The service marketing mix is also known as an extended marketing mix and

is an integral part of a service blueprint design. The service marketing mix

consists of 7 Ps as compared to the 4 Ps of a product marketing mix.
Simply said, the service marketing mix assumes the service as a product
itself. However it adds 3 more Ps which are required for optimum service
delivery.

The product marketing mix consists of the 4 Ps which are Product, Pricing,
Promotions and Placement. These are discussed in my article on product
marketing mix the 4 Ps.
The extended service marketing mix places 3 further Ps which include
People, Process and Physical evidence. All of these factors are necessary for
optimum service delivery. Let us discuss the same in further detail.
Product The product in service marketing mix is intangible in nature.
Like physical products such as a soap or a detergent, service products
cannot be measured. Tourism industry or the education industry can be an
excellent
example.
At
the
same
time
service
products
are heterogenous, perishable and cannot be owned. The service product
thus has to be designed with care. Generally service blue printing is done to
define the service product. For example a restaurant blue print will be
prepared before establishing a restaurant business. This service blue print
defines exactly how the product (in this case the restaurant) is going to be.
Place Place in case of services determine where is the service product
going to be located. The best place to open up a petrol pump is on the
highway or in the city. A place where there is minimum traffic is a wrong
location to start a petrol pump. Similarly a software company will be better

placed in a business hub with a lot of companies nearby rather than being
placed in a town or rural area.
Promotion Promotions have become a critical factor in the service
marketing mix. Services are easy to be duplicated and hence it is generally
the brand which sets a service apart from its counterpart. You will find a lot
of banks and telecom companies promoting themselves rigorously. Why is
that? It is because competition in this service sector is generally high and
promotions is necessary to survive. Thus banks, IT companies, and
dotcoms place themselves above the rest by advertising or promotions.
Pricing Pricing in case of services is rather more difficult than in case of
products. If you were a restaurant owner, you can price people only for the
food you are serving. But then who will pay for the nice ambience you have
built up for your customers? Who will pay for the band you have for music?
Thus these elements have to be taken into consideration while costing.
Generally service pricing involves taking into consideration labor, material
cost and overhead costs. By adding a profit mark up you get your final
service pricing. You can also read about pricing strategies.
Here on we start towards the extended service marketing mix.
People People is one of the elements of service marketing mix. People
define a service. If you have an IT company, your software engineers define
you. If you have a restaurant, your chef and service staff defines you. If you
are into banking, employees in your branch and their behavior towards
customers defines you. In case of service marketing, people can make or
break an organization. Thus many companies nowadays are involved into
specially getting their staff trained in interpersonal skills and customer
service with a focus towards customer satisfaction. In fact many companies
have to undergo accreditation to show that their staff is better than the rest.
Definitely a USP in case of services.
Process Service process is the way in which a service is delivered to the
end customer. Lets take the example of two very good companies
Mcdonalds and Fedex. Both the companies thrive on their quick service and
the reason they can do that is their confidence on their processes. On top of
it, the demand of these services is such that they have to deliver optimally
without a loss in quality. Thus the process of a service company in
delivering its product is of utmost importance. It is also a critical
component in the service blueprint, wherein before establishing the service,

the company defines exactly what should be the process of the service
product reaching the end customer.
Physical Evidence The last element in the service marketing mix is a
very important element. As said before, services are intangible in nature.
However, to create a better customer experience tangible elements are also
delivered with the service. Take an example of a restaurant which has only
chairs and tables and good food, or a restaurant which has ambient
lighting, nice music along with good seating arrangement and this also
serves good food. Which one will you prefer? The one with the nice
ambience. Thats physical evidence. Several times, physical evidence is used
as a differentiator in service marketing. Imagine a private hospital and a
government hospital. A private hospital will have plush offices and well
dressed staff. Same cannot be said for a government hospital. Thus physical
evidence acts as a differentiator.
This is the service marketing mix (7p) which is also known as the extended
marketing mix.

