Introduction and Objectives
When any organization plans to offer any new product and service in the market, it needs to develop a marketing plan. This marketing plan of the company includes all the important aspects which may affect the business growth and success of that company. This report includes the marketing plan for Oman Air Organization that is offering a new baggage offer in the holy month of Ramadan. Oman Air is the flagship carrier of Sultanate of Oman and it is operating its operations as national airline of Oman. Based on the grounds of Muscat International Airport, it offers its scheduled international and local passenger services, charter flights and regional sir taxi.
Established in the year 1993, this airline has experienced a significant growth and played an important role in developing Muscat as a traffic hub in the Middle East. In addition to this, it supports the industrial, tourism and commercial sectors also (Oman Air, 2018). In May 2017, the company has offered a new baggage offer in the month of Ramada so that it can increase the passenger traffic. This report includes the marketing plan of Oman Air for next five years. It includes external and situational analysis of this airline (Muscat Daily, 2017). Furthermore, it describes the marketing objectives for the plan along with marketing strategy recommendations. At the end, it draws a budget for each of its marketing mix strategy in the airline industry.
Current market and company situational analysis
Current market analysis and situational analysis of Oman Air will assist in evaluating different external and internal factors which affect the growth and business of airline. To analyse the competition, Porter’s five forces analysis is conducted for Oman Air. In addition to this, SWOT analysis is conducted to discuss internal and external factors of the organization (Belobaba, Odoni and Barnhart, 2015). Different analyses of Oman Air are given below:
Porter’s Five Forces Analysis
Industry Rivalry (High)
The competition threat is high in Oman airline industry as there are various players which are offering airline services to targeted audiences. Some of the major competitors of Oman Air are like Qatar Airways, Gulf Air, Etihad Airways, Emirates, Airarabia etc. All the airlines in the region are offering similar services so competition is becoming fierce. There are various airlines which are offering airline services on low cost fare. This is the reason that Oman Air has expanded its services by proving premium flight experience. In addition to this, it provides a new baggage offer in the holy month of Ramadan (E. Dobbs, 2014). Under this offer, the travellers will be able to travel with 2 bags weighing up to 30 kg in total for no extra charges. It will assist Oman Air to overcome the competitive pressure in the country.
Bargaining power of buyers (Moderate)
Bargaining power of buyers is strong for Oman Air as there is a similarity in the services of all the airlines and switching cost is very low in this industry. But Oman Air can attract more customers as it offers luxury airline services at affordable prices. The economic classes in Oman Air’s flights provide various facilities like comfortable leg and head rests with the generous elbow and leg room. It can affect the bargaining power of buyers as Oman Air is making innovation in its airline services like baggage offer.
Bargaining power of suppliers
There are very few suppliers in the market so suppliers have high bargaining power. For Oman Air, major suppliers are like fuel supplier, merchandise suppliers or food suppliers. Apart from this, there are only two aircraft components suppliers i.e. Boeing and Airbus. Oman Air is using airbus model only that increases its bargaining power (Homsombat, Lei and Fu, 2014). If the airline plans to shift to another supplier i.e. Boeing then it will need higher switching cost. This cost will be related to training and development of employees.
Threats of new entrants (Moderate)
Threat of new entrants is moderate for Oman Air as start-up cost of airline business is higher than other businesses. This is the major entry barrier for competitor as there will be need of high capital like establishment of headquarters, hiring or buying aircraft, hiring of pilot and other staffs. However, new entrants with low cost fare are affecting the business and revenues of Oman Air (Kleymann, and Serist?, 2017). The new entrants need to comply with various rules and regulations in Oman airline sector.
Threats of substitutes (High)
In the airline industry, the threat of substitutes is very strong as people think that it is expensive to travel by air. So, middle class and lower class people prefer to travel by rail or road transport. But these alternatives are very time consuming. Considering this factor, higher income people prefer to travel by air. However, Oman Air is offering luxury travelling services on affordable prices so that all people groups can afford travelling by air.Consumer Behaviour
Oman Air is one of the most popular airlines in Oman. It offers its in-flight services through various domestic and international flights. Oman Air has maintained its brand image by offering luxurious services on reasonable costs. The interiors of outstanding aircraft of Oman Air include first class mini suite that offer its first class travellers with the direct aisle access. This airline is committed to provide confortable, quality and seamless travelling experience to the passengers. It has affected the consumer behaviour positively (Forgas, et al, 2010).
