Etihad Airways - Marketing Plan

Marketing

Plan

Ms Joyner Gwendolyn Rodrigues

Year – 2010

Mark

etin

g S

trate

gy R

eport

ETIHAD AIRWAYS – Marketing Plan

of 25

UNIVERSITY OF WOLLONGONG in DUBAI

College of Business

Project report

Title: ETIHAD AIRWAYS – Marketing Plan

in partial fulfilment of requirement of the subject:

MARK 935 – Marketing Strategy

for the MIB Program Summer2 2010

By

Ms. Joyner Gwendolyn Rodrigues

Student ID: 3769537

Submitted to: Dr. Melodena Stephens Balakrishnan

Date: 23rd

August 2010


of 25

Executive Summary

Etihad Airways, the national carrier of the United Arab Emirates and carrier of the region of Abu Dhabi was

established by Royal (Amiri) Decree of Abu Dhabi in July 2003. (Etihad Airways, 2010) The Airline commenced its

commercial operations in November 2003

This Report is divides into three main parts – namely, Introduction, Market Analysis and the Market Strategy. The

Introduction Section gives the reader an overview of Etihad Airway in light to the company‟s organizational

background. It also shed light on the performance analysis of the airline in terms of revenue and on time performance.

In the introduction sector, the product and services and its star product and cash cow product is also discussed. One

can also learn about the company‟s competencies and vulnerabilities. Last but not the least the Introduction Section of

the report gives an overview of the U.A.E Aviation sector, both in the opportunities which airline can take advantage

off and the challenges which an airline company can face.

The Market Analysis Section, give a total analysis of the U.A.E. Aviation market in terms of the profitability of the

market, competitor analysis and also customers value and customer total analysis. Here the reader will all be able to

find out who are the current target segments of Etihad Airways and also who will be the future target customers. The

profiles of both current and future customers are given.

The Market Strategy Section shed lights on both the organizations objectives and also on the 7 P of the marketing mix.

The objective of Etihad Airways as has been divided into both long and short objectives. It states both the current

market strategy for each mix and also suggests recommendation, Etihad Airway need to undertake for the future.


of 25

Table of Contents

Introduction to Etihad Airways ..................................................................................................................................... 5

Company Background................................................................................................................................................... 5

Product and Service ...................................................................................................................................................... 6

Organizational Competencies and Vulnerabilities ........................................................................................................ 6

U.A.E Aviation Industry ............................................................................................................................................... 6

Market Analysis .............................................................................................................................................................. 8

Profitability of the market ............................................................................................................................................. 8

Competitor Analysis ..................................................................................................................................................... 8

Customer Value ............................................................................................................................................................ 9

Customer Analysis ...................................................................................................................................................... 10

Marketing Strategy ....................................................................................................................................................... 11

Organizational Objectives ........................................................................................................................................... 11

Product Strategy .......................................................................................................................................................... 11

Price Strategy .............................................................................................................................................................. 12

Place Strategy .............................................................................................................................................................. 12

People Strategy ........................................................................................................................................................... 12

Process Strategy .......................................................................................................................................................... 12

Physical Evidence Strategy ......................................................................................................................................... 13

Promotions Strategy .................................................................................................................................................... 13

Appendix ........................................................................................................................................................................ 15

Chart – Etihad Airways Performance Index, .............................................................................................................. 15

Diagram – Etihad Airways Product Portfolio ............................................................................................................. 15

Diagram – Etihad Airways Product Share ................................................................................................................. 16

Diagram – Etihad Airways – BCG Matrix .................................................................................................................. 16

Table – Competitors Comparison ............................................................................................................................... 17

Diagram – Customer Perceived Value – Trade off between Benefits and Cost ......................................................... 18

Table – Target Customer Profile ................................................................................................................................. 19

Table – Etihad Organizational Objectives .................................................................................................................. 20

Diagram – Etihad Airways Product Strategy .............................................................................................................. 21

Table – Price Comparison ........................................................................................................................................... 21

Diagram – Terminal Three Abu Dhabi International Airport ..................................................................................... 22

Diagrams of Etihad Airways Physical Evidence Strategy .......................................................................................... 22

References ...................................................................................................................................................................... 24


of 25

Introduction to Etihad Airways

Company Background Etihad Airways, the national carrier of the United Arab Emirates and carrier of the region of Abu Dhabi was

established by Royal (Amiri) Decree of Abu Dhabi in July 2003. (Etihad Airways, 2010) The Airline commenced its

commercial operations in November 2003 with a ceremonial flight form Abu Dhabi International Airport to Al Ain

International Airport. Within a short span of time Etihad Airways has grown to become not only one of the leading

airlines of the U.A.E, but also of the world. The Airline has turn out to be the fastest growing airline in the history of

commercial aviation. (Etihad Airways, 2010)

Etihad is an Arabic word which mean „United‟. Etihad Airways has strategically chosen its brand name as it plans to

unite the west and the east with a centre at Abu Dhabi. (Etihad Airways, 2010) The present tag line of the Airline is –

“From Abu Dhabi to the World”. (Etihad Airways, 2010).

