A Project Report

on

for Brand Management at IBS Mumbai

Submitted to Prof. Amarjeet Patpatia

Submitted by:

Kashish Gupta

15BSP1683

Section A

Brand Management

Vision

Singapore Airlines has a responsibility not only to be an excellent company, but also to be an

excellent citizen of the world by enhancing the lives of the people we touch. With that aim in

mind, we have made many commitments to the arts and education, to our communities, and

the health and welfare of our country’s citizens, and those in countries we fly to. With this goal

in mind, we’ve also made a strong commitment to preserving the environment – and our world

for future generations.

Mission

“Singapore Airlines is a global company dedicated to providing air transportation services of

the highest quality and to maximising returns for the benefit of its shareholders and

employees.”

Macro Environmental Factors

Political

Singapore has a politically stable environment.

The Government allows the airline to take 90% of their decisions freely.

They allow the airline to do CSR work from their own profit.

During the economic crisis the Government helped the airline to be stable within the market.

More importantly, the government has a good relationship with Europe and all other countries

which are advantageous for the airline.

The government only taxes the airline 20% of their total profit, which is more favorable than

the rates set for other airlines. Other countries take more than 30%.

Economic

From 2007 to 2008 they faced a Global Financial Crisis just as all countries did so the

Government financially supported SIA in their operation.

An increase in oil prices in 2009 greatly affected airlines and thus resulted in increased air

ticket prices.

Social

They cover all segments of the market.

SIA understand the cultural diversification of their passengers and they have a lot of respect

for it so they cater for that by offering their traditional food, upon their request.

Technological

In 2007, SIA were the first airline in the industry to introduce a large airbus (A380).

SIA were the first airline to introduce working in-flight using passenger laptops without power.

Singapore Airlines introduced in–flight entertainment systems.

Fast e-ticketing system.

Environmental

SIA use cleaner, greener aircrafts.

Legal

Fair trading law

Consumer law

Natural environmental law

Five freedoms of air (Licenses to fly to other destinations)

STP

Segment Passengers Preferring Comfort / reliability

Target Group Corporates / Upper Middle Class / Middle Class

Positioning Premium

Target Market

Singapore Airlines most profitable market segment is business and first class customers, with

higher incomes, an expectation of quality service, frequent flyers who values comfort over

price.

Economy class passengers pays only 8.5% of the First Class fare, and 14% of Business fare,

while business fare is 60.7% of the first class fare.

Full First and Business Class sections would produce the greater return, however it is a highly

competitive and difficult market to win over competitor’s loyal customers.

Segmentation

Demographic Geographic Psychographic Behavioural

38-55 Resides in both Asia

and America in most

common flight

destinations

Minimal price

sensitivity

Loyal purchase

history value

accumulating reward

points

High Income earners Stable democratic

environments

Loyal to brand once

relationship

established

Book online

Married Current US and

Singaporean dollar

Values comfort and

reliability

Preference for access

able websites and

booking systems

College Educated Payment Method

usually directly

online or via travel

agent

Conservative

political preferences

Not impulsive by

nature

Adult Children Multi languages

spoken given nature

of high travel work

Service preferences

based on quality not

price

Lifestyle involves

regular distance

travel for work

Usually male Not heavily

influenced by market

trends

Information search

primarily online

Located in both

America and Asia

Can be spontaneous

and require

flexibility

Upper Middle Class

Upper Class

Influenced by peers

Positioning

Singapore airlines is positioned as an airline service with high cost and with a high quality of

service.

SWOT Analysis

Strengths

Reputable brand name.

Strong backing of Singapore Govt.

One of the largest airlines in the world in terms of market capitalisation and number of

passenger carried.

Known for its premium and excellent service and unparalleled customer service and hospitality

Largest market share.

Excellent branding and marketing has made Singapore Airlines one of the few airlines having

very high recall.

The technological development of in-flight facilities.

Large and green aircrafts.

Financial stability.

Loyal customers.

Weaknesses

Cargo, airport terminal services and the engineering department have been operating as

separate businesses, without success.

The high price of their air tickets.

SIA doesn’t have a strong domestic market; they rely on the international market.

Increasing Competition means market share growth is less.

