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Question:

Describe about The pursuit of new product development Principles Of Marketing?

 

Answer:

What is marketing?

Marketing can be defined as the process by which the goods and the services move from the place of their concept to the customers. It involves to the identification of the product, the selection and the development of the product so that it meets the requirement of the people. there are two types of definition given one is from the social perspective and the other is from the managerial perspective (Appannaiah, Reddy and Ramanath, 2010). From the social perspective it can be said that marketing as the process by which the individuals as well as the groups get what they need by offering, creating, and exchanging services which provides value and products freely with the others. The managerial perspective defines marketing as the art of selling the products. But it needs to be seen that the main objective of marketing is to understand the needs and wants of the customer very well so that the product fits them and they are able to sell it to the people.

The American Marketing Association gave the managerial definition of marketing as: “Marketing (management) is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals” (Kotler and Armstrong, 1991).

The airline industry is one of the profitable industries in the world and it is also one of the most challenging. There are three major issues that put threat to this industry they are safety, sustainability and convenience. The Malaysian airlines provide world class flight experience for the people. It is the national carrier in the country and is the largest airline industry in Asia. The airline carries nearly 37000 people on a regular basis to moiré than 80 destinations across the world in 4 continents. The airline provides the best Cabin staff in the area and it has won awards for this. More over the company has over the past seven years have won this award for their outstanding performances in the service they provide to the people (Ashrafia, 2015).

It can be said the company is way ahead in marketing their offers and the services that they provide. They try to understand the needs and demands of the people and customize their services in such a way that it is liked by the people. The success of the company depends on fact that how much the products liked by the people and the demand among the people. by the statistics that the flight carries 37000 people daily it can be seen that the company is successful in creating demand among the people by giving them unparallel services and they were successful in their marketing strategy (Hill, Self and Roche, 2002).

Situation Analysis (SWOT) and how the Marketing Strategy is applicable to Malaysia Airlines

The situation analysis of Malaysian Airlines can be done with the help of SWOT analysis. The Malaysian airline is a government owned airline and the flag holder of Malaysia. The company has several hubs and ports from where the flights are controlled. From the situation analysis of the company we will be able to find the factors that add to the strengths and weakness of the airline company (BOONE, 2012).

The strengths of the company

Strong recognition of the brand- the brand is equally recognized in the domestic market as well as in the international market. The company has constantly put up a high standard of services to the people. The airline is rated as five stars by the aviation rating organization. More over the company is a award winner in the best cabin staff

There is strong brand recall- the Malaysian airline is the name that comes to the minds of the people due to the branding and the promotion done by the company. More over the company has a well developed advertising as well as marketing teams who help the company to highlight their images in the minds of the people (The Telegraph, 2015).

Management of the company- the Malaysian airlines has a strong management team and a good organizational structure. The management team plays an important role in the in planning as well as the controlling of the actions of the company in order to make the airline one of the best in its class in Asia.

Quality distribution system- the Malaysian airlines has an extensive distribution network in the south Asian part, Middle East and also in Australia apart from the other global destinations like the USA and Canada. The distribution system of the company is proved to be efficient with more and more people are relying on it and are using it as a means to travel to the different parts of the world (theguardian, 2015).

The weakness of the company

There are several weaknesses that the company faces. It is in terms of the personnel as well as the finance.

Relying on the international market- the airline depends heavily on the international market and the international onward moving traffic for their operation. There is very small domestic traffic in the country and there is limited growth in the domestic market of the company.

Financial condition- the company was able to turnaround from their losses in the year 2007. They were not able to fully recover from the losses and were seriously hit in the year 2011 when they suffered a loss of RM 237 million. More over the competitors like the Thai airways and the Singapore airways have recovered from their losses and are financially stronger than the Malaysian airlines.

Lowering operating profits of the company- the operating profits Malaysian airlines are lowering each day. Thus the performance is getting more severe as the company has to tackle the situation with the limited operating capital (Fine, 2009).

Opportunities of the company

Emerging markets- the company has the opportunity to enter new markets and expand the business internationally in various foreign markets. Thus the company has the opportunity to exaggerate the airline business in to the untapped market.

New services- the company is trying to give added advantages to the people through their services. The company is promoting the Malaysian airlines as a tourism which provides medical packages to the people. The company has partnered with the local hospitals and it expects to get medical passengers from Indonesia, Vietnam, and Bangladesh.

Threats of the company

Competitors- the Malaysian airlines faces a lot of competition from the other airliners like the Thai Airlines, the Singapore Airlines etc. more over there are low cost airlines like the Air Asia as well as the Jet Star. These companies are set not to lose their market share in the Asian market.