Introduction to Etihad Airways

Company Background
Etihad Airways, the national carrier of the United Arab Emirates and carrier of the
region of Abu Dhabi was established by Royal (Amiri) Decree of Abu Dhabi in
July 2003. (Etihad Airways, 2010) The Airline commenced its commercial
operations in November 2003 with a ceremonial flight form Abu Dhabi
International Airport to Al Ain International Airport. Within a short span of time
Etihad Airways has grown to become not only one of the leading airlines of the
U.A.E, but also of the world. The Airline has turn out to be the fastest growing
airline in the history of commercial aviation. (Etihad Airways, 2010)

Etihad is an Arabic word which mean United. Etihad Airways has strategically
chosen its brand name as it plans to unite the west and the east with a centre at Abu
Dhabi. (Etihad Airways, 2010) The present tag line of the Airline is From Abu
Dhabi to the World. (Etihad Airways, 2010).
Etihad Airways is governed by a Board of Directors under the chairmanship of HH
Sheikh Hamed bin Zayed Al Nahyan and operates in terms of its founding
legislation and the Article of Association of the Company. The Airline has a new
management team since 2006 under the leadership of Mr. James Hogan Present
CEO. (Etihad Airways, 2010)
Etihad Airways has several awards under its umbrella. The most prestigious award
with the company has won is the World Leading Airline Award at the 2009
World Travel Awards. Beside that Etihad has also been awarded as the Best Long
Haul Airlines at the 2010 Business Travel Awards. The airline has also been
awarded as the Best Marketing Strategy of the Year 2009, by the Middle East
Business Achievement Award. (Etihad Airways, 2010)
The capital of the United Arab Emirates, Abu Dhabi is Etihad Airways base and
hub. Etihad Airways Corporate Office is located in Abu Dhabi. The airline operates
through various travel agents who are their general sales agents which operate in
42 countries over the world. (Etihad Airways, 2010). The airline currently serves
an international network of more than 64 destinations over forty-two countries
around the world. (Etihad Airways, 2010) Markets which Etihad Airways has
covered include Indian sub continent, North America, Europe. Middle East and
North Africa, Australia, South East Asia and South Africa. (Etihad Airways, 2010)
On an average Etihad Airways according to the 2010 estimation of the company,
the airline operates around 147 flights per day and 1,032 flights per week. (Etihad
Airways, 2010)
Etihad Airways currently operates a fleet of 54 aircraft, consisting of: two Airbus
A319s; 13 A320s; 16 A330-200s; two A330-300s; four A340-500s; seven A340600s; two A300-600Fs; six Boeing 777s; and two MD11Fs (Etihad Airways, 2010)
Over the next 10 years, Etihad plans to take delivery of: six Airbus A330s by the
end of 2011; 20 A320s between 2011 and 2015; 10 Airbus A380s from 2014; 25
A350s between 2017 and 2020; 35 Boeing 787s between 2014 and 2020; and 10
Boeing 777s between 2011 and 2013. (Etihad Airways, 2010)
Besides having its own fleet of aircrafts, Etihad Airways has code sharing
agreement with 23 of the world airline so as to build it world networks. The 23
airlines include Jet Airways, Malaysian Airline, Cyprus Airways, American
Airline...etc. (Etihad Airways, 2010)
Beside the international air transportation of passengers which is Etihad Airways
main business line, the company operates Etihad Holidays which handles tourism

need of customers and also Etihad Crystal Cargo which handles international
transportation of goods, precious cargo and pets. (Etihad Airways, 2010)
According to (FlightStats, 2010), Etihad Airways On time performance is 78%
during the 15th of July to the 15th of August 2010.(Refer to Appendix Page 15,
Chart Etihad Airways Performance Index).But according to the Etihad Airways
Corporate Factsheet, the airline states to have a 91% on time performance. (Etihad
Airways, 2010)
In the years 2009, Etihad Airways revenue exceed more than 2.3 Billon USD.
(Etihad Airways, 2010). In the first quarter of 2010, Etihad Airways, reported 24.5
% growth in passengers revenue as compared to the industry average growth of
22%. (Etihad Airways, 2010)

