Current Market Situation of Etihad Airways - Case Study Example

Research Current Market Situation This part of the paper is based on providing current market situation on Etihad Airways. Brand The origin of Etihad Airways is Khalifa City A. The Etihad Airways was established and introduced in July 2003. The operation of this Abu Dhabi based airways was initiated in November 2003. The existing product line of the company includes passenger transportation, Etihad Cargo and Etihad Holidays. Marketing of the Brand The prime business activities of Etihad Airways are to deliver quality air transport facilities to travel agents, freight and customers. The passenger transportation is the core activity of the company. The royal decree of Abu Dhabi established Etihad Airways in July 2003. HH Sheikh Hamed bin Zayed Al Nahyan is at top position of board of directors that governs the Etihad Airways. Furthermore, the board comprises of two sub-committees and seven self-governing non-executives associates. Additionally, it includes own chairman and commission in an Audit Committee and Executive Committee. On September 2006, James Hogan was appointed as CEO and President of Etihad Airways. One of the strength of the company is that it is regarded as one of the leading airline flag carrier in the world. It is completely governed and owned by the government of Abu Dhabi. This helped the company to strengthen their funding towards implementation of new strategies. It faces firm competition and rivalry from Singapore Airlines. The risk of loss can be amplified by investing more on airline industry. Market Environment Macro-environmental factors like economics, religion, languages, political forces and geography blocks, cultural, social and technological factors have huge impact towards existing product line of Etihad Airways. The micro environmental factors include competition from Easy Jet, bargaining power of suppliers and customers. The major overhaul and trends of the company includes increasing the number of employees, aircraft, employees and cargo carried has impacted the marketing decision of the company in the UAE. Market Description Product Lines in UAE It is a worldwide airline transport market. The current fleet size of the company is 117. Moreover, the current listed destinations of Etihad Airways are 120. The future growth perspective of the company is expanding their business prospects in European and Russian market. Another future perspective is buying new aircrafts. The current customers of the company are shippers or passengers. The wants and needs of customers are to enjoy superiority quality of products or services. The buyers can consider pricing strategy as indication for both service quality and service costs. The potential alteration provided by the company is to provide price-service offers. Market Segment The existing market segments are psychographic, geographic and behavioral market segment. In perspective to business and first class, the company offers facilities like Etihad pearl Business and Etihad Diamond First class. In case of geographic segment, the destinations of the company are in 120 countries. The psychographic segments are high end and luxury end segment. The behavioral segments are people with leisure purpose, travel purpose and holiday occasions (Basu, 2014). The potential alteration made by the company in enhancing efficiency of operations and maintaining high revenue. The potential new segments are inbound holiday lovers, outbound holiday lovers and business segment. Target Market The geographic segment variables are age, gender, family life cycle, nationality, social class, occupation and geographic region. In case of out-bound holiday lovers, the geographic region variable includes UAE and Abu Dhabi. In case of in-bound holiday lovers, the variables of geographic regions include any region. The current and future target market age segment ranges from 25 to 45 years. The family life cycle variables include single, children, married, newlyweds and couples. The nationality variables are Expats and UAE. The educational variables include secondary school. Marketing Opportunities The aviation industries in UAE are believed to receive high investment. This would provide opportunity for Etihad Airways to grow their business portfolio. The company can include cost-leadership strategy within their business operation to augment their market share. There are several ranges of customers that opt to care about pricing segment rather than quality. The cost-leadership strategy would benefit the company to penetrate on specific low-cost market segment (Pradhan, 2008). It would help Etihad Airways to become more efficient. It is highly important for the organization to consider both existing market segment and new potential market segment. It is true that business environment in UAE is highly changing due to the growing market competition. Therefore, the organization should try to focus on cost leadership strategy as a potential market segment for the people of lower-middle class income group in order to maintain an effective competitive edge in the UAE market place. In addition to this, the organization should focus on marketing activities to ensure effective brand awareness. Recommendations It is highly important for the organization to develop and implement cost leadership strategy in order to offer services at economic price level. It is true that recent global econo0mic slowdown affected the sales growth rate of each and every airway due to affected purchasing power of people. In addition to this, cost-leadership strategy will help the organization to offer quality and differentiated services at competitive and economic price level. Promotional campaign can be considered as one of the most important marketing aspects to increase the sales growth rate. First of all, it is highly important to consider both traditional and online contemporary promotional and advertising platforms to promote the brand and newly developed service portfolios. Effective online promotional strategies will help to create significant brand awareness. New Marketing Mix Proposal This part will develop a new marketing mix proposal for