Marketing

Marketing Communications: Cathay Pacific Airways

 

Part A – Description of Organization

            Cathay Pacific Airways has one of the youngest and most efficient fleets of any major airline, and features some of the most technologically advanced aircraft from the world’s leading aircraft manufacturers Boeing and Airbus Industry. To Cathay Pacific, a great flight is not just about a smooth check-in, good food and comfortable seat, but it is about anticipating what a customer wants before they need to ask for it ( 2006).

            The airlines was founded in Shanghai, China on September 24, 1946 by two ex-air force soldiers, Roy Farrell and Sydney de Kantzow, who each put up HK to register the airline. The name “Cathay” was derived from an ancient name give to China, and “Pacific” because they believed that they would one day fly across the Pacific to the United States. The company initially flew routes between Hong Kong, Sydney, Manila, Singapore, Shanghai, and Guangzhou, while scheduled service was limited to Manila, Singapore, and Bangkok only ( 2006). It has dedicated it service to providing fast and reliable performance throughout the West Indies and the world, and today, Cathay Pacific continues to maintain that standard with 14,000 employees and 87 aircrafts. Cathay Pacific serves 43 destinations throughout Asia, North America, and Europe with the major hub in Hong Kong. With dedicated service and 167 daily departures, Cathay Pacific Airlines has proven itself as a leader in world travel ( 2002).

Part B – Evaluation of Current Strategy

            It has been reported that marketing communication consists of the messages and the related media to communicate to the market, and this consists of strategies related to advertising, branding, direct marketing, graphic design, marketing, packaging, promotion, publicity, public relations, sales, sales promotion, and online marketing ( 2006). Marketing communication has a very important role in the success of a specific product and the company in the market, so with the use of effective means of communication, a company can successfully introduce a product to their target market.

            Similarly, the Cathay Pacific Airways is also innovating and improving their marketing communications strategies to effectively establish their reputation in terms of their service in the market. Due to the fast-changing technology, more and more companies, including airlines invest on new information systems and innovative technology. In this way, they can serve their customers better, and even cater to the needs of their employees, in terms of faster and effective communication and efficient service.

            In 2001, Cathay Pacific Airways invested more than 0 million in e-business, and a part of that change in the company’s strategic direction was to implement an e-learning environment called the “Learner’s World”. The e-learning environment would help Hong Kong-based Cathay Pacific deliver learning to more than 14,000 employees. Graham Higgins, the manager of the Learning and Development Group at Cathay Pacific, said that the training function at the company is made up of eight physical training centers, which are autonomous, with each training center based on a different department. The focus of the program is to ensure that employees reach high levels of professional performance as well as to build a culture of innovation and collaboration. In addition, when the airlines started focusing on its e-business strategy, it also began implementing its e-learning strategy within the company to build the airline’s learning management system. It manages the employees learning process, from enrolling learners and tracking their progress through delivering tests and reporting costs, and through Learner’s World, the airline employees have open access to a wide range of learning options, from online tutors and virtual classrooms to in-class training (Hollis, 2006). Moreover, this program will be beneficial for the airline’s employees for the design of their learning experiences are consistent with the service experiences for their customers, such as their choice, control, customization, and community, and have reengineered every aspect of employee experience the company can leverage, including their benefits, performance management, career development, learning, and many others. It also defines a culture of self-responsibility to get courage to innovate and openness to collaborate, for a more effective communication and success (2006).

This strategy of Cathay Pacific is surely beneficial for the company, for the program will not only add learning and knowledge to the employees, but also enable them to communicate effectively with each other. In this type of industry, communication is one of the best strategies to develop and improve, for without effective communication, it would be hard for the company to function. In addition, with effective communication brought about the program, the company can ensure that their employees have the first hand information in training and development, which would be useful in rendering services to their customers. With the use of the program, the company can properly and effectively assess and evaluate the need for improvement in the company, such as identification of internal and external problems, conceptualization of marketing projects and plans, and implementation of new production strategies and regulations. Moreover, with the e-learning program, the company can effectively apply some key strategies related to advertising, direct marketing, promotions, public relations, sales and online marketing. With advanced technology, the company can endorse and introduce their innovations more openly to the consumers, which would lead to increase in sales and profit of the airline company.

