Emirates Airlines and Etihad Airways

Introduction

This paper discusses Etihad Airways, the number 2 airline of the United Arab Emirates (UAE), and compares it to Emirates Airlines, the number 1 airline of the Middle East, and fourth largest airline in the world. The paper provides examples of the 7 P’s of the extended marketing mix for each airline, and provides a detailed marketing plan for Etihad Airways. The marketing plan includes how the plan will meet business objectives and marketing objectives of Etihad Airways as well as an Action Plan that can be used to to monitor and evaluate the company’s progress for meeting its business goals and objectives.

Etihad Airways

Etihad Airways is the 2nd largest airline in the UAE and the second flag carrier airline of the UAE with its HQ in Abu Dhabi and its main hub at Abu Dhabi International Airport. Founded in 2003, Etihad Airways offers over 1,000 flights every week aboard its fleet of passenger and cargo planes, including Airbus and Boeing jets. It reaches destinations all over the world—America, Africa, Australia, Asia, the Middle East and Europe. In 2015, it saw revenues of more than $9 billion and it currently employees more than 20,000 workers (Etihad Airways, 2015).

Sheikh Khalifa bin Zayed Al Nahyan issued the Royal Decree establishing Etihad Airways as the second flag carrier of the UAE: his purpose was to have an airline for Abu Dhabi. That airline grew immensely over the following decade. It turned its first net profit of $14 million in 2011 in line with corporate guidance. It took a 29% stake in Air Berlin the same year, followed by a 10% stake in Virgin Australia, a 40% stake in Air Seychelles, a 49% stake in Jat Airways, a 51% stake in Air Serbia, a 49% stake in Alitalia.

Toe enhance its visibility, Etihad Airways has sponsored numerous sports teams around the world including the Baltimore Brigade, an arena football team in the U.S.; Manchester City F.C. in the UK which has named its home stadium Etihad Stadium; the Mumbai Indians, a cricket team in India; the Washington Capitals, an NHL team in the U.S., and the Washington Wizards, an NBA team in the U.S. Etihad was the title sponsor of the 2009 Grand Prix in Abu Dhabi. In 2014, Etihad partnered with Major League Soccer (MLS) in the U.S. to be the Official Airline of the MLS. In 2017, it partnered with IMG Models, to promote fashion shows.

Etihad offers a range of seating options in its new aircraft, including a First Apartment on Airbus A380-800, which is 39 sq. ft., ottoman/bed, 24-in. flat screen TV, vanity cabinet and bar. Its luxurious stylings have made it one of the most appealing first class cabins in the industry. Even more impressive is The Residence, which boasts 125 sq. ft., a private living room, bedroom and bath; a reclining sofa and 32-inch TV. Then there is the Business Studio seat, which is perfect for the executive on the go and provide a cozy but private seating arrangement with TV and leather-bound chair that turns into a bed. Economy seating is also available.

The company’s slogans have included the following over the years:

· From Abu Dhabi to the World

· The World Is Our Home, You Are Our Guest

· Flying Reimagined

· Choose Well

It has a reach of 75 destinations and a fleet size of 116.

Emirates Airlines

Emirates is the largest airline in the Middle East with nearly 4,000 flights every week leaving Dubai. Its range extends to 140 cities worldwide, 81 countries and 6 continents. It is the fourth largest airline in the world in terms of numbers of passengers flown. Like Etihad, Emirates’ fleet consists of Airbus and Boeing jets. It has more than 100 Airbus A380s and more than 150 Boeing 777s.

Emirates employees more than 60,000 workers and has revenues of more than $24 billion annually. Since its founding in 1985, the airline increased the number of passengers flown every year. To help increase its growth and visibility, Emirates has sponsored Spinnaker Tower in Portsmouth, England. It is a sponsor of Cricket Australia, the Pro Arch Tournament and Lord’s Traverners. It has been a sponsor of FIFA and FIFA World Cup. It is also a sponsor of the football club Real Madrid. In the U.S., it has sponsored the U.S. Open and is the official airline of the MLB team the Los Angeles Dodgers. It has even had Hollywood actress Jennifer Aniston star in two commercials for the airline (Emirates, 2018).

