Marketing Plan of Emirates Airline Essay Example
Marketing Plan of Emirates Airline Essay Example

Marketing Plan of Emirates Airline Essay Example

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  • Published: September 20, 2017
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Introduction

Emirates Airlines was founded in 1985 by the ministry of Dubai, starting with just two airplanes. However, it has grown significantly over the past twenty years and currently operates a fleet of 83 planes, serving 78 destinations in 55 countries. One distinctive aspect of Emirates Airlines is its diverse workforce, which includes cabin crews from 95 different nationalities. This diversity makes it stand out as one of the airlines with the largest number of crew members from various backgrounds. Despite its impressive track record, Emirates Airlines remains committed to pursuing new opportunities and expanding its operations in the future.

Emirates Airlines has recently placed orders for approximately 45 A380 Airbus jets, with a total value exceeding 26 billion US dollars. This acquisition will establish Emirates as the leading purchaser of Super-Jumbo Airbus, showcasing its potential to become one of the largest and most profitable airlines

...

globally. With unwavering dedication, Emirates Airlines is determined to achieve its mission.

Emirates is renowned for its advanced services, which include individual entertainment systems in all classes featuring 22 audio and 18 TV channels. Customers have the convenience of booking flights, searching for flights, and selecting their seating area online. These remarkable features have resulted in Emirates receiving over 280 international awards, including the esteemed CAPA airline of the year award in 2005.

Business Overview


General Profile of the Airline Industry

The airline industry is currently thriving and is considered one of the most competitive and expanding sectors globally. It contributes to economic growth, international investment, and tourism. Over the past decade, this sector has experienced robust annual growth of 7%, catering to both corporate and leisure travel demands. With average growth rates approximately 3.

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times higher than GDP rates, it stands as one of the fastest-growing industries.

From 2000 to 2010, the figure is expected to rise by an average of 5% per year. The airline industry can be affected by political, economic, and trade factors. For example, after the September 11th attack, passenger numbers decreased due to terrorism concerns. Economic factors like increasing oil prices can have a negative impact on the global airline sector's profitability. As a result, numerous airlines have implemented strategic changes and enhanced their services in order to not only survive but also succeed in this fiercely competitive industry.

They invest deeply in the quality of services by introducing an e-booking system, more comfortable seats for passengers, low-cost carriers, new interactive entertainment systems, and many other technological techniques. The ideas behind introducing these services were to attract customer's faith and gain a competitive advantage. To survive in such a challenging market, many companies opt to come to an agreement to reduce costs and share available resources, which is also known as an alliance. Overall, the airline industry expects to double the number of passengers by 2010 and exceed 3 billion due to trade, economic development, and tourism. As a result, successful airlines will be those that can continue to play smart by implementing the above ideas to secure a strong position in the aviation market.

Competitors Overview and Situation Analysis

The airline industry is currently experiencing intense competition as sales increase at a rapid rate before starting to gradually stabilize.

In the current advertising and sales promotion stage, competition is intensifying. To attract customers' attention, many competitors are allocating more funds to research and development (R;D). Consequently, companies

are now prioritizing product and service differentiation in order to secure customer loyalty. One approach is reducing operating costs which leads to lower profit margins and forces less efficient companies out of the market.

Many companies choose offensive strategies over defensive strategies to survive and compete in the market. They achieve this by modifying their market product and marketing mix. One example is Kuwait Airways, which launched a low-cost carrier to increase its customer base, loyalty, and sales. Emirates airlines also faces tough competition from both major international and national airlines. The main competitors in the UAE are the national airlines of other states, such as Air Arabia. Air Arabia, established in 2003 by a decree from the ruler of Sharjah, is a national airline based in Sharjah airport. It has quick access to Dubai and offers fast check-in facilities.

