53236 Marketing Management Assignment Sample
Introduction
Etihad airways is a famous airline of UAE, provides service regarding passenger as well as cargo in a worldwide range from Middle East to North America with the other partners. In this report, the marketing environment of the airlines, the effect of pandemic on the Etihad airlines, marketing mix as well as marketing segmentation, targeting, and positioning will be discussed in a constructive way. In the contemporary situation after the pandemic the airlines may face some issues regarding the operation related to the business and some important recommendations will be provided to cope with the situation and retain the position in the competitive market.
Evaluating the marketing environment of Etihad and the effect of Covid-19 in this airline
Macro environment PESTEL
Political/Legal
Political stability in the country plays a significant role in renowned airline services through which this airline is able to provide national and international airline services for the passengers. Good political relationships with neighbouring countries provide opportunities to Etihad to expand the business internationally. Although stable political environment, this airline services have been disrupted due to outbreak of Covid-19 as lockdown announced by the government created obstacles for Etihad economy. Due to the insufficient employees during the Covid-19 pandemic the flight company was not able to maintain the consumer protection policies which affected the brand image of the company (Etihad.com. 2022). On a specific note, due to national and international regulation, the flight service of the company has been disrupted in many countries and for that reason, the company has observed financial loss during the pandemic. Many international countries have restricted international flight and very few people were conducting the journey with the help of airlines which catered to many business barriers for the company during the Covid-19 pandemic. However, the company has received government support during the Covid-19 outbreak and due to the increasing cases in North America, the government of Abu Dhabi has decided to not operate the airlines in North America (Abate et al., 2020).
Economic environment
Etihad Airways is a vital part of United Arab Emirates’s economy, therefore, in modern time, this service generate huge revenue for the country as well as individuals working in this company. In 2019, this company announced about 32% improvement in operating performances on US$5.6 billion and it may be stated that airline’s transformation program has increased by 55% operating performances since 2017 (refer to Appendix 6). The company has experienced a huge financial loss due to the disruption of airline activities and global lockdown. It has been observed that Etihad Airways is one of the most profitable airline organizations in the world where due to the deadliest effect of the Covid-19 the financial and economic status of the company has degraded. According to the report of Economic Times, during the pandemic, the company had a financial loss of around $1.7 billion and it also impacted the salary and jobs of the employee of the company (Refers to Appendix 1). In addition to that, the pandemic has created a massive economic impact on the countries of the world and for that reason, many people in the country have not purchased flight tickets. A journal states that, the Covid-19 has created a negative impact on the entire network of airports and for that reason, Etihad airways is badly affected (Nhamo et al., 2020). However, due to the online work culture, many businesses and organizations have conducted their operation on digital platforms which have decreased the sales of airline tickets of Etihad airways. Etihad airways play a vital role in improving the economy of UAE and the management of the company has done many trade agreements which develop the economic status of the nation.
The airline authority of Etihad has ordered the employees of the company to stay at home as the number of flights has been reduced during the pandemic which denotes the economic impact of the Covid-19 on this company (Siddique and Khan, 2020). During the Covid-19 outbreak, the people of many countries have lost their jobs and due to insufficient business activity the global flight operation was disrupted and for this reason, Etihad reduces the number of national and international flights. The company was not able to receive profit for the flight operation and for those reason employees of the company have lost jobs and it created the state of unemployment in the company. A report also states that effective business strategy is required to improve the company an country economy or else it created a negative impact in the brand building and marketing policy of the company (Emil, 2021). During the post-pandemic situation, the airline authority had decreased to vaccinated all the employees and maintain all Covid-19 guidelines which help the company in maintaining the business operations in a professional manner.
Socio-Cultural Environment
Analyzing the socio-cultural environment of the company it has been observed that during the Covid-19 the number of customers of the company has decreased. On the other hand, the price of the flight of the company is a little bit high in comparison to other flight companies and for the reason, after the Covid-19 most of the customers were not able to afford the flight service of the company. The living standard of many countries had degraded as many people were not able to get a proper job during Covid-19 which has created an economic crisis in many countries which affected the profit matching of the company. Many customers of the company have purchased the flight ticket of Etihad due to educational purposes, however, during the Covid-19 pandemic the entire offline educating system has shifted into online which decreased the number of customers for the company. The company also followed the basic principle of consumer protection as it provides all of the information of flights, flight timing, delays and many more and the company is extremely concerned in fulfilling the demand of every customer.