Product and Service

The international transportation of people, i.e passengers is the main business of
Etihad Airways. The airline has three different types of product for various sectors
which are Diamond First Class, Pearl Business Class, and Coral Economy Class.
Furthermore, Etihad Airways operates in the tourism industry through Etihad
Holidays and operates in cargo and logistic with Etihad Crystal Cargo and Etihad
Express2D (New Product since 2010). (Etihad Airways, 2010) . (Refer to
Appendix, Page 15, Diagram Etihad Airways Product Portfolio)
For its product portfolio of various businesses that Etihad Airways operates under
in terms of product share, 60% is the international transportation of passenger,
Etihad Crystal Cargo takes 30% and Etihad Holiday has 10% share. (Refer to
Appendix, Page 16, Diagram Etihad Airways Product Share)
In terms of profits and revenue in its International Transportation of Passengers
Business, Etihad Airways gets 40% of its revenue from its Etihad Pearl Business
Class, 20% from its Etihad Diamond First Class and 40% from its Etihad Coral
Economy Class. In terms of market share, the Etihad Coral Economy has a larger
market share, then Etihad Pearl Business Class and then Etihad Diamond First
Class.
Based on the The BCG Matrix (Boston Consulting Group Growth-Share Matrix,
one can place the Eithad Coral Economy in as the Cash Cow of the Airways as the
product has low market growth but had relative high market share. Along with that,
Etihad Crystal Cargo and Etihad Diamond First Class. The Pearl Business Class
would be the Star Product as the product has a relatively high market share and
relatively high market growth. The company need to prioritise what it needs to do
with Etihad Express2D and Etihad Holidays as they are both Question Mark
Products as the both have a relatively high market growth but low market share.
(Refer to Appendix, Page 16, Diagram Etihad Airways BCG Matrix)

Product Strategy
Etihad Airways Core Product Component is the Air Transportation on both goods
and passengers. The Airlines Actual Product Component comprises of Etihad
Brand Product Portfolio which has, Etihad Diamond First Class, Etihad Pearl
Business Class, Etihad Coral Economy Class, Etihad Holidays, Eithiad Crystal

Cargo and Etihad Express2D. The Actual product component also comprises of
Etihad Airways staff and crew, in flight and on ground entertainment system and
Menus. Etihad Airways Augmented Product Components give the airlines most of
its completive advantage. (Refer to Appendix, Page 21, Diagram Etihad Airways
Product Strategy.)Etihad Airways Augmented product has competitive advantages
in terms of its product strategy the Etihad Airways is not only the national carrier
of The United Arab Emirates but also of the region of Abu Dhabi. Abu Dhabi is a
region with is developing rapidly as the future business and tourism hub of the
Middle East. Thus having Abu Dhabi as a hub gives the airline a competitive
advantage. Etihad has its own private terminal at the Abu Dhabi International
Airport; this also gives the airline a competitive advantage as compared to other
airlines operating from and to Abu Dhabi Etihad Airways also has a chauffeur
service for it passengers at the Abu Dhabi Airport and at other airport where Etihad
operates there, they have the service for their Diamond First Class and Pearl
Business Class passengers. Etihad Unlike few other airline, Etihad Airways allows
passengers to Check In, 24hr prior to departure, this safes passengers time as they
only need to arrive at the airport an hour early to departure than the normal three
hours. Etihad Crystal Cargo with its Xpress2D service to Europe and North
America is a service from shipments airport to the customer door is also one of the
airlines competitive advantage.
Potential Products Many Airways do not have lounges and place for
unaccompanied minors passengers, Etihad Airways can develop a place like a
lounge and programme for these untapped segment. Moreover with teen
programme all over the world like the world youth day, an unaccompanied minor
programme with help to get more customers. Etihad can have a unaccompanied
minor program for kids from the age group of 8 to 18 years of age. Due to issues of
kidnapping and other legal and security issues, Etihad can have consent form
which needs to be filled and signed by both parents and guardians. Etihad Airways
can also charge passengers a small fee for excess baggage if the customer declares
it 24 hour before departure. More over Etihad Airways can have a baggage at the
door pick up for it passengers. Thus many passengers can travel to the airport with
no difficulty. Like Jet Airways, Etihad Airways can also start serving hot towel to
economy class passengers as well at departure. Etihad Airways could start the
Express2d service within U.A.E also. ETIHAD AIRWAYS Marketing Plan Page
12 of 25

