Executive Summary
For the purpose of writing a report on tourism marketing, we have chosen Singapore Airlines. The reason behind choosing this airline is because it is regarded as one the biggest airlines in the world and has its headquarters in Singapore. Singapore has always been a major attraction for tourists and those who visit Singapore must also travel via the national airline so as to make the journey more memorable. The revenues of Singapore Airline have always been growing, however, the recent rise in competition within the airline industry has led to low turnover ratios. A survey has indicated that in terms of market capitalization, Singapore Airline has secured the second position. We will be looking at the good aspects of Singapore Airline and understand why the airline has been a good traveling option by the flyers. We have made use of secondary data for the purpose of making this report. The limitation we faced was that if we had the opportunity to interact with the employees directly, we would have gain more insight into their operational efficiency and integrated marketing communication activities.
Introduction
Singapore Airlines is the national airline of Singapore with its origin at the Singapore Changi airport. The airline was established in the year 1970 and although many private airlines have joined the airline industry but none has been able to replace the standard and reputation of Singapore Airlines. Singapore Airlines has never compromised on its philosophy and values and this is why it is recognized as one of the best airlines across the globe. The history of Singapore Airline is rich. The airline was once the Imperial Airways which then became MAL after the departure of British colonies. For years, the MAL airline functioned from Malaysia and Singapore to various other countries. When Malaysia became independent, it decided to have its own Malaysia Airline. Singapore also agreed with Malaysia and on a friendly basis, both the countries divided the airline assets in the form of aircraft, airports, and other facilities. Boeing aircraft came in the share of Singapore. As destinations continued to increase, expenditures rose too which resulted in a financial and economic crisis for Singapore Airlines. Later, Singapore Airlines formed alliances with various airlines including Delta, Air New Zealand, Air Canada, Lufthansa, Swiss Air and several others. As of now, the airline covers thirty-five countries with more than sixty-two destinations. It covers almost six continents from Singapore as its hub. The network route of Singapore Airlines is quite huge and includes regions of Africa, Middle East, North America, Australia and South West Pacific (Wirtz and Johnston, 2003). There are three subsidiaries of Singapore Airlines which are named as Silk Air, Tiger Air, and Scoot. The airbus owned by Singapore Airlines is the largest passenger carried any airline possesses. It was in the year 2010, that the International Air Transposition Association announced that Singapore Airlines has secured the second position among airlines in the industry in terms of market capitalization. The survey mentioned the worth of Singapore Airlines as fourteen billion American dollars (O'Connell and Williams, 2011).
SWOT Analysis
Strengths
Singapore Airlines has a strong support by the government of Singapore which gives it a strong position among other airlines. The hub of Singapore Airlines is in Singapore which is durable. The number of passengers it carries is the highest one and the aircraft it owns are the largest one in the world. The market capitalization is of strong value which makes Singapore Airlines as one of the strongest and successful airlines. The destinations covered by Singapore Airlines are multiple which again adds to the strength of the airline. The airline provides a luxurious journey to the passenger based on their class preference. Singapore Airlines is still known for its Singapore Girl idea of branding.
Weaknesses
Since Singapore is a bit of expensive area so flying from the hub cannot be affordable for all. The competition in the airline industry is very intense due to which it has become hard for Singapore Airlines to maintain its position. The financial performance of Singapore Airlines has been declining which contributes to its weaknesses.
Threats due to nonpayment of wages, the relationship between the senior management and employees got eroded. The prices of Singapore Airlines ticket are high which must be lowered down so as to allow the middle class to enjoy their journey via Singapore Airlines. Due to increase in the terrorist activities, people would stop traveling for leisure which could bring losses Singapore Airline.
Opportunities
More and more international destinations are being included in the list by Singapore Airlines which will be seen as a great opportunity for making profits. There is ample growth potential in the Middle East which can be cashed by Singapore Airlines. Incorporation of technology and innovation can produce more means of attracting and retaining customers. The aircraft such as Air Bus and Boeing are likely to lift up the status of the airline.
Customer Information
Singapore Airlines is known for providing a quality journey to its customers coupled up with premium services. The customers of Singapore Airlines are mostly the Europeans and Americans; Asians are also becoming a segment. Individuals, families and business class travels on the airline. The airline is positioned as one of the prestigious airlines around the globe and known for having the best customer service as the employees are well trained to look after the needs of all customer segments belonging to the economy, super economy, business and premium classes (Roy, 1980). Since the focus of Singapore airlines is based on delivering quality, the airline is positioned just below Emirates in the perceptual map diagram.
Perceptual Map Diagram for Singapore Airlines
Competitive Analysis
The competition in the airline industry is quite intense. The rivalry among airlines on the dimensions of low-cost leadership and differentiation is pronounced. The entry barriers for new or global airlines are high because the airline regulations are becoming very stringent plus the fierce competition also makes it difficult for new airlines to survive. Increasing oil and gas prices can also act as a strong barrier. The bargaining power of Singapore Airline is high as it has the option of switching suppliers in case one defaults. The buyer’s power is low as there is no direct substitute of Singapore Airlines.