Air Arabia has been leading the way in providing affordable air travel to the Middle East and Northern Africa since 2004. Taking inspiration from successful low-cost airlines in America and Europe, they have tailored their fares to suit local preferences. The airline is committed to offering convenient and frequent online booking options, competitive prices, exceptional service, and high safety standards. Their "Pay less.Fly more" program aims to make air travel accessible while also rewarding frequent flyers.

In contrast, Etihad Airways started operating in November 2003 with just a small team of four members but has now expanded its workforce across the region, employing over 2500 individuals.

Etihad, the UAE's national airline, was established with an investment of AED 500 million by a royal decree from Sheikh Khalifa bin Zayed Al Nahyan, the President of UAE. In 2007, Etihad

experienced a passenger growth to over 4.6 million compared to the previous year and received prestigious recognition as the World's leading New Airline for two consecutive years, 2004 and 2005.

Similarly, RAK Airways is another national airline of the UAE founded in February 2006 under an Emiri Decree issued by the Ruler of Ras Al Khaimah. Its main goal is to contribute to Ras Al Khaimah's economic development by attracting businesses and executing various projects. To cater to different markets, RAK Airways offers both charter and scheduled services.

Emirates Airlines implements a differentiation generic strategy to distinguish itself from competitors and provide top-notch quality services. This strategy includes being the first airline to offer TV screens for all classes and providing training courses using modern plane simulators. By continuously striving to be the best in the market, Emirates aims to gain a competitive advantage, increase awareness nationally and internationally, and ultimately drive demand and profit.

3)

Strategic Marketing Focus

In this section we will explore the mission, goals, core competencies, and external and internal environments of Emirates airlines.
Mission
Emirates airline aims to offer consistently high-quality, value-for-money service and become the best airline on all routes. Its mission also includes positioning itself as a long-term sustainable business that provides value to customers, employees, and investors.
Goals
The goals of Emirates airline include maximizing the overall Group's return on capital, maintaining a diverse and balanced earning stream, and leveraging the group's competencies in the market.
Objectives
Specific objectives related to these goals are retaining and improving the market share of frequent business class travelers.

Emirates Airlines is aiming to increase its market share from 40% to 55% by the end of 2009. They plan on accomplishing this goal

by targeting the low-cost carriers market, which will result in a return on investment.

Promotion: The objective of Emirates Airlines is to promote Dubai's tourism activities and introduce Dubai to the world.

Values: Emirates Airlines possesses valuable human resources and highly qualified staff. Their vice-chairman has over 50 years of experience in the aviation industry. Moreover, the airline is dedicated to providing exceptional training to their employees and continuously enhancing their skills, regardless of associated costs. Additionally, Emirates Airlines serves as Dubai's international carrier. This is significant because Dubai enjoys political stability and benefits from its strategic location, making it particularly advantageous for transit passengers.

Core Competencies
Implementing various key factors is essential for sustaining the success of airline companies. Differentiation plays a crucial role in distinguishing one airline company from another by offering advanced services. For example, the incorporation of the latest technology, such as wide seats and e-ticketing, in the aircraft can attract and retain customers. Similarly, building a strong brand name can foster a loyal customer base. This ensures that customers remain dedicated to the company with a strong brand name and are less likely to be swayed by enticing offers from competitors.

There are airline companies that use specific techniques to retain customers, such as offering flyer miles for earning enough points for a free ticket. Additionally, alliances are formed between networks of different companies to share resources and attract more customers, which expands services and increases available routes. These partnerships also result in shared experiences and lower operational costs. Furthermore, establishing long-term contracts with suppliers is important for building strong relationships, providing security even in the face of future changes in pricing strategies.


External

Environment PEST Analysis for Emirates Political

The airline industry is greatly affected by political situations like wars and terrorism. The presence of terrorist activities in various regions globally, including the USA, Palestine, and Iraq, has made these areas unfavorable for both tourists and businessmen traveling. On the economic front, having state-of-the-art airports equipped with cutting-edge technologies that can meet customer requirements is a crucial factor for the success of any airline.

