MKT 200: Principles of Marketing

Group Report

Instructor: Dr. Shilpa Iyanna Due Date: 20.12.2011

Ayah AlBadri NadeenAyman Nour Mustafa RubaJaffal Sara Nattat

1011849 1004999 1006756 1006534 1026215

Table of contents

Executive Summary Introduction Survey & Results Situation Analysis Target Marketing and positioning Marketing Mix Product Price Place Promotion Conclusion Interview

Ayah Ayah Ayah Nour Nadeen

Sara Sara Ruba Ruba

Nadeen

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Executive summary
By reserving a spot in the broad industry of aviation, Etihad airways can now be listed one of the most successful airline companies in the Middle East. In 2008, just a couple of years after starting its commercial operations; Etihad airways was granted the marketing award of the Airline Strategy Awards. The 2008 award came after hard work and a planned marketing strategy which focused basically on providing customers with high quality services. Etihad has made so much success in just a small period of time in comparison to other airlines. This report will explain the marketing strategy that led Etihad to the peak. Along with the marketing strategy, the report will also present feedback numbers on Etihad airways and discuss the pricing strategies that Etihad uses to attract its customers.

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Introduction
When it was first launched by Royal (Amiri) Decree in July, 2003 under the chairmanship of HH Sheikh Hamed bin Zayed Al Nahyan, Etihad Airways had not more than 6 aircraft operating in the international airs. However, today Etihad has about 57 aircrafts operating with 1000 flights a week departing to 66 destinations in 44 countries. Along with the operating aircrafts, Etihad has worked on improving its services, yet adding higher quality and features to it. Cracking out of the major business practice which is providing international flights, it has added Etihad Crystal Cargo, Etihad holidays, limousine rides in different destinations and lounges too. We are governed by a Board of Directors under the chairmanship of HH Sheikh Hamed bin Zayed Al Nahyan and are led by James Hogan, who was appointed Chief Executive Officer in 2006. Our main business is the international air transportation of passengers. We also operate Etihad Holidays, Etihad Crystal Cargo and a global contact center organization as part of our commercial group.1 It is crystal clear that Etihad has worked hard to own its success and reputation. Eight years of hard work and improvement has owned the company its reputation, success and many global awards. This is what makes Etihad a target for competition in the aviation industry.Etihad airways have offered a worldwide global experience of safe, comfortable and luxurious mode of travelling. It is also a fast growing airline company that has achieved the global standard of travelling in very few years. In this report we are going to discuss the environment that Etihad operates in, general information about Etihad, competitors and how Etihad deals with them, governmental control if any existed, technological and economic effects.

Our history, 2011.

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Survey

OBJECTIVE
We have conducted a survey in order to know the feedback of people towards the services Etihad Airways provides and whether Etihad airways is using a good marketing strategy. We have surveyed around 50 people from different nationalities and ages. Using structured questions directed to all people regarding the nationality, has made our survey successful and had allowed the group to generate statistics and facts about people's feedback toward Etihad airways. The Survey's objectives are the following: 1. To know if Etihad Airways is a choice that people have in mind when travelling 2. To know whether people are satisfied with the quality of the services, the offers and the pricing system? 3. To examine whether advertisements play a role in people's awareness about Etihad offers and whether it can be a factor in Etihad's success 4. To know what other airways can be a preference to people and why

QUESTIONNAIRE --Feedback Form-This survey is conducted in order to gain feedback from people around the services and facilities Etihad Airways provide. We are interested in your opinions and suggestions if there are any. Please take a few minutes to fill out this form. Age____________ 1. Occupation
Student Working Other

Gender_____________

Nationality____________

2. Do you travel abroad much?

Yes No

3. Do you have concerns about which airlines to choose when traveling?

Yes No

4. Do you consider Etihad airways when booking your flight?

Yes No

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5. Have you ever booked a flight withEtihad airways?

