The late 1940s marks the beginning of growth of Singapore Airlines that was a result of joint venture between the Malaysian government and businesspersons in Singapore. According to Singapore Airlines (2011), “the partnership between Malaysia and Singapore in the airline ended in divorce in 1972 and Singapore established Singapore Airlines.” Whereas the growth and expansion of Singapore Airlines are attributed to effective utilization of influential business performance factors, this research paper seeks to examine how pricing, distribution, and revenue management have influenced the performance of the airline. This research also seeks to examine how these and other factors can be used to improve Singapore Airlines’ performance into the future.
The pricing strategy is an important attribute and should ideally be focused on the pursuit of a strategy that is based on customers’ perception of value. As has been noted in both academic and empirical literature, majority of organizations are faced with the problems of finding the right blends between the attributes of products quality, design, features, costs and prices. High levels of competition within the airline industry have made effective pricing a real challenge to most airline companies. However, Singapore Airlines adopts a variety of onboard experience that caters for all levels of clients. Comprising of suite, first class, business class, and economy class, the pricing strategy within Singapore Airline aims at achieving the greatest value out of a service. As noted by Keller (2000), many managers are usually averse to how price can and should relate to what customers think of a product and therefore either charge too much or too little for a product.
Singapore Airlines adopts a comparable pricing strategy that takes into account a number of factors in the market. In setting the price, the company takes into account pricing strategy of skim and penetration prices. These prices are set in consideration of several factors in the market such as place, targeted customers, and the quality of service.
Product or service placement remains of the most successful factors for companies operating under competitive environments. In fact, according to Kotler and Armstrong (2007), “the key to succeeding in business is organized distribution channel.” Singapore Airlines has immensely benefited an efficient distribution channel that takes a service closer to the people. According to Roll (2010), “Singapore Airlines operates passengers’ services to more than sixty cities around the world while passengers within Asia can connect to over 30 cities by SilkAir, a regional wing of Singapore Airlines.”
Efficient management of revenues calls for maximization of revenue levels, allocation of revenue in areas that translate to highest returns on investments, and minimizing risks in revenue. Singapore Airlines maximizes revenue management by product differentiation because of competitors from the Asia region. Singapore Airline’s main objective is to achieve a global recognition as the airline of choice. The push for the achievement of this objective necessitates the adoption a number of business performance factors aimed at improving on the bottom-line. One aspects of Singapore Airlines success lies behind strategic marketing.
Marketing and Positioning
One of the marketing activities in Singapore Airline is doing business differently. As mentioned above, from the onset, the firm aspires to be different from other airlines. This is depicted in the firm’s reluctance to implement its auditors’ proposal to institute a non-executive board of directors. On the other hand, the integration the fluid strategy process is effective as it saves on time involved in making critical operation decisions. Despite the simplicity of the strategy, the airline takes keen interest because its success lies in comprehensive and detailed analysis of grave issues. The positioning strategy that is vital for Singapore Airline is their focus on small issues and detailed analysis of the issues. Most companies adopt the classical business school of thought that concentrates on the bigger picture envisaged by senior managers.
According to Kotler, et al., there are myriad ways of identifying competitive advantages, one of which is personnel differentiation. “Companies can gain a strong competitive advantage by hiring and training better people than their competitors,” (Kotler, 2010, p. 286). This process requires careful selection of customer-contact followed by effective training of recruited staffs. Employed staffs ought to perform their duty at the best of their knowledge paying attention to accuracy, efficiency, and quick response to matters arising from operational activities.
The case of Singapore Airline presents a real life application of success nature of marketing theories studied within institutions’ lecture halls. Strategic application of influential performance factors in business such as marketing, positioning, effective revenue management, pricing, and distribution are relevant success determinate factors in today’s competitive market environment as visualized in the discussion above. Singapore Airlines has strong market competitiveness due to establishment of brand operations that are popular with its target group. However, the management of the airline believes in point of difference as opposed to adoption of point of parity for triumph. Singapore Airlines believe that for a successful and sustainable business operation, things must be done in complete uniqueness as compared with other players in the industry.
Keller, K. L. 2000. “The Brand Report Card,” HBS, 147-157.
Kotler, P and Amstrong, P, 2007, Principles of Marketing. John Wiley and Sons.
Kotler, P., Brown, L. & Burton, S., 2010. Marketing, 8th Ed. Pearson Australia, Frenchs Forest.
Roll, M. 2010. Singapore Airlines – An Excellent Asian Brand. Web.
Singapore Airlines. 2011. About us. Web.