The UAE is committed to investing in the growth of airports in Abu Dhabi and Dubai. This investment aims to promote economic development, decrease reliance on oil income, attract more tourists, and increase airline company profits. Furthermore, factors like population growth and a diverse society also contribute to higher airline profits as they accommodate a rising number of expatriates. Additionally, advancements in technology have both positive and negative effects on the airline industry.

The implementation of teleconferencing has resulted in a reduction in the necessity for face-to-face business meetings, leading to decreased business travel and fewer purchases of business tickets.

Emirates' Internal Environment SWOT Analysis: Strengths

Emirates is a member of the Arab alliance (Arab Air) and was the first airline company to introduce Internet booking with a variety of features and options. Additionally, Emirates offers self-check-in services for customers at Dubai and partner airports.

Long-haul flights from Dubai to New York are facilitated by the world's largest purchaser of Airbus aircraft, which plans to book 45 Airbus planes by 2012. In order to enhance employees' commitment to their work, the company offers training, rewards, and performance analysis. Additionally, they are an official sponsor of the FIFA World Cup 2006. The Skywards Miles frequent flyer program is shared with various

airlines, including Sri Lankan Airways. However, a weakness of the company lies in the substantial investment required for purchasing airplanes and implementing cutting-edge technologies, resulting in high operational costs.

Emirates Airlines is renowned for its higher fares and lack of membership in a global alliance. Moreover, they are not authorized to operate in Abu Dhabi, the UAE's capital. Nevertheless, the UAE's high per capita income presents growth prospects. The government is investing in regional airports' development and expects a substantial increase in tourist arrivals. Dubai's growing population and internet usage provide an advantageous setting for new ventures.

Dubai Air shows play a significant role in promoting the regional aviation industry. However, there are several threats that the industry might face. These include potential losses of around 5 billion due to the escalating oil prices. Additionally, the expenses for aviation security and insurance will also increase the operational costs for airlines. The presence of low-cost carriers poses a threat to traditional airline operators. Another concern is the vulnerability of information security in the electronic ticket system. Furthermore, natural disasters and outbreaks of acute diseases can adversely affect tourism. In summary, Emirates Airlines has strengths such as new technologies like e-ticketing and self-check-in services. However, one noticeable weakness is the high prices of Emirates, which are influenced by their substantial investments in aircraft acquisitions.

There are both opportunities and threats concerning Emirates Airlines. Some opportunities include investments in Abu Dhabi airport. However, there are also threats such as an increase in oil prices, low-cost airlines, and the spread of killer diseases.

Marketing Plan


Target Market

Over the past few years, Emirates Airlines has been less affected by the economic and airline downturn compared

to other carriers. Emirates Airlines divides its market segment into three categories:

UAE's Tourism and Business segment Customers

Emirates Airlines has benefited from Dubai's emergence as a regional business and tourism hub, contributing to its growth and the increase in regional air passenger traffic.

The freehold ownership law in Dubai has been instrumental in attracting tourists and businesses to the city. Under the ruler's strategic plan, Dubai aims to welcome 15 million visitors by 2010. This growth is creating opportunities for expansion in tourism, business, and local airlines, particularly in the GCC region. According to the World Travel and Tourism Council (WTTC), the Middle East accounted for approximately 2.4% of global travel and tourism activity in 2006, with an expected growth rate of 5%.

Emirates should capitalize on the projected 9% surge in passenger traffic in the upcoming years. The UAE, renowned as the world's fifth-largest exporter of Crude Oil, and Dubai, a rapidly expanding city, face high demand for skilled and unskilled workers due to their thriving economy and emerging labor market. The appealing labor market, which offers generous wages, has attracted individuals from across the globe. Presently, expatriates comprise 80% of the country's overall population while Emiratis represent only 20%. Consequently, the United Arab Emirates boasts a diverse population within the Middle East.

