Faculty of Science, Engineering

and Technology (FSET)

AVA10004
Aviation Marketing

1
Aviation Marketing
Adam Phillips:
Studied Economics
Experienced AN, GF, EY
Linkedin linkedin.com/in/ajgphillips

Week 5

Marketing Mix - Products

Agenda

1. Recap – Marketing and Value

2. What is the Marketing Mix
3. What is a product/service
4. Product life cycle and developing a new
product
5. Building a product
a. Product features
b. Product quality
c. Branding
 Re-cap: What is marketing

• The process of planning and executing the

competition, pricing, promotion, and distribution
of ideas, goods and services to create exchange
and satisfy individual and organizational
objectives (American Marketing Association, AMA,
2004)
• A social and managerial process by which
individuals and groups obtain what they need and
want through creating and exchanging products
and value with others (Kotler, et al, 2006).

4
 Re-cap: What is marketing

• So does that mean a Company has just NOT

got a good Marketing Strategy if it cannot sell:
– Heaters in the Sahara Desert
– Ice in the Antarctic?

5
 Re-cap: Maslows Theory

Maslows needs Need and want, requirements,

and objectives
• Needs are state of felt deprivation, essential
to survival
• Wants: the form taken by human needs and
are shaped by culture and individual
personality

6
 Summary

No matter how good the Marketing Strategy

there must always be a fundamental need or
want (GAP in the market)

WHICH Creates Value!

7
 Re-cap: Value

Is the relationship between what is paid and

what is received (Blythe, 2009),
How to measure it?
– How to create it?
– Through marketing
– Through literature
– Through research

8
 Marketing Mix
▪ Is the set of controllable tactical marketing tools (4Ps or
7Ps) that the firms blend to produce the response it
wants in the target market (Kotler and Armstrong, 2010).
▪ 4Ps
▪ Product: tangible, physical product, as well as its values
created
▪ Price: pricing strategy
▪ Place: is a marketing channel, a set of interdependent
organisations that help make a product or service available
for use or consumption by the consumer or business user
(Kotler et al, 2010)
▪ Promotion: all marketing communication activities, including
personal selling, sales promotion, public relations, direct
marketing, trade fairs and exhibitions, advertising and
sponsorship

9
 Marketing Mix
▪ 7Ps for service industry:
▪ Process: the actual procedures, mechanisms, and
the flow of activities by which the service is delivered.
▪ People: all human actors who play a part in service
delivery and thus influence the buyer’s perceptions.
E.g. the firm’s personnel, the customer, and other
customers in the service environment
▪ Physical evidence: the environment in which the
service is delivered, and where the firm and
customer interact, and any tangible components
that facilitate performance or communication of the
service (Zeithaml et al. 2008)

10
Marketing Mix
Price:
List price
Discount Products: goods, services and
Allowances experiences:
Physical evidence: use of other tools Settlement and credit time variety/quality/design/features
and techniques in the environment is /brand name/packaging/
important warranties/returns

Marketing mix—
targeted customers
and intended
Process: contact with positioning Promotion : advertising/personal
customers in the process of selling/direct marketing/online
delivery, aiming at creating and marketing
enjoying experience

Placement logistics:
People: relationship demand
marketing chain/logistics/channel
management

11
Agenda

1. Recap – Marketing and Value

2. What is the Marketing Mix
3. What is a product/service
4. Product life cycle and developing a new
product
5. Building a product
a. Product features
b. Product quality
c. Branding
 A Product
Is anything that can be offered to a market
for attention, acquisition, use or
consumption that might satisfy a want or a
need (Kotler et al, 2006).

13
Service as a Product

A form of product that consists of activities,

benefits or satisfactions offered for sale that are
essentially intangible and do not result in the
ownership of anything.

14
Service as a Product
▪ Most products are a combination of goods
and services
▪ Product is sold with assistance of sales agents
▪ Service delivered with the assistance of front line
employees
▪ Experience is used to differentiate offerings
(e.g. Apple stores)

15
 Airlines

What is the Airlines Product?

- Good or Service?

- Is it is collection of products?

16
 Three levels of product/service offer

Core product:
Core benefit or service

Actual product or secondary service:

Product or service is reflected in some tangible form
(Features, styling, quality, brand names, packaging,
processes, accessibility, physical evidence, service
delivery, people/employ involved)

Augmented:
After sale service, warranty, delivery and credit,
installation

17
 Qantas Product

Core product:
Time critical transport

Actual product or secondary service:

Seat allocation/Flight booking
system/Schedules/Safety record/
In-flight service/Meals

Augmented:
Qantas Club/FFP/holiday package/car rental
package/tours/priority baggage/fly-drive
package

18
BUT

• You need to understand your environment!