The company’s slogans have included:

· So be good to yourself, Fly Emirates

· From Dubai to destinations around the world.

· Fly Emirates, Keep Discovering

· Hello Tomorrow

· Fly Better

It has a reach of 180 cities and a fleet size of 258.

The 7 P’s of Marketing

Ries and Trout (2009) state that “marketing is not a battle of products, it’s a battle of perception” (p. 23). To help shape the perception of the consumer, the marketing mix gives a company a way to think about how consumers are impacted by the 7 P’s. The 7 P’s of marketing are: 1) product, 2) place, 3) price, 4) promotion, 5) people, 6) processes, and 7) physical evidence. Each of the 7 P’s should be designed to help the company achieve its objectives.

Objectives

Etihad

For Etihad, the main objective is to “take a holistic approach to corporate responsibility alongside our efforts to be the world’s best airline” (Our Responsibility, 2018). Etihad states that all of its efforts “are focused around adding value: to our people, our communities and our planet” (Our Responsibility, 2018). It has defined these objectives in the following terms:

· Growing together:

Support for the Abu Dhabi 2030 vision.

· Greener together:

Commitment to minimise our environmental impact.

· Working together:

The development and well-being of our diverse employees.

· Giving together:

Contributions to charities and humanitarian relief.

Growth is one of the biggest objectives of Etihad, which defines this objective as “delivering solid performance through increased passenger and cargo volumes” (Our Responsibility, 2018). Thus, while expanding its services, Etihad also wants to enhance its image by showing a commitment to sustainability, caring for the environment by going green, giving back to its communities.

Emirates

Emirates Airlines has as its main objective the goal of being a leader in the industry, ensuring customer satisfaction and growing every day. The core of this objective consists of the company’s main values:

· Excellence – in everything we do.

· Agility – to move as one with the impact of thousands.

· Innovation – to remain ahead of the game.

· Leadership – we lead the industry and our people with strong example.

· Reliability – count on us to get results (Emirates Group Security, 2018)

By focusing on excellence, agility, innovation, leadership and reliability, Emirates is able to describe the quality of service and products it seeks to offer its clients.

Product

Product is the thing that is being sold to the consumer—a good or a service. In many cases it is also a brand, a concept, a perception—as Ries and Trout (2009) put it. Product also refers to the advantages it can give to a consumer—i.e., what makes it better than other products on the market, or what features of the service make it unique and particularly appealing. Tracy (2004) states that when it comes to product, one should “develop the habit of looking at your product as though you were an outside marketing consultant brought in to help your company decide whether or not it’s in the right business at this time.” That means, one should assess a company’s product by analyzing whether it actually works for the company and enables it to meet its business objectives.

Etihad

First example. The main product Etihad offers is flights out of Abu Dhabi. This meets the company’s main business objective of providing its community the opportunity to grow together. The company’s slogan is “from Abu Dhabi to the world” and that starts with its ability to provide people flying into and out of Abu Dhabi the opportunity to travel with ease and comfort.

Second example. Another product Etihad offers is a range of seating options from economy to business seating. This meets the company’s objective of providing quality to its customers and meeting their needs, whatever they. Whether one is looking for an inexpensive seat or a seat on which they can have a good meal and get some work done or enjoy some rest, Etihad offers what the flyer needs. Its unique seating designs include The Residence Apartment, the First Apartment and the Business Studio—all of which are uniquely tailored to specific clientele.

Emirates

First example. The main product of Emirates is its wide range of destination flights. With over 150 cities and six continents to which it flies, Emirates is one of the leading airlines in the world for this very significant reason: it goes everywhere people want to be. This meets the company’s objective of being a leader in the industry by ensuring the airline provides service for the major destinations that clients seek.

Second example. The other product Emirates offers is its unique range of seating and dining, which includes an onboard bar, first class showers, first class private suites, and more. Not quite on par with Etihad in terms of style and sophistication, Emirates makes up for it in terms of quantity. This meets Emirates’ business objective, which is to provide excellence of service.