Yes No

6. If yes, do you think Etihad airways provides good high quality services or is it just like any other airways? Yes No Other

7. Do you think Etihad airways is using a fair pricing system?

Yes No

8. Can we say that Etihad airways provides good offers from time to time?
Yes No Other

9. Can we consider advertising a factor in Etihads success?

Yes No

10. Do you see Etihad advertisements Online (i.e. Facebook, twitter, social networks)?
Yes No

11. Have you tried other features in Etihad airways other than traveling?(ex. Etihad airways provides limousines for travelers, it also provides Etihad holidays a full package of holiday with resorts and a plan to make the trip memorable) ?
Yes No Other

12. Have you heard about Etihad Guest card?

Yes No

13. Can you rely on Etihad airways for a safe comfortable trip?
Yes No Other

14. Do you have any other airways preferences?

Yes No

15. If you do have any other preferences, please verify in the space below. ________________________________________________________________________________________________

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RESULTS
Gender 21 males 29 females 14-19:6 people 20-35: 33 people 35-50: 5 people 50+:6 people 22 students 25 working 3 others 30 do travel a lot ; 20 do not Age

Occupation

Do you travel a lot?

Do people have concerns when choosing airlines? Do you consider Etihad airways when travelling?

33 people said they do; 17 said they dont.

46 people consider Etihad when booking while the rest didnt.

Have you tried Etihad Airways?

48 have tried Etihad; the rest havent.

Does Etihad provide high quality services?

43 people said Etihad provides good services, 1 didnt agree and 6 others believed that the services are of the same quality of other airlines.

Does Etihad use a fair pricing system?

27 disagreed, believing the pricing system is unfair; 23 agreed.

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Does Etihad provide good offers from time to time?

42 said yes, 6 are not up to date and do not know, 2 said no.

Is advertising a factor in Etihad's success?

41 agreed; 9 disagreed.

When asked about whether Etihad advertisements are found online people said When asked about whether people have tried the other features of Etihad other than traveling people said

21 said yes; 29 said no.

9 people said yes they have tried other features, while 41 haven't.

Have you heard about Etihad guest card?

27 have heard about it and many were members, the rest have not heard about it.

Can you rely on Etihad for a safe and comfortable trip?

47 said yes, the rest said no.

Do you have any other airline preferences?

23 do have other preferences, 27 dont.

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ELABORATION
50 participants have been surveyed, 58% were females and 42% were males. The age range 14-19 included a 12% of people, 20-34 included a 66%, 35-50 10% and 50+ included 12%. 50% of these group ages were workers, 44% were students and 6 % stated other occupations. When people were asked if they travel a lot, 60% said they do travel a lot, the rest dont. Of course when travelling people would think about which airlines to book on, 66% of the people surveyed said they have concerns about choosing the airlines to book on, the rest were fine and had no concerns.

RECOMMENDATIONS
By many participants, it was recommended that firstly Etihad airlines should increase advertisements so that people would be aware of offers. Secondly many comments about luggage limits were written, many people believe that Etihad does not give an enough luggage limit for passengers so increasing the limit would be a solution too. To get back to our survey objectives, a big number considers Etihad when booking a ticket, 86% of people also believe Etihad provides high quality services , others said it is not consistent. For instance, the food offered in the plane isnt always of high quality. As to the pricing system, people believe that Etihad must redesign their pricing system because not everyone can afford those prices; this is what makes people head to competitors. People did agree that advertisements were part of Etihad's success but many were not aware of the online advertisements. As to the other airline preferences, people listed many big names for different reasons.

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Situation Analysis
A situation analysis is both the process by which management evaluates the products and businesses that make up the company; and a method to evaluate a companys business portfolio in terms of its market growth rate and relative market share.2Etihad airways is the fastest growing airline among other airlines, and its one of the best airlines in the gulf region. Etihad airways main branch office is located in the capital of the UAE; Abu Dhabi. In addition it has a lot of offices worldwide, and hires only the best in each department or major. In addition Etihad airways hires people from different nationalities and backgrounds, starting from on land crew and staff to cabin crew and flight attendances, and airplane captains. This makes Etihad airways a multinational airline company, and this strategy is applied in all of its offices around the world. An option that distinguishes Etihad airways from other airlines is that it offers a 2 years program that involves the Emirati newly bachelor graduates to join it, and within a 2 years study they would be promoted to a managers level. This program is to motivate UAE nationals and to attract them to work in Etihad.3 Moreover, Etihad airways has its own competitors, not only within the UAE, but in the gulf region as well. Competitors in the UAE are: Fly Emirates, or Emirates Airlines-which actually has its main branch based in the commercial capital, Dubai. As for the gulf region; Qatar airways is considered the major competitor to Etihad airways. The conducted survey requested that people pen down their votes for other preferred airlines, 46% responded. The votes were as follows:

VOTES
QATAR AIRWAYS FLYDUBAI ROYAL JORDANIAN ROYAL FALCON EMIRATES AIR ARABIA MEA 0
2 3

Kotler and Armstrong, page 66, 2012.

