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Executive Summary
The COVID-19 pandemic has represented a significant hit on the airline industry, including Singapore Airlines, which has relied heavily on the Chinese market. As the world begins to open new destinations, it is essential that the company attracts customers and communicates value and dedication to high-quality service. Due to the increased competition and the crisis that the airline industry has encountered, service excellence in combination with price competitiveness are the recommended strategies for the organization. By increasing its online presence, Singapore Airlines will be more proactive when communicating with clients and creating a platform for returning clients.
Introduction
The Strategic Marketing Plan chosen for the current assessment concerns Singapore Airlines (SIA), which has been tremendously affected by the restrictive rules associated with the COVID-19 pandemic. The aim of the plan is to help the organization recover from the long periods of restricted operations as countries have been shutting down travel destinations. Even though the company has been an exemplary performer throughout the years, during the pandemic, SIA has limited capacity by 96% and grounded the majority of its fleet (Pangarkar, 2020). The strategic plan for the organization will include considerations of restarting operations as air travel begins being accessible, deals for customers traveling for work or family visits, as well as deals for customers who have received a vaccine and those traveling to tourist destinations.
Company Background
The airline began as Malayan Airways back in 1947 before becoming an independent organization under its current name. Currently, SIA has stakes in two low-cost airline carriers such as Tiger Airways Holdings and Scoot (NIKKEI Asia, 2020). At the present time, SIA engages in passenger and cargo air transportation and operates through such segments as Singapore Airlines, SilkAir, SIAEC, and Budget Aviation (NIKKEI Asia, 2020). Under the Singapore Airlines brand, the company provides full-service passenger air transportation for both short- and long-term flights. For regional markets, full-service passenger flights are covered by the SilkAir brand, while Scoot focuses on the low-cost customer segment (SilkAir and Scoot, 2021). Finally, the SIAEC segment offers airframe maintenance and overhaul services, line maintenance, fleet management, and technical ground handling (SIAEC, 2015). Thus, the organizations operations are extensive and cover different areas of service that should be considered in the strategic marketing plan.
Environmental Analysis
PESTEL
The analysis considers the political, economic, social, technological, legal, and environmental factors that Singapore Airlines and the industry faces. In terms of political factors, SIA faces a stable local political environment with solid backing from the government. However, there are some political developments leading to economic uncertainty. As to the economic factors, the company is challenged by the financial downfall of the country due to the COVID-19 pandemic, with Singapore registering negative GDP growth of -6% in 2020 (The economic context of Singapore, 2021). Also, unemployment is a significant issue that has appeared due to structural economic changes, such as the outsourcing of low-skilled labor and the COVID-19 crisis (The economic context of Singapore, 2021).
When it comes to social factors, Singapore is a highly traditional country, with SIA having to share the national values of the nation (Heracleous and Wirtz, 2014). Its population is hard-working and aims to work hard to fulfill its materialistic desires, which increases national productivity and enables the business sector to expect higher purchasing power from customers. As to the technological factors, the latest trends in the area of technological advancement have driven the quality of life in the country, with the Internet easing the communication and connectivity within the population. Environmental factors that are relevant to the countrys analysis are concerned with the recent work of Singapores Ministry of Sustainability and the Environment and the Anti-Pollution Unit that aims to maintain good air quality and other environmental factors (MSE, 2021). For SIA, environmental factors are especially relevant because of the need to comply with the national regulations regarding air quality and the emissions from the airline industry. Finally, the legal factors are important to consider; Singapore is highly focused on electronic commerce that enables transparent market regulations. Overall, the PESTEL analysis of the country has shown that the overall environment is favorable for doing business in the sphere of air travel. The customers show a high purchasing power and holds demand for full-service air transportation. Considering the broad demographic of Singapore and its neighboring countries, the company can target both low-cost and the premium segment.
Micro-Environmental
The cultural factors that influence consumer behaviors are embedded into the Eastern traditions associated with family values, respect for one another, and high quality. Therefore, SIA customers look for a high quality of services at competitive prices and expect the company to share the same values that they share. Social factors play an important role because they allow SIA to segment its clients based on their status. While higher income customers look for premium services at high prices, customers of a lower social status will choose affordable prices for good-quality services. Personal factors such as age, the choices lifestyle, occupation, and income will help define customer behaviors and their choice of the services that they choose from SIA. Finally, psychological factors such as the fear of air travel during the pandemic will define the likelihood of SIA gaining profit.
