Issues of High Competition and Fare Reduction in Cathay Pacific Airways

This essay discusses the issues of high competition and fare reduction faced by Cathay Pacific Airways and provides a literature review on consumer behavior and its impact on profitability. It also offers conclusions and recommendations for the airline.

Assessment

Abstract
This particular essay is based in the issues of high level of competition faced by
Cathay Pacific Airways which leads in reduction in its fare in form of various discounts
which lead to financial weakness and reduction in profitability. Thus, current assignment
consists of literature review to get better understanding about various aspects related
with this issues and its solution. Further, valid conclusion and recommendation are also
formed on the basis of findings of this essay to lead better sales and profitability for
Cathay Pacific Airways.
Table of Contents
INTRODUCTION...............................................................................................................1
Literature Review...............................................................................................................1
Discussion .........................................................................................................................5
Conclusion and Recommendation.....................................................................................6
Conclusion ....................................................................................................................6
Recommendation..........................................................................................................6
REFERENCES..................................................................................................................7

INTRODUCTION
Airline Industry mainly comprises of companies and organisation which offer air
transport services to customers which leads many direct and indirect benefits for
economy. The airline industry of Hong Cong is very well developed which offer cargo
and passenger services to more than 190 destinations and characterised as one of the
most competitive airline industry due to presence of many big airline players which lead
significant impact on strategy formulation like pricing strategy and other of operating
organisation (De Mooij,2019). The current essay is based on Cathay Pacific Airways
which is also among major player of Hong Kong Airways Industry the main hub and
heart of which is located at Hong Kong International Airport, Cathay City. The main aim
of Current essay writing is to get understanding about consumer behaviour in order to
evaluate about all the factors which comprise of personal and psychological aspects
that lead effect on buying habits of consumer and lead influential on the profitability and
sales of an organisation. Further, the main purpose of current assignment also
comprises of a detailed literature review based on decision making process,
motivational factors, brand perception, social media effect and marketing position along
with its discussion, Finally, a description about conclusion and recommendation is also
made in current assignment.
Literature Review
Literature review comprises of analysis and evaluation of available sources of
information present in form of past facts and records to provide better understanding
about a selected topic and its associated aspects from view point of various scholars
and researcher (Mothersbaugh & Hawkins, 2016). Current literature review is based on
the topic of consumer behaviour which consists evaluation of various online articles and
authentic journals to get better understanding on its aspects which comprises of all
personal and psychological effects along with decision making process, motivational
factors, brand perception, social media effect and marketing position.
As per the view point of Valentin radu, (2019), Consumer behaviour is a
complex concept which comprises of study of consumers buying pattern and selection
of product and services based on the emotional, mental, and behavioural responses of
a consumer. It has been evaluated that the buying habits of a consumer is mainly based
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on some factors which mainly consist of pricing strategy along with all personal and
psychological behaviours and aspects like service and facilities provided, promotion and
communication level, accessibility, etc. which motivates customers for buying a product
or availing a service (Murphy & Dweck, 2016).
With regard to the information provided by Willy Lin, (2020), Airline industry of
Hong Kong is considered as one of the most highly competitive industry of the globe
which is based on the evidence that many larger and big sized players and
organisation are operating in this sector. It has been evaluated that Hong Kong
International is one of the busiest and best considered airport of the world with more
than 190 airline destination served by around 100 airlines. These big player in the
Airline Industry of Hong Kong comprises of two main names which have maximum level
of local legacy i.e Cathay Pacific Airways and Hong Kong Airlines which are facing a
huge level of cut throat competition while operating in the industry(Hwang & Lyu, 2018).
This high level of competition lead influence and viable impact on strategy for utilisation
of both organisation which are mainly limited to only other prising strategy as to attract
larger number of customers many promotion tactics are applied that mainly comprises
of frequent pricing discounts in form of Tuesday Fanfares,Festival promotion, Adhoc
promotional fare, Buy one Get one Free etc. by both Cathay Pacific Airways and Hong
Kong Airlines (Zhang & Benyoucef, 2016). Thus, this high level of competition has lead
to many issues and drawbacks for organisation operating in Airline Industry of Hong
Kong as they are giving regular discounts to customers which are making them
financially weak as also hampering their profitability. It has been evaluated that Airline
industry of Hong Kong is based on a perception that fare reduction is only way to attract
and cater larger number of organisation but this perception is true only up to a small
extent as there are many other personal and psychological castors that motivates
customers to buy tickets and avail services which consists of quality of service and
facilitates which develop and lead to better brand image. Further, promotion strategy,
communicative and social media effect, etc. also acts as main motivational factors that
lead impact on buying habits of consumer (Taufique & Vaithianathan, 2018).