UAE Nationals, 2011.

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ROYAL FALCON, FLYDUABI, AIR ARABIA were picked for economic reasons, the rest were believed to have higher service qualities than that of Etihad airlines. When Etihad launches a new program or an idea in the market, the competitors launches it too, and vice versa. So in order to attract customers to use Etihad airways from Dubai for example, they offer shuttle buses that take the passengers from and to Abu Dhabi. This eases the transportation for many consumers and attracts them to using Etihad airways instead. This service is not only provided via UAE, it is also provided in other countries. For instance, customers who book flights from Abu Dhabi to Cairo, but they actually want to head to Alexandra, they simply reach Cairos airport and Etihads shuttle buses over there take them to the destination they seek within Egypt. Governmental Controls are not highly discussed, and thats a policy specified within the airline. According to the conducted survey; 92% considered Etihad airlines when booking. 96% were guests at Etihad; of those, 86% had a positive impression and believed Etihads services were of high quality and 2% of Etihads guests thought Etihad services were no different than other airlines services.

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Target Market and Positioning

First, target market means to identify the type of customers that the company or business firm wants to introduce its services, goods or products to. In other means, the company or business firm should specify or narrow down their target customers in order to produce a better and effective result. In addition to satisfy those specific customer needs, and attract even more customers.4 However, some firms cannot simply choose specific customers and its services should be available to everyone. Such an example is the organization which we are talking about, that is Etihad airways. Etihad airways cannot choose specific customers to apply its services on, as everyone should have the right to travel anytime and anyplace. This means that Etihad airways cannot choose only the upper social class hierarchy to provide them with airline tickets and travelling services. However, the targeting and boundaries can be applied within the airline itself. For instance, there are 3 main classes when travelling, which is the first class, business class and the economy class. In here, Etihad airways categorized its services into different levels, where higher social class would probably choose the first and business classes, while the main stream customers would choose the economy classes. Customers who buy first and business class tickets will pay extra money to get extra services and more comfortable places on the plane, in addition to extra special services when at the airport. While the economy class consumers, would pay much less in buying their tickets and get some less service than the other two classes. But eventually, both will be heading to the same destination and same airline, only having different seats and different customer care services. Second, is market positioning, here is when the company or business firm makes sure that their product or service reaches all the customers. In addition they make sure that it fits with the consumers needs.5 Etihad airways try its best to make their services reachable to all customers. Here is where they make sure that there are tickets available to all kinds of customers, such as first class tickets to high socialites, then business class tickets for business class or people in the same levels and finally economy class tickets where it serves the main stream customers. To Etihad airways, anyone who buys a ticket only once through Etihad and subscribes in Etihad customers membership, is considered a guest for life.

4 5

Kotler& Armstrong, page 73, 2012. Kotler& Armstrong, page 73, 2012.

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Market Mix
The market mix;is the set of tactical marketing tools - product, prices, place, and promotion that the firm blends to produce the response it wants in the target market.6 Marketing mix is divided in to 4 major categories, or in other words, the 4 Ps. Those 4 Ps are Product, Price, Place and Promotion. Each P will be explained in details: Product Product is the goods-and-services combination the company offers to the target market.7Etihad airways is reputable for its services both in the air and on the ground. The product itself is a combination of the luxurious experience in the modern Arabian setting. Etihad customers are engaged with Etihad from the instant they purchase the product online or otherwise. In the air, Etihad provides a safe setting for guests to feel comfortable in; through their Arabian hospitality unlike other airlines. As one of three top gulf airlines, Etihads services are flexible and serve its efficiency purposes. Other features include: Miles plus cash where customers collect points by traveling. 1MileRedemption feature which makes a customer of even 1 flight with Etihad eligible for their rewards. Seats availability extends till before the flight where seats may be sold at commercial prices otherwise known as OpenSeats. Reward Shop; where customers can redeem on flights, products or services exclusively. 8

