Etihad Airways serves as the national airline of the United Arab Emirates. The airline has been in operation for the last one decade and has flights to various destinations across the world. It also operates cargo services to various parts of the world and has managed to experience rapid growth in the period it has been in operation. The company has both Airbus and Boeing aircraft as part of its fleet which help it transport customers and cargo to more than 85 global destinations from its headquarters in Abu Dhabi (Russel and Cohn 21). Since it is owned by the UAE government, its board consists of different political and business figureheads who make crucial decisions that influence the manner it operates in the industry. As a result, this approach has enabled the airline to develop a unique corporate strategy that helps it to strengthen its competitive position in the industry. This paper will discuss the marketing plan for Etihad Airways’ market entry to Bangkok, Thailand.
Analysis of Internal Environment
Recognition of Corporate Philosophies
The most important corporate philosophy which drives Etihad Airways’ operations in the industry is the focus on cross cultural understanding. The firm has established strong accountability systems to help it build a strong foundation for sustainable growth in the long run. As a result, the firm’s internal operations are guided by the expectations of its diverse stakeholders in different environments where it operates.
The board evaluates the suitability of decisions made to the company’s long term objectives in the industry (Russell and Cohn 27). As a result, the firm has established a corporate culture that is influenced by implementing new approaches of doing business and this has helped it to attain positive results in different activities it is involved in. The firm’s board has recognized that the airline is still very young in the market and needs to have strong values to influence its long term visions in the industry. Therefore, they have established an effective communications policy that addresses the needs of various customers in different markets.
Description of Corporate Philosophies
Cross cultural exchange is one of the methods which Etihad Airways uses to reach out to other segments of the market. This is exemplified in its recruitment practices because it has employed staff from more than forty different countries who perform different tasks and responsibilities. Therefore, this approach has enabled the firm to incorporate elements of its cross cultural awareness in the services it offers customers in different market locations. The firm has a strong value based relationship with customers, influenced by high operation standards and service excellence in all facets of its operations (Russell and Cohn 29).
This has enabled the firm to put in place high quality standards that focus on satisfying customers’ needs and expectations to improve their overall experiences. Consequently, the airline’s employees who are equipped with diverse skills and competencies are able to coordinate different aspects of the firm’s operations to ensure it satisfies the needs of its employees in different markets.
SWOT Analysis of Etihad Airlines
- It has a strong financial position that helps it to plan and execute its strategy.
- Strong government support and favorable policies by the Abu Dhabi government have helped the firm to experience rapid growth in the market.
- The airline charges lower prices compared to Emirates Airlines and Qatar Airways for high quality services.
- The airline has a highly competent management team.
- The airline is benefiting from high levels of global recognition due its sponsorship of high profile teams and sports events.
- The airline is known for providing high quality services to its customers and it has managed to win several service excellence awards.
- The airline has strong strategic alliances with other smaller airlines which have helped it to enter more foreign markets within a short period of time.
- It lacks well established customer service centers to deal with various issues faced by its passengers.
- Some customers have experienced delays while waiting time for connecting flights to different destinations.
- It serves fewer global destinations compared to its main competitors; Emirates and Qatar Airways.
- It lacks experience in the industry and this makes it susceptible to different types of risks in the market.
- Its reputation has been dented by delays in compensating customers whose tickets have been canceled.
- It depends a lot on government support and this may affect its ability to grow its operations independently in the long term.
- The firm intends to expand its operations to new global destinations.
- Growth in volumes of cargo transported using airplanes will enable the firm to strengthen its cargo division to make it take advantage of new opportunities in the industry.
- Forming strategic alliances with other airlines will enable the firm to attain a higher degree of market penetration.
- Use of technology to improve the quality of service it offers to various customers in different market segments.
- UAE’s location and increased economic activities in Abu Dhabi and Dubai is likely to attract more business travelers and tourists.
- Better connections to Europe, Far East Asia and Africa due to the favorable location of Abu Dhabi International Airport.
- A weaker competitive advantage in the market due to the improving performance of other experienced airlines in the industry.
- The firm is also susceptible to foreign currency markets instabilities which impact negatively on global fuel prices.
- Unexpected natural calamities such as bad weather, earthquakes, volcanic ashes and strong winds which disrupt air travel.
- The firm is also likely to be affected by unfavorable government policies which are enforced in different market destinations which affect its operations.
- Customers’ preference for low cost airlines in south Asia and the Far East is likely to affect the airline’s long term competitive position.
