-of-home media and the internet as the communication tools. The outcomes of these campaigns are frequently reviewed by experts through attitude studies. There were tactical campaigns carried out globally creating awareness and promoting products and new offerings such as new routes, increased number of flights on particular routes, inflight services and so on. (Nasser, Nguyen, Boelke, & Yu, 2005) Promotions Emirates offers sponsorships in sporting events through out the world in order to raise awareness on a global level as these sporting events have a large viewership throughout the world. Examples include the sponsorship of the famous Soccer Club Arsenal. They also sponsor the Legends Race of veteran jockeys in Melbourne. (Nasser, Nguyen, Boelke, & Yu, 2005) Media Relations The steps Emirates takes towards adding value for the customers gets reported and broadcasting in the top media channels. For instance, it was broadcasted on headlines on TV, internet, and the newspapers when it announced its aircraft order worth $15 billion. By doing so, they won airtime and newspaper space, worth millions of dollars and that aided in building its brand image globally in the customers minds. (Nasser, Nguyen, Boelke, & Yu, 2005) Place Emirates has a gigantic network of its own that comprises of around 90 advertising and PR agencies. The network is distributed throughout the world whereever the company operates to promote and raise awareness of the brand. Distribution Channel The key players in the distribution channel of Emirates are the travel agents. The team of Emirates maintains close ties with the travel agents throughout the world as they are responsible in making the biggest share of sales for Emirates. Other than that, Emirates uses travel shops and the ticket offices at airports to makes sales of tickets. Internet The official website, www.emirates.com has been constantly updates and refined by experts adding more functionality and information for the customers and visitors to keep visiting. The dedicated servers it uses are capable of loading up requests for 85,1000 web pages a day from customers visiting it form all over the world. The website also has features that support online booking from many of its markets globally. It also has the ability to cater the contents based on the geographic region from which it is being accessed and provide tailored offerings accordingly. Emirates uses the internet very effectively for its global campaigns. It uses its advantages of being extremely cheap and having a very wide range to reach its diverse customer base through out the world. (Emirates, 2009) People As discussed previously, Emirates has turned into an empire with having servies such as airport services, hospitality services, tour operator services, catering services and so on. According to the report at the end of fiscal year on 31 March 2009, Emirates Airlines has 48,246 employees hired. 10,324 of these are cabin crew in the vast line of Emirates aircrafts. 2141 of the employees are flight deck creq, 1849 are in the engineering department and 9379 were listed as “other” Process Firstly, Emirates Airlines use means of communication to reach the customer. They include internet and their distribution channels. Travel Agents play a key role in the channels used by Emirates Airlines to make sales to the customers. Furthermore, the more than 48,000 employees that work for Emirates Airlines provide the customers with after sale services and information that they need. They assist and provide quality service to the customers, both in-flight and outside. The wide variety of services that are available on the flight, such as food, games, movies, music etc. also add to the customer experience. All these elements work in integration and harmony to provide the customer with the high quality experience that Emirates Airlines promises. Physical Evidence The physical evidence that the customer sees creates a perception of quality in the customer’s minds. Emirates Airlines makes sure that that its promise of quality and comfort reflects all its physical environment so that the customer knows what to expect when it sees it. The aircrafts are clean and well maintained, the food is hygeinic, the seating is luxurious depending on the Class the customer selects, the staff is nicely dressed and talks politely etc. Overall, Emirates’ physical evidence gives a clear picture to the customer that the company is determined to live up to the customer’s expectations and the company’s promises. Responding to Changes in Macro Environment Emirates have proven to be staunch believers of their ideology. During the time of the high oil prices where all airlines were opting to cut down costs in every possible way, Emirates did not change its strategy. It kept pushing for expansion to maintain their competitive position in the market in the future. Today, in every industry, competition is at its peak. Because of globalization, competition is fierce and customers are more informed than ever. It is very difficult for airlines to maintain their lead in the market. Emirates, however, has always been on its toes. It grabbed a 40% share in Air Lanka and establised a strategic