Marketing Strategy Analysis for Emirates airline
As the airline industry is especially increasing and highly competitors so, there are many market share in the industry. Moreover, the airline industry is affected by the environmental (e.g.
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political, economics and etc.) that decreasing the number of passengers. At this point, there are many reasons, which have an affect on the airline industry to competitive among industry, so many airline companies need have developed their strategies to be more effectively in order to lead the market area.
Emirates airline is one of the big company in the airline industry, but today there are large number of Airline companies are still growing in the market, which are looking for stealing a market share. In this point, with in the growing industry there are more and more choices for the customer to be able to chose the airline who they wanted to traveling with and yet still looking for the one which can serve their need also. Due to the hitting of economic slump, it’s sent the effect to the large commercial airline shrinks them and may not be able to expand the company. Therefore, the switching cost to the low cost airline has also created an impact on the Emirates airline.
In order to maintain the business success and obtain customer to flying with, the airline also need to modify their strategies and service which could give to customer feels the different and added value after purchasing the products. The aim of this report, the author is trend to analyze and evaluate the strategic issues, which can be able to give and effectiveness for the airline to develop their strategic use to be more effectively.
In this report will consist of two major parts: part one will analyze which strategic formulation and lead to implement strategic approach as gaining ahead competitive advantages from resolving the switching cost of consumer leak to the budget airline. In the following part, the author will recommend and conclude at the end of the section.
In this research, the author trends to use a secondary data sources to seek and conduct this research. This is because of the use of the secondary, it’s also give the reader to gather information a wider range from the different sources which can justify and analyze in order to achieve the tasks. In addition, the use of the secondary data will also give an efficiency in term of saving time to conduct this research from the available sources e.g. The Internet, Books and journals are also an important in term of apply and develop with their own report.
Target Market and Positioning
In terms of performing the business, the marketer should be identifying who is the customers and understand the customer action for a product or service in order to providing the satisfy goods or service for them.
Emirates airline is one of the air carrier, which have hardly felt the economic and airline down turn. There are three major categories of passengers: tourism and business, expatriates and transit passengers.
UAE’s Tourism and Business segment Customers.
Dubai’s emergence as a regional business and tourism hub that has provided Emirates airline plenty of room for increasing and has fueled regional air passenger traffic. Dubai aims to attract 15 million visitors by the next year. Therefore, Emirates airline should plan to take advantage from this situation that can make more passengers to the airline.
Expatriates in UAE
Because of Dubai economic is rapidly increasing, it has created huge demand of workface and the highly paid labor market is a major attraction for the various workface around the world. The diversity of population enables Emirates to plan their route; they have reached mutual agreement with almost all the national authorities around the world to operate in. Dubai operate in an “open sky” policy, which allow any carrier to compete with Emirates airline.
Due to Dubai is the operational hub for Emirates airline; it is the best position to connect between Europe, Asia and Australia that can be support to the airline. Emirates has been using “connecting point” in the promotional of their marketing especially transit passengers, the well established and marketed wide range network enables their to prosper in particular segment.
In order to identify Emirates airline strategic options, ANSOFF directional matrix can be used as a starting point to identify the options that are available. According to Aaker and Mcloughlin (2007), there are four possible alternative growth strategies that can be developed. It consists of market penetration, market development, product development, and diversification.
(see appendix 1)
– Marketing Penetration (Improving In-fight Service)
Business focuses on selling existing products to existing markets drives growth strategy for Market Penetration.
1) Retain and boost market share of Emirate airlines product and services.
2) Protect market dominance of Emirates airlines existing markets.
3) Driving out competitors by restructuring mature market.
4) Enhance usage of existing passengers.
Tele-communication is essential element in everyone daily life, in order to enabling passengers to make voice and data call over aircraft’s telecom system, Emirates would like to add communication while on the airplane, it would be very good service for the business passengers. Currently, Emirates have an expensive telecommunications method to make voice call and Internet, passenger’s mobile phone should be beam signal to the ground satellite system and from Immarsat, which is already installed on most of the Emirate airplanes.
– Marketing Development (Extending New Routes)
Due to the number of services is increasing into new markets where company seeks to sell their product to new areas so, the launching existing services to new area or new market segments is a possible way to achieve this strategy.
The objective of Emirates airline is building up Dubai into a popular aviation centre that will finally serve as an important universal long haul hub. It provides an alternative to the traditional European airline hubs as Heathrow Airport (London), Charles De Gaulle (Paris) and Schiphol (Amsterdam). The airline heavily promotes Dubai as a destination, offering reduced hotel rates as well as insight to event like the Dubai shopping Festival that hope to attract more travelers to the city. In order to improving the number of tourism, Emirates airline add new route and destination especially in UAE tourism.