Analysis of Economic and Social/Political Environment
Global Economic Analysis (Current)
Some of the major challenges that are likely to affect the growth of the global airline industry include: unstable fuel costs, unpredictable political environment in various destinations, increasing popularity of low cost carriers and high costs of expansion (Welford 11). In addition, delays in various destinations have become common due to the failure by major airlines to coordinate their schedules effectively. European and North American markets are experiencing maturity while other markets in Asia, Africa and Latin America are likely to experience positive growth in passenger numbers.
Therefore, Etihad Airways needs to focus on these markets to grow its operations in the industry. Increase in liberalization and economic integration in Africa, Latin America and Asia will create new growth opportunities for the firm. Therefore, the firm needs to streamline its marketing and business strategies to ensure it is well prepared to take advantage of various opportunities in the market.
Economic Analysis of New Market
Thailand’s airline industry is dominated by Thai airways but it has been experiencing high rates of growth in passenger numbers in the last ten years. This has made it easy for other market players to join the industry to exploit various opportunities that exist. However, in the last five years, Thai Airways market share has fallen by more than 30% which shows the industry has become more competitive (Welford 15). Low cost carriers such as Air Asia, Tiger and Nok Air have increased their dominance of the domestic as well as regional aviation industry. These low cost carriers have frequent flight schedules which enable them to transport large numbers of people to local and regional destinations. It is estimated that the capacity of the aviation industry will grow by an estimated 4% due to high levels of liberalization in the industry which have attracted new airlines (Welford 17).
Political and Social Environment of New Market
The political and social factors which affect the Thai government in the last one year have impacted negatively on its appeal as one of the most preferred business destinations in South East Asia. Therefore this has reduced the number of visitors that used to travel frequently to the country for leisure and business. This reduction has affected the overall growth of the country‘s airline industry and it is likely to reduce existing market opportunities for new airlines that seek to establish operations there. The country receives a lot of travelers from China, Australia, Europe, Japan, North America and Singapore (Charoensettasilp and Wu 179).
The uncertain political situation has discouraged them from coming and this has negatively the operations of many domestic and international carriers that serve the Bangkok route. However, Thais are known as kind and hospitable and these attributes are likely to encourage some travelers to visit the country to experience the positive cultural environment.
Political Analysis of New Market
Thailand‘s is a democratic monarchy led by a King who serves as the head of state and is highly revered by all citizens. The head of government is the Prime Minister who leads the political party that has a majority in the national legislative assembly. The country’s citizens have favorable attitudes towards balancing work and leisure and this encourages them to allocate part of their incomes to different recreational activities.
Social Analysis of New Market
More importantly, middle class consumers in the country have a positive attitude towards traveling and adventure. This encourages them to travel to different places within the region and other parts of the world for business and leisure (Prasatadisak and Chailom 143). In addition, the country has a positive macroeconomic environment that encourages foreign investments due to low taxes, flexible labor policies and the low costs of doing business.
Legal Analysis of New Market
The legal environment favors investments but there are still some challenges which are related to employment laws which may not conform to Etihad’s long term operations in the industry. The country offers favorable conditions to locally owned firms over international firms and these protectionist tendencies may affect Etihad airline’s competitive position in the industry. As a result, the firm needs to put in place effective risk mitigation policies to help it deal effectively with these challenges. Since the firm is known for forming strategic alliances with other airlines, it may be compelled to establish a joint venture with other existing airlines in the country. This is likely to help the firm to overcome legal barriers that may affect its competitive position in the industry in future (Prasatadisak and Chailom 147).
Major Competitors and Rivals. Direct and Indirect
Some of the firm’s current direct competitors include: Qatar Airways, Emirates Airways and Gulf Air. Its indirect competitors include: British Airways, Virgin Atlantic, South African Airways and Korean airlines. Qatar and Emirates airlines have established stronger market networks which help them maintain their competitive position in different markets.
Marketing Strategies of Competitors
Emirates airline allows its customers to customize their inbound service choices using their smartphones and this enables it to offer a good service experience to clients. On the other hand, Qatar has strong partnerships with other airlines in different markets which enable it to offer prompt connecting flights to its customers without any delays (Taneja 67). Gulf Air offers low fares to customers that are interested in travelling to various regional destinations in Middle East, South Asia and North Africa. British airways and Virgin Atlantic offer round trip packages for their frequent travelers going to various global regions. These policies have enabled these airlines to make their customers more loyal thereby strengthening their performance in the global aviation industry.
Strengths and Weaknesses of Competitors
Emirates and Qatar airline firms have benefited heavily from low taxation and heavy involvement by government technocrats in their affairs which has allowed them to remain stable in the international aviation industry. However, these firms have to contend with high levels of political and economic instability in some destinations in the Middle East and North Africa. Syria, Iran, Egypt, Iraq and Libya continue to face many political problems which have made it difficult for international airlines to operate in these countries (Taneja 70).
