Marketing Strategy Essay: Air New Zealand In Malaysia.

Keeping in mind the information in you will now analyse the organisation's external environment, develop a SWOT analysis, competitive advantages, strategic focus as well as marketing goals and objectives.

In this report, the marketing strategy for Air New Zealand Limited will be evaluated to understand the key factors which the company should consider while expanding its operations in new market. Malaysia is selected as the potential target market for Air New Zealand in this report. Various factors relating to the target market will be identified in this report such as characteristics based on demographics, values, psychographics and geography, basic needs, preference and requirements of customers, buying habits and consumption and disposition characteristics. A marketing mix will be conducted in this report in which product, pricing, distribution, and promotion strategy will be given for Air New Zealand. Lastly, organisation and control policies will be given in which the approach to implementing marketing strategy will be identified along with recognition of any changes in organisational structure, internal marketing strategies and implementation of schedule and timeline.

Malaysia is identified as the target market for Air New Zealand because the company has not established its operations in the country which has many potential growth opportunities. This segmentation report will evaluate key information regarding Malaysia such as similar needs, product offerings, characteristics, and behaviour of customers in order to evaluate and understand the market and potential growth opportunities available in the country for Air New Zealand.

Malaysia is a country situated in Southeast Asia, and it is a federal constitutional monarchy which consists of 13 states and three federal territories which separated into two similar-sized regions, Peninsular Malaysia and East Malaysia by the South China Sea (Andaya & Andaya, 2016). Although the size of these two regions is similar, however, there is substantial difference in their population size. Almost 80 percent of the Malaysian population resides in West Malaysia, and the rest of the 20 percent resides in East Malaysia. Currently, the total population of Malaysia is 32.21 million from which 1.73 million reside in Kuala Lumpur which is the capital of the country (Worldometers, 2018). Due to a large number of populations, it is a significant market for airline corporations that wanted to expand their operations in the country. Currently, Malaysian Airline has exploited the population in the country; however, there is still opportunity available for new companies to expand their operations in the country.

The primary target market for airline companies in Malaysia resides in major cities which include adults and families who travel for business and vacation purposes. Malaysia is an upper-income economy which has a GDP per capita of 11762.10 USD, and it is expected to grow around 12227.40 USD in 2020 (Trading Economics, 2018). The corporation has a growth rate of 5.9 percent which is higher than many other Asian countries such as Singapore (3.6 percent), Indonesia (5.1 percent) and Thailand (3.9 percent). Most customers earn a decent living, and they prefer to travel abroad during holidays. The number of businesses operating in the country is also high; therefore, there are many business persons who choose flight option while travelling. The population is relatively young as the median age is around 27.7 years in the country (Statista, 2018). The top key concerns of citizens are job security and nation’s fiscal status. Although saving intentions are high among Malaysian citizens, however, they also prefer to spend their money on new technologies and holidays which makes it a lucrative market for airline corporations.

Geographic traits

The primary market for Air New Zealand is middle and upper-class citizens who prefer to take foreign holidays and choose flight options while traveling for business purposes. The e-commerce market is popular among Malaysian citizens, and they prefer it due to high transparency and low prices (Chong, Chan & Ooi, 2012). Therefore, airline corporations also use this market to give lucrative offers to customers in order to increase their sales. Middle-class customers are the ones who spend the most in Malaysia based on which they are the primary focus for airline enterprises.

Malay, Chinese and Indians are a part of three main ethnic groups in the country based on which the customer values are set. Malay people are the indigenous people in the country and they did not prefer to travel must often as they are more connected to the country and its resources. Indian citizens are the ones who travel one or two times a year because they are family oriented people and they travel ones a year to meet their families who did not reside with them (Peletz, 2018). Chinese citizens should be the primary focus for Air New Zealand because they are the ones who spend most on travelling for vacation and business purposes.

Most customers in Malaysia did not prefer to save their money, and they prefer to invest it by enjoying foreign holidays, luxury meals and electronic devices. Although this mentality is changing as the number of Indian citizen increase in the country, however, most people still prefer to enjoy their lives by living pay check to pay check. Most customers want comfort when it comes to a travelling experience through the flight, and they also prefer to avoid paying high prices for traveling (Islam, Shahbaz, Ahmed & Alam, 2013). The buying habits of Indian citizen are that they prefer to travel one or two times a year and they plan these vacations a long time before the date in order to get best flight deals. On the other than, people who are travelling for business purposes did not care about the prices and all they care about is getting someplace without appropriate time. To summarise, the basic needs of customers is comfort at lower prices, and the buying habits of customers who are traveling for vacation and business purposes are different.