How They are Different/Same

Etihad and Emirates are the same in terms of product in so far as both are focused on providing flights to destination cities around the world and offering great seating to accommodate the needs of every type of traveler. They are different in terms of product when it comes to where they fly and the range of options travelers have for seating. Etihad offers some of the most elegant, private and luxurious seating of any airline in the world. Emirates also offers upscale seating and arrangements but is primarily focused on getting as many people to their destination as possible.

Place

Place refers to where the company’s products or services can be obtained. This is important for a business because providing consumers access to their goods or services will make all the difference in the success of a company’s development and connection with consumers. Tracy (2004) notes that the company “must make the right choice about the very best location or place for the customer to receive essential buying information on the product or service needed to make a buying decision.” That means whatever the product is, place is important because place is what allows the message about the product or service to reach its target and reel them in.

Etihad

First example. Etihad is headquartered in Abu Dhabi, with the purpose being to provide an airline specifically for people traveling to and from Abu Dhabi in the UAE. This was in line with the company’s business objective of providing new services for its community and helping the people to grow together.

Second example. Etihad has expanded its reach by acquiring stakes in several well-known airlines, such as Virgin and Air Berlin; it has also expanded its service around the world to provide more “place” for its consumers. This has been in line with its business objective to grow with its consumers.

Emirates

First example. Emirates is based out of Dubai and serves as the number one airline in Middle East. This is in line with its business objective to lead the Middle Eastern airline industry by being the most popular and serviceable airline for air travelers in the region.

Second example. Emirates is fourth in the world thanks to its nearly 200 hundred destination cities that it services. Place is at the top of Emirates’ list and is one of its most important business objectives—to be everywhere and serve everyone. By expanding its reach around the world to every continent save one, Emirates has a place virtually everywhere and thus has tremendous access to the global market.

How They are Different/Same

Etihad and Emirates are the same in the sense that both are based in the UAE. However, they are different in that Etihad is based out of Abu Dhabi and Emirates is based out of Dubai. Thus, they each serve a particular region of the UAE with particular clientele. They also both fly to different cities, so their “place” abroad is also distinct from one another.

Price

Price refers to the pricing strategy that the company uses to move its products or services. The key to this strategy is to identify what customers are willing to pay and then price accordingly. There are a variety of strategies that can be employed to help in this department, from the low-price/economy strategy to the luxury brand high-end price strategy. It all depends on the image the company is trying to cultivate and the brand the company has put forward. As Tracy (2004) points out, sales, discounts and incentives all play a part in how price is determined and what products are priced where and for which customer segment.

Etihad

First example. Economy tickets are generally priced according to industry standards, so price is not a major factor here. Etihad typically comes out ahead when compared to Emirates in terms of pricing but only marginally. Price helps Etihad achieve its business objectives by giving the company a position that is right in accordance with industry standards.

Second example. The extras and perks are where price comes into play in a big way. Etihad uses luxury pricing to provide a luxury experience for fliers who can afford the big perks—like a personal, private shower in The Residence. This helps to appeal to top-tier clientele who want to know that they are getting quality service and are willing to pay top dollar for it, which aligns with the company’s business objective of meeting consumer demands. And in Abu Dhabi there are some high consumer demands.

Emirates

First example. Similar to Etihad, Emirates prices its economy tickets to lower class fliers who look to budget their money. While perhaps slightly more expensive than Etihad overall, Emirates makes up for it with the fact that it has more destinations for fliers. This allows Emirates to meet its business objective of being everywhere for everyone.

Second example. And like Etihad, Emirates also boasts excellent luxury seating at a luxury price. The pricing strategy Emirates uses for its luxury compartments is in line with industry standards here, too, so it is not that distinct from Eithad overall. The same rule applies in terms of meeting business objectives: economy class seats get one pricing strategy, and another is used with the upper class because people expect quality at high price levels and won’t believe it is if not priced to appear as such.

How They are Different/Same

When it comes to pricing, both Etihad and Emirates follow the same pricing strategies. They apply economy pricing strategies for lower class tickets and luxury pricing strategies to upper class tickets. This enables them appeal to target consumers in different ways.

