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Marketing: Recommendations on Revising Malaysia Airlines

Marketing Strategy in Improving its Market Share

August 9, 2015

Authored by: Alexis Choo

Student ID: 0131GKIGKI0415

WESTMINSTER INTERNATIONAL COLLEGE, SUBANG

Lecturer : Dr Julian Michael Berry

Tutor : Dr Vincent Wee

Group : 33

Contents

List of Appendices .................................................................................................................................. 1

List of Tables .......................................................................................................................................... 2

Abbreviations .......................................................................................................................................... 3

Objectives ............................................................................................................................................... 4

Executive Summary ................................................................................................................................ 5

Introduction ............................................................................................................................................. 6

Situation Analysis ................................................................................................................................... 8

Customer Analysis .............................................................................................................................. 8

Competitor Analysis ........................................................................................................................... 9

Direct Competitors .......................................................................................................................... 9

Indirect Competitors ....................................................................................................................... 9

Air Traffic Statistics .......................................................................................................................... 10

Competitive Market Share Segment ................................................................................................. 10

Barksdale & Harris Combined Portfolio Model ............................................................................... 11

SWOT Analysis ................................................................................................................................ 13

Strength ......................................................................................................................................... 13

Weaknesses ................................................................................................................................... 13

Opportunities ................................................................................................................................. 14

Threats........................................................................................................................................... 15

PEST Analysis .................................................................................................................................. 16

Economics ..................................................................................................................................... 16

Political ......................................................................................................................................... 16

Socio-Cultural ............................................................................................................................... 16

Technological ................................................................................................................................ 17

Legal ............................................................................................................................................. 17

Environmental ............................................................................................................................... 17

Consumer Market Segmentation ........................................................................................................... 18

Consumer Market Segmentation ....................................................................................................... 18

Geographic ........................................................................................................................................ 18

Demographic ..................................................................................................................................... 19

Psychographic ................................................................................................................................... 20

Behavioural ....................................................................................................................................... 20

Primary Segment Customers ............................................................................................................. 21

Secondary Segment Customers ......................................................................................................... 21

Potential Customers Segment ........................................................................................................... 21

Marketing Strategies Analysis .............................................................................................................. 23

Ansoff Matrix.................................................................................................................................... 23

Marketing Strategy ........................................................................................................................... 24

Profit Projection for 3 Years ............................................................................................................. 24

Hybrid Strategy ................................................................................................................................. 26

Marketing Mix Actions ......................................................................................................................... 27

Internal Marketing ............................................................................................................................ 27

Interactive Marketing ........................................................................................................................ 27

External Marketing (7Ps) ................................................................................................................. 28

Place .............................................................................................................................................. 28

Product .......................................................................................................................................... 28

Price .............................................................................................................................................. 28

Promotion ...................................................................................................................................... 29

People ............................................................................................................................................ 29

Process .......................................................................................................................................... 29

Physical Evidence ......................................................................................................................... 29

Recommendations for Total Customer Experience (TCE) ................................................................... 30

References ............................................................................................................................................. 33

1

List of Appendices

Appendix 1 Last Quarter Financial Losses MAS for 2013 and 2014 ........................................................ 7

Appendix 2 What are the most important factors when purchasing airline tickets? Source: Elliot &

Consumer Traveler .................................................................................................................................. 8

Appendix 3 Source: Market Realist ...................................................................................................... 10

Appendix 4 Source: CAPA, 2014 ......................................................................................................... 10

Appendix 5 CPM of MAB and Competitors ........................................................................................... 11

Appendix 6 MAS Profitability Ratios of 10 years Source: MorningStar, 2014 ................................... 14

Appendix 7 Source: Thomson Reuters ................................................................................................. 15

Appendix 8 Aviation Jet Fuel Price as of 21 Aug 2015. Source: IATA, 2015 ..................................... 16

Appendix 9 Consumer Market Segmentation for MAB ....................................................................... 18