British Airways Company has a strong brand value but its main weakness is that it has a weak financial position which has restricted its future growth plans in the industry. Virgin Atlantic mainly targets high net worth individuals who are willing to pay high ticket prices to experience luxurious services and high levels of comfort. However, one of the major challenges the firm faces is that there is intense competition in the high end segment of the market and this is likely to affect its long term competitive position in the industry.
Major Competitors and Rivals in New Market
Some of the main competitors the firm is likely to encounter in its dealings in Thailand include Air Asia, Qantas, Thai Airways, Emirates, Tiger and Nok Air. The direct competitors Etihad will encounter after entering the Thai airline industry include: Emirates, Qantas and Thai airways. These three airlines target business people and tourists travelling to and from Bangkok for various purposes.
Marketing Strategies of Competitors of New Market
Emirates’ main market strategy focuses on using long haul and medium range flights to connect customers to different global destinations within short periods of time. Qantas and Thai airways focus on customer service excellence and innovative internal practices to maintain long term customer loyalty to their products and services in the market. Air Asia, Nok and Tiger airlines are indirect competitors which offer low fares to customers that travel to different destinations within the region and beyond. Therefore, Etihad needs to come up with new ways of penetrating the market to enable it to attain positive outcomes from its operations (Taneja 71).
Strengths and Weaknesses of Competitors of New Market
The main strength of Thai airways is that it relies on patriotic feelings of Thais to strengthen its performance. Emirates Airline has efficient booking and inbound service procedures which have helped the firm to make its operations more efficient. On the other hand, Qantas has a good understanding of the regional market and this helps it to formulate policies which are responsive to customer’s expectations. However, Thai Airlines has been severely affected by intense competition from low cost carriers such as Air Asia and Nok, which has reduced its local and regional market share. Emirates airline has also been affected by high marketing costs, low passenger numbers, restrictive policies in some and high fuel expenses. These problems have negatively affected the company’s performance (Taneja 81).
Qantas’ airline’s main undoing is that it has failed to take note of cross cultural factors that impact on its operations in the Thai industry. Even though Air Asia and Nok have witnessed an increase in passenger numbers, they have not diversified their product offerings to increase their earnings in the market.
Market Potential Analysis
Market Potential Estimates
Many customers in Thailand prefer to use internet based solutions when booking and paying for tickets to various destinations. Therefore, this has compelled many firms to use online booking and payment systems to increase their sales. However, in the short term, the aviation industry is expected to grow by a small margin due to reductions in customer numbers. Some travelers are discouraged from visiting the country due to political unrest in the country. After the political situation in the country improves, forecasts by various research agencies have shown that Thailand will benefit from an annual increase of 7% in visitor numbers in the next five years (Graham, Papatheodorou and Forsyth 65).
At the moment, occupancy rates in various hotels in Bangkok and other major cities are low. However, they are expected to rise in future after the political situation in the country becomes stable. Since the main international airport is well connected to other airports in the world, this leaves room for new airlines to connect quickly from Bangkok to other destinations across the globe.
The cargo market also offers a lot of opportunities for growth because it is projected to increase in the next ten years. Since Thailand’s economy is export oriented, Etihad’s cargo division can transport merchandise produced by firms based in the country to other parts of the world to increase its revenues. Overall GDP growth for Thailand is estimated to be 3.4% in 2014 due to high levels of political uncertainty which have negatively affected economic performance. This will be an improvement because the GDP attained 2.6% growth in 2013 but will still be far from 2012’s economic performance when the country registered an estimated GDP growth rate of 6.5 % (Graham, Papatheodorou and Forsyth 71).
However, the country has managed to maintain single digit inflation which is projected to remain below 3% in the next five years. This shows that Thailand’s currency the Baht will remain stable against other international currencies such as the U.S. dollar, Euro and the Yen in the medium term. Therefore, this will have a positive effect on the Etihad’s operating costs in the country.
Market Share Analysis
Global Market Share
Etihad Airways has strategic alliances with various smaller airlines and this has helped to expand its presence into new global markets easily. The firm has bought stakes in different airlines such as Air Berlin, Virgin Australia, Jet Air and Air Seychelles. This helped the firm together with its regional competitors Emirates and Qatar airways to increase their collective global market share to an estimated 12% by 2013. The firm’s total passenger numbers have been on an upward trend in the last three years and it managed to carry more than ten million travelers in 2012 (Scourse). This was an increase of more than 20% compared to the estimated 8.4 million passengers who traveled on the airline in 2011. This shows that within a short period of time, Etihad has managed to increase the number of passengers carried by its aircraft to various global destinations. If this trend continues for the next ten years, it will help the airline to increase its market share and competitive advantage in the global aviation industry.