• For aviation that is typically Geographic

position
– Network
– Traffic flows
– Reason for Travel

• BECAUSE: You don’t wear your hiking boots to

run a marathon.

19
Product concept applied to airline
industry
▪ Aerospace industry
▪ Aircraft
▪ Airline industry
▪ Route/Destination
▪ Cabin configuration
▪ Package (hotel and destination)

20
 Route/destination
• Qantas network

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 Holiday packages

22
Classification of product/service

Product/Service

Consumer product B2B product

 Is airline service a consumer or a B2B
product?

24
Agenda

1. Recap – Marketing and Value

2. What is the Marketing Mix
3. What is a product/service
4. Product life cycle and developing a new
product
5. Building a product
a. Product features
b. Product quality
c. Branding
Product Life-cycle (PLC)
▪ Describes the stages a product/service goes
through from when it is first thought of until it
is finally withdrawn from the market
▪ Not necessarily all products reach its final
stage, some continue to grow while others rise
and fall

(Source: URENIO) 26
stage Indications
Introduction Less competition,
stage Consumers not ready to accept
Rely on word-of-mouth or
experience/experiment
Growth More competitors,
stage Compete on price,/product
quality/features/
service/values
Profits increase
Maturity Slow down in sales and
stage revenues
More competitors
Customers
bored/insensitive/critical
Declining Increased competition
stage Shift of consumer taste
Advancement of technology
Replacement by better product
27
Strategies
Launching strategy is crucial:
Promotion focusing on raising awareness
Price crucial
Free trial
Highlight functions, outcome
Improve quality/features
Highlight values/status
Shift promotion from raising awareness to
convincing
Identify a niche within the market
Increase promotion and advertisement
Push for R&D for new features/value
Monitor market performance
Repositioning
Reduce cost
Develop a new product
 Managing PLC
Relationship between PLC and consumer
behaviour

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 3 ways to manage products
1. Modify the product
➢ Altering a product’s characteristics to try to increase and
extend the product’s sales
➢ Quality
➢ Performance
➢ Appearance
2. Modify the market
➢ Finding new users
➢ Increasing use among existing users
➢ Creating new use situation
3. Reposition the product
➢ Changing the place a product occupies in a consumer’s mind
relative to competitive products
➢ Reposition a product by changing one of the 4 marketing mix
elements

29
 Managing Product Portfolio

30
Agenda

1. Recap – Marketing and Value

2. What is the Marketing Mix
3. What is a product/service
4. Product life cycle and developing a new
product
5. Building a product
a. Product features
b. Product quality
c. Branding
What is a new product?:

▪ Not existed before

▪ New category entries
▪ Repositioning
▪ Additions to product lines
▪ Product improvement
▪ Variations to the above
A new product
Category Description
New to the world This represents inventions. Product is new to the world.
The first car, camera, match, computer, aircraft
New category Products that take the firm into a category that is new to it.
entries Products are not new to the world, but new from
manufacturer’s perspective
Additions to product Represents products that are line extensions in the firm’s
line current markets
Product Represents existing products that have been made better.
improvement Every product in the market has been or will be improved in
the course of its life cycle
Repositioning This category is reserved for products that are re-targeted for a
new application or to a new user. Can have different functions,
or for different target customers
Variations to the Variations such as new to the country, new to the channel,
above packaging improvements and different methods of
manufacturing are not commonly accepted as new products

33
 A New Service
➢ A new service means:

➢ Style changes: logo, uniform, deco, etc…

➢ Service improvement: an actual change to a feature or

a service procedure, e.g. online check-in, onboard menu
in more languages, new design of menu, more food on
board

➢ Additions to existing service range: new unit offered

to an educational program

➢ Major innovation in service/delivery: speech

recognition system for taxi booking

34
 Examples: Cathay Pacific
We are among the first airlines to have rice
cookers, toasters and skillets on board,
enabling our flight attendants to prepare freshly
cooked rice, toast and eggs to your liking. First
Class passengers can also go à la carte and
choose their own meals and dine anytime they
wish. Hmm, how about having fried eggs, sunny-
side up?

(Source:
www.cathaypacific.com) 35
 Cabin service (BA vs. Emirates)

Contrast Etihad

https://www.youtube.com/watch?v=2C24vrbrKxo

36
 A new service launch –BA new service to
Chengdu
• https://www.youtube.com/watch?v=NswZx1TC
BFE

37
 Product Innovation
➢ Frontline staff is key to provide feedback of
customers to stimulate new service
development and delivery:
➢ Improvement of process, such as queuing
➢ Introduction of a new feature

38
 Individual Product Decisions

Product
Product Branding Packaging Labelling support
services

39
 Product Attributes
▪ Refers to the benefits a product offers to the
marketplace, which are then communicated
and delivered by product attributes, including:
➢ Quality
➢ Features
➢ Design

