Marketing Plan For Etihad Airways

Etihad Airways, the National Airline of United Arab Emirates started by the Royal Decree with Abu Dhabi as the corporate hub commenced its operations commercially in November, 2003. This project aims at studying the current marketing position of this new entry into Singapore aviation industry, details out the plan of strategies for more effective outcomes so as to convince Singapore customers and promote Etihad Airways. The study is focused mainly on the First Class and Business Class product segments of Etihad Airways.

The study is further carried out by briefing out some important introductory details required, describing the current marketing scenario, reviewing its product segments, competition and various channels for Etihad Airways. These sections highlight the performance of Etihad Airways, how well it is contributing its services in different regions and how can it be a preferable option for the Singapore customers. They help us in understanding Etihad’s competencies, vulnerabilities, products, the various available opportunities and challenges that an Aviation company can face.

Further SWOT analysis is being conducted and the results are analyzed to strategize on the organizational objectives and marketing mix. It details out the Positioning, Product, Pricing, Place and Promotion strategies. It also sheds some light on how the organizational goals can be achieved through these strategies by detailing out the action programs, budgeting and control requirements.

Current Marketing Situation

Market Description:

Etihad Airways, the National Airline of United Arab Emirates started by the Royal Decree with Abu Dhabi as the corporate hub which commenced its operations commercially in November, 2003. It provides an international network from Abu Dhabi, the capital of United Arab Emirates to around 64 destinations covering 42 countries worldwide. The Airways current operates with 54 different types of aircrafts which includes MD 11Fs, A319s, Boeing 777s, A320s, A330-200s, A340-500s, A330-300s, and A340-360s.

This project mainly deals with the Etihad Airways in Singapore region to improve the functioning of Etihad in Singapore. Singapore, located at such a hemisphere acts as an incredible link between west and east. Singapore remarked as the best holiday destination, honeymoon spot and industrial centre, has got good air connectivity all over the world with large number of passengers travelling to and from it. Etihad Airways providing the international air transportation offers the best of its services and packages to make a safe and sound trip to Singapore. Singapore Aviation Industry is the busiest air hub in Asia providing various services of maintenance and repair as well. Singapore has got the best liberal aviation policy in the Asia region which opens up the market for domestic as well as foreign players to establish their airlines.

Etihad Airways is led by the best Management team and a supportive, excellent Board of Directors. The Management team is led by Mr. James Hogan, CEO of Etihad Airways and the Chairman of the Board, HH Sheikh Hamed bin Zayed Al Nahyan.

It provides the best hospitality which reflects the true culture of Arab which gives the feeling of warmth and generosity thus enhancing the Arab prestige and glory.

Etihad along with air transportation is also diversified into various other industries which include its operations into Holiday spots, Gamings- Rugby, Football, Racing, and Golf and into Crystal Cargo which takes care of the customer’s treasured possessions. Etihad Holidays meets the tourism need of the travelers. Etihad Gaming provides the best entertainment clubs and features for the travelers with excellent and high fashioned equipments and treatments. Etihad crystal cargo deals with the international transportation of cargo goods, treasury and such goods. Etihad’s total portfolio comprises of 60% from the Airlines, 20% from the Crystal Cargo and 10% each from the Holidays and Gaming.

Regarding the products that Etihad Airways offers, Etihad guarantees with excellent travelling practice both in flight and on the ground providing passengers with three types of classifications: First Class which is considered as Diamond Class, Business Class also called as Pearl Class and Coral Economy Class.

Reflecting the Etihad’s performance and effectiveness, Etihad Airways has grabbed many awards. Few of them include the best Airline of the Year 2010 in the Aviation Business Awards presented in the year 2010. It grabbed the World’s Leading Airline award for the second continuous year in 2010 in the World Travel Awards. In the product segments it offers, it also has achieved the Best First Class Provider Award in the Business Travel Awards and the Best Business Class Airline in the Irish Travel Trade Awards for the year 2010. Along with these it has been awarded with many such achievements throughout the year.

Product Review:

As mentioned above, the product portfolio of Etihad, depending upon the service or the field it entered into; Etihad has offered best of its ability delivering customer focused service. In the Aviation industry, Etihad Airways has delivered three main types of products to all the types of customers. These include the First Class or Diamond Class, Business Class or Pearl class and Economic Class or Coral Class. These products have shown an increasing performance and thus made Etihad committed to upgrade its Economic class cabins and Business class cabins. It also has recently upgraded new First class suite in around 14 aircrafts which would be available by 2010 and the First class cabin would further be increased into 17 aircrafts by 2011. Etihad offers superior services to make customers enjoy a comfortable, excellent, smooth and fast travelling experience.

This project focuses more on the first two product segments, Diamond First Class and Pearl Business Class of the Etihad Airways; since they offer special and attractive services to the passengers.