Competitive Strategy
In the airline industry, SIA is a market leader for the quality of services it provides as well as the focus on differentiating their services based on the unique needs of its diverse range of clients. Because of this, the recommended competitive strategy is to protect the market share with the help of responsive anticipation, especially since air travel is currently in a critical position. SIA should strengthen its ties with loyal customers in the sphere of passenger air travel as well as continue its operations in cargo air transportation. The customers represent a young demographic that can be attracted with the help of affordable deals and higher-income passengers who value premium services. Online advertisement can be used broadly to expand the total market because of the possibility to reach a broad audience of customers.
Marketing Strategies
SMART Marketing Objectives
The first marketing objective is concerned with increasing the online sales of tickets by 30% within the next six months as the population begins receiving the vaccine against COVID-19. The second objective is to increase online marketing coverage on social media by 50% within the next six months. Increasing social media presence is required to increase customer engagement as well as target services to potential clients, especially the younger demographic that may be interested in low-cost flights. The third objective is to increase the companys Corporate Social Responsibility (CSR) efforts to help populations affected by coronavirus as well as educate the public regarding the safety measures on flights. By showing the dedication to CSR in the light of the pandemic, the company will position itself as a responsible contributor to the local community.
STDP Analysis
Segmentation
Geographically, segmentation of SIA entails capturing airline customers over the world, which means that the needs to which the company will have to cater. Because of the coverage of a wide range of flights, SIA will manage different air travel requirements of different destinations on six continents. As to the demographic segmentation, SIA will maintain its strategy of differentiating services into full service and low-cost flights because of the varied income and occupation of customers. In the pandemic context, it is important to focus on low-cost flights because of the economic crisis as well as the need to fill as many seats on flights as possible. The psychographic segmentation of the company entails appealing to different customer profiles that perceive the services of SIA differently. Therefore, younger and less wealthy customers should find SIA services that are targeted to them so they can see that the company is not only focused on the premium segment but also offers affordable flights to different destinations. Finally, behavioral segmentation intends to divide customers based on their knowledge, attitude, and uses and responses to different services (DeAsi, 2018). Therefore, SIA will segment its customers based on the benefits they seek and loyalty status. For example, the priority customers can enjoy the additional amenities such as extended access to lounges in different destinations covered by SIA. Customers who fly using low-cost options will also get benefits when flying with the company, such as mile bonuses, online check ins, and more.
Targeting
The target market of SIA consists of clients that share common needs that the company serves, such as passenger air travel and cargo services (Rozario, 2015). Differentiated target marketing is used by the organization to target different target segments and designs separating different needs and goals to achieve higher sales a stronger industry position. Both high- and low-income customers are covered in the targeting of the company, which is concerned with offering several classes of flights between which clients will choose. For instance, suites, first class and business class flight tickets are aimed at customers with higher salaries who are more willing to spend more money on their flights.
Differentiation
SIA is considered an airline specializing in premium services which prides itself on quality and differentiates itself from rapidly growing low-cost airlines. Therefore, the fully branded service differentiation enables the organization to pursue continuous quality improvement, innovation, and cost leadership. Compared to other enterprises in SIAs market, few have been able to execute the dual strategy profitably. While the company continues serving its loyal customers who pay premium prices for high-quality services, it has also figured out how to get new opportunities in both middle and low ends of the market.
Positioning Map
The positioning of Singapore Airlines in relation to its competitors is illustrated below.
Market Research
Competitors
The main competitors of Singapore Airlines include AirAsia, SkyWest, and Republic Airways. Throughout all of the competitors, there has been a noticeable decrease in net income as a result of the temporary suspension of flights to many destinations. Compared to SIA, AirAsia has greater social digital coverage across such platforms as Twitter and Instagram, showing high levels of engagement with its customers (Singapore Airlines competitors, 2017). However, SIA has been transporting the largest number of customers over the years, which shows high levels of trust.