Geographical Market Share
The main areas that Etihad airways has increased its market share is in European and Asian routes due to the strategic alliances it has with other airlines that operate in these regions. The airline is the third largest in the region after Emirates and Qatar, which have also managed to increase the number of passengers they carry. Through its main hub in Abu Dhabi, the airline utilizes favorable government policies that enable it to extend its operations to other global and regional market destinations. As a result, this has helped the airline to create more value in its products in different market it serves (Scourse). High levels product differentiation which the firm is known for will help it penetrate new markets easily and this will have a positive effect on its operations in the long run.
Market Share Potential of New Market
The potential of the new market is high because it has a lot of local as well as regional travelers. Etihad’s long haul flights give it an advantage in this market because the firm will be in a position to attract customers from different market segments who are willing to try out the services it offers. More importantly, since the Thai market is dominated by low cost carriers that only use price as the differentiating factor, Etihad can solidify its presence in the local aviation industry. Therefore, using its strategy of establishing strong alliances and connecting its passengers to busy hubs and destinations in short periods of time, the airline will be able to create new demand for its services in Bangkok (Scourse). The airline can increase its passenger numbers to about 13 million per year if it incorporates key cross cultural management strategies in its operations.
Product Line Analysis
Product Line Objectives and Strategies
Etihad’s product line objectives are mainly influenced by the needs of its customers in different markets where it operates. The firm segments its product offerings depending on customers’ preferences, expenditure patterns and the nature of relationships it seeks to build with them. Etihad offers three main service offerings to passengers that seek to travel to different global destinations: Diamond Class, Pearl Class and Coral Class. The diamond class is a premium first class service that offers customers a five star hospitality experience with seats which can be flattened to become beds. The diamond class also gives travelers more privacy with more personalized inbound entertainment services (Cole 52).
The pearl business class also offers wide seats that can be converted into beds with more personal entertainment features and an exclusive dining experience to customers. Lastly, the economic class has cozy seating arrangements that allow travelers to feel more relaxed onboard.
Product Line Analysis – All Products
The main products the firm will offer on the Bangkok route will be the pearl business class and coral economic class travelling packages. The diamond class service will be offered at a later date after its long term viability to the airline’s long term profitability has been established. More importantly, the firm will offer specialized services to families by allowing parents traveling with their young children more room for privacy to increase their comfort.
Additional care and support will also be offered to family persons to ensure they have a positive traveling experience whenever they use the airline. This will help the firm to strengthen value perceptions customers have towards its services to increase the value of its brand in the industry (Cole 57). Other additional services the firm intends to add to its product line include: duty free shopping, champagne bar for business travelers and prayer rooms for different passengers on long haul flights.
Divisions, Regions, Territories-Sales-Current Year
The firm registered a net profit of more than 62 million dollars in 2013, a profit growth of about 48% and its revenues increased to 6.1 billion dollars in the same period. The cargo division also increased its revenues by more than 30 percent to stand at 928 million dollars (Cole 60). This shows the firm’s two main divisions; the passenger and cargo divisions can stand on their own in a highly competitive industry. The firm’s loyalty program has also managed to attract high numbers of people with current figures estimated at more than 2 million members. The main reason that has enabled the airline to attain high levels of positive growth is its decision to venture into new markets such as Europe, Australia and Asia. As a result, this has made it easy for the airline to increase its profit revenues in the industry.
Positioning of Product
The firm uses quality, luxury and strategic partnerships as its positioning strategy in the global aviation industry. Its business strategy focuses on offering travelers both long and short haul transportation to different destinations in the world. This is aims to increase its penetration into various global markets. This enables the firm to offer high class hospitality services to customers going to various destinations making them to have a more positive service experience during their travels. In addition, the firm has managed to create strong brand loyalty using its customer loyalty program which offers a lot of benefits to customers who use its services frequently (Cole 71). As a result, this has helped the firm to generate more revenues in different global markets. Etihad’s operations in the market are influenced by positive values which influence the manner its employees perform their duties in their respective workstations.
Customer- Client Analysis
Current Customers in New Market
The Thai market is complex and has different types of customers with diverse needs and expectations. Many people that use airlines in the country do so out of the convenience and timeliness offered by air transport. The majority of customers that travel to and from Bangkok are business and tourism travelers. A good number of visitors that come to Thailand are attracted by the country’s culture, openness and hospitality which makes them have a positive stay whenever they visit (Somwang 75). Other customers prefer using airlines to carry perishable and less bulky cargo to different places to save time and costs. Since Thailand is an export oriented economy, there are many business firms that have established long term partnerships with various airlines to transport their commodities to different global markets.