Etihad Airways is governed by a Board of Directors under the chairmanship of HH Sheikh Hamed bin Zayed Al

Nahyan and operates in terms of its founding legislation and the Article of Association of the Company. The Airline

has a new management team since 2006 under the leadership of Mr. James Hogan – Present CEO. (Etihad Airways,

2010)

Etihad Airways has several awards under its umbrella. The most prestigious award with the company has won is the

„World Leading Airline‟ Award at the 2009 World Travel Awards. Beside that Etihad has also been awarded as the

„Best Long Haul Airlines „at the 2010 Business Travel Awards. The airline has also been awarded as the „Best

Marketing Strategy of the Year 2009‟, by the Middle East Business Achievement Award. (Etihad Airways, 2010)

The capital of the United Arab Emirates, Abu Dhabi is Etihad Airways base and hub. Etihad Airways Corporate

Office is located in Abu Dhabi. The airline operates through various travel agents who are their general sales agents

which operate in 42 countries over the world. (Etihad Airways, 2010). The airline currently serves an international

network of more than 64 destinations over forty-two countries around the world. (Etihad Airways, 2010) Markets

which Etihad Airways has covered include Indian sub continent, North America, Europe. Middle East and North

Africa, Australia, South East Asia and South Africa. (Etihad Airways, 2010) On an average Etihad Airways according

to the 2010 estimation of the company, the airline operates around 147 flights per day and 1,032 flights per week.

(Etihad Airways, 2010)

Etihad Airways currently operates a fleet of 54 aircraft, consisting of: two Airbus A319s; 13 A320s; 16 A330-200s;

two A330-300s; four A340-500s; seven A340-600s; two A300-600Fs; six Boeing 777s; and two MD11Fs (Etihad

Airways, 2010) Over the next 10 years, Etihad plans to take delivery of: six Airbus A330s by the end of 2011; 20

A320s between 2011 and 2015; 10 Airbus A380s from 2014; 25 A350s between 2017 and 2020; 35 Boeing 787s

between 2014 and 2020; and 10 Boeing 777s between 2011 and 2013. (Etihad Airways, 2010)

Besides having its own fleet of aircrafts, Etihad Airways has code sharing agreement with 23 of the world airline so as

to build it world networks. The 23 airlines include Jet Airways, Malaysian Airline, Cyprus Airways, American

Airline...etc. (Etihad Airways, 2010)

Beside the international air transportation of passengers which is Etihad Airways main business line, the company

operates Etihad Holidays which handles tourism need of customers and also Etihad Crystal Cargo which handles

international transportation of goods, precious cargo and pets. (Etihad Airways, 2010)

According to (FlightStats, 2010), Etihad Airways On time performance is 78% during the 15th of July to the 15th of

August 2010.(Refer to Appendix Page 15, Chart – Etihad Airways Performance Index).But according to the Etihad

Airways Corporate Factsheet, the airline states to have a 91% on time performance. (Etihad Airways, 2010)

In the years 2009, Etihad Airways revenue exceed more than 2.3 Billon USD. (Etihad Airways, 2010). In the first

quarter of 2010, Etihad Airways, reported 24.5 % growth in passengers revenue as compared to the industry average

growth of 22%. (Etihad Airways, 2010)


of 25

Product and Service The international transportation of people, i.e passengers is the main business of Etihad Airways. The airline has three

different types of product for various sectors which are Diamond First Class, Pearl Business Class, and Coral

Economy Class. Furthermore, Etihad Airways operates in the tourism industry through Etihad Holidays and operates

in cargo and logistic with Etihad Crystal Cargo and Etihad Express2D (New Product since 2010). (Etihad Airways,

2010) . (Refer to Appendix, Page 15, Diagram – Etihad Airways Product Portfolio)

For its product portfolio of various businesses that Etihad Airways operates under in terms of product share, 60% is

the international transportation of passenger, Etihad Crystal Cargo takes 30% and Etihad Holiday has 10% share.

(Refer to Appendix, Page 16, Diagram – Etihad Airways Product Share)

In terms of profits and revenue in its International Transportation of Passengers Business, Etihad Airways gets 40% of

its revenue from its Etihad Pearl Business Class, 20% from its Etihad Diamond First Class and 40% from its Etihad

Coral Economy Class. In terms of market share, the Etihad Coral Economy has a larger market share, then Etihad

Pearl Business Class and then Etihad Diamond First Class.

Based on the The BCG Matrix (Boston Consulting Group Growth-Share Matrix, one can place the Eithad Coral

Economy in as the Cash Cow of the Airways as the product has low market growth but had relative high market share.

Along with that, Etihad Crystal Cargo and Etihad Diamond First Class. The Pearl Business Class would be the Star

Product as the product has a relatively high market share and relatively high market growth. The company need to

prioritise what it needs to do with Etihad Express2D and Etihad Holidays as they are both Question Mark Products as

the both have a relatively high market growth but low market share. (Refer to Appendix, Page 16, Diagram – Etihad

Airways – BCG Matrix)

Organizational Competencies and Vulnerabilities Competencies – Being based in Abu Dhabi, the capital of The United Arab Emirates, Etihad Airways is the only

U.A.E airline which can term itself as the National Carrier of the United Arab Emirates. The strategic location region

of Abu Dhabi adds to the organizational competences of the airline. As it based in Abu Dhabi and has its own terminal

the Airlines attract a lot of In – Transit Passengers who are connected form the east to west or the other way around by

Abu Dhabi.

Etihad Airways fully owned by the Abu Dhabi government. Etihad is governed by a Board of Directors under the

chairmanship of HH Sheikh Hamed bin Zayed Al Nahyan. (Etihad Airways, 2010). Etihad has also has so plans to

invest in the re designing of 10 Airbus 320, which will hold 162 seats all belong to the Etihad Coral Economy Class

for short haul fights. (Saleem, 2010). Etihad Crystal Cargo received its first wide body freight carrier i.e the A330-200

in August 2010. The airline plans to operate the aircraft in September 2010. (Air Cargo News, 2010). Thus visible that

the Etihad Airways has the competencies in terms of funding for the company to grow and invest in new strategies.

Vulnerabilities – The only vulnerabilities Etihad Airways has, is that it still a young airlines and yet the airline

benchmarks itself with the world leading airline like Emirates. In order to become like the leading airlines in the

world. Etihad is investing in a lot without even breaking even. It this continues the organization may run into a loss.