Appendix 10 SocialBakers Analysis on MAB's Facebook Likes. Source:SocialBakers ...................... 19

Appendix 11 Forecast on Generation Spendings on Business Flights Source:Cederholm ................... 20

Appendix 12 Generation X Highest Internet Usage Source: Pew Research ......................................... 22

Appendix 13 MAB Facebook Page Source: Facebook ........................................................................... 31

Appendix 14 MAB #StayStrong Campagin ............................................................................................ 32

List of Tables

Table 1 Ansoff Matrix ............................................................................................................. 23

Table 2 3 Years Planning for MAB ......................................................................................... 25

Table 3 3 Years Income Statement for MAB .......................................................................... 26

Table 4 3 Years Projection of Balance Sheet of MAB ............................................................ 26

Abbreviations

MAS - Malaysian Airline System

MAL - Malayan Airways Limited

MAB - Malaysia Airlines Bhd

LCC - Low Cost Carriers

IATA - International Air Transport Association

CAPA - Centre for Aviation

BCG - Bostron Consulting Group

PLC - Product Life Cycle

FY - Financial Year

SIA - Singapore Airlines

VoIP - Voice over Internet Protocol

BAC - Brahims Airlines Catering Sdn Bhd

Nufam - National Union of Flight Attendants

AVOD - Audio Video on Demand

GST - Government Service Tax

RM - Ringgit Malaysia

USD - United States Dollar

FFP - Frequent Flyer Program

WIIFM - Whats In It For Me

CRM - Customer Relationship Management

WOM - Word of Mouth

APEX - Advance Purchase Excursion Fare

MH - Malaysian Hospitality

CPM - Combined Portfolio Model

RMB - Chinese Yuan (Ren Ming Bi)

F2F - Face-to-face

SLA - Service Level-Agreement

TCE - Total Customer Experience

CEC - Customer Experience Culture

Objectives

This paper aims at achieving the following objectives:

Critically evaluate the airline industry market attractiveness and potential in managing

risk among competitors

Evaluate on market segmentations and consideration of new market segmentation

Recommend a marketing strategy with future financial projections of 3 years

according to Ansoff Matrix Framework

Critically analyse marketing mix action in order to achieve broad based marketing

strategies as proposed in Ansoff Matrix Framework

Discussion on customer total experience being with MAB

Executive Summary

This written report examines the performances of MAB in its competition environment as

against those Malaysia-based competitors. Besides that, the report dictates on

recommendations on improving the companys marketing strategies and on how to improve

customers total experience with the company.

The introduction section of the report gives a brief summary of MAB and the industry review.

It also explains on the competitive environment MAB is involved in, comparing its SWOT,

PESTEL and PLC/BCG model to understand better of the services offered by MAB. It also

studies on its competitors, acknowledging and learn the responsive and positive returns of

their marketing strategies.

In the research and analysis process, critical evaluations are done in order to determine a

better marketing strategy for MAB. By using the evaluation results, conclusions may be

derived to improve customers total experience with MAB.

Introduction

The aircraft industry in most of the world, including Malaysia is said to be of oligopoly

structure. Oligopoly simply means having few competitors providing the same sort of product

or services (Nagurney & Li, 2014). In addition, oligopolistic companies emphasizes on their

marketing campaigns in order to gain better market share and the competitors are all

interdependent and decisions made will affect all players (Varun, 2011). However, the

aviation industry has changed in recent years as new competitors especially low-cost carrier

like AirAsia, MalindoAir have entered into the picture. The main reason that LCC are

attracting customers is their complex fare structure via cost reduction and productivity

increase (Chowdhury, 2007).

MAS have come a long way since 1937 when it was founded as MAL. The company first

flew their commercial flight on 1947 and since then grows into an international carrier within

decade. The growth of the company never stop as it progressed with up to 850 domestic and

international flights; finally settled down with the name, Malaysia Airlines as it took its

course on 1st October 1972. Besides this, MAS owns subsidiary Firefly, MASwings and

MASkargo where FireFly operates on home base flights between Subang and Penang where

as MASwings focusing on inter-Borneo fights while MASKargo manages freighter flights.

