Marketing Plan Report of Oman Air - Case Study

Marketing Plan: Oman Air
Marketing Plan
Oman Air – Case Study

Marketing Plan: Oman Air
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Contents
Introduction and Objectives.........................................................................................................................3
Current marketing and company situation analysis.....................................................................................3
Porters’ five force model.........................................................................................................................4
Bargaining power of suppliers.............................................................................................................4
The threat of new entrants...................................................................................................................4
Threat of substitute products................................................................................................................4
Threat of competitive rivalry...............................................................................................................4
The bargaining power of consumers....................................................................................................4
SWOT.....................................................................................................................................................5
Strengths..............................................................................................................................................5
Weaknesses.........................................................................................................................................5
Opportunities.......................................................................................................................................5
Threats.................................................................................................................................................6
PEST.......................................................................................................................................................6
Political................................................................................................................................................6
Economic.............................................................................................................................................6
Social...................................................................................................................................................6
Technological......................................................................................................................................6
Market segmentation...................................................................................................................................7

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Marketing plan objectives...........................................................................................................................7
SMART objectives..................................................................................................................................7
Marketing mix strategy recommendations...................................................................................................8
Product....................................................................................................................................................8
Price........................................................................................................................................................8
Place........................................................................................................................................................8
Promotion................................................................................................................................................9
Evaluation and control.................................................................................................................................9
Budget.......................................................................................................................................................11
References.................................................................................................................................................14
Appendices................................................................................................................................................16
Appendices 1:........................................................................................................................................16
Appendices 2.........................................................................................................................................17
Appendices 3.........................................................................................................................................18

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Introduction and Objectives
Oman air is the flagship airline carrier of Oman and is based on the grounds of Muscat
international airport. The airlines is a key member of the Arab air carriers’ organization. The
organizations’ roots can be traced back to 1970 at the foundation of Oman international services
(Hooper, 2011). Oman air, however, was established in 1993 and has shown a pacing growth
since then. The airlines has a total fleet of 48 aircrafts and has aimed at increasing the same to 68
by 2023.
Besides extended reach of commuting services, Oman airlines provide exclusive benefits to their
passengers including inflight entertainment, duty free products, mobile telephony and internet
connectivity and passenger comfort with the help of sufficient leg and elbow space. The airlines
has partnered with various other airlines such as Turkish airlines, Ethiopian airlines, Sri Lankan
airlines etc. for extended reach, strong network and passenger convenience (O’Connell, 2011).
This case throws light on the special offer laid out by the organization during the holy month of
Ramadan which allows passengers to carry 2 bags weighing up to 30kg without any charge while
travelling via Oman airways. This promotional tool was an instrument to garner more customers,
pay tribute to the holiness of the Ramadan month and demonstrate effective customer service as
a strong value set of the airlines. This report aims at identifying various micro and macro
environmental factors affecting the growth of the organization. It also highlights various
strategies that can help the airlines with establishing an effective marketing plan in order to
promote and communicate the Ramadan offer to a wider audience. The strategies recommended
also lay emphasis on Oman air’s goal of enhancing the current growth rate and becoming the
best airline in a span of the next five years.
Current marketing and company situation analysis
To effectively analyze the macro and micro environmental situation of any business, there are
various tools of marketing that can be applied to the firm. Given below are three important and
strategic ways to garner greater detail about all the factors that are affecting the business. Porter’s
five force model throws light on the overall condition of the industry, SWOT analysis focuses on
the strengths, weaknesses, opportunities and threats that the organization encounters and lastly