Due to the airline managed road shows and press convention to announce its entry to new city, these event allow travel agents, tour operators and local airline personnel in contact and gain information about Emirates’ new routes, holiday packages and other promotion that can give a advantage for the airline.
After performing a new route to the country’s economic hub – Shanghai – the airline offers passengers a chance to visit the epicenter of China’s political and cultural activities. Because of China’s richest city in terms of historical value and has a heritage that dates back over 3000 years and houses marvels as the Forbidden City, the Great Wall of China and the Ming Tombs.
The success of Dubai as an intercontinental hub, it has been facilitated by airline such as Emirates. The centre point of Dubai has become extremely important; because of it hardly two points on the globe where it is not logical or possible to use Dubai and connecting point, and it usually a good direct route.
– Product Development (Private Suite)
Introducing new services into existing markets implies product development is strategy, which involves the development of skill and requires business to expand customized services that can apply to current markets.
As Dubai is a hub for international business travelers, this is time to improve new product to provide for top-level business executives. The CEO’ imagine of multi-national company makes lengthy overseas journey to attend a board meeting that could have a main impact on the company financials. The fact, company would like CEO to be on top for the rested, refreshed and relaxed so, the cost of CEO’s air travel is doesn’t seem so expensive when comparing to service for them.
Emirates airline has more services for business travelers that is reason why Emirates airline introduce high quality first class private lounges to attract business travelers. The premium class private suit would be fully outfitted with personal storage, coat cabinet and desk and individual mini bar. Long seat reclines to become fully horizontal couch and TV wide screen. Exceptional level of personal services including a gourmet and wines provided by specially trained multi-lingual cabin crews are the other value addition for this product.
– Related Diversification (Low-cost carrier)
The last strategic option allows Emirates airline to exploit its competitive advantages in airline service qualities. Diversification is a strategy, where business sells new services to new market segment. It is more precarious strategy because of limited experience on particular new market areas (Lee and Carter, 2009).
After the European low cost carriers are a successful, Middle East operator also started expression to explore new marketing concepts of “Frills-free” fly. The low cost airline is increasing at more times in the average industry.
The low cost airline offers lower prices than traditional airline by fascinate promotion. The low cost has flexibility fare that is one reason why some people is switching cost to them.
Air Arabia dominates exclusively to this low cost carrier service in UAE. Therefore, Emirates Airlines must decide how to respond this threat posed to the large expatriate market in UAE. Among the options considered there is scope to introduce low-cost subsidiary of Emirates Airlines.
Emirates Airlines be supposed to slightly spread from current marketing objectives to obtain the low cost airline market share and to retain its customer base of UAE expatriate market. This can be done launching new subsidiary to cater budget airline market. The key routes should be high demand and large number of expatriate’s home country like Egypt, India and Pakistan.
In terms of Emirates Airline system, new budget airline is help to introduce new Al-Makthoum International Airport in Jebel Ail that is located on Dubai border. This will provide residents of Dubai and Northern emirates enhanced travel option to neighboring destinations. Emirates Airlines is placing lease order of for 200 aircrafts. The carrier is expected to use Airbus A320 or a Boeing 737 on lease basis for the first few years prior to acquiring ownership status.
As Mintzberg, Ahlstrand and Lampel (1998) the implement strategic is going to using after the marketing plan, it should be evaluated. The evaluation is necessary for extent the marketing objectives, it have been achieved during the specified time period.
Improving In-Flight Service:
Success criteria of deploying a system to allow passenger to use their mobile phones for communication, it is increasing market penetration. It can be measured in terms of voice and data usage and expansion of market penetration. There is not corrective action plan if it fails to respond.
Extending new routes
New destinations are implemented to achieve market development. Flight market occupancy is showed the result of this strategy. It needs to re-discover new destination if the flight occupancy level is lower than expected.
First Class Private Suites
The first class private suites is a new product of Emirate airline, it can be measured the success of the product. Quantitative measurement of this product would be number of booking or occupancy. If it fails, the corrective plan is reducing the tickets price.
Success criteria would be capturing new customer base for the airline. Since its separate operating entity we can estimate financial results of operating profit would be good measure to evaluate the success of budget airline subsidiary.
To conclusion, the related diversification options were suggested as the firm strategic business solution. The overall analytical approaches primarily from the positioning operational hub as a Dubai. However, the firm has high capability to expand its competencies and capabilities into other market areas that the resource based view approach is estimated as the most suitable one.