MAS was all along a government-owned carrier until it became private in 2014, making a

complete overhaul after suffering two tragic aircraft disaster which gives the company a new

name, MAB (Business Insider, 2014).

MAB has earned itself more than 100 recognitions and one of the remarkable ones is Worlds

Best Cabin Crew for few consecutive years. The aviation industry still sees growth as new

low-cost carrier joins in the battle with MAB staying competitive. However, MAB has been

making losses over the years as shown in Appendix 1.

Appendix 1 Last Quarter Financial Losses MAS for 2013 and 2014

The losses are further increased as MAB was hit by both MH370 and MH17 tragedy, losing

customer trust and business opportunities; impacting its market share locally and

internationally thus it is vital to review its marketing strategies.

Situation Analysis

Customer Analysis

According to a survey done by Elliot and Consumer Traveler, cheaper air fare tops the chart,

followed by Schedule and non-stop against connecting flight. Customers care less about

business class availability and reputation of the airline service as shown in Appendix 2 (Elliot,

2011). This could further explain as customers prefer LCC due to price factors and LCCs

usually provide direct flights whereas MAB as a 5-star carrier would emphasize on its service

quality. However, quality services come with greater cost which sets a setback on customers.

Appendix 2 What are the most important factors when purchasing airline tickets? Source: Elliot & Consumer Traveler

Competitor Analysis

Direct Competitors

MAB has competitors in Asia like Cathay Pacific, Garuda Indonesia, Singapore Airlines and

LCCs like AirAsia and MalindoAir. The emergence of LCCs in Asia has troubled MAB and

other full-service airlines yield as LCCs being more popular choice for customers (Grant,

2014). MAB was reviewed to be more unproductive as its workforce of 19500 staff is 30%

than its main competitors and its revenue per employee is only 51%, comparing to Cathay

Pacific and 38% of Singapore Airlines (Meager, 2014). This may be one of the reasons MAB

has been making losses.

Indirect Competitors

MABs indirect competitors would be ferry cruises for long distance or oversea travels while

inland travels would be buses, trains and land vehicles. It is vital to consider the competitions

against indirect competitors because customers are open to other options if they are

uncomfortable in flying with MAB, especially after both air crash tragedy which impacted

MABs earnings as reported (AFP, 2014).

Air Traffic Statistics

According to IATAs press release, there was an increased demand of 5.9% in 2014

compared to 2013. 2014s aviation industry performance was stronger than average by 5.6%

which sees the room for growth, pin-pointing on Asia-Pacific and Middle East (IATA, 2015)

as depicted under the bar chart below. It is evident to say that there are potential customers

and opportunities in the Asia Pacific and Middle East market; pending to be explored.

Appendix 3 Source: Market Realist

Competitive Market Share Segment

According to CAPAs study which is shown in the pie chart below, Air Asia tops all aviation

companies in the local market, holding 32.8% of the market shares while MAB is placed

second with 30.2%. MABs subsidiary, Firefly holds 3.5% which is quite reasonable since it

is considered as small scale airline as compared to others (CAPA, 2014).

Appendix 4 Source: CAPA, 2014

Barksdale & Harris Combined Portfolio Model

Both BCG Matrix Model and PLC are commonly used to analyze companys products but in

this case, Barksdale & Harris combined both into CPM in understanding where MAB stands

in the market and what are the actions needed to improve their market share or rather, grow

another market.

Based on the CPM above, MAB is said to be at a decline stage as it has been making

substantial losses over the years due to management inefficiency (Singh, 2014) Despite so,

MAB has yet to reach the Dodo stage as MAB still generates revenue and is the preferred

airplane company especially for routes to London, Frankfurt and Los Angeles. However,

effective strategy like introducing new products or services has to be developed to overturn

this and make MAB a Cash Cow.