According to the 2006 census, the population of UAE is 4.2 million. This population is diverse, with the national emirate making up 20%, other Arab and Iranian individuals making up 23%, South Asians making up 50%, and others (Westerners and East Asians) making up 8%. This diversity allows Emirates to plan routes all around the world. Emirates has reached agreements with national authorities worldwide to

operate in their countries. Dubai follows an "open sky" policy, which means any carrier can compete with Emirates airlines.

Dubai serves as the operational hub for Emirates airlines, offering a convenient connection point between Europe and Asia/Australia. This strategic location has contributed to the airline's growth. Emirates has capitalized on this by targeting transit passengers. The airline's well-established and marketed network of routes has greatly benefited this specific segment. Currently, Emirates airlines operates in 87 cities across 59 nations, with further expansion expected.

Furthermore, in order to cater to the industry's growth, Dubai airport authorities have invested $4.1 billion in expanding Dubai Airport. The renowned "Fly Emirates" caption has gained global recognition and continues to attract customers from all over the world.

Strategic Objectives

As the airline industry has reached a mature stage with intense competition among operators, each airline employs offensive strategies to ensure their market position. Emirates implements the following marketing strategies to effectively conduct business.


Market Penetration (Improving In-Flight Services)

Business focuses on selling existing products to existing markets drives growth strategy for Market Penetration.

  1. Retain and boost market share of Emirate airlines product and services
  2. Protect market dominance of Emirates airlines existing markets.
  3. Driving out competitors by restructuring mature market.
  4. Enhance usage of existing passengers

Enabling passengers to make voice and data call over aircraft’s telecom system Tele-communication is vital element in everyone daily life, So communicating with others while on airplane would be very good value added service can

provide by Emirates Airlines. This can be done by adding some infrastructural changes on aircraft to communicate and partnership with telecom provider who can assist deploy. Currently Emirates uses high expensive tele-communication method to make voice calls and internet, instead can deploy new system to make voice and data calls from traveler mobile phone via trusted telecom providers. Passenger’s mobile phone should be beam signal to the ground satellite system and from Immarsat which is already installed on most of the Emirates airplanes. Similar service, “On Air” is being developed by Airbus SAS and air transport IT service provider SITA.

Earlier this year, British carrier BMi and TAP-Air partnered with OnAir to offer voice and text messaging services for European flights.

Market development: (Extending New Routes)

The company aims to expand its current services into new markets by launching them in different geographical areas or targeting new market segments. Emirates Airline's goal is to establish Dubai as a major international long-haul hub, providing an alternative to traditional European airline hubs like London's Heathrow Airport, Paris' Charles De Gaulle, and Amsterdam's Schiphol. The airline actively promotes Dubai as a destination, offering discounted hotel rates and showcasing events like the Dubai Shopping Festival to attract more visitors. Adding new routes and destinations, especially with the growth in UAE tourism, is suggested.

Emirates Airlines does not operate in major regions and therefore needs to expand to popular destinations worldwide. The airline follows its usual practice of conducting road shows and press conferences when entering a new city. These events allow travel agents, tour operators, and local airline personnel to connect and learn about Emirates' new routes,

holiday packages, and other advantages. Once a route to Shanghai, the country's economic hub, was established, Emirates offers passengers an opportunity to explore the heart of China's political and cultural activities. Shanghai is China's wealthiest city in terms of historical significance, with a history dating back over 3000 years and renowned landmarks like the Forbidden City, the Great Wall of China, and the Ming Tombs. The success of Dubai as an intercontinental hub has been greatly supported by airlines such as Emirates. Dubai's geocentric nature has become exceptionally crucial.

Now there are hardly two points on the globe where it is not logical or possible to use Dubai and connect any two cities, and usually it is a pretty direct route.