Etihad Airways needs to use the 7P’s of service marketing mix to come up with an appropriate market segmentation strategy. This will help it plan its activities in the industry better to help it penetrate the local aviation industry easily. More importantly, the firm needs to consider the level of brand equity it is likely to gain from its operations in the market by coming up with a unique business concept. The 7p’s which the firm needs to take into account in its operations in the local market include: product, price, place, promotion, people, process and presentation. Using these attributes, the firm’s engagement with customers in the market should be guided by their spending power and their lifestyle patterns (Somwang 79). This will enable the firm to come up with more personalized marketing strategies that address the needs and expectations of clients in the market to help it attain good long term performance.
The firm’s target market strategies should focus more on consumers’ social and economic status and how it is going to engage with them to make them have positive perceptions towards its products in the market. The firm needs to target business people and tourists who travel to regional and other global destinations for various purposes. Therefore, it needs to be more innovative to develop high quality service concepts that give customers good service experiences to increase their loyalty (Kotler and Armstrong 74). Many customers are interested in reliability, comfort, caring staff and high quality in-flight menus whenever they use various airlines to travel to different destinations. Since the firm has established viable connections to Europe, North America and other parts of Asia, it needs to engage with high profile visitors that frequent these routes. This will enable the firm to use opportunities on its existing routes to strengthen its long term performance on the Bangkok route.
End User – Consumer Demographics
The main consumer demographics the firm needs to focus on are the middle class and upper income segments of the market. For instance, Thailand shares a lot of cultural and religious similarities with China. The airline needs to take advantage of this factor to increase passenger numbers between Bangkok and several Chinese cities (Kotler and Armstrong 75). In addition, many elderly people from Europe and North America are likely to be encouraged to visit the region for leisure especially during winter. Etihad can develop mutual understanding with tour operators and travel agencies to offer them high quality packages that improve the quality of their stay in the country.
End User – Consumer Psychographics
Psychographic factors which the firm needs to focus on include: lifestyles, consumption patterns and market trends that affect general consumer attitudes. Many high income consumers opt for convenient solutions whenever they book flights. For this reason, business and tourism travelers prefer an airline service that is integrated with other hospitality services such as accommodation and taxi transport from the airport to specific locations they intend go to.
Pricing Objectives and Strategies
The Bangkok route is served by low cost companies and other international airlines which offer different services depending on specific consumer segments they target. Etihad should use customer satisfaction and comfort as the main guiding factors that will determine prices to be charges for its tickets. Using localized payment and customer service solutions, the firm should integrate various aspects of its operations to strengthen the value attached to its brand by customers. This approach will help the firm to create more value for its products in the market because customers will be in a position to find out how their needs will be satisfied (Kotler and Armstrong 79). In addition, onboard services should be closely coordinated with ground services to enable the firm to offer a high quality comprehensive package which satisfies the expectations of its customers.
The pricing structure adopted by Etihad should also focus on other expenses incurred by the firm in its operations. These include: form of taxes, airport charges, fuel, aircraft maintenance and staff wages. All these factors have an impact on the firm’s operations in the industry. In addition, the firm needs to take into consideration the competitive situation it is likely to encounter after it has entered the Thai market. This will enable it to come up with a more appropriate pricing strategy that conforms to its long term objectives in the industry. Etihad needs to create demand for its services in by encouraging new customers to register and become part of its loyal customer program.
This will entice customers to make decisions that will help the firm to attain positive performance targets which it has set for itself in the industry (Tsang). As a result, the firm will be able to use different marketing channels to make consumers aware about benefits they are likely to get by using its services.
Pricing Analysis of Our Prices vs. Competitors
Etihad’s price strategy differs greatly from that used by many other firms in the industry. Since Air Asia, Tiger and Nok Air only focus on flying large numbers of travelers to different destinations, they have lower satisfaction rates compared to other airlines that do not use competitive pricing as their main market strategy. Etihad’s main competitors such as Qantas, Emirates, Singapore, Thai and Korean Airways use service quality and positive perceptions to influence their pricing. Therefore, the firm needs to use the recognition it has gained from various customer service excellence awards to develop an appropriate price structure for its operations. As a result, this will help the firm to adopt a business model that attracts customers who are willing to pay premium prices to enjoy luxurious services and high levels of comfort it offers (Tsang).