Part B
Product
The service offered by Singapore airlines is based on the idea that it meets the standards perceived by the customers and delivers benefits which are perfectly in line with their needs and wants. The primary service offered by Singapore Airlines to its customers is air transportation. Through air transportation, Singapore Airlines wishes to ensure that the people can make use of its services to reach their destination. In addition to the conventional means of transportation such as railways or ship, traveling by airways is mostly preferred because it takes less time to travel by air as compared to other methods. Moreover, air transportation saves the individuals from traffic jams and delays. The air transportation service of Singapore Airlines is the target market or the population of Singapore as well as other countries and is expanding at international level by carrying out acquisitions and planning partnerships. Customer services offered by Singapore Airlines are exceptional and serve as differentiating features for the airline. For instance, the employees treat the customers in a friendly and polite manner and respond to their concerns on an immediate basis. The purpose of Singapore Airlines is to deliver exceptional quality of journey to its customers and make sure that they exhibit loyalty towards the airline. Singapore Airlines does not focus on low cost tickets but make sure that the ticket price justifies the quality it offers. Tickets are available to customers via the official website of Singapore Airlines-the customers can also approach travel agencies for getting their seats booked well in time. Since Singapore Airline is one of the largest airlines so there are flexible timings and schedules designed to meet the needs of all employees. Bagging handling issues are tackled at the airline successfully so as to keep the customers pleased and loyal. The employees also engage themselves in providing feedback, suggestions, and creative ideas to improve operational efficiency and gain more market share.
Place
As of now, the airline covers thirty five countries with more than sixty-two destinations. It covers almost six continents from Singapore as its hub. The tickets are available to customers online as well as through the distribution network of Singapore Airlines. The customers just show their printed e-tickets and get boarding passes. Heracleous and Wirtz (2012) also supported the idea by mentioning that Singapore airline has a strong website where all the services and travel programs associated with the airline are mentioned for customer’s view. There is a special section of feedback from customers where comments are regarded as valuable and necessary improvements are made.
Part 2
Price
The pricing of Singapore Airlines is based on the differentiation feature of it. Unlike some airlines which are low cost and offer short haul, point to point traveling, Singapore Airline does not offer low price of tickets and prefers long hauls and breaks at connecting airports. The basic ideology of Singapore Airline is to provide comfort and luxury to the customers when they choose to fly this airline. The aircraft is usually divided into a few classes such as business class, economy class, and business plus class. The business plus class offers the maximum luxury and comfort to its passengers which also mean that the price for its ticket would be higher. Those who want to travel within the comfort of the business class would pay more than the price of a regular ticket but it would be less than the business plus class. Then it is the economy class where the majority of the flyers are seated. In the economy class, customers are not given exposure of many luxuries but they are offered headrests, meals and treated with respect and dignity. The price of the ticket of economy class is certainly lower than the mentioned classes. The kind of food provided to the business class comes with variety and the passenger can choose the type of cuisine he wishes to eat. The options for food and drinks are limited in the economy class but still the customers enjoy the hygienic and tasty cuisine. The baggage charges are extra than the ticket price. The baggage price is charged depending upon the weight of it. As the baggage increases, the price linked to its also increases. Special discount packages are offered to loyal customers as well as the new ones on occasions such as Christmas and family holidays so that Singapore Airline can add its role in bringing happiness and laughter (Michael, 1987).
Packaging
Packaging is an important concept when it comes to the products. Singapore Airlines offer air transport and customers services so the element of packaging would be different here. The packaging of Singapore airline would be based on features such as the look of its aircraft, the seating arrangement, leg space, business, and economy class as well as the benefits its offers in the form of a luxurious journey, exceptional customer service and the polite approach of the employees towards the customers. The overall feeling and experience which the customers acquire while flying with Singapore Airline is also representative of packaging.
Part 3
Promotion
Recently, ZenithOptimedia has been appointed as the official media buying agency by the Singapore Airlines which is responsible for taking care of offline as well as online buys.The offline media buys include tradition marketing methods such as television, radio, and print whereas all the digital media and social media falls under the category of online buys. The agency feels honored to have taken the task of all marketing and communication activities of Singapore Airlines and promises to yield strong results (Manjur, 2015). Having an external agency to work for improving the market efforts of a company as it reduces costs as well as help the company gains better results. Loh and Venkatraman (1995) suggested that outsourcing operations, whenever a company feels that it does not have the capabilities and knowledge to get desired results is a good option. This way the company is better able to focus on other areas and builds up its strengths. Sometimes it happens that the cost of carrying out marketing and advertising exceeds the specified budget which means that the company is not able to manage its resources in a sound manner. Therefore, hiring an external agent who is an expert in the area can certainly benefit organizations in the long run.
The Singapore Girl slogan of advertisement of the airline has served to strengthen the brand image. The air hostesses of Singapore Airlines wear the traditional Sarong Kebaya dress which serves as the core of its integrate marketing campaigns (Baumann, 2016). Adhering to identities like such can certainly help in profit maximization of Singapore Airlines as well as others who follow the philosophy ideally. The dignity and value of a brand increase when it does not deviate from its core concepts and values.