Terrorism and crashes- terrorism is one of the major threats to the company. The effect of the terrorism might be in some of the countries in which the flight is operating or in the flight itself. More over there has been some crashes in the flights of the Malaysian Airlines like the MH370 and MH17 in the recent past.

 

Customer satisfaction

The concept of the customer satisfaction is an important aspect in the marketing concept. The main aim of the marketers is to satisfy the needs, wants and the demands of the people by providing goods and services according the choice of the people. The customer satisfaction is perceived from the fact that the people will purchase repeatedly and the name of the company will spread by word of mouth (Chen, 2015). The airlines industry is concerned with the satisfaction of the customers, for that purpose the companies need to renew their strategies as well as try to products innovation and services that will provide benefit to the people. the airline industry of Malaysia needs to constantly improve their uniqueness in the services so that there is competitive advantage of the company over their competitors (Factors Affecting Customer Linking Capabilities and Customer Satisfaction in CRM, 2012).

Perceived value- Customer perceived-value is the process of perception about the quality, benefit, social psychology and money. It is said that perceived value is a significant aspect in the purchasing decision of the consumers, and the customers will purchase a product by means of high perceived value.

Perceived quality- Perceived quality is just the customer’s assessment in overall, of the average process of getting consumer services. Some expert considers that the apparent quality is the degree of conformity rate among the perceived performance as well as customer expectations. The brand image of the company can be positively impressed by the perceived quality. Customers also judge the class of the product or the service on the base of a range of informational cue that they try to relate with the items (DR.K.VANITHA, 2012).

Macro and micro environment of marketing

There are two kinds of factors that affect the environment of the business. These factors are sometimes external to the company and at times internal to the company. The macro environment is considered to be the one that is external to the company and affect all the firms that are there in the industry. The micro factors are those that are internal to the company and are likely to affect the individual company only (Themalaysianinsider.com, 2015).

The various macro environmental factors that affect the business are:

Economic factors

Political factors

Technological factors

Socio-cultural factors

Environmental factors

The various micro environmental factors that affect the business are:

Customers

Suppliers

Shareholders

Employees

Media

Competitors

The macro environmental factors that affect the Malaysian airlines are:

Socio economic factors

The airlines industry has suffered losses of around $10.4 billion in the year 2008 and the $9 billion in the year 2009. The fall in the loss of the airlines was due to the fact that the prices of the fuel reduced. The company earlier also faced tremendous losses in the year 2000 when the company was forced to cut down the routes that were unprofitable. The Malaysian airlines had to face the struggle again in the year 2011 due to the rise in the fuel price and for the mismanagement issue. The company has recovered well from the crisis with in 2013 by executing a rationalization of the routes and implementing better marketing strategy. Until recently the company faced severe blow when two of their aircrafts crashed within a gap of four months in 2014. It was seen that the company which was struggling with the financial crisis had to face the new challenges due to the plane tragedies (Dugi-doc.udg.edu, 2015).

 

Socio-cultural factors

The aviation industry looks to the matter of the environment and the impact that are associated with the environment. The aircrafts of today are nearly 80 % more fuel efficient than those that were manufactured in the 1960s. There are certain aspects that needs to be kept in mind that the aircrafts in while in the air emit certain amount of carbon dioxide in the atmosphere. There are certain factors that had an impact on the people. There are people from various religions who board the planes for their travel. Malaysian airlines need to take the initiative that the people travelling in it are satisfied and they need to market the fact that the planes effective in holding up their demand and that the planes are efficient in saving the environment so that they can earn the trust of the people (Lee and Park, 2014).

The micro environmental factors that affect the Malaysian airlines are:

Competitors

The competitors of Malaysian airlines are intense as the company faces tough competition from other airlines like the Singapore Airways and the Thai Airways. The company faces both full fare as well as low cost airlines that operate in the Asian region. There is immense competition that the company faces in the Middle East region, India and China. These competitions often create a pressure on the performance of the company and hamper the revenue of the company (Song Jing, n.d.).

Employees

Malaysian airlines have a well designed structure in the organization. There are talented employees who look after the benefit of the people. The productivity of the airline help the company improves their situation during the financial crisis that had hit the company in the year 2004-2005. Though there are certain advantages of having skilled employees who look to the benefit of the company, there were times when the inefficiency of the employees led to severe losses. This was mainly due to the poor decision making of the company.