MABs competitor, AirAsia who currently tops the market is still at its growth and can be

considered as a Cash Cow. However, for the first half year of 2015, AirAsia X which is the

long-haul flight is making losses (CAPA, 2015). It may be possible for AirAsia to be moving

toward late maturity stage as the companys growth is slowing down.

On the other hand, Cathay Pacific had reported a positive performance in 2014, an increase of

63.6% in its dividends per share growth whilst SIA on the other hand reported a slightly

decrease in its profit for FY2014.

Appendix 5 CPM of MAB and Competitors

From the PLC/BCG Model, it is observed that aviation companies are interdependent to each

other and recommendations and strategies should be introduced in order to prevent their

companies from turning to dodos.

SWOT Analysis

Strength

Cabin Crews

MAS has won numerous awards for having excellent cabin crew services where crews are

heavily trained to serve and promote the airline. This is part of MASs branding strategy

where slogan like MH is Malaysia Hospitality was used to highlight on the hospitality of

employees.

International fleets

MAS has earned great impression of being the top international flight carriers. Long haul

flights like Boeing 747 and 777 are well equipped with AVOD which clearly triumphs over

competitors like AirAsia. The excellence in servicing customers for economy and premium

class had won numerous awards.

Weaknesses

Poor Financial Health

MAS has been making losses ever since 2011 as shown in Appendix 6. The Operating

Margin, EBIT Margin and importantly, ROI are showing negative values which means the

company is making losses while competitors like SIA and Cathay are earning positively. The

losses are partly due to increased competition. Nonetheless, long haul airways are affected

too and the two air crash tragedy of MH370 and MH17 further worsen the financial losses.

Appendix 6 MAS Profitability Ratios of 10 years Source: MorningStar, 2014

Poor Management

Many analysts reported on poor management that had caused the financial losses. Nasaruddin,

president of Nufam mentioned that the problem lies within the management team instead of

internal staffs (The Rakyat Post, 2015). Tan Sri Tony Fernandes on the other hand slams on

the MAS management for its poor management in delaying the KLIA2 Terminals and

financial losses which then impacted customers to paying higher taxes (Kamal, 2014). In

order to turnover, MAB made plans on cutting costs and selling off fleets; estimating

breakeven by 2016.

Opportunities

Firefly

MAS launched its own LCC, Firefly, which flies domestically and neighbouring country like

Singapore, Indonesia and Thailand. Firefly has helped gain revenue and competes against

LCC competitors. Firefly earned the opportunity of being the sole airline connecting Penang

with Thailands Phuket and Koh Samui. The operations of Firefly may be ported into MAB if

its found profitable and workable in competing against LCCs.

Newer Fleets

MAB management team has plans on removing old fleets and acquiring better technology and fuel

efficient aircrafts to achieve cost saving and making it align to competitors. New technology planes

provide better in-flight experiences and strengthen customers confidence towards MAB.

Threats

Economic changes

Malaysia economy is undergoing downslope as RM dropped while oil price gone drain low

along with unstable political conditions. RM slammed nearly 17% as shown in Appendix 7

and such negativity caused foreign investors to withdraw from investing in the country

(Economist, 2015).

Appendix 7 Source: Thomson Reuters

Competitors

AirAsia as the biggest LCC competitor, MalindoAir joining in the game and other foreign

companies like SIA and Cathay are competing hard in the Asia region because LCCss low

prices pressure. MAB has to differentiate its product and services in order to gain market

interest and sustain its customers from switching to competitors product.

PEST Analysis

Economics

Asia region as stated has tremendous opportunity and growing demands. Sales revenue varies

depending on factors including high operation and maintenance costs, global recessions,

intense competition and the fluctuation of fuel prices where Appendix 8 shows the latest jet

fuel price. Besides this, the fluctuation of currency, strengthen of USD and RMB devaluation

impacts the whole economy.

