Significance of Marketing Mix in Ethiopian Airlines

This report analyzes the significance of marketing mix in Ethiopian Airlines and how it influences policies and decision making within the enterprise.

SIM337 CONTEMPORARY
DEVELOPMENTS IN BUSINESS
AND MANAGEMENT
ASSESSMENT(A10)

ABSTRACT
The present report is based on varied development within business and management to
undertake the better services of the enterprise. Furthermore, study is based on business
activities of Ethiopian Airlines, this is wholly owned by the Country government and this was
founded on 21st December 1945.
Therefore, report has covered overview of the primary external influences with use of
PESTLE and Porters five forces analysis. Additionally, significance to customer relationship
management has been evaluated with use of chosen theme as marketing mix and corporate social
responsibility approach.

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Overview of primary external influence to the determine business activities of organisation.
.....................................................................................................................................................1
TASK 2 ...........................................................................................................................................4
Analyse the significance of chosen theme to chosen enterprise and how this influences
policies and decision making within enterprise. ........................................................................4
Critically evaluate the effectiveness of organisation response. ..................................................5
Demonstrate the some areas for improvement in response of the organisation. ........................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business management defined the disciplines that is devoted to organizing, analysis,
planning the various kind of business operation (Nuthall, 2018). Therefore, management within
the business relates with areas and organizing are the activities that helps to getting people
together that helps to accomplish the desired goals and objectives.
The present report is based on business activities of Ethiopian Airlines, this is wholly
owned by the Country government and this was founded on 21st December 1945. It is the Africa
largest airline in relation to passengers carried, destination served, fleet size and revenue.
Henceforth, this can be considered as 4th largest airline by the number of the countries served.
Furthermore, report will cover the activities as to give overview of the primary external
influences to which the enterprise helps to undertake the activities together. Henceforth. Study
will define the significance of customer relationship management in terms to evaluate the
effectiveness of organisation response.
TASK 1
INTRODUCTION
External components to the enterprise are dynamic and can be change at rapid place. The
changes are crucial to undertake the business activities effectively. Furthermore, report will focus
on to determine the external influence of working enterprise that aids to firm to undertake
business activities properly. Also, Porters five forces will be conducted that support to reflect the
competitive environment within airline industry.
1. Overview of primary external influence to the determine business activities of organisation.
External factor of the enterprise has huge impact on the success and failure of the
enterprise. This also allows to keep the track on performance and business activities of the
enterprise (Maunder, 2019). Henceforth, the airline industry has highly contributed to the
globalisation of the world economy. Currently, the economic recession also shook the entire
industry of airline sector. This connects the buyers and sellers as well also transport the good
across the nations. There are various challenges that faces by the airline industry such as high
operational cost, regulatory framework and demanding clientele. To determine the external
influence the Pestle analysis can be defined as one of strategic method with help of which airline
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firms can weigh all the external components that are affecting business. These are defined in the
following manner as are-
Political environment- The Ethiopian Airlines takes the initiatives to bringing out together the
forces that must be altered by the influence of legal authorities on infrastructure of country.
Additionally, political components may be inclusive of environment regulations, empowerment
laws, tariffs and trade restrictions etc. In the most of the country there are strict regulations for
the aviation industry. It is mainly due to risks associated and this also results in deaths and
accidents or any irreparable damage. In addition to this, political components can generally vary
between nations. Henceforth, the aviation industry is global and spans the entire globe.
Additionally, government regulations address the concern like safety, security of passengers and
several other concerns. Therefore, this can be said that air transport offers the varied benefit to
the both socially and economically. There are number of the legal authorities that that has put
major consideration on generating value by partnering with the airline companies. In addition to
it, the regulatory environment has been relaxed in several market that leading to enhance
partnership. Therefore, increased legal regulations affects the working of industry negatively.
This can be true to said that government regulations and political factors plays vital role in
determining the growth and proliferation of airline industry.
Economic factors- Ethiopian Airline needs to bring out Africa economic components and forces
that is inclusive of inflation, wage rates and growth of economy etc. This is the term that has
greater and inevitable effect on organisation. Airline industry is highly dependent on economic
situation. Therefore, economic instability has resulted into the demand of low cost airline as per
Ryan air and Easy Jet etc. Due to it both economic and premium travelling declined. Thus, it can
be stated that the airline industry also take the initiatives to cope up with the increasing fuel
prices. These are the components that made it typical to cope up with increasing the prices of
fuel (Myers, 2019). Thus, people around the world are becoming the more used to low budget
airline and this is reason due to which their business are grooming. In addition to it, economic
downturn and enhancement in prices of fuel has taught many valuable lesson to the airline sector.
