5C Analysis of Singapore Airlines
Write a report on Marketing Strategies of Singapore Airlines.
Singapore Airlines is one of the popular and renowned airlines companies of the world which was founded in the year 1947 after the joint venture of the governments of Singapore and Malaysia. Singapore Airlines is regarded as a respected airlines company of the world because of its safe journey, excellent service and innovative technologies. The network of the company has reached to more than 60 destinations in more than 30 countries. Singapore Airlines with its subsidiaries have the most modern type of fleet all over the world. Singapore Airlines is considered to be the flag-carrier of the country. It operates with the help of many subsidiaries and has an alliance with Star Alliance.
The 5C framework is an important tool for making a situation analysis by any organization (Sauria et al. 2015). It is the scanning of the environment on five significant areas for taking valuable marketing decisions. The 5Cs are company, collaborators, customers, competitors and the context.
Company
Singapore Airlines has created an excellent brand image in the airlines industry all over the world. The company has an excellent work culture and the employees are well-mannered and well-mannered. The company has a mission of providing highest quality air transportation service and to maximize the returns to its shareholders as well as employees. Since its inception, the company is creating value for its customers and enhancing brand loyalty. The values include safety, pursuit of excellence, integrity, concern for the staff and the customer and teamwork (Skyjourneys 2015).
Collaborators
Singapore Airlines first got into collaboration with Tourism Malaysia in 2016 (Singapore Airlines 2017). This has been their first marketing collaboration memorandum. It was signed at Berlin.
Customers
The customers of Singapore Airlines have various segments from business professionals to students. The young people are the prospective customers of Singapore Airlines. The customers are satisfied with the service that they are getting from the airlines and it is able to create that value. The customers of Singapore Airlines are from different parts of the world.
Competitors
The airlines industry is very competitive and the competitors of Singapore Airlines are FireFly, JetStar, Tiger, AirAsia and Cebu Pacific in the domestic. The national competitors are Qatar Airways, Emirates and many others. There are many daily flights which are available in Singapore apart from the Singapore Airlines.
Context
Context defines the macro-environmental analysis of a firm or an organization. The tool used for this analysis is the PEST analysis.
STP Analysis
The national political framework of a country has enormous impacts on the operational activities of the airlines industry. All the countries are having a national carrier and it represents the nation itself. They get the support of the government and most of them are government-owned. Singapore Airlines also get the support of the Singapore government.
The airlines operate beyond the national economic boundaries and are subjected to the international economy as well. One of the major economic threats to the Singapore Airlines is the rise of the fuel costs. Unrest in the Middle East has also affected the service of Singapore Airlines as it affecting the oil prices.
Social trends in a country also have impacts on the airlines industry of a country. On the other hand, consumers are shifting their preferences from premium airlines to low cost travels and this resulted in the increase in number of low cost carriers (Lawton 2017). Though Singapore Airlines has a premium strategy, it is trying to enter the low cost travel format.
Airlines industry is the one where the competition is intense (Dai, Liu and Serfes 2014). Technology plays a vital role here. Technological developments are having enormous impacts on the business of the Singapore Airlines. The features of the airline are technologically advanced that attract the customers (Taneja 2017). It has adopted certain innovations like reclining seats, seatback entertainment systems and headsets.
The STP analysis takes into account the segmentation, targeting and positioning strategies of the Singapore Airlines. STP analysis helps a company to identify the target market and the customers from the whole population based on their need (Kotler et al. 2015).
Segmentation
The business and the first class market segmentation strategies of Singapore Airlines include demographic, geographic, psychographic and behavioral factors.
Demographic
The demographic factors include the customers of age group from 38 to 55 and they are usually having high income. They can be married, college graduate, adult and usually male. The customers are basically from different segments of the society like upper-middle class to upper class.
Geographic
They reside on different parts of the world as Singapore Airlines is connecting people from different countries. It has a stable democratic environment. The payment method is mainly through online but has the option of paying through the travel agents. The currency followed is the US or Singaporean dollar.
The price sensitivity is very minimal for Singapore Airlines. The customers are loyal to the brands who have established relationships with it. The company has targeted the customers who give importance to comfort and reliability while travelling. The customers are conservative and have political preferences. These customers have preferences for services based on quality more than that of price (Schmitt and Gollnick 2016). They are not heavily influenced by the market trends. These customers have the chances of getting influenced by their peers.
