History and Background
The Emirates Group (Emirates) is a Dubai-based airline that offers local and international passenger and freight services to over 156 destinations globally (MarketLine 3). It consists of two firms: the Dubai National Air Transport Association (Dnata) and the Emirates Airlines. Its primary airport is the Dubai International Airport (DIA). Historically, the sheikdom’s ‘open skies’ program initiated in the 1950s saw the formation of Dnata in 1959 to reduce oil dependency and promote tourism (MarketLine 3). Initially, the organization functioned as a provider of support services and as a domestic representative of other carriers (mainly Gulf Air and British Airways) transiting through Dubai.
A drop in the number of Gulf Air flights to DIA in the 1980s led to the launch and incorporation of Emirates Airlines in 1985 through a government decree (Squalli 138). Dubai’s strategic location and status as a global business/tourist hub contributed to the airline’s rapid growth. The company got to profitability within the first nine months during which it transported over 250,000 passengers and 10,000 tons of cargo (Squalli 141). Over the years, the airline’s performance has been impressive, making it the fastest-growing carrier in the Gulf region. Its large fleet comprises 244 planes, including “two Boeing and 12 777Fs” for cargo and passenger transportation (MarketLine 4). Dnata is a leading airport service (freight and ramp) provider in the UAE. Emirates’ revenue for 2017 stood at AED 80,621million, which is about 93% of its earnings, making it the largest carrier in the Gulf Corporation Council (GCC) region (MarketLine 4).
Basic Principle and Marketing Concept
A fundamental concept underlying Emirates’ success is the integrated marketing communication (IMC) strategy used to promote its services to clients. IMC involves a variety of tools utilized to optimize communication effectiveness that results in a stronger brand position and competitive gains (Luxton et al. 38). Emirates uses advertisements, e-commerce, public relations, and sponsorships in its IMC approach. The basic principle of marketing implemented by the airline is the promotional element of the 4P’s mix.
Its promotional strategy includes company-owned systems, such as the Frequent Flyer Program used to maintain close relationships with customers through newsletters and e-mail messages (Emirates Group). Further, it runs an e-commerce platform that allows travelers to e-check-in and e-ticketing. The airline leverages on its in-flight entertainment, primary airport (DIA), lounges in multiple destinations, and chauffeured cab services to promote its brand image through commercials (Emirates Group). Other owned marketing tools that Emirates uses include posters, booklets, and holiday shops for travelers. Further, campaigns such as ‘Hello Tomorrow’ depict the brand as unique and special.
In addition, the airline uses social media tools to market its brand. It uploads videos and pictures regularly on its active Facebook page and Twitter account to promote its services and respond to customer queries. The social sites offer a low-cost promotional strategy for the Emirates Airlines and allow travelers to share their in-flight experiences with others. The airline also uses paid promotional tools. They include sponsorships, such as the FIFA World Cup and Formula 1 (Emirates Group). Another marketing strategy is celebrity endorsement from sports personalities, e.g., Pele.
Consumer or Business Market
Emirates primarily serves the consumer market through its diversified business. Airline services (passenger and freight), in-flight catering, and a chauffeur are available to business-class and first-class travelers. It owns a fleet of 244 planes taking passengers to 156 locations in 83 nations globally (MarketLine 3). The airline also serves the business market. Emirates’ Dnata provides airport services to other carriers. It offers ground handling and cargo management services to other airlines and their passengers (MarketLine 4). It specializes in domestic and international air transport, hospitality, IT infrastructure, and freight support, among other services.
Market Segment and Target Market
Emirates’ business comprises three segments: “Airline, Catering Operations, and Other” (MarketLine 4). Each of these divisions has specific operations. The Airline segment offers passenger and freight services to local and international markets. It serves 156 destinations worldwide, and, in 2017, it transported 56.01million travelers, 4.16million more than 2016 (MarketLine 4). Emirates’ SkyCargo is the business unit that offers freight services to over 50 locations worldwide with its DIA terminal able to handle 1.9million tons of consignment (MarketLine 4). It operates Boeing and 777F aircraft for long-haul cargo transport. SkyCargo also offers courier services for products that require refrigeration and pets.
The Catering Operations division offers in-flight catering services for institutions and business executives. In-flight dinners featuring gourmet services are available on demand to first class travelers. This segment contributed 3.2% in earnings to Emirates’ 2017 revenue (MarketLine 5). The company’s third business division (Other) handles consumer products, including food and drinks. Its revenue contribution in 2017 was 3.5% of the airline’s earnings (MarketLine 5).
The target market that Emirates caters for has multiple geographical and income segments. The airline primarily focuses on people visiting Dubai for business or tourism. Most of the travelers are young professionals and expatriates working in the UAE. The airline’s geographical market comprises six segments: “Europe, East Asia and Australia, the Americas, Africa, Gulf and the Middle East and West Asia and the Indian Ocean” (Redpath et al. 126). It targets the upper-middle and upper-income groups by dividing its flight experience into business and working classes that are promoted using distinct communication strategies.