Diamond First Class: Etihad provides excellent five star boutique hospitality and services in the Diamond First Class suite. It includes a luxurious and comfortable Poltrona Frau Leather seat which can be rolled out to be a flat bed, a big enough well finished wooden table, doors available to provide the complete privacy, power points and USB ports are provided for connecting power devices, a 23 inch personal entertainment screen, a personal wardrobe, a mirror and lighting options with dimmers are made available. The new First class suite is currently made available on Abu Dhabi- London service, and soon would be available on 14 aircrafts between different nations by 2010 and would also increase in number to 17 aircrafts by 2011. The Diamond First Class product of Etihad Airways has grabbed the Best First Class provider Award in the Business Travel Awards, 2010.

Pearl Business Class: Etihad Airways provides a comfortable convertible well featured chair cum flat bed with a 15.4 inch personal entertainment screen, a long table big enough to have a comfortable dine, headsets, plug points and lights with dimmer settings. In the recently introduced Business Class cabins, long and wide 1-2-1 configured seats are provided.

Coral Economic Class: This is the basic class offered for all the passengers with new comfort cushion seats and pillows are provided along with a small 10.4 inch entertainment screen. It makes the seats more comfortable and individual with the cup holders and coat hooks provided. Extra support and care is provided for the families in flight at boarding as well.

The Dining especially in First and Business Class is more exciting with a special menu to place order, high quality food and the beverages provided and the managers are hired from well established brands in the markets. The passengers or travelers in these classes can dine when they wish to. From the world’s best vineyards, wines are served to the travelers in these two classes. Coral Economy class passengers too have their flexibility to choose their food from choice of three menus made available and can also select complimentary drinks.

The personal entertainment screens are made available to the passengers in all the classes to let them enjoy movies, music, games, TV shows and specific channels especially for kids. Plug points and USB ports are also provided at every seat so that individual can connect their laptops and mobiles for their continuous entertainment. Recently Etihad is upgraded these entertainment systems with Panasonic eX2 systems to make them more attractive.

Amenity Kits, Family Packs and special attention, care for family persons, and Duty free shopping facilities are some extra features that are provided to the passengers through its products in Etihad Airways. These are the services offered in flight in the products of Etihad Airways.

Even on the ground, Etihad provides special services depending on the product segment of the passenger. The First Class and Business Class travelers are provided special luxury lounges. The First class lounge includes special services like Champagne bar, la carte dining, Cigar lounge and Six senses spa. In Business class, along with Six senses spa passengers can enjoy international cuisine and few entertainment options. Special care is taken for children and kids, and special prayer rooms are also provided for the passengers.

Based on the BCG Matrix, which measures the products between two dimensions of market share and market growth; Coral Economy class which has got low market growth and high market share falls under COWS. Even the Diamond First class falls under the same category. The Pearl Business class comes under STAR which would be high on both market growth and share. Among the remaining businesses Crystal Cargo also falls under COWS, while Gaming Express 2D and Holidays are the QUESTION MARK products with relatively high market growth and low market share.

The BCG Matrix (Boston Consulting Group) is the matrix between the two dimensions MARKET SHARE and MARKET GROWTH. It helps in determining the priorities to be given for the product portfolio. For a long term success in the business, a firm should go for high growth products which are in need of cash and low growth products which generate high amount of cash. The terms mentioned above are explained as:

Competitive Review:

Since we have considered the region of Singapore among the various regions of Etihad Airways services, we review the competitors based on this region only. The leading Airways in Singapore Aviation industry includes: Singapore Airlines, Qantas Jetstar Airways and Tiger Airways. Singapore Airlines, being the established brand in the Asian Aviation industry stands as the main competitor and Etihad being a young non local player in Singapore Aviation industry faces stiff competition from it. Though Jetstar Airways and Tiger Airways compete to the equal level; Singapore Airlines providing excellent services, using advanced technology and innovative products, and practicing best human resource management acts as the best competitor to the Etihad Airways. Jetstar Airways and Tiger Airways providing low cost air transportation act as next best competitors especially while maintaining the price for Etihad.

Etihad extending its services into Holidays, Crystal Cargo also faces stiff competition from others as well in an indirect way. The Telecom industry upgrading and improving its technology, arranging video conferencing and online meetings would be a stiff threat as it leads to less amount of travelling through air indirectly through Etihad. Similarly, the Holiday Cruise Line providing holiday setting and hotel setting activities along with many other extra features and making people enjoy their holiday while transporting them from various places to places plays as a competitor.

As mentioned above, Singapore Airlines being a well established brand and offering similar services at similar price acts as a stiff competitor to Etihad Airways. Jetstar and Tiger Airways on the other hand maintains low cost strategy, provides value to the customers in terms of cost as compared to Etihad Airways.