Appendix 8 Aviation Jet Fuel Price as of 21 Aug 2015. Source: IATA, 2015

Political

MAS has strong support by the government before privatizing. This has no doubt helped

MAS on being stronger against competitors and pertain its seat in top market share. However,

the political situation in Malaysia is rather unstable as BERSIH demonstrations took place in

protesting for few agendas which attracted worldwide attention (Economist, 2015). Besides

this, the government had imposed GST which implies to both citizen and tourist that spends

in the country.

Socio-Cultural

Social-cultural has impacts over airline sales as well where traveling demands increase

especially during festive seasons. In the Asia-Pacific regions, Philippines, China, Thailand,

Malaysia and neighbouring countries has fairly high number of public holidays. These

seasons are analyzed and promotion packages may be introduced to influence passengers in

choosing MAB.

Technological

Technology has been improving on aircrafts manufacturing as well as services provided in

and out the aircrafts; to offer better flying experience. For example, most of the airline

companies implemented online check-in. In the airplane, customers have access to Wi-Fi,

power outlets, USB ports and most basic, AVOD entertainments for passengers (Shu, 2014).

MAB has given AVOD.

Legal

A countrys legal and regulations affects the aviation industry in order to make peace and

protect both airline companies and passengers benefit. Globally, competition law has been

applied in the airline industry to address to code sharing, price fixing, corporate discounts and

many other modules where airline companies would need to seek authorization from the

committee before publicizing (Lee, 2011).

Environmental

Environmental plays a role in aviation industry as well. Different geographical locations,

climates and weathers may impact an aviation companys flight schedule, cargo arrangements

which then impact the operations and sales. For example, Typhoon Soudelor that slammed

Taiwan traps airline passengers in the airports, delaying all scheduled flights which could

cost a bundle to the airline companies (SputnikNews, 2015).

Consumer Market Segmentation

MAB is going to start fresh and thus it is vital for the company to review on their customer

segmentations. With market segmentation analysis, MAB may design strategic decisions to

market their services (Optimove, 2015). Appendix 9 shows the segmentation for MABs

customers. Analysis are based on reasonable presumption along with social media studies by

companies like SocialBakers and We Are Social.

Consumer Market Segmentation

Appendix 9 Consumer Market Segmentation for MAB

Geographic

Based on SocialBakers study of MAB Facebook likes, MAB has accumulated 1653903 likes

which can be breakdown to different countries as shown in Appendix 10. United States has

the most likes while Malaysia is placed 13th

. Amongst the top 10 countries that followed

MAB, mostly are Asian countries where the growing market is. This proves that MAB is on

the right track and may use the social media marketing strategies to attract customers.

Geographic

Countries

Region

Demographic

Family Size

Age

Income

Psychographic

Traveler/Business

Social Class

Behavioral

Loyalty

Benefits

Service

Appendix 10 SocialBakers Analysis on MAB's Facebook Likes. Source:SocialBakers

Demographic

Generally, populations are categorized into few which are baby boomers, Generation X, Y

and Z. Cederholm mentioned that baby boomers are the main spenders in traveling yet the

Generation X will be overtaking baby boomers in 10 years time (Cederholm, 2014). This

could mean that the primary customers are of age 40s to 70s while secondary customers are

the Generation X whom are at their early 25s to 40s. Based on the age gaps, it can be

presumed that the passengers travel either for business or in families with minimum middle-

class income. Appendix 11 shows the forecast of different generations spending on air tickets.

Appendix 11 Forecast on Generation Spendings on Business Flights Source:Cederholm

Psychographic

There are reasons on passengers taking flights and generally it can be categorized to traveling,

business trips and visitations. Kirby further confirms that the demand across airline industry

is absolutely positive for both business and leisure traveling (Boehmer, 2014). On the other

hand, as mentioned earlier in demographics, the future major customers would be Generation

Y with the least of middle-class in terms of the social status.

