GM704 International Marketing Management

Introduction

Marketing management is an important factor to consider for the contemporary business organizations. This is due to the reason that in the current intensely competitive market scenario, effectiveness of the marketing management makes the difference among the business organizations (Meffert 2013). In addition, the current era of globalization, business organizations are having another importance in initiating the marketing management to stay relevant in different countries around the world. Contemporary approach of the marketing management is having number of different strategies and practices that can help the business organizations in having holistic efficiency in the market (Coombes and Nicholson 2013).

In the industrial scenario of the United Arab Emirates, one of the major and leading organizations is Emirates airline. They are also one of the leading airliners in the world with having their presence in more than 80 countries. It is also being reported that Emirates are having more than 64000 employees and is certificated as the fourth largest airline company in the world (emirates.com 2018). The major reason of selecting Emirates in doing this report of marketing management is due to their extensive marketing approaches. In addition, it should also be noted that global airline industry is facing intense competition with the ever increasing number of new entrants in the market. Thus, considering the extensive business activities of Emirates and their competition in the market, this will provide an ideal foundation for doing this report.

This report will discuss about views and opinion of different authors in view to the marketing concepts and business factors for Emirates. In addition, this report will also discuss about the marketing concepts and strategies followed by Emirates in their global business. Marketing mix of them will also be critically analyzed along with discussion on their external and internal business environment. There will be number of gaps identified and in accordance to these gaps; a few recommended steps will be discussed in their report.

Review of the literature

Importance of service quality

The current airline industry is highly competitive in nature and it is facing a number of issues in terms of different factors. In the recent time, emergence of the budget carriers is a major trend in the global airline industry. This is due to the reason that with the origination of the lower cost and budget carriers in the market, the demography of the target customers got changed and footfalls got increased significantly. According to David (2013), though budget carriers are posing a significant threat to the legacy airliners but there are lots of differences between these two service providers. One of the major differences stated by the authors is the service quality. This refers to the fact that legacy airliners are majorly focused on the service quality and on the other hand, budget carriers are majorly focused on the cost effectiveness. It is reported that Emirates won the 14^th consecutive award for the best in-flight entertainment service and best airline staff service by Skytrax World Airline Awards (Emirates.com 2018). This denotes that Emirates are also more focused on their service quality and it is also one of their differentiating factors from their competitors.

Further, it is also being stated by Chen and Hu (2013) that service quality is having direct impact on the customer loyalty. This is due to the reason that the more service quality will be initiated by the airliners, the more will be the loyalty level of the customers. It is also being stated by the authors that loyalty level of the customers is low in case of the budget airliners due to the reason that customers only look for the lowest cost in this case. However, in the case of legacy and premium airliners, customers tend to have more loyal to the airliners with having higher service quality. This is another source of competitive advantage for Emirates. This is due to the reason that they are having higher level of customer retention with major portion of the revenue is coming from the existing customers. Based on the theory given by Chen and Hu (2013), it can also be concluded that Emirates is focusing on maintaining their service quality to stay ahead in the competition.

Pricing strategies

Another major issue in the current airline business scenario is pricing. This is due to the reason that even the budget carriers are offering much lower price compared to the legacy airliners but they are catering to completely different customer segments. The major competition is between the legacy airliners and one of the major factors in competition is price. According to Hernandez and Wiggins (2014), initiating the pricing strategies is a major challenge for the global airliners mainly because of push and pulls factors. The authors have also stated that major push factor in pricing strategy for the airliners is cost of jet fuel, which is having increasing trend in the recent time. Thus, increase in the price of jet fuel will lead to the increase in the fare. On the other hand, the major pull factor for the pricing strategy is customer demand and economic condition. If the customers are having certain economic condition, then increase in the fare will lead to reduction in demand from the customers. These factors are creating challenges for the airliners in determining their price. It is identified that according to the marketing mix strategy of Emirates, premium pricing is being initiated by them (Mumbower, Garrow and Newman 2015). This is justifying their higher end customer service and facilities. However initiation of the premium pricing is also restricting the market penetration for Emirates.

Based on the above theory, it is further stated by Bergantino and Capozza (2015) that initiating the pricing strategies is more important for the airliners operating in the global market. This is due to the reason that different countries are having different set of economic conditions and different purchasing power of the customers. Thus, it is difficult for the global airliners to maintain universal pricing rather they initiate price discrimination for different markets. It is also stated by the authors that in the case of price discrimination strategy, global airliners also face the issue of initiating universal price in the international flight (Escobari and Jindapon 2014). In the case of Emirates airline, they are having their international route in more than 140 destinations in 81 countries. Thus, it is difficult for Emirates to initiate pricing policy in their business operation.

Host country situation

In the case of airline marketing, host country situation is one of the major determining factors for the international airliners to market the service. According to Chen, Chen, Lai and Li (2014), image of the host country is having influence on the consumer’s evaluation of foreign airliners. This is due to the reason that if the image of the host country is favorable and positive, then it becomes easier for the airliners to market their services across the world and consumers also pose positive perception selecting their airliners. It is also being stated by the authors that image of the global airliners will get more influenced by the country image due to the reason that they will have to target the global customers.

In the case of Emirates airlines, United Arab Emirates is their host country and is having favorable relationship with all the major economies around the world. This is helping Emirates airline to have favorable customer perception regarding their brand. In addition, it is also acting as a major competitive advantage for them in attracting new customers from different countries around the world (Hussain 2016). The favorable economic growth of the United Arab Emirates is providing positive impact on the brand value of Emirates airlines among the global customers.

