From Marketing Mix to Relationship Marketing - Research Paper Example

Running Head: Marketing Strategy Name Course Instructor Date 1.0. Introduction Everest Airlines has been in operation for close to thirty years now, it has been a carrier of choice for people traveling from Europe and America to Africa and Asia. The airline just like most carriers in the world is experience some hard times. With the security threats, the number of passengers to some of the routes especially in Middle East and Northern Africa has declined drastically. The airline has had to terminate some of its routes especially to places which are affected by insecurity and epidemics. It is only recent that one international airline suffered huge losses when its plane was shot down; it is out of this backdrop that Everest Airline has made the hard choice, to withdraw its services in some areas due to security concerns. This is bound to have some serious drawbacks as far as profits are concerned. It is out of this, that Everest Airline has introduced low cost flights to areas which are secure. This is aimed at recovering from the losses which will be incurred from suspension of flights in some destinations. One of the major concerns that Everest Airlines anticipates is that other airlines will be aiming at providing services to new and emerging markets where a similar strategy will be used. It is out of realization of this that the Marketing communication strategy is prepared. Marketing communication strategy is defined as planning ,executing and examining the brand messages aimed at creating customer relationship . (Egan J 2007)In utilizing marketing communication strategy, all the communication tools, channels and avenues are coordinated and integrated within the company ,into a program that capitalize on impact of end users at minimal cost. (Egan J 2007)The goal of marketing communication strategy is to build brands which have high chances of being purchased and increasing the profitability capacity of the business. The main idea of the strategy is to make people internalize the message through exposing them to the same message using different channels. (Egan J 2007) (Grönroos C 1994) With the Airline reporting a dip in profits and the fact that competition in the industry has intensified coupled with the threats facing the business, Everest cannot ignore the fact that the future will be tough. These calls for an adoption of a sound strategy which will see the company remain competitive and further increase the chances of profitability. (Smith, P and Taylor, J 2002) Everest has received several international and local awards, as one of the best airlines operating in Turkey as well as the leading carrier in the Asian and African markets. The awards include the best cabin crew as well as exemplary customer service. Everest aims at capitalizing on these achievements to win more customers as well as retain the old ones. Everest is a listed company in Turkey Security exchanges , it vision and mission dwells on building a reputation among its customer and the public at large as a highly reputable airline which symbolizes dedication to service ,affordability and modernity. (Egan J 2007) 2.0. Problem statement Everest Airlines has been recording a decline in profits, a trend that has worried the top management and investors at large. The global security concerns, competition from other players and declining economic standards have been cited as some of the factors which have contributed to this downward trend. The company recognizes that it should step up efforts in providing quality services to its customer while at the same time play by the global trends, where remaining competitive should be a key focus. It is on this premise that the airline is introducing low cost flights targeting mass travelers with an aim of making high sales which would eventually translate into increased profitability. The company believes that such a move will attract customers especially the mass market, the middle and low income earners. Through the product the customers will not only save but also get quality services from a reputable airline. The marketing communication strategy will come up with the approach that will be used by the company in realizing this end. (Egan J 2007) (Grönroos C 1994) 3.0. Situational analysis 3.1. The target market and how it will benefit Everest Airlines will be targeting the low and middle income earners in African and Asia as well as in Europe. The market is bound to benefit from the low fares as they will save substantial amount of money out of it. With great savings on the travel cost, the customers will have more money to save this will; not only allow them to finance their other ventures but also give them an opportunity to invest. This will have a multiplier effect as more investment will mean additional jobs thereby reducing the rates of unemployment. (Smith, P and Taylor, J 2002) (Dobele, A., Toleman, D, Beverland, M 2005) 3.2. SWOT analysis This involves looking at Everest Airlines current position as well as identifying the preferred decision in the years to come. The analysis will examine the Airlines strengths, weaknesses, opportunities and threats. 3.2.1. Strengths Everest Airlines prides itself as an airline of choice for many travelers looking to connect between Europe and Asia as well as Africa. The fact that it is the only carrier plying some routes in Africa and Asia ,puts it at an advantage as far as these markets are concerned. The company also prides itself for highly qualified and dedicated staff, a factor that has made it to be named as one of the airlines with the best customer support. (Smith, P and Taylor, J 2002)Any business which puts customers first, scores highly as far as number of customers using its products is concerned. The reputation that the company has build over the years will play a major role in convincing the customers to use their low cost flights. The fact that the airline has been known to offer quality services, will serve a score point as far as continued support is concerned. The company expects that the service will be well received in the market at a time when the cost of flight has been increasing at a high rate. The fact that the Airline is accredited and recognized in different part of the