ESSENTIAL AIRLINE MARKETING STRATEGIES

The concept of marketing can be quite confusing to those who are unfamiliar with business, management, and economies. They might wonder: what is the different between marketing and sales? Is there anything else that marketing can do other than advertise? Why and in what way is marketing related to economies? Marketing researchers have analyzed these important issues in great detail over the past 50 years. 

1) Market segmentation and product differentiation

Why do airlines need different classes such as first class and business class? whydo airlines images differ? does it matter if airlines do not segment? what if the target market is shared with competitors? the art of market segmentation and product differentiation is introduced. Airlines constantly use these skills, which form the core elements of their product strategy.  the answer to all question above involves product strategies. Different types of customers exist: some rich , some are not. Some passengers' travel costs are reimbursed by taxpayers and their bosses, while other passengers pay for their own tickets. Some passengers travel for business, while others travel for leisure only. Wealthy customers might be willing to pay more to get a larger and more private seat during their flight for added comfort and privacy: these passengers are what the airlines call business travelers, but not all business travelers fly business class. Some airlines focus on the higher-end markets: business and first class travelers.The cabin interior of the legendary supersonic Concorde is an excellent example thereof. This famous and luxury aircraft was equipped with first and business class only. Normally, in order to attract business and first class passengers, airlines need to offer dedicated check-in counters, as well as finely decorated lounge facilities, complete food, beverages, and newspapers. However, if the market size of these well-off passengers is not big enough, it may prove too costly to run these facilities.

2) Airline marketing strategies- what you really need to know

Most people have already read plenty of marketing ideas and have learned basic marketing concepts from newspapers columns and business magazines, but what is the entire picture of marketing? The most important and basic elements of marketing are introduced. Readers will understand the role that marketing plays, and will then be ready for advanced marketing knowledge. Airline marketing is just like regular marketing, but marketers are marketing airlines services. The first thing everyone needs to know is that professionals usually divide marketing strategies into four categories: Product, Price ,Place and Promotion. That is 4P's. It is still from the bedrock of most marketing plans that marketers draw up, meaning that when people talk about marketing strategies, they base many of their decisions on these four categories. Any marketer  should know what the 4P's mean in his or her specific field. To the airline marketer, product means the delivery of  services to airline's customers, price means the fare that airlines charge their customers for the service. Sometimes price also refers to total costs, which includes searching, handling, and delivery costs. This definition leads airlines to another decision factor: place though there are minor differences in the various definitions of place, it usually refers to the channels that airlines use to sell their product and services. The more channels airlines apply, the easier it gets for their customers to reach the airline's products and services. Last is promotion which is variety of tools that will make customers know the product, love the product, and hopefully buy the product. That is to say different promotion strategies  are usually needed in order for customers to know, to love, or to buy the product. Basically, all these concepts are derived from the 4P's. As long as the concept of the 4P's understood, the other marketing concepts won't be too hard to understand either.

 

    

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THE IMPACT OF SHARE SWAP BETWEEN MALAYSIA AIRLINES (MAS) AND AIR ASIA

 Malaysia Airlines (MAS) and AirAsia is competitor to each other in the same operating region. As a business competitor both of the company will try to capture the market before the other one wins it. The competition sometimes is too high until they cannot stand with it and hurt each other. So that, route rationalization is a significant method to reduce the competition and both company must be together to develop economy of the country.

MAS as a national carrier which bring Malaysia flag around the globe must be preserved or supported, so that both company cannot to try to kill each other business although they are competitor to each other. Thus, share swaps being introduced with the intention to relax the competition between two companies. After a while, they consolidate each other in term of business operations. However share swaps does not mean that MAS can interrupt AirAsia business strategy and vice versa, but they are allowed to co-operate in term of the operations. For example, they can do code sharing.

At the same time, MAS which is owned by the Government have to fulfill the Government needs and want, they have to follow any instruction by the Government. Therefore, MAS is carrying more national responsibility rather than its competitor; AirAsia. MAS also carry the burden to fly to unprofitable route as a social service to the nations while AirAsia is freely to focus on their business.

