Aviation Industry Is Facing Many Environmental Forces Marketing Essay

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1st Jan 1970 Marketing Reference this

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Strategic marketing planning is the process involves deciding on marketing strategies and developing and maintaining a strategic fit between the organization’s object and abilities in the light of changing marketing opportunities.(Kotler & Armstrong, 2009) .

The process concludes planning, implantation and controlling, through measurement, plans can be adjusted to meet the market needs to circulate the procedure concordantly. The planning step concludes environmental scanning which is process of collecting information about the marketing environment as well as monitoring, forecasting, assessing the information gathered though scanning.

Besides, it is undeniable that environmental scanning is vital in the marketing planning process. Firstly, it provides a base of objective qualitative information about the environment that strategists can utilize (Allan, 2007); secondly, it sensitizes the company to the dynamic needs and preference of its customers; thirdly, it helps the company capitalize on early opportunities and provides an early signal of impending problems; forthly, it can also make the company keep an eye on its competitors and respond quickly to some uncontrollable events.

Taking marketing positioning into consideration, Singapore Airlines is a full service airline and focus on adding value for high-end travelers. Therefore, the company scans the marketing environment to seek for benefit for their target consumers. Realizing Airbus A380 is the world’s most advanced, spacious and efficient aircraft, and it provides large spaces and additional services for customers, which is completely match with the company’s goals, so Singapore Airlines makes deal with Airbus through sufficient marketing scanning.

Nevertheless, environmental scanning can not always be perfect as its limitation still exists. Even today’s aviation is a pure competition market; information that can be selected by the public is inadequate and may not that reliable, especially for those listed companies, most of their financing statements are attractive and only provide the positive side that will confuse the outer groups. Moreover, the secondary information may be not timely while the first hand information is too costly.

Question 2

Microenvironment consists of factors and elements in an organization immediate area of operations that affect its performance and decision making freedom. (Kotler & Armstrong, 2009) There are six components of microenvironment: firstly, the company’s internal environment, which is composed of company groups, such as management personnel, finance, research and development, purchasing, operations, marketing and accounting; secondly, the company’ suppliers, which form a critical link in the company’s overall customer value chain and. They provide the resources needed by the company to produce its goods and services. Thirdly, the marketing intermediaries, which is regarded as all the individuals, organizations who help in the promotion, selling, and distribution of products, they includes resellers, physical distributions firms, marketing services agencies and financial intermediaries. Fourthly, the customer factor, consisting of the five types of markets (consumer, business, reseller, government, and international markets), so that products the company sells must be specialized and customized carefully. (Freedam, J & Godwin, M 1994) Fifthly, competitor, the marketing concept states that a company must provide greater customer value and satisfaction that its competitors and do more to satisfy target consumers in order to be successful; the last factor is various publics which are any group that has an actual or potential interest on or impact on an organization’s ability to achieve its goals.

Supplier

Referring to the case, it is evidently that the supplier of aviation industry is plane manufacturers which are Airbus and Poeing. It is widely known that Airbus and Poeing have dominated this market for a long time and they occupy large market shares. They produce different kinds of planes to meet their different customers’ needs. For example, more advanced and spacious airplanes (Airbus A380 and Poeing 747) are produced for those full service airlines such as Singapore Airline, Emirates and Qantas. While simultaneously, relatively economic airplanes (Poeing 737 and Airbus A320) are comparatively fit for budget air travel companies such as Air Asia and Virgin Blue. Besides, they also commit themselves to innovated and creative area to devise and fabricate new airplanes to adjust the new marketing environment. For instance, resulting form current world condition, Airbus develops A380 to be more environmental friendly, less fuel consumption and of higher performance and lower running cost. What’s more, an important and serious matter for supplier is timely delivery while delayed delivery happens to A380 that cost a lot to Airbus. In addition, Poeing and Airbus are absolutely adversaries.

Competitor

Turning to the competitor factor, which plays vital role in the microenvironment, has momentous performance in aviation industry. Two types of competitors are listed:direct competitors,and indirect competitors. Experts define direct competitors as organizations offering similar type of products or services to satisfy similar type of customers. According to this case, Singpore Airline, Qanta and Emirates are competitors referring to the full service airlines. They should spare no effort to provide adequate space, a series of homelike services, and other augmented services before boarding in the plane and after leaving the airport. However, in the area of budget airlines, the competition is keen with is formed by Air Asia, Tiger Airways, Virgin Blue and Jetstar. These companies are concentrated on minimizing the cost and providing convenient service. For example, Air Asia Airline only files two types of aircraft, the Airbus 320 and Boeing 737 to reduce staff training as well as operations and maintenance costs. ( )

