Airline Marketing: Singapore Airlines - Essay Example

Airline Marketing There is a widely held misconception that marketing is about selling what is being produced. It is much more than that. Marketing is involved in deciding what should be produced. Marketing is involved in deciding what should be produced as well as how it should be sold. As such it is the lynchpin of any industry. It is all - pervasive. It is important to recognize that everyone in the airline can contribute to the marketing process. The essence of marketing is to identify and satisfy customer needs; to be consumer-or- market oriented rather than production - or supply oriented. If an airline concentrates on merely selling what is produced before identifying what customers want and are prepared to pay for, it is doomed to failure. The first step in marketing is to identify markets and market segments that can be served profitably. To do this one uses the whole range of market research methods, from desk based statistical analysis to survey of current and prospective users of air services. The aim is to gain at the understanding of the needs of different market segments and also the degree to which such needs are not currently being satisfied. This leads on naturally to the production of traffic forecasts, which should be as detailed and segmented as possible. The second stage of marketing is to decide, in the light of the preceding market analyses, the air services that should be offered in the market and their product features both in the air and on the ground. This is product planning. Price is the most critical of the product features but there are many other aspects of the airlines products that must also be decided on. Product planning is related to three key factors: the market needs which have been identified, the current and expected product features of competing airlines and the costs of different product features. In assessing the costs of proposed products, the supply and the demand sides of the industry are brought together, for there is a trade-off between the two. The product planners must balance the costs of desired product features against what customers are prepared to pay for. The third stage is to plan and organize the selling of the products on the basis of a marketing plan. This involves setting up and operating sales and distribution outlets both airline-owned, such as sales office or telephone and internet sites, and indirect outlets involving a range of agents, sub-agents and on-line agencies. In order to attract potential customers, the marketing plan will also include a detailed program of advertising and promotion activities. Lastly, marketing is concerned with reviewing and monitoring both the degree to which the airline has been able consistently to meet the service standards and product features planned and customers responses to them. Such monitoring through weekly sales figures, customer surveys, analyses of complaints and other market research techniques should enable airlines to take short term corrective action, where possible, and also to make longer-term changes in their service and product features. We would be discussing here the marketing approach adopted by one of the best international airlines - Singapore Airlines. Singapore Airlines Ltd. (SIA), the national airline of Singapore and a major carrier in the Pacific region with routes to Europe and North America, is known for its unparalleled customer service as well as for its continuing efforts to upgrade its aircraft and technology. A long-established strategic seaport, Singapore is an important transit point for travel to other areas of the Far East. Even during times of severe recession in the airline industry, SIA has been the world's most consistently profitable airline and, unlike most, a virtual stranger to debt. The "Singapore Girl" flies to 90 cities in 40 countries. Singapore Airlines and the 4 Ps of Marketing : Product: Product and service specialists are often susceptible to beliefs surrounding their categories. Such beliefs are particularly apparent in traditional categories such as food stuffs, personal care, automobiles etc. Service specialists are prone to local customs which dictate how customers should be served. A new service concepts needs to take into account what is acceptable behavior by sales and service staff, what are correct appellations on printed matter and Web sites, and how much personal responsibility staffs are expected to take during customer critical incidents. Because of their focus on innovation and novelty, product and service specialist often appeal to consumers cognitive needs. In most cases, this is an appeal to a need for new experiences. Singapore Airlines is very good at consistently introducing service innovations in order to provide new experiences to its regular passengers. Price: The core of the service, transportation from the origin to the destination, is almost the same for every airline. Differences in flight time are very small as all airlines tend to use aircraft that are very much alike. Scheduling can however be a key form of product differentiation. Pricing has become one way of differentiating an airline product as the regulation has been eased. However, at least in short term, pricing is easy to initiate but will only lead to deterioration of profits. The differentiation must then be done in the reservation services, check-in, in-flight services, route selection and different types of marketing components (advertising, bonus programs etc). Differentiation has been used successfully by SIA many times. However, it appears that differentiation for a wide market, in other words, without limited focus, has become more and more difficult to sustain. Product: SIA has always regarded product design and development as a serious, structured scientific issue. SIA has a service development department that hones and tests any change before it is introduced. This department undertakes research, trials, time and motion studies, mock -ups, assessment of customer reactions - whatever is necessary to ensure that a service innovation is supported by the right procedures. Underpinning continuous innovation and development is a culture that accepts change as a way of life. A trial that fails or an implemented innovation that is removed after a few months, is not seen as a problem. In some organizations, service - and, indeed, product innovations live beyond their useful date because of political pressure or the lack of resource investment. SIA, however, expects that any innovation is likely to have a short shelf life. The airline recognizes that, to sustain its differentiation, it must maintain continuous improvement and be able to kill programs or services that no longer provide competitive differentiation. Service businesses have some extra weapons that products lack. As well as offering the usual four Ps of the normal marketing mix - product, price, promotion and place - services have three additional elements - people, process and physical evidence. Clearly people are the central element to any service. SIA dedicated to differentiate itself on service, and has communicated the quality of its service through its long running "Singapore girl" advertising campaign. Despite some controversy whether this is sexist and demeaning to the women, there is no doubt that it has communicated the core values of attentiveness, charm and personal service extremely well. Staff selection and training ensure that the promise is actually delivered consistently. Beyond that Singapore Airlines are also using technology to try to improve the quality of the process. For business passengers, individual requirement can be captured and stored on a database so that preferences for drinks, meals, seating positions and so on can be delivered immediately. To be greeted by name with a smile, your favorite brand of your favorite drink, and the promise of your chosen meal when you want it - rather than when the airline finds it convenient - add up to superior service. They are developing a process to deliver a better service that is consistent with the brand's value. Singapore International Airlines (SIA) specializes in long haul flights, particularly for the business executive market. SIA is one of the most profitable international carriers. It is regularly nominated as best airline, particularly for service. In fact, it aims to be "the airline for fine service". Its philosophy is that the customer comes first and that staff have to be flexible in dealing with customers. Employees are highly trained and paid above average salaries. SIA continues to set the industry standard in customer service. Their procedures follows model which are outlined in much of the service literature, such as : a strategic focus on customer adopting a "total company" approach to service excellence; continuous benchmarking, and incremental improvements to the system. The company also have active customer feed back system, and promotes a 'holistic' perspective by which all staff look at all processes at the time in an effort to identify areas of improvement. SIA, one of the safest airlines in the world and an award winner has a service and performance index (SPI). It tracks the SPI quarterly and aims to achieve or exceeds its targets. They take corrective actions when rating falls. These data and trends influence the addition of new processes, systems and services. A gradual decline in the ratings of SIA for in-flight entertainment drove it to introduce exciting video and audio entertainment for all classes of travel; customer feedback for this new service has been outstanding. Thus, we conclude, Singapore Airlines instantly communicates to the public that it offers a unique, professional and somewhat exotic service. Female flight attendants (Singapore girl) and their batik Sarong Kebaya uniforms have become an image and a standard that are now being recognized world - wide. REFERENCES : Shaw Stephen, 2004: Airline Marketing and Management, Ashgate Publishing Ltd. Read More