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Introduction
Saudi Arabian Airlines is a flagship airline, headquartered in Jeddah. The company is focused on passenger transportation, cargo transportation, and delivery of government delegations to meeting venues. The airlines customers are wealthy customers who prefer high-quality flights. Tunisair, Kenya Airways, and Emirates SkyCargo are the companys three main competitors. This paper will analyze in detail the marketing strategy of Saudi Airlines. This will include an analysis of the advantage of the air carrier and ways to improve the firms performance.
Marketing Mix
Concept 1 Price
The products price is responsible for the final profit of the company. It is composed of production costs and expected profit. The price is influenced by consumers perception of the goods and the place of the goods on the market (Abdelhady, Fayed and Fawzy, 2018, p. 246). The availability of a flexible price formation system due to several service classes is an absolute advantage of the company. Thus, it is possible to satisfy both the needs of well-to-do customers and those whose income is not so high. However, the program of bonuses for clients is not so developed, which can be corrected by using competitors experience.
Concept 2 Product
The product is what the company opens for, so it should be given a lot of attention. Design originality, assortment, functionality, and quality are key aspects of this element of the marketing mix. The company performs flights to more than one hundred destinations and has an impressive fleet of aircraft (Saudia ranked fastest growing airline brand in the Middle East, 2022, para. 10). Saudi Arabian Airlines offers services in first, business, and economy classes. Accordingly, each client can choose any type of service depending on their income. The disadvantages can be considered a small variety of services provided by the company. It would be worth differentiating the scope of the companys activities by opening branded hotels.
Concept 3 Place
An essential aspect of the marketing mix model is the accessibility of the product to the consumer. The potential buyer must see the product immediately and become interested. This means that it is necessary to think about where and how to place it. The airlines fleet of over 150 aircraft is considered the third-largest in the Middle East region (Hardiman, 2021, para. 1). The company has destinations on five continents, reflecting Saudi Arabian Airlines extensive presence in the international market. However, there are still not enough destinations, which means it is necessary to expand them by establishing cooperation with those cities and countries where the companys airplanes do not yet fly.
Concept 4 Promotion
Product promotion in the 4P marketing model is such activities that attract the potential buyers attention. Activities to market a new product begin with the creation of a portrait of the target audience. It is necessary to determine the needs of potential buyers and, based on this data, create a product advertisement (Firdausy and Idawati, 2017, p. 43). Numerous celebrities have repeatedly participated in advertising the services of Saudi Arabian Airlines, and the company has also sponsored various events both within the country and abroad. In its marketing strategy, this aviation company promotes the idea that customers belong to the royal class. However, the lack of inclusiveness may keep the company from increasing the number of passengers. The philosophy of Saudi Arabian Airlines should be changed in such a way as to demonstrate the availability of the carriers services to a large number of people.
Differentiation & Competitive Advantage
First of all, differentiation in a company manifests itself in the fact that several types of services are offered. The various displays of this strategy can help the company gain a competitive advantage over other air carriers. However, the uniqueness of the product means that it will cost more, and thus the services of Saudi Arabian Airlines will remain available only to wealthy customers. At the same time, the total product, namely airline services, remains at a high level, as shown by positive feedback and the companys profit growth dynamics. As noted above, a possible solution could be to change the philosophy of the company in order to attract more customers. However, this would mean that the goals of differentiation would not be fully achieved.
Coping with Commoditisation
Commoditization is the process of transforming a product from elite to public. The product or service loses its uniqueness and is simplified, and consumers easily switch to the producer who offers a lower price. As noted, such a strategy can have a positive impact on a companys performance. So far, flights by Saudi Arabian Airlines are perceived by customers as something available only to people with high incomes, which cuts off a large portion of potential customers. The process of commoditization will run the risk of losing some loyal customers due to the change in the companys philosophy. However, it is possible to retain them through a loyalty system and unique offers and by improving service and launching new projects. Not only the need to increase revenue but also the overall market situation is forcing Saudi Arabian Airlines to commoditize.
Segmentation
Faced with fierce market competition, Saudi Arabian Airlines encounters a crisis of lost passengers, reduced competitiveness, and underutilization of aviation resources. In creating a reasonable customer value model, customers are divided into groups, and customers from different customer groups are analyzed and accordingly segmented. Traditional segmentation is carried out in airlines by class of service (Waguespack and Ambrose, 2021, p. 51). The high price elasticity of demand characterizes economy class, and business class means high margins. There is also segmentation based on customer preferences, which is also present at Saudi Arabian Airlines. For the airline under analysis, there is an opportunity to simultaneously maintain product segmentation and commoditize. For example, the class system can be retained, while the number of flights with many seats for passengers with limited budgets can be expanded.
Conclusion
In general, Saudi Arabian Airlines maintains its leading position in the market, standing out for its unparalleled quality of service among its competitors. However, the coronavirus epidemic has destroyed the success of many air carriers. This situation has affected Saudi Arabian Airlines as well, and therefore it is essential to change some marketing strategies in order to maintain the leadership position. In particular, greater priority should be given to the implementation of flights. That is, more flights for passengers with little money should be organized. At the same time, it will be critical to retain the loyalty of premium passengers, which can be achieved by providing them with unique offers.
Reference List
Abdelhady, M., Fayed, H. and Fawzy, N. (2018). The influence of the 4Ps on passengers purchasing decision-making: the case of LCCs, International Journal of Heritage, Tourism and Hospitality, 12(1), pp. 246-270.
Firdausy, C. and Idawati, R. (2017). Effects of service quality, price and promotion on customers purchase decision of Traveloka online airline tickets in Jakarta, Indonesia, International Journal of Management Science and Business Administration, 3(2), pp. 42-49.
Hardiman, J. (2021). SkyTeams largest middle eastern airline: the Saudia fleet in 2021. Simple Flying, Web.
Saudia ranked fastest growing airline brand in the Middle East (2022) Web.
Waguespack, B. and Ambrose, S. (2021). Fundamentals of airline marketing. New York: Taylor & Francis.
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