U.A.E Aviation Industry The U.A.E aviation industry is one of the leading aviation industries not only in the Middle East and North African

region, but also in the world. The industry has a huge market growth in the Middle East and North African Region.

The industry the home of two world leading airlines, namely – Etihad Airways and Emirates Airlines. During the

global rescission and global environment crisis, as compared to other aviation sectors, the U.A.E Aviation industry

was least affected. The industry is on if the leading revenue sectors towards the U.A.E total economy.

The strategic location of the country is the biggest opportunity that the U.A.E Aviation sector can take advantage of.

The country is geographical situated in the middle of all the hemispheres. Thus country not only connects the east and


of 25

the west but also the north and the south. Thus the industry is successful in redirecting passenfres and air routes

through the country.

Currently the UAE's aviation sector has nearly 70 Billion AED investment in infrastructure and also 435 Billion AED

in total aircraft and engine orders. the total investment in the U.A.E's aviation sector crosses more than 505 Billion

AED. This investment in the U.A.E. Aviation industry is one of the largest in the world. (Rahman, 2010).

Once the redevelopment programme for eight international airport will be implemented, all U.A.E.aiports collectively

will be able to server more than 300 Million passengers pet annum. (Rahman, 2010)

The Dubai Chamber Report quoted that, “This massive expansion of capabilities has been seen for the last few years

and is expected to continue in the short to the medium term, both in terms of ground services infrastructure and

aircrafts. Almost all U.A.E major airports are witnessing extensive expansion as well as placing record orders for new

passengers and cargo aircrafts. The modernisation and expansion of the infrastructure will result in efficiency gains

which should keep up the strong pressure on ticket prices.” (Rahman, 2010)

U.A.E has five regional airlines each of who are increasing it fleet at a very rapid pace, however over capacity as

compared to the underlying demand may not only decrease yield of each airline per also will decrease revenue of each

airline. Revenue will decrease due to the increase in competition and also in the fight to attain high market share.

(Issac, 2010)


of 25

Market Analysis

Profitability of the market According to Michael Porter, there exist three forces from 'horizontal' competition which are threat of substitute

products, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition

which the bargaining power of suppliers and the bargaining power of customers which determine the marketplace of a

particular market. The Application of Porter‟s Five Forces to Etihad Airways is given below –

1. Threats Of Substitute Products – Due to the global recession, many customers are opting to fly with low cost

airlines and even airline which have no fringe benefits. More over there exist airline, which provide some

level of the same service at a cheaper cost, e.g. Oman Air and Jet Airways.

2. Threat Of Established Rivals – Etihad Airways competes directly with Emirates Airlines in terms of market

share within the U.A.E aviation sector. Besides Emirates Airlines, Etihad also competes with, Air Arabia and

now Fly Dubai. Each airline within the U.A.E aviation sector is increase the number of fleet rapidly. The

competition among the rival airline is very high and also intense. Etihad and Emirates are like the Coke and

Pepsi war, if Emirates does something, Etihad Airways does it and vice versa.

3. The Threat Of New Entrants – As U.A.E and the region of Abu Dhabi is developing rapidly as the aviation

hub of the future, the region is likely to see more commercial airlines operating form Abu Dhabi International

Airport. This may pose a threat to Etihad Airways as customers may opt to fly with those airlines for various

reasons than with Etihad Airways.

4. The Bargaining Power Of Suppliers – Currently there are only two main suppliers of aircrafts, Boeing and

Airbus. The world aviation industry is dominated by only these two suppliers. As there is no more competition

the bargaining power of the suppliers is must higher than that of Etihad Airways. But Etihad may opt to buy in

bulk which may reduce the power of the suppliers.

5. The Bargaining Power Of Customers – The Bargaining power of customers is very low in the Airline industry

as passenger always take and pay the price the airline gives. The customer normally takes the price Etihad

may offer for a long haul flight as changing flights may be more expensive.

Competitor Analysis The direct competitors for Etihad Airways are Emirates Airlines, Fly Dubai, Air Arabia within U.A.E. In the Middle

East and North African Region, Etihad Airways competitor not only includes the U.A.E based airlines but also include

airlines like Qatar Airways, Gulf Air, and Oman Air. Singapore Airline and other international airways would also be

the direct international competitor of Etihad Airways. Etihad Airways main competitor is Emirates Airline. Etihad also

benchmarks itself according to Emirates Airlines. Therefore Emirates Airlines is one of my strategic benchmark

companies. Beside Emirates Airlines I have chosen Air Arabia because of its low cost market strategy. (Refer to

Appendix, Page 17, Table – Competitor Comparison)

Indirect competitors of Etihad Airways are would be the Telecom Industry and the Holiday Cruise Line Industry. The

telecom industry poses a threat as, due to the enhancement technology for e.g. video conference, people do not need to

travel to different countries for business reasons. Holiday cruise line like Carnival Cruise Lines and Star Cruises could

be another strategic group of competitors as they not only transport people from place to place but they also have

hotel setting and various actives on board, thus people can spend a vacation onboard while travelling from port to port.

The Hotel Hospitality Industry like Dolce hotels and Resort, the Burj Al Arab Hotel...etc, is another industry to which

Etihad Airways can benchmark it hospitality services with.

The value gained from customers when they travel with Etihad competitor Emirates Airlines is also the same value the

customer would get while travelling with Etihad Airways. However Emirates in terms of Image delivers more value to

the customer as it has been there for the past 25 years. With Air Arabia, customers would get the value in terms of

monetary price as the airline is much cheaper than Etihad Airways as it is a low cost carrier.


of 25

Customer Value The value or the relative worth of a product is the psychological belief the customer creates about a certain product or

brand. Value is the tradeoffs between the “get” and “give” components the customer experiences. (Zeithaml, 1988).

