Icfai University, Dehradun

Course Code: SLMM604

Course Name: Services Marketing

Faculty Name: Shafiulla

Date: July 06, 2010

Topic of the Assignment

Services Marketing Strategies of Singapore Airlines

Srikanth Kumar. T

Student Signature Faculty Signature

Student Name Srikanth Kumar. T

IUD Number 0901202411

IBS Number 09BS0002411

Section Services Marketing

Assignment Type

Please tick []

appropriate one

Field based Non-Field based

[Based on personal experience

and reflection]

Objective

The primary objective of the study is to evaluate the effectiveness of Services

Marketing at Singapore Airlines.

Introduction

SIA is one of the two offshoots of the Malayan Airways, an airline company

formed in 1947 by British interests when both Malaya and Singapore were under

British rule. When Malaysia was formed in 1963 the airline became known as

Malaysian Airways. In 1966, the company’s name was changed to Malaysia-

Singapore Airlines (MSA), only to cease operation in 1972 when both

governments aspired to have their own airlines, bearing their country’s name. The

Malaysian Airlines System (MAS) is the spin-off on the Malaysian side while SIA

goes to Singapore.

Singapore International Airlines can only operate international flights, Singapore

being an island city at the tip of the Malaysian peninsula; yet the company has

grown in stature to become one of the most successful airlines globally. This is

judged from the various industry awards it has garnered since its inception in 1972.

Now, SIA is the world's second-biggest airline by market capitalization (common

stocks valued at USD 6.8 billion) after U.S.’s Southwest Airlines. Its currents

assets are valued at USD 9.2b and current liabilities stands at only USD 2b, which

gives a current ratio of 4.58, way above the rule of thumb standard of 2.0.

It has a workforce of 29,734 employees drawn from all over the world. Its major

competitors are Cathy Pacific, Japan Airlines, and Malaysian Airlines.

Core Competencies of Singapore Airlines

SIA’s core competencies include the skills of its top management at planning

marketing strategies and the interpersonal skills of its flight attendants. Making

flights as comfortable as possible is what they do best.

Core Services of Singapore Airlines

The core service of Singapore Airlines is to air travel and transportation of

customers and goods services to various destinations.

Supplementary Services of Singapore Airlines

Supplementary Service offerings are what differentiate Singapore Airlines from its

competitors. These help in

- facilitating use of the core service

- Enhancing the value and appeal of the core service.

1. Singapore airlines were the first to introduce small 8‖ television screen for every

passenger.

2. Singapore Airlines announced the first Singapore Airlines Suites which is

available on the Airbus A380 which provide the customers with sophisticated

seating facilities and other amenities.

3. Singapore Airlines offers World Gourmet Cuisine in all three classes. Regional

dishes are often served on their respective flights, such as the Kyo-Kaiseki,Shi

Quan Shi Mei, and Shahi Thali meals available for first class passengers on flights

to Japan, China and India, respectively.

4. SIA has also introduced a Popular Local Fare culinary programme offering

local favorites to passengers in all classes flying from selected major destinations.

5, Business and first class passengers may also choose to use the "Book the Cook"

service on some flights, where specific dishes may be selected in advance from a

more extensive menu.

6. Singapore Airlines also provide its customers with the unique SMS contact

service where the Singapore Airlines club members with Singapore mobile

numbers can enjoy the convenience of being able to directly get in touch with a

customer service representative from anywhere in the world, simply by sending a

Short Message Service (SMS) text message.

7. Passengers may check-in between two to 48 hours prior to flight departure. This

may be done over the counter or at the lounge within the airport

8. Alternatively, they may check-in through the Internet or by short message

service. Online printing of boarding passes is available through Internet check-in.

Passengers on short trips may also check-in on their return flight upon departure

from the city of origin.

9. Frequent Flyer Programs of Singapore Airlines

KrisFlyer

Miles are earned and redeemed on Singapore Airlines' own services as well as with

Krisflyer partners. Partners include all Star Alliance members, SilkAir, Virgin

Atlantic, Delta Air Lines, and numerous hotel chains and car-hire companies.

