Marketing Plan Development for Royal Air Maroc - Report Example

MARKETING PLAN DEVELOPMENT FOR ROYAL AIR MAROC Table of Contents Table of Contents 2 Introduction 4 CRITICAL REVIEW OF THE CURRENT MARKETING AND PROMOTIONAL ACTIVITY 4 MARKETING REPORT 6 International Marketing Plan 6 Situational analysis of Royal Air Maroc 6 SWOT and TOWS analysis of Royal Air Maroc 6 PESTEL analysis on Royal Air Maroc 9 Marketing mix or 7P analysis of Royal Air Maroc 10 Porter’s five forces analysis of the Royal Air Maroc 12 International Marketing practices 13 Recommended marketing strategies 13 Segmentation, targeting and positioning strategy 13 Identify critical issues and cost effectiveness which will affect the overall strategy 14 Recommendation of promotional strategies with supporting marketing mix 14 Risk assessment of the implementation of the promotional strategy 15 Conclusion 15 Reference list 16 Introduction Marketing is one of the major strategic tool or factors that organisations need to develop in order to increase the growth and sustainability. Being the marketing manager of Royal Air Maroc, researcher discussed international marketing plans. International marketing plan will aiding the airline company in utilising different types of marketing principles (Buckley, 2002). The airline firm is offering travel service facilities in the different routes linking different countries. The organisation started as the government-owned carrier service providers of Morocco. They are providing fleets for both the human and cargo items (Blythe, 2006). International marketing policies of Royal Air Maroc are concentrating to penetrate and expand their service routes in the European segment. In the current study, different aspects of international marketing plan and market analysis of the concerned airline organisation has been stated (Baron, 2010). CRITICAL REVIEW OF THE CURRENT MARKETING AND PROMOTIONAL ACTIVITY Royal Air Maroc is providing low cost airlines service in the Morocco and other global routes, owned by the Moroccan government. They are having the fleet size of 50 and offering the routes in 94 different destinations. Headquarters of the organisation is situated in the “Casablanca-Anfa Airport” that is based in Casablanca area of Morocco. However, the organisation is facing certain negative factors; these factors are harming their performance and profitability. In addition, marketing plan of Royal Air Maroc was losing its feasibility during the year 2009 to 2011 (Royalairmaroc.com, 2015). The organisation has reported high operating losses during the year 2009-2010 and 2010-2011 financial years. Royal Air Maroc is mainly government-owned fleet carrier service providers in Morocco. Failure of that period forced the organisation in updating the marketing plans. They have introduced different types of international strategies to redevelop the market share and profitability. Regenerated marketing plans helped the firm in recording huge operating profits. During the years 2012 and 2013 marketing strategies reported higher growth in airlines market (Royalairmaroc.com, 2015). Ryanair, EasyJet and Air Berlin are the main competitors of the organisation. Reformation of the marketing strategies of the Royal Air Maroc is quite complex. Profitability and performance statistics are developed with the adoption of the strategic development process (Chiambaretto, 2012). The organisation is mainly providing travelling and touring service to various destinations. They developed the service provisional channel. Employees are the key aspect of service provisions of airline industry. Royal Air Maroc has developed new operational strategies to mitigate the difficulty faced in operating and grow. Ratio of employees for every airliner decreased to 58:1 in the year 2014 while it was 110:1 in the year 2010- 2011. On the contrary, carriage ratio of travellers in respect of every employee increased to 2,329:1 in the year 2014 whereas it was 1,054:1 during the year 2012 (Royalairmaroc.com, 2015). Therefore, it can be said that the airline company is facing intense challenge in providing higher satisfactory services. Royal Air Maroc is facing challenge in Casablanca centre for international trafficking issues. European airline organisations are penetrating in Moroccan airline routes offering low cost courier service. Moroccan airline market is getting stiffened for the increased competition (Maroc, 2015). MARKETING REPORT International Marketing Plan Situational analysis of Royal Air Maroc Royal Air Maroc is having good amount of market share during the 2009-2010 period however they faced increased global entry challenge from the year 2012. Situational analysis of the organisation will contrast external environment of market factors along with investigation on competitors (Eid and Zaidi, 2010). The airline organisation is having different competitors in the global segment. Ryanair, EasyJet and Air Berlin are the major low cost carrier competitors. In the Moroccan airline industry RAM is facing challenge of reducing profit earning for the penetration of various low cost multinational. Key strength of the organisation is goodwill in the market, which is created for their ownership or governing body. The firm is controlled by the Moroccan Government. Moreover, they are offering reliability in meeting fleet travel time and feasible airline service provisions (Gures et al., 2014). SWOT and TOWS analysis of Royal Air Maroc Opportunities Threats Royal Air Maroc can develop their market condition with the help of implementing airline alliances strategies (Gronroos, 2006). Code share agreements can effectively develop the rate of growth for the organisation in the African continent. The airline can enjoy the corporation strategy along with the “Air France and International Airlines Group” to increase the rate of share in the market. Royal Air Maroc is increasing the loyalty development process to retain the experienced employees. Training and development policy will increase the service