Further, as per the view point of Rahman, M. K., Zailani, S., & Musa, G. (2017), it
is difficult for manages and employees of an organisation to evaluate about the factors
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and reasons that lead impact on consume behaviour which is mainly based on personal
and psychological factors comprises, age, income level, lifestyle, beliefs, motivation,
etc. Thus, to develop better understanding and awareness about buying habits of
consumer use and implication of decision making process is made which comprises
of many steps. A typical decision making process comprises of identifying nature of
decisions along with gathering relevant information to take such decision. Further,
identifying and availing all possible alternatives on the basis of weigh evidence is also
forms a vital aspect of decision making process (7 STEPS OF THE DECISION MAKING
PROCESS, 2017). Beside this, choosing best possible alternative on the basis of facts
and evidence along with taking effective action and timely review and monitoring of
decision and its consequences are also the most notal step of a division making
process.
With respect to the information provided by Anne L. Applefeld, (2020),
motivational factors are the main reasons and aspects that drives and motivate a
consumer to buy and avail a particular and specific product and services. In case of
Airline industry, the main motivating factors that lead impact on consumer mind set
mainly comprises of prising along with the level of services and comfort provided by a
airline industry. Besides this, as per the view point of Deia B, (2014), there are some
additional facilities like food, entertainment, seat design, Wi-Fi and power outlets are
also there which acts as some of the most common factors that lead impact on decision
of consumer regarding flying with particular airline. Apart from theses, the other main
motivational and deriving factors in case of Airline Industry comprises of safety
measures and timely on-boarding and reaching to destination which is based in
efficiency and effectiveness of schedule and coordination of an Airline organisation
comprises of timely scheduling of flights which leads significant influence on decision
making and consumer behaviour while opting and selecting a flight (Ho & Wu, 2019).
Apart from this, according to the view point of Paige Leidig, (2020), the another
main factor that lead influence on behaviour of consumer comprises of brand
perception and attitude that motivates and inspires a customer towards a particular
brand or product. As per the findings of “ Social Media Industry Report 2017: Airlines” it
has been evaluated that the brand image and perception act as major factor to
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determine and set the consumer behaviour. This research is mainly based on the
volume of conversation, net sentiments of customer comprising both positive and
negative aspects based on brand passion and perception. The attitude and behaviour of
a customers towards an Airline brand and its perception is mainly based on in-flight
comforts and experiences of consumer, customer services, cancellation and delays of
flights, along with promotion and communication level on travel search engines
(Rahman, Zailani, & Musa, 2017). Thus, it can be evaluated that the consumer buying
habits and selection of brand is depended on the services and facilities provided by a
brand along with the ways and safety measures taken up to handle and resolve a tricky
situation on which the actual image and brand perception of customers is depended.
Beside this, as per the information provided by Hwang, J., & Lyu, S. O. (2018), it
has been find out that the reference group and key opinion leaders also plays a vital
role in motivating and influencing people towards boarding and selecting a flight as they
facilitates standard comparison of services and facilities provided by various
organisation in Airline industry along with their pricing and fair strategy. It has been find
out that a positive rating and optimistic reference by KOL towards the services and on-
time scheduling facility of Cathy Pacific Airways lead a vital role in attracting and
catering larger number of customers for this organisation (Al Marzouqi, Khan & Hussain,
2019). The reference group / KOL is having a positive attitude and review regarding the
services of Cathay Pacific Airways which makes it world's fifth largest airline which flies
over across 190 destination of world across Asia, Oceania, Europe, Africa and North
America. Further, the Cathay Pacific is also well known for its 7 lounges through which it
operates at Hong Kong International Airport for premium cabin passengers, Silver,
Gold, and Diamond members. Thus, a positive image and brand position is hold by
Cathay Pacific Airways which helps in attracting and catering larger number of
customers (Ganesh, 2016).