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PEST analysis performs a detailed check of various factors in the environment that may affect
the organization (Yuan, 2013).
Porters’ five force model
Bargaining power of suppliers
The suppliers of Oman air are Boeing and Airbus. Since these are the only two suppliers their
bargaining power is very strong. However with the increasing market penetration of Oman air
and strong network tie ups, this power can be reduced (Lee, 2014).
The threat of new entrants
Due to the increasing entry of various UAE and Asian counterparts moving towards the Middle
East, there is an increasing likelihood of consumers willing to switch to lower cost airlines.
However, the airline industry itself is expensive to enter and hence as long as Oman air continues
to effectively service its customers and use the right marketing mix strategies, customer loyalty
can be built and maintained.
Threat of substitute products
The substitutes to the airline industry are commuting by road or trains. Both of which are
relatively more time consuming. Therefore the threat of substitution is negligible.
Threat of competitive rivalry
Etihad airways, Qatar Airways, Gulf air and Emirates are the biggest competitors of Oman air.
The five airlines are consistently competing over market share as well as number of passenger
carried every year. Due to increasing interests of all these five airlines in buying more fleets and
expanding their networks, the competition is expected to get more intense (Longley, 2013).
The bargaining power of consumers
The bargaining power of consumers is also very high owing to increasing number of options
available to them. However, there is no room for customers to negotiate on price as they have to

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pay the price that is asked. This indicates that price reduction can be an effective market
penetration strategy used by the airlines.
SWOT
Strengths
Oman air’s biggest strengths is its strong brand name in the industry which is an indicator of
strong quality and customer satisfaction. More importantly, the strong government backing
makes for a strong support system for Oman Air as 99.893% of the shares are held by the
Government of Sultanate (Oman Air, 2016). The brand has won various awards and accolades
for its consistently improving service and enhanced customer service. The inflight services
especially the sale of duty free products is well renowned.
Another strength supporting the success of Oman air is the strong network that has been built by
tying up with various other airlines to increase reach and convenience for the customers. The
airlines has various codeshare partners which operate jointly with closely matching and
complementing schedule making it easier for customers to plan their travel effectively.
Weaknesses
The increasing dependency on partner airlines is one of the biggest weaknesses of Oman air.
Many customers opt for the Oman airlines due to its heavy connectivity in various regions. This
increases the airlines’ dependency on other carriers especially their codeshare partners.
Opportunities
The airlines has aimed to increase its fleet size to 68 by 2023 which will provide Oman Air with
an opportunity for more frequent flights between airports. The number of airports have also been
on a consistent rise (Appendices 1). Secondly, Oman air could further increase its network to
target more American destinations.

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Threats
The increasing number of competitors in the industry as well as the sudden emergence of low
priced flights can prove to be a threat for Oman air. Secondly the increasing fuel price will shoot
up costs for the airlines and this will make it difficult to survive in the cut throat competition
existing today. Thirdly, the company has various long term borrowings which are bearing
interest and the fluctuations in interest rates can directly impact the company’s financials.
PEST
Political
The political instability and increasing civil wars make it difficult for the airline to operate in the
Middle East. However, Oman air is the flagship carrier of the Sultanate of Oman and hence has
immense government support. The country functions in absolute monarchy which makes the
Sheikh the head of the government (Hertog, 2013).
Economic
The increasing economic problems has led Oman air to reduce its dependency on the government
and aims to stand on its own two feet by creating new partners and making the firm a fully joint
stock company. In the current economic scenario, the airline would not consider a business
alliance but enter joint ventures with joint costs and income (Times of Oman, 2015).
Social
The increasing purchasing power of the passengers as well as improved lifestyle have increased
demand for airline travel. The fast paced lifestyles, increased geographic connectivity,
globalization and greater working hours insists passengers to travel by air. This has had a
positive impact on the airline’s performance.
Technological
Oman air has won four prestigious awards in 2016 at Oman tech awards. The social media
campaigns of the brand are truly impeccable and have garnered immense attention from across

