Branding: Malaysia Airlines - Assignment Example

Table of Contents: Introduction…………………………………………………………………. 3 Background and Industry Context………………………………………….3 The MajorCompetitors of Malaysia Airlines……………………………….5 Rationale Why the Brand Needs to Evolve………………………………….5 Weaknesses and Opportunities of the Airline Company……………………8 Process of Selecting a Branding Agency………………………………………8 Branding Strategies…………………………………………………………….9 The Plan…………………………………………………………………………11 Conclusion……………………………………………………………………..13 References………………………………………………………………………14 Appendix………………………………………………………………………..17 Introduction: This paper talks about Malaysia Airlines, and it identifies the various challenges and opportunities that the airline company has. This paper also examines the various ways and methods in which Malaysia Airlines could use for purposes of branding itself, in order to meet a competitive over rival companies. In meeting the objectives of this paper, the researcher will analyze the various strengths and weaknesses of Malaysia Airlines. The researcher would also consider the strategies that the airline company should use in changing its managerial approach. This paper will also examine the branding, the advertisement and web strategies that the business organization should use. This paper would also identify a branding agency that can help the company to re-invent itself. The main argument of this paper is that Malaysia airlines has numerous opportunities for growth, and if they are effectively used, then the airline has the capability of becoming the most dominant and profitable airline in the world. Background and Industry Context: Malaysian Airline is one of the international airline companies that operate their flights from the International Airport of Kuala Lumpur. This airline company also operates secondary hubs in the city of Kuching and Kota Kinabalu to various destinations in the world. These destinations are found in Oceania, Europe, and the various cities in Asia (Tan, 2008). Based on this fact, Malaysia airlines plays an important role in the transportation industry and this is by connecting the various cities in the world. It has made it possible for people to travel across Asia, Europe and Oceania, and as such, it helps in facilitating economic growth (Pride and Ferrell, 2008, pp. 31). This is because the government will collect taxation revenue from it, and at the same time, it is making it possible for business executives to fly across Asia, for purposes of conducting business trade. Malaysia Airline is the flag carrier of the state of Malaysia (Kaufmann, 2013). This means that this airline carrier is regarded as a national airline. This is advantageous to the company, mainly because the company has the capability of effectively branding itself. Having a positive brand image is a very important aspect for the company, and this is because it will manage to obtain a competitive advantage over its rivals or competitors. Branding is therefore an example of a marketing strategy or policy. Malaysia Airlines is also a member of the airline alliance called Oneworld. This is an airline alliance that was formed in the year 1999. The major goal of this alliance is to be the most dominant and first choice airline company for the international travelers, who frequently use air transport. The central office in this alliance is situated in New York, and it comprises of airline companies such as Japan Airlines, Qatar Airways, British Airways, Air Berlin, Cathay Pacific, etc. Formation of strategic alliances is a very important business initiative for any organization (Haile, 2013, pp. 66). This is because the organization under consideration will manage to use the resources and facilities of its partners in the alliance, for purposes of advancing its own agenda. Furthermore, a strategic alliance will enable a business organization to easily access and penetrate new markets (Parkerson and Saunders, 2005, pp. 243). This is because they would be using the distribution channels, and resources of the alliance members (Miletsky and Smith, 2009, pp. 53). As of the year 2014, the national government of Malaysia was engaging in a process to acquire the company, by purchasing all the shares owned by its minority shareholders. This is with the purpose of ensuring that the airline company becomes fully owned by the government. The government of Malaysia has an ownership of 69% of the company’s shares. This is an indication of how important Malaysia Airlines is to the people and government of Malaysia. The Major Competitors of Malaysia Airlines: Air Asia is one of the major competitors of the company. This is the largest South East Asia low cost carrier, and it has its headquarters in Malaysia. This company managed to acquire or control most of the domestic routes pursued by Malaysia airlines. This is because of its low cost pricing strategy. Boeing 777 is also another competitor of the company. Boeing managed to force Malaysia airlines out of its Los Angeles route. Singapore Airlines and Thai Airlines are some of the other competitors for Malaysia Airlines. Singapore Airlines is one of the most profitable airline company in Asia, and it is a great competitor to Malaysia