Further, as per the view point of Eun-JuSeo and Jin-WooPark, (2017), it has
been evaluated that a significant effect is lead by social media marketing and digital
promotion as it leads and ensures a better interaction and enhanced connection with
target audience. It has been analysed that a social media has become an essential and
most vital marketing tool for Airline Industry of Hong Kong as it leads and facilitates to
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larger number of customers and account holders on Facebook, Instagram, Twitter and
other social sites. Thus, ensures a much better, efficient and faster way for Airline
industry to connect and interaction with larger number of customers. It has been
evaluated that Engaging and developing better relation with customers and leads and
effective interaction on social media would helps an Airline organisation to build
stronger customer relationships (Chen, Chen & Wu, 2018). This, forms and leads a vital
part in setting apart the high level of competition through showing and reflecting positive
aspects and true benefits of services and on-boarding to their audience. Further, use of
social media also ensures and encounters a better way for organisation like Cathay
Pacific Airways to reflect and show that how its brand is different and better than other
organisation by reinforcing that and showing that their business cares about its
customers in much better way than other competitors. Thus, an evaluation could be
made that social media leads a positive impact on Airline industry through ensuring and
leading a better promotional and marketing tool to have and set a better relation and
interaction which helps and support consumer behaviour to make a valid and more
reliable decision regarding the selection of Brand. Further, Cathay Pacific Airways had
fully accepted that social media marketing as it leads a viable way for this organisation
to interact and connect with customers in order to make them aware about its exclusive
services and up -to- date services in order to cater and attract their attention while
making decisions regarding selection of a flight (Hjorth & Hinton, 2019).
Beside this, Kristen Baker, 2019, social media marketing offer a better platform
for an organisation or Airlines to meet the satisfaction and expectation level of target
audience through offering a better connection and interaction with its customers. Beside
this, various online channels are also provided by social media which are incredibly
valuable and beneficial for business growth through attracting and retaining larger
number of customers by the use of Facebook, Twitter, Instagram, LinkedIn, etc. Apart
from this, an evaluation is also dewan that many advantages like enhanced brand
awareness and improved brand image along with enhanced interaction and better
connection with customers are also lead by social media marketing thus, it is valuable
and important for all organisation especially operating in airline industry to cope up with
cut throat competition by becoming more attractive and exclusive that other firms.
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Discussion
On the basis of above Literature Review a discussion can be made that the
Airline industry of Hong Kong is characterised as highly competitive the main reason
and evidence behind which is existence of many big players which comprises of top
airlines of world like Cathay Pacific Airways. Further, it has been evaluated that the high
level of competition has lead to many challenges and issues for Airline industry of Hong
Kong which comprises of providing services at low price and fair that has lead to
financial weakness for many organisation (Koch & Tritscher, 2017). A discussion can
also be lade on the basis of above literature review that Airline Brand of Hong Kong are
having a perception that consumer behaviour is mostly rely on the prising of a services
but a critical analysis can be made that this perception is good and positive only up to a
small extent as there are many other factors also which lead emphasis on attitude and
buying habits of a consumer.
Part part this, an evaluation an discussion could also be made with respect to
above Literature Review that consumer behaviour is a complex aspects that is difficult
for all organisation and firm to understand especially in the Airline industry as many
motivational factors and driving aspects are there which effects personal and
professional aspects of consumer. A discussion can be made that pricing strategy is not
the only factor or aspect that effects or impact the buying air-tickets by a customer thus,
providing discussion and reduction in fare is not the only way to attract and cater
customers (Chumwatana & Chuaychoo, 2017). A discussion can be made that the
strategy of providing discounts and reduction in fair has resulted in weak financial
position that is a big issues and threat for an organisation. Therefore, Cathay Pacific
Airways and other organisation needs to focus on some other motivational factors like
quality of services and facilities, on time scheduling, safety measures and other
comforts of consumer to ensures higher productivity and better sales. Beside this, an
implication can also be made from above literature review that social media marketing is
valuable and viable for organisation in Airline industry as it lead to enhanced brand
awareness and better connection with customers to retain them for a longer period.
Thus, it is implicated from above discussion that consumer behaviourism is a complex
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conception that is not only depended on price of services but also affected by other
factors which consist of promotion activity and level of services and facilities offered.