Channels of Distribution Analysis
Channels of Distribution Objectives and Strategies
The main objectives and strategies that should influence Etihad’s channels of distribution should involve: expenses to be incurred, technical skills of staff to be hired, competitive environment and quality of service to be offered to customers. Therefore, the firm needs to ensure that the channels of distribution it uses for ticketing, cargo bookings, passenger transfers and other additional services add value to its operations in the industry. As a result, this approach will enable the firm to use its channels of distribution to eliminate any delays that are likely to be experienced by customers using its services in different areas (Tsang). More importantly, the firm needs to consider the significance of integrating technological solutions in its internal processes and how this is likely to add value to its operations in the long run. Therefore, the firm needs to consider using payment formats that offer high levels of convenience to its customers in the industry.
Analysis of Channels of Distribution Currently Used
Channels of distribution which the firm currently uses include sales agents in various countries, who book its clients on flights going to different destinations. In the last one year, the firm has looked for ways of integrating its distribution processes to ensure various internal processes are coordinated more effectively to help it gain a higher competitive advantage in the industry. In 2012, the firm introduced the Sabre Airline Solutions that links it with affiliate sales agencies across the world. This has improved the period taken by the firm to make important decisions which are crucial to its operations. This approach has enabled the firm to improve its reservations, inventory, planning and marketing processes (Balakrishnan, Michael, Moonesar and Rogmans 112). This distribution format has enabled the firm to streamline important processes to ensure it offers its customers current information about departures, in-flight amenities and general laws they need to observe.
Channels of Distribution Objectives and Strategies of New Market
The channels of distribution that the firm will use in Thailand will focus on providing important information to clients to encourage them to make better choices. Cultural factors that influence consumers to make particular consumption choices should be taken into account to ensure they feel comfortable when using various services offered by the firm. For instance, the firm needs to consider the implications of using external agents to sell tickets to its customers in the country.
Analysis of Channels of Distribution of New Market
Technology and localized channels of distribution are used by many airlines that operate in Thailand to attain a higher degree of market penetration into the country. The firm should consider using local languages together with other international languages such as English, Chinese and French in its marketing campaigns. This will improve the manner in which the firm communicates with its customers to make them have more positive perceptions towards its services (Balakrishnan, Michael, Moonesar and Rogmans 112).
Marketing Personnel Analysis
Marketing Personnel Count
Since the firm will be relying mostly on external marketers, it needs to hire about twenty five to thirty marketing personnel who are conversant with consumer habits in the local aviation market. The firm’s main marketing personnel will be required to help it to penetrate the market quickly by developing networks with travel agencies, tour operators and the government. This will ensure Etihad Airways is well prepared to make a positive impact in the industry to attain positive performance (Balakrishnan, Michael, Moonesar and Rogmans 115). More importantly, the firm’s marketing personnel need to come up with creative solutions that address clients’ needs in the market to increase their loyalty to the firm in the long run. Therefore, the firm will mainly rely on Thai nationals who are knowledgeable on local cultures and dominant consumer behaviors to engage effectively with its target markets.
Marketing Personnel Budget
The main budget will cater for staff salaries, licenses, marketing campaigns, rent charges and other overheads that the firm is likely to incur in its operations in the industry. The breakdown of the firm’s expenses in the first six months is highlighted in the table below:
|Budget Item||Cost in dollars|
|Staff salaries (six months )||126,000|
|Rent Charges (Six months)||5,000|
|Electricity, water, internet (six months)||5,000|
Table 1 showing the budget for sustaining marketing personnel in Bangkok.
Analysis of Non-Sales Personnel
The firm will also hire other non sales personnel for administrative purposes. This will mainly include: drivers, logistics staff and IT support employees who will be eight in number. All these employees will be hired from the country to protect the company from complex labor laws that may delay its entry into the industry.
Analysis of Sales Force Past Success/Failures
In the past, the firm failed to liaise with sales agents and other important stakeholders such as traveling consultants and tour companies in other foreign markets where it operates. However, the firm will rely on its marketing staff to execute customer support functions and since they will be linked with external sales agents, they will be in a position to provide accurate information to the firm’s customers in the industry. This will enable the firm to use the Sabre airline system to link up all stakeholders to facilitate quick information sharing to ensure decisions are made quickly without any delays (Thitthongkam and Walsh 138).
The marketing personnel will all be under the country manager of the firm’s operations in Thailand. He will be assisted by the marketing manager who will closely coordinate various functions the firm performs in the industry. The rest of the employees will consist of: sales and marketing assistants, customer service representatives, logistics assistants, bookings liaison assistants and IT support staff. The firm will use a lean organizational structure which conforms to its objectives in the industry to help it save unnecessary costs which are not beneficial to strategic focus (Thitthongkam and Walsh 140). This will enable the firm to implement key strategies that are relevant to its long term operations in the market to help it attain a higher level of corporate excellence. In addition, this will help the firm to implement changes in its local systems quickly to help it attain good results from its operations in the industry.
