Service Marketing Analysis Report: Cathay Pacific Airline Assessment

This report provides a comprehensive service marketing analysis of Cathay Pacific, a major airline based in Hong Kong. The analysis begins with an introduction and situational overview of the airline industry, highlighting challenges such as competition, fuel prices, and economic instability. The external environment is examined using PEST analysis, considering political, economic, social, and technological factors. Porter's Five Forces analysis assesses the bargaining power of suppliers and consumers, the threat of competition and new entrants, and the threat of substitution. An internal analysis is conducted using the service marketing mix (product, price, promotion, place) and the 4Is framework (initiation, generating new ideas, integration, and implementation). The report evaluates the airline's service quality through gap analysis, identifying technology, skills, knowledge, policy, delivery, and communication gaps. A SWOT analysis summarizes the key strengths, weaknesses, opportunities, and threats. The conclusion synthesizes the findings, emphasizing the challenges and strategic considerations for Cathay Pacific, supported by references to relevant academic sources and industry reports. The report provides a detailed overview of Cathay Pacific's marketing strategies, challenges, and opportunities within a competitive airline market.

SERVICE
MARKETING
Cathay Pacific

Introduction
• Situational analysis has a critical role in
the management of operations and
making of strategies.
• Service quality has important role in the
success of the organisations.
• It is critical that company analyses the
gap in the quality of their services when
compared with international standards
and competitors.

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• Airlines industry is facing many kinds of
challenges such as competition, increasing
fuel prices, decreasing stability in the
international economic condition.
• Cathy pacific is one of the biggest flag
carriers from Hong Kong.
• In 2010, Cathy pacific, Cathy cargo, and
Cathy Dragon all together carried 27 million
customers as well as 1.8 million tonnes of
cargo and mail.

External Environment
PEST Analysis
• Political analysis: Hong Kong is having a highly
stable political environment but the influences of
China in their affairs have sometimes disturbed the
condition. For instance there had been protests
going on in the country from past many months
which have affected their business.
• Economic: They have a highly stable economy
which helps in business of Airlines industry. The
purchasing power of the people in the country is
high hence even premium pricing can be set easily.

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 Social: Hong Kong is having a hybrid
population i.e. people from all the parts of
the world are living in this country. This had
a positive impact on the airlines industry.
 Technological: Airlines Industry is highly
influenced by the technology. Cathy Pacific
will have to continuously invest higher on
the technology especially in the
technologies that can ensure safety and
improve user experience.

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Porter’s five forces
 Bargaining power of suppliers: There are
large numbers of suppliers that are
available in the market. Due to this their
bargaining power is in the lower side.
 Bargaining power of consumers: There
are lots of options available with
consumers which enhances their
bargaining power towards the higher side.

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 Threat of competition: There are numbers of
international competitors that are in the market
hence the threat of competition is on the higher side.
 Threat of new entrants: the amount of investment
that is needed is setting up the business is higher
and profit margin is low due to competition hence
threat of new entrants is on the lower side.
 Threat of substitution: With the development of high
speed trains and development of inter country roads
the threat is moderate as they are not as fast as
Airlines medium.

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Competitor’s analysis
Perceptual map

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Competitors Positioning Resources
Air China Unique Chinese experience They have high quality resources and support of
Chinese government
Singapore airlines Middle class positioning They have to work on quality of resources
Republic airways Competitive pricing They will have to work on the technology they
are using when compared with other competitors
(Airways, 2016).
Competitors Positioning Resources
Sky west Highly competitive High quality resources available
Emirates and Etihad Premium airlines Higher financial base and support of local
market
Cathy Pacific Quality providing airlines Higher quality resources.

Internal analysis
Service Marketing Mix
 Services: They are offering services of all
kinds i.e. business class, economy class,
premium economy class, first class. The
quality of services is on the higher side which
is their biggest strength.
 Price: The prices are highly competitive and
there are large numbers of prices variations
being done according to the timing of booking,
the season of booking and other factors.

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 Promotions: They are doing promotions
with the help of different kinds of mediums
which include digital and traditional media
both. They offer other kinds of promotional
cards or membership that helps in
attracting customers.
 Place: This Company offers its products to
more than 130 international destinations.

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4I framework
 Initiation: They analyse the situation and
need of the market and according they
initiate their innovation processes.
 Generating new ideas: They generate
new ideas with the help of resources
they have and at the same time
ensuring that they have the capacity to
work on those ideas.