Now, the company has introduced new baggage offer in the month of Ramadan that will definitely has positive impact on customers. In addition to this, nowadays people are becoming very concerned towards environment and natural resource. Considering this concern of customers, Oman Air has maintained a record of saving environment by reducing the emissions. It is possible due to its fleet. Moreover, the organization also provides various exclusive customer services (Hanssens, et al, 2014). These services are like boarding, baggage handling and personal valet at airport. In this way, the organization is offering its services considering the changing needs and demands of passengers towards airlines. This new effort of company will have positive impact on the customer behaviour in the country.
SWOT analysis is a type of situational analysis that includes both external and internal factors which may have both positive and negative impact on growth of company. SWOT analysis of Oman Air is given below:
Oman Air is a national flagship carrier of Oman that offer premium flight services on affordable prices. One of the major strengths of Oman Air is that it has direct flights to Middle East, Europe, Africa, Asia and India. This extensive network of the organization assists this airline to entice more tourists, corporate travellers and medical tourists. The company is making focus on the fuel prices that directly impacts the cost per flight. Oman Air is able to avoid the extra expenses by the use of more fuel efficient crafts. This airline has various routes which are especially designed for trade and marketing. This new offer of baggage is also one of greatest strengths of Oman Air.
Being a small organization, Oman Air is confronting lot of competition from other large airlines in United Arab Emirates. The flights of Air Oman fly to 47 destinations, out of which only 4 destinations are from Europe (Kipley & Jewe, 2015). This airline loses lot of its business due to lack of connectivity with different European sectors like Amsterdam, Belgium and America. It is facing issues due to the fact that cost of operations is high in Muscat.
Oman Air won various awards from last three years like best Middle East airline, best business class seat award, economy service award etc. These achievements can be used by Oman Air to attain an increased customer base by effective advertising and promotion. It will assist the organization in attaining effective brand image and bringing more customers in next five years (Jarach, 2017). Additionally, it can expand its operations in more nations and introduce new airbuses for longer and shorter routes. After the introduction of this new baggage offer, it will be able to increase the number of passengers for Oman Air. In the peak season, it can close the low cost fare ticket and provide only high cost tickets. It will increase the revenues and sales of airline in next five years.
One of the biggest threats for Oman Air is intense competition from large and established players in UAE airline industry. These players are Qatar Airways, Gulf Air, Etihad Airways, Emirates, Airarabia. Low cost airlines are posing major threat to Oman Air. Increased prices of fuel have threatened Oman Air and it is affecting this airline due to its big fleet.
In this way, Oman Air has various strengths and opportunities through which it can overcome its weaknesses and threats. By providing this new offer, Oman Air can be able to resolve different issues.
The above situational analysis of Oman Air indicates that this airline is targeting the travellers considering different segmentation characteristics like demographic, geographic, psychographic and behavioral. The target market of Oman Air is stated below:
Under demographic segmentation, Oman Air is targeting the customers from different locations like Bahrain, Dubai, Riyadh, and Abu Dhabi, Damman, Tehran, Kuwait and people from the gulf region. By expanding its operations, it can target the customers in more regions as well.
Under this type of segmentation, Oman Air is targeting the passengers based on their socio-economic characteristics. In this, it is offer its airline services to both upper and medium classes of people. Now, it can target the people from lower social class by offering low-cost flights and new baggage offer in the month of Ramadan (Kachaner, Lindgardt and Michael, 2011).
In this type of segmentation, Oman Air is focusing on the age group and income of people. Currently, the airline focuses on the age group of 20 to 40 year olds who have middle and higher income capacity. With the introduction of new baggage offer, it can target 20 to 60 year old people as they travel to Oman for holy purpose in Ramadan month.
In this way, Oman Air can target lower income level people as its new targeted audiences as it has introduced new offers and low cost operations.