Price Strategy
Etihad Airways present has a a market penetration pricing strategy so as to get
market share in the United Arab Emirates. Moreover by delivering the somewhat
the same service as compared to Emirates Airlines and British Airways, Etihad
may be trying to attract more passengers and thus more revenue to break even, as
the company wants to break even by 2011. (Refer to Appendix, Page 21, Table
Price Comparison)
Once Etihad Airways has broken even, I recommend that the company increase it
prices by 10%. In that way Etihad Airways would be in the same category with
Emirates Airlines, with the price factor too. Thus customers will not perceived
Etihad as a low value brand compared to Emirates Airlines and British Airways.
The luxury high quality image of Etihad will increase to a higher level.
Place Strategy
Etihad Airways presently distribute its tickets not only through its main office and
branches but also thought it general sales agent all over the world. The airline also
distributes its ticket online thought its corporate website. On its corporate website
an individual can book and choose fares according to his or her budget. Moreover
Etihad Airwys also has Customer Service call centres where one an individual can
call place a reservation or make a book for a particular flight and seat if it is
available.
In the future, it is recommended that Etihad Airways keeps its current place
strategy and but also add to the number of branches and more general sales agents
to its list. Moreover Etihad Airways could open small stall at leading mall where
individual could also came a book a flight there.
People Strategy
Etihad Airways has a well educated and trained staff both on air and on ground.
This is visible as the company scored 91.5% in a customer service benchmarking
survey conducted by Ethos Consultancy. (Ethos Consultancy , 2010) . Etihad
Airways has trained it staff to be courteous and helpfully to the all the needs and
demands of its customers. Moreover the staffs are very informative and also give
suggestion.
As Etihad Airways is a part of the service industry, the airlines should invest more
in the training and development of its staff. An Airline can introduce new product,
have more fleets, lessen its fare but at the end of the day, the customer goes back to
the airline which had a courteous and helpfully staff. After all in the end its the
experience what the customer gets that make the difference. Employees also act as
word of mouth marketers.
Process Strategy
Etihad Airways has a very simple process, for its customers and passenger form the
time they make their book to the time to depart or arrive from Abu Dhabi. Etihad

Airways owning it own terminal at Abu Dhabi International Airport adds to the
easy and simplification of the process. (Refer to Appendix, Page 22, Diagram
Terminal Three Abu Dhabi International Airport) this diagram shows the whole
process through which a passengers goes through right form arriving at the airport
car park to the Check In to Departure. Etihad Airways also offers various types of
Check In Process like Online Check In, Abu Dhabi City Check-in, Dubai City
Check-in and also Check-in at the Check-in at the Abu Dhabi International Airport.
This help to simplify the travelling process for passengers

Physical Evidence Strategy

The Physical Evidence of an airline is what is visible to the customers. It is the
environment in which the service is delivered or rendered to the customer.
Etihad Airways physical evidence strategy consists of the unique way ETIHAD
AIRWYS is written. It consist of the logo and the Royal Decree symbol on it
aircraft tail. It is very easy and visible to spot an Etihad Airway Staff and Crew due
to their uniforms which is also apart of the airline Physical Evidence Strategy.
The in-flight entertainment system and the menus is also a part of the Etihad
Airways Physical Evidence Strategy. Etihad offers a wide range of Menu to its
customers. These Menu prior take off can be even customized according to
customer need. Moreover the In- Flight Entertainments system provide audio and
video option. One can choose from classic movies to the latest in films. Most films
are available in more than three languages, other subtitles are provides. The Etihad
Airways In- Flight Entertainment System also provide passenger with games and
quizzes to whilst their time on board.
Etihad Airways used both royal colour which is black and gold, this promotes the
luxurious and royal image of the brand wants to sell and wants to be perceived as.
Moreover the colours can be adaptable to everything and anything.
The sitting arrangement made on board, like the sleeping seats in Diamond First
Class and the Green Seats in Pearl Business Class with each seat having an
adjustable reading lamp.
Terminal Three at Abu Dhabi International Airport, its spacious and convient
layout, the amenities found like a free internet zone so that people can mail their
loved on just before going aboard.
From above it is visible that Etihad Airways Marketing team has taken a lot of
effort and to create a positive vibe for its customers through tangible assets so as to
add to the whole experience gained by the passenger while travelling Etihad
Airways.
(Refer to Appendix, Page 22, Diagrams of Etihad Airways Physical Evidence
Strategy)
Promotions Strategy
Promotion is a tool through which an organization can induse the ability and desire
of purchase in to a potential customer. The following are the promotional strategies
that Etihad Airway used to attract customer.
1. Sales Promotion Etihad Airways has various types of sales promotion. They
have coupons and bundle offers which they give out the customers. More over
Etihad Webpage offers the cheapest air fares as compared to need sales agent. Thus
they promote direct promotion to airline and not to the general sales agents. Etihad
Airway also promotes itself through participating in various sweepstakes.

