AVA20010 Aviation Legal Framework
March 4, 2023
Master of Business Administration
March 4, 2023
Introduction
The assignment on marketing strategic development has been undertaken to unravel the operating environment of a concern from a marketing perspective. The organization selected for further analysis is Singapore Airlines Limited which is a highly successful airline transportation business. The initial section will include an overview of SIA, the airline industry in which it operates its market orientation, and its offering to customers (Bagautdinova, Gafurov & Kalenskaya, 2013).
As the topic progresses further, the 5 main elements namely company, customer, collaborator, competitor, and context that are vital in making marketing decisions by SIA will be analyzed. The process adopted by the business to collect market information is covered and a new marketing strategy and marketing tactic has been developed to support the market strategy (Banerjee & Soberman, 2013).
Organisation Overview
The Singapore Airlines Limited (SIA) airline firm officially began its operations in 1972. During the 44 years of its existence, it has successfully expanded its business and included better and more innovative carriers like Boeing 777, and Airbus A380, etc which help it to have a sustainable existence in the airline sector (Chaffey, 2016). Since SIA ranks amongst the top 15 air carriers all around the globe in terms of its revenue passenger kilometers, this organization has been selected for further analysis. Singapore Airlines travels to 200 destinations located in 70nations on 6 different continents. This vast operational scope encourages studying its market approach.
Airline Industry and Marketing Orientation of SIA
As per Fraga, the airline industry involves all the businesses that offer air transportation services for traveling passengers and freight. The participant airlines use aircraft to provide their services. Different air carriers vary in the magnitude of operations based on their nature i.e. whether they are domestic airlines or international airlines (Fraga, 2016). The competitive intensity in the airline industry is quite intense and SIA has a special place in this industry since it was the very first international airline firm to operate A380 which is the world’s largest passenger air carrier.
Singapore Airlines adopts a unique marketing orientation by placing customers at its core. It has adopted a learning orientation that is based on continuous improvement so that it can be the best airline that provides world-class cabin crew service and the best travel experience. As per Griffith & Hoppner, the focus on high-quality customer service by incorporating innovation, the latest technology, and genuine quality helps it to maintain its solid position in the market. The main service offered by SIA is its best-in-class flying experience for its customers (Griffith & Hoppner, 2013).
5 Cs of SIA
This section on the 5 Cs is vital since it incorporates a thorough analysis of different factors that affect the marketing decision of Singapore Airlines Limited. The areas namely company, customer, collaborator, competitor, and context have been assessed for a better understanding of their role in the current marketing scenario of SIA.
Company – According to Jenkins & Samiee, the most vital strength of SIA is its excellent service quality and focus on supreme customer service and hospitality aspects. The airline tries to improve its business model by adopting the latest technology and giving better training to its crew so that the customer experience is enhanced. One of its weaknesses would be its focus on the premium section of society (Jenkins & Samiee, 2016). This approach shrinks its target audience and overall profitability in the industry.
A new opportunity for SIA would be to explore more international and exotic destinations so that it can leverage its successful brand image (Katsoni & Venetsanopoulou, 2013). A threat to SIA in the current market environment is the rising competitive intensity in the airline industry due to the existence of a large number of rivals like Cebu Pacific, AirAsia, etc. Another threat that exists is the rise in fuel costs which minimizes its profit generation capacity.
Customer – As per Liu & Ko, the customer base that SIA targets is the high-end audience with high-income earnings who are willing to experience premium quality travel by air. Its most profitable market segment includes business and first-class passengers who value comfort over price. Since the customers of SIA are mostly wealthy, they prefer to experience premium quality flying with the best cabin crew service (Liu & Ko, 2014).
Collaborator – It includes the various partners of SIA basically outside parties like suppliers, distributors, etc. A vital collaborator of SIA is its suppliers of fuel since the fuel expenses of the airline are very huge. The rising use of brand collaboration is an important strategic decision to improve the passenger experience. SIA collaborated with the BMW brand to design the carriers’ 777 top-class cabins.
Competitor – This is a vital area since it impacts the profitability of Singapore Airlines in the airline industry. The presence of low-cost airlines has increased and this has increased the competition level in the airline sector (Popkova, et al., 2013).SIA is under great pressure due to the expansion of the Middle East’s ‘Big Three’ airlines namely Emirates, Qatar Airways, and Etihad Airways. The yields of SIA have declined due to rising competitive intensity. Its key competitors are Cathay Pacific Airways Limited, AirAsia, etc.