Airlines. This is because most international passengers normally prefer to use it. Rationale Why the Brand Needs to Evolve: Currently, Malaysia airline is undergoing a series of financial and operational problems. In a bid to restructure and improve the operations of the company, Malaysia Airlines is currently involved in a process of retrenching approximately 6,000 employees (Ryan and Jones, 2009, pp. 19). Furthermore, the airline company wants to transfer all its liabilities and assets to a new company by the year 2017. This is with the hope of achieving profitability, and relisting its shares to the stock market by the year 2010. Retrenching of employees is always an indication that the company under consideration is passing through a series of financial and managerial problems (Wendell, 2011, pp. 39). This is also an indication that the company under consideration might not manage to fulfill its obligation to all its employees. Therefore, the best option is to carry out a retrenchment (Riley, 2010, pp. 59). This retrenchment is therefore a sign that Malaysia Airlines is passing through a series of financial and economic challenges. Furthermore, the government of Malaysia is in a bid of acquiring a total control of the airline. Currently, the government controls 69% of the company, and it seeks to take the remaining 31%. This is for purposes of saving the company from collapse, and financial ruin. Acquiring a controlling stake in a company, by the government, is one of the important measures used, for purposes of helping an organization to come out of recession (Curran, 2010, pp. 21). Take for example, the case of General Motors, during the 2007/2008 financial crisis. The American Federal government bailed out the company, and in exchange, the government was able to acquire shares in the company as security for the loans. General Motors is one of the most important American car manufacturers, and hence the Federal Government had to intervene, to protect it, against going bankrupt (Riggs, 2007, pp. 31). This is the case of Malaysia airlines. This airline company is a national carrier, and hence the government of Malaysia initiated measures of protecting it against bankruptcy. This includes completely taking over the company, for purposes of rebranding and restructuring the company so that it may begin making some profits. The airline began making losses in the year 1997 (Mars, 2010, pp. 51). In this year, the company made a massive loss of approximately RM 260 million. This is after making a profit of RM333 million, in the year 1996 (Curran, 2010, pp. 41). This was a massive loss, and it is an indication that the management and the operations of the company were not up to date. In the subsequent years, the airline company continued making losses. For example, in 2001, the company made a loss of RM 417, in 2002, the company made a loss of RM 836 million. These losses forced the company to cut off, the many unprofitable routes that it was operating on (Thurlow and Aiello, 2007, pp. 306). This includes routes such as Darwin, Vancouver, Brussels, and Madrid. Cutting off of these routes is an indication that the airline company could not manage the competition that was occurring in these routes. However, in the year 2004, the company managed to make a profit of 461 million, and it returned to its loss making endeavors in the year 2005, with a loss of RM 1.3 billion. This loss was unacceptable to the shareholders and all the stakeholders of the company. Furthermore, these losses were announced when the regional competitors of the company were involved in posting some good profits (Bazargan, 2010). This includes Singapore airlines and the Turkish airlines. Some of the reasons advanced for the poor financial performance of the company, is based on the fact that, the company was experiencing an increase in fuel prices, inefficient and unprofitable routes, overstaffing, increased competition, increased repair and maintenance costs, and poor management (Dreyer, 2012, p. 36). One of the most important factors leading to the loss making of the airline company is an increase in fuel costs. For example, in the year 2005, the total cost of the fuel incurred by the airline company was RM 3.5 billion. This is an increase of about 40.4%, when compared to the year 2004, when the company was able to post some profits (Taneja, 2014, pp. 37). The total increase in fuel costs amounted to RM 977.8 million in the year 2005 and an additional RM 157.6 million and this is because of an additional consumption of fuel. On the other hand, 60% of the routes, operated by the company were unprofitable (Button, 2004, pp 14). This is a massive percentage, and any transportation company, that experience a loss in such routes will most definitely make a loss (Abrams, 2003, pp. 43). An example of a route that was highly unprofitable for the company is the Manchester route. This route was unprofitable because of the many airline industries that were operating in it, low number of passengers, and high fuel costs experienced in this route (Lipczynski, 2008, pp. 39). Furthermore, low cost airlines were also another factor responsible for the loss making tendencies of the airline company. The airline