Relationship between what benefits the customer attains from the product or brand and the cost borne by the customer

to obtain those benefits. Thus in an equation format

Application Of Customer Perceived Value to Etihad Airways (Refer to Appendix, Page 18 , Diagram – Customer

Value)

The functional benefit derived by the Product which Etihad Airways delivers to the customer is air transportation of

both passengers and goods. The product for passenger is further divided into three products – Coral Economy Class,

Pearl Business Class and Diamond First Class, for most of its sectors. This give the customer the benefit to select a

product that will best fit his/hers budget. Services provided by Etihad Airways not only include, „In-Flight Services‟

like „latest Entertainment System‟, „Mouth Watering Menu‟, „In- Flight Duty Free‟, but also ground services like „On

Time Check- In‟, „One Time Luggage at Arrival‟, „24 hours prior Check- In Online‟, „Etihad Spa‟ and „Etihad

Lounge‟ at terminals, „Online Booking and Reservation‟, and last but not the least a „Chauffeur Service‟. Etihad

Airways also give the customer the liberty to customize certain product according to the customer‟s preference. E.g.

Customization of Menu‟s. Etihad Airways Employees who are not only well trained to address the customer needs but

who are also very informative in regards to queries and direction also increases to the benefit gained by the customer.

Furthermore, the Etihad staff on board, at ground or also in the offices and call centres, are very friendly, courteous,

helpful and also available on request. In terms of Image, Etihad Airways not only provides the customer with superior

and luxury travel experience In-Flight but also on the ground. The airways also give and image of continuously being

in the pursuit Excellence and Perfection.

The costs incurred by the customer not only include the Monetary Cost of buying a ticket where it is visible that

Etihad Airways is moderately price. (Refer to Appendix, Page 21, Table – Price Comparison) The airline gives a

reasonable price for a direct flight to Manchester. U.K. Cost in terms of Time, Etihad Airways is very convenient for

passengers who which to travel from and to the region of Abu Dhabi, U.A.E. the Online Check-In Service and the

Chauffeur Service also give ore convinces to the passengers. Furthermore, as the airline has its own terminal at the

Abu Dhabi International Airport, the time from Check- In to departure and also the time flight arrival to customs and

baggage pick up is shorten. Having it own terminal at Abu Dhabi International Airport, also reduces the Effort the

customer need to take to reach their destination. The main cost of Etihad Airways would be the Psychic and Physic

costs where customers may opt to fly with cheaper priced airline who may offer the some of the same services e.g. Jet

Airways. Similarly for short distance e.g Abu Dhabi to Muscat, passengers may opt for a low cost carrier with not

fringe benefits.

From the above paragraphs, it is clear that the value the customer gets form Etihad Airways is superior travel

experience with a reasonable cost. The customer pays a high monetary cost for the high level of benefits and service

which the customer gets in return. Etihad Airways Customers attain a high value travel experience which is not only

effortless and convenient with a presence of a strong brand value felt. Etihad Airways exhibits the best price without

compromising on hospitality and customer satisfaction. In an Airline Service Quality Benchmarking Study done by

Ethos Consultancy which analyses the customer experience from flight booking all the way through to check-in,

baggage drop, boarding, plane conditions, in flight services such as food and beverage, entertainment and shopping,

right through to disembarkation and final baggage claim, Etihad scored 91.5 percent in terms of customer satisfaction.

(Ethos Consultancy , 2010)


of 25

Customer Analysis The United Arab Emirates has many international airports. Etihad Airways, which is the region carrier of Abu Dhabi

caters to customers who are primary based in Abu Dhabi and Al Ain. Thus the target customers for Etihad Airways

are the passengers who travel to and from Abu Dhabi International Airport.

The Airline tagline “From Abu Dhabi to the World” currently focuses on outbound holidays and travel from Abu

Dhabi. Thus it is visible that the current target segments are tourist and business people from Abu Dhabi. Moreover

based on its pricing strategy, the company focuses on middle class and higher class social sector. The company

currently target customers are people who want to travel with luxury and high standards of hospitality.

According to Milne, (2009), Etihad Airways has currently segmented its customers on biases of purpose for which

they travel. Thus you have passengers segmented into Tourist, Personal, Religious, Business, In Transit Passengers

who may use Abu Dhabi or other regions within the Middle East to connect to their final destination (Milne, 2009).

Abu Dhabi is a rapidly developing region both in terms of business and in terms of tourism. The Abu Dhabi Tourism

Authority (ADTA), anticipates a growth in tourist arrivals to hotels in Abu Dhabi from 1.34 million in 2006 to 3

million by 2015. (Jones Lang LaSalle, 2009) Moreover with event like the F1 and Fifa World Club Soccer being held

in Abu Dhabi, the traffic of tourist is expected to rise. The Midfield Terminal Complex at the Abu Dhabi International

Airport, which is valued at 6.85 Billion USD, will eventually increase the airport‟s passenger handling capacity to 20 -

50 million passengers annually. (Jones Lang LaSalle, 2009).

Hence in the future Etihad Airways must not only target outbound passengers from Abu Dhabi but also target inbound

passengers, namely business class and tourist to Abu Dhabi.

See Table – Target Customer Profile, Appendix, Page 19 for Current and Future Customer Profile for Etihad Airways

Customers.


of 25

Marketing Strategy

Organizational Objectives For focus brand Etihad Airways, I have divided its objectives into short term goals and long term goals. The short

term goals are the key issues the company needs to accomplish by mid 2011. The long term objectives the company

needs to accomplish within the next three four years.

Short Tem Objective –

The primary objective of Etihad Airways is to break even by 201. This the airline can do by decreasing cost

and simultaneously increasing yield.