In the ways to survive in the tough economic conditions, this is becoming more productive and
this also reducing the cost. It has not only influence the profit but also affects the employment
opportunity to the people. This recession has left some positive effects as the working style of
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firm also get changed. Thus, prices were reduced service standards raised. Therefore, the boom
in low cost carriers has made the air travel cheaper for the masses.
Social factor- Airline sector creates the social value on the enterprise and this also affects the
working conditions of the entity. Culture and social influences that has certain firms that vary
from country to country. The Ethiopian Airline needs to considers this documents to remain
competitive within the airline industry. On the other hand, social components inclusive of safety
and healthy consciousness, growth of population and number of demographic. There are several
industries that aids to generate profit from the airline industry. Additionally, changes in taste and
preferences impacts the working conditions and also affects the working conditions of the
enterprise. Therefore, the firm impacts and impacted by the social forces. In order to meet out the
changing demands of the consumers airlines industry required to incorporate the changes
effectively and efficiently. In the current scenario the passengers prefers the airline services that
are providing the extended service at the low fares. In the past few years, there also has been
reduction in the business class travelling and this is also considered as to be the huge loss for the
companies. Thus, automation is also considered as the another component of the airline industry
that has make the people use of Skype features and they hold the conference call instead of
travelling from one place to another.
Technological changes- Ethiopian airlines bringing Africa technical advancement that is one of
crucial way that aids to bring competitive advancement. It is one of the factor that drives the
globalisation and it is inclusive of ecological and environmental aspects. Additionally, enterprise
must be innovate and also must be compatible with the advancement in techniques. The
significance of technological advancements also affects the working of the industry in the huge
aspect. In the current scenario, the passengers prefers to reach to ticketing and check in service
through their hand held devices instead of forming their line or booking manually. In addition to
it, significance of the technological components can be understood with the heavy use of
technology in aviation ( Derr and DeLong, 2018). Under it, both the travellers and firms must
know that how to play their role effectively. Therefore, technological advancement also speed up
the convenience and safety. With the continue in technological changes the airline industry
regularly gain by the increased safety of air travel. Thus, trends of technological advancement
affects the working of the industry in the huge aspect. This can be true to said that enhancement
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in the technical advancement can helps to airline to gain more amount of the profitability through
offering safety and enhanced services.
Legal issues- Ethiopian Airlines must bring legal components that is inclusive of the certain laws
and legislation that also impacts the business operations. It is also inclusive of the current
legislation that tends to affect the industry areas and this can be relate with employment, safety
and health and employment competition. Likewise, economic, political, technological factor
legal factor also hold the special place for analysing the external environment situation of the
country. There are number of the laws that are mainly devised for air traffic for the safety and
security of the passengers. Henceforth, there are many regulations that requires the airline to
offer the safe travel along with the high quality services to the passengers ( Hwang and Chung,
2018). There are number of the laws that have been proposed to regulates the airline and this
helps to treat the passengers effectively and efficiently. In addition to this, many of the laws are
framed up for the air traffic and this also allows security for the passengers. Thus, airline sectors
are also responsible for the air crashes and other kind of damages and disaster. Additionally,
number of the laws have been proposed that aids to regulates how the airline treats its
passengers.
Environment aspects- The ecological components impacts the working of the industry in the
huge aspect. This can be stated that fuel is one of the major expenditure of the industry and
airlines are required to invest in more environment friendly and fuel efficient aircraft. In addition
to it, fuel is defined as one of the major expenditure of the industries and airlines are required to
invest in more environmentally friendly and fuel efficient aircraft. In addition to it, climate
changes has huge impact on aviation industry as airline needs to require the practice green flying
procedure for protecting the environment. By analysing the current environment, it can be stated
that climate changes also has huge impact on airline industry as the global airline industry has
become very competitive and this is a very expensive business as well. It has increased the cost
of doing business, facing competition from the low cost airlines and abiding with the rules and
regulations that imposed by the legal authorities as well as changes in profile and demand of
consumers and this has led external components affects the working of industry. Thus, recent
crashes and incident has highly affected the profitability and productivity of the airline industry.