Opportunities

Expand the service to more countries and cities.

Can Leverage the Excellent Hub which it has created in Singapore.

Introduce more technological advances and in-flight facilities.

Do more promotional work to Middle Eastern and Chinese markets in order to increase the

market there.

Develop their low cost airlines.

More international destinations to leverage on its high value brand image

Threats

Fuel cost increases.

Competitors in low cost airlines.

International political view.

Travelers affected by the European financial crisis.

Rising Labour Costs.

4 P’s of marketing mix

Product

Singapore airlines has managed to deliver premium service to very demanding customers

(achieving differentiation); at a costs close to budget carriers.

It is essential for Singapore Airlines to create a significant point of difference in their service

strategy if the company wants to remain competitive without engaging in an unprofitable price

war.

For this to achieve it is recommended that Singapore Airlines introduce new product which

will provide a point of difference from competitors.

Target market value service and quality over price, so Singapore Airlines needs ensure they

are exceeding customer expectations and unused services available are utilised.

Introducing variable opaque products (VOP) would satisfy what customer needs.

VOP is when passenger self-selects the travel product based on much certainty he/she is

prepared to accept in one or more product attributes.

For e.g., if they wish to fly economy class and pay extra for a pass of business class lounge, or

offering First Class passenger tickets with complete flexibility where seats are available.

An airline customer’s flexibility is related to their willingness to pay.

Introducing a VOP approach to the airlines would enhance the customer satisfaction level and

can be used as a valuable marketing tool.

Price

The revenue and profit objectives of the firm are to seek profit and cover costs. Singapore

Airlines maximizes revenue from a fixed capacity by varying prices and target segments over

time using revenue management systems.

Place

Singapore Airlines has made themselves available at all possible places be it online through

their websites or the counters at airports or travel agents. They are available is 53 countries

over the world including Hong Kong, Australia, New Zealand, Singapore, Brazil, Afghanistan,

India etc. and over 228 destinations in these countries. But they still need to expand more to be

the most known airlines in the world.

Promotion

Singapore Airlines has promoted themselves through their icon “Singapore Girl” which was

introduced in 1972 after the split of Malaysia-Singapore Airlines in two carriers Malaysian

Airline System and Singapore Airlines. The uniform was designed by French Couturier, Pierre

Balmain, and over the years, Singapore Girl became the true representative of the brand.

Airline slogan “WHAT A GREAT WAY TO FLY” is so broad it is used in advertising to all

target markets.

Specialized campaigns used in print such as The Economist Magazine, Newsweek and The

Financial Review promote images of luxury and their business class services.

Economy class customers are targeted through pricing, booking agents and non-specific brand

promotion such as the ad shown.

Television advertising has not been a priority for the company.

In 2012, in order to focus on marketing communications, SIA with its creative agency, TBWA,

conducted a survey. The underlying aim of the survey was to draw focus to attributes that

differentiated SIA from other airlines. Customers of different ages, incomes and genders were

interviewed as a part of the process. The survey led to the launch of a campaign named “THE

LENGTHS WE GO TO”. This campaign was expected to help the airline move away from its

traditional central idea of Singapore Girl to its exceptional service commitments.

Product to Brand journey

Singapore Airlines after MSA split in 1972 was in a different position than most of the other

airlines at the time. There were no domestic roots to serve it was forced to immediately start

competing with international airlines for routes, getting access to airports, securing flight slots

and landing rights and attracting a new customer base. Unlike most state-owned entities,

Singapore Airlines was subject to heavy competition from the onset and this tough start created

a driving spirit to compete and also a dedication to branding, especially in the boardroom.

These factors have prevailed within the SIA organisation since then, and served the airline very

well.

Singapore Airlines decided on a fully branded product/service differentiation strategy from the

very beginning. Innovation, best technology, genuine quality and best customer service were

to become the major drivers of the brand.

Singapore Airlines has remained true to their brand attributes. They have pioneered many in-

flight experiential and entertainment innovations, and strived to be best-in-class. SIA was the

first to introduce hot meals, free alcoholic and non-alcoholic beverages, hot towels with a

unique and patented scent, personal entertainment systems, and video-on-demand in all

cabins. The company keeps driving innovation as an important part of the brand, and the cabin

ambience and combined experience are key factors of their success.