The secondary objective of Etihad Airways is to maintain is to customer value even while decreasing cost.

The tertiary short term objective is to maintain the status quo of being a luxurious brand while decreasing cost.

Long Term Objectives –

The primary long term objective of Etihad Airways is that airlines should not only be profitable every year but

also profits should increase by 5 -10%.

The secondary objective would be to increase customer value and satisfaction by 8 – 10 % by 2015.

The tertiary objective would be to have a 15% increase in Emirates staff by 2013.

Lastly Etihad Airways has an long term objective of creating inbound holidays to Abu Dhabi by 2030.

(Can also Refer to Appendix, Page 20, Table – Etihad Organizational Objectives)

Product Strategy Etihad Airways Core Product Component is the Air Transportation on both goods and passengers. The Airlines

Actual Product Component comprises of Etihad Brand Product Portfolio which has, Etihad Diamond First Class,

Etihad Pearl Business Class, Etihad Coral Economy Class, Etihad Holidays, Eithiad Crystal Cargo and Etihad

Express2D. The Actual product component also comprises of Etihad Airways staff and crew, in flight and on ground

entertainment system and Menus. Etihad Airways Augmented Product Components give the airlines most of its

completive advantage. (Refer to Appendix, Page 21, Diagram – Etihad Airways Product Strategy.)Etihad Airways

Augmented product has competitive advantages in terms of its product strategy the Etihad Airways is not only the

national carrier of The United Arab Emirates but also of the region of Abu Dhabi. Abu Dhabi is a region with is

developing rapidly as the future business and tourism hub of the Middle East. Thus having Abu Dhabi as a hub gives

the airline a competitive advantage. Etihad has its own private terminal at the Abu Dhabi International Airport; this

also gives the airline a competitive advantage as compared to other airlines operating from and to Abu Dhabi Etihad

Airways also has a chauffeur service for it passengers at the Abu Dhabi Airport and at other airport where Etihad

operates there, they have the service for their Diamond First Class and Pearl Business Class passengers. Etihad Unlike

few other airline, Etihad Airways allows passengers to Check In, 24hr prior to departure, this safes passengers time as

they only need to arrive at the airport an hour early to departure than the normal three hours. Etihad Crystal Cargo

with its Xpress2D service to Europe and North America is a service from shipments airport to the customer door is

also one of the airlines competitive advantage.

Potential Products – Many Airways do not have lounges and place for unaccompanied minors passengers, Etihad

Airways can develop a place like a lounge and programme for these untapped segment. Moreover with teen

programme all over the world like the world youth day, an unaccompanied minor programme with help to get more

customers. Etihad can have a unaccompanied minor program for kids from the age group of 8 to 18 years of age. Due

to issues of kidnapping and other legal and security issues, Etihad can have consent form which needs to be filled and

signed by both parents and guardians. Etihad Airways can also charge passengers a small fee for excess baggage if the

customer declares it 24 hour before departure. More over Etihad Airways can have a baggage at the door pick up for it

passengers. Thus many passengers can travel to the airport with no difficulty. Like Jet Airways, Etihad Airways can

also start serving hot towel to economy class passengers as well at departure. Etihad Airways could start the

Express2d service within U.A.E also.


of 25

Price Strategy Etihad Airways present has a a market penetration pricing strategy so as to get market share in the United Arab

Emirates. Moreover by delivering the somewhat the same service as compared to Emirates Airlines and British

Airways, Etihad may be trying to attract more passengers and thus more revenue to break even, as the company wants

to break even by 2011. (Refer to Appendix, Page 21, Table – Price Comparison)

Once Etihad Airways has broken even, I recommend that the company increase it prices by 10%. In that way Etihad

Airways would be in the same category with Emirates Airlines, with the price factor too. Thus customers will not

perceived Etihad as a low value brand compared to Emirates Airlines and British Airways. The luxury high quality

image of Etihad will increase to a higher level.

Place Strategy Etihad Airways presently distribute its tickets not only through its main office and branches but also thought it general

sales agent all over the world. The airline also distributes its ticket online thought its corporate website. On its

corporate website an individual can book and choose fares according to his or her budget. Moreover Etihad Airwys

also has Customer Service call centres where one an individual can call place a reservation or make a book for a

particular flight and seat if it is available.

In the future, it is recommended that Etihad Airways keeps its current place strategy and but also add to the number of

branches and more general sales agents to its list. Moreover Etihad Airways could open small stall at leading mall

where individual could also came a book a flight there.

People Strategy Etihad Airways has a well educated and trained staff both on air and on ground. This is visible as the company scored

91.5% in a customer service benchmarking survey conducted by Ethos Consultancy. (Ethos Consultancy , 2010) .

Etihad Airways has trained it staff to be courteous and helpfully to the all the needs and demands of its customers.

Moreover the staffs are very informative and also give suggestion.

As Etihad Airways is a part of the service industry, the airlines should invest more in the training and development of

its staff. An Airline can introduce new product, have more fleets, lessen its fare but at the end of the day, the customer

goes back to the airline which had a courteous and helpfully staff. After all in the end its the experience what the

customer gets that make the difference. Employees also act as word of mouth marketers.

Process Strategy Etihad Airways has a very simple process, for its customers and passenger form the time they make their book to the

time to depart or arrive from Abu Dhabi. Etihad Airways owning it own terminal at Abu Dhabi International Airport

adds to the easy and simplification of the process. (Refer to Appendix, Page 22, Diagram – Terminal Three Abu Dhabi

International Airport) this diagram shows the whole process through which a passengers goes through right form

arriving at the airport car park to the Check –In to Departure. Etihad Airways also offers various types of Check – In

Process like Online Check – In, Abu Dhabi City Check-in, Dubai City Check-in and also Check-in at the Check-in at

the Abu Dhabi International Airport. This help to simplify the travelling process for passengers.


of 25

Physical Evidence Strategy The Physical Evidence of an airline is what is visible to the customers. It is the environment in which the service is

delivered or rendered to the customer.