partnership with it. This strategy aided Emirates in promoting its brand and awareness in the Southern Asia market as well as other parts of Asia. Moreover, Emirates SkyCargo and Korean Air Cargo are also in a pact to code-share capacity of cargo on routes from Delhi and Mumbai in India. (Nasser, Nguyen, Boelke, & Yu, 2005) Why Emirates Might Change Its Mix If the Marketing of Emirates is analyzed closely, it will be noticed that Emirates has been using the same strategy for too long. The conditions in the industry have changed. There is a global recession and all airlines are taking measures to minimize the damage this recession will do them. Emirates, in the year 2008 and 2009, experienced a fall in the profits by 72% (BBC, 2009). If Emirates continues to stick to its strategies of expansion, the concept of Marketing Myopia will apply to it. The reason behind declining profits is recession. Emirates Airlines is likely to, and should, take a notice of that and adjust its Product, Pricing, Promotion and Place, People and Place to cater to the changing needs of the customers. Today, customers are not attracted to luxury and glamour as much as they are to lower prices. This change is due to the low income levels in households. Emirates might change its marketing mix to reflect the change. Below is the Marketing Strategy that Emirates is likely to adopt with the noticeable changes in the Marketing Mix. Changes in Marketing Mix Product Changes The idea behind the new marketing is to target the higher and middle income groups as the target audience. This target market will be offered services with minimum possible trimmings, therefore adjusting the Product element of the marketing mix. An obvious challenge with this strategy will be that Emirates Airlines will need to ensure that, by doing so, the quality of service is not compromised and the brand image of the company is not deteriorated. Measures will have to be taken to ensure that the elite class customers of Emirates do not create a negative perception of the brand for catering to the middle class society also. This strategy should be adopted because, worldwide, population in developing countries is on the rise and most of that population fits into the middle and higher middle class of the society. This market must be noticed and catered by Emirates before competition does. Price Changes This target population wants the service that Emirates offers, but wants it in a more affordable package i.e. without the extra frills. Etihad Airlines, a direct competition for Emirates does offer this package and might take the share of Emirates through catering to this identified market. Emirates should take full advantage of its size and economies of scale that it has achieved that other airlines aim for. It is in a better position to decrease costs and pass on the value to its customers in terms of lower prices. As a result, the Price element of the Marketing Mix would have to be changed. Promotion Change The marketing strategy would aim to hammer in the concept of vacations back into the minds of the consumers because in today’s era of recession and low incomes, the desire of vacations is slowly decreasing in the customers. Emirates will have to adjust its Promotion element of the Marketing mix and devise an advertising campaign that will act as a motivator for these customers. To make this successful, it should offer the lowest rates in the market for the peak season months from June to August and from November to December. These are the most preferred months for vacations for family vacations because of the children’s holidays. The deals and packages that Emirates should offer should relieve the customers of the trouble they go through for visa, tickets, hotel booking and so on. The package should include all this so the customer would have to go to just one place to get it, and pay a lump sum amount to enjoy all the facilities. It is also favorable if Emirates adds a touch of humor into its advertising campaign in order to attract children and families more. Along with this, relevant and sufficient information should be given through the advertising medium so that the customers do not have to make an extra effort of calling up travel agencies to get the information on fares, packages etc. Below are few of the marketing campaigns that Emirates has used recently. Figure 1 International Award Winning Campaign done at Interflow by the HeadLion team Figure 2 International Award Winning Campaign done at Interflow by the HeadLion team Figure 3 International Award Winning Campaign done at Interflow by the HeadLion team The advertising campaigns shown are already being used by Emirates. The new marketing strategy should adopt this very idea of adding humor into the campaigns. These advertisements, however, cater only to the market in Europe. There are several other markets of Emirates that need attention such as Thailand, Kenya, Singapore, Malaysia etc. This strategy should be widely used in these markets as well. Moreover, in addition to humor, it should be made sure that more information is added into the advertisements. The middle and upper middle class society that needs to be targeted is more