2. Direct Marketing Etihad Airways uses it employees and staff to directly

market the airline and it products and service through word of mouth
communication Etihad Airways takes part in various travel and tourism events and
exhibitions.
3. Sponsorship Etihad Airways brands its name by promoting sport festivals like
the F1 Etihad Airways Abu Dhabi Grand Prix and the Ferrari F1 team. The
company also sponsors the Abu Dhabi Golf Championship and Gaelic Athletic
Association (GAA). Etihad sponsors a UK Premiership rugby team know as
Harlequins RFC and Manchester City FC. (Etihad Airways, 2010)
4. Advertising Etihad Airways advertises on all media channels form, television
to radio to newspapers to magazines and travel magazines. Presently Etihad
Airways does 20% Television adverts, 20% print ads, out of which 10% are in
leading newspapers as Gulf News and Khaleej Times and 10% are in travel
magazine. Etihad does 10% radio adverts.
5. Prints Promotions Etihad does a lot of print promotion. The airlines develop a
lot of brochures and posters which they give the customer directly or indirectly
through general Sales Agents. The company advertises these posters also in house
in the airline main office and branches. One can see various types of thes poster
also at Abu Dhabi International Airport Terminal one and three.
6. Gifts Etihad give gives to it general sales agent, managers and also loyal
customer. These gifts are branded with the Etihad Airways Brand,

VI. Conclusion:
Etihad has proved time and again that with its out of the box attitude, backed by
lavish Arabian hospitality it has earned a place for itself in the minds of customers.
Customers who have experienced this service would vouch for the standards set by
the airlines. The constant up gradation employed by Etihad in providing service by
acquiring new aircrafts, ensure that their planes will be in the air for the majority of
the time than on ground for maintenance. Another aspect of Etihad that has to be
noted is its strategy to expand vertically into the airlines industry by venturing into

the air cargo industry, which is both lucrative and profitable. This will only ensure
that the airlines will prove to be a dominant player in the aviation industry over the
long run.
Another key aspect that has to be noted is that Etihad achieved all this within a
span of less than ten years whereas other major players are still struggling to in
spite of being in the market much longer. The recent partnership with V Australia
will see the airline controlling a chunk of the domestic market as well. This is a
very lucrative area as the present players are not very reliable and quite expensive.
If Etihad enters this segment with its present marketing strategy of providing
luxury at an affordable price, it is sure to repeat its success that it had in the
international market.
Etihad currently employs the strategy of having fewer destinations than its
competitors. This has enabled the airline to provide better service for the ones that
they have than run off in search of newer destinations. This concept of quality over
quantity is of great concern in the airline industry, particularly if the airline wants
to be perceived as a luxury brand and not a cheap low cost, no frills airline.
Potential customers can be gained only if they could be convinced that they are
getting more bangs for their buck. The perception of customers towards quality has
drastically risen over the years and many wouldnt mind paying the extra money if
they are convinced they are getting what they paid for. Etihad knows this and
strategically places their products and services to attract these customers. They
know that the airline industry is a delicate one and word of mouth advertising is
very crucial for their survival. This is the reason they truly focus on their customers
and make sure that they feel satisfied and make it a point to come back after being
on one of their flights.

As Abu-Dhabi is turning into an international tourist destination and business

centre for the Middle East, Etihad being operated from here will be strategically
positioned and they stand to gain a potential share of the action. Hence upholding
the concept of Abu Dhabi to the world is very crucial for their marketing strategy.
Another concept that has to be highlighted is the different classes that categorise
the service provided by the airline. This ranges from the Diamond First class to
Pearl Business and the Coral Economy. This ensures that the airline will be able to
cater to the needs of the rich as well as the average market. Even though this
differentiation is there the level of service provided is very much the same and a
passenger travelling on coral economy would feel that they received a service that
was parallel to or even better than the service offered by business classes of similar
carriers. This plus point of Etihad to convince their customers of their superior
service is what drives them forward.
To conclude it can be safely said that if Etihad continues to provide this sort of
superior service and follows the low price penetration strategy it can enter more
markets and repeat its success. The airline has proved that it is able to retain its
customers and that their customers recommend the carrier to others have worked in
the advantage of Etihad. The carrier has to build on this brand loyalty and continue
to provide better and newer services and gradually add more destinations and grow
at the steady pace. This will see the airline reaching a top position and turning out
to be one of the most preferred ones in the aviation industry
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Etihad
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