Consumers
The customers targeted by Singapore Airlines are divided into two core segments. The first customer demographic that the company serves includes high-income individuals that can afford purchasing flight tickets at premium prices for high-quality services. The marketing efforts of the company have long been dedicated to showing the organizations commitment to service excellence that is being delivered consistently to its clients. The Singapore Girl is a marketing message implemented by SIA specifically to represent the airlines care, graciousness, efficiency, and warmth when it comes to delivering unique in-flight experience (Singapore Airlines an excellent, iconic Asian brand, 2021). Moreover, over the years, the Singapore Girl has become an icon for the country, showing the commitment of the nation to quality and service.
The second customer demographic that SIA considers in its operations includes the clients who travel through low-cost options and value affordable services without the frills of the premium class. With the help of the low-cost carrier Scoot, SIA covers multiple destinations across the globe at affordable prices (Singapore Airlines, 2021). Scoot provides good quality services and places emphasis on spontaneous discovery of new destinations, increased connectivity, as well as fresh experiences (Aviareps, 2018). Middle- and lower-income customers are attracted to Scoots business model because the company allows to pay for amenities that matter to their clients. For example, a customer has a choice of whether to purchase inflight meals.
Industry
Both global and Singapores aviation and tourism industry has been significantly impacted by the spread of the coronavirus (U ur and Akb1y1k, 2020). China has been the most significant source market for Singapores industry of air travel and tourism as one of the most relevant markets for the country (Singapore tourism statistics, 2021). Chinas routes accounted for approximately 11% of SIA Groups passenger traffic before the emergence of the coronavirus, which resulted in all but a few of the companys Chinese roots being suspended or cut by half (Sobie, 2020). Similar to SIAs experience in the airline market, its competitors in the region have also suspended the majority of their operations as a result of the pandemic (Lin, 2020). Most of the airlines globally have been forced to stall their fleets, which has been associated with increased expenses.
Marketing Mix
Product: the product strategy and mix in Singapore Airlines is explained by the company being one of the leading companies in the world, which is known for its high-quality services (Singapore Airlines an excellent, iconic Asian brand, 2021). The main product and service strategy is offering comfortable flights and related services to its clients. They include suites (available on Airbus380-800), first-class flights, business class, premium economy class, and economy class.
Pricing: The pricing strategy of Singapore Airlines has been focused on offering variable pricing in accordance with customer classes. The company offers opportunities for their customers to book online tickets through the website and offers price discounts on special occasions. The prices of Singapore Airlines are competitive and help the company cater to a wide variety of clients from different financial backgrounds.
Place: The organization covers flights in more than sixty destinations worldwide. Based at Changi Airport in Singapore, the company depends on the geographic locations of its fleet because of the restrictions associated with the pandemic.
Promotion: The company promotes its brand through a multi-dimensional advertising strategy that includes TV advertisements, printed ads, as well as online resources such as Google Ads and social media marketing.
Detailed Marketing Mix
Within the detailed marketing mix, the focus of the strategy should be placed on promotional efforts. In the light of the pandemic, it is important to attract customers from both targeting demographics to meet the SMART objectives identified previously. The company should invest in social media marketing more to increase the reach of consumers (Nelson, 2018). It is important for the company to engage in a multi-dimensional promotional effort to improve customers interest in air travel once the restrictions associated with the COVID-19 pandemic are lifted (Borko, Geerts, and Wang, 2020). Working on brand reputation and loyalty is especially valuable for the company, which is why the promotional strategy entails effective social media marketing (Iaorait, 2016). It is necessary for SIA to develop strong relationships with customers that pay premium prices because loyalty is highly important for ensuring that clients return to the company as the restrictions on air travel get lifted. As to the customers that purchase low-cost flights with SIA, promotions are especially relevant because they are on the look for competitive prices for tickets. By allowing this segment of customers to have access to promotions, sales, and other deals, SIA will show dedication to its clients.
Conclusion
In conclusion, even though Singapore Airlines have been a significant player in the airline industry over the years, the limitations brought by the COVID-19 pandemic has placed the majority of its operations on halt. Even when destinations have been open, customers have shown fear to fly because of the potential to get the disease. Due to the volatility brought by the pandemic, it is highly important for Singapore Airlines to engage in a promotional marketing strategy to offer customers the best deals in the region so that they choose the company. As flight restrictions get lifted, SIA will be dedicated to work with deals and offers to facilitate price differentiation.
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