Environmental
There is a requirement of ultra-premium fuel in running airplanes of a company while due to the Covid-19 and lockdown the supply chain fuel has been totally dust striped. The management of the company has experienced multiple problems in purchasing adequate amounts of fuels in options for the flight of the company. Every airline company prefers to decrease the energy cost, however, due to the massive negative outcome of the Covid-19, the energy cost of the company has decreased. The existing management of the airline of the company also planned to reduce the environmental impact by operating net zero carbon emissions service by 2050 which will also reduce the fuel dependency of the company. Additionally, there is a huge effect of the environment in defining the market and business policy of Etihad airways.
Technological Environment
During the Covid-19 the company has incorporated many technical tools to the company which may help the employees of the company in handling the entire operation of airways from remorse location. The company is extremely concerned about establishing a healthy relationship with customers and for this reason, the company has developed an effective Customer Relationship Management (CRM). One of the main advantages of these technical tools is that it will maintain the working flow of the company during any kind of pandemic and it will not affect the wellbeing of employees of the company. However, due to the insufficiency of customers the company was unable to improve its financial status which affected the future goals and objectives of the company. The management of the company always focus on implementing innovative technology which makes the airline service more customer focused, advanced and sophisticated.
Micro-environment – Porter’s five forces model
Porter’s five forces model is mainly used to analyze the internal environment of the company and it is the duty of the management of Etihad to conduct the analysis in order to understand the market condition during the Covdd-19 in an effective way.
Threat of Entry
The airline industry is one of the most profitable industries in the world, however, due to the Covid-19, it has been badly impacted. On the other hand, the threat of new entrants in the industry is extremely low as in the industry there are many big players and without a massive investment, the company will not be able to sustain itself in the industry. Etihad is a big name in the airline industry as it provides superior service to the national and internal customers over the years which increased the brand image of the company.
Threat of Substitutes
There are many competitors of the airline company at the national and international level which may be a threat for the company. Additionally, there are substitutes for Etihad in domestic travels such as trains, buses, cabs and many more even though on a global level flight service does not have several substitutes. During the pandemic, flight service is one of the main modes of transformation which provides safe and quick transportation which enhances the business opportunity for the company.
Bargaining Power of Buyers
Bargaining power is high in the market as the customer has multiple options of flight service in national and international service which may decrease the competitiveness of the company during the pandemic. Along with that, the switching cost is extremely low which may influence a customer to change the preference of flight service while drinking the pandemic. There are only a few companies operating international flights. The brand image and excellent customer service of the company may help Etihad to retain loyal customers which may create a beneficial impact in increasing the profit level of the company.
Bargaining Power of Suppliers
The bargaining power of suppliers is high for Etihad as in this scenario an airline company has to do a long term agreement with the suppliers and for that reason, Etihad may not be able to switch the suppliers in an easy manner. Along with that, during the Covid-19 the cost of raw materials has also increased which increased the bargaining power of suppliers.
Competitive Rivalry
The market is becoming extremely competitive as there are several competitors of Etihad in the international market which also refer to a decrease in the competitiveness of Etihad. The management of a company is required to conduct a detailed analysis of the market which may help the company in identifying the change in the market and if the functional manager of the company will be able to define an effective strategic approach then it will improve the competiveness of the company (Kotler et al., 2019). Moreover, the name of the competitors of Etihad are Air China, Emirates, Air Arabia, Pacific Airways and many more even though if the company is able to identify and understand the strength of computers then it may help the company in delivering effective marketing strategies in order to achieve growth and success.
Describing the marketing mix of Etihad regarding the context
Services
Product plays a great role in marketing mix, in this case the services for passenger as well as cargo are provided by the airlines to the market for attention, consumption or acquisition use which may satisfy the required need. Marketing is a prevalent societal process, improvement of marketing depends on product improvement, pricing, communication, and distribution and better service in this case always seek the attention of the customer (Kotler and Lavy, 1969). The company provides various services through one booking such as the airline flies to passenger destinations and the cargo destinations with a huge responsibility from Asia to America to satisfy the passenger’s needs. Apart from that, the smooth mobile check in, tailored seat option, luxurious airport lounges, Flying nannies as well as food beverages managers, scope to spend leisure relaxedly, inflight fine dining are several attractive services provided for the passengers by the airlines (Etihad.com, 2022). Etihad introduces an app to provide smooth, flawless check in as well as live tracker to reduce the tension of traveling internationally for the passenger’s, courier services to avail the facility.