Etihad Airways physical evidence strategy consists of the unique way ETIHAD AIRWYS is written. It consist of the

logo and the Royal Decree symbol on it aircraft tail. It is very easy and visible to spot an Etihad Airway Staff and

Crew due to their uniforms which is also apart of the airline Physical Evidence Strategy.

The in-flight entertainment system and the menus is also a part of the Etihad Airways Physical Evidence Strategy.

Etihad offers a wide range of Menu to its customers. These Menu prior take off can be even customized according to

customer need. Moreover the In- Flight Entertainments system provide audio and video option. One can choose from

classic movies to the latest in films. Most films are available in more than three languages, other subtitles are provides.

The Etihad Airways In- Flight Entertainment System also provide passenger with games and quizzes to whilst their

time on board.

Etihad Airways used both royal colour which is black and gold, this promotes the luxurious and royal image of the

brand wants to sell and wants to be perceived as. Moreover the colours can be adaptable to everything and anything.

The sitting arrangement made on board, like the sleeping seats in Diamond First Class and the Green Seats in Pearl

Business Class with each seat having an adjustable reading lamp.

Terminal Three at Abu Dhabi International Airport, its spacious and convient layout, the amenities found like a free

internet zone so that people can mail their loved on just before going aboard.

From above it is visible that Etihad Airways Marketing team has taken a lot of effort and to create a positive vibe for

its customers through tangible assets so as to add to the whole experience gained by the passenger while travelling

Etihad Airways.

(Refer to Appendix, Page 22, Diagrams of Etihad Airways Physical Evidence Strategy)

Promotions Strategy Promotion is a tool through which an organization can induse the ability and desire of purchase in to a potential

customer. The following are the promotional strategies that Etihad Airway used to attract customer.

1. Sales Promotion – Etihad Airways has various types of sales promotion. They have coupons and bundle offers

which they give out the customers. More over Etihad Webpage offers the cheapest air fares as compared to

need sales agent. Thus they promote direct promotion to airline and not to the general sales agents. Etihad

Airway also promotes itself through participating in various sweepstakes.

2. Direct Marketing – Etihad Airways uses it employees and staff to directly market the airline and it products

and service through word of mouth communication Etihad Airways takes part in various travel and tourism

events and exhibitions.

3. Sponsorship – Etihad Airways brands its name by promoting sport festivals like the F1 Etihad Airways Abu

Dhabi Grand Prix and the Ferrari F1 team. The company also sponsors the Abu Dhabi Golf Championship

and Gaelic Athletic Association (GAA). Etihad sponsors a UK Premiership rugby team know as Harlequins

RFC and Manchester City FC. (Etihad Airways, 2010)

4. Advertising – Etihad Airways advertises on all media channels form, television to radio to newspapers to

magazines and travel magazines. Presently Etihad Airways does 20% Television adverts, 20% print ads, out

of which 10% are in leading newspapers as Gulf News and Khaleej Times and 10% are in travel magazine.

Etihad does 10% radio adverts.


of 25

5. Prints Promotions – Etihad does a lot of print promotion. The airlines develop a lot of brochures and posters

which they give the customer directly or indirectly through general Sales Agents. The company advertises

these posters also in house in the airline main office and branches. One can see various types of thes poster

also at Abu Dhabi International Airport Terminal one and three.

6. Gifts – Etihad give gives to it general sales agent, managers and also loyal customer. These gifts are branded

with the Etihad Airways Brand,


of 25

Appendix

Chart – Etihad Airways Performance Index, (FlightStats, 2010)

Diagram – Etihad Airways Product Portfolio (Etihad Airways, 2010)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

On Time

Late

Very Late

Excessive

Cancelled

Diverted

Etihad Airways Performance

Date Range: Jun 15, 2010 through Aug 15, 2010

Air Transportation Of

Passengers

•Diamond First Class

•Pearl Business Class

•Coral Economy Class

Tourism

•Etihad Holidays

Air Transportation Of

Goods

•Etihad Crystal Cargo

•Etihad Express2D


of 25

Diagram – Etihad Airways Product Share (Etihad Airways, 2010)

Diagram – Etihad Airways – BCG Matrix

High Low

High „Star‟

Etihad Pearl Business Class

„Question Mark‟

Etihad Holidays

Etihad Express2D

Low „Cash Cow‟

Etihad Coral Economy Class

Etihad Diamonf First Class

Etihad Crystal Cargo

„Dog‟

6%6%

48%10%

30%

Diamond First Class

Pearl Business Class

Coral Economy Class

Etihad Holidays

Etihad Crystal Cargo

Ma

rket

Gro

wth

Market Share


of 25

Table – Competitors Comparison

Particulars

Airlines

Etihad Airways Emirates

Airlines Air Arabia

Year of

Establishment 2003 1985 2003

Product Luxurious Air

Transportation

Luxurious Air

Transportation

No fringe benefit air

transportation.