interested in rates, fares, taxes, and other important information regarding the package. Therefore, the advertisements shown above should be used and tailored to cater to the demographics and culture of the different markets in order to make it most effective. Print media could be used for this marketing strategy. However, there are certain disadvantages and limitations of the print media. Print media has the potential to drive up costs. Certain magazines are quite pricy when it comes to customizing messages based on regions. Moreover, print media tends to be impersonal. It, obviously, will not be able to have the same sort of effect that one to one marketing would. Also, newspapers do not have a very high shelf life. People do not use newspapers for more than a day so resources could be wasted using the print media. (Buzzle, 2009) Direct marketing is the best method used by marketing departments as it allows interaction between two people which is inaccessible to the public. The direct interaction of the customer and the marketing department makes it easier for the marketing department to accommodate issues by customers and hence deal with it. Even though telemarketing is the most efficient way to deal with the customers, it comes with many strings attached which not only require a telephone call, but many efforts just to attract the customers. In order to pull the customers towards the offers, they need to be presented with a visual aid. Also, telemarketing is usually used for large audience; as a result it takes up a lot of time and can be quite costly. Internet Marketing is a more effective method to market to the audience. It not only allows the department to focus on a specific target group, but it allows the customers to view the offers easily in a highly cost efficient way. It is also customer-friendly because it allows them to view the offers and hence is able to receive further information about the offering. Internet marketing makes advertising easier for marketing departments because of websites related to social networking such as Twitter and Facebook. Potential buyers or the targeted audience may then be attracted to click on those advertisements to receive further information regarding the market offering. These social networking forums also allow customers to have a one to one conversation with the department to resolve their issues. For example, if a customer needs help with an issue, he or she may contact the department through these advertisements of Emirates airlines or just communicate with them via these social networking forums. Place Changes The process of fulfillment is carried out to make the final sale, which can be done in three ways. For instance, the customer can either book the ticket or the package online, in person or though the telephone. In order to book it online, he must first log on to the website, pay via a credit care and print the e-ticket. To book it over the telephone, he or she must provide the credit card information to the travel agent in order to receive his or her ticket or package. People Naturally, to compete in a highly competitive environment where competition is cutting down costs to adjust prices to gain an edge, Emirates would also have to cut down its costs. One of the ways that it might do that is by having layoffs in the workforce. It is not necessary that this takes place, but observing the trend in the industry, it has high chances of happening. Process With all the changes made in the marketing mix, the process of delivering value to the customer might go through certain changes. Emirates will have to integrate the separate changed elements and make them work in a unified form to deliver the service and quality that it promises. Conclusion Emirates Airlines is one of the fastest growing and most profitable airline companies in the world. It has been one of the most dominant players in terms of Marketing in the global environment. It has continued to attract customers through its services and has created its reputation based on its consistency in providing quality service to the customers. However, times are now changing. In today’s era of recession and increased competition, Emirates will have to adjust to the changing needs of the customers. It must let go of high end luxury services in order to cater the changing demographics and economic conditions of the world. If it fails to do so, there might be a risk of it losing its share in the market and its position as the leader in providing quality to its customers. References BBC. (2009, May 22). Emirates airline profits down 72%. Retrieved December 4, 2009, from BBC: http://news.bbc.co.uk/2/hi/business/8063581.stm Cateora, P. R., & Graham, J. L. International Marketing. Twelfth Edition. Emirates. (2009). About Emirates. Retrieved December 4, 2009, from Emirates Website: http://www.emirates.com/english/about/about_emirates.aspx Kotler, P., & Armstrong, G. (2008). Principles of Marketing. Pearson Education. Kotler, P., & Keller, K. L. (2005). Marketing Management. Prentice-Hall. Nasser, A., Nguyen, H., Boelke, L., & Yu, W. (2005). Strategic Management in A Global Context. 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