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Case Study - Marketing Individual Assignment

Irwandi Merki Gunawan


The air travel industry has been developed successfully in many countries. The improvement
of the airline industry is supported by the aircraft industry such as Airbus and Boeing. The Airbus and
Boeing are competing to produce a new and better aircraft. Beside that, the travel airline industry is
freshly booming in Asia that affected by the budget airline provide an economically airfare to travel
(Kotler, Adam, Denize and Armstrong, 2009). The budget airline is keep pressing the bigger carriers
and taking their customers. In order to compete with the budget airline, the bigger carries is trying
to increase the perceive value, customer’s satisfaction and raise the route of travel.

According to Armstrong and Kotler (2011), microenvironment is a force that closes to the
organisation and affects the service to the customers. The relationship with the suppliers, company,
competitors, marketing intermediaries and various publics will build a success in the marketing. In
relation to the case study of air travel industry, the company is an organisation which is divided into
many departments. An example of air travel company is Singapore Airlines. Apart from the company
itself, there are many competitors in the same industry such as Emirates and Qantas. The competitor
is other company with same services in an industry. Based on case study, the competitors are trying
to compete with the Singapore Airline to increase their profit by providing the new aircraft as the
Singapore Airline introduce the new aircraft, the A380 carried (Kotler et al., 2009). In order to
compete with their competitors, a company must provide greater value and satisfaction. Beside they
are competitors, they supported by the supplier, which is Airbus or Boeing. The supplier is a link in
the organisation to deliver the resources (Kotler and Keller, 2009). The suppliers provide resources
that the organisation needs to produce goods or provide services. The company also need other
organisation to promote their product or services to the final buyer. Its call marketing
intermediaries, marketing intermediaries include resellers and agencies (Armstrong and Kotler,
2011). The customer is an essence of every company. The company must know about the customer
want and needs. The company must keep their customer satisfied. When the customers not satisfy
with the good or services, it will cause a loss of customers. Hence, the company must make keep
customers glad with the goods or services and make the customer become royal customer to their
company. Others factor in the microenvironment is the public. Public is a group that has a possible
concern or impact to the organisation. Public also help the company to market their product or
services. For instance, Singapore Airline introduces the A380 in the publicity (Kotler et al., 2009).

Beside the microenvironment, the organisation also related to the macroenvironment.

According to Armstrong and Kotler (2011), macroenvironment is the bigger community force that
affects the whole microenvironment which contains a political, economic, demographic and
technological. Based on case study, the demographic factor is the study of human population in
terms of age, gender, occupation and other statistics. The changing of the terms of human
population is giving an impact to the company. As an example, by the different of ages, children,
young people and adult, its affect the demand of people want to travel (Armstrong and Kotler,
2011). The company should think about the different level of ages which level like the goods or
services and gives the best product or service for it. However, the economic also affect the
customer’s expenditure. The economics of people depends on their income to spend to the goods or
services. For instance, when the people achieve low revenue, they will not travel by high cost airline
but by using budget airline, hence it affecting to the air travel industry. The industry must adapt
which area must be focus on high quality and low quality by the economic (Kralj and Markic, 2007).
The other factor is the political factor, includes the laws that the government force or limiting a
situation to the society or the organisation. For example, The Singapore Airline has been continually
pressing the Australian government for the access a flight to the Australia, as an example of the
political factor. Lastly, the technological factor is the significant forces that affect the changing of the
new technology, product or services (Lancaster and Reynolds, 2001). It is important to the
companies to improve the technology for long term or short term to compete with the competitors
in the market share. To the relation to case study, it is important for the travel airlines industry to
keep the technology of their aircraft up to date. For example, the technology that Singapore Airlines
wants to develop is the aircraft which can carry more fuel and have the cleanest fuel burn.

Based on case study, some factors that influence the increase in air travel to Asia are budget
airline, the competitor of air travel industry, extended travel route to more country and the
development of aircraft technology (Kotler et al., 2009). Firstly, the main factor of the increase in air
travel to Asia is budget airline because the budget airline attracts people with its cheap airfares and
dominating the airline industry in Asia. For instance, the Tiger Airlines introduce the single digit of
airfares of $9.95. Through the cheap airfares provided by budget airlines, the competitors such as
Virgin Blue, Jetstar and Qantas are considering providing the cheap airfares like the existing budget
airlines or increase the quality and services of their aircraft (Kotler et al., 2009). By increasing the
quality and services of their aircraft, they think it can compete with the budget airline (O’Connell and
Williams, 2005). The better and the comfortable of aircraft may be able to attract people to travel to
Asia from far Asia. Moreover, the by providing the cheap airfares like budget airline will cause a loss
of their company. The development of aircraft technology also can attract people to travel to Asia.
The development of aircraft technology is improving the comfortable and facilities of the aircraft. For
example, the aircraft built the television and also a larger space to sit. By the improvement of the
aircraft, it can make people comfort with long journey travelling. The extended travel route to more
country is also important to many airlines industry to attract more people to travel directly from one
country to other country.

In the air travel industry, there are many choice of travel between high class airline and
budget airlines. Some people are likely to choose the high class airline compared with the budget
airline. They think that the high class airline is comfortable and they feel happier than the low cost
airline. Especially for the quality of the aircraft, they feel comfortable with it, it experience less
turbulence than the low cost airline and also more space for baggage in the cabin (Kotler et al.,
2009). Moreover, the foods and drinks inside the aircraft make some people want to travel with the
same air travel industry. Furthermore, many people also comparing the safety of the aircraft. They
think that the high class airplane is safer to use than the airplane in low budget airline. The space of
seat is also the reason why many people prefer to fly with the high class airlines (Kotler et al., 2009).
Many people prefer to pick the larger space which makes them more comfortable. In addition, the
services are the biggest priority of the industry to keep customer loyal to the organisation. Hence,
the customer will keep using the high class airline. On the other hand, the budget airline is also
preferred by most people in Asia to travel. Most people think the budget airline is cheaper for travel
to their destination. They prefer to spend their money for other things rather than spending it for
travelling with high class airline. Some people also think that they did not need any baggage or foods
and drinks in the aircraft. They can reduce the cost by not paying for baggage, foods and drinks. In
addition, they just care about arriving to their destination.

In conclusion, the airlines industry is influenced by microenvironment and

macroenvironment factors. The macroenvironment includes the entire microenvironment and also
the development of the company. The booming of air travel in Asia also persuades other air travel
industries to compete by increasing the customers’ per ceived value and satisfaction. This value and
satisfaction is important because it leads to the understanding about the consumers’ behaviour
whether it can create more customer or not for the company. Therefore, the company must
understand about the consumer’s behaviour, environments, and customer’s value and satisfaction
as it influence the company’s future.
Armstrong, G., & Kotler, P. (2011). Marketing: an introduction (10th ed.). New Jersey, NJ:
Prentice Hall.

Kotler, P., Adam, S., Denize, S., & Armstrong, G. (2009). Principles of Marketing (4th ed.).
New South Wales, NSW: Pearson Education Australia.

Kotler, P., & Keller, K.L. (2009). Marketing Management (13th ed.). New Jersey, NJ: Pearson
Prentice Hall.

Kralj, D., & Markic, M. (2007). Global Marketing and Environmental Excellence. International
Journal of Energy and Environment, 1(2), 155-163.

Lancaster, G., & Reynolds, P. (2001). The Art of Marketing: Introduction to marketing. New
Delhi: Crest Publishing House.

O’Connell, JF. & Williams, G. (2005). Passenger’s Perception of Low Cost Airlines and Full
Service Carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines’. Journal of
Air Transport Management, 11(1), 258-272.

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