On the other hand, it is also being stated by Hao, Hu, Bruning and Liu (2013), in the case of global branding, country image plays an important role. In addition, the impact is further more on the flag carrier due to the reason that they are being represented by the country value and image in the global market. For instance, Emirates airline is one of the flag carriers of United Arab Emirates and thus country image is having more importance for their global branding. This is due to the reason that being a flag carrier, global customers will relate the country image with that of the standard of the airliners (Arif, Gupta and Williams 2013). In this case also, Emirates airline is having favorable position with the help of positive country image of United Arab Emirates.

Market concepts of Emirates airline

Emirates airline follows extensive marketing strategies in their global business operation. This is mainly due to the reason that they are having their presence in larger number of countries with different market scenarios (Lovelock and Patterson 2015). The following sections will discuss about the marketing concepts and marketing strategies being followed by them.

Marketing concepts

It is identified that Emirates airline follows marketing concept similar to what the majority of the business organizations are following. This concept refers to the process of understanding the target market well and offering products and services accordingly. This is relevant in their service strategy that is being evolved till their inception. One of the major examples for Emirates airline of following marketing concept is offering variety of services to different destinations around the world (Hussain, Al Nasser and Hussain 2015). At the initial stage, they started with a few destinations and in the following time, more destinations including shorter and longer hauls are being included based on the demand. In addition, the added services such as food and accommodation facilities are being offered in customized manner. For instance, flights of Emirates airline from the Australia are being served with Australian cuisines and cultures (Redpath, O’Connell and Warnock-Smith 2017). Similar in the case of flights from India, Indian food and cultures are being initiated for customer service. This is due to the marketing orientation followed by them. This concept is also helping Emirates airline in effectively cater to the market and coping up with the change in the market scenario.

Societal marketing concepts

This concept is relatively new in the contemporary business state of affairs and this refers to the strategy of considering the business sustainability and long term welfare over others. In the case of airliners, one of the major sustainability issues is use of non renewable sources of fuel and air pollution (Murphy, Oberseder and Laczniak 2013). Therefore, in relation to this issue, Emirates airline is upgrading their aircrafts with more fuel efficient ones such as Airbus A320 Neo and Boeing Dreamliner. These aircrafts are consuming less fuel than others. Emirates airline is also reducing the fuel usage per person by using larger aircrafts such as Airbus A380. This is helping them to transport more customers with the same amount of fuel usage. Other sustainability strategies such as effective flight management systems and using of recyclable materials are also initiated by them (MIYAMOTO et al. 2013). This is also helping them to create positive branding in the market.

Marketing strategies of Emirates airline

The major two marketing strategies being followed by Emirates airline is market focus and service differentiation. Cost leadership strategy is not being initiated by them due to the reason that it is not a viable option for the premium and longer hauls flights of Emirates. The following sections will discuss about the current market strategies of them.

Service differentiation

This refers to the strategy of offering distinctive services to the customers that are unique in own sense and are not offered by the competitors in the market. Emirates airline follows the differentiation strategy by offering wider routes in the Middle Eastern regions compared to their rivals. In addition, the added services including the ground service such as check in and checkout facilities and pick up and drop facilities for the customers are being designed in distinctive manner (Ray Gehani 2013). This is enabling them to offer unique services to their customers. In addition to these, the loyalty and frequent flyer programs offered by Emirates are also helping in retaining their existing customers by offering customized services (Terblanche 2015). It is reported that terminal 3 of Dubai international airports is specially being built to cater to the flyers of Emirates. This terminal is having more than 80 walkways, 90 escalators, 150 elevators and 1500 parking spaces. All these extravagant facilities are only offered to the flyers of Emirates. This is one of the huge differentiation factors for Emirates over their competitors (Tsui et al. 2014).

Market focus strategy

Market focus strategy refers to the process of targeting a specific customer segment and determining their taste and preference pattern. In accordance to that, products and services are being offered. In the case of Emirates airline, the focus segment for them is the premium and higher end customers including the corporate clients (McQuarrie 2014). The service mix of Emirates airline ranging from the economy class and business class accommodation to time of travel and route choices is being designed accordingly. Initiation of market focus strategy is helping them to have the service standards for meeting all the requirements and expectations of their customers. Thus, retention of existing customers is also getting increased (Urde, Baumgarth and Merrilees 2013). It can also be concluded that offering differentiated services to the particular target market is helping Emirates airline to have better brand value and more target customer volume in their global business.

Marketing Mix of Emirates Airline

PESTLE Analysis

Ansoff matrix

Conclusion

This report concludes that marketing strategies and activities of Emirates airline are one of the major reasons for business growth in the recent years. It is identified that extensive marketing activities of Emirates airline is helping them to create global branding. In this report, different views of the authors in relation to the current challenges and trends of airline industry are being discussed with identification of numbers of determining factors. In relation to these factors, the marketing concepts and strategies of them are being analyzed. It is identified that Emirates airline is more customer centric organization and it is helping them to cater to the current trends effectively. In addition, in this report, the external business environments of Emirates airline are also being identified with a number of challenges and opportunities. This report also concluded that Emirates airline is currently following market growth strategies that are helping them to expand their business operation worldwide. In the following section, this report will recommend a few steps that will further help Emirates airline to enhance their business operation in the global market.

Recommendations

• It is recommended that Emirates airline should introduce their sub brand in the market that will help them to cater to the shorter routes with budget fares. This sub brand will be budget carrier and will operate in domestic routes of different countries. Initiation of this strategy will help Emirates airline to target the customers from both the international and domestic routes. Thus, market share and sales revenue will get increased.
• It is also recommended that Emirates airline should create their second base in western region. This will enable them to target the routes in the western regions without getting depended on the Dubai base. Currently, all their routes are centered to Dubai. Having second base western region will help Emirates airline to have different routes.
• It is recommended that Emirates airline should initiate cost leadership strategy along with their existing strategies. This will help them to gain more competitiveness in the market along with increasing the profitability.

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