SIA moved to the new Changi Airport which opened in 1981. SIA launched KrisWorld, an

advanced flight entertainment system, across all classes in 1995.

On the technology side, Singapore Airlines still maintains the youngest fleet of aircraft

amongst all major air carriers, and keeps to the stringent policy of replacing older aircrafts

for newer, better models. They have always been first in line to take delivery of new aircraft

types like Boeing 747 jumbo jets, Boeing 777, and they were the first airline to fly the Airbus

Super Jumbo A-380 in 2007.

Even the aircrafts have been sub-branded like 747-Megatop and 777-Jubilee to further

distinguish SIA and its brand from competitors.

Singapore Airlines also flew Concorde between Singapore and London in the late 70’ties

in collaboration with British Airways (BA). The aircraft was painted with SIA’s colours

and logos on one side, and BA’s on the other, and it carried crew from both airlines.

Keeping in line with its strategy to be the pioneer in every aspect, SIA was the first airlines in

the world to fly Airbus A-380 on the 25th of October 2007 between Singapore and Sydney,

Australia. Marred by almost a year and a half in delay, this first A-380 flight, named flight

number SQ380, garnered tremendous amount of worldwide publicity. It further helped SIA’s

brand image that all the revenue generated by flying 455 passengers on this first flight was

donated to three charities in a ceremony the next day in Sydney. SIA has later started to fly the

A-380 to London, Tokyo, New York, Hong Kong and many other global destinations to follow

as Airbus delivers new aircrafts.

The strategy behind the technology program is clear: It enhances cost efficiency to use the

latest aircrafts and at the same time, SIA uses these events for marketing purposes. An example

of this was the new non-stop services to Los Angeles and New York launched in 2004, which

attracted huge publicity in global media and kept the innovation promise of the brand alive.

The special aircrafts for these long-range routes (Airbus 340-500) were for example sub-

branded Leadership to further distinguish the brand promise. Due to rising fuel costs, the direct

route to Los Angeles was terminated 20 October 2013, and the direct route to New York was

terminated 23 November.

Singapore Airlines recognizes that each innovation has a relatively short life span. Once

other airlines adopt it, it is no longer considered “innovative”. Therefore, SIA continues to

invest heavily in R&D, innovation and technology as an integrated part of the business

strategy to further differentiate itself.

Today, Singapore Airlines flies to over 228 destinations in more than 53 countries including

services by Singapore Airlines Cargo, SilkAir (regional airline of Singapore Airlines

launched in 1976), Scout (low-cost long-haul airline of Singapore Airlines launched in 2011)

due to economic crisis which was hit in 2008 to prevent its brand and codeshare partners

under the global airline partnership and network Star Alliance.

Singapore Airlines aircraft fleet

Singapore Airlines has 102 aircrafts in its fleet (March 2014). The average age of its aircrafts

is six years and nine months, making the fleet one of the world’s youngest and most fuel-

efficient.

Singapore Airlines has the following aircrafts in its global fleet (March 2014):

19 Airbus A-380-800, and 5 on order

26 Airbus A-330-300, and 8 on order

28 Boeing B-77-300,

and 6 on order

29 Boeing B-777-200

Singapore Airlines were one of the first customers of the Boeing B-777 during the 1990’ties

and has used the aircraft consistently on most global routes. The aircraft has one of best safety

records in the industry, and is a very reliable long-haul workhorse for global airlines.

SIA placed its first orders for B-747s in 1972 and took delivery of the first examples in 1973.

In 1994, SIA became the world’s biggest B747-400 operator when it took delivery of its 23rd

of the type. By 2003, SIA operated a record 51 Boeing 747-400s, comprising 39 passenger

variants and 12 freighters.

Singapore Airlines crew guide

Singapore Airlines employ both female and male cabin crew though the Singapore Girl

is probably the most recognised face of the airline. There are three operating ranks on

board any Singapore Airlines flight: Flight stewardess, Leading stewardess and Chief

stewardess (same rank equivalent for males).