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the globe. Their Facebook page especially has over 1.5 million followers. Oman Air’s mobile
application is user friendly and easy to use by its customers and can be downloaded from
Google’s play store (Appendices 2).
Market segmentation
Market segmentation is the process of dividing the market into various segments of customers
who have similar needs and demands (Wedel, 2012). This process helps organizations in
understanding and targeting a wider audience in a single go.
Oman air flights have been divided into business class, first class and economy class. As a part
of its growth strategy for 2016, Oman Air’s CEO Paul Gregorowitsch has planned to target
premium customers by restructuring its newest fleet Boeing Dreamliner (Times of Oman, 2015).
Despite the entry of various low cost airlines, Oman air is clear about its high price high quality
policy. Customers of the airline are high end consumers with great purchasing power. The
airlines is high priced and delivers excellent quality service to its customers. It has positioned
itself to serve the niche market of these customers and continues to target those (Lee, 2011).
Marketing plan objectives
SMART objectives
The objective of the marketing plan runs on the timeline of the next 5 years. As a marketing
manager, it is strongly believed that Oman air would require to set up clear objectives in order to
sustain as well as enhance the current performance and fulfill its goal of becoming the best. The
following objectives are the key goals that Oman air must focus on:
1. Use of efficient promotional tools to gain customer attention and increase reach to a
wider audience by increasing the company’s TOMA (Top of mind awareness score).
Oman air could distinguish itself by effectively using various social media tools in order
to reach out to consumers (Tuten, 2017).
2. Increase the market share: Oman air’s objective is to increase the number of passengers
to 9.5 million by 2019. This is easily achievable especially since they already have plans
to increase their fleet to 68 by 2023.

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3. Increase brand loyalty by enhancing customer service. This can be measured by keeping
a track of customers and garnering information about how often each customer travels
(Laroche, 2013). Frequent flying customers could be targeted via email marketing with
exclusive offers and discounts.
Marketing mix strategy recommendations
Product
Product is the most primary aspect of the marketing mix of any organization (Huang, 2014). In
case of Oman Air, their primary offering is the flight service. While their ancillary services
include duty free products, inflight services and entertainment, baggage handling, quick check-
ins etc. As a marketing manager, recommendations to Oman air would be to improve the quality
of inflight service, increase the number of frequent flights and geographically expand the
network to remote regions of the Middle East. To improvise further, the mobile application of
Oman air should be made available of Apple’s I store as well.
Price
Oman air should use premium pricing strategy in order to build a perception of people regarding
the high quality of the product. Premium prices allow marketers to keep the prices of the product
artificially high in order to attract the high income customer segment (Keller, 2017). This
strategy is also often known as price skimming as it skims off the creamy layer of the market.
Luxury has an evident psychological association with premium pricing. Marketers believe that
they can position their product luxuriously by pricing it premium.
Place
Oman air must target to gain complete monotony over the Middle East. As of December 2014,
the Sultanate of Oman is served by a total of 27 airlines and Oman air is the dominant player in
the industry. The airline controls 62% and 58% of flights and seats respectively (Anna, 2014)
(Appendices 3). Oman air must now aim to increase that market share to 74% and 69% of flights
and seats respectively by 2020. This would help the brand remain market leaders in the Middle
East.

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Promotion
Once a product or service has been introduced in the market, it is imperative that it is promoted
in the right manner and through the right channels (Armstrong, 2015). Oman air already has
some excellent promotional strategies in place. However a few recommendations would include
the following:
1. Social media marketing: Oman air is bang on with it current social media marketing
strategy and it is evident by the high number of followers on both Facebook and
Instagram. However the brand can also appropriately use new tools of social media like
Snapchat and Pinterest (Scott, 2015). At the time of events organized by the brand, ‘Live’
features of Facebook and Instagram can also be used to promote the event real time
(Hannah, 2016).
2. Strategic relationships: As a marketing manager, it is essential to build strategically
crucial relationships with journalists and media houses in order to promote the brand to
the right audience. These relationships also help the brand in case of a crisis. If there is a
negative news about the brand, effective relationship management with media houses can
mellow down the news that reaches the audience at large.
3. Television ads and billboards: Since Oman sir is offering great quality service at a high
price, it is also important that the firm invests in marketing activities. Especially in order
to promote the baggage offer for the month of Ramadan, Television advertisements must
be released and poster on various billboards must be published. This would garner
attention of every day customers (Biocca, 2013). Most customers adopt the same route to
work and watch the same channels at the same time. Hence advertising Oman air at the
right place and at the right time would ensure that the advertisement reaches customers
more frequently.
Evaluation and control
Once the marketing plan for any business has been decided and implemented, it is important that
the plan is also evaluated at various steps. Often marketers make the mistake of performing this
evaluation at the end of 5 years. But it is imperative that this plan is assessed at different stages
in order to ensure that the implementation is on the right track (Parmenter, 2015). For Oman air

