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Malaysian Airline: Marketing Principles

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Question:

Describe about Concept and process of marketing, Concepts of segmentation, targeting and positioning, and Marketing mix in different contexts of Malaysian Airline? 
 
 

Answer:

Abstract

This report will contain in depth analytical and descriptive information on Malaysian Airline in perspective of marketing processes and practices in existing and potential scenario that involves segmentation, targeting and position strategies. This report will focus on current scenario of Malaysian Airline and identified tragedies happened with MH17 and MH370. Considering these bad incidents that impacted on overall brand reputation of Malaysian Airline along with impact on market share this report will discuss on how the airline will redefine, design and develop its new product and service to create more competitive advantage in existing and potential market. The report will present information on best possible option in terms of new product and service development and their marketing strategies to target customers and regain market share. The entire report will divide in four sections and multiple sub sections that will present marketing strategies and problem addressing approach / practice of the Malaysian airline.

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Introduction

Malaysian Airline is one of prestigious airline brand in airline industry that provides their services in 80 destinations worldwide with larges workforce. Each day around 37,000 passengers travel through Malaysian airline. The Malaysian airline has gained its market and brand reputation because of its excellence service, hospitality practice, warmth and friendliness culture.

In the below sections and subsections covered difference marketing process and strategic approaches in perspective of identify and introduce solution in against of existing and potential problem which reflect less control on air traffic management practices and safety concerns. The report will focus on marketing communication practices and elements of marketing process in terms of enhance the overall presence of Malaysian Airlines.

 

1. Concept and process of marketing

1.1 Concept and element of marketing process

American marketing association has defined concept of marketing as set of activities, processes, creation, communication, offers and share values for customers, clients, stakeholders and society.

Similarly, Kotler defined marketing as set of social and managerial processes which provide values in the form of products and services that cater individuals and groups wants and need.

On the basis of above concept of marketing that presented by AMA and Kotler indicate and focus of customers and market’s need and want through different set of social and managerial processes to cater products and services. With respect to above concepts the Malaysian Airlines which is one of largest airline and provide range of service in overall 80 destinations in worldwide. Every day near about 37,000 passengers are travelling through Malaysian airline. To develop its brand value and market competitive presence the Airline focus on warmth and friendliness culture, impressive hospitality, quality service. The best cabin crew, unique Malaysian hospitality, culture helps to communicate its value based services for its target market.  Difference set of processes Malaysian Airline has introduced to defined its values based services and communicate same to its customers. (Ama.org, 2014)

Below points define strengths, weaknesses, opportunities and threats of Malaysian Airline in perspective of marketing strategy:

Strengths

  • Malaysian prestigious and quality hospitality.
  • Worldwide presence and covered 80 destinations in worldwide presence along with provide platform to travel 37,000 passengers each day.
  • Effective and efficient marketing communication practices and processes
  • Support from Malaysian government
  • Customers’ centric approach

Weakness

  • Unwanted past events that involves planes crashed that impacted overall brand image of Airline and reflect lack of operation control system.
  • Depending on international moving traffic
  • Limited market share

Opportunity

  • More expansion scope to have or increase market presence that impact on market share
  • Focus and introduce more domestic and international route to cover more destination
  • Enhance airport facility services

Threats

  • High amount of expenses of fuel and continuous increase of fuel price
  • Rapidly change in government rules and regulations

The above identified key strategic practices and processes explained marketing activities of Malaysian Airline. The modern concept of marketing focuses on customers’ oriented strategies and practices. The major activity of marketing is to identify customers, communicate them about products and service by identifying their want and need. Similarly, Malaysian Airline has identified customers' preference during travelling that includes hospitality services, security and safety and more destinations. The organization is continuously focusing on all these parameters and trying to arrange excellence service for their target market. (Sagar, 2014)

1.2. Cost and benefits of market activities

Many marketers supported and justified how marketing activities is essential important for any brand building and maintaining that brand in existing and potential markets. Simultaneously, these marketing activities define and design in such manner that will provide larger customer satisfaction and communicate value based products and services that company is catering.

In case of Malaysian Airline, there was happened some bad event / tragedies with flight MH370 & MH17 back to back in last six months. However this airline created good brand image in terms of their services practice and overall culture strategies. Generally in such cases plane crashed, airline prefer rebranding option but here due to back to back two cases and high amount of loss in terms of plane cost, confidence of their existing and potential customers, overall volume of sales and all impacted badly the Malaysian’s business. Here, the company needs to market and communicate their customer about key highlight of future approach and practice of Malaysian airline to prevent such incidents to regain market share and customers’ confidence. The Rebranding strategy is little challenge as this carry high cost. But through high amount of marketing strategies the Malaysian airline can achieve their targets:

  • Creation of new advertisement message that include preventing steps and assure more safety.
  • Continue with Warmth and friendliness culture.
  • Focus on hospitality management and also focus on services that cater in airport area.
 

2. Concepts of segmentation, targeting and positioning

2.1. Macro and micro environmental factors that influence marketing decisions

Malaysian airlines systems have faced huge challenges due to many factors such as full-service carrier airline companies in other countries.