However, this share swap give direct impact to:

Malaysia economical impact

• The cancellation of Firefly’s flight to Sarawak is a step to reduce AirAsia competitivenes level because Firefly as MAS’s subsidiary low cost carrier is a perfect competitor to AirAsia.
• This is not good for our economy, since it will reduce the income as less airlines operates. 
• This share swap had been looking as a monopoly agreement of both parties. This also will cause a major impact on tourism industry of our country. Tourism industry among a major contributor for Malaysia’s GDP.

If we refer to the case happen in Sarawak, where the state try to seek opportunity to offer foreign airlines to operate into Sarawak, this will create another wave to our economic stability. This situation, if not being controlled, will cause major injury to our airlines industry as the number of direct competitor increasing. Increasing number of competitor is not good for our local airlines industry as they have to struggle to be sustain in this industry. 

However some airline analyst state that this share swap give benefit to both parties because share swaps being introduced with the intention to relax the competition between two companies. Both parties will consolidate each other in term of business operations and not try to kill each other. If it true, then it is good for our country because both airlines can focus on their business without so much competition within the domestic and they can divert their attention to foreign airlines. This will stabilize GDP of the country and will strengthen our economy when both airlines consolidating each other for a firm business operations.

The impact to Malaysia Airlines

• MAS seemed the most suffer for this deal. At the initial of the share swap, MAS management structure has been restructure and their personnel being replaced including the Managing Director, Tengku Azmil. 
• There are also changing in MAS operation, for example, MAS terminated its route to Capetown and Buenos Aires happen after the restructuring and share swap.
• For the first 4 month after the share swap shows that MAS experienced loss of RM 1.28billion for the final quarter of the year 2011 and total RM 2.5billion loss after 8 month of the deal. 
• It shows that the deal is not helping the MAS to recover, instead of that MAS keep loss.
• It is also said by the former MAS managing director, that the share swap will not resolve the MAS woes. Under the deal, AirAsia will send its aircraft to MAS for maintenance, this will increase the high operating cost of MAS while it only get the less benefit from the deal comparing to what AirAsia get, it’s not shock if MAS will loss for the next financial quarter.

However, for the chairman of AirAsia Tan Sri Rafidah Aziz, the loss that MAS get has nothing to do with the share swap. She says: “MAS has been making losses from some time back and it is not because of the share swap,”

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ISSUE IN AIR TRANSPORTATION

Microchip disappeared: MAS Cargo urged to security level

PENANG: Police ask management MASKargo and Malaysia Airports Berhad (MAB) to increase security measures at the Air Cargo Complex in the state to ensure that it is not conceded more in the future.

State police chief Datuk Koh Hong Sun said immediate action must be taken by both sides to repair the weaknesses is there between him and adding closed-circuit cameras (CCTV) in the area.

He said a special meeting was held with both management today and they have identified several weaknesses that allow area easily transgressed irresponsible parties.

When talking to reporters here, he suggested that both the management gives police powers to the security guard on duty at the complex as well as supplying guns to guard their safety.

"Also equipped with power and guns, more frequent and extensive patrolling should be done in the area to ensure safety," he said.

Koh said CCTV should be installed on the inside and outside of the security hut to enable the authorities to monitor and support CCTV should also be installed in the vicinity.

"Ideally, the security guard posted personal details or identities of those entering and leaving the other area assisted recording of CCTV," he said.

He said the inspection document for permission to enter the area should also be carefully and any copy or photocopy of a letter or document can not be accepted.

In the early morning incident yesterday, a group of about 20 robbers, the four of them dressed in Rela, entered the Second Air Cargo Complex in Batu Maung was about 2.15pm morning.

Coming of four Rela members on the grounds of illegal immigration inspection in the area were not suspected by the security guard in charge of the entrance.

A moment later, two container lorries, leading the remaining robbers hiding in them, are allowed to enter the area after the driver supposedly produced a copy of a letter from a company to unload the goods.

Conclusion

Finally, the security of air cargo could collaborate with the International Civil Aviation Organization (ICAO) and the World Customs Organization (WCO) to jointly host a conference on "Facilitating and Improve Air Cargo Security

Ministry of Transport and Customs collaboration with ICAO and WCO, can bring together aviation safety officer and the customs authorities as well as private sector stakeholders.

with this, the goal of identifying methods to enhance cooperation and coordination in strengthening border and aviation security and at the same time facilitate the movement of air cargo smoothly and safely.