KrisFlyer is divided into KrisFlyer, KrisFlyer Elite Silver and KrisFlyer Elite Gold,

which correspond to Star Alliance Silver and Gold, respectively. Elite Silver and

Elite Gold status is given to passengers who have accrued 25,000 and 50,000 miles

(80,000 km), respectively, within a 12-month period. The 12-month period is

predefined according to when you initially applied for Krisflyer membership, so

traveling 25,000 miles (40,000 km) over a 12 month period may not qualify for

Silver status unless it corresponds with the 12 month period assigned to you by

Singapore Airlines. Singapore Airlines flights in booking classes V, Q, G, N and T

(group and promotional fares) and SilkAir flights in booking classes W and L earn

no miles.

The PPS Club

Priority Passenger Service (PPS) is for passengers who have

accumulated S$25,000 worth of PPS Value within a year. PPS Value is accrued

while flying Singapore Airlines Suites, First Class or Business Class on Singapore

Airlines, or Business Class on SilkAir. The PPS is divided into the PPS Club,

Solitaire PPS Club and the Solitaire PPS Club Life.

A member with PPS Club status will qualify for Solitaire PPS Club by

accumulating PPS Value of S$250,000 within five years. The Solitaire Life PPS

Club status was formerly given to members who accrued a total of 1,875,000 miles

(3,018,000 km) or 1,000 PPS sectors. Benefits are equal to Solitaire PPS Club

members but did not have re-qualification criteria. Singapore Airlines has since

ceased accepting new Solitaire Life PPS Club members.

All PPS members have priority check-in, baggage handling, guaranteed Economy

Class seats when wait-listed on Business and First Class and have access to the

business-class section of the Silver Kris Lounge. Solitaire PPS members and their

spouses also access First Class check-in and the First Class sections of Silver Kris

Lounge.

Flower of Service (Singapore Airlines)

Information:

To obtain full value from any good or service, customers need relevant

information.

Singapore Airlines provides information about their flight schedules, inflight

services etc to its customers in a timely and convenient way. Singaporeair.com the

website of Singapore Airlines provides all the information needed to its customers

and also provides information about various accommodation facilities available at

Singapore and also redirects them to their websites.

It also provides information about the loyalty programs and the points earned by its

members and provide them information about redeeming the points.

Order Taking:

Singapore Airlines provides the reservation service to its customers through its

website where they can book the tickets and also select any other extra

supplementary service like inflight food or entertainment while booking the tickets

without much effort and in a less time. As the customer involves in booking the

tickets the order would be mostly complete and accurate.

Once the ticket is booked the customer is provided with an e-ticket along with the

confirmation number which can be used by them while receiving the boarding

pass.

Billing:

Billing is common to almost all the services and they have to be accurate, legible,

and complete.

Singapore Airlines provides its customers with bills immediately after they book

the ticket and the customer can check the contents in the bill before they pay the

amount and if they notice any problem with the billing, the customer service

executives at the Singapore Airlines immediately rectify the problem.

Payment:

Singapore Airlines transactions are very simple and convenient; it makes their

customers pay the bills in a faster and easier way. They provide various payment

options to its customers where they can pay by using a credit card, debit card, cash,

or the frequent flyer program members can also redeem their points for paying

their bills.

Consultation:

When a customer wants to book a ticket Singapore Airlines provides its customers

with various options like first class, business class, economy etc and also gives

them options like selecting the flights on the basis of lowest fares or on the exact

dates etc. It also provides them with various options of food available inflight

where the customer can chose from the available choices.

Singapore Airlines members’ requirements are pre loaded in the Singapore airlines

server and when they try to book the tickets they are given some tailor made

options suitable to their needs.

Hospitality:

Singapore Airlines employees treat their customers as guests. They also offer

transport facilities to its customers to the airport and also provides shuttle services

for a one day trip in Singapore to its transit customers at free of cost. If a flight is

delayed then the customers are provided with a star hotel accommodation for free

if the service is delayed by more than 10 hours and for shorter delays customers

can relax in their lounges at the airports and are also provided with refreshments at

free of cost. Singapore Airlines also came up with a concept of arrival lounges

where the customers reaching the destinations early in the morning after a long

overnight journey where they can have their bath, breakfast and use free internet

services before catching the next flight to reach their final destination.