could not effectively compete with these prices, and this is mainly because of its high operational and administrative costs. Air Asia is one of the companies that was responsible for taking up, majority of domestic routes operated by Malaysia Airlines. This is because the company offered cheap air fare. It was therefore difficult for Malaysia Airlines to compete with its rivals. Based on these facts, the company needs to restructure and re-brand itself, for purposes of making it more competitive, and attain some profits. Weaknesses and Opportunities of the Airline Company: One of the weaknesses of the company is its reliance on international markets, as opposed to the domestic markets. Furthermore, the company is experiencing a limited growth in its market share (Stilliard, 2007, pp. 33). This means that the company is not growing, or exploring opportunities in other emerging markets. The reason the company has failed to invest and increase its market share, is based on the fact that it has been making losses for a long period of time (Green, 2002, pp. 61). This has forced the company to move out of certain routes, as well as retrench its employees or workforce. Despite these weaknesses, the company has numerous opportunities. As a member of the Oneworld alliance, the company has an opportunity of taking advantage of the resources of its partners to move into a new market. Furthermore, the company has an opportunity of having a global presence because of being a member of the alliance (Lohia, 2013, pp. 43). As a national carrier, the company may enjoy sponsorship from the government, and hence, it may manage to acquire capital to enable its operations. Process of Selecting a Branding Agency: For purposes of rebranding itself, the company should seek the services of Anthem. While choosing this strategy, there is a need of examining the experience and the capability of the firm under consideration (Riley, 2010, pp. 53). The company should look for a firm that has experience in the branding of famous and successful companies. Anthem branding agency qualifies in this perspective. For example, Anthem was involved in the branding of Beijing Olympics, and their design of the Nestle Rolo Cone, which is found worldwide. Furthermore, the company managed to win the PAC leadership awards. This is for their design and rebranding of Nestle. The company should therefore seek the services of this agency. Branding Strategies: For the airline company to achieve growth, and start making profits, there is a need of rebranding itself. One of the most important ways or methods of carrying out a re-branding strategy is the change of names (Taneja, 2014, pp. 16). The name Malaysia airlines is associated with disasters. For example, the company is viewed as a loss making organization, which is unable to compete efficiently and competitively with its competitors (Zaid, 1995, pp.26). Furthermore, the airline company managed to loss two of its fleets in air accidents, which was able to kill a large number of people (Lohia, 2013, pp. 51). One accident involves a situation whereby one of the airplanes managed by the company was able to get lost, killing many passengers in it. Another airplane was shot down by the Ukrainian rebels, who were supported by the Russian military. This was a disaster, and it resulted to the deaths of everybody who was in the plane. The name, Malaysia Airlines is associated with disasters, and hence there is a need of changing the name, for purposes of re-branding it (Button, 2004, pp. 11). Take for example a company such as Arthur Andersen. This was one of the largest and most profitable auditing and accounting firms in the world. However, the company was caught engaging in unethical measures and practices (Schwartzel, 2012, pp. 51). This is by misrepresenting the accounting and financial records of many companies, for purposes of helping them evade taxation, or mislead their shareholders (Hirst, 2008). The company was forced to pay fines amounting to millions of dollars. However, the company was able to re-brand itself, and it changed its name to Accenture. Accenture is a continuation of Arthur Andersen, and it is managing to make profits, despite its bad history. Malaysia airlines therefore need to re-brand itself, into a new airline company. For example, the company can call itself, Pan Asia airlines. This is a new name, and it will make the company to have a new identity (Haile, 2013, pp. 43). A new name would also come with a new logo. Take for example Singapore airlines. Singapore airlines normally use the logo of the Singapore Girls. This logo has been efficient in ensuring that Singapore airlines remain profitable, and it attracts customers to it. The use of the Singapore Girls is a reflection of the culture and beliefs of the people of Singapore (Clarke, 2004, p. 44). They are depicted as hospitable, polite, kind, and affluent. Malaysia airlines should also choose a logo that represents their culture, beliefs, and values. This would play a great role in attracting the domestic customers, whom the airline has been losing to Air Asia (Taneja, 2010). Communication is another branding strategy that the airline company has to use. This would involve