Marketing of Etihad Airways - Case Study Example

AIRLINE MARKETING Table of Contents AIRLINE MARKETING Table of Contents 2 ETIHAD AIRWAYS 3 Marketing 4 Marketing Strategy 4 ETIHAD’s Marketing Policies 5 a)Product: 5 b)Price: 6 c)Promotion 6 d)Place: 8 Critical Appraisal 9 Works Cited 11 ETIHAD AIRWAYS ETIHAD Airways came into existence in 2003 that makes the Airways part of the aviation industry for almost a decade. ETIHAD Airways is the UAE’s nationalised airline with its presence in over 50 countries across different continents. In the past 9 years of its journey, ETIHAD has grown into one of the leading airways in the world. The world has changed a lot over the last decade and so has ETIHAD in its approach and business structure. But, what has remain intact with this global airline is its service, which has its main focus on the hospitality factor, depicting the warm, friendly, altruistic culture of the Arab world. ETIHAD Airways in terms of the number of flights which ply to & fro to various destinations is no less and captures the staggering number of around 1000 flights in a week. These facts can alone prove the growth structure of this Abu Dhabi based airline, while leaving other factors of its success untouched. It can be no mere coincidence that an airline is voted as the world’s top airline for 3 years consecutively. This further elaborates on the success story of ETIHAD Airways as a global aviation player serving millions of passengers worldwide through its world class service & product in terms of hospitality & aircrafts and a vision to be a true global commercial airline (“Our history”). Marketing Marketing is a wide term which acts as an umbrella to various marketing activities related to products & services. These marketing activities ensure that the needs of the consumers are met and in return, they are getting the value. Every marketing activity has different objective and is different for different products & services. Marketing involves two types of marketing activities, namely Inbound & Outbound activities. The inbound marketing is about analysing the consumers, distinguishing the target market form the rest, competitor analysis, positioning & pricing of the products. The outbound marketing, on the other hand, is to emphasise on the promotional activities, sales promotion, working on public relation & the most important advertisement (“Basic definitions of marketing”). Marketing Strategy Marketing strategy can be defined as the strategy or plan adopted or implemented by an organisation to ensure that the firm utilises its resources to the best of use thereby meeting its marketing objective. The marketing strategy for any firm comprises of two utmost important elements: a) The target market b) Developing & maintaining a specific marketing mix for the specified target market based on the 4 P’s of marketing mix, mainly product, price, place & promotion (Pride, Hughes & Kapoor 345). ETIHAD’s Marketing Policies The marketing policies of any firm depends on certain factors, such as segmentation of the market, then analysing and targeting the desired market, and lastly, the positioning of the products & services offered by the organisation. Even for an airline company, it is very important to develop a strong marketing policy for its business; the same is true for ETIHAD Airways. ETIHAD Airways in a short span of time has been successful in reaching the top position and holding on to it for past 3 years. This success of ETIHAD and its marketing policies can be analysed 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 analyse the marketing policies of an airline company behind its success (Shaw 6). The 4 P’s of marketing mix to determine & analyse the marketing strategy implemented by the ETIHAD Airways are: a) Product: The streamline product for an airline company is its services provided which are rather intangible in nature but the return on investment is tangible. These services are the most important product in comparison to its other product line which is also part of the airline company such as the aircrafts, onboard products & scheduling of arrival and departure. Since the beginning of its journey, ETIHAD has been upgrading its products, be it in the form of services it offers to its customers to the aircraft it uses for that extra comfort of the people travelling by the ETIHAD Airways. ETIHAD’s primary product, the services, are largely appreciated by consumers who travel by its airline. The hospitality factor both in flight and on ground are of great quality. It is continuously striving to offer something new and better in its product section. The company currently has above 60 Airbus & Boeing aircrafts including ETIHAD’s crystal cargo flights. To further please its customers, ETIHAD has added new aircrafts to offer special services in the form of luxury classes, such as Diamond Luxury suite, Coral for economy class and Pearl for business class to cater to the needs of the customer according to their preference (“Our history”). b) Price: Price is a factor which is variable for any sector and aviation is no exception. Every now and then the price of air tickets keeps fluctuating depending on various elements, such as fuel price, tax, product prices, etc. ETIHAD also faces the same problem but still it manages to emerge as a winner in attracting customers. ETIHAD has always branded itself as a luxury airline, but also has its services open to people who look for reasonable option. Another reason for ETIHAD’s success lies in the fact that it offers the best service in comparison to other airlines. It services are unique and are based on the target market. ETIHAD offers different luxury classes as per customer’s choice and spending capacity, thereby price factor being out of the context or in other words, price is substituted by world class service (Thomas 148). c) Promotion Promotion can be said to be the utmost important element of the 4 P’s of marketing. It is promotion through which the company creates awareness about its products & services. Various companies have different way of promoting its products; some use