Channel Review:

Singapore Aviation industry is one of the leading industries in the world. Being located at the hemisphere it acts as an incredible link between east and west. Singapore Aviation industry stands as the busiest airport and cargo hub in the Asia specific region. It is the principle component in the Singaporean economy. The contribution of the aviation sector in the Singaporean GDP is up to 5.5% equivalent to round 7.9 billion Singaporean Dollars.

The major airports are undergoing massive expansion and heavy modernization which might lead to significant impact on the ticket prices. Also, besides the major airlines Etihad, Singapore Airways, Jetstar and Tiger, other regional as well as new foreign airlines are also increasing their fleets at high pace which might lead to stiff competition which in turn might lead to less revenue generation per airline.

SWOT Analysis:

Strengths:

Etihad Airways being one among the worlds leading airlines has Abu Dhabi itself as its corporate hub; thus has the location advantage connecting Singapore customers easily to all over the world. Also being completely owned and governed by Abu Dhabi government strengthens its funding to grow well and invest in new strategies. Provision of the best hospitality service and customer satisfaction at the reasonable price, improves the performance and revenue generation of the firm. As discussed above, Singapore aviation industry being having a liberal aviation policy provides Etihad, a child from UAE aviation industry, which is a leading and successful industry all over the world, a good strength to grow up and establish its brand in Singapore. Establishes in 2003, the young and aspiring nature would act as next major strength to innovate and initiate new ways of leading in the business in Singapore providing luxurious and comfortable journey, making travelers enjoy the whole ride with special and exceptional services offered at reasonable prices.

Weakness:

Though innovation adds up to the point being a young and non local player in the Singaporean Aviation industry faces tough and stiff competition from the established brands like Singapore Airlines. Also, Etihad having larger share into the airlines and further investing much more in the same industry might lead to high risk of loss. Being a nonlocal player, trying to attract the Singaporean customers maintaining their traditions and culture would be a weak point for Etihad to practice.

Opportunities:

The soaring fuel prices in Singapore after the Indian Ocean Earthquake in 2004, made the low cost aviation industry to move onto consolidation phase. This resulted in many low cost airlines to merge or close their businesses. This provided a finest opportunity for Etihad since maintaining the prices, being new young player and providing excellent services, Etihad can attract more customers and gain competitive advantage. The next opportunity would be the Singaporean Aviation Policy which is considered as the most liberal policy in the whole Southeast region. Etihad being a foreign player can easily establish and attract customers with its special and innovative practices and develop its brand in Singapore easily. United Arab Emirates aviation industry receiving the highest investment also gives Etihad an opportunity to grow further since the funding would be easily available. Singapore having large number of liberal agreements with the United Arab Emirates also helps Etihad to carry out its operations comfortably.

Threats:

Etihad Airways faces threats from different sources. The physical size of the country Singapore imposes greater risk by increasing the dependence on aviation negotiations. Due to the recent recession, travelers prefer to travel at cheaper rates and are even not bothered about the fringe benefits and other extra features. So other competitors existing like Jetstar Airways which follows a low cost strategy acts as serious threats to Etihad which prefers to provide best hospitality and customer satisfaction at a higher price. Increasing competition, heavy modernization and expansions taking place in aviation industry might lead to reduction in revenue generation per airline. Airbus and Boeing being the only suppliers to the Etihad, the power of these suppliers might be more than that of Etihad which again poses a serious threat compared to Singaporean Aviation based Airways which has got the maintenance and repairing centers established by the manufacturers.

Objectives and Issues:

The key objective of this study is to convince the Singaporean travelers to use Etihad Airways and increase the performance of Etihad Airways in Singapore. As discussed in detail above, Etihad having its own strengths and weakness with Singapore providing availing opportunities threats strategizes its products so that it gains the competitive advantage over the other Singaporean Aviation companies. But though Etihad holds the strengths that it provides excellent of hospitality, uses modern technology and other features; Singapore Airlines with its established brand provides stiff competition. So, Etihad being young and innovative must efficiently discover the ways to handle the competition and achieve gain in the business.

The other objectives of Etihad can be categorized into short and long term goals and objectives. Short term might refer to those goals that are to be attained in a year or so that is by middle of 2011. Long term goals refer to those aims and objectives required to be accomplished in next five years.

The primary short term goal is to achieve break even by 2011. The best way to achieve this objective is to increase the yield while reducing the cost. The other key short term objectives include maintaining customer value as well as the status of the brand of Etihad while reducing the cost. Also recently developed short term aspects include upgrading at least 17 aircrafts with new first class suite by 2011.

