International Marketing for Travel & Tourism - Literature review Example

Emirates Airlines International Marketing for Travel and Tourism Table of contents 0 introduction............................................................................................................................3 2.0 An Evaluation of Emirates Airlines’ Marketing Plan/ Strategy.............................................4 2.1 Challenges and Competition........................................................................................4 2.2 Situational Analysis......................................................................................................6 2.3 Customer Analysis and Collaborations.........................................................................7 2.4 PEST Analysis...............................................................................................................7 2.5 SWOT Analysis.............................................................................................................9 3.0 More Marketing Strategies.....................................................................................................11 4.0 Conclusion..............................................................................................................................12 5.0 References..............................................................................................................................13 1.0 Introduction It is hard to fathom the contemporary world being without the airline industry because the airline sector has a plethora of benefits to the society and equally offers quicker services compared to other forms of transport. This in turn helps build other industries and sectors of the world, hence playing a crucial role in ensuring a better world economy. The airline sector is vital in promoting globalisation and internationalisation endeavours of businesses, organisations and industries across the world (thus the need for various airlines to remain at the forefront of the competition from rivals by having the most superior strategies for marketing the respective airlines). This report delves on an international airline, the Emirates Airlines, and its marketing strategy. The Emirates Airlines is competitive airline, which is currently giving a number of airlines (such as the Air France and Lufthansa) a run for their money, and with increasing reach, the airline is set to realise untold heights in the business of air service (Namaki, 2008, p. 469). The Emirates Airlines was founded in 1985 and has since metamorphosed into the biggest airline in the Middle East. Fully owned by the Dubai government, the Emirates Airlines is a subsidiary of the Emirates Group. As a result of its excellence in service and astounding growth rates, the airline has amassed for itself a formidable brand name and become a giant mention in matters aviation. Moreover, the airline has equally continued to rank highest in terms of financial growth with the prospects of the future only predictably brighter. The goal of the Emirates Company is to lead by excellence. Its mission statement states that the company exists to provide the world’s best in-flight experience and the vision statement, additionally, is to make civilisation safe and sustainable. These are appealing aspirations which on their own attract customers globally by evoking sheer curiosity and a need to sample the services provided here-in. they help the company market itself and realise its objectives which are to increase market share, retain and obtain customers, and enhance global tourism (OConnell, p. 94). 2.0 An Evaluation of Emirates Airlines’ Marketing Plan/ Strategy 2.1 Challenges and Competition The Emirates Airlines has in the last few years immensely spread its operations. The fastest growing airline in the world, it has become a major player in fields of business, tourism, travel and leisure all across the globe. However, amidst its splendour and impressive growth rate (success), the Emirates Airlines still faces a number of challenges. These challenges include competition from rival airlines with equally gifted and formidable tactics. The Emirates Airlines’ strategic team can never afford to bask in threatened glories with such incessant and stalking competition ever-present in the business of aviation. The aim of the Emirates Airlines is therefore to remain a step ahead of the competition (that is going nowhere) in terms of innovation and implementation (Ferrell & Hartline, 2005, p. 411). Internal forecasts predict that competition in global aviation is set to become even stiffer. With customers always on the lookout for high performing and quality aviation systems, the Emirates faces a daunting task of retaining, and more importantly, expanding its customer base and permanently establishing it as the number one preferred airline globally. This calls for a multipronged approach which include the provision of superior and wider range of drinks and foods (for various tastes and cultures), better security measures, a reputation for the friendliest and most helpful staff (in every department), well organised and affordable transport services to and from the airports, ease of acquiring air tickets, improvement of existing technology, and so on. The Emirates, unlike the competition has to focus on long lasting implementations instead of short-sighted achievements that are bound to fade with time. The efficiency and quality status of most airlines in the Middle East is below the international standards. However, the Emirates must endeavour to compare itself with the best of the world and not lower its standards so that it can remain steadily ahead of the competing pack. 29 year old Emirates Airlines has proved its market acumen thus far by overtaking the 90 year old Lufthansa Group in terms of passenger numbers and fleet of airplanes. The Emirates has fearlessly plunged into the highly competitive and open sky policy of the United Arab Emirates and has risen above the rest to become a leading air services provider. Its success portends the spirit of free enterprise, competition and utmost resilience. Other notable competitors of the Emirates Airlines include the Etihad Airways and the Qatar Air. The Etihad, for instance, is the carrier for the Abu Dhabi area and is UAE’s national carrier with the airline presently owning and operating over 50 