Positioning
Behavioral
Singapore Airlines has made a segmentation based on behavioral factors also (Xie, Poon and Zhang 2017). These customers prefer to book the tickets online but also prefer accessible websites and other booking systems. They have a history of loyal purchase and they give value to the accumulation of reward points and getting some facilities. They are not generally impulsive in nature.
Target market
Singapore Airlines authorities have decided to target different segments of the society from middle class to the corporate. The passengers of the economy class pay 8.5% of the first class fare whereas the business class fare is 60.7% of the first class. The airline is mostly used by the passengers for the business purposes as the fare is little more than the other airlines. It has also targeted the students who take their service in the vacations. First and business class are providing them more return.
The positioning strategy of Singapore Airlines is such that consumers feel that the prices of the tickets are higher than some of the airlines and lower than some other but the quality of service is also very high.
The company needs to target the people of the society having low income so that their reach is enhanced and revenue is increased.
The action plan of Singapore Airlines is taking into consideration the analysis of the marketing mix elements that is comprised of 7 Ps of marketing (Armstrong et al. 2014). They are product, price, place, promotion, people, process and physical environment.
Product
Singapore Airlines has been an all time choice for many passengers globally. It has occupied the tenth position with respect to carrying the international passengers. The company has a large number of flights connecting different parts of the world. Till the end of January, 2017, Singapore Airlines is having a fleet of around 111 aircraft that includes Boeing 777, Airbus A350, Airbus A330 and Airbus A380. The Airlines Company is offering a wide range of products and services (Bhasin 2017). The products included on-ground and in-flight products. Singapore Airlines initially had the business and economy class but later introduced the first class after their main competitor British Airways has introduced it and able to draw most of the passengers towards them. Singapore Airlines Suites are available on the Airbus A380 to A800.
Each of them has a separate compartment, mounted LCD TV on the front wall, seats are of leathers, provision for separate beds and privacy blinds. The features of the economy class include slimmer seats, adjustable headrest, in-flight entertainment facilities and increased legroom. Business class includes features like stowage options beside seats and they are turned into beds. First class is also having comfortable seats with bed options. Premium economy class is providing an additional service namely Book-the Cook.
Price
The pricing strategy of Singapore Airlines is such that it is able to attract lot of customers and able to generate fair amount of revenue. In 2010, the rank of Singapore Airlines was second with respect to market capitalization and the net income in 2017 is $262 million (Gurufocus 2017). It has targeted the different sections of people from the society, middle class, the corporate and the upper-middle class. These customers are ready to shed extra bucks for the facilities that the airlines company is providing. It has adopted the premium pricing policy for the customers as it has a high degree of customer loyalty. Based on the price, it is regarded as a premium brand in the airlines industry offering many features (Bhasin 2017).
Place
The Headquarter of Singapore Airlines is located at Airline House in Changi, which is in Singapore itself. The company is presently operating from the Singapore Changi Airport. It has become a major airline in the Europe, Pacific region and North America and still extended its presence in various cities that is nearly ninety cities of around forty countries including United Kingdom, Australia, Bangkok, Dubai and United States (Bhasin 2017). The distribution network of Singapore Airlines is very widespread that has helped the company in creating awareness among the consumers. It takes into account the services of the affiliated portals, companies, travel agents, own websites and tour operators for the booking of tickets and other related services. The company was having a trained workforce which was equal to around 25,000 by the end of 2016. This workforce has helped the company in making the operations more efficient.
Promotion
Singapore Airlines has utilized the integrated marketing communication strategies very well. It has utilized the social media as a good platform for the promotional activities like blogs, YouTube, Facebook and Twitter (Bhasin 2017). Traditional methods like newspaper and television ads have also helped it to reach to the customers. Recently, it has launched the Frequent Flyer program in order to reward the loyal passengers.
People
The people of Singapore Airlines include the employees of the company including the pilots, crew members, the air hostesses and the ground staff members (Karlins et al. 2017). The company has made a good and effective workforce by providing proper training and the crew members as well as the ground staff are very efficient in their work. This has helped the company in its operational activities.
Process
The processes of Singapore Airlines are very fast and the employees are very swift in their daily operations. They are delivering high quality services and perform regular check up of the systems so that no failures can take place. The services are prompt and stable.
Physical Environment
The overall physical environment of the airlines and the company are very good. It attracts the passengers to take the service. The airlines are neat and clean and the crew members are well dressed. They are very friendly with the passengers.
Singapore Airlines was at the third position after Emirates and Qatar Airways in the list of top 10 airlines companies in the world in 2016 (Skytrax 2017). It initially had the business and economy class but later introduced the first class after British Airways. It has not yet become the leader in the airlines industry. It is working in the niche market as well as in the mass market segment. It is slowly moving into the low priced airlines.