The airline offers customisation options for flying experience such as passengers choosing the seat according to their wish and may book a larger space for flying and thus the airways ensure a comfortable journey to the passengers. The airlines provide convenience such as fine foods, premium drinks, wifi and hot showers to both the economic and business class that earns great satisfaction of the passengers as there is no division in case of perks. Etihad airways offers on flight nanny service to the passenger travelling with children by providing continuous entertainment with goody bags of games, arts and craft which is a great initiative to attract the customer to avail the service repeatedly (Refer to Appendix 2). Passengers are pleased to travel through these airlines because it offers an option of flat beds, well designed smart seats, back seat screen for entertainment and many more. Etihad airlines offers good dining options as well as food and beverage managers are ready to guide the passengers according to the choices to opt the dishes for dining which ensure good hospitality management. The demand of the airway service gradually becomes high day to day, technological invention greatly ensures the progress and associated investment supports better service to enhance the business throughout the world (Abdelhady et al., 2019).
Price
The price of the product is an integral part of marketing and in this case the sum of values through which the customers avail the services of the airways is the price of the service. The company sets the price based on the real value of the service as well as considers supply value, rival companies’ ticket value, and seasonal discount to retain its position in the market. The company uses different approaches to set the pricing such as mark-up pricing, target return on investment pricing, perceived value pricing, competition based pricing, penetration pricing. The most common approach is mark-up pricing through which the airways calculate the cost up value and increase the price with a specific margin to obtain overall profit (Etihad.com. 2022). Moreover, the airways industry requires high capital investment; target return on investment pricing is a common way to balance the cost of setting up huge infrastructure because the price includes a percentage of investment in the pricing. Etihad may use perceived value pricing as this is depending on passengers perception based on the brand image, the quality of service, utility of the service and many more.
Etihad may follow the competition based price as the company has several competitors in the national as well as international market to balance the profit and the other competitors’ price. In this case, the airline company offers prices in the range of INR 2,30,000- 3,00,000 which is moderate in comparison to other airways (Refer to Appendix 3). The airline company may adopt the penetration pricing as an effective strategy to enter into a new market or to cope with the situation after a pandemic by setting up the value below market price to seek the attention of the customer. The Pricing strategy is extremely important as the wrong pricing strategy leads to failure of the service due to lack of desired profit (Deshpande, 2018).
Promotion
Promotion is a great marketing strategy tool to attract the targeted consumer base to lead huge sales, gain an overall profit, and effectively build brand loyalty to take competitive advantage in the business. Sponsorship is the most known customer sales promotion tool which includes bonus, award, discount, coupons, to attract the passengers to avail those offers as well as this helps the company to achieve the success. Etihad offers 10% discount on economy tickets as well as 5% on business tickets to the students and it grabs the attention of the student to avail the service in a deductive price range which ensures affordability of the customer (Etihad.com, 2022). Advertisement is another promotional tool as a promotion of the product, service or brand attracts the attention of the customer to be involved in the sales process. Advertisement through taking sponsorship is another way as in this case Etihad offers partnership in a wide range from Manchester FC to HSBC golf championship, Formula 1 Abu Dhabi grand prix to bring the people together.
Personal selling is also a part of the promotion in which the company has to convince the potential buyer to avail the service and it is the most effective as well as costly way of promotion as it includes only one person instead of the whole customer base. Etihad offers the passengers to customize their own travel plan and the company provides the services accordingly from check in the airport to arrival in the airport, this enhances the satisfaction of the customer. Etihad airlines first introduced a Very Important Person (VIP) as brand ambassador which aids the company to be distinct in terms of sincerity, competence, excitement out of five brand personality dimensions and throw a strong competition for other rival companies in home country (Kotsi and Slak, 2018).
Place
Place suggests valuation of delivery network and it refers to the process of well distribution of the services such as distribution channels, location, transport to the customer to retain the growth among the competitive world. Etihad offers the passengers worldwide travelling options from America to Asia with a flawless delivery process and great hospitality as it increases trust of the customer in terms of responsibility of the airways (Etihad.com, 2022). Etihad travels with a large group of people and to facilitate the process of booking tickets it offers its own website to do the process easily to seek attention of the customer. The airways partners with Hong Kong airlines, Turkish airlines, Avianca, China Eastern MU, All Nippon Airways, Asian Airlines, Air Canada, Air Europe, Air Astana and so on to provide convenient travelling options and retain its position as desirable airways. The airport of the Etihad is going through a transformation to balance the traffic growth which is called forecast and it immensely helps in the whole process of journey or travelling through air (Etihad.com. 2022).
Effective payment gateway is also a part of the process of distribution as customers are looking for secured payment and several options of payments such as debit card, credit card eases the process of distribution for national and international passengers. Good payment gateway serves as a benefit for the customer as well as it boosts the whole distribution network system of the airways company. Airways companies hire low cost carriers (LCC) to focus on getting effective and punctual service by reducing unnecessary benefits and cost, providing only basic requirement needs for flying (Lohmann and Spasojevic, 2018). Etihad secure logistics as well as cargo ensures the process of safe collection, transportation, handling, storage and delivery for the valuable goods and it ensures the distribution network system and it enhances the targeted customer base (Etihad.com, 2022).