Product Development (Private Suite)

Introducing new services into existing markets implies product development. This strategy involves the development of fresh competencies and requires business to expand customized services which can apply to current markets. Since Dubai is a hub for all international business travelers this is high time to introduce new product to cater top level business executives. Imagine the CEO of multi-national company makes lengthy overseas journey to attend a board meeting that could have a major impact on the company financials.Of course, company wants CEO to be top of his game, rested, refreshed, relaxed and ready.

Emirate Airlines has introduced high-quality first-class private lounges to attract business travelers and make the cost of CEO's air travel seem less expensive. These premium-class private suites are fully outfitted with personal storage, coat cabinets, desks, and individual mini bars. The long seat can recline to become a fully horizontal couch, while the 21"

widescreen entertainment offers over 500 channels. The product also includes an exceptional level of personal service, with a la carte gourmet cuisine and a wide-ranging selection of wines provided by specially trained multi-lingual cabin crews.

Diversification: (Low-cost carrier) Diversification is a risky strategy where businesses sell new services in new market segments. In light of the successes of European low-cost carriers, Middle East operators are also interested in exploring the concept of "Frills-free" flying. The global low-cost carrier sector is growing at a rate that is more than three times the average industry global rate. In January 2007, there were just under 50 million seats on 342,000 LCC services offered worldwide, an increase of 17% and 15% year-on-year, respectively.

Low-cost carriers are airlines that offer discounted fares compared to traditional network airlines. These savings are achieved by eliminating certain passenger amenities typically provided by traditional airlines. The main opportunity for low-cost carriers lies in the elasticity of passenger fares, low rates of air transport penetration, and the substitution of traditional low-cost transportation modes such as trains and buses. In the UAE, Air Arabia dominates the market for low-cost carrier services. This poses a threat to Emirates Airlines, which must decide how to respond, especially considering the large expatriate market in the UAE. One option being considered is the introduction of a low-cost subsidiary for Emirates Airlines. In order to acquire a share of the low-cost air travel market and retain its customer base of UAE expatriates, Emirates Airlines should slightly diversify its current marketing objectives. This can be achieved by launching a new subsidiary specifically targeting the budget airline market. The key routes for this subsidiary should

be based on high demand and the large number of expatriates from countries such as Egypt, India, and Pakistan.

Under the arm of Emirate Airlines, a new budget airline subsidiary is being introduced to the new Al-Makthoum International Airport being constructed in Jebel Ali, located on the Dubai border. This will provide residents of Dubai and the Northern emirates with an enhanced travel option to neighboring destinations. Emirates Airlines is placing a lease order for 200 aircraft and is expected to be operational by 2009. The carrier plans to use either an Airbus A320 or a Boeing 737 on a lease basis initially, before eventually acquiring ownership. Kuwait Airways has already succeeded in implementing a similar practice by introducing a low-cost carrier called "Al-Jazeera" to enhance its passenger base, loyalty, and boost sales. This modification of the marketing mix aligns with Ansoff's growth matrix for business strategy. The matrix outlines that a business's growth depends on whether it sells new or current services in new or current markets. The growth strategies recommended by the matrix set the path for the business strategy.

Evaluation

Once the marketing plan has been implemented, it needs to be assessed. This assessment involves determining the degree to which marketing objectives were accomplished within the specified timeframe. The table below illustrates the efficacy of marketing strategies and suggests ways to enhance or replace the current plan. Enhancing In-Flight Services The success criteria for implementing a system that allows passengers to utilize their mobile phones for voice and data communication is to expand market reach. This can be measured by examining voice and data usage, as well as the growth

of market penetration.

If the response fails, there is no corrective action plan. The implementation of new routes and destinations is done to achieve market development. Measuring the success of this strategy is best done through flight occupancy. If the flight occupancy level is lower than expected, it is necessary to explore new destinations.