There are several advertising agencies linked with Singapore Airlines which offer print and digital advertisements to the airline for the purpose of strengthening its marketing campaign. During summer vacations and Christmas when people travel more than usual to spend days with their family and dear ones living in other states can get special discounted offers. Social media such as Facebook and Twitter is also playing an important role in increasing customer share.
Part 4
People
Singapore Airlines is one of those airlines which take cares of its employees. Although Singapore airline gives importance to its customers and makes certain that the customers feel satisfied when the fly with the low-cost airline but it actually pays, even more, attention to its employees. The airline believes that its employees as its essential assets and if it fails to keep them motivated and satisfied, they will not be able to perform in an effective manner and make the profitability of the airline go down. Moreover, the level of customer service delivered by employees will also undergo negative impact so ensuring that the workforce is motivated and dedicated is of prime importance. Martin (2015) mentioned in his research that like many reputed organisations, Singapore Airline is also an advocate of equal opportunity employer. Whenever a new position or existing vacancy announcement is made by the Singapore Airlines, the management ensures that they consider applications based on the intellect and capability of the candidates. They also make certain that no form of sexually based or gender based discrimination ruins the recruitment and selection process at Singapore Airlines. The culture of Singapore Airline promotes diversity and participation. Diversity is a challenging area in the context of human resource management and Singapore airline appreciates diversity and its advantages. There are more than twenty-nine thousand employees of Singapore Airlines of which twelve thousand are based in the headquarters of Singapore. Singapore Airline feels fortunate to have its employee base composed of people with varying skills and knowledge through which they make their full contribution towards the success of the Singapore Airlines. Moreover, Singapore Airlines encourages participation from its employees in important strategic matters. All the employees are given empowerment and they can exercise their right to give their opinion wherever needed.
Keeping the employees motivated and loyal to the airline has been a great task for the management. Shareholder program has been launched by the airline to ensure that when the employees leave the organization, they take away with them a significant share of Singapore Airlines as a small gift for giving their lifetime to it. Extensive training are provided to employees based on their job responsibility and career growth plans. Southwest invests heavily in training programs because it believes that unless it has a workforce with strong skills, it cannot dream of gaining success. Singapore Airline rewards its employees in both monetary and nonmonetary pattern so as to keep them motivated and dedicated to the airline.
Integrated Marketing Communication
DeVito & DeVito (1986) came up with the concept of communication which is basically the act of transferring information from the sender to the receiver, in the presence of noise and a channel. In simple words, communication is all about putting your message across to the other party of interest. Communication is regarded as effective only when the receiver is able to interpret the message as per the intention of the sender. Marketing communications act as a significant element of marketing strategy and plays an important role in the building of brand equity. It is through advertising and other means of marketing communications that the perception about a brand is created in the mind of customers (McGrath, 2005). Marketing communication details the marketing tools as avenues for the correct positioning of the brand in the minds of customers (Madhavaram, Badrinarayanan & McDonald, 2005).
Keller (2009) views the concept of marketing communications as a medium via which organizations create a dialogue with its target market in relation to the products and services they offer. The challenge of marketing communications is to ensure that the right message gets transmitted to the right people, at the right place, in the right way and at the right time (Pickton & Broderick, 2001).
McGrath (2005) mentioned that there are several components of integrated marketing communications including sales promotion, advertising, public relations, direct marketing and online marketing. These elements can also be named as a promotional mix.
What Singapore Airlines believes in is the fact that unless an organization communicates to its target market what it does and how it does it and what it wishes to achieve in future while delivering value to its customers, the customers would never get an idea of the reputation of the organization (Chong, 2007). Keeping this in view, Singapore Airlines take the marketing and advertisement campaigns very seriously.
Singapore Airline makes certain that it communicates the essence of the airline and information of its new and improved service and new destinations through advertisement. The advertisement is done through print and electronic media mostly which means that Singapore Airlines would place its advertisements in newspapers, pamphlets, billboards, the website of the airline, social media such as Facebook page as well as television advertisement. Although television advertisement has not been a popular methodology by Singapore Airline yet its effectiveness cannot be ignored. The Singapore Girl is the main focus of the integrated marketing communication and is highly reliable too. If the image of air hostess is there on a billboard for instance and nothing else is mentioned on it, even then the people will understand that this ad belongs to Singapore Airline. Social media has been a great opportunity for attracting and retaining flyers. Incorporation of artificial intelligence as a means of exploring target market in a better and professional manner has also been a great initiative by Singapore Airlines (Simon, 1991)
Conclusion
We have looked at the marketing aspect of Singapore Airline and learned that airline covers more than sixty destinations within six continents. The SWOT analysis has been mentioned as part of the situational analysis along with competitor analysis and market information for Singapore airline. The services offered by Singapore airline have been mentioned in detail including the air transportation and customers service. Promotional and advertisement aspect of marketing has been discussed in detail which signifies that communication between the employer and customer guarantees success.
References
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