Differentiation and Positioning Strategy
Emirates differentiates its brand from competitors through its products, environmental focus, and personnel. It focuses on high-quality product differentiation by providing shower spas for first-class travelers, a luxurious lounge at its destinations, and a superior in-flight ICE entertainment system that allows access to TV shows, films, and videos in different languages (Strickland 4). In addition to product differentiation, Emirates is a leader in energy efficiency. It uses fuel-efficient A380s that consume 20% less fuel compared to other planes of a similar size. As a result, it contributes to the efforts to lower carbon emissions and improves its image among environmentally conscious travelers. Emirates’ personnel are culturally diverse. The cabin crew includes 120 different nationalities and native speakers of 80 dialects (Strickland 7). They are the people who drive the airline’s growth.
The carrier positions itself as a premium brand in the airline industry. It promises a unique travel experience for people who choose its services. It boasts of a large fleet of commercial planes, including A380s and 777s that are less than ten years old (MarketLine 3). It has received international awards for excellent in-flight experience and an ICE entertainment system for which it charges a premium fee. Emirates also positions itself as the most preferred airline through its skyward program. Under this service, regular travelers earn points, which they can redeem in the UAE. Thus, the program enhances the travel experience and brand image.
Product, Pricing, Distribution, and Promotion Strategies
Product Strategy
Emirates offers a unique travel experience through its three product offerings: first, business, and economy classes. These divisions come with distinct facilities and services. In over 70 nations where Emirates have operations, travelers using the first and business classes receive chauffeur services to take them to their hotel (Emirates Group). In addition, the DIA boasts of first-class and business-class lounges that offer Wi-Fi services, meals, and drinks. The first-class section also includes a private suite and a shower spa, while the business-class cabin is fitted with a side table for executives (Emirates Group). In-flight Wi-Fi services, entertainment, and in-seat phones are available to all passengers, including those in the economy class.
Pricing Strategy
Emirates uses a dynamic pricing strategy. Its prices reflect consideration for consumer demand, time of the year, and competitor packages. It charges a premium for superior services – entertainment, shower spa, and private suite – it offers to first-class travelers. Emirates acquires competitive gains by operating from a major airport (DIA) that helps cut ground operational costs. Thus, the airline can give competitive prices to its customers. The dynamic pricing strategy also allows Emirates to manage cabin capacity to control prices.
Distribution Strategy
Efficient distribution channels for products/services can give significant competitive advantages. Emirates uses a range of strategies to attract and serve its customers. One such approach is intensive distribution links to provide low-cost tickets during wintertime and summertime through its website (Emirates Group). Emirates also uses exclusive distribution strategy to market its products and expand its geographical coverage. It has partnerships with travel agents who act as intermediaries between the airline and customers. Travelers can purchase tickets from Emirates’ local agents. The company also employs a selective distribution strategy to provide promotional offers and discounts to specific passengers and airliners using its ground services.
Promotional Strategy
The airline’s promotional strategy resonates with its brand positioning efforts. The ‘Hello Tomorrow’ initiative is the principal program that Emirates uses to promote its products. All its promotional messages reflect the motivational element conveyed through this platform. Additionally, Emirates’ marketing campaigns and expansion to new markets use this phrase. For instance, in announcing its Oslo, Norway, as its new destination, the airline used the expression ‘Hello Oslo’ (Emirates Group). Its advertising mix involves various tools, including in-flight commercials, sponsorships of football clubs (Manchester City), celebrity endorsements, etc.
Summary and Recommendations
This report analyzed Emirates, a leading brand in air transportation based in Dubai. It was launched in 1985 and became profitable within the first year. The two factors that led to its establishment were a decline in Gulf Air flights in Dubai and the government’s open skies policy. It comprises two divisions: airline and Dnata (MarketLine 3). The primary segments are air transportation and catering. It employs an integrated marketing communication to promote its brand image. Its differentiation strategy is grounded in providing premium products, fuel efficiency, and crew diversity. It positions itself as a high-end brand targeting the middle-upper and upper income groups. It uses diverse product, pricing, distribution, and promotional strategies to compete globally.
Based on the analysis, two recommendations are given that could drive Emirates’ long-term organizational success. First, the airline should pursue an internationalization strategy to expand to new destinations, such as China and Japan. Travelers from these areas would prefer to make a stopover at DIA before continuing their journey. Second, Emirates should invest in its personnel (flight attendants) to ensure that they provide superior customer service. Well-trained and empowered employees will ensure a comfortable and memorable travel experience and increase consumer loyalty.
Works Cited
Emirates Group: Welcome to the Emirates Group. Our Brands. Web.
Luxton, Sandra, Mike Reid, and Felix Mavondo. “Integrated Marketing Communication Capability and Brand Performance.” Journal of Advertising, vol. 44, no. 1, 2015, pp. 37-46.
MarketLine: Company Profile. The Emirates Group, 2017. Web.
Redpath, Nick, Frankie O’Connell, and David Warnock-Smith. “The Strategic Impact of Airline Group Diversification: The Cases of Emirates and Lufthansa.” Journal of Air Transport Management, vol. 64, 2017, pp. 121-138.
Squalli, Jay. “Airline Passenger Traffic Openness and the Performance of Emirates Airline.” Quarterly Review of Economics and Finance, vol. 54, no. 1, 2014, pp. 138-145.
Strickland, John. “From Modest Beginnings: The Growth of Civil Aviation in the Middle East.” Journal of Middle Eastern Politics and Policy, 2015, pp. 1-8.