People
People play a pivotal role in the marketing mix and it refers to the people involved in advertising, selling, customer service, sales process and so on as to ensure a good service at the end of the day. The airways company effectively recruits people to meet the desired productivity as the specialist people may recommend various strategies to enhance the service as well as taking competitive advantages. In addition to that, the specialist people may give proper advice to the company through identifying the targeted consumer, assessing the latest trend, and setting a plan to implement the advertisement in the right time to help the company to create competition for other companies in the market. People related to Customer Relationship Management (CRM) is also an important part of marketing as the feedback process is the most effective tool to earn satisfaction of the customer. Etihad provide live chat facility through Twitter and Facebook 24 hours a day to the passengers to solve the passengers’ enquiry effectively and provide proper solutions which may help the company to maintain its brand image (Refer to Appendix 4). The airways company may give latest training regarding technologies or better performance to the employees related to advertising, customer service, and sales to ensure the desired productivity for the success as effective performance and productivity enhance branding of the company. Moreover, Etihad provide refund opportunity to the customers within 24 hours of purchasing the ticket through which the prime customers utilise this airline tickets for the destinations and it increase brand reputation (Refer to Appendix 5).
The company also hires people according to desired criteria of the company in sales as the proper sales strategies help the company to ensure retaining of targeted customers as well as increase the base. Moreover, the employee also matters in the case of customer service, sales process and for this reason the company may recruit people after checking their interpersonal skills. People related to marketing research are the key options to perceive customer expectations, understand the need of the customer, knowledge of services and to do the marketing research properly the company may hire the people carefully (Wilson, 2016). Etihad aviation training such as carbon crew training effectively prepares employees in order to provide better service to meet the demand of the passenger as well as ensure proper service (Etihad.com, 2022).
Processes
Process is the way through which the company provides the service to the consumer smoothly as well as flawlessly and suitable customer interface to retain the brand name of the company. The company has to ensure the convenience regarding the website, the feedback process, the activity of the work, process of the delivery system, tracking of the cargo product and many more. In the recent days the Information Technology (IT) supports the company to deliver the service through desired interface to satisfy the customer and to retain the brand image of the company. Artificial Intelligence (AI), blockchain technology and various other modern technologies ensures better processing for the company and helps to meet the expectations regarding service of the passenger. Chatbot including massive advanced AI helps the airways company ease the process to reach the passengers as well as customer to get better feedback and solution of the problem with the help of desired conversation (Brandtzaeg and Følstad, 2018).
The airways companies try to implement personalized customer service with the help of social media, technology to maintain constant connection with the passengers to boost the confidence of the customer. The packaging of the product for the cargo is important in case of delivery of the product and proper packaging is really important to meet the expectations of the customer as well as to retain brand loyalty. Etihad effectively manages waste in the time of flying as well as the packaging process by avoiding the plastic and maintaining sustainability which attracts the passengers and customers due to awareness of the company regarding pollution (Ethiad.com, 2022). Green packaging is one of the company’s competitive strategies in modern days to attract customers as well as a powerful sustainable target to retain the position in the competitive market (Auliandri et al., 2018). Etihad’s well developed guest app plays an important role to help the passengers from checking the airport to arrive at the destination which ensures the whole process of journey is more convenient for the consumer.
Physical Evidence
The physical evidence is another P of marketing mix and it refers to the quality of the service particularly in terms of funding and specially the branding strategies and promotional tools to achieve the desired result in marketing. Physical environment, interaction, outcome quality are the ways to measure the satisfaction of the consumer and the airport service quality ensures the reuse of the company as well as the brand loyalty (Hong et al., 2020). Physical evidence includes the shape of the vehicle, the designs of furnishing equipment, quality of meals, airport lounge facility to assess the service quality and ensure expected service for the customer. The ambiance is one of the important physical evidences which play an important role in the air industry including the condition of the aircraft. Flawless take off and arrival as well as music time in the airplane as well as the lounge may determine the quality of entertainment for the consumer. Views as well as cleanliness is important for the companies as cleanliness maintains hygiene and the option of customised seats offers the passengers to enjoy the journey and satisfies them.
