Evaluation of Marketing Strategy for Air New Zealand Limited

8 | Page Marketing Strategy Malaysia Marketing Strategy Introduction 2 Target Market 3 Marketing Mix 5 Product strategy 5 Place strategy 5 Pricing strategy 6 Promotion strategy 6 Advertising program 6 Personal selling 6 Sales promotion 7 Organisation and Control 7 Conclusion 10 References 11 Introduction In this report, the marketing strategy for Air New Zealand Limited will be evaluated to understand the key factors which the company should consider while expanding its operations in new market. This segmentation report will evaluate key information regarding Malaysia such as similar needs, product offerings, characteristics,

Marketing Strategy

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Table of Contents
Introduction...........................................................................................................................................2
Target Market........................................................................................................................................3
Marketing Mix.......................................................................................................................................5
Product strategy................................................................................................................................5
Place strategy....................................................................................................................................5
Pricing strategy..................................................................................................................................6
Promotion strategy............................................................................................................................6
Advertising program......................................................................................................................6
Personal selling..............................................................................................................................6
Sales promotion.............................................................................................................................7
Organisation and Control......................................................................................................................7
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11

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Introduction
In this report, the marketing strategy for Air New Zealand Limited will be evaluated to understand
the key factors which the company should consider while expanding its operations in new market.
Malaysia is selected as the potential target market for Air New Zealand in this report. Various factors
relating to the target market will be identified in this report such as characteristics based on
demographics, values, psychographics and geography, basic needs, preference and requirements of
customers, buying habits and consumption and disposition characteristics. A marketing mix will be
conducted in this report in which product, pricing, distribution, and promotion strategy will be given
for Air New Zealand. Lastly, organisation and control policies will be given in which the approach to
implementing marketing strategy will be identified along with recognition of any changes in
organisational structure, internal marketing strategies and implementation of schedule and timeline.

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Target Market
Malaysia is identified as the target market for Air New Zealand because the company has not
established its operations in the country which has many potential growth opportunities. This
segmentation report will evaluate key information regarding Malaysia such as similar needs, product
offerings, characteristics, and behaviour of customers in order to evaluate and understand the
market and potential growth opportunities available in the country for Air New Zealand.
Geographic traits
Malaysia is a country situated in Southeast Asia, and it is a federal constitutional monarchy which
consists of 13 states and three federal territories which separated into two similar-sized regions,
Peninsular Malaysia and East Malaysia by the South China Sea (Andaya & Andaya, 2016). Although
the size of these two regions is similar, however, there is substantial difference in their population
size. Almost 80 percent of the Malaysian population resides in West Malaysia, and the rest of the 20
percent resides in East Malaysia. Currently, the total population of Malaysia is 32.21 million from
which 1.73 million reside in Kuala Lumpur which is the capital of the country (Worldometers, 2018).
Due to a large number of populations, it is a significant market for airline corporations that wanted
to expand their operations in the country. Currently, Malaysian Airline has exploited the population
in the country; however, there is still opportunity available for new companies to expand their
operations in the country.
Demographic traits
The primary target market for airline companies in Malaysia resides in major cities which include
adults and families who travel for business and vacation purposes. Malaysia is an upper-income
economy which has a GDP per capita of 11762.10 USD, and it is expected to grow around 12227.40
USD in 2020 (Trading Economics, 2018). The corporation has a growth rate of 5.9 percent which is
higher than many other Asian countries such as Singapore (3.6 percent), Indonesia (5.1 percent) and
Thailand (3.9 percent). Most customers earn a decent living, and they prefer to travel abroad during
holidays. The number of businesses operating in the country is also high; therefore, there are many
business persons who choose flight option while travelling. The population is relatively young as the
median age is around 27.7 years in the country (Statista, 2018). The top key concerns of citizens are
job security and nation’s fiscal status. Although saving intentions are high among Malaysian citizens,
however, they also prefer to spend their money on new technologies and holidays which makes it a
lucrative market for airline corporations.

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Psychographic traits
The primary market for Air New Zealand is middle and upper-class citizens who prefer to take
foreign holidays and choose flight options while traveling for business purposes. The e-commerce
market is popular among Malaysian citizens, and they prefer it due to high transparency and low
prices (Chong, Chan & Ooi, 2012). Therefore, airline corporations also use this market to give
lucrative offers to customers in order to increase their sales. Middle-class customers are the ones
who spend the most in Malaysia based on which they are the primary focus for airline enterprises.
Value traits
Malay, Chinese and Indians are a part of three main ethnic groups in the country based on which the
customer values are set. Malay people are the indigenous people in the country and they did not
prefer to travel must often as they are more connected to the country and its resources. Indian
citizens are the ones who travel one or two times a year because they are family oriented people
and they travel ones a year to meet their families who did not reside with them (Peletz, 2018).
Chinese citizens should be the primary focus for Air New Zealand because they are the ones who
spend most on travelling for vacation and business purposes.
Basic needs and buying habits of customers
Most customers in Malaysia did not prefer to save their money, and they prefer to invest it by
enjoying foreign holidays, luxury meals and electronic devices. Although this mentality is changing as
the number of Indian citizen increase in the country, however, most people still prefer to enjoy their
lives by living pay check to pay check. Most customers want comfort when it comes to a travelling
experience through the flight, and they also prefer to avoid paying high prices for traveling (Islam,
Shahbaz, Ahmed & Alam, 2013). The buying habits of Indian citizen are that they prefer to travel one
or two times a year and they plan these vacations a long time before the date in order to get best
flight deals. On the other than, people who are travelling for business purposes did not care about
the prices and all they care about is getting someplace without appropriate time. To summarise, the
basic needs of customers is comfort at lower prices, and the buying habits of customers who are
traveling for vacation and business purposes are different.