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or any other player in the airline industry following key performance indicators are crucial for
the success of the organization:
Criteria Key performance indicators
Safety 1. Number of Fatalities
2. Reported dangerous situation that
have occurred in flight.
3. Reported illness or diseases.
Flight ops 1. Number of PAX (passengers on
board)
2. 2. Number of flights (total fleet)
3. Average daily available flying time
Environmental 1. Spills, discharges or releases to land.
2. Fuel used
Financial 1. Operating margins
2. Total maintenance cost
3. Revenue per seat available
This report throws light and elaborates a marketing plan. In order to gauge the impact of the plan
the following strategies must be adopted:
1. Feedback from customers: Customer feedback forms must be distributed and collected in
the flights. These forms must also contain a section where the passengers can provide
recommended changes in the services and report grievances.

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2. Evaluate number of customers: Surveys must be conducted to evaluate the number of
customers flying by the airline every month. Any change in the number must be
evaluated and analyzed.
3. More frequent board member meetings: Board meetings help the brand in addressing
issues faced by the board members. Frequent meetings would ensure that if there are any
issues faced by the board members then they can be addressed. The working team would
be kept on their toes and follow ups would be more efficient.
4. Followers on social media: Oman air should keep a track about the number of followers
on social media. Facebook, Instagram, Snapchat, Pinterest are all mediums to promote
the brand and establish a communication channel with customers. An increased number
of followers indicate that a wider audience can be targeted from a single platform.
5. TRPs on TV ads: Television advertisements can be evaluated based on the TRPs
(Television rating points) which judges how many views has the particular advertisement
receives. In case the TRPs are low, the brand can work upon their advertisements or
change the timing or the channel at which these advertisements are aired.
Budget
Budgeting is a crucial aspect of any business. One of the biggest advantages of Oman air is the
incredible government support it has. This makes is plausible for the organization to invest
wisely yet efficiently on its marketing strategies. Approximate costs have been listed down in
order to understand the expenses incurred for various strategies of Oman air.

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Strategy Cost
Increasing the number of fleets A Boeing costs around $50 million whereas a
bigger aircraft can cost up to $125 million.
Oman air is expected to increase the number
of its fleet to 68 from 48.
Promotional tools:
1. Facebook advertisements
2. Billboards
3. Television advertisements
Promotional tools:
1. Facebook advertisements cost
approximately $ 0.2 per click for an
audience as large as that of Oman air.
2. Billboards cost depends on the
geography and one billboard
approximately costs $800 per month.
3. A 30 second commercial
approximately costs $500 per month.
This is the approximate cost that would be incurred. Based on the same, a budget has been
formulated. This is not the exact cost but research has been conducted to reach approximate
figures.

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Particulars Amount ($)
Expansion cost
Employee salaries
Advertisements and promotional cost
Fleet purchasing cost
Fuel expense
Currency fluctuation expense
Training cost for employees
Misc. Expenses
500000
175000
250000
1000million
2500000
350000
150000
200000
Total Expenses 1.41 million
Expected Revenues 2.34 million
Net profit (Assumed) 0.93 million
Conclusion
Oman air which is the flagship carrier of the Sultanate of Oman. The airline carrier has market
domination over the Middle East but is expanding for further growth. The airline has been awarded with
various accolades especially for its excellent customer service and efficient marketing strategies. The
report has elaborated upon the current economic and social scenario the airline operates in and how
does it impact the performance of the airline. As a marketing manager, a marketing plan has been
devised with key objectives of increasing market share, increasing the use of social media to promote
the brand and increasing the number of passengers.

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References
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Appendices
Appendices 1:
Appendices 2
Appendices 2

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Appendices 3