Human Resource Development Analysis
Human Resource Development Objectives and Strategies
The main human resource objectives that will influence the firm’s operations in the industry will focus on recruiting and training employees to make them understand the firm’s internal values and systems which influence its operations in the industry. More importantly, new employees will be made aware about high quality practices they need to observe whenever they interact with customers to increase their levels of satisfaction. Since the firm will mainly focus on offering its customers high value from the services it sells, it will be forced to develop its employees’ skills to make them capable of performing their duties more effectively.
This will help the firm to sustain good results in the long run (Thitthongkam and Walsh 140). As a result, the firm needs to use continuous learning approaches to make its employees acquire multidisciplinary skills to help them overcome different challenges they are exposed to in their operational environments.
Current Human Resource Development Program
The current human resource development program which the firm relies on places a heavy emphasis on cross cultural codes of conduct and service quality. It has helped the firm to attain a higher degree of innovation in its internal operations thereby allowing it to offer exclusive services which have given it a higher competitive edge. As a result, the firm has established a strong corporate governance culture that makes all employees aware about its objectives and specific standards they need to adhere to. More importantly, change management systems in the firm have helped it attain good results in its operations because it is more responsive to the needs of its clients in different markets (Vedder 91). Etihad’s employees understand the importance of the firm’s vision in the industry and they are always willing to make sacrifices to satisfy its customers.
Effectiveness of Current Human Resource Development Program
The current human resource program has helped the firm to transfer high quality practices to its staff to make them satisfy its customers effectively. Etihad has managed to institute performance management systems that measure and reward employees who excel in their duties in their respective workstations. The rewards offered to employees are in form of bonuses and other benefits which motivate them to attain better results in various activities they engage in (Vedder 94). As a result, the airline has been able to maintain high levels of excellence in its dealings with customers and this has helped it to penetrate different global markets quickly. Consequently, cabin employees and other staff are always willing to solve various problems that affect passengers and other customers and this has increased Etihad’s brand appeal in various markets it operates in.
Human Resource Development Expenditures for New Markets Analysis
The human resource development of employees in Thailand will require the firm to use both in-house and external trainers. These trainers will transfer knowledge to newly recruited employees in the Bangkok office to make them understand the firm’s corporate culture, its vision and long term objectives. Therefore, the main expenditures the firm is likely to incur in its human resource development activities include: training compensation for trainers, instructional materials and technological applications needed to make new employees more competent in their duties. The firm will also need to pay human resource consultants to help it develop appropriate strategies that respond to local conditions that exist in the local industry (Vedder 99). This will help the firm to attain good results from its operations in the industry.
Marketing Research Analysis
Marketing Research Objectives and Strategies
The marketing research should focus on purchasing power, average numbers of travelers to and from Bangkok, expenditure patterns of travelers on the route and other important statistics that reveal the prevailing situation in the industry. All these factors should be used by the firm to make appropriate decisions regarding the manner it is going to engage with different customers in the industry. The firm needs to integrate its business strategies with other market research approaches to find out more about existing conditions in the industry (Delfmann 81). In addition, the firm must focus on finding out perceptions customers have towards its brand and how they are likely to affect its operations in the local industry in the short term. As a result, travelers will be in a position to try out some of the services offered by the firm to find out if they conform to their unique expectations.
Marketing Research Project Plan
The marketing research will focus on growth of the airline industry, factors that influence purchasing decisions, modes of payment for tickets and the main reasons customers travel to different destinations. The importance of technology in bookings, ticketing and communications is also another area that needs to be looked at keenly to find out how it influences the manner in which clients make decisions. More importantly, other factors such as competitors’ market share and their ability to influence current and future consumption patterns will be given more attention by the market research. The project plan will also find out if customers prefer making single ticket bookings without any additional features or if they prefer making ticket bookings that have accommodation and transportation services (Delfmann 84).
The research project plan will also seek to find out the impacts of low cost airlines on the firm’s operations in the market. This will enable the firm to find out how some customers react to its pricing structure in the market to enable it to come up with more proactive solution to this issue. In addition, the firm needs to find out the impact of the country’s tourism sector on the aviation industry to evaluate the relationship between the tourism industry and passenger numbers that travel on different airlines. This will help the firm to forecast probable profitability targets it is likely to attain from its operations in the industry in the next three to five years. Therefore, the firm will be able to estimate Bangkok’s inbound and outbound traffic flows to find out if it can sustain its operations on the route for a long period (Delfmann 89).
