Emirates Airlines the Purpose of Research Proposal

" (Knorr and Eisenkopf, 2004) the fifth and final strength identified for Emirates Airline in the work of Knorr and Eisenkopf (2004) is stated to be the Emirates "...award-winning service in all classes, which is matched or exceeded only by very few other carriers such as Singapore Airlines. Sixth, clever marketing - for example, Emirates, not Lufthansa - was named official carrier of the 2006 FIFA World Cup hosted by Germany - has created a very strong brand awareness worldwide. Finally, since the UAE's currency is firmly pegged to the U.S. dollar, Emirates has benefited, at least in recent years, from an additional devaluation-related cost advantage, especially vis-a-vis its Eurozone-based rivals." (2004)

Strengths of Emirates Airline Identified

The work of Knorr and Eisenkopf (2004) state that Emirates Airline weaknesses are really hard to pinpoint however, derived from what is a "notoriously unreliable...source...some posters on travel-related internet blogs are complaining about (allegedly) slipping service standards in general and lack of consistency in service quality in particular." Identified in terms of 'opportunities' presenting to Emirates Airline is the "most important contributing factor to Emirate's success, and a huge opportunity for future growth...is Dubai's very favorable location." (Knorr and Eisenkopf, 2004) Dubai is located at the "crossroads of some major passenger and cargo flows, the economic importance of which is set to grow in parallel with the rise of the near-by emerging economies." (Knorr and Eisenkopf, 2004)

The UAE's government has experienced great success in the negotiation of free-trade agreements and with all major economies which is believed to have the potential to increase air travel demand to and from the UAE and as well "the entire Arabian peninsula has been one of the fastest growing regions worldwide." (Knorr and Eisenkopf, 2004) the countries neighboring Dubai have been on a path to progressive liberation of the airline markets presently potential for new growth and as well the decision of Emirates to "operate a huge fleet of A380 aircraft will enable the airline to continue to grow..." (Knorr and Eisenkopf, 2004) Noted in the work of Knorr and Eisenkopf (2004) as the biggest threat to Emirates success is that instability of the political climate in the Middle East. Stated additionally as a threat is "the increasing lobbying by some of its competitors in core markets such as Australia, France and Germany, as well as in large untapped ones like Canada..." (2004)

THE SUCCESS of AIRLINE BRAND (EMIRATES AIRLINES)

CHAPTER THREE

LITERATURE REVIEW

The work of Kleymann and Seristo (2004) entitled: "Managing Strategic Airline Alliances" states that in the marketing initiative and specifically in marketing of services such as "air transport, images in the eyes of customers and identities - as seen by the organizations themselves - are of utmost importance." Customers do not only buy transportation from one location to another location but at the same time, other dimensions of services are being purchased by customers as well which include:

1) Quality;

2) Dependability;

3) Punctuality;

4) Attention;

5) Friendliness;

6) Safety;

7) Life-style;

8) Nationality; and 9) Prestige, among others. (2004)

Brand identity can be viewed from four perspectives including:

1) Brand as a product;

2) Brand as an organization;

3) Brand as a person; and 4) Brand as a symbol. (Kleymann and Seristo, 2004)

Airline brands have traditionally been linked quite closely to "...national cultures, symbols of nations and personalities of executives, and the starting point for creating a successful alliance brand to replace member carrier brands..." (Kleymann and Seristo, 2004) Kleymann and Seristo (2004) state that brand image is representative of "the perceived values that make up the brand existence; these values are evaluated positively or negatively by potential customers and others in the market. Brand image is a perception, not necessarily a fact." (2004)

Brand image is also representative of the expectations of the customers and it has been demonstrated in research that "in service marketing the danger of creating expectations that are difficult to fulfill is a real danger indeed." (Kleymann and Seristo, 2004) in addition, brand image, directly affects the company internally and primarily through motivation of employees and thereby resulting in an effect on the productivity as well as the quality of the service provided. Kleymann and Seristo state that branding and brand strategy "concerns a wide spectrum of issues, it is not only about advertising and logos..." But include such as brand strategy components of:

1) Distribution channel policy;

2) Design of retail;

3) Customer interface;

4) Product design;

5) Service quality;

6) Pricing;

7) Advertising;

8) Corporate communications; and 9) Corporate actions and public relations. (2004)

Brand equity is described by Kleymann and Seristo as "...a set of brand assets and liabilities linked to a brand, its name and symbol add to or subtract from the value provided by a service to a firm and its customers. It represents a financial concept associated with the valuation of the brand; it stems from loyalty by customers, name awareness, perceived quality, brand associations and other assets, such as channel relationships." (2004) the work of Holt (2002) divided brand value into four components as follows:

1) Reputation value;

2) Relationship value;

3) Experimental value and 4) Symbolic value. (Kleymann and Seristo, 2004)

Kleymann and Seristo states that airlines "typically have monolithic brands, in other words, there is only one brand which is the same as the company name." (2004) Kleymann and Seristo relate as well that "stronger roles of alliances in marketing can be seen as a sociological issue too. If alliances are replacing individual airlines as brand, a sort of new patria is created." (2004) the benefits of the common alliance brand is appreciated differently by various types of alliance members. Kleymann and Seristo relate that there are existing "challenges, costs, and potential risks in being associated with an alliance brand." (2004)

Stated as an interesting "component in airline alliance marketing is pricing..." because aggressive pricing is implemented during times of weak demand however during times of strong demand "airlines underline the quality of service, comfort, etc. In advertising. The eternal challenge in airline marketing and particularly advertising is striking a balance between building a quality image and conveying the message of low prices: too much emphasis on low prices in ads may hurt an airline's brand and quality image, but a failure to inform consumers about low prices may result in lost traffic." (Kleymann and Seristo, 2004) Alliance advertisements are very quiet concerning pricing and this is stated to be because the low-cost carriers "are really challenging the established carriers in terms of pricing - and making it more difficult for the established carriers to justify the higher fares..." (Kleymann and Seristo, 2004)

The price-quality balance is a challenge however for Ryanair and its aggressive pricing strategy results in prices being so very low that "the product experience typically exceeds expectations. " (Kleymann and Seristo, 2004) This is in contrast to today's regular carriers who use advertising that inflates expectations resulting in expectations that are unmet. Related in the work of Kleymann and Seristo is the fact that a critical factor in marketing of services is the factor of information flow. Airline customer surveys report that "belated information, wrong information or the lack of information are serious causes for dissatisfaction among passengers." (2004) Information flow includes information needed by customers related to seating, availability of electrical outlets for laptop PCs and the problem is that this information is not always immediately available. Also stated as a problem in many airlines is the "flow of customer feedback within a company..." (Kleymann and Seristo, 2004)

Alliances in Branding in the Airline Industry

It cannot be stressed how important the strategic alliances and accompanying influences are upon the airline branding initiative. According to Kleymann and Seristo the assessment of the performance "...of an alliance proves difficult as many of the objectives of alliance are very general and thus tricky to measure." (Kleymann and Seristo, 2004) Stated as examples are the following:

1) Add value to an airline's product line;

2) Reduce competitive pressure;

3) Provide access to new capabilities; and 4) Share and decrease risks. (Kleymann and Seristo 2004)

Past research has indicated that assessment of the performance of an alliance is done quite poorly by organizations in terms of:

1) They fail to measure performance of individual alliances rigorously;

2) They fail to recognizes performance patterns across alliance portfolios; and 3) Alliance portfolio managers fail to know whether the portfolio really supports the overall corporate strategy. (Kleymann and Seristo, 2004)

Kleymann and Seristo state that it is important to understand that in assessing performance "there are two sides of a coin: revenue side and cost side." (Kleymann and Seristo, 2004) Cost sources in the airline business is stated to be categorized 'as follows' and 'in descending order of typical significance:

1) labour;

2) fuel;

3) charges for landing, en-route navigation, etc.

4) aircraft (depreciation)

5) other materials;

6) ground equipment and property (depreciation);

7) outside services expenses (ground handling, etc.)

8) financial…