On top of these ranks come the Inflight supervisors who effectively are trainers and mentors

from the Singapore Airlines Academy flying alongside the operating crew. Inflight supervisors

work like any other cabin crew, but they also play their most important role as mentors and

trainers on board any flight. They ensure than practices and standard operating procedures in

regards to service, safety and governance taught in the academy are implemented consistently.

Their function is also to mentor, guide and to pick up any insights on how service and safety

levels and standards can be improved as they watch actions and behaviour on-board the flights

and feed it back to the operations and training departments. Inflight supervisors – and any

cabin crew – are one of the most important assets for Singapore Airlines as they constantly

seek to innovate and take their brand to the next level.

Communicating the message

Singapore Airlines has been as consistent in its communication vehicles as in its brand strategy.

The primary message “Singapore Airlines – A Great Way to Fly” has been consistently

conveyed in exclusive print media and also in selected TV-commercials of very high

production value to underline the quality aspirations of brand. All communication messages

are featured through the iconic Singapore Girl in different themes and settings.

When Singapore Airlines recently launched their comfortable Space Bed seats in business

class, they ran a 60-second commercial of a highly emotional and mythical character to

underline the aspiration of the brand and the Singapore Girl, and to set their airline brand

apart from competition.

Interestingly, Singapore Airlines has chosen to focus on one aspect of the experiential brand

strategy – in-flight hospitality and warmth featured by the Singapore Girl – rather than trying

to communicate the entire brand benefits through its messages. A dangerous trap, which many

other brands often fall into in their efforts to communicate all at once. This has led to a focused

and consistent message for SIA during the last 32 years. This in itself is a great achievement

for any brand.

The Singapore Girl has contributed immensely to the success of Singapore Airlines’ brand

strategy and its entire positioning around customer and service excellence.

In April 2014, Singapore Airlines signed a deal with Formula One Group to become the

title sponsor of the Singapore F1 race. The Singapore F1 race will be named “The 2014

Formula 1 Singapore airlines Singapore Grand Prix” and it will take place from 19-21

September 2014 at the Marina Bay street circuit in Singapore. Singapore has hosted F1

races since 2008, and became the first street as well as night race in the world.

Using the brand to drive revenues

While other airlines have also pursued high service/quality brand strategies, none has been

able to match Singapore Airlines in consistency, commitment, and true permeation of the

brand in every facet. SIA has been able to maintain their brand advantage by not wavering

from their brand strategy. This is a particularly difficult position to maintain in a highly

cyclical industry where the competition seems to react on a daily basis to changes in

performance. This type of commitment takes dedication from the board, CEO and senior

management team, and strong faith in the brand’s ability to pull through bad times. The

management team and shareholders must maintain a longer term outlook to avoid making

short-term, reactionary decisions which dilute the brand.

For example, pressure on US airlines stemming from low-cost carrier competition has caused

a number of the full-service airlines to begin charging for on-board services which used to be

free. Historically, business travellers were willing to pay a premium for full-service airlines,

essentially because they provided these services. By abandoning their customer service

strategy, even on restricted flights, the premium US airlines are diluting their brand in search

of short-term profitability. This is creating a circular effect where the premium airlines are

losing cost-sensitive customers to low-cost airlines, which causes them to reduce price to retain

these customers. This in turn creates more cost pressure. This cost pressure causes them to start

reducing the premium services which made them distinct from the low-cost airlines in the first

place.

Singapore Airlines has been able to deliver some of the best results in the industry by

avoiding this type of reactionary behaviour.

Global airlines are facing increased competition from low-costs carriers and airlines from

particularly the Middle East (Emirates Airlines, Etihad Airways and Qatar Airways) which

has put pricing pressure on premium, full-service airlines. Singapore Airlines has mentioned

plans for rolling out premium economy seats during 2015 to boost its attractiveness. Many

competitors have already rolled out premium economy seats but Singapore Airlines has been

careful to follow due to potential cannibalization of its full-fare business and first class

products, and overall considerations for the implications for the Singapore Airlines brand.

Singapore Airlines offered premium economy seats on the non-stop flights to Los Angeles and

New York between 2004 and 2008, but later converted the entire aircrafts to business class

configurations. The non-stop flights were terminated in 2013.