developing an efficient and effective advertising strategy (Oyewole, Sankaran and Choudhury, 2007, p. 27). It should involve the use of the internet, radio channels, the television, etc. While advertising through the internet, the company should use social media sites such as twitter, instagram, and facebook. This is because these sites have a large number of people. The company might manage to reach a large population, with its advertising messages (Taneja, 2014). The company should also use Google Ad-sense for purposes of advertising its products and new services. Google Ad-sense is an advertising tool, created by Google, whereby users would click on a link that talks about the products and services offered by Malaysia Airlines. `Through this action, chances are high that the company would pass information to a large percentage of audience (Melewar, 2008). The Plan: The Branding Brief: The branding company that Malaysia Airlines should use is Anthem. One of the proposed branding strategies that Malaysia Airlines would engage in, is changing its brand name, from Malaysia Airlines, to Pan Air. The reasons of changing the brand name, is based on the fact that the name Malaysia Airlines is associated with disasters. Passengers will therefore be reluctant to board the airplane. Anthem branding company should be responsible for leading the re-branding of the company (Bazargan, 2010). Anthem Branding Company will have the responsibility of identifying various strategies that the company should use, for purposes of re-branding itself. It will analyze the strategies used by the competitors of the company, their strengths, and weaknesses, and hence develop a branding capability that will help the company to achieve a competitive edge over its rivals or competitors (Hankinson, 2010, pp. 300). The branding company will also have the responsibility of developing a marketing strategy that the company should use, for purposes of communicating its re-emergence to the target customers. Furthermore, this branding company should have the task of identifying the appropriate logo, and design that Malaysia Airlines should adopt (Abrams, 2003, pp. 41). While rebranding Malaysia Airlines, the branding company should target international and domestic travelers. The company should lay more emphasis on Asians, and this is because most routes should be on Asia. The company should also capitalize on its uniqueness. This is a national carrier,, and it is recognized by almost everybody in Malaysia. The company should take advantage of this unique characteristic, and develop strategies aimed at selling this uniqueness to its target customers (Lohia, 2013, pp. 52). This is through the use of the radio, the internet, the print media, and television advertisements. It is important to understand that the people of Singapore are very proud of their cultures and country. Marketing the company as a national carrier will manage to bring out these emotions, and people may come out, in support of the company (Taneja, 2014, pp. 17). The evidence that this is a national carrier is depicted whereby the government owns 69% of the shares of the company. This means that the government has an absolute control over the affairs of the company. Timeline and the Channels to use: While carrying out a re-branding process, the company should expect the entire process to take 3 years. This is because the company would be trying to change itself, and form a new entity, and it would take time for the company to market itself considerably. For purposes of changing the name of the organization, the branding company should carry out a research, and find out the appropriate name to give the company. Pan Air was just a proposal, which can be adopted or rejected, based on the research carried out by the company. This is a process that can take a period of approximately 2 months. In developing an advertisement strategy, the company should consider using the internet, television, and the print media to convince its target market on the need of travelling by using its fleet of airplanes. The company should use social media sites, such as Facebook, Twitter, and Instagram to advertise its projects. Furthermore, the company should use the international media, such as CNN, and BBC for purposes of advertising its projects. These tools have an international reach, and hence the company reaches its target audience. This is a program that should take approximately two years of constant advertisement. Conclusion: In conclusion, Malaysia Airlines needs a rebranding. This is because it is experiencing a series of financial problems that are brought about by poor management and lack of focus. Furthermore, Malaysia Airlines has suffered a series of disasters, such as a loss of two of its airplanes. One airplane disappeared in the sea, while another airplane was shot down by the Russian military. To give it a competitive edge over its rivals, the company needs to initiate a better advertisement strategy that would help it achieve a competitive advantage over its rival companies. Anthem branding company is one of the best firms that can help the company to efficiently brand itself. 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