Additionally, indirect competitors are organizations offering similar products but serving customers with different characteristics, needs. Full service airline and budget airline attract customers in the different ways but compete with each other drastically. The aviation industry has been reigned by full service airlines for many years as they hold some advantages. They offer meals, drinks and other additional services in the aircraft. Moreover, they provide large personal space, adjustable leather headrest, showing they are circumspect and customer oriented. Surprisingly, some companies such as Etihad Airway takes further offering of a chauffeured limousine service for its first and business class passenger to show the customers are exalted and of high social status. All benefits full service airlines offers aimed at forming noticeable impressions and reputations on customers. Nevertheless, budget airline focuses on low price and low cost. As globalization process develops, many people have to take plane frequently while the cost is limited. Thus, budget airlines appears and booming fast. In conclusion, full service airlines insist that the how much value the customer will receive is far exceeding how much customer has paid whereas budget airlines state to make everyone affordable to fly.

Question 3

With corresponding to microenvironment is macro environment. Macroenvironment is defined as universe of sociological elements (major external and uncontrollable factors) that affect a company’s ability to serve its customers or sell its goods and services. (Kotler & Armstrong, 2009) It consists of six forces: demographic, economic, natural, technological, political and cultural forces.

Demographic Environment

Demography is the study of human population in terms of size, density, location, age, gender, race, occupation and other statistics. (Kotler & Armstrong, 2009) The demographic environment is worth consideration for marketers because it involves people and people make up markets. In recent years, the aviation industry in Asia is booming, resulting from the tremendous potential of aviation industry (large population, high density and mobility).

Natural Environment

The natural environment involves the natural resources that are needed as input by marketers or that are affected by marketing activities (Leong, S. M, 2009). Nowadays, because of energy shortages and environmental pollution, the world begins to increase environmental concerns, and the aviation industry is no exception. (Pappas C. 2005) For instance, the A380 is designed based on the concept of environmental protection as the center, which is called as “green aircraft” and its average power generated by each of the carbon dioxide is low.

Cultural Environment

The cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors. Actually, influenced by cultural environment, some passengers may prefer Airbus to Boeing.

Other important factors:                                                 

The development prospect of the aviation industry is vast. Throughout the aviation industry in the macro environment, some factors are likely to have the greatest impact on future growth of this industry: economic, technological and political environment.

Economic Environment

The economic environment consists of factors that affect consumer purchasing power and spending patterns (Kotler & Armstrong, 2009). OnceAirbus and Boeing are monopolizing the market for a long time. Nowadays, great changes have taken place. Many airlines introduce two types of services: full service airline and budget airline. Singapore Airlines, Tiger Airways are focusing on full service in the market, then some airlines launch budget service airline in accordance with the needs of the market. (Hakim C 2007)

When talking about the future growth of the industry, economic environment includes currency income, living cost, interest rate, saving and these economic variables influence macro-environment greatly. Economy is the foundation of all the aviation industry activities. Interest rates, inflation, exchange rate, GDP growth, may influence the development of the aviation industry. For example, the current financial crisis is sweeping the globe and causes a great loss to the global aviation industry.

Technological Environment

Technology is the primary productive force. The technological environment is perhaps the most dramatic force shaping our destinies, which are forces that create new technologies, creating new product and market opportunities.

In aviation industry, the innovation and upgrading of technology is revolutionary. For the purpose of competing with Boeing, Airbus works hard to research and develop new aircraft, and ultimately develop the A380. The “Big bird” has ended the almost 37 year reign of Boeing 747 as the World’s most spacious passenger plane. Powered with four Rolls-Royce Trent 900 engines, the A380 is the largest aircraft, as well as being held to be “cleaner, greener, quieter and smarter”.

Creative changes in the development of new technologies can determine the future of the airlines. With the rapid upgrading in technology, if there is no advanced technology added in the plane, it can be easily fall to disuse. Moreover, the more technology is added, the more profit the manufacturer can receive.

Political Environment

The political environment includes all laws, government agencies, and lobbying groups that influence or restrict individuals or organizations in the society. (Kotler & Armstrong, 2009) In aviation industry, Governments plays vital roles. On 25 October 2007, A380 made a flight from Singapore to Sydney, which marked a major milestone in the history of aviation. As it has been dubbed by the Australian air traffic control-landed in Sydney. As a result, Singapore Airline gained early mover advantage in the publicity stakes in Australia that built a knockout and attractive reputation.

Business operations are subject to political and legal forces. In the process of development of the aviation industry, some countries may implement air traffic control or limit other countries’ airlines by law into its own countries, to support and protect the national aviation industry. These factors are likely to have great impact on future growth of the aviation industry.

In conclusion, economic, technological and political environment are likely to have the greatest impact on future growth of this industry.

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