As their future marketing strategy, staring January 2007, Cathay Pacific will be phasing a new seat design and cabin interiors with enhanced in-flight entertainment options. One of the most important features common to the business and economy classes is the new three-point seatbelt design, which was previously used on business jets only, and this design will offer increased stability at take-off and landing ( 2006). Cathay Pacific Airways features three classes, namely the First Class, the Business Class, and the Economy Class. The new First Class seats are fully adjustable with massage function, and can be easily converted into a 36” x 81” bed, believed to be the largest provided on any commercial airline. Additional stowage space and a personal closet will also be provided, will also feature a new extendable meal table and an enhanced personal entertainment system with a fully adjustable 17” x 16.9” TV screen. The Business Class will feature suites with luxurious seats that can be converted into a 6-foot-6-inch horizontal flat bed in herringbone configuration that will also offer a four-way lumbar support and a relaxing massage. There will also be an enhanced in-flight personal entertainment system that will offer a large 15” x 16.9” personal TV and Audio Video On Demand, with the handset doubles as a personal phone. Lastly, the Economy Class seats will have a fixed back design, which allows passengers to recline their seats without intruding on those seated behind, and the new Live Black Upholstered Seats uses office chair technology to provide extra support for the spine. Features also include a larger 9” personal TV screen offers Video Audio On Demand, a larger tray table, a coat hook and a literature pocket that has been relocated to below the seat cushion, which creates more legroom for passengers ( 2006). The improvement of the amenities of Cathay Pacific Airways is also part of their aim to improve and develop their marketing strategies, for with the innovation and pleasant features of the airline, the company can better accommodate their passengers, and even providing them the comfort and elegance, they truly deserve. Moreover, the new features of the three different classes enable the passengers to get more than the amount they have paid for, which not only entails enjoying the trip, but also enabling the passengers experience new technologies. Aside from advertising and online promotions, the airlines would not have a hard time promoting their airlines because of the help of word-of-mouth from their passengers that would help endorse the airline to others passengers and customers.

Part C – Proposed Marketing Communications Strategy

 

A. Marketing Objectives

            It has been reported that there are five general promotion objectives to choose from, and these five promotional activities should be compatible with the mission and objectives of the company, as well as their competitive and marketing strategies of the business (Hofstrand, 2005). These five promotional activities are, to provide information, to increase demand, to differentiate the product, to accentuate the value of the product, and to stabilize sales (2005). From these set of promotional objectives or activities, the airline can use the different types of promotion, which includes advertising, direct marketing and public relations. Take for example the SARS scare a few years ago, and the terrorist attacks, it would be best to make a marketing communications plan based on how to promote the safety of the passengers regarding the issues. In using the five promotional objectives as a basis, the airlines can start by providing information to their consumers, regarding their policies on the safety of their passengers. With providing correct and effective information, the passengers can realize the airline’s desire to protect their customers, which would lead to an increase in demand of the airline’s service. In addition to the safety features and safety precautions of the airlines, are its improved amenities that would suit the passengers well. With the new amenities, the airlines will become differentiated from other competitors, and its value will be accentuated, and lead to the stability of sales and profit for the company. Moreover, corporate objectives include customer loyalty, profit, market leadership, growth, employee commitment, leadership capability and global citizenship (2006). By having a good marketing plan, which is improving the amenities, the technology and communication of the airlines, it can obtain customer loyalty, for consumers will be provided with the highest quality of products, which would entail a good profit for the growth of the company and its shareholders. It would also allow the company to develop market leadership, and expand to new areas of development. These objectives would enhance employee commitment and increase performance and productivity of the company, and contribute to its mission to serve globally. Cathay Pacific Airways must still continue to innovate technology and develop communication to further provide unparalleled service to passengers.