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Henceforth, it can be stated that PESTLE analysis will assist to determine the weak areas
and this also shows up the efforts that are required to invest to get the things effectively and
efficiently.
Porter's five forces analysis-
Porters five forces reflects the competitive environment within the industry. It is termed
out as strategic tool that minimise the risk of losing the competitive edge that enterprise ensures
the profitability of the enterprise. Thus, profitability of the firm depends on following forces as
are-
 Competitive rivalry- The existing competition of the enterprise leads to undertake
identification of the enterprise in which firms are competing hard to maintain their power
within the enterprise. In addition to this, competitive rivalry is the analysis of the brand
and commodities within the market along with its strength and weakness and the share
within market.
 Threats of new entrants- It is in the favour of entity that exist within the market that
creates the barriers for the new entrants and this also prevents from entering into the
industry. Thus, barriers can be both industrial and legal. Also, the size and reputation of
the firm plays the crucial role in operating business activities within market. Thus,
barriers as technical and culture to Ethiopian Airline can impact the decision of the new
entrant into the market.
 Threat of substitute products- Ethiopian Airlines bringing Africa together the substitute
commodities and these are the alternatives that are available within the market at
comparatively better prices. These are the commodities that are prevails due to the
technical and innovative advancement. In addition to this, high threat of substitute leads
to low profitability as this also limits the profit of entity by placing of price celling due to
the fear of being substituted by other commodities. Thus, this also impacts the growth
potential of the industry.
 Bargaining power of suppliers- The powerful suppliers also dominate the power to
capture the significant value for themselves by demanding high price for commodities by
limiting the quantity of commodities and services and quality of the commodities. In
addition to this, the commodities that offered by the suppliers are highly differentiated.
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 Bargaining power of customers-The buyer who has the strong bargaining power can
influence the working of the enterprise. Henceforth, the selection of the clients becomes
crucial for enterprise as this avoid the situation that is highly dependent on the buyers.
TASK 2
Analyse the significance of chosen theme to chosen enterprise and how this influences policies
and decision making within enterprise.
Marketing mix of Ethiopian Airlines undertakes the analysis of the brand and firm that
covers the 4Ps as product, price, place and distribution. It is article that elaborates the pricing,
advertising and distribution plan of action that used by the enterprise. Thus, marketing mix
defined in following manner as are-
Product- Ethiopian Airlines serve their customer through mixed fleet in their commodities
portfolio life Boeing and Airbus. This is the enterprise that caters the consumer at both personal
and professional level by offering flying services in relation to first class, business class and
economy class. Ethiopian Airlines offers the great deal of the entertainments inside the flight
and also provide wide range of commodities to keep customer satisfied. In order to be
competitive advanced the entity can able to promote excellent customer service with help of
better housekeeping and healthcare for customers.
Price- Ethiopian Airlines also has its hub within the Africa and also serves as low cost tickets to
its consumers as compared to the other airlines. This is the entity that has differential pricing
strategic in its marketing mix. This is the enterprise that render best services along with effective
prices rates and services. It is the entity that used Bundle pricing strategies that enhances the trial
rate of the customers. With the help of this method, the entity can be possible to control the cost
and lowers the distribution and marketing expenses. In addition to it, Ethiopian Airlines should
use the premium pricing policies for premium customers who demands the luxurious and
customised service at flights.
Place- Ethiopian Airlines brings the Africa together and also places the high significance on the
placement of this commodities that directly relates with the accessibility for consumers. This
enterprise interacts directly with the consumers and also collect the important details in relation
to consumer behaviour and feedback with help of company operated stores.
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Promotion- Marketing plan of action for the Ethiopian Airlines is to high significance on the
tactics and strategies of promotional activities. Henceforth, quoted enterprise needs to use the
360 degree approach under promotional activities. It is the entity that uses the social media
presence to get directly engage with customers and their needs and demands.
Corporate social responsibility is termed out as the vital concept that defined as self
regulating business model that assist the firm to be the socially accountable. With help of
practising the Corporate social responsibility the customers, employees and stakeholder can put
their major focus on the working of enterprise. Within the airline sector, CSR plays the crucial
role as this help to fight against inflation and provide the opportunity of an low prices air
transportation. In the today's era the airline industry is taking initiatives to go beyond the
economic decision and this can also have huge impact on the working of industry.