The services offered by the Air New Zealand are focused on the comfort of its customers, and their prices are not high. The company offers its customers 31 international destinations which include major cities in Asia, Europe, North America, South America, and Oceania. The corporation is the flag carrier of New Zealand, and it has recently decided to purchase new aircraft to provide better customer experience. Currently, the corporation has eight Boeing 777-200ERs which are chosen by the company due to the comfort which they provide to customers. These aircraft are configured with 312 seats which comprise of 26 business class, 40 premium economy and 246 in economy class (Airnewzealand, 2018). This aircraft is good for long-haul services. The corporation also has 777-300ER and 787-9 which has 342 and 302 seats respectively.

Demographic traits

These aircraft are focused on providing a comfortable option to customers based on which they provide them facilities such as Wi-Fi and streaming services which customers can choose. The corporation has decided to replace 777-200ER with A350s because they provide strong economic performance and they are also flexible aircraft (Australian Aviation, 2018). The company is also replacing 767s with 787-10 while flying its customers to Asia which got the same range and it is suitable for that part of the network as well. These changes will benefit the company while expanding its operations in Malaysia by offering relatively cheaper yet comfortable flying options to customers. These aircraft also have options for customers who are travelling for business purposes with luxury. These aircraft have long range which assists the corporation in offering more international locations to its customers in Asian countries.

The headquarters of Air New Zealand is situated in Wynyard Quarter, Auckland City, New Zealand and the corporation manages most of its operations directly from its headquarters. In order to manage its operations in other nation, the company has established many hubs in major cities which assist it in managing its operations. Australia, United States, and India are some of the major markets for Air New Zealand based on which the company is able to effectively manage its operations (Nooririnah, Khalil, Aludin, Rohana & Zuraidah, 2013). While expanding its operations in Malaysia, the corporation should also establish a hub in the capital of the country, Kuala Lumpur. It will assist the company in increasing the number of flights to and from Malaysia while ensuring that they did not get delayed. It will also assist the company in providing effective services to its customers that will build its positive brand reputation. The corporation should also collaborate with travel agencies, tour operators and others to offer booking tickets and other related services to customers. The corporation has 12,000 employees around the world who are highly trained and motived. The company can leverage them to establish its operations in Malaysia by offering effective services to customers.

In the 2017 financial year, the corporation generated revenue of $527 million which has decreased than compared to the profits of previous year which were $663 million (Airnz, 2017). However, it was the second highest provided generated by the company in its history which resulted in increasing dividend for shareholders and bonuses for staff members. Due to this growth in profits, the corporation has the chance to use its resources to offer competitive pricing to its customers in Malaysia. This pricing strategy will result in increasing the sales of the company which will expand its customer base in the international market. The customer needs and purchasing habits of Malaysian customers are focused on cheaper flight options which provide a comfortable journey experience (Nooririnah, Khalil, Aludin, Rohana & Zuraidah, 2013). Air New Zealand will be able to reduce its fuel prices by replacing its current aircraft with new ones. The profit generated by the company will also enable it to offer competitive pricing and offers to its customers which will allow the organisation to expand its customer base in Malaysia. The pricing strategy should be updated as per the response of the customers to ensure that the company is flexible to the market requirements and it is able to change its prices as per the demand of customers.

Psychographic traits

Most Malaysian customers use online services while booking their tickets based on which the corporation should adopt a digital advertisement strategy. The company should advertise its products and offers through social media sites and website advertisements (Berthon, Pitt, Plangger & Shapiro, 2012). The company should also reward its customers who refer their friends the services of the corporation which will encourage them to use the services of the organisation. The company should also post its advertisements in business magazines in order to target customers who travel for business purposes.

The company should use personal selling methods to approach Malaysian customers who prefer the traditional approach to promotion. The corporation should use its talented staff members to reach out to customers in order to encourage them to use the services of the company. It should also offer them prizes and discounts when they use the services of the company which will enable the corporation in increasing its customer base.

