January 10th, 2018
Marketing Plan for Singapore Airline – customer and competitor analyses
In today’s keenly competitive and rapidly changing environment, satisfying the wishes of the customers has become more challenging. Consequently, the foundation of any company is built on thorough knowledge of customer needs (Fader & Hardie 2009). Such awareness is bettered when an entity segments its market to allow it to target a specific market effectively. The strategies should in this case be directed on ways to create value to the customers. Before considering any strategy, companies should first think about current and potential customers, trends in customers’ use of service or buying the product, why customers buy a particular product and why others do not buy that particular product or service (Vanil, Babu, & Panchanatham 2010). Consequently, firms should pursue long-term relationships with profitable customers (Kim, Jung, Suh & Hwang 2006).
SIA in this respect has segmented its business to offer premium, business class and economy class products as highlighted in their website. Accordingly, SIA’s target market is wide-ranging with its services appropriate for people in middle-income and high-income groups. To position itself in such groups, the entity differentiates its services offering premium service for first class customers. For instance, the entity offers a wide range of entertainment, lounges and dining facilities to match each customer segment expectations.
Competitive conditions in the airline industry are getting more challenging. SIA’s main competitors are Malaysian Airlines and Emirates, which have flights to destinations that SIA serves. For instance, Emirates has embarked on aggressive growth by lowering the price tickets. Internationally, SIA faces competition from large flight entities such as American Express, which have achieved economies of scale, thus can offer equally competitive services as those offered by SIA. However, SIA fairs well with such completion as evidenced from its ranks in various assessments. For instance, in terms of revenue passenger kilometres, SIA ranks amongst the top 15, and 10th in the world for international passengers carried (Heracleous & Wirtz 2009). It was also ranked the second largest airline in the world by market capitalisation of 14 billion US dollars in late 2010. In essence, the company has managed to compete effectively by having a great cash flow, upgrading its fleet, having the best airport in the world, excellent flight operations, admirable cuisine, return check-in (within 48 hours), improved seating and comfort, internet check-in, fax check in and the charming “Singapore girl”. The company also offers other services including aero-engine overhauling services, airport terminal services, simulator training, and aircraft cabin equipment marketing, properties, general insurance and aviation. This has greatly boosted its capital and cash flow hence enabling it to compete effectively.
On the other hand, like many other airlines, SIA has also felt the impact of increasingly challenging situations within the industry. For instance, security concerns and fluctuating fuel prices have made the company unable to compete effectively. Similarly, there is a risk of long-range aircrafts bypassing their areas of operation. For instance, the Boeing 777-200LR which was launched in 2005 is able to fly 17, 500km which can allow airlines to bypass Singapore centre. To mitigate such risks, SIA is seeking permission to fly from Australia to US and Australia to Europe (SIA, 2011). Go to part 6 here.