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Marketing Mix
Product strategy
The services offered by the Air New Zealand are focused on the comfort of its customers, and their
prices are not high. The company offers its customers 31 international destinations which include
major cities in Asia, Europe, North America, South America, and Oceania. The corporation is the flag
carrier of New Zealand, and it has recently decided to purchase new aircraft to provide better
customer experience. Currently, the corporation has eight Boeing 777-200ERs which are chosen by
the company due to the comfort which they provide to customers. These aircraft are configured with
312 seats which comprise of 26 business class, 40 premium economy and 246 in economy class
(Airnewzealand, 2018). This aircraft is good for long-haul services. The corporation also has 777-
300ER and 787-9 which has 342 and 302 seats respectively.
These aircraft are focused on providing a comfortable option to customers based on which they
provide them facilities such as Wi-Fi and streaming services which customers can choose. The
corporation has decided to replace 777-200ER with A350s because they provide strong economic
performance and they are also flexible aircraft (Australian Aviation, 2018). The company is also
replacing 767s with 787-10 while flying its customers to Asia which got the same range and it is
suitable for that part of the network as well. These changes will benefit the company while
expanding its operations in Malaysia by offering relatively cheaper yet comfortable flying options to
customers. These aircraft also have options for customers who are travelling for business purposes
with luxury. These aircraft have long range which assists the corporation in offering more
international locations to its customers in Asian countries.
Place strategy
The headquarters of Air New Zealand is situated in Wynyard Quarter, Auckland City, New Zealand
and the corporation manages most of its operations directly from its headquarters. In order to
manage its operations in other nation, the company has established many hubs in major cities which
assist it in managing its operations. Australia, United States, and India are some of the major markets
for Air New Zealand based on which the company is able to effectively manage its operations
(Nooririnah, Khalil, Aludin, Rohana & Zuraidah, 2013). While expanding its operations in Malaysia,
the corporation should also establish a hub in the capital of the country, Kuala Lumpur. It will assist
the company in increasing the number of flights to and from Malaysia while ensuring that they did
not get delayed. It will also assist the company in providing effective services to its customers that
will build its positive brand reputation. The corporation should also collaborate with travel agencies,

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tour operators and others to offer booking tickets and other related services to customers. The
corporation has 12,000 employees around the world who are highly trained and motived. The
company can leverage them to establish its operations in Malaysia by offering effective services to
customers.
Pricing strategy
In the 2017 financial year, the corporation generated revenue of $527 million which has decreased
than compared to the profits of previous year which were $663 million (Airnz, 2017). However, it
was the second highest provided generated by the company in its history which resulted in
increasing dividend for shareholders and bonuses for staff members. Due to this growth in profits,
the corporation has the chance to use its resources to offer competitive pricing to its customers in
Malaysia. This pricing strategy will result in increasing the sales of the company which will expand its
customer base in the international market. The customer needs and purchasing habits of Malaysian
customers are focused on cheaper flight options which provide a comfortable journey experience
(Nooririnah, Khalil, Aludin, Rohana & Zuraidah, 2013). Air New Zealand will be able to reduce its fuel
prices by replacing its current aircraft with new ones. The profit generated by the company will also
enable it to offer competitive pricing and offers to its customers which will allow the organisation to
expand its customer base in Malaysia. The pricing strategy should be updated as per the response of
the customers to ensure that the company is flexible to the market requirements and it is able to
change its prices as per the demand of customers.
Promotion strategy
Advertising program
Most Malaysian customers use online services while booking their tickets based on which the
corporation should adopt a digital advertisement strategy. The company should advertise its
products and offers through social media sites and website advertisements (Berthon, Pitt, Plangger
& Shapiro, 2012). The company should also reward its customers who refer their friends the services
of the corporation which will encourage them to use the services of the organisation. The company
should also post its advertisements in business magazines in order to target customers who travel
for business purposes.
Personal selling
The company should use personal selling methods to approach Malaysian customers who prefer the
traditional approach to promotion. The corporation should use its talented staff members to reach

