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Transcript of Singapore Airlines
AMITY INTERNATIONAL BUSINESS SCHOOL
A Term Paper Report On Singapore Airlines Marketing Strategy Analysis Submitted by: Kanika Arora A1808711021 MBA 3C(2011-2013)
As part of our course curriculum dissertation in our specialization has helped us in gaining deep knowledge into the field of marketing. Any accomplishment requires the effort of many people and a project of this nature requires intellectual nourishment, professional help and encouragement at various stages.
I bear to imprint of my people who have given me their precious ideas and time to enable me to do this research. I owe much to Ms Latha Chakravarthi who has been my mentor and my guide all through. At last but not the least I also thank to all persons interviewed for their kind cooperation. Im indebted to all those who have been helpful throughout the process of writing this report but as the cliche goes, Im solely responsible for any remaining errors of fact or judgement.
Kanika Arora A1808711021 AIBS Noida
TABLE OF CONTENTS
CONTENTS EXECUTIVE SUMMARY 1.1 TITLE 1.2 INTRODUCTION ON THE TITLE 1.3 OBJECTIVE 1.4 SCOPE OF STUDY 1.5 LIMITATION OF STUDY 1.6 OVERVIEW OF ORGANIZATION,PRODUCT AND BRAND
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LITERATURE REVIEW 2.1 RESEARCH PAPER 2.2 SUCCESS OF SIA ANALYSIS 3.1 PEST ANALYSIS 3.2 SWOT ANALYSIS 3.3 MARKETING MIX MARKETING STRATEGY EVALUATION 4.1 SEGMENTATION 4.2 TARGETING 4.3 POSTIONING 4.4 MARKETING CHANNEL RECOMMENDATIONS CONCLUSION REFERENCES
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CHAPTER 1:EXECUTIVE SUMMARY
EXECUTIVE SUMMARY TITLE:SINGAPORE AIRLINES MARKETING STRATEGY ANALYSIS
This report is commissioned to do a study on the inter-relationship of the marketing strategies of Singapore Airlines (SIA), its prestige brand and its performance. We draw attention to Singapore Airlines since 1972; the introduction of Singapore Girl has become one of the leading icons for the SIA and this has developed a brand differentiation among other major airlines and established itself as the Most Profitable Airlines in the world. Over the past few years, although SIA has generally maintained its market share, the profits decreased significantly, and with further analysis, using PESTEL, it notably affirmed that SIA faces a challenging and unpredictable operating environment with instability in economic climate and tough competition which it has little control over. According to the business time (dated 12 Sept 11), SIA fuel cost accounted for more than half of its operating cost which eroded its profit margin. Using SWOT, we have discovered that SIA tends to focus on the product enhancement rather than seeking what customers actually want, its latest product class beyond first class suites has demonstrated the lack of consultation. Its poor adoption of new internet marketing concepts demonstrated on the poorly revamped website portal of SIA which has ignited anger and frustration of their customers. With external factors like deregulation of the airline industries resulted in the low barriers of entry and poor understanding of budget airline economy allowing the budget airlines to seize the market shares of the budget-conscious travellers with their ever increasing of new fleets of the new aircrafts boosting better safety and fuel efficiency
The report evaluates and concludes that launching their new advertisement campaign, refocused its Singapore girls image to differentiate itself and also launching a new brand SIA X, to serve the medium and long haul sectors to tap on this budget s egment of the market. This will offer an alternative option for consumers compared to Air Asia and Jetstar. This differentiates the low price budget segment from its economy class segment, thereby possibly reducing the pricing pressure. It is also evident that SIA needs to address the basic of marketing concept that is to understand the needs and wants of its customers. 5
SCOPE AND LIMITATIONS: The scope of the study is to know and analyse the marketing strategy of the Singapore Airlines, which is credited as the No.1 airlines of Singapore by collecting the data from various sources. While the limitation of this study is that only the secondary data was available as primary could not be gathered due to cultural contraints and the time limitation. The validity of the data is also not very long.