aircrafts and working in collaboration with over 40 world airlines such as the American Airlines, Malaysian Airlines, Jet Airlines, and so on. Apart from the air transportation, Etihad Airways also takes part in international transportation of goods (Connell, 2011, p. 377). Another challenge that the Emirates continues to contend with is the increases in the prices of fuel. Aviation fuel is quite costly and increases of the same only serve to significantly up the costs of operations which in turn retard development and competitive edge accrued from extra capital. The Etihad Airways, for example, benefits from increases in oil prices as it is backed by oil owners, unlike the Emirates Airlines which is backed by oil buyers. Weak travel demands, more so in periods of global recession/ financial strain also pose a huge challenge to the Emirates Airlines especially when a lot has been invested in the airline (in attempts to upgrade its outlook and customer appeal (awaiting a new market season). Weak demand therefore often leads to bad losses such as in the 2008 era of the global recession or at times of low tourist activity such as around February (immediately following the December festive period) and during terror alerts (Walker, 2003, p. 225). Increased government taxes (another ubiquitous challenge) also results in inflated costs of operations which, like the increase in oil prices, lead to slow growth rates and reduced ability to implement sound development agenda. The challenges faced by the Emirates are quite serious and result in a need for real quality leadership and experience in the field of airline management coupled with a dedicated and innovative staff (Pryke, 1987, p. 124). 2.2 Situational Analysis With time, the Emirates Airlines has grown in both stature and scale and inserted itself in the aviation business as a world beater in tourism and travel. The airline has gained a reputation as a committed industry which is dedicated in enhancing and participating in every aspect of air transport. In the year 2001, the Emirates Airlines made history by making an order – the largest ever – of Boeing airplanes in an undertaking that cost a whopping 9 billion USD. The airline is recorded to have carried cargo over 22.5 tons in weight and 44.5 billion passengers in the 2013/ 2014 financial year alone, with the airline yet still aspiring to increase these figures by exploring new areas/ destinations of the world. This is poised to be a great step that will inevitably take the Emirates miles ahead of the rest. The Boston Group predicts that by the end of the current decade, the Emirates Airlines shall have become the largest airline in the world (Romaithi, 2006, p. 90). 2.3 Customer Analysis and Collaborations Through a dynamic market strategy, the Emirates redirected its efforts to position its customers as globalists. The airline also came up with a multimedia program dubbed ‘Hello Tomorrow’ which endears to effectively depict the airline as a contributor to connectivity across the world and an enabler of unforgettable experiences. This program is relatively cheap but has proved to very helpful in terms of marketing the Emirates Airlines and thus enhancing its profit levels. The Emirates strategically shares joint ventures with Qantas Airways which substituted Singapore with the city of Dubai being a stop over to United Kingdom’s London. Furthermore, the company boasts more than 7 subsidiaries such as the Arabian Adventures, Congress Solution International, Emirates Holidays, Emirates Tours, and so on. In order to enhance its competitive edge, however, it is recommended that the Emirates Airlines acquire more partners in the airline industry (Cadogan, 2009, p. 365). This is one area in which the competitors such as the Etihad Airways continue to trump over the Emirates and hinder its market influence and penetration. 2.4 PEST Analysis (i) Political and Legal Environment The Emirates Airlines moved in swiftly to pen agreements with Asian Pacific nations and others more in a move that opens up trade and transport routes. These agreements have since the beginning of the new millennium been helpful in opening up the rest of the world to the Emirates. (ii) Economic Environment If a nation’s economy (such as that of the UAE) is healthy and stable, individuals do well financially and this financial capability enables the citizens to manage and take Emirates flights. A sound global economy thus promotes the operations and enhances the profit levels of the company. However, profit levels take a tumble when the prices of fuel go up. (iii) Social and Cultural Environment The employees of the Emirates are suitably and well trained to be flexible and to adapt to the social as well as cultural environments they operate. In addition, the company’s policy of according services to any person regardless of their origin, race, color, political affiliation, religion and tradition helps in attracting and maintaining a wealthy display of cultural and social diversity. In this case, this strategy enables the Emirates the capacity to have any kind of client from any part of the world. (iv) Technological Environment The world and consumers are more technologically aware. In this light, the Emirates Airlines always strives to be superior technologically and recently added a crucial arsenal (in the shape of Airbus A350-XWB, Boeing 747-8F) to aid its competitive ability technologically. In addition, in a world where environmental conservation is deep in everyone’s hearts, a company known for environmental recklessness is usually shunned. Recent technological advances have helped the Emirates enhance their facilities and fuel usage therefore considerably lowering the negative impacts of the Emirates’ operations on the global environment. Along the same wavelength, the airline uses bio fuel which is known to be safe and price friendly. This strategy enhances public acceptance and reduces the costs of operations which furthers the airlines’ cause (Phillips & Doole, 1994, p. 78). 