Etihad Airlines. Product The organization has adopted differentiation strategy that includes different product segments. They have diversified their business in cargo and passenger segment. It is important for the organization to develop more diversifications in passengers segment to increase sales growth rate. Price The organization should try to adopt cost-leadership strategy as it will help to offer high quality and differentiated services to target customers at economic and competitive price level, which will help to create potential competitive advantages over other competitors. Place The organization should increase its number of operational hubs. In addition to this, management should decentralize its distribution and supply chain network in order to offer high quality services quite efficiently. Promotion The organization should include both traditional and contemporary online promotional strategies. In addition to this, they should focus on social media promotional strategies in order to create significant brand awareness. Market Research This section of the report will conduct market research analysis including both primary and secondary analysis in order to understand the brad and its several marketing aspects. Primary Research A close ended survey questionnaire has been developed in order to conduct a primary analysis to find out the effectiveness of business operation process and customer base satisfaction level of Etihad airways. First of all, it has been identified that most of the respondents are females as they have interest in the particular airline. It is clear from the questionnaire survey that majority of the respondents have replied that cost is important while choosing a particular vacation destination. There will be two reasons behind this, such as recent financial crunch and affected purchasing power of people due to the current ongoing global economic recession. Therefore, the organizations should try to focus on cost-leadership strategy. The organization is the second leading organization within the UAE airline industry and has strongly focused on effective customer service management process. There are several organizations that have failed to win the trust of the customers. But, effective organizational leadership style, significant brand positing and high service quality aspect has helped the organization to maintain its competitive position within the particular industry. In addition to this, the organization is highly focusing on the marketing of the brand considering the major target customers aged between 17 and 30. In terms of income segment, it has been identified from the primary market research that people of higher income group and upper-middle class income group are the major target customers. It is true that the organization has strongly focused on differentiation strategy considering the different aspects of market segmentation. But, lack of cost-leadership strategy has affected the sales growth rate of the organization. Therefore, it will be highly effective if the organization considers the inadequate and affected purchasing power of lower-middle class income group. It is highly important for any organization to consider effectiveness of the target marketing while developing any kind of marketing plan and marketing strategy. It is highly important for the organization to develop and integrate business differentiation strategy in order to target people of different cultural and national background. It is clear from the survey that Emirati and Middle Eastern are the major target customers. It should be effective to target people of different cultural background and identity. Majority of the respondents generally love to travel twice in the year and some of the travelers generally love to or tend to travel on monthly basis. Therefore, this frequency can prove the demand of this airline service. According to the responds of the respondents, it has been identified that Emirates Airlines is the leading and preferable airline for the target customers. Etihad Airways can be considered as the second leading organization in this industry. In terms of quality, majority of the respondents are highly satisfied with the quality that6 is provided by the organization. In addition to this, people or passengers are highly satisfied with the behavior of employees as majority of the respondents have rated that the employees of the organization are friendly. In terms of recommendation, there are mixed responses from the respondents. Therefore, it is highly recommend that the organization should focus on marketing and other pricing strategies in order to overcome the ongoing issues and develop a potential target customer base in UAE. Secondary Research Etihad Airways can be considered as the second largest airlines in UAE. The organization has effectively adopted and implemented differentiation strategy in its business operation process. This adopted and implemented differentiation strategy has helped the organization to focus on effective market segmentation and target marketing strategy (Cole, 2012). The airways has different flight class segment. In addition to this, the organization used to target people of both middle class income group and higher middle class income group. The organization is generally operating in the service providing industry. Therefore, the management of the organization has seriously focused on both effective turn-around timing of flights, significant in-flight quality aspect and effective in-flight entertainment aspect (Plunkett, 2008). Effective following up customer service and in-flight feedback facility has helped the organization to overcome several service related issues. In addition to this, the management of the organization has significantly focused on geographic, demographic and psychographic segmentation in order to overcome the threat of higher degree of intense market rivalry. References Plunkett, J. (2008). Plunkett’s Airline, Hotel and Travel Industry. London: Sage. Cole, A. (2012). Analysis of Etihad Airways. New Jersey: Pearson. Basu, P. (2014). The Report of Abu Dhabi. New York: Springer. Pradhan, P. (2008). Gulf Business. London: Routledge. Read More