Emirates Airlines has introduced a new product called First Class Private Suites. The success of this product launch can be measured quantitatively by the number of bookings or occupancy. If the product does not perform well, a corrective plan is to reduce the ticket price. However, this product is not price sensitive, so a price reduction may not be effective. On the other hand, for Budget Airlines, the success criteria would be attracting a new customer base for the airline.

One way to assess the success of a budget airline subsidiary is by examining its financial results, specifically its operating profit. Another way to measure effectiveness is to hire an external marketing auditor or agency. A comprehensive and systematic market audit can help management allocate marketing resources efficiently by evaluating the objectives, strategies, structure, and performance of the marketing organization on a periodic basis.

Implementation Plans & Budget

Strategy # 1 (Market Penetration):

Strategic Program:
- Deployment a system to allow passengers to make voice and data calls from their mobile phones

Implementation Tasks:
- Technical Study
- Feasibility Study
- Partnering strategic alliance with telecom service providers
- Installation of system on aircrafts
- Marketing concepts to the audience

Responsible:
- Chief Technology Officer
- Vice President – Finance
- General Manager – Marketing

Time Scale:
- New service launch would be on 1st January 2009

Cost

Factors:
- Approximate Budget: 150,000 for each aircraft
- Marketing Budget: 150,000

Strategy # 2 (Market Development) :

Strategic Program:
- Operating new routes and destinations

Implementation Tasks:
- Researching market gap to operate new routes
- Feasibility Study
- Partnering hotels and tourist institutions at new destinations
- Partnering strategic alliance with local airports to operate
- Marketing new routes to the target market

Responsible:
- Vice President – Finance
- Vice Present - Operations
- General Manager – Marketing

Time Scale:
- Four new routes are added every quarter starting from January 2009

Cost Factors:
- Additional capital investment for new aircrafts: USD 200 million
- Marketing budget for each route: 0The strategic program "Strategy # 3" (Product Development) involves introducing new First Class Private Suite on aircrafts, with implementation tasks such as technical and feasibility studies, installation and modification of onboard facilities, and marketing concepts to the audience. The responsible positions for this program are the Chief Aircraft Officer, Vice President of Operations, Vice President of Finance, and General Manager of Marketing. The launch of this new service is planned for 1st January 2009, with an approximate budget of $300,000 for each aircraft and a marketing budget of $150,000.

The strategic program "Strategy # 4" (Diversification) focuses on establishing a low-cost carrier subsidiary. This program includes tasks such as market and feasibility studies, leasing and buying used aircraft, deploying new human resources for the subsidiary, and developing marketing strategies for the new target customers. The responsible positions for this program are the President and Chief Executive Officer. The target timeline for implementation is mid-2009, with an estimated budget of $500 million.

In conclusion, as traveling remains a special interest for people worldwide, there will always be a

demand for the best services. This also necessitates a focus on better safety measures.

Emirates airlines are responsible for providing the best services and security to their customers, especially in a country like UAE with different ethnic groups. As the number of airline companies increases, there is more pressure for Emirates to maintain their fame and glory. To address this, Emirates has developed a strong strategy that focuses on implementing their plans. With their unique qualities, dedicated services, and promising strategy, Emirates will continue to deliver exceptional efforts in a multicultural country like UAE and uphold their motto of flying high.

References

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html> [Accessed 8th June 2008]

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  • In 2004, AME Info FZ LLC was established. On December 20, 2005, their website can be accessed at http://www.

    The economic success of Dubai as a hub is predicted to continue growing (Hussain, 2008). Retrieved from nameinfo.com/48088.html on 8th June 2008. A source from Gulf News states that Dubai's economic success as a hub is expected to expand (Hussain, 2008). Retrieved from archive.gulfnews.com/articles/08/06/06/10218851.

    html> [Accessed 8th June 2008]

  • Anon. [n.d] Ansoff’s Product/Market matrix [Online][n. ] Available from <http://tutor2u. net/business/strategy/ansoff_matrix. htm> [Accessed 8th June2008]
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    Available from l

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