Developing cost advantages

Singapore Airlines’ brand strategy is, in theory, a relatively high-cost strategy. Each

brand benefit requires significant investment, careful management and detailed

implementation programs to live up to the brand promise. Singapore Airlines has

carefully built a financial and fixed cost infrastructure which allows them to continue

investing to support the brand while challenging the competition on costs.

First, the strong cash position allows Singapore Airlines to internally fund purchases of new

equipment and airplanes, and limit interest costs. SIA is not locked into long-term leases,

and can easily accommodate newer, more efficient equipment which minimizes

maintenance costs and avoid aircraft downtime.

A second benefit of SIA’s infrastructure is the age of their fleet. Maintaining the youngest

generation of aircrafts provides SIA with some of the lowest fuel costs in the industry. This

is very significant since 15-20% of an airlines’ total costs derive from fuel. On top of this,

SIA carefully hedges up to 50% of their fuel contracts two years in advance to avoid cyclical

and often large volatility in fuel prices.

Finally, the financial and cash position has allowed SIA to weather the short-term dips in the

industry better than the competition.

The brand delivers results

Singapore Airlines has maintained its position as one of the best-known and best-performing

brands in Asia, and remains one of the few consistent performers in an industry where

established brands are struggling to stay alive. SIA has followed a very simple management

formula to achieve outstanding results:

Revenues: Command a price premium through consistent brand benefits and avoid

reactionary pricing behaviour in order to condition the customer not to wait for price matching.

Costs: Tight control of costs though ownership of the most cost-efficient aircrafts,

hedging against fuel price increases, and agile management of the entire company etc.

Profits: Run the business with a long-term outlook. Be consistent. Stay true to the brand.

Road Ahead for SIA

The critics had been now questioning over the years about the brand’s excessive reliance on

Singapore Girl, with some of them opining that the icon was outdated. The company hoped

that “The Length We Go To” campaign would silence such criticism.

Moreover, it was anticipated that the campaign would reflect innovation in the marketing

strategy of Singapore Airlines. “Singapore Airlines ads have always had amazing production

values, and it was really important for us to maintain the quality of film that the airline has

always been known for. What we wanted to do was create a fresher, more relevant, more

contemporary look for the airline.

Recommendations for SIA

Ads should continue to feature the iconic Singaporean Girl, as it is a familiar and instantly

recognizable image, however the accompanying text should explain how customers now have

a greater choice when travelling with Singapore Airlines. Analysis of Service Environment

The service environment associated with the Singapore Airlines can be related to the services

such as First-class check-in, SilverKris lounge, KrisFlyer Gold lounge.

It is recommended Singapore Airlines introduce Variable Opaque Products into their

marketing mix to appeal to a market segment which is currently side-lined, but has great

potential to increase revenue and add value to customers’ experience.

Further research recommended into the price customers are willing to pay for new options

available to customers, which should be reasonable enough for customers to increase the price

of their ticket, without creating excess demand in areas such as the Business Class lounge.

The customers need to understand the key message that Singapore Airlines is adapting to their

needs better, without compromising on service, meaning it is essential all marketing channels

have an identifiable look and feel.

The strong brand equity of Singapore Airlines is one of the most valuable assets for the

company and its cash-rich balance sheet. Singapore Airlines is a leading business case from

Asia demonstrating the importance of strategic branding, and they should serve as great

inspiration for other Asian boardrooms trying to build and manage their own brands. Singapore

Airlines is among the top companies globally that is truly able to control the brand through

every interaction and experience. SIA has become a hugely rewarded innovator and industry

leader: A great way to fly.

Concluding Remarks

Singapore Airlines use lots of business strategies to reach this level within the marketing

industry. They have done a great service to the aviation industry and helped to develop it. On

the other hand, they have given a quality service to customers and added features and services

for their entertainment during their journey. They use a brand strategy to keep their standard;

the SIA is a very successful business within Asia so Asians can be proud of it. The business

strategy used by Singapore Airlines has been successful; therefore, they give more

consideration to external factors and keep their core competencies up to an adequate standard,

in line with their competitors. Lastly, find out the strategic options available within the market

and follow them, then SIA can make a development in the industry and keep their brand highly

respected.