quality provided by airline service providers Perception of the customers will get affected with the feedbacks of the airline service rating providers. Fuel cost is increasing rapidly Post recessional economy is forcing people to opt lost cost couriers The organisation is facing the challenge from the European airlines (Haase, 2011) Strengths S-O Strategies S-T Strategies Royal Air Maroc is having high supremacy in the market Morocco. The organisation is a Government owned airline company therefore they are facing lower challenge of foreign entries or the localised competition (Jevons, 2000). Royal Air Maroc also having huge fleet size 50 airbus and having the employee of more than 2800 peoples. They are having the Boeing planes like B787, B747 and B767 which are having high capacity of carrying people for many destinations (Maroc, 2015). As it is government owned organisation, reputation or goodwill of this airline is higher in the aviation The organisation must use their goodwill in the Moroccan airline industry to penetrate and expand in other regions of Europe and Africa. Code share agreement will increase the maintenance of fleet size and employee management Training and development policy will increase the efficiency of employee base of organisation Government will empower proper legislative controls on the organisation. Government ownership will be creating positive perceptions among the consumers RAM need to develop the fleet size consist more Boeing fleets and less number of airbuses so that the fuel efficiency increases (Kotabe and Murray, 2004). Moroccan supremacy can help in developing competency in the global market Weaknesses W-O Strategies W-T Strategies Rapidity of taking any decision for the government is low. Expansion and other modification strategies are tough to be taken. Airline association was not made by the Royal Air Maroc as there are certain limitations in the government terms and conditions. Code share agreements and corporation strategies will increase flexibility in decision making Code share agreements will increase ability of RAM in developing association among top level airline organisations (Kotler, 2000). Fuel cost and employee perception related decisions need to be taken promptly to enhance the competency. Lower feasible airline association will reduce the ability of the organisation to attract customers in the post recessional market. PESTEL analysis on Royal Air Maroc External market traits can be contrasted with the help of PESTEL analytical tool (Luther, 2001). Political Moroccan political condition is quite stable, therefore Royal Air Maroc can make proper strategic development Economic During the year 2008, airline customers faced higher challenge of economic crisis. People prefer low cost carriers to travel. However, inflation and rising fuel cost increases barriers for setting low transportation cost. Royal Air Maroc can face the challenge of global exchange rate of Moroccan Dirham and 2% interest rate (Metcalf, 2010). Social African and European airline industry is impacted by the social and cultural aspects. Words of mouth promotions plays vital role to influence and attract different social groups. Technological Royal Air Maroc is using fleets like Airbus and Boeing. They are implementing most emerging technologies in the airline service to provide more effective transportation service (Pal and Kapur, 2013). Environmental Royal Air Maroc must be able to maintain their carbon and pollution emission level. Carbon footprints, carbon credits and green house gas measures must be included in sustainable strategies of organisation. Legal Royal Air Maroc will face the legal obligations while penetrating in foreign countries. They will face the immigration and taxation controls in different regions of the world (Pal and Kapur, 2013). Marketing mix or 7P analysis of Royal Air Maroc Marketing strategies of any service provider organisation can be designed more effectively with the help of 7P marketing mix strategies. Products and service: in the airline industry mainly providing transport and cargo service to Moroccan customers. However, new strategy of Royal Air Maroc concentrated on expanding their operations in the European and African countries. Service segment of the firm must be redeveloped as to meet the ever changing customer’s demands and perceptions. Airline organisations should offer some technologies to increase customer satisfactions. Destinations and fleet size must be modified in terms of changing demands of existing and potential customers. RAM is seeking to expand their service provisions in Europe, Asia and other potential African countries (Palmer and Boissy, 2009). Price: currently airline organisations are facing the challenge of lower economic prosperity among the customers. Economic crisis like inflation and recession will force the customers to spend less in the travelling and leisure segments. Royal Air Maroc is a government owned firm and offering business class and economic class (Wood, 2003). However, the organisation is facing challenge of the increasing fuel price that will force the organisation in terms of increasing price of the travel routes. In the post recessional economy peoples are seeking for the economic travel classes (Robins, 2003). Place: mainly the major tourist destinations or most visited airports are used as the travelling destination or the service providing place. However, flights or planes are place of providing the service. Royal Air Maroc is maintaining placing of service strategies effectively. Casablanca-Anfa Airport is the base of organisation situated in capital of Morocco. Therefore, airports and airline fleets are major placing strategic attributes (Ruskin-Brown, 2005). Promotion: Royal Air Maroc must set their marketing strategies effectively so that they can be able to make proper advertising of the service range they are having. Public relationship, sale endorsement, and integrating selling are the major strategies that organisations must ensure