Behavioural

It is challenging for airlines to understand all customers expectation which motivates airlines

to improve their services and strategies to attract passengers (Boksberger, 2011). Generally,

the customers may be categorized to few behaviors which are loyalty, benefits-centric and

service-oriented. Loyal customers would choose MAB regardless of benefits provided while

benefits-centric customers look forward to loyalty programs like FFP. Service-oriented

customers expect excellent service by cabin crew.

Primary Segment Customers

Based on the segmentations presented earlier, we can conclude that primary customers have

the following characteristics.

Asia Countries

Family travelling in groups

Baby boomers & Generation X

Middle Class and above

Benefit-oriented

Secondary Segment Customers

Secondary segment customers have the potential in becoming primary if requirements are

met. The characteristics are shown below.

Countries out of Asia

Below well-being family and Individuals

Generation Y

Below Middle class

Slacker group where customers do not concern about any of the benefits, services or

being loyal.

Potential Customers Segment

Asia countries

Family Group of at least 2

Generation X

Middle and above class

Benefit & service oriented

The Generation X will be the future important customers. Therefore, the marketing

strategies should focus on the expectation of this group. To reach out to these customers,

benefits and services programs through digital marketing are the best-sought strategies as

Generation X has the WIIFM attitudes and Generation X has the arguably best education as

mostly gained the least of Bachelors Degree or higher (Schroer, n.d). In addition, digital

marketing will grow the targeted customer segments because the potential market, Asia-

Pacific has 1.4Million users (We Are Social, 2015) and still growing. Research also shows

that majority digital media demographics are Generation X (PewInternet, 2014).

Appendix 12 Generation X Highest Internet Usage Source: Pew Research

In terms of value proposition, MAB may market its 5 star service and benefit-filled flying

experience towards customers, proposing to them Serving you and your loved ones with the

best hospitality. With effective marketing strategies, MAB may expect profit as RyanAir

reported an increase of 32% after adapting digital marketing strategies (Lauchlan, 2014).

Marketing Strategies Analysis

Ansoff Matrix

Ansoff Matrix focuses on existing and potential product and market where MAB may

determine the suitable growth strategy in order to market to the potential customers. Also,

Ansoff Matrix helps to understand the risk of the strategies the company opted for

(Manktelow, n.d).

Present New

Present Market Penetration Product Development

Market

New Market Development Diversification

Table 1 Ansoff Matrix

Based on the Ansoff Matrix, different quadrant uses different strategies and absorbs different

risks. For MAB, the advisable would be Market Penetration as MAB has already

established its services in many regions, including the potential Asia region. In view of

MABs overall financial status, MAB should focus on increasing sales for existing product in

its existing market. In short, it is advisable for MAB to increase the frequency of flight in

Asia countries, providing passengers the renowned 5-star services.

However, there are risks associated which is discussed below.

Market Place becomes saturated

There is a risk where stagnant customer satisfaction stops the market growth. It can be

resolved by improving and aggressive marketing strategies frequently (Kokemuller, n.d).

Deviated Opportunities

MABs 5-star services requires high production cost in terms of trainings given thus can be

considered as luxury service yet market penetration with lower price may devalue it and

making it cheap, causing MAB missing the opportunity. However, this risk may be

diversified or managed promptly if the services are customized according to different price

grades of flights offered. For example, business class may be further customized and charged

differently, providing options to customers.

Marketing Strategy

While managing risks that may occur, MAB may find itself competing in the most profitable

region and gain more market shares with customized services and products. Therefore, the

most appropriate marketing strategy would be digital marketing, starting off with

rebranding. This is because both MH incidents have completely tarnished MASs brand.

Fortunately, the management has already worked on rebranding and reorganization.

Nonetheless, MAB logo should be changed as well.

Profit Projection for 3 Years

With this 3 years plan, MAB hopes to breakeven from losses and start gaining profit. These

plans will help strengthen MAB and customers ties.

Year Milestone Description

1

Rebranding

Renaming of MAS to MAB.

New logo.

Organization Restructure

Cut workforce by 6000 to achieve optimum

workforce capital.