Promotion

Promotion refers to the ways in which a company promotes itself, either through sales tactics or through advertising (direct or indirect). Tracy (2004) states that “large and small companies in every industry continually experiment with different ways of advertising, promoting, and selling their products and services.” So it is important for companies to vary their promotional activities over time so that their approach to marketing does not become too stale.

Etihad

First example. Etihad sponsors Major League Soccer in the U.S., making itself the official sponsor of the MLS, which gives it great visibility in America. As soccer (football) is a top international sport, this kind of promotion makes Etihad a good brand name for fliers who are going overseas from the U.S. This meets the company’s business objective of expanding its market by increasing its visibility.

Second example. Etihad has developed numerous catchy slogans over the years to help create a brand image that is appealing to consumers. From “Flying Reimagined” to “Choose Well,” Etihad promotes itself by identifying itself as an industry leader in innovation and quality. This is in line with its business objective of being a quality, top tier airline.

Emirates

First example. Emirates has used Hollywood actress Jennifer Aniston to promote its airline. This is a huge promotional activity in the great scheme of things, as typically Hollywood actors and actresses tend to shy away from advertising. Aniston is globally recognized as a big-time celebrity, so having her as the face of the company is a great way to promote the company. This aligns with Emirate’s business objective of being the best in the business: when you have one of the top Hollywood celebrities promoting your business, you come across as the top-tier company.

Second example. Emirates has is the official airline of the Los Angeles Dodgers, which is one of the most globally recognized major league teams in the world. This puts Emirates again on a global platform and enhances its brand appeal significantly. Again, this aligns with the business objective of being the best in the airline business: when you sponsor the biggest names in sports, you come across as the best in the business that you represent.

How They are Different/Same

Both seek to sponsor big names in sports to game publicity and promote themselves. Emirates is a little different in that it has used a big name Hollywood Actress to help promote its brand. Etihad, however, has also looked elsewhere outside sports—for instance, in fashion. So both have also looked for ways to promote themselves outside of popular sports as well.

People

People are the staff, workers, owners and managers who make the company run. People help make the workplace environment and workplace culture shine. They help keep customers happy. They help to lead and communicate the vision and inspire. The best way for a company to succeed is to hire the right people for the right job, states Tracy (2004).

Etihad

First example. Etihad provides great customer service through its frequent flyer program, which givers members the ability to shop online through its online store using discounts. What makes this special is that Etihad also has agreements with other airlines and so members can access their portals too. This is in line with Etihad’s business objective of providing its customers with more choices.

Second example. Etihad has also had great leadership throughout its rein—from James Hogan to Peter Baumgartner. The leaders of Etihad have consistently made the right decisions about where to invest and how to expand. This is in line with the company’s aim to be a serious competitor in the industry on a global level.

Emirates

First example. Emirates, like Etihad, also relies on strong leadership to bring its vision to market. Leaders like Tim Clark and Ahmed bin Saeed Al Maktoum have been instrumental in growing the company making it one of the premier airlines in the world. This has been in keeping with the company’s business objective of being the best in the industry—by hiring the top talent, it has been able to become one of the best.

Second example. Emirates has also made it a point to get the right people for the right job. That is why Aniston became the company’s spokesperson in 2015: she possessed the right charisma and celebrity to spread the word about the company and make it even more popular. This too has been in line with the company’s business objective of being the best in the business.

How They are Different/Same

When it comes to business, both Etihad and Emirates share the same outlook with respect to people: people matter. They focus on putting the right people in place to help develop their respective companies and keep their respective customers happy. Both understand that power that people play in the success of an airline.

Processes

Processes refer to the manner in which the product or service is delivered to the consumer. This is a big part of one’s business because the delivery is typically part of the overall experience. A consumer might enjoy the food at a restaurant—but if the service is terrible, it will leave a bad impression on the diner and possibly lead him to never want to come back. Tracy (2004) states that a company “should develop the habit of thinking continually about how you are positioned in the hearts and minds of your customers. How do people think and talk about you when you’re not present? How do people think and talk about your company? What positioning do you have in your market, in terms of the specific words people use when they describe you and your offerings to others?” By answering these questions, one can begin to understand whether one’s processes are working well.