Marketing Plan Objectives (SMART)
For next timeframe of five years, Oman Air will establish some marketing objectives which are stated below:
- To become the airline of first choice for travellers
- To enhance the revenues by 20% and reduce the costs.
- To become a safer airline to win the trust of passengers
- To gain a significant market growth in next five years.
- To give contribution to the development of Sultanate of Oman.
The marketing objectives of Oman Air are specific as they will lead the organization to increase in the number of passengers. It will focus on the people who travel to UAE in the month of Ramadan. It will assist the organization in attracting more travellers towards this airline (Rahmani, Emamisaleh, and Yadegari, 2015).
The objectives of Oman Air can be measured by looking at the passenger traffic at Oman Air flights and Muscat International Airport. It will consider the number of increased travellers in the flights of Oman Air.
For Oman Air, there is nothing that cannot be achieved. In the future, the company will make every effort to attain these objectives (Hitt, Ireland & Hoskisson, 2009). Oman Air has already started its efforts on this by introducing new offer on baggage weight.
The objectives set by Oman Air are really relevant to its operations. By targeting the lower income people, the company will be able to increase its customer base and revenues as well in next five years.
This airline will make an action plan that will include all the required actions and timeframe for the activities. The company will try to attain its objectives in next timeframe of 5 years.
Marketing Mix Strategy RecommendationsProduct
Oman Air is offering airline and in-flight services to fulfill the needs of all the classes of travellers. As mentioned above, company is offering luxury services to people as its economic class seat includes leg and head rests, leg and elbow room, entertainment system, audio and video screens and satellite TV (Pearson and Merkert, 2014). In the future, the company should offer the low cost flights for the people who cannot afford its luxury services. It should offer the best quality services by targeting the low to medium income level people.Price
Price is one of the important components of marketing plan. Considering different groups, the organization should offer different packages for different income groups. The company should continue with its new baggage offer in which guests in economic classes are able to travel with two bags of 30 kg in total for no additional charges (Fu, et al, 2015). After Ramadan, this offer will be continued like people will be able to carry luggage of 30 kg for a nominal fee. It should offer low-fare operations with additional facilities. Looking at the competition in the market, it should focus on pricing strategy.Place
Oman Air should develop an extensive distribution network so a large population can approach its services easily. It is selling its services in different location of Oman and UAE. Via its flights, the passengers are travelling in or outside the country. The tickets of airlines should be available online so that people can book easily (O'Connell and Williams, 2016).Promotion
Promotion is the most significant part of marketing mix strategies through which company can advertise and communicate with the customers. Oman Air should focus on this strategy as it has less brand presence. The organization should use different media for promotion like social media, print media, television, hoardings etc. In addition to this, it can use effective slogan to promote its air services among customers (Li, and Kannan, 2014). These promotional activities will improve the access and usability of the services of Oman Air.
Evaluation and Control
After the implementation of marketing strategies and marketing plan, the team of Oman Air will monitor the marketing plan for next five years. It will evaluate the effectiveness of marketing plan in the process. For Oman Air, it can be analyzed by considering the number of passengers and their satisfaction. Oman Air will analyze the customer satisfaction considering the social media enquiry, number of tickets booked and repeat intention of travellers for Oman Air. The major key performance indicators at Oman Air are number of passengers, sales, revenues, repeat intention, and occupancy rate etc. Looking at these KPI’s, the airline can analyze the effectiveness of its marketing plan (Hussain, 2016).
The budget for each marketing strategy is designed below. This budget includes costing for all the marketing strategies by doing a research.
Marketing Mix strategies
The company will implement its marketing plan by spending the above cost and expenses on different marketing strategies (Shaw, 2016).
From the above analysis, it can be concluded that Oman Air is a national carrier of Oman. The company has huge support of Government of Oman. The organization is proving new and profitable offers to the customers. The report includes the marketing plan for Oman Air in next 5 years. The external analysis of this airline shows that company is facing intense competition from well-established players. So, it needs to enhance its brand image by the use of effective promotional and pricing strategy. It needs to become more innovative in offering the airline services to the mass population of Oman and from other nations.
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