Demographic segmentation and differentiated strategy

The Malaysian airlines operate on a service based criteria which accommodates the customer with an excellent flying experience. The company on a regular basis reviews the performance of the company so that they are able to update the service that they provide, and they stay in competitive advantage from their competitors. The target customers of the company are all class of people belonging to the high income group as well as the low income group. The company has initiated this approach so that they are able to attract a wide range of people (Palmer, 2000). The company tries to achieve those by introducing sales promotion through the media and also by establishing of subsidiaries in the business. The company ensures that the customers are entitled to a first class travelling experience at low prices whenever the people board the plane. The company follows a differentiated targeting as the company has special classes of tickets for all the types of people.

There are various features that the company provides like corporate travel, government travel in the commercial sector apart from the various low priced and high priced flights that are provided to the people (Eggermond, 2007).

In the corporate travel the company provides special facilities to the people of the corporate sector by planning the most attractive, competitive and suitable price structure for the corporation and for the people.

In the government travel the company tries to provide for the government employees certain facilities as the government is the strategic partner of the company. The company provides tickets as well as travel warrants to the government officers and other officials on the duty.

Consumer behavior identifies the needs and the wants of the people or the consumers. Needs are those that are unsatisfactory conditions that the people have and thus it prompts the companies to look into those matters to serve the people in a better way. There are certain aspects that are considered to be essential for the company to make the consumer feel happy and satisfied after they avail the services of the company. Malaysian airlines consider that the consumers of their services are in need of specific services so that they are satisfied while they are travelling by flight (Marshall, 2013).

It needs to be seen that the companies spend huge amount of money to identify what makes the customers satisfied. There are various factors in the airline industry that makes the people alter their buying decision, or make a purchase. It needs to be identified that the passengers select different types of airlines based on the service that they receive, the socio economic condition of the people and also the purpose for which the people are availing the flight. With the rise in the competition among the various airlines, each one of the company are trying to offer one thing or the other to attract the customers from different nations (Elder, 2015).

In Malaysian airlines the people are drawn to the service of the airlines due to several factors like the music, marketing, lighting and advertising. The company seeks to provide the people services that are beyond the expectations of the people. The company has extensive advertising on the various media so as to attract the people to avail the flight in spite the disaster that the company faced when the MH370 and MH17 crashed recently. More over the company provides hospitality services in the airlines where the company has tie ups with the local hospitals so that the people can receive emergency treatments in those hospitals. The cabin staffs of the airlines are very good they take care of the passengers in a highly sophisticated manner and the airlines had received the best award for the cabin crew. Thus these are some of the factors that prompt the customers to stay loyal to the airlines (Maricic, Veljkovic and Djordjevic, 2012). Considering the needs and the wants of the people, the company tries to grab the attention of the people by giving world class services, in the flight. The needs and demands of the people are looked after by the cabin staffs, so that the passengers do not have any complaints while they are traveling. There are certain other services that the company offers on the ground like the Golden Lounge which the people can use, the Kids corner and the Platinum suites. In the air, the company provides services like the Experience First, the Business & the Economy class.

 

New positioning for Malaysian airlines

The company can decide to launch a new premium airline regionally. The company can decide to launch a new range of flights that will provide short hauls, like the company introduces the new flights like the new Boeing 737-800 fleet. Given a fresh slate, the new model of the business be able to be planned from the beginning for the sustainable business success with no inertial drag of legacy of the airline models. The comparatively smaller dimension of Boeing 737 means the airline can soar to more destinations where the customers and the people wish for traveling, at times that are convenient to the schedules of the people (Malaysiaairlines.com, 2015). The company also intends to create a management structure separate from the existing one so that the company can concentrate on the distinctive needs of the customer of provincial quality travelers. This innovative airline will set innovative standards for the product and the quality of service, cost efficiency, as well as excellence in operation. It will thus set the outline for the success of the airline.

New product development

There are a number of airlines that offer Wi-Fi services on board the plane. The internet services on the planes are not a new concept. But the Malaysian airline are yet to install the system, though the onboard Wi-Fi system are slow compared to the terrestrial systems but the lack of the system on board t he Malaysian airlines are a drawback for the company. Even their toughest competitor like the Singapore airlines is into the services, and they are giving the Malaysian airlines tough competition (Annacchino, 2007).

So the best product that could be developed is the online Wi-Fi system, which will be beneficial for the company as well as the people. There are several advantages if the company installs the Wi-Fi on the planes. The product can be named as MASconnect

The product- the Wi-Fi on the planes is similar to the ones that are installed in the ground. But the services that the onboard wifi provides are not as fast as compared to the services that are the ground wifi provides. The MASconnect will provide the people with the opportunity to serve the internet even 30000 feet above the ground. The wifi will be provided with the air borne mobile connectivity. This facility will make the people use all their mobile phones and other devices which need the internet even while the people are on the air (BOONE, 2012).