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out to customers in order to encourage them to use the services of the company. It should also offer
them prizes and discounts when they use the services of the company which will enable the
corporation in increasing its customer base.
Sales promotion
In order to promote its sales, the corporation is required to adopt a competitive pricing approach in
which it should offer discounts and offers to its customers in order to attract them. The corporation
should use different sales techniques in order to promote its services in the country based on
cultural and social factors. For instance, the company should offer discounts on festivals and other
cultural occasions to encourage its customers to use flight services of the company. The corporation
can also design its services based on purchasing habits of the consumers to ensure that they are
more likely to select the services of Air New Zealand above others.
Organisation and Control
Marketing implementation is a process of executing marketing strategy through creating specific
actions which assist in ensuring that the marketing objectives of the company are achieved. The key
objectives of the company are to increase its customer base and profitability by exploiting the
aviation market of Malaysia. The corporation can achieve this objective by ensuring that its pricing
strategy meets the demands of customers and they prefer the services of Air New Zealand above
others. There are different ways through which the management of the company can approach to
implementing the marketing strategy such as by command, through change, consensus or an
organisational culture (Piercy, 2016). However, the best approach for Air New Zealand in this
scenario is through change management. Change management is crucial in corporations to ensure
that they are able to sustain their productivity while continuing to expand their operations in other
nations. In this approach, the marketing strategies are evaluated and selected by the top level
executives of the company, and they implement them to the lower levels of the management and
employees. This approach is similar to command approach; however, the key difference is that the
management did not forcefully implement these policies (Akaka, Vargo & Lusch, 2013). The
corporation should implement these policies by considering that needs and demands of the low-
level management and employees.
While implementing change approach, the management of Air New Zealand should modify the ways
in which the company manages its operations to ensure that these policies are successfully
implemented on different level in order to achieve effectiveness. This approach is based on architect
to ensure that various elements of the company are able to effectively comply with the change

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policies. The company is required to skillfully craft the change policies to avoid resistance between
employees to ensure that they comply with the marketing strategy of the enterprise (Baker, 2014).
This is a time-consuming process which takes a great deal of time to design and implement, and
these policies are implemented by the management. The key issue in this approach is that it suffers
from the problem of separation of planning and implementation. This is the most suitable option for
Air New Zealand because of various cultural differences between the domestic market of the
company and Malaysia. Although the company will hire local employees to manage its operations,
however, there are various cultural related challenges faced by the existing employees who will
provide training facilities in the corporation (Nooririnah, Khalil, Aludin, Rohana & Zuraidah, 2013).
Effective marketing is a major part of successful expansion of the company based on which
understanding of local culture and other factors is also important for the organisation. In order to
achieve this objective, the company is required to ensure that it understands cultural factors to
target its customer base needs.
The understanding of customer purchasing habits and social factors is also important, therefore, the
corporation should implement the change approach to ensure that the employees did not resist to
these policies and they are able to understand cultural differences. While implementing this
approach, the company is required to establish internal marketing activities in which it should set its
priorities straight to ensure that it has made right and accurate expectations from its target market
(Hogan & Coote, 2014). Expecting too much or too less would result in creating challenges for the
company while approaching its target market which could reflect negatively on its profitability. The
corporation is required to build team and secure its resources to ensure the success of its marketing
campaign. The team will assist the corporation in collecting relevant data regarding the target
market and resources will enable the company to ensuring that it is able to reach a wider audience.
Building timeline is a key part of marketing strategy in which the organisation is required to clearly
outline its goals to ensure that it is able to oversee the performance and implementation of its
marketing strategy (Kumar, Rahman, Kazmi & Goyal, 2012). The company should dedicate different
tasks on its timeline to ensure that the management is able to make joint effort towards achieving
those tasks to ensure the effectiveness of the marketing strategy. Following is a detailed project plan
which is recommended for Air New Zealand to implement its marketing strategy.
Activities which will be
performed/ Weeks
1 2 3 4 5 6 7 8 9
Identification of target
market

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Market evaluation
(characteristics)
Marketing mix
Development of
marketing strategy
Feedback from
professionals on
marketing strategy
Implementation of
marketing strategy
Making necessary
changes and adaptation
of the strategy

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Conclusion
Based on the above observations, it can be concluded that Malaysia is a potential target market for
Air New Zealand which can assist it in increasing its customer base and profitability. In order to
approach the market, it is important to define the key characteristics of the target market to ensure
that the company understands various factors regarding its customers such as their buying habits,
cultural factors, preferences, requirement, demographic factors, and others. The evaluation of
Malaysia is conducted in this report as a potential target market for Air New Zealand to understand
key cultural, social, demographic and economic factors. The marketing mix strategy is given in this
report for Air New Zealand which can assist the company in setting its products, prices, place and
promotion strategies. Effective evaluation of these strategies is important to ensure that the
company is able to expand its operations without facing any negative implications in the Malaysian
aviation market. Lastly, it is recommended the company should choose change approach while
implementing its marketing strategy and a timeline is recommended for the company as well.
Effective compliance with these policies will result in increasing the customer base of the
organisation, and it will enable the corporation in sustaining its future growth in Malaysia.

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