Etihad airways serve a great deal of assistance for its customers transportation to and from airports; such as limousine rides and shuttle buses. All fit to serve theirneeds. Services extend to their luxurious lounges in airports within the Emirates (3 lounges are available at Abu Dhabi airport) and elsewhere in the world, where a first class or business ticket would earn the customer the benefits of first class lounges in all 66 flight destinations it offers. According to the survey conducted, 82% have not tried these luxurious features due to their unaffordability. Etihad offers services that pans tourism agency and shipping activities. Such as: Etihad Holidays, which offers packages for 80 destinations in 26 countries.

6 7

Kotler& Armstrong, page 75, 2012. Kotler& Armstrong, page 75, 2012. 8 Unique features, 2011.
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Hala Abu Dhabi, which more or less a trip management for business or leisure activities within Abu Dhabi for Abu Dhabi visitors. Etihad Crystal Cargo, which offers cargo services to 86 destinations worldwide, including freighter-only services to 26 destinations of the 86 worldwide.

Its In-flight Services (IFS) are composed of several levels of services depending on the customers wishes. Whether it were first, business or economy; all are treated with a fairly high hospitality. To each seating level its difference in style of dining and services. Special features and services are offered to members of Etihad Guest loyalty program, which is highly praised by its members due to the special offers and rewards they receive. These features include offers, milespluscash, and chances to win prizes. It is customary that cabin crew and land crew ask the passengers if they would like to fill a form and get the card (MrAsaad, 2011). However, the survey conducted showed that 46% have no knowledge of it.

Does Etihad Airways provide high quality services?

2% 12% Agree 86% Disagree Dont know

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Price Price is the amount of money customers must pay to obtain the product. 9 Price is the most important element in the market mix as it is the only tool that generates revenue. Etihad ticket prices are non-negotiable; they are sold at a fixed price per the destination and per the season and time. No consistent specific strategy is used due to seasonal demands on flights and their promotional environment at times. The prices are variable, depending on the seasons and

revenues management. (Mr. Asaad 2011).

Airlines all around the world deregulate their pricing strategies due to the fast-shifting and highly demanding setting they function in. The revenue management decides on which range of prices would generate revenue based on seasonal timings and peoples willingness toward Etihad airways . Though, it is mainly due to the variety of seasons demands. Current ticket prices at Etihad airways differ from one destination to another; heres a list of currently offered prices: In middle east flights 480-590 AED (one way) part of an ongoing promotion of over a month now. Europe flights 2000- 5000 AED Far east flights 3000 AED America, Latin America & Canada 5000- 7000 AED Africa 4000 AED10

According to the survey conducted, 54% thought that Etihad uses an unfair pricing system, believing competitor prices are better. However, 84% admitted that Etihad does offer good sales and offers from time to time,4% said otherwise and 12% had no knowledge about the offers or sales. Those who were not up to date with the offers blame their ignorance on Etihads poor advertising.

Is the pricing system fair?

46%

54%
9

Agree Disagree

10

Kotler& Armstrong, page 76, 2012. Mr. Asaad, 2011.

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Place Place is the convenience aspect of the market mix; as it includes company activities that make the product available to target consumers.11Etihad airways does not let their customers face any geographical problems. As they have about 17 branches around the United Arab Emirates, all located in different places. Some are standing alone offices, some are located at Malls, some are located in travel and holiday agencies. While internationally, Etihad airways has offices in 9 countries, even to destinations they do not fly to. Etihad airways has a program called Interline; interline is dealing with other local chartered airlines within the destinations customers wish to travel to, meaning Etihad airways has arrangements for its customers to use local airlines to help their travel to their final intended destinations due to its specialty with international airports only. This allows customers to depend on Etihad airways for their trips in their entirety. According to Mr.Asaad, 2011; Etihad travels to Australia/Sydney and then local airlines within Australia take the passengers to Queensland or New South Wales. This eases the travelling stresses on the passengers travelling to places where there isnt an international airport provided.