Price Penetration Strategy Skimming Strategy Penetration Strategy

Place Abu Dhabi, U.A.E Dubai, U.A.E Sharjah, U.A.E

People Well Skilled and

Educated

Well Skilled and

Educated

Well Skilled and

Educated

Promotions

Direct Marketing

Printed Adds

Website

Sponsorship

PR

Flyers and

Brochures

Events

Direct Marketing

Printed Adds

Website

Sponsorship

PR

Flyers and

Brochures

Events

Direct Marketing

Printed Adds

Website

Sponsorship

PR

Flyers and

Brochures

Events


of 25

Figure – Customer Perceived Value – Trade off between Benefits and Cost

B

enef

its Product

• Air Transportation

Service

• On Time Check-In

• On Time Luggage at Arrival

• Online Check-In

• Latest In-Flight Entertainment System

• High Standard In-Flight and Ground Menu

• Chauffeur Service

• Customization of Certain Service. E.g. In-Flight Entertainment and Menu's

• Spa and Lounge Service

• In- Flight Duty Free

Employees

• Well Trained

• Very Informative

• Courteous and Helpful

• Availiable as per Request

Image

• Luxury at a Reasonable Price

• Superior Travel Experience both Inflight and on the Ground

• Safe and Environment-friendly Travel

• In Pursuit of Excellence and Perfection.

Cost

sMonetary Cost

• Moderately

Time

• Convient for Tourist to and from Abu Dhabi

• Short Check – In Queues

• Booking can be done Online

• Associated with many General Sales Agents

• On Time Schedule

Psychic and Physic Cost

• I can get the same service with another airline at a much cheaper cost.

• Why travel short distance with Fringe Benefits when I can travel with Low Cost Airlines?

Effort

• Less effort for passengers to get to the aircraft from Check-In Desk

• Effort in carrying Hand Luggage to the aircraft


of 25

Table – Target Customer Profile

Variables The Outbound Holiday

Lovers

(Current Target Market

Segment Catered To )

The Inbound Holiday

Lovers

(Future Target Market

Segment To Be Catered)

The Business Man

(Future Target Market

Segment To Be Catered)

Geographic

Variables

Geographic Region Abu Dhabi, U.A.E Any Region Any Region

Density Urban Urban Urban

Demographic

Variables

Age 25 – 45 25 - 45 30 - 45

Gender Male and Females Male and Females Male and Females

Family life cycle Single, Couples, Newly

Weds, Married, May have

children

Single, Couples, Newly


children

Single, Couples, Newly


children

Income (Monthly) 7,500 – 16,000 AED 7,500 – 16,000 AED 20,500 – 40,000 AED

Occupation White Collar Jobs White Collar Jobs White Collar Jobs

Education Minimum Secondary School Minimum Secondary

School

Minimum Graduation

Certificate

Nationality U.A.E. and Expats U.A.E. and Expats U.A.E. and Expats

Generation Generation X and Y Generation X and Y Generation X and Y

Social Class Higher Class and Middle

Class

Higher Class and Middle

Class

Higher Class and Middle

Class

Psychographic

Variables

Psychographic

Lifestyle

Luxury and High End

Lifestyle

Luxury and High End

Lifestyle

Luxury and High End

Lifestyle

Personality Sophisticated Sophisticated Sophisticated, Well

Educated, Individualistic

Behavioural

Variables

Behavioural

Occasion

Holiday Occasions, Travel

and Leisure Purpose,

Business Purpose outside

Abu Dhabi

Holiday Occasions,

Travel and Leisure

Purpose, Business

Purpose to Abu Dhabi

Business Trips to and from

Abu Dhabi.

Benefits Convenient, safe and high

customer value.

Convenient, safe and high

customer value.

Convenient, safe and high

customer value, Privacy

along with Luxury

User Status Non-user, first time user,

regular users, potential user

Non-user, first time user,

regular users, potential

user

Non-user, first time user,

regular users, potential

user

Usage Rate Occasionally to Medium Occasionally to Medium Occasionally to Medium

Loyalty Status Medium Medium Medium

Readiness Stage Aware Aware and Unaware Aware and Unaware

Attitude toward

product

Different. Product has a

better appeal than other

brands.



brands.



brands.


of 25

Table – Etihad Organizational Objectives

Short Term Objective Long Tem Objective

Break Even by 2011.

A. Decrease Cost

Operational cost by 10%.

Marketing cost by 15%.

B. Increase Yield

On high revenue sectors e.g. Flights to

Australia.

On high revenue products e.g. Diamond

First Class and Pearl Business Class.

On Sectors which go full on a daily basis

e.g. EY206 to Mumbai is a small aircraft

travels without a seat vacant most of the

time, thus by changing the body from a

smaller aircraft to a bigger one, the

company can attract more passengers.

Maintaining and increasing profits every year after

the company breaks even

Do not erode customer value. Keep customer value

at 91.5 % while aiming to decrease cost.

Not only to sustain its customer satisfaction level

but also increase it by 10% by 2015

Maintain the company’s status quo in terms a of

luxurious brand.

15% Emirati employee growth within the

organization by 2013

Create inbound holidays to Abu Dhabi and create

Abu Dhabi as tourist hub by 2030


of 25

Augumented Product

Actual Product

Core Product

•National Carrier of The United Arab Emirates.

•National Carrier Of The Region of Abu Dhabi

•Has seperate terminal at Abu Dhabi International Airport.

•Etihad Lounge and Spa.

•Etihad Chauffeurs Service.

•Abu Dhabi as a transit hub.

•Etihad Diamond First Class

•Etihad Pearl Business Class

•Etihad Holidays

•Etihad Crystal Cargo

•Etihad In Flight Entertainment

•Friendly, Courteous and , Hepful Staff

•Luxury Service.

•Etihad Lounge and Spa

•Online Check In

•Air Transportation

Diagram – Etihad Airways Product Strategy

Table – Price Comparison

Abu Dhabi (AUH) to Manchester (MAN)

Reference

Airline Price

Etihad Airways (Direct) 3,795 (Etihad Airways, 2010)

Emirates Airlines

(Direct, Dubai) 4,165 (Emirates Airline, 2010)

British Airways

(Stopover Heathrow) 2,635 (British Airways, 2010)

Qatar Airways (Stopover

Doha) 3,065 (Qatar Airways, 2010)

Air France (Stopover

Amsterdam and Paris 3,425 (Air France, 2010)

Price is Total price in AED, including return airfare, taxes, and fees for 1

passenger.

