Fly To The End Of The World
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Case 16 Fly to the end of the world
Current Background
Facing the increasing fierce competition, airlines make efforts to differentiate themselves from each other in order to obtain the maximum of market share. In some cases, Air New Zealand as a successful example has done a decent job with implementing some successful marketing strategies. Certainly, some potential opportunities and problems that company has ignored existing as well.
After years of often ferocious competition, Air New Zealand was forced to form an alliance, and then became a full member of the Star Alliance Group in 1999, which for the sake of extending network and offer better service to its customers, thereby obtained the competitive advantages. Additionally, the airline alliance, to some extend, has gradually changed the market environment.
Air New Zealand, as part of Star Alliance Group, provides a large number of worldwide destinations for its customers. For serving this large market, marketing managers cannot be satisfied with just planning present activities, because of dynamic markets and consumersÐŽ¦ needs, competitors and the environment are continually changing (Quester, P, McGuiggan, R, Perreault, W, McCarthy, E, 2004).
Significantly, Air New Zealand paid more attention on customer service as a competitive advantage, and searching further options to enhance it. They did not just improve the existing service but also provided a series of additional services to satisfy customersÐŽ¦ needs. Furthermore, the implementation of a new telephone system developed by IBM and the ÐŽÒRightNow Web eService CentreÐŽ¦ in 2001 has played a significant role in the marketing communication. In terms of building a long-term relationship with customers, Air New Zealand introduced the ANZ Airpoint Programme to benefit their customers in order to generate the repeat business.
As for the promotion strategy, Air New Zealand through the partnership with New Line Cinema (the filmmakers of the The Lord of the Rings trilogy
) to promote New Zealand as a top destination for holidaymakers with the aim of drawing more worldwide customers that result in a increased need of flights between Auckland and Los Angeles.
Obviously, the market environment for Air New Zealand is superior. However, the airline market is volatile and dynamic, and the Virgin BlueÐŽ¦s emerging in New Zealand market is significantly threatening Air New Zealand.
2. Case Issues
According to the case, Air New Zealand actually has implemented some successful strategies. Yet, there also have some unexploited opportunities and underlying problems. The following step will utilize SWOT analysis to identify the case problems and issues.
SWOT analysis
Strengths
Dominant position in home market
Holding of Ansett
Full member of Star Alliance Group
Good marketing communications strategy
High quality Internet services
Many-faceted service & Exceptional inflight service
Successful partnerships with airlines and
companies
Excellent crew scheduling and rostering system
Weaknesses
Weak brand extension
One-track promotion strategy
Limitation of alliance
Opportunities
New era of Internet
Broad marketing development
Trend of co-operation
Threats
Domestic and international competition
New Airlines entering the New Zealand market
According to the above analysis, case issues will be identified as follow:
1) Did Air New ZealandÐŽ¦s strategy of joining the Star Alliance Group is a successful strategy? Are there any changes in marketing environment will influence the companyÐŽ¦s strategy plan?
Marketing environment as one of important variables significantly affects marketerÐŽ¦s decision. An evaluation of the various environments surrounding the organization, combined with an understanding of the consumer market, is the key to identifying growth opportunities (Quester, P, McGuiggan, R, Perreault, W, McCarthy, E, 2004). Significantly, market manager as an interface between the market and the organization must remain keep in touch with environmental changes.
2) Is the promotion of forming the partnership with New Line Cinema and showcasing New Zealand as a top holiday destination a successful promotion strategy? What are the advantages and disadvantages of partnerships? Are there any other channels that company has ignored to build a brand recognition?
Promotion, one of the basic elements of marketing mix, is concerned with informing the target market or others in the channel of distribution about the ÐŽÒrightÐŽ¦ product. (Quester, P, McGuiggan, R, Perreault, W, McCarthy, E, 2004). A successful promotion, which can create an extensive influence make company easier to catch up customers and generate high revenue. Furthermore, good brand recognition would reduce the selling time and effort. Consequently, a good promotion is important for a company.
3) Is customer service ANZÐŽ¦s competitive advantage? Facing the increasing fierce competition, how to sustain competitive edge becomes a crucial issue that company should significantly emphasis on.
Customer, placed in the centre of the marketing mix, is the target of all industriesÐŽ¦ effort. The marketing concept emphasizes that an organisationÐŽ¦s activities should focus on target markets and concentrate on developing a competitive advantage to meet the needs of target market (Quester, P, McGuiggan, R, Perreault, W, McCarthy, E, 2004). Furthermore, find a competitive advantage to differentiate from other competitors is important.
3. Analysis of the Case
1) After joining the Star Alliance Group in 1999, Air New ZealandÐŽ¦s market has developed dramatically. A host of benefits have gained from