11

Kotler& Armstrong, page 76, 2012.

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Promotion Promotion is the activities that communicate the merits the product and persuades target customers to buy it.12For Etihads global recognition, it should undergo a massive amount of promotional series. This required a market penetration strategy to begin with; such as special ticket offers to far destinations with low prices. Etihad airway covers all media vehicles, from internet and social blogs, to radio and television; this had all aided its global recognition. According to Mr. Asaad, 2011; Etihad airways promote their tickets via Online, Radio, Internet and Facebook Ads. However, according to the conducted survey; 58% said they were not exposed to these online advertisements, 42% said they were. Etihad airways advertised their airline in many different languages and in different ways in order to attract customers and passengers throughout the world. Etihad airways follows a lot of procedures to attract all possible consumers, such as Bonus Miles which means the more frequent you travel, the more miles you get. There is also Luggage allowance which is an offer from Etihad airways to some destination flights such as flights to India, where they give their passengers extra luggage bonuses. Etihad also offers those who enroll as basic members through their website plenty of options; such as bonus miles and Luggage allowance options, as well as other options offered from Etihad. However,according to the survey conducted; when asked about whether advertising was part of Etihad's success 82% said yes it is what made Etihad get here, 18% disagreed. In addition, Etihad has an extra service that distinguishes it from other airlines which is Etihad Guest. According to Mr.Asaad, 2011; Usually cabin crew and land crew ask the passengers if they would like fill a form and get the card. This card is a miles collecting card, for each time the passenger flies to a certain destination, points are added to the card. The passenger collects those points and might get a free ticket or electronic equipment as well as jewelry. The advantages of the Etihad guest are that there are no blackout periods and the passenger gets cash plus miles every time they fly through Etihad. Etihads image according to the survey to the survey conducted is prosperous; 94% of people surveyed said that even if they were not Etihad guests but have heard from others about Etihad, they believe that Etihad is reliable and is a choice for a safe, comfortable trip.

12

Kotler& Armstrong, page 76, 2012.

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Conclusion
We can establish that Etihad airways had accomplished a lot of success in a remarkably short period of time, as it used to be unusual for an Arabian airline to reach this magnitude of success globally. Etihad is now a brand name; it is considered internationally by foreign languages when choosing an airlineand buying a ticket. It had held its vision and is not waiting too long to accomplish it; it strives to become the best airline in the world with a touch of Arabian hospitality. Etihads vision: As the National Airline of the United Arab Emirates, we seek to reflect the best of Arabian hospitality - cultured, considerate, warm and generous - as well as enhance the prestige of Abu Dhabi as a centre of hospitality between East and West. Our goal is to be a truly 21st century, global airline, challenging and changing the established conventions of airline hospitality. We welcome everyone who flies with us as a distinguished Guest, as reflected in the unique hospitality we offer in our Guest Travel Classes. With our fresh new approach to service in the air and on the ground, we seek to return a sense of freedom to flight. As well as a relaxing experience, we also strive to make travel safe and environmentfriendly by practicing the highest global standards in both these areas. And we are always in touch with your needs. Thats why we are constantly innovating, taking the smallest detail into account in our pursuit of excellence and perfection.13 One of the main reasons Etihad airways is now successful is its marketing procedures that it overtook in order to reach its current status in the aviation industry. As without the high marketing strategies, the firm would not have reached its current potential for the way customers find it. As one of the three top airlines in the Gulf region, it had taken its stand and made its mark for the future of the aviation industry in a remarkable fashion. Etihad airways had led other airlines to look up to it, and had created its footprint for future generations to ponder at.

13

Our vision, 2011.

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--INTERVIEW FEEDBACK--

As part of the report, an interview was conducted for further official answers, numbers and reliable information for the report. Members of the group interviewed the corporate key account manager; Mr. DaoudAsaad at Etihad Airways office in MadinatZayed branch, Abu Dhabi, UAE.

Here were the interview questions and their responses.