Etihad

First example. Etihad puts the customer at the center of choosing the way in which service is provided: “We have developed some great ways for you to enhance your journey with Etihad. Whether you are looking for additional services at the airport, more space on board or want to personalise your travel experience, then we have some great options for you” (Etihad Airways, 2018). By allowing the customer to customize their service process, the company aligns itself with its business objective of providing personalized service to each client.

Second example. By allowing flyers to choose onboard services, airport services and travel services, Etihad further customizes the process by which it delivers itself to customers. Flyers can shop, upgrade, book hotels or cars, lounge in the airport and so on. There is nothing that is off limits in terms of customizing the total experience. This is also in line with the company’s aim to treat the customer right.

Emirates

First example. Emirates provides numerous options for flyers, just like Etihad does. This aligns with Emirates’ business objective to be the industry leader. By making sure every possible option is available, Emirates projects itself to the top of the industry.

Second example. Emirates gets people to more destinations than any other Middle Eastern airline. Its process of delivery is thus engineered to be the best in terms of reach. That is in keeping with its business objective to be the number one airline in the industry.

How They are Different/Same

Both Etihad and Emirates share the same idea about how to win customers. Each focuses on providing the customer with as many options when flying and traveling as possible. Their own difference is in how options are delivered. Etihad focuses on seating options while Emirates focuses on travel destination options.

Physical Evidence

Physical evidence refers to how the product or service is packaged. It refers to the brand, the brand image, the layout of the business, the way it looks, the environment in which it is sold and so on. Tracy (2004) states that “packaging also refers to your people and how they dress and groom. It refers to your offices, your waiting rooms, your brochures, your correspondence and every single visual element about your company. Everything counts. Everything helps or hurts. Everything affects your customer’s confidence about dealing with you.” The way the company presents itself will impact the way consumers receive what the company is selling.

Etihad

First example. Etihad presents itself as a step above all other airlines by providing the finest in everything—from airport lounges to planes to seating and dining. The airline presents itself and its people with exquisite form and beauty. Perfection is the essence of what Etihad does. This is in line with its business objective of growing with its consumers to be the best they can be.

Second example. Etihad’s brand is based on its commitment to values and principles that will make the company shine. Its brand represents status and sophistication. That is image it cultivates by packaging itself as a leader in the UAE airline industry. This aligns with its business objective to be a leader in the industry and to set industry standards.

Emirates

First example. Emirates presents itself with professionalism in its workers garb. The flight attendants are professionally dressed and groomed to ensure satisfaction for clients. This is in line with the company’s aim of being reliable and a leader.

Second example. Emirates also provides its services in top-tier style and innovative designs to appeal to clients who want the latest in their flying experience. From the way their seats and rooms are designed to the way their logo is presented, Emirates is about style and class. Its packaging is sleek and elegant. This is in line with its business objective of being a leader.

How They are Different/Same

Both Etihad and Emirates focus on packaging their services and products in the finest there is to offer. From food cuisine to style of dress of their workers, both put the best possible appearance on their offerings. Thus both adopt the same approach—emphasizing elegance and sophistication above all else.

The Marketing Objectives of Etihad Airways

The marketing objectives of Etihad Airways are to: 1) increase sales, 2) build brand awareness, 3) grow market share, 4) target new customers, and 5) enhance customer relationships. Each of these objectives are SMART objectives in that they are Specific, Measurable, Achievable, Realistic, and Timed.

Marketing Plan and Action Plan

Product Strategy

Etihad could enhance its operations by offering a line of new products and services that allow it to differentiate itself from competitors. These could include: 1) an airplane spa, 2) an airplane child care section, and 3) an airplane prayer room section. These new products and services would help the airline to increase sales, target new customers and enhance customer relations.

Action

The action plan for this strategy is for Etihad to design a new fleet of planes specifically designed to facilitate family travel by having a child care section, a spa section and a prayer room section. This would make flying more appealing to families and enhance Etihad’s image. To design a new fleet Etihad would have to invest in a new plane line and work with the designer in meeting the needs. This plan is SMART because it meets each of the SMART characteristics.