Micro environment factors: Competitors are the major issue in high edge of competitiveness.

Porter’s five forces

To evaluate the micro-environment of Malaysian Airlines systems, the Porter’s method would be used:

Threat of new entry: Malaysian airlines systems have not been impacted by new threats for the international phase because the company has been able to sustain for long term. There could have chances of new entrants in the market because these mergers might provide competitive offers to their customers.

Customer bargaining power: The selection of customers for choosing the airlines are preferable with variety of offerings and customers have high power of bargaining to fly at the price they are willing to pay.

Supplier’s power: Malaysian Airlines had bought a few aircrafts from airbus and Boeing and Airbus has high power towards their customers because they monopolize for a very long time and offers high quality safety measures.

Substitutes: Travelling through air is environmental friendly and saves high time.

Competitive rivalry: Malaysian Airlines offers attractive promotions and discounts to their customers to survive in the competitive world.

Customers

The airline industry is full of operators from many locations and no company has a monopoly on flights. Thus, Malaysian Airlines should focus on the customer’s behavior and demand.

Macro environment

Pest factors would relate to macro environmental analysis.

Political factors: Malaysia has attractive travel places and government promotes and manages the tourism assets to implement policies and legislations.

Economic factors: Malaysia has been categorized as a developing country and the purchasing power of the people has been stressed by many other competitors.

Social factors: Government has implemented major ways to boost the industry in maintaining the attractiveness for excellent hospitality.

Technological factors: Malaysian Airlines offers online services for their customers to book the tickets online and to offer packages such as bookings of hotels etc. Malaysian Airlines has also been offering excellent and digitalized screen that consists of movies, music etc.

Demographic environment

Population has a huge impact on the sales of Malaysian Airlines and the increase in the number of population also impacts the sales. At the same time, the demand of the product also increases. (Thakor & Mistri, 2012)

2.2. Segmentation

Market targeting is a marketing concept that helps marketer to meet the market goals into success. Market segment is divided into different areas known as geographic, psychographic and demographic segments.

Demographic segmentation: According to demographic research, the average age of passengers of Malaysian Airlines is 14.6 years and it ranges from 25 years and above. Most of the passengers possess high income to use the services and business people travels all the time.

Geographic segmentation: Quantas Airways follow the Kangaroo route that offers flights from Europe to Australia as well as New Zealand gateways with respect to Kuala Lumpur international airport within 4-5 hours. (Nag, et.al, 2007)

2.3. Targeting strategy

With the entry of low cost carriers, the competition for the full service airlines likes Malaysian Airlines increased so that the company can segment its market and target only high class premium business level customers for whom luxury is most important and the customers who are not concerned about their budgets. The company should focus on differentiated marketing so that the company could be able to retain the targeted customers. Very low cost product differentiation will help Malaysian Airlines to succeed at a very low cost and this will provide them best experience and the customer will also agree to pay the price for the superior services.

2.4. Buyer behavior affects marketing activities

Consumer tastes and preferences influence customers to purchase the products and consumer behavior theories are developed within cultural contexts by studying the behavior of people within each country. Social factors could be elements that comprise the term motivation and also influence by the motivating agent. Customer satisfaction and loyalty are major factors that impact customer behavior. Psychological factors include the level of trust and the influence of social and cultural factors are major constraint.

Buying behavior is made up of internal and external factors that explain the consumer’s buy certain products. Two supply and demand circumstances can impact the type of marketing for Malaysian Airlines products when the product is in high supply and demand is scarce or when the product is scarce but there is a high increase of demand. (Vogt, 2015)

Example: By having the customers sign up to a face book page, one can interact on a personal matter. The advertisements help the company to run in a competitive edge.

2.5. New positioning for Malaysian Airlines

Malaysian Airlines could position itself with the targeted strategy and positioning strategy. The company can build its brand image in the minds of consumer and with respect to high quality products. To gain the competitive edge, the company can develop the cost leadership strategies involved in the transformation plan.

This way, the company can gain the competitive advantage to improve the experience and to make the decisions with respect to price. The competitive strategy could be developed with an intense competition and Malaysian Airlines is strongly pushed by low cost carriers with low fares. This way, it would be able to improve the product quality and services at low cost. (Wong & Musa, 2011)

Positioning strategy: “By being the first to maintain the unique place in the minds of the consumer”

For example: Miller Lite was not the first light beer but it was known to be placed as a light beer. Similarly, Lowenbrau was the popular German beer in U.S. but Beck’s beer was placed as a unique place with the help of advertisement.