in the time of penetration or expanding into new markets. Social Media is another promotional option for Royal Air Maroc to attract more customers from different geographical and demographical customers. Mainly promotion requires effective communication tools to create attraction among the peoples (Sandhusen, 2000). Process: attractive packages like seasonal discount, family discounts and loyalty discounts will attract customers from various backgrounds. Thus, Royal Air Maroc is also adopting the strategies like involving Boeing and airbus to develop attractive fleet size. Increase in the destinations and carrier types will attract more potential customers (Shahin and Ghasemaghaei, 2010). Physical Evidence: interior of the planes, service elements like foods, baggage section, cargo system will attract the customers. Peoples: pilots, air hostesses and cabin crews must be efficient to meet the demands of the customers. Training developing existing and new recruits will increase performance of the overall airline service provisions (Shahin and Ghasemaghaei, 2010). Porter’s five forces analysis of the Royal Air Maroc Bargaining power of the buyers: customers can negotiate the price of air travelling; mainly low cost travelling is highly demanded by the customers. Bargaining power of suppliers: suppliers of the aircrafts, fuels, machineries, food and other pantry materials can negotiate the price of travelling fares. Market competition: the organisation will be facing the challenge from Ryanair, EasyJet and Air Berlin. Competitors will reduce the scope of profitability (Sharma, 2008). Threat of substitutions: airline travel can be substituted by rail routes, public roadways travel and owned vehicles. Threat of new entry: in the globalised market airline industry will face the challenge of meeting new entrepreneurs (Solanke et al., 2001). International Marketing practices Royal Air Maroc modified their global marketing strategies along with operational arrangements. They are promoting their fleet size that consists of the different type of Boeing and airbus (Westwood, 2011). They are operating in the leading European and African countries with their extensive marketing policy. They are mainly promoting their ownership structure which empowers government ownership. Royal Air Maroc has also using different type of advertising mediums. Social mediums are increasing the reach of audience or potential customers (Srikanth and Venkata-Reddy, 2011). Recommended marketing strategies Royal Air Maroc is planning to develop seven innovative routes during the quarter preceding month of Jun of the year 2013 (Maroc, 2015). They can develop the marketing plan disseminating the features of the aircrafts. Moreover, they can promote the tourism and travelling areas around the airports. They must ensure the promotional strategies as per the demographic and cultural dimensions of the potential customers. Segmentation, targeting and positioning strategy Segmentation: Royal Air Maroc will segment potential customers as per the numerous airlines using. Target customers set: being one of the lower cost airline couriers Royal Air Maroc is targeting upper middle class persons who travel through airlines (Sultan and Simpson, 2000). Positioning: Major positioning strategies of Royal Air Maroc will promote significance of money peoples are going to spend in travelling to different destinations (Warnaby, 2009). Identify critical issues and cost effectiveness which will affect the overall strategy In the contemporary economic condition Royal Air Maroc is facing huge challenge due to increasing fuel cost and decreasing passengers. Cost effective strategies are relevant to obtain more sales promotions aiming the customer segments (Svensson, 2005). Royal Air Maroc has eliminated more than 10 medium haul aircraft due to the deceasing number of the fleet passengers. Royal Air Maroc managers observed that number of passengers decreased to 5.6 million during the year 2013 which reported with 6.1 million during 2011. However, the organisation is in the state of grow. They are using Boeing 787 in replace of Boeing 767; this strategy will provide more fuel efficiency. Management of the organisation are planning to increase the leasing process to reduce capital expenditure (Maroc, 2015). Recommendation of promotional strategies with supporting marketing mix Airline services must be disseminated in details to attract potential customers. Promotional policy must ensure the dissemination of the charges or rates of travelling to different destination. Royal Air Maroc can use the social media or digital media to reach more peoples in lower cost. Service process and physical evidence factors must be added in the promotional policy. Staffs capacity or skills can be promoted to attract peoples. Risk assessment of the implementation of the promotional strategy Royal Air Maroc will be facing the challenge of meeting the success criteria with the help of new promotional strategies. There is some sort of uncertainty that marketing or project plan will meet the success. Moreover, promotional strategies can create unknown atmosphere among the existing marketing teams (Vrontis and Melanthiou, 2011). Conclusion Contemporary strategies of Royal Air Maroc are concentrating on the expansion of market in different regions of the world mainly European and African countries. They are facing the challenge of instable political and economic conditions in North African region. Moroccan peoples are having lower efficiency of spending in airline travelling regions. The organisation got affected by the recessional and inflation attributes as they were losing 2 million Euros in every months of operations. Reference list Baron, S., 2010. Service marketing. London: SAGE. Blythe, J., 2006. Marketing. London: SAGE Publications. Buckley, P., 2002. International business versus international marketing. International Marketing Review, 19(1), pp.16-20. Chiambaretto, P., 2012. 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