Place: Distribution Strategy

Etihad could enhance its place by increasing its distribution via expansion to more markets. It is already in 80 cities, but Emirates is still in more than double that number. Etihad should strive to be: 1) number one in the Middle East, 2) a major player in Asia, and 3) a major player in Europe. This strategy would allow the airline to grow market share, build brand awareness, target new customers, enhance customer relationships and increase sales. All of its objectives would be met.

Action

The action plan for this strategy is for Etihad to partner with other airlines to create hubs in more destination cities. This would allow the airline to be more competitive and diverse. The plan can be measured in terms of how many partnerships are established over the year, and how many new hubs are strategically opened. It can be monitored using quarterly reviews to see how developments are proceeding by meeting with department heads.

Pricing Strategy

The pricing strategy for Etihad could be enhanced by focusing on 3 pricing types: 1) the discount pricing strategy, 2) the economy pricing strategy and 3) the luxury pricing strategy. Everyone loves discounts and these would appeal to all consumers no matter the level of class. Discounts could be offered during times when travel is light so as to induce more people to fly. The economy pricing strategy would help to appeal to consumers who want to fly without having to spend a lot: they are not focused on service or quality—just on getting from point A to point B. Then there is the luxury pricing strategy which focuses appealing to high class consumers who want to pay more because this is how they perceive quality. This will achieve the objectives of enhancing customer relationships.

Action

The company must first identify periods of the year that are light and provide discounts to entice fliers. Second, the company must identify what price consumers will pay for cheap travel. Third, the company must identify what luxury class customers want in a luxury experience. These goals can be measured by using surveys and questionnaires to obtain data from consumers. They can be monitored by using the same process and by interviewing consumers.

Promotional Strategy

The promotional strategy is to: 1) hire a Hollywood celebrity to be spokesperson for the brand, 2) sponsor a film festival, and 3) purchase naming rights for a sports stadium. Each of these three would increase the brand’s awareness, increase sales, grow market share, and target new customers.

Action

First, Etihad has to make contact with a celebrity who would be willing to work with the airline. Second, it would have to identify a film festival that is appealing and determine how to sponsor it. Third, it must identify a sports team that has naming rights for sale for its stadium. The team should be popular and perhaps up-and-coming. This goal could be measured by weekly updates on the research department and monitored through contacts with stakeholders.

People Strategy

Getting the right people for the right job is essential. The people strategy is to: 1) hire the right leaders for expansion, 2) hire the right people for crewing the planes, and 3) hire the right customer service team. This would allow the company to increase sales and increase the brand’s awareness.

Action

The action plan for this strategy is to coordinate with HR by identifying a quality talent pool and identifying the features of the job that would best match with the talent. This could be measured by using a metrics system based on what to look for in people’s resumes. It could be monitored by using social media like LinkedIn.

Process Strategy

The process strategy could be enhanced by: 1) improving meal service times, 2) increasing entertainment selections, and 3) having more comfortable seating. These objectives would allow the company to increase sales and grow market share. How the service is processed is crucial to gaining customers.

Action

The action plan for this strategy is to increase the number of meals that can be prepared in the kitchen, obtain greater entertainment contracts with media providers, and increase seat comfort by reshaping the design to provide greater space and comfort. The plan could be measured by setting the goals defined by metrics and monitored using managerial oversight.

Physical Strategy

The packaging strategy could be enhanced by: 1) improving the logo design, 2) developing a new slogan, and 3) developing new uniforms. This would help the company to improve sales and raise brand awareness.

Action

The action plan for this strategy is to hire a graphic arts developer to create an exciting new log, a PR team to develop a new slogan, and a fashion wear designer to create elegant new uniforms. This could be measured using proper metrics and monitored using appropriate managerial oversight.

References

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Etihad Airways. (2015). Great ways to enhance your journey. Retrieved from

https://www.etihad.com/en-us/plan-and-book/enhance-your-journey-with-etihad/

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https://www.etihad.com/en-us/about-us/corporate-profile/responsibility/

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https://www.entrepreneur.com/article/70824