Depart – August 26th

2010, Return – September 10th

2010


of 25

Diagram – Terminal Three Abu Dhabi International Airport

Diagrams of Etihad Airways Physical Evidence Strategy

New Logo Old Logo New Logo

Tail Symbol


of 25

Etihad Airways

Staff and Crew

Etihad Airways

Pearl Business

Class


of 25

References

Air Cargo News. (2010, August 9). Etihad Accepts First A330-200 Freighter - Air Cargo News. Retrieved August 9,

2010, from Air Cargo News Website: http://www.aircargonews.net/News/Etihad-accepts-first-A330~200-

freighter.aspx

Air France. (2010). Air France - Book Online. Retrieved August 22, 2010, from Air France Website:

http://www.airfrance.ae/cgi-bin/AF/AE/en/local/process/standardbooking/FindOutboundFlightActionViaCalendar.do

Basit, A. (2010, February 1). UAE Airlines Outperform Rivals in Service Quality -. Retrieved July 27, 2010, from

Khaleej Times Online:

http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2010/February/business_February7.xml&section=bu

siness&col=

British Airways. (2010). British Airways - Price Quote. Retrieved August 22, 2010, from British Airways Online:

http://www.britishairways.com/travel/fx/public/en_ae?eId=111011&timestamp=0821084245&source=original&sourc

e=continue

Emirates Airline. (2010). Make A Booking - Emirates. Retrieved August 22, 2010, from Emirates Airline Coporate

Website: http://fly1.emirates.com/IBE/ResultByPrice.aspx

Ethos Consultancy . (2010, February 1). Emirates Airlines narrowly edges out Etihad to top Airline Service Quality

Benchmarking Study. Retrieved August 19, 2010, from Ethos Consultancy Webpage:

http://news.ethos.ae/en/post/2010/02/01/Emirates-Airlines-narrowly-edges-out-Etihad-to-top-Airline-Service-Quality-

Benchmarking-Study.aspx

Etihad Airways. (2010). Book your flight - Etihad Airways. Retrieved August 22, 2010, from Etihad Airways

Coporate Website:

http://booking.etihadairways.com/pl/EtihadOnline2/wds/OverrideServlet?__utma=1.1756865608.1281319292.128225

4672.1282418554.6&__utmb=1.21.10.1282418554&__utmc=1&__utmx=-

&__utmz=1.1281497043.4.5.utmcsr=google|utmccn=(organic)|utmcmd=organic|utmctr=etihad%20

Etihad Airways. (2010, April 14). Etihad reports 25.4 per cent Q1 growth in revenue passenger kilometres - Etihad

Airways Archived News. Retrieved August 20, 2010, from Etihad Airways:

http://www.etihadairways.com/sites/etihad/global/en/aboutetihad/mediacenter/newslisting/newsdetails/Pages/Q1-

growth-in-revenue-passenger-kilometres-apr10.aspx?fromNewsListing=false

Etihad Airways. (2010). Factsheet. Abu Dhabi: Etihad Airways.

FlightStats. (2010, August 15). (EY) Etihad Airways On-time Performance Rating - Flightstats. Retrieved August 19,

2010, from FlightStats Website:

http://www.flightstats.com/go/FlightRating/flightRatingByCarrier.do?airlineCode=EY

Issac, J. (2010, August 16). Khaleej Times Online - Overcapacity may impact UAE aviation sector yields. Retrieved

August 20, 2010, from Khaleej Times Online:

http://www.khaleejtimes.com/DisplayArticleNew.asp?section=business&xfile=data/business/2010/august/business_au

gust239.xml

Jones Lang LaSalle. (2009). on.point Abu Dhabi City Profile. Abu Dhabi: Jones Lang LaSalle IP Inc.

Milne, D. (2009). King of the Skies - Business Management Online. Retrieved July 28, 2010, from Business

Management Online: http://www.busmanagementme.com/article/King-of-the-Skies/

Qatar Airways. (2010). Qatar Airways - Flight & Fare Selection. Retrieved August 22, 2010, from Qatar Airways

Website: http://booking.qatarairways.com/qribe-web/public/showIBE.do?L=en


of 25

Rahman, S. (2010, August 16). Dubai Aviation Hub UAE aviation sector hits great heights - Gulf News. Retrieved

August 20, 2010, from Gulf News Online: http://www.zawya.com/story.cfm/sidGN_15082010_160830

Ramavarman, T. (2010, March 22). Khaleej Times Online - Abu Dhabi Airport Passenger Traffic Records 17pc

Growth. Retrieved August 20, 2010, from Khaleej Times Online:

http://www.khaleejtimes.com/darticlen.asp?xfile=data/business/2010/March/business_March486.xml&section=busine

ss

Rizvi, M. (2010, July 27). Khaleej Times Online - Passenger traffic at Dubai International rises 16.3% in H1; cargo

surges 26%. Retrieved August 20, 2010, from Khaleej Times Online:

http://www.khaleejtimes.com/darticlen.asp?xfile=data/business/2010/July/business_July519.xml&section=business

Saleem, N. (2010, August 6). Gulfnews - Etihad to reconfigure up to 10 A320s into economy jets. Retrieved August 9,

2010, from Gulfnews Website: http://gulfnews.com/business/aviation/etihad-to-reconfigure-up-to-10-a320s-into-

economy-jets-1.664600

Zeithaml, V. A. (1988). Customer perceptions of Price ,Quality and Value: A means end model and synthesis of

evidence. Journal of Marketing , 52, 2 -22.

Etihad Airways - Marketing Plan

Documents

Transcript of Etihad Airways - Marketing Plan