As per the present era, the businesses are crucial part of the society and airline industry
needs to exceed the compliance of legislation and obligations of what is expected them to put the
major focus on the interest of the society. CSR will helps the entity to improve the community,
youth education and society etc. In addition to this, it can be stated that the CSR also helps to
creating the goodwill, positive image and also aids to build competitive advancement within the
enterprise. In addition to it, CSR is increasingly becoming very crucial for the aviation industry.
Henceforth, the reporting about the Corporate social responsibility is defined as an
intangible assets that has triple bottom line approach as per the assessment of the performance of
the enterprise. Thus, execution of the activities of CSR initiatives both can be defined as the
environmental ad social and this is significant approach within the aviation industry (Chadwick,
Parnell and Anagnostopoulos, 2018). In addition to it, CSR affects the ability of firm to attract
the top talent and this also impacts the job satisfaction levels and rate of retention. The working
entity that practices the approaches of CSR can have happier and more satisfied employees.
Businesses that are practising and approach of CSR has main object to invest more in their
employees and work harder to create the workplace that employees enjoy returning to each day.
As per the present scenario, it can be stated that rise of social media has impacted the
significance of Corporate social responsibility. Today's, the firm with unethical business practices
are highly exposed on social media and this can reduce the brand image of the enterprise. Social
media plays effective role in to run the business practices ethically and this also helps to enhance
the sales of enterprise and large audience reach the free positive publicity.
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Therefore, CSR Impacts the business ability to find out to attract the top talent and this
highly affects the job satisfaction level of the employees and this also enhance job retention rates
as well (Chaffey, Hemphill and Edmundson-Bird, 2019). It provides the sense of purpose to
invest more in the employees and this led to enhance their job satisfaction level. In the recent
years there are many enterprise that has widely uses the corporate social responsibility and this
led to enhance the brand recognition of the enterprise. Due to implementation of CSR
approaches, this can be possible to run out the process of business in more effective and efficient
manner.
Critically evaluate the effectiveness of organisation response.
From the last few decades the concept of corporate social responsibility has growth at
exponentially rate. Corporate social responsibility is the foundation that aids to understand the
responsibilities of the enterprise towards the society in which all organisation executes their
activities. By understanding the significance of the CSR by the enterprise towards the society can
also impacts the financial performance of the enterprise. This can aids to enhance the brand
recognition of the enterprise.
As per the view of Crane, Matten and Spence, (2019) stated that the activities of the
CSR are as investment that made by the entities and this shows the effective relationship between
the corporation and stakeholder such as customers, investors, employees, and society as a whole.
The main purpose of the entity is not only to earn profit but also assist to have welfare to
society. In addition to it, positive relationship between the CSR and financial performance aids to
conduct the organisation activities effectively.
According to the view of Jamali and Karam, (2018) stated that the optimistic involvement
of the approach of CSR has a probability to have advancement over the society and businesses.
Aviation industry needs to understand the effectivenesses of implementation of CSR as this
influence the choices and preferences of the customer in positive aspect. It is defined as the
concept in which firms willingly and decide voluntarily to make contribution towards to make
better society and provides the cleaner environment. It aids to integrate the firm with the social
and environmental concern in their business operations and also make effective interaction with
the stakeholders of the enterprise on the voluntary basis. If the firm provides healthy
environment to their employees as well customers, will be easy for the entity to generate capital
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because financial institution and shareholders will attract toward the organisation due to image
created with the implementation of CSR.
In the airline sector it can be helpful to manage the situation by creating the good image
in the mind of the customers. It leads to bring improvement in the financial performance of the
enterprise. Thus, improvisation in financial conditions helps to enhance the employee satisfaction
of the enterprise. From the past few years the competition within the airline industry is
significantly enhancing and this is crucial to create a need to sustain long term profitability and
growth advancement ( Demirag, 2018). Thus, the ability of the aviation industry us to attain the
long term growth is mainly based on two things as to promote quality service with help of
implementation of CSR and loyalty scheme that leads to boost the customer relationship
management. In addition to it, Corporate Social Responsibility (CSR) program brought up in
order to promote growth in this industry.