 

3. Individual elements of marketing mix

3.1 New product and service

The new product and service development completely depend on move or step towards existing problem solving characteristics. The existing and major problem associate with last tragedies happened with Malaysian airplane MH370 and MH17. So, the possible move in terms of product development should be related with more safety and security system for passengers and planes. With respect to all scenarios the best possible new product would be effective and efficient aircraft tracking capabilities and system, new enhancement in overall communication system between airlines and air navigation services operators, Range of technology enhancement to make more effective aircraft tracking process and global air navigation infrastructure. Through these product and services enhancement and development the Malaysian airline will be achieve their vanished brand reputation. Safety and security is prime concern for travelers. So, system and process to create more effective and efficient safety and security of plane and travelers create competitive advantage in coming future. (Withley, 2015)

3.2. Distribution is arranged to provide customer convenience

Customer satisfaction helps to get the highest level of success. With high level of service, total customer satisfaction and loyalty increases by the company. Thus, the unique development of solution meets the customer needs and relates the recommended customer satisfaction activities to business goals and objectives. The major strength is to serve excellent ambassadors on behalf of the customers. The common approach of customer satisfaction measures the product’s or service by the company to meet the needs and expectations of customers. Customers might get dissatisfied with the products or services offered by Malaysian airlines for variety of reasons. (Bolton & Tarasi, 2015)

3.3. Prices are set to reflect an organization objectives and market conditions

The major reason of price setting is to explore the pricing methods that service companies adopt in terms of setting the prices along with the service. This will influence the organizational as well as environmental characteristics. To achieve the objectives, the data and information could be gathered via personal interviews and observations in 170 companies operating in multiple sectors.

3.4. Promotional activity is integrated to achieve marketing objectives

To establish the objectives and budgeting for the promotional plan, there is a huge importance of objectives with respect to planning and decision making. Objectives are specific, attainable, measurable, realistic and quantifiable. It is stated in the marketing plan and is understood with the marketing plan. Experimental objectives such as sales and market share increases success of the business. Therefore, the time given for reaching the objectives should be practical and achievable. (Sway, 2015)

3.5. Elements of extended marketing mix

 The marketing mix is the mixture of marketing activities that the relation is associated with the association to meet the needs of the targeted market. Thus the marketing mix could consist with 4Ps such as:

Products are produced with high quality that could fit the needs of the consumers and Malaysian Airlines offers huge range of services at low cost depends on the market segment. The support of marketing of the products is based on the appropriate promotional as well as advertising strategies. Thus, the elements of marketing mix such as product, price, place and promotion enables to meet the target goals and satisfy the needs of the customers.

The three extra Ps such as physical evidence, process and provision of culture also are relevant to meet the service mix such as:

The physical evidence was not very important to the consumer but in today’s modern world, consumers come into contact with products or services and expect high level of quality. They also expect good volume of presentation.

Provision of customer service depends upon service industries and customers are loyal to serve them well. The queries are handled properly with the face to face interaction and this way, the company is able to maintain strong customer relations.

Process: This is associated with customer service and it makes an organization effective. Therefore, the marketing mix should be relevant in service industry to meet the needs of the customer. (Wong & Musa, 2011)

 

4. Marketing mix in different contexts

4.1. Plan marketing mix for two segments

Market segment refers to the major activity in the process of marketing. It can be identified on the basis of consumer characteristics and Malaysian Airlines could use two different segments of market with respect to wealth and the level of customers is price conscious. Target market does not end with segmentation and it refers to aimed at the segment. Thus, the segmentation strategy will be dependent on income based and price consciousness. It should be designed to meet the needs of an individual where the customers will be able to pay the air fares successfully.

Many of the consumer market segmentation can be applied so that the manager can implement its own plan. The two narrow segments help to tailor the needs. Objectives and issues in one consumers packaged products category will be helpful to reach the success. The introduction of new products to replace the existing product could harm the marketing mix. (Icao.int, 2015)

4.2. Differences in marketing products and services

Business marketing is the major concern of marketing the product as well as service to the other companies and use the product in combination of used products in the process of business. Consumer marketing is direct marketing based on an individual and consumer. It is essential to use both the types of marketing where issues could be different. Thus, the selected target market and their choices like price, promotion, and distribution are dependent on those target segments. The nature of business purchase is influenced by decision makers and professional buyers.

4.3. International marketing differs from domestic marketing

The terms known as domestic and international marketing are interchangeable at the present scenario. When talking about marketing theories, international marketing is the stage in the evolution of global marketing.

Domestic marketing: Companies manufacture goods and sell those goods within the country itself. So, there is no phenomenon of international marketing in it.

International marketing: International marketing refers to the company that sells products to multiple countries and the approach is called as “polycentric” that makes different products for different countries. (Gundlach, 2007)

Therefore, the major difference between the international as well as domestic marketing is that the global business instead of operating different products to different countries increases and provides a single product to the globe. (Oyewole, Sankaran & Choudhury, 2007)

Conclusion

In conclude, The Malaysian Airline is well known and reputed Asia’s largest airline brand but due to some tragedies and bad events back to back with MH17 and MH370 the organization is facing challenge to retain its market share and brand image. The report indicate that best possible solution against these problem will be introduce and enhance more control, security and safety system to create effective and efficient traffic tracking, plan and navigation of plane. In existing scenario the key marketing strategies should be based on create awareness and assure customers for more safety and security in terms of travelling through Malaysian Airline.

 

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