world means that it will access the market easily, retaining the old ones and entering into new grounds. The airlines banks on low labour costs to venture into the new product, given that labour market is flooded with new entrants who are willing to offer similarly high quality services at low costs ,means that the company can afford to maintain a huge labour force at low costs. This will be specifically the case in all the low cost flights, where the Airline intends to keep the operational costs as low as possible while maintaining the same levels of quality that the company is known for. (Egan J 2007) 3.2.2. Weaknesses One cannot ignore the fact that the company has not been performing well financial of late. This has been as a result of declined revenue, mainly due to decreased uptake on the services. The security and economic situation at the global platform has been the main culprit as far as this situation is concerned. (Smith, P and Taylor, J 2002)The company has been experiencing low profit margins, cash flows has been weak, some of the routes which the airline has been plying have been unprofitable. Also high cost of operation coupled with weak marketing strategy has been identified as weaker points for this airline, components that may hinder the success of its strategy. 3.2.3. Opportunities The company plan to introduce low cost flights will put it at an advantage as it attempts to venture into mass market. History has proved that companies which target the mass market are successful in the log term. Although the payback period may be long , when the company sustains such a market, there are higher chances of making good returns over long term. Experts argue that mass market should be characterized with quality services. Many businesses make the mistakes of ignoring the issues of quality in this kind of approach. This would be a suicidal move especially of the business is looking for a turnaround in profitability. The expansion to the new market is also an opportunity for the company given that there is likelihood if increasing their revenue base. While this can be realized, it is always prudent to note that quality services should be an important aspect in building a reputation in new market. The company should strive in provide services which meet the customer requirement, they should feel that they are getting value for their money. (Smith, P and Taylor, J 2002) (Dobele, A., Toleman, D, Beverland, M 2005) (Egan J 2007) 3.2.4. Threats Airline industry is current faced with numerous problems, some which is threatening to halt the sector altogether. The global security issues have been a major concern, it is only recently that Malaysian airline suffered immense losses and damage on its reputation when a plane disappeared while more than three hundred passengers on board. A few months later , the airline plane was shot down in a conflict zone. The security threats are real, as at now there are some routes which have been declared as dangerous, to that effect Airline regulators have had to close these routes for the challenges that they place on the crew and passengers too. (Smith, P and Taylor, J 2002)The conflicts zone increase day and day out, this means that carriers have to constantly review the security situation and take the necessary measures for the sake of their customers as well as profitability of the company. Eruption of ebola in West Africa has seen carriers suspending their flights in these routes, Everest Airlines along this, has been forced to suspend flights to the worst hit countries, Sierra Leon and Liberia. Given that these countries as well as others in the region form the target market for low cost flights, the new product will be affected. Whereas any business is guided by profits, it pays to put the interest of the customers and crew first and that is why the company despite the opportunities presented might now be in a hurry to introduce the service in these routes. Terrorism as a global security threat also posses a major threat, there has been an increase in terror activities mostly targeting airports and aircraft. Everest Airline has to invest on security, to ensure that this threat is addressed. The increasing fuel prices also threaten the profitability of the new venture. (Smith, P and Taylor, J 2002) (Dobele, A., Toleman, D, Beverland, M 2005) The price volatility makes it hard to predict the future trends and the airline might not guarantee low airfares over long run. If it becomes hard to continue offering the service at affordable price, the airline may be forced to raise the fares, further affecting the product. When the company is forced by market forces to retain the current prices, there is a likelihood that the quality of the product being offered might be affected or the business withdraws the service altogether. With increased competition, this is a scenario which is likelihood to play. In such an event Everest Airline which is introducing the low cost flights with an aim of improving its revenue base and eventually its profitability cannot continue operating a service which is a loss to the business. (Egan J 2007) (Obelesky, N 1998) It may be forced to raise the fares or withdraw the offer once and for all. Therefore the marketing strategy adopted should not only address on the issues of price alone, it should incorporate other aspects which influences the customer’s ability to buy a product. The company should aim at building a reputation as the best carrier in the routes it plies while at the same time highlighting on the key benefits which will be derived from use of the airline products. The fact that foreign currency is a major component in airline business means that any fluctuation will affect the profitability of the business. In the recent past major currencies have been volatile, if this situation continues coupled with high inflation rates, one can only expect the worse in terms of the company profitability. (Dobele, A., Toleman, D, Beverland, M 2005) There are other airlines which are offering similar products, this means that competition is high in the industry; therefore Everest Airlines have to position itself as the most affordable carrier through offering lower rates than the competitors but also having a mix of marketing solutions and value addition which