Conclusion and Recommendation
Conclusion
On the basis of above essay a conclusion can be drawn that consumer
behaviour is vital and complex phenomena which is based on many personal and
psychological factors which lead significant impact on their buying habits. A conclusion
can be made that pricing is not the only factor that effects buying habits of consumer but
there are some factors are also there like food, entertainment, communication,
promotion, seat design, Wi-Fi, safety measures, timely scheduling of flight and power
outlets which impacts and motivate customers to buy the air-tickets. Further, a
summarisation can be made that implication of decision making process can be viable
way to understand and develop perception about consumer behaviour on the basis of
some facts and evidence for decision making. Beside this, it has been also evaluated
that their are many motivation factors like quality of services and product, facilities
provided, security measures, etc. that leads impact and drives the selection and
decision making of customers. At last, a summarisation can be made that social media
marketing and digital platforms lead to a better way of promotion and communication for
Airline industry to ensure and have better promotion and marketing of its service to
enhance its sales and productivity through attracting larger number of customers.
Recommendation
Implication and adoption of decision making process is suggested and
recommended for Cathay Pacific Airways as it ensures a more reliable and better
decision making on the basis of facts and evidence so that some better strategies could
be made and lead out to overcome the issues of high competition along with
maintaining good level of sales and profitability. Further, enhanced and better use of
social media marketing is also suggested for Cathay Pacific Airways as it lead to a cost
effective way of promotion and marketing to attract and cater the larger number of
customer through setting a better connection and interaction with customer (Tian,
2018). Social media promotion also ensures more competitive strength to Cathay
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Pacific Airways through making it able to communicate about its exclusive and superior
feature to attract more consumer to improve its sales and productivity. Adoption of
social media ,marketing is suggested for Cathay Pacific Airways on the basis of above
literature review and discussion as it lead to and ensure a better interaction and
connection with customers to attract and retain them for a longer period. A platform and
online channel is provided by social media marketing to promote and advertise superior
features of Cathay Pacific Airways to have a upper hand and higher position than
competitors in its business environment.
REFERENCES
Books and Journals
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Prioritizing dimensions in the UAE’s airlines industry. Social Responsibility
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Chen, X., Chen, L., & Wu, D. (2018). Factors that influence employees’ security policy
compliance: An awareness-motivation-capability perspective. Journal of
Computer Information Systems. 58(4). 312-324.
Chumwatana, T., & Chuaychoo, I. (2017, October). Using social media listening
technique for monitoring people's mentions from social media: A case study of
Thai airline industry. In 2017 2nd International Conference on Knowledge
Engineering and Applications (ICKEA) (pp. 103-106). IEEE.
De Mooij, M.(2019). Consumer behavior and culture: Consequences for global
marketing and advertising. SAGE Publications Limited.
Ganesh, A. (2016). Understanding the Relationship between Employee Motivation and
Customer Retention. Vilakshan: The XIMB Journal of Management. 13(1).
Hjorth, L., & Hinton, S. (2019). Understanding social media. SAGE Publications Limited.
Ho, C. W., & Wu, C. C. (2019). Using job design to motivate employees to improve
high-quality service in the airline industry. Journal of Air Transport
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Hwang, J., & Lyu, S. O. (2018). Understanding first-class passengers' luxury value
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Koch, S., & Tritscher, F. (2017). Social media in the airline industry: acceptance of
social seating. Journal of Hospitality and Tourism Technology.
Mothersbaugh, D. L. & Hawkins, D. I. (2016). Consumer behavior: Building marketing
strategy. McGraw-Hill Education,.
Murphy, M. C. & Dweck, C. S. (2016). Mindsets shape consumer behavior. Journal of
Consumer Psychology. 26(1). pp.127-136.
Rahman, M. K., Zailani, S., & Musa, G. (2017). What travel motivational factors
influence Muslim tourists towards MMITD?. Journal of Islamic Marketing.
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Taufique, K.M.R. & Vaithianathan, S. (2018). A fresh look at understanding Green
consumer behavior among young urban Indian consumers through the lens of
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Tian, X. (2018). Effectiveness of Social Media Analytics on Detecting Service Quality
Metrics in the US Airline Industry.
Zhang, K.Z. & Benyoucef, M. (2016). Consumer behavior in social commerce: A
literature review. Decision Support Systems. 86. pp.95-108.
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