Posted by Triple A/ 215361454
Last June, Skytrax announced the top 100 Airlines in the world at Farnborough Airshow. The awards are most coveted quality accolades for the industry and described as “the Oscars” of the aviation industry (Skytrax 2016). Emirates at number one, Qatar Airways at number two and the newborn Etihad Airways at number six. The three reputed aviation brands happen to be from the Middle East. Could this be a coincidence or the airlines have adopted deliberate strategies to reach the top position?
Emirates established in 1985, set their goals to provide high-quality products and services. Over the years Emirates has evolved into a global conglomerate applying 4Ps marketing mix approach.
Place – Emirates capitalizes on Dubai’s strategic location and modern approach, by offering its passengers quick transfers linking east and west. The airline has introduced many new flight routes that are short and proved beneficial for the company and the passengers (Bhasin 2016). Emirates Chairman and Chief Executive’s mission has always been “to connect Dubai to the world, and connect the world through Dubai” making Dubai as a global hub and a global destination in itself (Carroll 2016).
Product – Emirates airline was first to introduce personalized service to its customers. They raised the bar, offering different products in all classes of travel. For economy in-flight entertainment with adjustable head rest, pillow and blanket. For business class, flat-bed and minibar. First Class has a private suite, shower facilities and fine dining on-demand (Emirates 2016).
Pricing – Emirates works on dynamic pricing. They set flexible prices based on current market demands. Emirates owns its ICT capabilities and have been able to develop artificial intelligence to support dynamic demands for pricing. Dubai being an expat market, with limited regulation, low-cost labor, young talents and petrol subsidies has kept costs and tickets prices low and very competitive against other airlines.
Promotions – Perhaps the most significant of all, is their promotional strategies. Over their life cycle, Emirates has launched several promotional campaigns – Fly Emirates, Keep Discovering, Kids Go Free, Hello Tomorrow and more. Advertising includes both above the line and below the line that attracts various customer segments based on new destination launches. In 2015, Emirates won the Best Engaged Campaign Award (Engage Prague 2016) for an integrated digital and social media campaign “Be There” challenge that resulted in 136 million reach on Facebook and 60 million views on YouTube.
Emirates has managed effortlessly to collaborate with partners for joint partnership marketing. A recent collaboration with Qantas has benefited both the airlines, offering the Australian market direct routes to various destinations. Emirates along with Dubai Tourism have also executed successful joint campaigns.
Although Emirates and Dubai are famously recognized, Abu Dhabi is the capital and Etihad Airways is the national airline. Emirates and Etihad come from the same country, United Arab Emirates. Etihad is relatively a new airline, established in 2003 and known for being the fastest growing airline in commercial aviation (Etihad 2016).
Etihad marketing strategy has been largely Segmentation, Targeting and Positioning model. In addition to Product, Price, Place, and Promotion strategies Etihad is also leveraging on People, Process and Physical evidence. The STP model is useful when creating marketing communications plans since it helps marketers to prioritize propositions and then develop and deliver personalized and relevant messages to engage with different audiences. This is an audience rather than product focused approach to communications which helps deliver more relevant messages to commercially appealing audiences (Hanlon 2006). Etihad Airways President and CEO James Hogan quotes “O’Hare (a leading marketer) will lead Etihad’s reach into new markets and take its brand positioning and marketing strategy up another level (Morris 2014) cementing Etihad vision and commitment to a strategy of collaborative growth in order to gain the scale Etihad requires to be competitive in the global market (Etihad 2016).
Segmentation, Targeting and Positioning – Etihad segments its customers into business and leisure travelers to get a better understanding of their needs and wants and how different market offerings can provide these customers satisfaction and value. Etihad offering for business class travelers depends on the willingness to pay and the quality of service. To retain and attract leisure travelers, market penetration is based on price strategy and loyalty marketing. Etihad also offers differentiated marketing, targeting several market segments and design promotional offers for each. Etihad has recently introduced the residential suite for their high profile clientele base.
The 8th P for Etihad seems to be Partnership. The airline has been making significant equity and/or partnerships investment in other airlines. Etihad made the strategic alliance with Jet Airways with a minority equity stake of 24% (Jet Airways 2013) and acquired 49% share in Alitalia (Etihad 2014). Most recently Etihad has tightened its hold on Virgin Australia by increasing its stake slightly to 24.2% (O’Sullivan 2015).
Etihad’s size in 2016 is about where Emirates was in mid-2007. Emirates has doubled in size between 2010 and 2016. Etihad has pursued partner growth and investment in other airlines (CAPA 2016).
Growth Comparison – Source CAPA – Centre for Aviation and OAG
2016-2017 will be an interesting and demanding year for both Emirates & Etihad, especially with strong competition from Qatar Airways. Qatar Airways is growing at fast rate, launching several new destinations in 2016 and are accepting the delivery of their new aircrafts. At the end of 2016, Qatar Airways will be as big as Emirates was in 2010.
Posted – Atiya Aparna Ahmad / 215361454
Bhasin, H. accessed 24/07/2016 – http://www.marketing91.com/marketing-mix-of-emirates-airlines/
Carroll, D. 2016, accessed 24/07/2016 – “Exclusive: HH Sheikh Ahmed on Dubai and Emirates”, Gulf Business website http://gulfbusiness.com/talking-dubai-emirates-airline-hh-sheikh-ahmed-bin-saeed-al-maktoum/#.V5NCZ7i7hBc
Emirates 2016 – http://www.emirates.com/au/english/
Engage Award 2016 – http://www.socialbakers.com/blog/2556-award-winners-at-engage-prague-2016
Etihad 2016 – http://www.etihad.com/en-au/
Hanlon, A. 2013, accessed 24/07/2016 – http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation-targeting/segmentation-targeting-and-positioning/
Morris, J. 2014. Royal Jet’s Chief Joins Etihad Airways. The Weekly of Business Aviation, 99(23), 4.
Flying against convention; Etihad. 2014. The Economist, 411(8893), pp. 56-58.
O’Sullivan, M. 2015, accessed 24/07/2016. “Etihad raises stake in Virgin”, Sydney Morning Herald. Website: http://www.smh.com.au/business/etihad-raises-stake-in-virgin-20150123-12wyqn.html