ICAO and WCO Joint also taken steps to enhance cooperation between the two organizations in ensuring air cargo from interference, and at the same time facilitate the movement of goods by air worldwide.

It will also benefit the two organizations between ICAO and WCO, and confirmed its commitment all parties to work towards a common goal, namely to ensure the success of the air cargo supply chain are safe and efficient.

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KLIA and LCCT

Have you ever heard about this two main airport? This is our Malaysia major airport for air transportation. Well known with service of aircraft cargos and passengers. It is the same airport but different terminal, different buildings, situated at different ends of the runway. KLIA is Terminal 1 and LCCT is Terminal 2. The two terminals are probably 20 miles apart.

First and foremost, let’s talk about KLIA. The airport is called Kuala Lumpur International Airport, but well known as KLIA. We can say that KLIA is a landmark of Malaysia. It is the main international airport in Malaysia located in Sepang district of Selangor. KLIA is the biggest airport in our country with 100 square kilometres, although there is total of 58 other airport on East and Peninsular Malaysia. Mostly, the other airport is for domestic flight only. 

It began its operations in June 1998 and still operates until now. KLIA is capable of handling 35 million passengers and 1.2 million tonnes of cargo a year in its current phase. The airport was officially inaugurated by Yang di-Pertuan Agong’s Duli Yang Maha Mulia Almarhum Tuanku Ja’afar ibni Almarhum Tuanku Abdul Rahman. The airport is operated by Malaysia Airporsts (MAHB) Sepang Sdn. Bhd. and is the major hub of Malaysia Airlines, MASkargo, AirAsia, AirAsia Malindo Air and Department of Civil Aviation (DCA).

There are an international and domestic flights operating on the airport, therefore terminals of the airport are well equipped with immigration processing facilities with security scanning to all passengers. KLIA is most popular with international flights. Due to the price ticket offered on domestic flight is way too high.

Another major airport is Low Cost Carrier Terminal, LCCT also known as budget terminal. It was opened at KLIA to satisfy for the demand of users of low cost airlines, especially the passengers of Malaysia’s first ‘no-frills’ airline, AirAsia. Like I mention before, LCCT located about 20km away from Kuala Lumpur International Airport’s Main Terminal Building (MTB), the 35,290 square meters LCCT was constructed on a fast track basis at the beginning of June 2005.

This airport is fully operating on 23^rd of March 2006. LCCT was the first airport to have separation between normal carriers and low cost carrier. The terminal may have different charges and costs. The concept of the budget terminal was taking the lead by Tony Fernandes of AirAsia at Kuala Lumpur International Airport in 2006.

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INNOVATION OF THE RAIL TRANSPORTATION

Rail transportation on the fast track

          Innovation is, and will continue to be, an integral part of the way railways conduct their business. Technological and process innovations help increase system safety, efficiency and reliability. This in turn lowers costs to customers and increases productivity. Railroads have always generated data. And today, with RFID and other technologies, they generate more data than ever before. IBM can use that data to help make railroads more efficient, safer, faster, cleaner, and profitable.

             

 The public and private sectors recognize the need for a better transportation infrastructure. And increasingly, they see the potential of smarter railroads to address that need. But how do we get there? Through the vagaries of history, geography, economics and politics, some continents (such as Europe) are much farther along in optimizing their transportation infrastructure for train passengers, even as others (especially North America) outpace them in the use of rail for freight transportation. Each could learn something from the other. We've reached an historic point—whereby technological advancements now meet the societal, environmental and financial demands for a more efficient and intelligent transportation system.                     

An instrumented, interconnected and intelligent transportation infrastructure—and smarter railroads, in particular—could make the global economy stronger, reduce greenhouse gas emissions, make highways safer and reduce road congestion. A smarter planet, in other words, needs smarter railroads.

Fact about the rail transportation:

v  Each year, rail lines carry 21 billion passengers and 10 billion tons of freight worldwide.

v  Rail carriers 6.25% of all intercity passenger traffic in Europe compared to 0.3% in the United State.

v  Only 18% intercity freight travel by rail in Europe compared to 47% in the US.