Context – The airline industry is exposed to various other elements that influence the profitability of the participants that operate inside it. The political and legal scenario involving changes in rules and regulations relating to passenger safety and security measures, flying operations, basic infrastructure requirements, etc. affect SIA’s performance (Lockrey, 2015). Similarly, the current technological scene motivates Singapore Airlines to spend a large amount of money for the introduction of new fleets with updated cabin products so that customers can have a premium quality experience and the airline can enjoy a competitive advantage against its rivals (Sabirova, 2014).
Singapore Airline Limited’smarket analysis
Singapore Airlines Limited has consistently outshined other airline participants in the uncertain business industry. It is essential to understand the process adopted by SIA to efficiently examine its industry environment and formulate business strategies that help it to have sustainable growth in the highly competitive sector. As per Navas & Anoop, the airline believes in maintaining strong partnerships within its process chain n order to explore ways to improve its sustainability performance across all aspects of its functions (Navas & Anoop, 2016).
Singapore Airlines conducts market assessment and market research on a regular basis in order to make important decisions relating to its business operations. Such a kind of market analysis helps the business undertaking to understand its various stakeholders including customers, employees, shareholders, and suppliers, all of whom closely operate with the airline and are vital for the success of SIA. As per Popkova, et al, by carrying out a thorough analysis of the highly competitive and uncertain airline sector the SIA has successfully devised its business model and marketing strategies that help it to maintain the reputation of an innovative market leader that offers a combination of high-quality products with excellent service after considering the prevailing market conditions (Popkova, et al., 2013).
The thorough analysis of different elements existing in the market allows SIA to understand the changing trend of its customers, steps taken by the rivals in the airline industry, the new elements that gain power in changing environment, etc. Thus an effective analysis and research by SIA help it to modify its business design in order to suit the changing market (Sabirova, 2014).
Values of SIA
Singapore Airlines Limited has dedicated itself to offering the highest quality air transportation services in order to enhance and maximize the returns of its different stakeholders and customers. Its value model has been created after studying the different areas that affect its market decisions. The value of SIA encompasses the areas namely excellence, safety, customer priority, concern for staff, integrity, and teamwork.
According to Vozņuka, SIA believes in maintaining the best professional standards while doing its activities to give the best quality experience to its customers. The airline considers safety to be an essential component of its entire operational activity and adopts practices and processes that promote the safety and well-being of its customers and staff. The key value of SIA that forms its framework is that it considers its customer to be the principal of its very existence (Vozņuka, 2014).
This approach allows the firm to deliver in such a way that exceeds the expectations of its customers. The airline gives equal importance to its staff and employees. They are given necessary training and development opportunities so that they can have fulfilling and bright careers in the airline industry. The airline strives for fairness in its entire business and operational process. SIA conducts its business tasks with pride and enthusiasm as a united team so that they can succeed in the airline sector.
These values are formed by SIA after a thorough analysis of various market elements is conducted that govern the airline industry. Hence market research is a vital aspect that has allowed Singapore Airlines to adapt to the changing environment and achieve substantial returns in the industry (Xiang, 2014).
Market Strategy
The section discusses the marketing strategy of Singapore Airlines Limited. Market strategy can be devised only after genuine and thorough research of the market has been conducted. A better understanding of the market scenario is vital to devise a market strategy that will help the business undertaking to have a sustainable performance in the highly competitive and uncertain airline industry. The potential market segment of Singapore Airlines has been highlighted in this section (ZHOU, JIA & GAO, 2014).
Segmentation
As per Griffith & Hoppner, the decision relating to segmentation by SIA depends on a number of elements. Currently, the customers of Singapore Airlines are located all around the globe and they have different wants and needs. Mostly SIA focuses on the premium customer segment of the market which mostly limits its profit-making capacity. It must try to tap the market with the middle-income audience so that it can give stiff competition to budgeted air carriers and have a stronger market position in the airline industry.