They will affect consumer’s reaction to a product

40
 Product Quality
➢ Refers to the ability of a product to perform its
functions. Including:
➢ Durability
➢ Reliability
➢ Precision
➢ Ease of operation and repair, etc…

Remember:

Basic quality levels are measured by perceptions of consumers

Companies choose a quality level that matches the expectations of the target
market or the quality levels of competing products
41
 Can you rank them?
➢ Airlines, what are the measurement to determine
the quality?
➢ Singapore airlines
➢ Virgin Australia
➢ Qantas
➢ Jetstar
➢ Korean airlines
➢ United
➢ American
➢ Spirit

42
 Items to consider
▪ Fleet and schedule-related product features
➢ Cabin configuration and classes of service
➢ Network, frequency and timing
➢ Punctuality
▪ Customer service-related product features
➢ Point-of-sale service
➢ Reservation and overbooking
➢ On-board service
➢ Ground service

43
 Items to Consider:
➢ Point of sale
➢ Reservation vs. overbooking
➢ Airport service
➢Check in
➢Bag drop
➢Self check-in
➢ Queuing
➢ Lounge
➢ In-flight service
➢ Baggage claim, lost and misplacement

44
 Skytrax—quality certified airlines
➢ SKYTRAX Airline Quality Audit (SAQA) programme is a globally
recognized and respected Quality Certification system for front-
line operational product and service delivery standards of an
airline.
➢ Quality Certified Airlines are subjected to complex SAQA
evaluation across all areas of front-line Product and Service
standards. This covers more than 750 features of product and
service quality measurement, divided across the airport and
onboard environments. The airport service analysis is based
upon each airline's home base airport.
➢ SAQA guidelines ensure that Quality Certification is conducted in
a standardized manner, and deliver the highest professional
standards that have been associated with SKYTRAX for more
than 20 years. The SAQA programme is the benchmark for
Quality Performance management in airlines, and all studies are
carried out by experienced, SKYTRAX research staff.

(www.airlinequality.com) 45
 Skytrax
“We have a complex set of product and service
delivery Quality targets that an airline must
meet, but one of the most important factors for
successful certification is the consistency of
Quality performance." (Skytrax)
5/4/3/2/1 star airlines

46
 5-Star Airlines
Latest ranking:
➢ Asiana
➢ Cathay Pacific
➢ Hainan
➢ Qatar
➢ Singapore
➢ Malaysia

47
Products designed to meet Customer
Journey
▪ Traditional Silo: Think , Operate, Sell
▪ Moving to Customer Journey & Ancillary Sales

Products can consist of partnerships: Alliances / Rental Cars /

Hotels / Holiday packages etc
48
Most of All Remember
▪ PROFIT = REVENUE – COSTS
▪ To create VALUE = what the customer wants /
needs

49
Branding
A brand is a name, a term, sign, symbol, or design,
or a combination of these, intended to identify the
goods and services of one seller or group of sellers
and to differentiate them from those of competitors.
➢ Is a seller’s promise to deliver consistently a specific set
of features, benefits, and services to buyers.
➢ Includes the use of brand name, trademarks, and
practically all other means of product identification.

A brand name is a word, letter, or a group of words

or letters. E.g. Sportsgirl vs. Adidas, NAB vs.
Commonwealth
 Brand

51
 A Trademark
➢ A legal term
➢ Includes only those words, symbols or marks
that are legally registered for use by a single
company
➢ It is not necessarily attached to the product

52
 Some Branding Concepts
• The value of company and brand name
• The added value a given brand name gives to a product
beyond the functional benefits provided
• Often represented by the premium a consumer will pay for
Brand equity one brand over another when the functional benefits
provided are identical
• Brand valuation is the process of estimating the total financial
value of a brand

Brand loyalty • Consistent preference for one brand over all others
• Leads to repeat purchase

Brand identity • Important to developing brand loyalty

53
Brand Equity
The most valuable global brands 2012
Rank Rank Rank Category Brand Brand Value
2011 change 2012 2012 ($M)
1 0 1 Tech Apple 182,951
2 1 2 Tech IBM 155,985
3 -1 3 Tech Google 107, 857
4 0 4 Fast Food McDonald's 95,188
5 0 5 Tech Microsoft 76,651
6 0 6 Soft drinks Coca-Cola 74,286
8 7 7 Tobacco Marlboro 73,612

7 8 8 Communication AT&T 68,870

Provide

13 9 9 Communication Verizon 49,151

Provider

9 10 10 Communication China Mobile 47,041

Provider
Brand Equity
Comparison of 2012 with 2015
Brand
Rank 2012 Brand value (M) Rank 2015 value (B)
Apple 182,951 Apple 154.1
IBM 155,985 Google 82.5
Google 107,857 Microsoft 75.2
McDonald 95,188 Coca-Cola 58.5
Microsoft 7,651 Facebook 52.6
Coca-Cola 74,286 Toyota 42.1
Marlboro 73,612 IBM 41.4
At&T 68,870 Disney 39.5
Verizon 49,151 McDonald's 39.1