New Business model.

New Marketing strategy.

Improve crisis management team.

Improve Customer Service team.

Cost Cutting Sell off/lease old fleets

Purchase newer fleets with better technology

Cut off non-profit making routes.

Budget airline meal.

Improve business operations, making air fare purchasing, boarding and other services easier.

Marketing Establish social media team.

Launch marketing campaign using digital marketing strategies which includes promotion,

competitions and loyalty programs

Reputation management

Engagement with communities

Engage communication networks with all parties

Engagement with partnership alliances like travel

agency, code share airline companies and loyalty

programs

2

Management Provide training to upskill employees

Revise and review possible profitable flight route

Improve quality control supervision

Raise brand awareness

Improve social responsibilities

Maintain 5-star service quality

Integrated Marketing Increase Brand Awareness

Improve Website traffic by encouraging air ticket purchased online

Engage promotion via MAB website

Live Chat Support via MAB website

Measure mentions and events on social media

Improve engagement with communities

Improve communication networks with all parties

Improve relationship with partnership alliances like travel agency, code share airline companies

and loyalty programs

3

Management Review employees KPIs

Reward employees; make them have sense of belonging with the company.

Hire potential employees to further grow MAB.

Improve financial health via better financial control. For example: lower operation cost,

improved margin ratios.

Improve social responsibilities

Improve 5-star service quality and fleet operations and maintenances.

Consider expanding operations to other potential regions.

Integrated Marketing Expand marketing scope wider to other regions.

Continuously improve social media traffic of MAB.

Aggressive advertising for regions with slower growth.

Introduce new products and services. Table 2 3 Years Planning for MAB

The figure below shows the 3 year projected income statement of MAB which expects to

breakeven by 2016, since MABs operation on 2015.

Table 3 3 Years Income Statement for MAB

Table 4 3 Years Projection of Balance Sheet of MAB

Hybrid Strategy

As risks have been measured, hybrid strategies would be suitable for MAB. This is because

some of the markets have more business travelers while some may have more leisure

travelers. MAB should be more flexible and find suit to market needs. Thus, customer

demands are heard and will be customized to meet their requirements. This is considerably a

better approach to meet different markets needs, instead of using one focused strategy (Lin

Say, 2015).

Marketing Mix Actions

Different marketing tools are used to perform situational analysis to understand the

companys present situation and determine its future path. Marketing 7Ps may be used to

achieve the marketing objectives.

Internal Marketing

Marketing has to be done internally in the company as well. This is because the employees

are also an asset of the company and they represent the brand as well. As McDuffie quoted,

employees are entrusted to be the voice of the companies brand; employees will be more

invested in the missions and visions of the company (McDuffie, 2015). Fogel on the other

hand emphasizes that internal marketing ensures employees effectively carries out the

companys products and services (Fogel, 2012). For MAB, marketing must be done internally

from top to bottom hierarchy as well by offering benefits like cheaper air fares, enhanced

loyalty programs and special employees welfare to employees and their close families,

similarly done by Disney in a program called Disney Difference.

Interactive Marketing

Approach audiences via digital marketing which is growing means opportunities in capturing

new and retaining old customers. The proposed plan for MAB is to advertise in Google

Adwords, social media like Facebook, Twitter, Instagram, and investing in mobile

application. Google Adwords helps advertise MAB regionally, reaches customers at a click-

away which demonstrates one of the 4Ps Place, being at the right place, the right time.

Besides that, social media like Facebook has growing importance whereby it allows

companies to learn about their audiences through Facebook Insights, allowing companies to

target their audience effectively (Cisnero, 2014). MAB may utilize social media to

communicate, understand and listen to customers. This represents part of CRM and it is

crucial to manage accordingly. MAB may organize events and competitions on social media

to attract customers to participate. For example, snap a picture of you on MAS and reasons

you like about MAB and hashtag #MABRocks. These will in turn becomes WOM which is

more valuable than adverts done by marketing team.