Targeting
The target market of Singapore Airlines can hence be expanded and people from different income backgrounds can be considered in its targeting activity. It should not just consider the elite air travelers but also economy class passengers since currently this section is rising at a fast pace and it has the power to influence the market performance of a business undertaking. Due to rising competition intensity, SIA has already started targeting normal passengers but this operation is pretty new as compared to its original business objective of targeting only the high-class section of society (Banerjee & Soberman, 2013).
The value proposition for its target section would be its innovative approach to enhancing the passengers’ flying experience. Its continued focus on its fine quality products with excellent service gives it an edge in the airline industry. The updation of its innovative business design gives it an advantage over its competitors in the industry and this feature gives its passengers a highly delightful experience (Chaffey, 2016).
Positioning
Since Singapore Airlines Limited initially targeted only the high-income section of society, it adopted the premium positioning model which focussed on a high-quality flying experience.SIA’s positioning strategy has always used a Singapore Girl as the main element in its marketing function.
But since the changing airline industry has encouraged the airline business to target the middle-class section of society as well, for this marketing move it needs to adopt a different positioning strategy that does not just focus on the premium audience and allows it to send across the correct message to its concerned target audience (Griffith & Hoppner, 2013). Singapore Airlines uses the tagline – “A Great Way to Fly” in its promotional activities in order to send its message regarding the quality of its airline brand. On some occasions, it also uses the statement “A standard of service that even other airlines talk about” to focus on its high-quality service.
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Marketing Tactics
The market tactics section includes a newly developed marketing mix of Singapore Airlines Limited that can be useful for the airline business. It basically includes the details relating to the product, price place, and promotion aspects of Singapore Airlines Limited and supports the marketing strategy that has been discussed in the above section. The recommended marketing mix of SIA would have certain characteristics which have been highlighted below.
Product – Singapore Airlines’ offerings mostly include high-quality traveling experience that brings customer delight. This product is mostly targeted at its premium customers. But since the marketing strategy that has been developed suggests the airline business focuses on customers from various income backgrounds, it should include more variety of products and services that can match the needs of the lower-income section and doesn’t hurt their financial condition (Liu & Ko, 2014). It could minimize some of its high-class elements like a 24-inch entertainment screen, comfortable seat with bed option, and adjustable in-seat lighting so that it should charge less ticket fee from this section of the target audience.
Price – Just as mentioned in the Product section, the pricing by Singapore Airlines Limited for the middle-income target audience should come with more price variations so that they are able to experience the service quality provided by the reputed airline firm without straining their pockets. The ticket pricing strategy adopted by the SIA must be reasonable so that no section of the target audience suffers and feels neglected.
Place – Singapore Airlines mainly operates in Singapore and it has its headquarters base at Airline House in Changi, Singapore. SIA mostly operates from its hub which is located at Singapore Changi Airport. In order to focus on a wider audience, it can expand its place aspect in its marketing mix so that people from different corners of the world will be able to use the airline facilities to travel to their desired location.
The expansion of place will have a positive impact on its networking and it will help the airline business to increase its profitability in the highly competitive airline industry.
Promotion – In the current marketing scenario, promotional activity is a vital component of the marketing mix of a business concern since it determines its reach in the entire market platform. SIA uses effective promotional tactics to have an advantage over its competitors in the airline sector. It has already launched a scheme called the “Frequent Flyer program” to reward the customers of SIA who are loyal to its brand by offering different kinds of incentives (Griffith & Hoppner, 2013). It can adopt a similar promotional strategy while targeting middle-income and lower-income sections of the audience. It can also increase its presence on different social networking sites so that it can effectively advertise through its official website and use popular portals and platforms like Facebook, Twitter, Instagram, and YouTube.
The use of the suggested marketing mix strategy by Singapore Airlines would help it to tap into a bigger market and earn more profits while giving stiff competition to the other participants in the airline sector (Navas & Anoop, 2016).
Conclusion
This assignment focuses on the market conditions of Singapore Airlines and throws light on the various marketing aspects which need to be considered in order to have sustainable growth and performance in a highly competitive and unpredictable airline industry. A marketing strategy for SIA has been designed so that the business firm can have a greater scope to earn more profits in the airline industry. Then a marketing tactic involving the marketing mix of SIA has been recommended so that it complements the suggested marketing strategy. All aspects have been taken into account to conduct a thorough analysis of Singapore Airlines and its operating environment from a marketing perspective.
References
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