The company can be recommended to invest more in the low priced aircrafts so that more people can enjoy their travel with Singapore Airlines.
Singapore Airlines is having competitive advantages in various ways like it is providing values to the customers at a price which is cheaper (Boyd 2016). The flight service has been exceptional and the growth has been remarkable. The training system of the company is very unique and innovative than the other companies. It is offering all types of facilities to the customers for all its segments. It is trying to become the leader in the airlines industry within the next few years through its efficient service.
The key success factors of Singapore Airlines are customer service and satisfaction, strong brand recognition, strong stakeholder management, capable workforce and good relationship with the customers (Merkert, Van de Voorde and Wit 2017). The company is well ahead than its competitors in terms of customer service. It gives rigorous trainings to its employees and upholds the company’s image. There is also on job training which is better than any other airlines company. The company has built a high reputation through their Singapore girl icon in the uniform, the kebaya. They are very friendly to the passengers and the service is almost same as that of its competitors. The stakeholder management of Singapore Airlines is very strong compared to its competitors. The workforce is an important part of the success of the company. It has a stringent recruitment process, particularly for the cabin crew and the pilots in comparison to its competitors Qatar Airways or British Airways.
The above chart shows the value curve of Singapore Airlines based on the key success factors
Conclusion
The report deals with the marketing strategies of Singapore Airlines. It has been inferred from the report that Singapore Airlines is one of the top ten airlines companies in the world, creating values for the customers in various ways. The marketing strategies of Singapore Airlines have been discussed using STP and 5C framework analysis. The competitors and competitive advantages of the company have been taken into account. The macro-environmental analysis gave us an indication about the airlines industry in the country.
References
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson Australia.
Bhasin, H., 2017. Marketing Mix Of Singapore Airlines – Singapore Airlines Marketing Mix [online] Available at: https://www.marketing91.com/marketing-mix-singapore-airlines/ [Accessed 16 June 2017]
Boyd, E., 2016. The future of pricing: How airline ticket pricing has inspired a revolution. Springer.
Dai, M., Liu, Q. and Serfes, K., 2014. Is the effect of competition on price dispersion nonmonotonic? evidence from the us airline industry. Review of Economics and Statistics, 96(1), pp.161-170.
Gurufocus, 2017. Singapore Airlines Ltd. [online] Available at: https://www.gurufocus.com/term/Net+Income/SINGY/Net-Income/Singapore-Airlines-Ltd [Accessed 16 June 2017]
Karlins, M., Koh, F., McCully, L. and Chan, C.T., 2017. 26 Expanding teamwork beyond the cockpit door: An Integrative Program. Aviation Training: Learners, Instruction and Organization.
Kotler, P., Keller, K.L., Manceau, D. and Hémonnet-Goujot, A., 2015. Marketing management (Vol. 14). Englewood Cliffs, NJ: Prentice Hall.
Lawton, T.C., 2017. Cleared for take-off: structure and strategy in the low fare airline business. Routledge.
Merkert, R., Van de Voorde, E. and de Wit, J., 2017. Making or breaking-Key success factors in the air cargo market.
Sauria, M.E., Phillips-Cremins, J.E., Corces, V.G. and Taylor, J., 2015. HiFive: a tool suite for easy and efficient HiC and 5C data analysis. Genome biology, 16(1), p.237.
Schmitt, D. and Gollnick, V., 2016. Airlines. In Air Transport System (pp. 187-223). Springer Vienna.
Singapore Airlines, 2017. Singapore Airlines Signs First Marketing Collaboration Memorandum With Tourism Malaysia. [online] Available at: https://www.singaporeair.com/en_UK/au/media-centre/press-release/article/?q=en_UK/2016/January-March/10Mar2016-1213 [Accessed 16 June 2017]
Skyjourneys, 2015. Vision, Mission and Values of Singapore Airlines [online] Available at: https://skyjourneys.blogspot.in/2015/11/vision-mission-and-values-of-singapore.html [Accessed 16 June 2017]
Skytrax, 2017. Top 100 Airlines 2016 [online] Available at: https://www.airlinequality.com/review-pages/top-10-airlines/ [Accessed 16 June 2017]
Taneja, N.K., 2017. Driving airline business strategies through emerging technology. Routledge.
Xie, L., Poon, P. and Zhang, W., 2017. Brand experience and customer citizenship behavior: the role of brand relationship quality. Journal of Consumer Marketing, 34(3).
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