Advantages of MASconnect- the feature will come with a low cost of $1.95 so that the people can connect and stay in contact with the people on the ground. There are no extra roaming charges that will be applied to the customers as the people will need to pay as the people will pay for it along with their normal roaming charges (Intervistas.com, 2015). The people need to turn on their wifi and browse for the signal on their phones and it will connect once the password is provided.

Disadvantages of MASconnect- it is not free and all the people will not be able to use the services and the people have to buy it. More over it will be available for the economic class or the business class and the government segment of the flight, initially. More over there is a disadvantage is that there is chance of data leakage to unauthorized people who try to access it

Distribution strategy that the company can use

The company can advertise for the product in their regular ads and can use big posters and hoardings to publish the product to the people. The company can use the television and the newspapers also to attract the people to the new feature that the company will install. More people will be attracted to the product as the people are in need of the internet service in all possible places so that they are able to work from any place, be it from 30000 feet above the ground (Business Plan Our Way Forward, 2011).

Price and the promotional strategy

The price of the product is minimal as the MASconnect will come for $1.95. The price is low as the concept is new and the company wants to test the acceptability of the product among the people. Once the product becomes acceptable in the market and the people like the experience the company will raise the price of the product. The people who wish to avail the services need to pay an additional price of $1.95 to the original price of the tickets.

The various promotions that the company can use are to make the people have an experience of the Wi-Fi services for free so that the people are aware of the features that the flight will provide. More over the company can use advertisements in the airports and distribute pamphlets when the people book their flights in person or provide online brochures to the people who will book the ticket via online (Peñaloza, Toulouse and Visconti, 2012). There are certain other strategies that the company can adopt that are the direct marketing of the product. The cabin crew can announce about the product when the people are on board that the airline will launch the paid Wi-Fi services for the people. The promotion of the product can be also through the word of mouth as the people will promote the product if they like the services and will tell others about the good services the MASconnect will provide.

Targeting the customers

The company will target two kinds of customers one is the business executives and the other is the government officials

The company will provide the people with the facility of wifi on the plane for the business class and the economy class (Gordon, 2002). The company will target them as they are the people who are in the need of the wifi on the plane as they have work pressures and they would like to avail the airlines which will provide them with the services. More over they will be able to afford the additional cost of the wifi since it will be beneficial for them. More often than not the people are asked to submit the reports to the offices on time (Pooler, 2002).

The next target customer of the company is the government officials as because the government of Malaysia is the strategic partner of the Malaysian airlines. The company will provide the services to the people when the people the government organizations will book the flights for the people.

 

Additional elements of the extended marketing mix

Malaysia Airlines in order to enhance the customer experience they need to improve customer service that the company provides to the people. In order to provide better service to the people the company needs to look at the needs of the people who are boarding the planes (Kishel and Kishel, 2005). The company needs to provide the people services that are innovative and are liked by the people. The company needs to maintain the 5 star image of the company. There are other changes that the company can adopt that are lower the cost of the tickets so that people of all economic backgrounds can avail the flights. The company should provide distinctive and unique products as compared to the competitors (Kotler, 1964).

Service differentiation- the Malaysian Hospitality (MH) that the company provides are unparallel compared to the others in the business. More over the company provides services and has own award like the “world’s best cabin staff” and the “Staff Service Excellence for Asia”. These are for the services that the company provides to the general people and the government officials who board the planes (Melewar and Saunders, 2000).

International tie-ups and domestic market

In the domestic market the company tries to serve the people with the services of the company. The company tries to see that the people are well served so that they remain loyal to the company. In the international market the company is in collaborations with the Air Asia (Malaysiaairlines.com, 2015). It provides seamless associations all through and ensuing in lesser fleet costs of procurement, ground handling as well as maintenance of costs and the improvements in the on-time performance of the company as well as improvements in the utilization of asset.

Conclusion

It can be seen that the airline industry is one of the profitable industries in the world and it is also one of the most challenging. There are three major issues that put threat to this industry they are safety, sustainability and convenience. The Malaysian airlines provide world class flight experience for the people (Peñaloza, Toulouse and Visconti, 2012). There are certain factors that lead to the airline being threatened like the competitors in the market and the two back to back damages to the flights. But there is one thing that needs to be kept in mind is that the airline is cheap compared to the other in the area and the airline provides as excellent services to the people on board the flight. The airline will need to incorporate certain changes so that the people overcome the fear and they remain loyal to it.

 

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