This provided them with a nice competitive advantage over the other airline

service provides.

Safe Keeping:

Customers prefer not to worry about their personal belongings that they bring with

them to the service site.

Singapore Airlines has an excellent track record of baggage transport, handling,

and storage of the baggage of its customers.

Exceptions:

In a service industry normally Customers appreciates some flexibility in the

services when they make special requests.

Singapore Airlines take various special requests from its customers in advance of

the service delivery like

Providing specially made food for the children on board

Medical assistance for customers

Special services for any disabled customers

Handling complaints immediately and providing them with possible solutions

Immediate assistance for the customers during emergency situations

Compensation for faulty service

Eg: On an SIA flight in 1996, a Chinese couple travelling in first-class with their

children and nanny had refused the food served. When asked, the man of the

family replied: ``We are just not used to these and would prefer a bowl of instant

noodles.'' Since then, every SIA flight carries a supply of instant noodles for those

customers who find in-flight cuisine not quite to their taste.

Extended Marketing Mix

McCarthy formulated the concept of 4Ps in 1975 – Product, Place, Promotion, and

Price. For many years these have been used as the principal foundation on which a

marketing plan is based. However with particular attention played to services

marketing in recent years Fifield and Gilligan in 1996 recognized three more Ps as

an integral part of marketing mix which extending the marketing mix. The 3Ps are

People, Process, and Physical Evidence.

It is the 7ps that we will use in analyzing the marketing mix of Singapore Airlines’

1. Product: features, quality, quantity.

2. Place: location

3. Price: Strategy, determinants, levels

4. Promotion: advertising, sales promotions, public relations

5. People: quantity, quality, training, promotion

6. Process: blueprinting, automation, control procedures

7. Physical Evidence: ambience, décor, cleanliness

Product:

Singapore airlines major product is air travel. The airline industry is a service that

satisfies customer needs for travelling. In the airline industry the customers can be

divided into two segments, business and leisure. While the airline industry started

out as a luxury item, business travel has changed this industry to a necessity.

Satisfying the customer needs today involves competitive rates, convenient

booking of flights and benefits with those flights. Airlines are now in the

commodity business as the public demands low-priced transportation.

Price:

Singapore Airlines follows the Value for Money pricing strategy. The prices for

the first class and business class are quite expensive and the pricing for the

economy class is affordable. This can also be termed as differential pricing strategy

as fares are different for different classes. The intention here is to charge the price

for the product and emphasize that it represents excellent value for money at this

price. This enables the airline to achieve good levels of profit on the basis of

established reputation. Singapore airlines also follow the low cost pricing strategy

for its Tiger Airways flights in order to woo the middle class customers by

providing air travel in low prices.

Promotion:

Singapore Airlines branding and promotional efforts mainly revolved around flight

crew. As Employees are the important assets for any service industry, Singapore

Airlines focused more of their promotions on focusing their employees in contrast

to most other airlines, who tend to emphasize on aircraft and services in general.

The Singapore Girl

The personalization of the Singapore Airlines brand can be found in the cabin crew

(male and female), where especially the flight stewardesses, commonly referred to

as Singapore Girls have become very well known. SIA engaged French haute-

couture designer Pierre Balmain at the inauguration of the airline in 1972. He

designed a special version of the Malay sarong kebaya as the uniform, which later

became one of the most recognized signatures of the airline—a designated and

visual part of the entire brand experience.

The Singapore Girl strategy turned out to be a very powerful idea and has become

a successful brand icon with an almost mythical status and aura around her. She

encapsulates Asian values and hospitality, and could be described as caring, warm,

gentle, elegant and serene.

Singapore Airlines has been as consistent in its communication vehicles as in its

brand strategy. The primary message ―Singapore Airlines—A Great Way to Fly‖

has been consistently conveyed in exclusive print media and also in selected TV-

commercials of very high production value to underline the quality aspirations of

the brand. All communication messages are featured through the iconic Singapore

Girl in different themes and settings.