The birth of Singapore Airlines Limited (SIA) was established since 1972 after the split from Malaysian Airlines. In the same year, the icon of the Singapore Girl was formed to create a common symbol to facilitate the airline marketing and advertising campaign. Singapore Airlines was in a different position than most other airlines at the time. There were no domestic routes to serve it was forced to immediately start competing with international airlines for routes, getting access to airports, securing flight slots and landing rights, and attracting a new customer base. (Matin-Roll-Business & Brand Strategist) Even since then, SIA has evolved itself to be one of the most reputable brands around the world, differentiated through it young aircraft fleets spreading its wings over five continents. SIA spread its wings from a regional airline to the present world airline leader and also to be the first company to launch the super jumbo Airbus A380. (Singapore Airline official website) SIA has fought bravely through countless of economic challenges and uncertain operating environment and has emerged itself as the leading airline in terms of innovation, safety and maintaining consistent profitability despite the volatility fuel prices, economic challenges and tight competition.
CHAPTER 2:LITERATURE REVIEW
RESEARCH PAPERSingapore Airlines Case Study The report provides an overview of the company and its environment. The paper identifies various resources and capabilities available to the company. The various strategies that Singapore Airlines utilise and how they affect the airlines performance. Visit Website Executive Summary The report provides an overview of the company and its environment. The paper identifies various resources and capabilities available to the company. The various strategies that Singapore Airlines utilise and how they affect the airlines performance.Key issues have been identified that threaten Singapore Airlines current market. The often complicated Government regulations and global laws that affect the airline industry have been defined and explained.Current industry issues and trends that affect Singapore Airlines have been researched, a number of recommendations have been provided, as a possible solution. Overview of Singapore Airlines Singapore Airlines (SIA) first flights began in 1947 partnered with Malaysian Airlines, each funded by there governments. The two airlines mainly serviced South East Asia.Singapore separated from Malaysia in 1965 to become the republic of Singapore. The two governments therefore decided to go there own ways and set up there own airlines. In 1972 Singapore Airlines was launched. The domestic market was basically non existent due to Singapore being a small country geographically. Singapore Airlines had to immediately pursue an international presence and started planning flight routes, airport resources, and government acceptance into foreign destinations etc. SIA also had to establish themselves as a genuine competitor and market the airline internationally to potential customers and future 8
stakeholders.Today, SIA has more than 10,000 employees and 95 aircrafts. The airline now serves 89 destinations around the world including Asia, Europe, North America, Middle East, Australasia, and Africa. ( www.airlines.priceline.com)SIA is situated at Changi Airport along with subsidiaries Silkair and Tiger Airlines. In 2004, Changi Airport received a record 30,400,000 passengers, a year-on-year growth of 23.1% in passenger traffic. Similarly, a record 1,780,000 tonnes of cargo was moved, representing a year-on-year increase of 10.2% in airfreight volume. (http://en.wikipedia.org). Changi Airport is classed as the hub of Asia, Changi provides stopovers, refuelling, and passenger exchange for all the international airlines travelling from one side of the world to the other. Changi Airport is also expanding to accommodate for there cut price airline and new Airbuses arriving in 2006.
Analysis of Singapore Airlines Environment In analysing the environment, the important external influences that effect performance and decisions of Singapore airlines have been detailed in this section.The airline industry has been strongly controlled by agreements and policies. Airlines couldnt just fly to any destination or country without appropriate authorisation.Most countries have there own national airline that are generally government backed and hold a big influence on there operation. The governments also implement policies and regulations to control foreign airline access to there airports.Some countries now have deregulated there national airline industry to reduce the amount of government control, and make access to airports/services more open for negotiation. Countries that have employed this action are the United States, Australia, European Union and Japan. The deregulation of the Airline industry opens doors for more entrants to the market and increased competition. Singapore Airlines is still owned by the Singapore government and is still affected by such controls.The Singapore government has signed an agreement with the United States called Open Skies that gives both countries unrestricted flight access to each others countries. The open skies phenomenon is gathering momentum and more and more countries are signing up. Singapore Air