advertisements as its tool to promote while others prefer sales promotion & personal selling. In an airline industry, promoting its services is different from what a FMCG company does. ETIHAD has been aware of this fact since its establishment and its core focus has been to promote its services in a different manner. It has many promotional activities which have somehow become a patent for the company. ETIHAD utilises the digital world of the 21st century at its maximum by promoting itself through electronic media, print media, direct selling or database marketing and also through interactive or internet marketing. In case of database marketing, the company collects the database of consumers and utilises it to promote its products. Database marketing is based on three important elements: a) Direct acknowledgement: ETIHAD reaches out to customers through mails, phone calls and the responses from the customers are monitored. b) Database is said to be measurable: ETIHAD monitors the responses from customers which may be from different medium. These responses or feedback are analysed and accordingly ETIHAD plans its activity depending on the customers’ feedback. c) ETIHAD makes sure that the databases of customers are collected for future prospects and according to these data, the target customers are chosen for the promotional activity which benefits both the company and customers (“Database Marketing”). Sponsorship has also been a major part of ETIHAD’s 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 ETIHAD has bagged are that of Abu Dhabi Grand Prix and the main sponsors of Manchester City Football club. Apart from this, the airline also promotes itself through its Loyalty program which gives its customers some extra benefits for being loyal to the airline. d) Place: A place in context to 4P’s can be defined as the point of origin from where a company wants to launch its product. ETIHAD may have started with few locations for its journey, but as time 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 having offices in different countries, ETIHAD also has tie-ups with various travel agents who make it easier for customers to avail the information regarding ETIHAD’s scheduled flights & fares from a specific location where the airline has not set up its office. Apart from this, distribution channel has also played a key role in the success story of ETIHAD. The distribution channel system which ranges from the traditional travel agents to the direct airline ticket sales through countries have all been a part of the marketing policy of the company. The places where the company cannot be the other distribution channels fill in the gap (Buhalis and Laws 246). GDS which stands for Global Distribution System is an online reservation system used by airlines for ticket reservation. This system has also been an important part of the ETIHAD’s marketing policy to increase its market share and customer base. The company pays a certain fees to the distribution system and in return provides the service on behalf of the company so that the company can cater to the customers who are otherwise not able to avail ETIHAD’s service because of unavailability of company location at the specifies location (Doganis 205). The above 4 P’s analysis draws a clear picture of the company’s policy which is mainly oriented towards catering world class service to its customers and to keep upgrading at specific times. Critical Appraisal 4 P’s of marketing has proved to be a strong tool for ETIHAD Airways. The analysis has resulted in many important outcomes which define the true motive of a company. Airline industry is a risk taking business because of its huge cost associated with products and services. If the policies applied are not analysed and restructured as per the demand of the time, then it becomes a different ball game for the company, and may eventually lead to its exit path. ETIHAD has very well understood this phenomenon and from day one it has set its policies in context of being a world class service provider and using the marking 4 P’s at its best. The company of ETIHAD has grown into a multi-billion company but the base on which it began its journey is still intact, i.e. hospitality, which have been a key ingredient to its success on global platform. It has yet not compromised on its service provided and keeps upgrading it by various means such as launching new luxury classes and buying better aircrafts. Though ETIHAD has been doing well in its business with its different approach, there is always place for improvement. ETIHAD as compared to its competitors is present in lesser number of countries which may be its strategy to focus at specific market and offer service at its best. But at some point of time, it needs to change its strategy and start venturing in unknown territories to maximise market share and increase its customer base. Price can be an issue for various customers who would prefer travelling from low cost airlines. In this case without compromising on service, the company can cut down on its fuel costs by shifting to aircrafts which are energy efficient and helps reduce fuel consumption. This will eventually help company to apply low price strategy and thereby attracting more customers around the world and make ETIHAD Airways the most sought after in the aviation sector or industry. Works Cited “Basic Definitions: Advertising, Marketing, Promotion, Public Relations and Publicity, and Sales”. Management help. org. n.d. Web.7 March, 2012. . Buhalis, D. and E. Laws. Tourism Distribution Channels: Practices, Issues & Transformation. USA: Cengage Learning EMEA, 2001. Print. “Database Marketing”. Study marketing.org. n.d. Web. 7 March, 2012. . Doganis, R. The Airline Business. New York:Routledge, 2006. Print. “Our history”. Etihad Airways. 2012. Web.7 March, 2012. . Pride, M.W, J.R. Hughes and R. J. Kapoor. Business. USA: Cengage Learning, 2009. Print. Shaw, S. Airline Marketing and Management. England: Ashgate Publishing Ltd., 2011. Print. Thomas, R.A. Soft Landing: Airline Industry Strategy, Service, and Safety. USA: Apress, 2011. Print. Read More