CSR programs has helped to increased growth and profitability within the firm by
complying with the ethical and morale obligations. With help of embracing the CSR programmes
the entity can able to work hard to ensure about the desire and needs of a society that can met by
the flexible interaction of the operations. It is the enterprise that has overriding the goals in terms
maximise the profitability conditions of the organisation. Therefore, social responsibilities of the
CSR has improved and protected the welfare of both business and society by complying with the
morale, legal and ethical actions. In the aspect of the environmental responsibilities this has
played the well significant role in meeting the environmental responsibilities and this also has
enhanced the strong corporate culture ( Demirag, 2018). With help of embracing the approaches
of CSR the firm can become able to offer the excellent deals to customers, assist to add value for
promotion and this leads to create the unique campaign benefit to the society at a large.
The main consideration of airline industry has develop the skills within the both corporate
and operation environment that boost the productivity and growth. With help of CSR
programmes, the management team has the strong zeal to promote the healthy environment and
workforce that hard to accomplish the goals and objectives. In addition to it, Human resource
management ensures that employees are skilled, motivated and supported to perform the things
effectively and efficiently. It is the entity that have embraced the opportunities that ensure about
the employees and they are adequately rewarded and remunerated for the quality performance.
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With help of rewarding employees helps to enhance the employee morale and Zeal. Thus,
implementation of the CSR aids to conduct the business activities effectively and efficiently.
Demonstrate the some areas for improvement in response of the organisation.
The aviation industry is continually under the fire for the sustainability issues. In addition
to it, there are many of the airline sector that are taking initiatives to improve sustainability and
also assist to reduce their environment impacts. On the basis of above report the recommendation
has been given to airline industry in following context manner as are-
 Aviation industry should put their major focus over the quality and this helps to have
successful airline operations. Quality is the parameter that aids to conduct the effective
and efficient services for the customers.
 Airline sector should have the ability to foster processes that helps to better integrated
with maintenance, ground operations, flight crews, allows to enhance operation
efficiency, customer loyalty and also increase the profitability.
 Ethiopian Airlines should use effective technological advancement that aids to improve
the integrated business processes that built on the foundation of the connected system.
This is one of the effective facilities that foster better working conditions.
 EAL should take the initiatives to have balancing operation profits and can deliver to
improve profitability. This allows to deliver customer experience. It is one of the effective
measurement that assist to facilitate better working conditions.
 Ethiopian Airlines should use Loyalty card program for their customers that can allow
them to redeem points in exchange of commodities and other exciting gifts.
CONCLUSION
From the above aforementioned report it can be concluded that business management
termed out as activities that is associated with running the enterprise such as controlling, leading,
monitoring, planning and organizing things effectively and efficiently. Additionally, Business
process management termed out as process of analysing and improving business process to
create more efficient and effective organisation.
The present study is based on Ethiopian Airlines, It is wholly owned by the Country
government and this was founded on 21st December 1945. It is the Africa largest airline in
relation to passengers carried, destination served, fleet size and revenue.
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Furthermore, report has covered the business activities has covered the overview of the
primary external influences to which the enterprise that helps to undertake the activities together.
Henceforth, Study has defined the significance of corporate social responsibilities over the
activities of business enterprise.
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REFERENCES
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Maunder, W.J., 2019. The human impact of climate uncertainty: weather information, economic
planning, and business management. Routledge.
Myers, M.D., 2019. Qualitative research in business and management. Sage Publications
Limited.
Derr, C.B. and DeLong, T.J., 2018. What business management can teach schools. In The
Management of Educational Institutions (pp. 127-137). Routledge.
Hwang, J. and Chung, J.E., 2018. The roles of business ethics in conflict management in small
retailer–supplier business relationships. Journal of Small Business Management. 56(2).
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Chadwick, S., Parnell, D., Widdop, P. and Anagnostopoulos, C. eds., 2018. Routledge Handbook
of Football Business and Management. Routledge.
Chaffey, D., Hemphill, T. and Edmundson-Bird, D., 2019. Digital business and e-commerce
management. Pearson UK.
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Jamali, D. and Karam, C., 2018. Corporate social responsibility in developing countries as an
emerging field of study. International Journal of Management Reviews. 20(1). pp.32-61.
Demirag, I. ed., 2018. Corporate social responsibility, accountability and governance: Global
perspectives. Routledge.
Nuthall, 2018 Maunder, 2019 Myers, 2019 Derr and DeLong, 2018 Hwang and Chung, 2018
Chadwick, Parnell and Anagnostopoulos, (2018) Chaffey, Hemphill and Edmundson-Bird,
(2019) Crane, Matten and Spence, (2019) Jamali and Karam, (2018) Demirag, 2018
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