1. Can you provide us with general information about the environment, industry and governmental controls within Etihad airways? Work environment/Etihad is one of the most leading and high standardized companies within the gulf region. Etihad offers a 2 years program that involves the Emirati newly graduates to join it, and within a 2 years study they would be promoted to a managers level. This program is to motivate local people and to attract them to work in Etihad. Speaking of the industry, the aviation industry is the most effected industry in recession. Everyone today is trying to limit they're spending on tickets so the business class are buying economic, even the economic class are trying to limit they're spending. 2. How do you deal with competitors? If Etihad launches a new program or something new in the market, Emirates airways and other competitors do the same so emirates airways and Qatar airways always head to the top with us. So in order to attract customers to use Etihad airways from Dubai for example, they offer shuttle buses that take the passengers from and to Abu Dhabi. In addition to that free chauffeurs for the business class are available too.
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3. Do you have specific target customers? Everyone who buys a ticket, even if once in a lifetime is considered a customer. 4. Can you explain more the services you provide in travelling, the features that differentiate Etihad airways from other airlines and the support services provided? Emirates, Etihad and Qatar airways are the top 3 airlines within the gulf region and Etihad is one of the top 10 leading airlines globally. However, Etihad offers an Arabic hospitality than the other airlines Continuation of the services goes on; from the minute the customer buys the tickets or accesses them online to the end when he/she goes on the plane. In addition of extra services such as shuttle buses Also, the 3 lounges provided in Abu Dhabi Airport, and the new terminal which has been built recently in Abu Dhabi Airport; which is terminal 3. Flexibility Infrastructure No blackout periods Cash plus miles 5. What are the price range of the tickets: (during promotions timing) In middle east flights 480-590 (one way) Promotion that has been going on for a month Europe flights 2000- 5000 Far east flights 3000 America, Latin America & Canada 5000- 7000 Africa 4000 6. How do you promote for the tickets? Online- Radio Internet- Facebook Ads Etihad target audiences everywhere In order for customer to get emails about special offers and promotions, they would enroll online through Etihads website www.eithadairways.com 7. How do you attract the customers in buying tickets Fairs Special promotions Miles bonus More baggage allowance
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 If the customer enrolled online to become a basic customer, Etihad airways usually give a 5 kg extra 8. Are the costs of the tickets fixable or variable? Variable, depending on the seasons and revenues management. 9. How do you distribute your services, meaning have you reached globally? Etihad airways locate an office in every destination they travel to, and if there are some destinations they didnt reach, they still locate offices over there. Another option available at Etihad is Interline which is working with other airlines. For example, Etihad travels to Australia/Sydney and then local airlines within Australia take the passengers to Queensland or New South Wales. This eases the travelling stresses on the passengers travelling to places where there isnt an international airport provided.

NOTES In addition, Etihad have this service called Etihad guest, usually cabin crew and land crew ask the passengers if they would like fill a form and get the card. This card is a miles collecting card, for each time the passenger flies to a certain destination, points are added to the card. The passenger collects those points and might get a free ticket later. The advantages of the Etihad guest are that there are no blackout periods and the passenger gets cash plus miles every time they fly through Etihad.

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References
Etihad airways, Corporate profile: Factsheet. Retrieved on 4.12.2011 from http://www.etihadairways.com/sites/Etihad/Etihad%20Images/Resources/EYFactsheet.pdf Etihad airways, Our vision. Retrieved on 4.12.2011 from http://www.etihadairways.com/sites/etihad/ae/en/aboutetihad/etihadstory/pages/etih advision.aspx Etihad airways, UAE Nationals. Retrieved on 3.12.2011 from http://careers.etihadairways.com/ehire/English/UAENationals.aspx Etihad airways, Our history. Retrieved on 4.12.2011 from http://www.etihadairways.com/sites/etihad/ae/en/aboutetihad/etihadstory/pages/etih adhistory.aspx Etihad airways, Unique features. Retrieved on 4.12.2011 from http://www.etihadairways.com/sites/etihad/global/en/guestrecognition/visitor/etihadg uest/Programme/pages/TheProgramme.aspx Kotler, P., & Armstrong, G. (2012). Principle of Marketing (14thed.). England: Pearson Education Limited. Mr. Asaad, Daoud. 2011. Interview.

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