In order to promote its sales, the corporation is required to adopt a competitive pricing approach in which it should offer discounts and offers to its customers in order to attract them. The corporation should use different sales techniques in order to promote its services in the country based on cultural and social factors. For instance, the company should offer discounts on festivals and other cultural occasions to encourage its customers to use flight services of the company. The corporation can also design its services based on purchasing habits of the consumers to ensure that they are more likely to select the services of Air New Zealand above others.

Marketing implementation is a process of executing marketing strategy through creating specific actions which assist in ensuring that the marketing objectives of the company are achieved. The key objectives of the company are to increase its customer base and profitability by exploiting the aviation market of Malaysia. The corporation can achieve this objective by ensuring that its pricing strategy meets the demands of customers and they prefer the services of Air New Zealand above others. There are different ways through which the management of the company can approach to implementing the marketing strategy such as by command, through change, consensus or an organisational culture (Piercy, 2016). However, the best approach for Air New Zealand in this scenario is through change management. Change management is crucial in corporations to ensure that they are able to sustain their productivity while continuing to expand their operations in other nations. In this approach, the marketing strategies are evaluated and selected by the top level executives of the company, and they implement them to the lower levels of the management and employees. This approach is similar to command approach; however, the key difference is that the management did not forcefully implement these policies (Akaka, Vargo & Lusch, 2013). The corporation should implement these policies by considering that needs and demands of the low-level management and employees.

While implementing change approach, the management of Air New Zealand should modify the ways in which the company manages its operations to ensure that these policies are successfully implemented on different level in order to achieve effectiveness. This approach is based on architect to ensure that various elements of the company are able to effectively comply with the change policies. The company is required to skillfully craft the change policies to avoid resistance between employees to ensure that they comply with the marketing strategy of the enterprise (Baker, 2014). This is a time-consuming process which takes a great deal of time to design and implement, and these policies are implemented by the management. The key issue in this approach is that it suffers from the problem of separation of planning and implementation. This is the most suitable option for Air New Zealand because of various cultural differences between the domestic market of the company and Malaysia. Although the company will hire local employees to manage its operations, however, there are various cultural related challenges faced by the existing employees who will provide training facilities in the corporation (Nooririnah, Khalil, Aludin, Rohana & Zuraidah, 2013). Effective marketing is a major part of successful expansion of the company based on which understanding of local culture and other factors is also important for the organisation. In order to achieve this objective, the company is required to ensure that it understands cultural factors to target its customer base needs.

Value traits

The understanding of customer purchasing habits and social factors is also important, therefore, the corporation should implement the change approach to ensure that the employees did not resist to these policies and they are able to understand cultural differences. While implementing this approach, the company is required to establish internal marketing activities in which it should set its priorities straight to ensure that it has made right and accurate expectations from its target market (Hogan & Coote, 2014). Expecting too much or too less would result in creating challenges for the company while approaching its target market which could reflect negatively on its profitability. The corporation is required to build team and secure its resources to ensure the success of its marketing campaign. The team will assist the corporation in collecting relevant data regarding the target market and resources will enable the company to ensuring that it is able to reach a wider audience. Building timeline is a key part of marketing strategy in which the organisation is required to clearly outline its goals to ensure that it is able to oversee the performance and implementation of its marketing strategy (Kumar, Rahman, Kazmi & Goyal, 2012). The company should dedicate different tasks on its timeline to ensure that the management is able to make joint effort towards achieving those tasks to ensure the effectiveness of the marketing strategy. Following is a detailed project plan which is recommended for Air New Zealand to implement its marketing strategy.

Conclusion:

Based on the above observations, it can be concluded that Malaysia is a potential target market for Air New Zealand which can assist it in increasing its customer base and profitability. In order to approach the market, it is important to define the key characteristics of the target market to ensure that the company understands various factors regarding its customers such as their buying habits, cultural factors, preferences, requirement, demographic factors, and others. The evaluation of Malaysia is conducted in this report as a potential target market for Air New Zealand to understand key cultural, social, demographic and economic factors. The marketing mix strategy is given in this report for Air New Zealand which can assist the company in setting its products, prices, place and promotion strategies. Effective evaluation of these strategies is important to ensure that the company is able to expand its operations without facing any negative implications in the Malaysian aviation market. Lastly, it is recommended the company should choose change approach while implementing its marketing strategy and a timeline is recommended for the company as well. Effective compliance with these policies will result in increasing the customer base of the organisation, and it will enable the corporation in sustaining its future growth in Malaysia.

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