2.5 SWOT Analysis (i) Strengths There are a couple of strengths that have enabled the Emirates to steady itself and become a main participant in the air transport industry. Its membership in the Arab Alliance, for one, earns it a competitive advantage and enormous global recognition. A strong support from the government of Dubai also enables the airline to safely secure its operations and extend them to other areas of the world. The Emirates Airlines is regarded by many as the best airline in the aviation business and several people prefer it to other airlines (which lead to higher profits as customers are retained and many more are gained). The Emirates Airlines is gifted in the art of eliciting customer loyalty. What this means is that in the end, customers do not trickle away into rival airlines as these loyalists also engage their friends, work mates and relatives and persuade them into considering Emirates’ services and flights. Apart from exceptional customer loyalty management, the Emirates is keen to employ into its ranks highly skilled and friendly staff who do their very best in the handling of customers and their property with dignity while also striving to develop game changing ideas that can enhance the wellbeing of the company. Another notable strength of the company is its wide reach. As at January 2015, the Emirates had covered about 72 countries in six continents. (ii) Weaknesses As with any other airline or business venture, the Emirates also have to deal with certain weaknesses. Chief of this is the effect of aggressive airline competition which effectively hinders market growth. Secondly, the ticket prices of the Emirates Airlines are higher compared to many other international airlines because the company uses the premium pricing strategy. This is often made worse when the costs of living become unmanageable to most people who therefore opt for cheaper options just to get from point A to point B (Jain, 2000, p. 348). thirdly, as has been previously stated, the lack of global international alliance reduces the airline’s competitive edge and visibility and is therefore a notable weakness of the Emirates Airlines. (iii) Opportunities There are immediate opportunities available to the Emirates that would amount to untold gains if well exploited. There are a lot more international destinations that the airline can still cover and establish itself in as the number one preferred airline. Secondly, to boost the confidence of customers in the airline, a brand new fleet leverage provision could be truly impactful. There is equally potential awaiting when the Emirates begins to cater also for the middle class and budget travelers and equally come up with and embrace game changing innovations (Simmonds, 1982, p. 525). (iv) Threats Threats faced by the Emirates are ever-changing while others such as enormous competition in the region of Middle East remain constant and ever-present. As already stated, oil price increments also threaten the operations and stability of the airlines with changes in government regulations, policies and regimes also always being unproductive and unpalatable at times. Apart from unstable political conditions, terrorist threats (attacks) and travel advisories often reduce the number and content of flights which hurts the seasonal income of the company. 3.0 More Marketing Strategies The Emirates Airlines plan to further penetrate the market and improve in-flight services by retaining and enhancing the market share of the of the company’s services and products, driving out competition through the restructuring of the mature markets, protecting the market dominance of the company’s current markets and enhancing the use of passengers in marketing endeavours. These approaches are cost effective yet result in huge gains by retaining existing customers and attracting many more. In addition, to attract more business people who cannot afford to be out of reach because they have to switch off electronic gadgets during flights, the Emirates have come up with a system that allows for continued communication with the outside world. Another technique of improving the number of clients is the introduction of new services into existing markets in a product development agenda. As a marketing strategy, the Emirates partake in numerous sponsorship programs of global events and sports actions, for example, the Ryder Cup and the ICC Cricket World Cup. These ventures are quite handy as they increase visibility of the company. The company is known globally by football and sports fans by sponsoring t-shirts of great teams such as Real Madrid (Madrid, Spain) and the Arsenal (London, England). In Arsenal FC, the company has further purchased the naming rights of the club’s Emirates Stadium as a sound global marketing strategy, not to forget the important tie ups with FC Barcelona (OConnell, p. 95). The Emirates Airlines use cheap marketing tools to great effect. These also include marketing via social media sites (such as on Facebook and Twitter), television advertisements and (tourism) magazines which require very little capital. The company also endears itself to its consumers and the rest of the world by frequently announcing seasonal pricing discounts and awarding privilege cards that enhance brand loyalty. Apart from high standard safety and security measures, the airline is also well respected on humanitarian grounds for its exceptional luggage services and special/ personalised assistance to disabled passengers (Peter & Olson, 1990, p. 400). The company also has a very good website rich with information that equally markets its activities well in over 9 languages and allows for online booking of flights and hotel rooms while also advertising the company’s luxurious, excellent and higher service quality. Furthermore, the airline’s over 55,000 employees from over 163 world countries significantly help market the airline across the globe by word of mouth (Andersen & Poulfelt, 2014, p. 345). 4.0 Conclusion The Emirates Airlines with its vibrant strategy of marketing and growth is set to realise better performances and growth. In the future, the Emirates Airlines will be heavy in virtually all nations of the world with their progressive ideas and innovations in technology, consumer retention, marketing, and environmental conservation. References Andersen, M., & Poulfelt, F., 2014, Beyond Strategy the Impact of Next Generation Companies, Hoboken: Taylor and Francis, 345. Cadogan, J., 2009, Marketing strategy, London: SAGE, 365. Connell, J., 2011, Air transport in the 21st century key strategic developments, Farnham, Surrey, England: Ashgate, 377. Encyclopedia of global brands (2nd ed.), 2013, Detroit: St. James Press. 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