Air ambiance is well connected with sales, market share, and profitability of the airlines company as it helps the passenger to reduce the stress and enhance the comfort. The airline’s passengers expect the pilot, cabin crew, engineers to be well trained and highly competent as travelling air is a huge risk and the competent personnel boost the confidence of the customer. The accuracy of the air personnel in providing benefits of the travel assures the passengers and motivates them to avail the same airways company repeatedly. Service system is another key facility of the physical evidence for the passengers as they expect to know the details about cancellation or want to avoid unexpected delays, and expect proper checking systems. Etihad shows immense perfection in the service system as it provides the latest update through the app and hires competent personnel to deliver a higher level of service to the passenger.
Market segmentation, targeting and positioning of Etihad
It is the duty of every company to implement market segmentation, targeting and positioning policy to achieve more profitability and stability in the existing market. One of the main features of the marketing of Etihad is that it is global in nature and for that reason, the company needs to make an effective marketing policy to target the global customer of the company. It is one of the prime responsibilities of a company is to develop an effective marketing strategy that may help the organization in producing the desired outcome in the existing market and creating more value to the business (Kotler, 1972). The management of the company also implements the marketing segmentation framework in order to divide the market or target the customer base of the company in a more professional manner. The company mainly uses two types of marketing segmentation strategies as demographic and psychographic. The successful implementation of demographic marketing segmentation always helps the organization in identifying the income level, occupation types, age, and nationality of customers which is useful for the company in targeting more customers. Moreover, the main approach of using psychographic segmentation is that it helps Etihad to understand the lifestyle and personality of customers.
The company is also focused on enforcing the satisfaction levels of customers while it has been observed that if the service of a company will not be able to satisfy the customer then a brand will not be able to improve the positioning in the market. According to a journal, customer satisfaction plays an essential role and matters a lot in generating extra revenue or profit for the company and for that reason customer satisfaction needs to be endured by the company (Basari. and Shamsudin, 2020). The management of Etihad also follows product orientation and selling orientation strategy which plays a vital role in increasing the customers of the company which will provide extra competitiveness to the company. The excellent customer service and marketing strategy is also influential for the growth of the company and targeting more customers in the international market which strengthens the brand position. One of the main approaches of marketing management is that it always helps the company in increasing the numbers of customers through making effective communication and delivering superior customer service which increases the value of customers. Etihad also believes in increasing the revenue levels by increasing the customer satisfaction level with the help of providing superior customer service in national and international flights. It is one of the main duties of the organization to implement marketing and promotional tools which will attract more customers and increase the number of customers for the company and provide strong competitiveness during the post-Covid-19 situation.
Conclusion
From the discussion it may conclude that, the Etihad is a well known company which operates airline service in a world wide range from east to west with effective marketing strategies as well as takes competitive advantages in the international market. The proper structure of the company as well as the political, economical, social, technological, environmental, legal atmosphere of the home country is suitable for the business. The marketing mix of the company is effective in terms of service, place, process, physical evidence, price and so on in order to retain the customer base as well as its position in the international market.
Recommendations
The recommendations for the airways company are following:-
- The company should focus on the Customer Relationship Management (CRM) with the help of customer behaviour theory to meet the expectation if the customer
- The company should implement AI based model in CRM to improve the feedback process to enhance consumer loyalty
- The company should hire digitally updated employee to meet the required demand of the service as the passengers nowadays are tech savvy
- The company should focus on the web designing to ensure better advertisement as well as attractive social media response to compete with other rival companies
The airline companies may face several issues in case of various operations and it may obstruct the growth of the company and for this there are some recommendations for the company to retain the position in the competitive market. The feedback process should be updated from day to day as the customer service enhances the growth of the company as well as the brand image of the company. The model based on customer relationship behaviour theory should be implemented to obtain effective results as it includes seven interrelated steps such as leadership model, customer model, measurement model, strategy model, and many more. Three domains of CRM such as personnel capability, service capability and customer orientation play an important role in meeting the expectations of the customer which helps the company to retain its position in the international market (Bhat and Darzi, 2018). AI integrated customer service should be implemented to maximize the airways company’s overall profit as well as retain the loyal consumers and to ensure the technology related service company should hire specialist employees (Chatterjee et al., 2020).
The company should hire digitally trained employees as after the pandemic almost all the operations are happening through digital platforms and the passengers are also becoming more tech-savvy. Social media marketing activities are extremely popular these days which also influences brand equity as well as the response to the customer for the airways company (Seo and Park, 2018). The airways company should hire specialists on web designing to make the advertisements as well as social media interactions more attractive in comparison to the other well known rival companies. The company should maintain the current protocols regarding the pandemic to ensure the safety of the customer as well as to earn satisfaction of the customer to retain its position in the competitive market.
References
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