When Singapore Airlines recently launched its comfortable Space Bed seats in

business class, it ran a 60-second commercial of a highly emotional and mythical

character to underline the aspiration of the brand and the Singapore Girl.

Interestingly, the airline chooses to focus on one aspect of the experiential brand

strategy (in-flight hospitality and warmth featured by the Singapore Girl) rather

than trying to communicate the entire brand benefits through its messages. Many

other brands fall into a dangerous trap when they try to communicate all at once.

Singapore has remained focused and consistent message for the last 32 years, a

great achievement for any brand.

The Singapore Girl has contributed immensely to the success of Singapore

Airlines’ brand strategy and its entire positioning around customer and service

excellence.

Place:

In Airlines industry place refers to the place where the services are provided. For

example Singapore Airlines sell their tickets through various travels agents and

also Customer can use the SST where they can book their tickets online sitting in

their homes or offices.

Singapore Airlines also provides Lounges to their customers in the airports where

the customers can wait before flight departures and they are provided with

pleasantries.

People:

All the human actors participating in the delivery of a service provide cues to the

customer regarding the nature of the service itself. How these people are dressed,

their personal appearance, and their attitudes and behaviors all influence the

customer’s perceptions of the service.

Singapore Airlines uses its people and its customers very effectively to

communicate its position. Employees are unionized, yet they are trained to have

fun, allowed to define what ―fun‖ means, and given authority to do what it takes to

make flights lighthearted and enjoyable.

People are hired at Singapore Airlines for their attitudes; technical skills can be and

are trained. And they are the most productive workforce in the airline industry.

Customers also are included in the atmosphere of fun, and many get into the act by

joking with the crew and each other and by flooding the airline with letters

expressing their satisfaction.

Process:

The Service delivery process of Singapore Airlines is very efficient, standardized,

and also makes the customers very much a part of the process, taking on their

roles willingly.

Customers can book the tickets in many ways; they can book through the travel

agents or book by themselves using the Singapore airlines internet booking service

or at the counters in the airport.

Customers are provided with the choosing the choice of their meal in flight and

which will be delivered at their seats.

Physical Evidence:

All the tangibles associated with Singapore Airlines further reinforce the market

position. Singapore Airlines operates a wide-body aircraft fleet from five aircraft

families: Airbus A330, Airbus A340, Airbus A380, Boeing 747 and Boeing 777. In

keeping with its policy of maintaining a young fleet, which stands at an average of

6 years 7 months as at 24 January 2010, it renews its fleet frequently.

Singapore Airline’s simple, easy-to- use website is yet another form of consistent,

tangible evidence that supports the airline’s strong positioning and reinforces its

image.

The consistent positioning using the services marketing mix reinforces the unique

image in the customer’s mind, giving Singapore International Airlines its high

value position, which has resulted in a huge and committed following of satisfied

customers and consistently increasing profits.

Internal Marketing:

Singapore Airlines knows the importance of its employees for providing better

service and satisfying their customers.

SIA is a large organization, with more than 28,000 staff located in cities and

subsidiaries throughout the world. People from different cultures must work

together to produce a seamless and positive customer experience. More than 25

countries are represented in the pilot pool alone.

To keep everyone on the same wavelength, SIA publishes a variety of department

newsletters and a monthly company-wide magazine. Regular dialogue sessions

between management and staff keep communications flowing.

SERVICES MARKETING TRIANGLE

COMPANY

Internal Marketing

Enabling Promises

PROVIDERS CUSTOMERS

External Marketing

Making Promises

Interactive Marketing

Keeping Promises

A "Staff Ideas in Action" scheme ensures that new suggestions are constantly put

forward for improvement. And semi-annual business meetings provide the forum

for evaluation of hard results in sales, markets, yields and customer satisfaction

levels.

Career Development: SIA staff is regularly appraised for performance, and

potential. High-flyers are identified early and given every opportunity to learn and

grow. Senior managers are uniquely well developed with frequent rotations

amongst top positions in the company. This leads to a management team with great

breadth and depth, with a shared understanding of "the big picture," with a

commitment to do what's best for the customers and the business, not just for one

or another department.