 

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Innovation in rail transport industry

Innovation in rail transport industry

High-speed rail

      In tandem technological advances as well as conscious society needs speed and efficiency in all aspects, various initiatives carried to meet these needs. For example, when developing countries wake as the United States (U.S.) strive to meet the needs of the people in terms of the efficiency of public transportation, high-speed Acela train Express Amtrak was the choice. With a maximum speed of 150 miles hour, Acela is the fastest machines in operation in the U.S. at the moment.

      But according to Railway Technology, the increasing age of machinery, stop frequency and curly and obsolescence track speed limit the average one-way from New York to Washington DC to 80 miles per hour.

     In addition, there are also several types of trains that operate outside developing countries is comparable with steadiness. Here is one of five high-speed trains in throughout the country.

1. CRH380A operating in China have speeds of up to 300 miles per hour is the fastest machine once put it as a leading to the world.

2. Tran rapid TR-09 from the German maglev technology is the same as technically monorail. With a maximum speed of up to 279 miles per hour put it as the second fastest train in the world.

3. Country Japan is famous for its speed rail proceedings of the Shinkansen high maximum speed is up to 275 miles per hour is also known as the platypus as the unique Duckbilled before.

4. Reseau ratchets owned French TGV has a speed of up to 236 miles per hour. But regular supervision only limited to 199 miles one hour.

5. Pride of the North Korean KTX only able to accommodate a total of 2 360 passengers. With a maximum speed reached 219 miles per hour, passengers can reach their destinations more quickly than expected.

Intercity KTM

Intercity rail service is a service introduced by KTM since more than a decade ago. As introducing additional services to the people by providing choices in terms of destinations, travel covers Peninsular Malaysia. Change after change has been implemented to provide a comfortable and safe in the journey to the destination of your choice in the shortest time possible.

At this time, service improvements are underway to build a double track that will provide a faster way of any public service operator in Malaysia.

Intercity travel by train allows you to enjoy the greenery and stunning vistas along the way. To secure services besides rest.

In 2012, Intercity and ETS services have been consolidated under a fully controlled administrative KTM Intercity SBU. The merger led to the introduction of several new products to its customers with the existence of the ETS services every 2 hours and standardization of existing concessions. Marketing Unit also makes the tour program starting from downtown up to Darwin, KL Central to Johor Bahru and KL Central in the promotion to introduce KTM Dense i-Card to get discounts for travel customers with service between cities.

                                
 Intercity rail service by KTM has made people easy to move from one place to another.

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Malaysia can be logistics gateway for ASEAN

As you know of all the Asean countries, Malaysia has the most number of Asean neighbours. This is because Malaysia share land and borders with Brunei, Indonesia, Singapore and Thailand, and Malaysia also share a sea border with the Philippines, which can be crossed very easily.

 

Even today, Malaysia is already playing the gateway role as it is the gateway for southern Thailand as Malaysia's Land Public Transport Commission Chairman Tan Sri Syed Hamid Albar said in his speech at the launch of the Asean-Business Advisory Council Seminar 2013 in Kuala Lumpur on 18 April 2013.

 

Syed Hamid said Padang Besar and Bukit Kayu Hitam are the top two export points for the four southern Thailand provinces of Songkla, Chumporn, Nakhon Ratchasmia and Surat Thani, accounting for 31 per cent and 29 per cent respectively.

 

Syed Hamid who was Malaysian Foreign Minister for 10 years also said that the government also plans to develop a global logistics hub with four integrated logistics centres, logistics parks, and a logistics park over 1,093 hectre in Iskandar Malaysia, located along one of the world's busiest sea-lanes, the Straits of Malacca. The transport and storage sector contributes RM30 billion to the country's economy, and it is 3.2 per cent of the country's gross domestic product (GDP).

In the speech he also mentioned that the Asean Economic Community (AEC) will remove substantially all trade restrictions for logistics services by 2013 and allow other Asean countries to take up to 70 per cent equity participation for logistics services and adding AEC also emphasises efforts to enhance transport facilitation and logistics services, promote multimodal transport linkages and connectivity. Malaysia's trade with Asean in 2012 amounted to US$115.9 billion or 27.3 per cent of Malaysia's external trade.

 

The conclusion here is as the government aim for a GDP growth of eight per cent per annum, government must make sure that the transport and logistics sectors also grow accordingly.

    

Malaysia's Land Public Transport Commission Chairman Tan Sri Syed Hamid Albar.

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