            The marketing objectives of Cathay Pacific Airways must include promotional and corporate objectives, in accordance to the brand’s mission and vision to attain company profit and market establishment. The market objectives should encompass its target market, being the general public. These would also cover marketing communications objectives that would require the company to use different types of communication media to effectively relate to the public, including the use of advertising media, such as billboards, printed flyers, radio, television, magazines, newspapers, posters, and the Internet. Using these forms of media is effective for many individuals are exposed to them, and are able to gather or obtain information from them. Exposure to the different forms of media greatly influences their decisions in creating brand loyalty. In addition, the forms or types of media are responsible for producing the brand image of a specific product. With an effective brand image, many consumers are encouraged to continually purchase and support that product, for with the proper use of advertising; the target market of the company can easily be reached.

 

B. Marketing Communication Mix and Strategies

            It has been reported that there are two kinds of promotional strategies, namely, the “push” and “pull” strategies, where the “push” promotional strategy makes use of a company’s sales force and trade promotion activities to create consumer demand for a product, while the “pull” promotional strategy requires high spending on advertising and consumer promotion to build up consumer demand for a product (  2006). In essence, the “push” strategy gives the company the opportunity to “press on” the products to their consumers by the use of promotion, while the “pull” strategy gives the consumers the chance to demand the product from their producers. In accordance to these two concepts, Cathay Pacific Airways must be able to use both strategies for an effective market success. In line with their aim to improve on employees’ communication and knowledge, the airline must seek additional ways to improve their information systems for easier dissipation of learning and knowledge in the company. In addition, additional trainings and seminars must be held to ensure that the information will be given to the airline employees first hand.

In their marketing communication plan, both the “push” and “pull” strategy must be aimed, for the effective use of these two strategies can determine the continuous success of Cathay Pacific Airways. The airline must work hard to introduce their new amenities and innovations to the market, and make sure that the new amenities will function well. This can be done by effective dissipation of information through different forms of media, being the Internet as the most effective. Another way is to declare partnerships with famous and innovative software and information systems companies, to be able to provide a program that would suit the airlines well. Moreover, the airlines can provide selected passengers, such as media personalities and celebrities a free ride on their new aircrafts to try their new amenities. This is to obtain feedbacks from them, in order to know if some more changes can be changed or improved.   

            With the success of Cathay Pacific Airways in introducing their newly improved amenities to their consumers, the company can now invest on advertising and promotions as their follow-up to providing their consumers with proper information. With good intentions, the company will be rewarded with increased product sales and profit. This result is the “pull” of the consumers to the services rendered by the Cathay Pacific Airways. This “pull” now fuels the company’s power and ability to participate in the industry, and continue further to innovate and invest on advanced technology and communication, to render improved service to the passengers. As a marketing strategy, the company must use the “push” and the “pull” promotional strategies effectively for good business results, for the use of both strategies creates the balance of the system needed to function properly in the industry. This balance in the company enables all the employees to perform well, and render efficient and dedicated service to their customers.

 

C. Control and Evaluation

            Control and evaluation is important for the company for these two activities enable the company to assess if they have achieved their goals, and for them to conceptualize new ones. Cathay Pacific Airways must have an annual plan control, which helps them gauge their performance in terms of their sales, market-share, expenses, budget, and customer satisfaction. An annual plan control can give the company the opportunity to reassess their plans, improve them, and make new ones. This plan also enables the airlines to effectively implement new projects in the company. Another useful tool for the company is an efficiency control, which enables them to gauge what marketing and sales efforts are successful or are failures in the market. This gives the company the chance to evaluate their existing policies, to increase production and improvement. The company must also have a strategic control plan, which is responsible for the short-term and long-term marketing plans of the company. This plan must be able to assess the organization as a whole, its related institutions, the company’s strengths and weaknesses, and market-effectiveness. The company also needs a profitability control plan, which assesses the ability of the company to allocate resources. This is important, for money, time, and manpower must be allocated properly to be used efficiently in the company ( 2006).   

           

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