Compensation Package: Singapore Airline employees and cabin crew are provided

with best compensation packages and also they have lower working hours when

compared to their competitors. The employees are also provided with free

transportation facilities they are focused as the face of the company in the

promotional activities.

The effort done on internal marketing in the organization resulted in the staff

giving out their optimum best when it comes to delivering services.

Continuous Training: Training is not a "one time affair." SIA understands that

daily customer contact can be draining, and that customer expectations are on the

rise. To meet this challenge, four training centers within the company (Cabin

Crew, Flight Operations, Commercial and Management Development) offer a wide

range of inspiring and demanding educational programs. Whether in the classroom,

on the job, or through full scale simulations, SIA staff members are continually

motivated to upgrade and improve their performance.

Training is not just conducted during robust economic times. Even during the

downturns, SIA's investment in training goes on. This gives the airline a two-fold

advantage. First, it allows SIA to surge ahead in service quality when other carriers

may be cutting back. Second, it demonstrates to all staff that continuous learning

and improvement are essential principles for success, not just "nice to have"

additions.

External Marketing:

Whether the advertisement is about new destinations, new airplanes, new cuisine

on board or brand new seats and video services, the legendary "SIA Girl" is always

featured in the advertising layouts and copy. Why? Because the bottom line for

SIA is not the plane, the seat, the video or the destination. The bottom line is

delivering quality service, and the "SIA Girl" is the brand identity - the public

personification of that service.

Of course everyone knows it takes the entire SIA team to deliver excellent service,

but showing a picture of a smiling engineer, a competent pilot or a friendly

telephone reservations agent would not carry the same consistency in external

communications. The "SIA Girl" represents impeccable quality service. In the

airline's external communications, she is always there.

Singapore Airlines makes a concerted effort to stay in touch with customers

through in-flight surveys, customer focus groups and rapid reply to every

compliment or complaint they receive. SIA consolidates this input with other key

figures to create a quarterly "Service Performance Index" that is closely watched

throughout the airline.

Frequent flyers are especially well connected with special messages, offers and

publications sent regularly to members of the priority passenger "PPS Club". Very

frequent flyers achieve an elite "Solitaire" status, with a wide range of valuable

privileges, including most convenient check-in, additional baggage allowance,

priority seating and waitlist and more.

Conclusion

The last three years has seen a dramatic shift in the airline industry. There have

been major shakeouts and loose consolidation among premium, full-service players

and an expansion in the low-cost carrier market, as well as in the closely regulated

Asian airspace. Air travel has become a commodity and most major routes are

saturated with fierce competition. The low-cost carriers have significantly

influenced consumer behavior for cheap price bargains among leisure travelers and

increasingly among business travelers.

SIA has already jumped ahead, launching its own carrier for local and short-haul

routes, Tiger Airways, to stay at the forefront of competition. The aim is to avoid

dilution of the core premium brand, Singapore Airlines.

Singapore Airlines strongly embedded positioning and commitment to the delivery

of quality services to its customers has positioned it well to compete in the new

landscape. The challenge is to stay true to the brand and keep delivering on the

fairly high-cost promise of quality, innovation and service. This requires heavy,

on-going investments and healthy cash-flows which can only be achieved though a

continuous price-premium strategy and satisfactory passenger load factors. In other

words, customers’ perception of the price/value equation, their future buying

behavior (partly to be influenced by the low-cost carriers) and loyalty among other

factors are crucial for the future.

In most industries, there are always segments willing to pay for quality services.

Therefore, the question is not whether there are customers in the market, but rather

the ability for SIA to constantly nurture the Services quality promise, keep

innovating and capture the overall value of the brand in the minds of the

customers.

The strong brand equity of Singapore Airlines is one of the most valuable assets

for the company and its cash-rich balance sheet. Singapore Airlines is a leading

business case from Asia demonstrating the importance of strategic branding, and it

should serve as great inspiration for other Asian boardrooms trying to build and

manage their own brands.

Singapore Airlines is among the top companies globally that is truly able to control

the brand through every interaction and experience. SIA has become a hugely

rewarded innovator and industry leader: A great way to fly.