will make the product standout from others. (Smith, P and Taylor, J 2002) (Dobele, A., Toleman, D, Beverland, M 2005) 3.3. Improving Everest Airline This will involve taking advantage of the strengths and opportunities as well as minimizing the risks and threats to the new product. The company needs to come up with a strong marketing campaign which will repeatedly drive the message home. (Smith, P and Taylor, J 2002) It should utilize the different channels which are effective in delivering the message, cost of this kind of campaign should also be looked at, and the means of delivering the message should not only be effective but also should be at minimal cost. 3.4. Organization objectives and communication goals Everest overall goal is to provide quality airline services to mass market , the goals of the communication strategy is to inform the market of the new low cost air flights which have been launched recently. The company aims at reaching as a wider market as possible. It aims at availing an affordable package where the travelers who intend to make huge savings out of their travel can do so. The communication goal is to inform the end users of the availability of the service and how it will benefit them. It will also inform the customers how they can access the service and where they can go for advice. (Smith, P and Taylor, J 2002) The key communication messages aim at informing the end users that Everest Airline is useful and practical solutions to the travelers needs. Customers can rely on the company to give them a product or products which will help them move from one point to another easily, comfortably and at an affordable cost. One of the key messages will revolve around informing the customers that Everest Airlines value the feedback and opinions given at all times and strive by all means to ensure that they are considered in the decision making process. (Dobele, A., Toleman, D, Beverland, M 2005) (Egan J 2007) 4.0. Marketing tools and strategies to be used to pass the message There are three marketing strategies to choose from, the company can adopt the pull strategy where the main aim is to create awareness, inform and educate. This is mainly done to change the target audience perceptions and also attitude. The strategy aims at bringing motivation to the target group, encouraging repeat business. Personal promotions, direct market where mails and emails or even phone calls are used, product demonstration through the internet will bring positive results. (Smith, P and Taylor, J 2002) (Hellensen, N 2007) Push strategies involves use of added value services to influence repeat purchases, approaches that will be used to achieve this are direct advertising ,promotions through giving introductory offers and improving public relations with an aim of creating a trusted brand name. (Smith, P and Taylor, J 2002) Profile strategy aims at distinguishing the company from the competitors; this is in consideration that there are other players who are offering similar services to the newly launched low cost flights. The airlines serve on the same routes and some are well established in these destination. While Everest Airline has been in business for long, the area of low cost flights especially in the new routes might present a challenge especially when it comes to beating the competition. The activities to be undertaken here will aim at bringing the up the level of awareness, change perception and attitudes towards Everest Airlines. (Smith, P and Taylor, J 2002) To achieve this, the company will adopt regular dialogues with the public with an aim of developing trust and commitment something which will yield to sound relationship. In short term this can be achieve by frequent press releases informing the public of the company moves and intentions, new launches and introductory offers. In the long term promotions will work effectively, this will help in building a positive relationship between the company and the public. (Dobele, A., Toleman, D, Beverland, M 2005) (Hellensen, N 2007) 4.1. Developing a media advocacy Media remains an integral part of marketing communication strategy; this is the channel that Everest Airlines will use to reach its current, past and future customers. A mix of pull, push and profile strategies will be used to reach the target audience. The company website will be used to connect to both reporters and the audience; resourceful and relevant articles will be posted here to keep the parties informed. Meetings will be arranged with reporters for the purposes of creating the press releases and articles which are related with the product. (Smith, P and Taylor, J 2002) (Dobele, A., Toleman, D, Beverland, M 2005 Media adverts both in print and digital platform can offer a positive reaction especially when targeting a large market. Everest Airlines plans to advertise both in print media and digital platform to ensure a wider reach. Advertise in audio and visual media, which is through radio and TV station, the company aims at buying advertisement air time during the prime time as this ensures that more people will be reached. (Dobele, A., Toleman, D, Beverland, M 2005) (Hellensen, N 2007) Table 1. Budget Proposed Activity Medium to be used Total cost in US $ Building media advocacy Online campaign 5,000 Meeting with reporters 4,000 Press releases and articles 3,000 Media adverts Paid up TV and radio commercials 10,000 Media relations 4,000 Other costs 3,000 Total costs 29,000 Note: Everest Airline is an imaginary airline company; its use in this article is only for academic purpose. References Smith, P and Taylor, J(2002) Marketing Communication, Third Edition, Kogan Page Limited Dobele, A., Toleman, D, Beverland, M (2005), “Controlled infection! Spreading the brand Message through viral marketing”, Business Horizons, Vol. 48 No. 2. Fill C (2002) Marketing Communications, contexts strategies and Applications, Hallow, Pearson Education Egan J., (2007), Marketing communications, Thomson Learning, London. Obelesky, N (1998) Strategy Formulation Model, London; Kogan Page Ltd Grönroos C., (1994), “From marketing mix to relationship marketing: Towards a paradigm shift in Marketing”, Management Decision, Vol. 32, No. 2. Hellensen, N (2007) Global Marketing, Fourth Edition, Pearson Education Limited Read More