China Mobile 47,041 GE 36.7

 Branding

“Brands help businesses create competitive

differentiation, command a price premium and
become more resilient to crises or economic
turbulence. This year, those businesses that
leveraged technology, focused on the customer
experience or boosted control of their brands
thrived” (David Roth of WPP)
2020 Brand ranking
https://www.forbes.com/powerful-brands/list/
Brand Equity: Why It Matters And How To Build It
https://www.forbes.com/sites/theyec/2021/07/12/brand-equity-why-
it-matters-and-how-to-build-it/?sh=d45ff6310dea
( source: www.wpp.com) 56
Brand Strategy
➢ Brand positioning
➢ Product attributes
➢ Benefits
➢ Beliefs and values—tap into emotions
➢ Brand name selection, good names
➢ Suggest something about the products or its benefits
➢ Easy to say, recognise, and remember/ distinctive/well translated
into other languages
➢ Brand sponsorship
➢ Manufacturer vs. private (store) brands, e.g. Boeing or Coles
➢ Brand development
➢ Help introduce new products
 Emotional branding
• https://www.youtube.com/watch?v=ct9B6sWx
GJc

58
 Managing Brands
▪ Brands are known through advertising,
personal experience, word of mouth, the
internet, sponsorship

▪ Everyone in the company represents the

brand

▪ Companies need to periodically conduct a

brand audit

59
 Emirates’ branding strategy
➢ Boutros M. Boutros, Divisional Senior Vice-President,
Corporate Communications, Emirates Airline and Group,
told Gulf News that his organisation will soon roll out a new
branding strategy that will take the brand image of the
world's fastest growing airline to the next level.

➢ Emirates has recently assigned StrawberryFrog, a branding

agency, as its global lead communications partner to
develop a branding strategy.

➢ The airlines increased its corporate communications budget

to nearly Dh1 billion including sponsorship advertising
and public relations, 22 percent of the group’s revenue
of Dh5.4 billion reported at the end of its last financial year
ending March 2010.

➢ https://www.thedrum.com/news/2012/03/27/emirates-set-launch-
new-global-brand-platform-strawberry-frog
(Source: www.gulfnews.com) 60
 Emirates
➢ Emirates has been involved with a wide range of sporting
events and teams around the world for over 20 years.
• In 1987, only two years after its inception, Emirates began
to build up its sponsorship portfolio.
• Today the airline is linked to some of the world's leading
sport events spread across the six continents to which
Emirates flies non-stop from Dubai.

➢ From the outset our objective has always been about

acquiring key sponsorships that will provide maximum reach
for our brand. Each sponsorship is carefully assessed and the
return on investment (RoI) is measured to ensure we receive
the greatest benefit for our investment.

➢ In addition to sporting events and clubs Emirates also has a

strong tie to the arts, such as our ongoing sponsorship of the
Melbourne Symphony Orchestra in Australia.

61
 Emirates branding strategy
Emirates has been committed to sponsorship in both
the UAE and around the world for over twenty years,
beginning with the first powerboat race held in Dubai, in
1987.
➢ Football
➢ Rugby
➢ Tennis
➢ Horse racing
➢ Golf
➢ Cricket
➢ Sailing
➢ Australian rules football
➢ Arts and culture

62
 Emirates “Hello Tomorrow”
https://www.youtube.com/watch?v=5jnAvu-ADrQ

We deliver on dreams

Emirates set to launch new global brand platform with

Strawberry Frog, 2012
"... a series of messages that represent the ‘spirit of Tomorrow’ -
Tomorrow Brings Us Closer to; New People, New Experiences,
New Styles, New Friends, bringing Emirates' new vision to the
marketplace. ..."
https://www.thedrum.com/news/2012/03/27/emirates-set-launch-
new-global-brand-platform-strawberry-frog
63
 A Product with a Brand

Vietjet https://www.youtube.com/watch?v=Sv-aB-
3mHRs

NZ:
https://www.youtube.com/watch?v=oLTUz9qk45o

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Etihad sponsorship
➢ As a global, innovative and young airline with a fresh
approach to everything we do, we associate ourselves
with a large number of events and causes that reflect
our own position as a catalyst for change.
We support the promotion of local culture in the UAE
and worldwide, and sponsor cultural and sporting
events that are consistent with our values of
hospitality, team spirit and helping to bring the world
together.
Summary
➢ What is Marketing Mix?
➢ What is product/service?
➢ Classification of product
➢ Product life cycle and developing a new
product
➢ Individual product decision
➢ Product quality
➢ Product features
➢ Branding