Effectiveness of Current Year’s Marketing Research
The projections of Thailand’s airline industry in 2013 show that it is mainly influenced by different political issues which the country faces. The power struggles have not tainted the country’s image regionally and abroad and this political instability has affected the number of visitors that are willing to travel to the country. Low cost airlines have a significant market share in the local aviation industry due to the convenience they offer to customers in the market. As a result, this has made some low and middle income customers in the country to overlook leisure and comfort to opt for cheap services.
Passenger satisfaction levels are also high for some airlines because they have managed to attract customers using their unique service offerings in the market. International travelers from China, Europe, North America and other neighboring countries that use the Bangkok route frequently prefer services that offer high levels of comfort and luxury (Delfmann 93). As a result, they are not easily swayed by low prices charged by other airlines operating in the industry.
Advertising and Sales Promotion Analysis
The firm will use different forms of advertising to reach out to various audiences in the market. This approach will enable the firm to make its customers understand the value of its products and how they can serve their needs. More importantly, the firm will use both traditional and new channels of advertising to attract different audiences it seeks to establish close relations with. Some of the advertising methods the firm can use include: print media, outdoor visual advertising, electronic media advertising and online advertising (Kotler and Armstrong 103). Print media advertising should be done through newspapers and publications that have a wider reach across the country to enable the firm to reach wider audiences. On the other hand, electronic media advertising through television and radio can be used to attract audiences that are interested in entertainment, news and other informative programs.
Advertising Objectives and Strategies
The firm needs to use advertising channels which encourage a lot of interactivity and elicit positive reactions towards its services in the industry. More importantly, the firm also needs to localize its advertising strategies to communicate to customers in local languages to make them have positive perceptions towards its services. This will help the firm to create new demand for its services in the industry.
Online advertising is effective because it allows a firm to use social networks, its own website and other online channels to interact with its customers (Kotler and Armstrong 107). This helps a firm to understand their peculiar needs more effectively and how they can be satisfied. In addition, this form of advertising allows a firm to get feedback from customers regarding the quality of services it sells to them. This helps a firm to invest in product and service improvements to increase its long term performance in a particular industry.
Brief Initial Advertising Budget
The main budget for advertising will focus on using media channels that appeal to broad audiences to ensure the firm makes all potential customers aware about its entry into the market. This will require the firm to conduct advertising using electronic media to capture the imagination of customers before it starts offering its services in the market. As a result, the firm will be in a position to increase consumers’ understanding about its role in the market and what it expects to achieve in the long run. In addition, the firm needs to use a broad based advertising strategy that enables all customers to memorize its brand message and core values (Kotler and Armstrong 111). The initial advertising budget will look as follows:
|Item||Cost (in dollars)|
|Television and radio adverts ( six months)||50,000|
|Newspaper and Print Magazine adverts||30,000|
|Sales promotions (catalogues and participation in events )||20,000|
|Online advertising on popular social media and websites||10,000|
|Advertising agency cost||60,000|
Initial Sales Promotion
The initial sales promotion will be done by the company’s participation in events that are directly related to the tourism industry in the country. Participation in such events will help the company to establish beneficial networks with other firms and individuals that have a lot of experience in the industry (Taneja 112). Therefore, the firm will be in a position to appeal to travel agents, customers and other stakeholders in the travel industry to make them understand the vision that guides its operations in the industry. Catalogues, fliers and other promotional items will be offered to enable customers and other stakeholders to understand Etihad’s objectives in the industry and the value they are likely to get from its services.
Sales Promotion Objectives and Strategies
Promotional strategies will be mainly influenced by changing market trends and consumer behavior in the local and international aviation industries. Some of the situations that may impact on firm’s promotional plans to be adopted by the firm include: changes in business laws and requirements, changes in technology, changes in human resource skills and changes in consumer behavior and preferences.
Future Promotional Ideas and Plans
Future promotional plans will aim at strengthening Etihad’s competitive profile in the industry (Taneja 115). In addition, future promotional ideas and plans will be aimed at increasing the firm’s market share in the industry to help it appeal to new consumer segments in the industry. This approach will help the firm to review its business strategies to ensure they conform to the long term needs of its customers in the market.
Even though the Bangkok route is dominated by low cost airlines, the firm needs to come up with innovative ways of appealing to customers to help it strengthen its performance in the industry. The current political turbulence being witnessed in Thailand discourages foreign investment into the economy. However, the industry has bright future prospects because forecasts show the number of travelers that will be traveling to and from Bangkok is projected to increase in the next three years. The initial marketing and advertising costs which the firm is likely to incur will also affect its operations in the industry. Therefore, it is important for the firm to localize its business strategies to ensure they are suitable for local market conditions.
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Tab 3 :Etihad Airlines passenger growth from 2005 to 2013.