Coming to the long term aspect, Etihad estimates to operate in about 100 major businesses and destinations by 2020. As the primary objective to achieve the above goal, it plans not only to earn profit every year but to increase the profit earnings by 5-10% every year. Other long term goals include increasing customer value till 2015 by 8-10% and also to increase the employee staff by 15% by the end of 2013.

Marketing Strategy:

Positioning:

Any company would be able to position its brand in the market only when it meets the customer requirements and overwhelm them with its extra features and services. It also must be able to catch up to the customers’ in different and attractive way. Singapore being the holiday and recreation spot for most of the travelers, they look towards airlines that provide lavish and joyful environment. The way the logo is designed, the services offered including various options of menus to dine, flexibility to choose their entertainment and many other features make the travelers feel that a proper care has been taken care of. This is to be maintained and improved accordingly. Similarly, Singapore is also a family visit spot. The service and support offered to the family members, kids and especially both in flight as well as on ground during boarding, all helps Etihad to convince the travelers to use Etihad Airways. Thus maintain these services and continue its trend Etihad can position itself as a new and successful brand in Singapore.

Product Strategy:

To explore product extensively, the product has been classified and explained in three levels. They are: AUGMENTED PRODUCT, ACTUAL PRODUCT and CORE PRODUCT. In our case of Etihad Airways, has got the following product segments in aviation: Diamond First Class, Pearl Business Class and Coral Economic Class. The other products might include the Etihad Gaming Express 2D, Holidays and Crystal Cargo. The three levels of these products can be explained as:

Augmented Product refers to the non physical part of the product. It basically refers to that added value that the actual product provides you. It includes warranties, customer care, delivery, extra features and services and so on. In our case of Etihad Airways, the augmented product category includes the services aspect and competitive advantage related factors which refers to: Dine and Meal requirements, Spa and Lounger Services, Chauffeur service, Modern Technology and Innovation, Medical and Religious needs, and Abu Dhabi as its Corporate hub with more liberal agreements with Singapore.

Actual Products or potential products are those mentioned above which includes the Etihad Pearl Business Class, Etihad Diamond first Class, Etihad coral Economic Class, Etihad Lounge and Spa, Etihad Holidays, Etihad Express 2d gaming, and Etihad Crystal Cargo.

The Core Product or the benefits that these products offered would be the AIR TRANSPORTATION to the people all over the world and that is what is creating value to Etihad.

Thus the product strategy can be framed accordingly based on the classification that has been done.

Price Strategy:

As given in the project details, Etihad had adopted market penetration strategy which offers a lower price so as to increase the market share. This strategy also helps it to gain competitive advantage over Singapore Airlines so that it can attract more passengers so that it can make more revenue to reach the break even and achieve its primary objective to develop the market in Singapore.

After achieving this objective, it has to redefine the price and preferably increase it so that over long term it establishes its brand, retrieves and attracts its customers irrespective of price by its services and features. Even this would help in removing the false notion of low valued brand of Etihad comparatively and also will increase the level of Etihad with its well maintained hospitality and customer satisfaction

Distribution Strategy:

The current distribution of Etihad Airways tickets is not only through its main offices and branches but they also allowed many travelling sales agents to provide their service all over the world. Even online facility is also provided recently through its official website. One can even choose his/her own fares according to their requirement. Also, it provides customer care call center service which offers an individual to book a reservation through a call if the set is available.

It is recommended to Etihad Airways to continue its current place strategy but it needs to be updated with the current list of branches and offices. Also, it could be that distribution areas can be more extensively increased at the heavy traffic areas where more people can book their tickets easily.

Promotions strategy:

A customer can be attracted effectively with the help of the following promotion strategies:

Through sales promotion where Etihad provides coupons to the customers, offers cheapest air fares directly on website rather than through general sales agents, thus promoting itself directly. It also promotes itself with the help of its participation in many sweepstakes. It can even go for direct marketing by employing new hires to focus only on promotion activities. Through sponsorships also one can promote itself. Through advertisements, endorsements, and printed promotions and also by giving gifts and maintaining relationship with customers one can promote himself successfully.

Action Programs, Budget and Controls:

Having discussed in detail about the Etihad marketing position and the strategies that can be adopted, now let us brief out some details of how to achieve these. The various action programs that can be taken are listed out in the above discussion where strategy has been mentioned as well as how it has to be done. Wanting long term profits, as explained in the BCG matrix, Etihad has to go for high growth and least cash inputs and low growth and high cash output related products. This can be achieved by investing more in the products of Pearl Business Class, Diamond First Class, Crystal cargo and others as discussed above. Similarly regarding the marketing strategies, every step has to be keenly be observed and taken to achieve the organizational objectives and issues.

Depending upon the strategy to be adopted, budget would be estimated and this would not be very high. Also the strategies as discussed would surely earn high range of revenue and lead to effective and efficient outcomes.