The mobile application may improve operations like web-check in, booking flights and

attending customer queries. With LiveChat, customers may reach MAB anytime which

improves customer satisfactory (Freedman, 2014).

External Marketing (7Ps)

Integrated marketing shall be adopted to amaze customers, giving them the brand experience

of being with MAB where MAB should focus on 3 of the 7Ps highly for better system

delivery - People, Process and Physical Evidence.

Place

MAB should provide 24/7 services to customers so that they may contact with the company,

be it flight bookings or queries. Besides this, stretching MABs services via affiliations with

travel agents, code share companies, hotels and other parties may also help in marketing

MABs products and services, allowing MAB accessible at different regions.

Product

Customers would demand for better service, from cabin services to catering and on-ground

services, the quality of services given must be distinguished where MAB has achieved

throughout the years. This is one way to distinct MAB from its competitors. It may be

improved by offering more luggage capacities, better insurance and quality cabin foods.

Price

MABs LCC, Firefyl may implement better promotions on Low-Cost Pricing while MAB on

may also implement such promotion yet at a full-fledged airline companys price range.

Certain routes may be APEX fares or value for money policy, depending on the routes

operation cost and passengers capacity.

Promotion

The elements of the advertisement may include tourism attractions, 5-star services provided

plus sales and promotions to attract public interest. MAB may also held contests with

attractive prizes where customers may participate. Other than MAB itself, extended parties

like travel agents, media and even customers may also play a part in promotion mix, for

instance, spreading WOM.

People

CRM is important for airlines which MAB should provide proper training for its employees

especially those whom are in direct contact with customers. This is to ensure employees are

knowledgeable and well-equipped; able to help customers and attend to queries constantly.

As customer experience is important, providing 5-star services would create new and retain

existing customers from switching to competitors airline. Furthermore, customers may spread

WOM and win referrals.

Process

Good process like shortening excessive booking steps and faster check-in process would

assure customers satisfactions. If quality process from flight booking, on-ground services, in

and off-flight services are being provided at all times, rest assured that customers would stay

loyal to MAB.

Physical Evidence

MAB should always ensure cleanliness, safety and accessibility are provided and upkeep at

all times. This is because the whole flying experience represents MAB brand and being

professional would ensure customer satisfactory.

As MAB practices the 7Ps, it is already positioning itself as the The Best Flying Experience

due to the proposition of being the best cabin service in the region.

Recommendations for Total Customer Experience (TCE)

Bankruptcy and MH incidents had tarnished the brand thus MAB has begun its journey of

rebranding. However, more can be done to improve customer experience via social media

which increases customer loyalty and satisfactions (Beule, 2015).

There are several touchpoints between MAB and customers as listed below.

Website, Mobile Application, Social sites

Call Center

Check-in

Crisis Management

Post-flight

TCE may be created by integrating MAB values into social media sites and aids in building

the brand. MAB has 5-star cabin crew in flight while listening, giving feedbacks and

resolving customers issues via social media as shown in Appendix 13, would add value to it

(Beule, 2015), creating service differentiation from competitors.

Appendix 13 MAB Facebook Page Source: Facebook

Besides that, solidarity with customers at difficult times creates personal touch and

exceptional TCE. MAB launched #staystrong campaign as shown in Appendix 14, had

received huge buzz where internet users replied in giving support and understanding (tvn24,

2014). Importantly, during BAU, shortening waiting time during check-in and gathering

feedback from customers post-flight demonstrates MABs professionalism and concern over

customers flying experience and overall satisfactions.

Appendix 14 MAB #StayStrong Campagin

Set aside social media, physically, MAB should create CEC which endorses TCE eventually.

Morgan quoted that employees should first be treated specially like incentivize contact center

agents who performed well in serving customers, train and emphasize cabin crews on safety

and services and making leadership visible throughout the organization (Morgan, 2015). This

is because employees are the voice of the brand and only with happy employees may the

company improve its customers TCE, making a difference against its competitors.

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