Marketing Report: An Analysis of Cathay Pacific's STP Strategies

This report provides a comprehensive analysis of Cathay Pacific's marketing strategies, focusing on segmentation, targeting, and positioning (STP). It begins with an introduction to Cathay Pacific, a Hong Kong-based airline, and its market position. The report then delves into segmentation, discussing various segmentation types used in the tourism industry, such as demographic, geographic, and psychographic segmentation. It specifically examines how Cathay Pacific segments its customer base, primarily through demographic factors like income and class (economy, business, and first class). The report then explores targeting strategies, including undifferentiated, differentiated, and concentrated marketing, highlighting Cathay Pacific's use of differentiated marketing. It also examines Cathay Pacific's campaigns, such as the "Heart of Asia" campaign, and its focus on business and leisure travelers. The report further analyzes positioning, defining its principles such as risk reversal, USP, and customer awareness. It emphasizes the importance of positioning in building brand reputation and achieving a competitive advantage. The report concludes by summarizing the key findings, emphasizing the importance of STP strategies for organizational success and the effective use of social media for brand awareness and positioning.

TRAVEL AND
TOURISM
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................3
Segmentation:..................................................................................................................................3
Targeting: ........................................................................................................................................4
Positioning: .....................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Marketing is a set of activities an organisation undertake in order to promote purchasing
or selling of goods as well as services (Armstrong, 2018). Cathay Pacific is a Hong Kong based
airline which offer cargo services in more than 141 destinations. The company was funded in the
year 1946 and is renowned as world's leading transportation hubs that employs around 20,000
people in 2010 in Hong Kong. Cathay Pacific ranks as third profitable airline and fourth by
operating profit.
Segmentation:
It is a practice that determines how companies divide or categorised target market into
smaller and approachable groups. The market segmentation is basically divide into two sets that
is Behavioural characteristics and descriptive characteristic. Behavioural characteristic include
attitude, occasion, loyalty status and so on (Basil, 2019). The descriptive characteristic consist of
demographic, geographic & psychographic segment. By the assistance of this, an organisation
optimize goods & advertising to various customer’s.
Different types of segmentation used by Tourism Business:
The travel business divide target market into different segments which are as follows:
Demographic: This segmentation take place by undertaking tourist's age, ethnicity,
religion, income, family members, marital status and so on.
Tourists classes: This type of segmentation is depends on motives & manner of touring.
There are different classes of tourists such as single tourists, Group of tourists, business tourist,
health tourist and the tourist who travel with friends as well as family.
Psychographic: The marketing team of an organisation gather information and segment
market according to attitudes, opinions, interest & overall personality (Deepak and Jeyakumar,
2019). In addition to this, Tourist industry consider the Psyche of tourist and then divide market
accordingly.
Geographic: This segmentation type consider factor like “place of origin” of tourist. This
factor plays an essential role as the tourist who belongs from different places has bringing up
with various cultures & different behaviour. It is determined that it is one of the most basic form
segmentation which is used by Tourist organisations.

Segmentation type use by Cathay pacific: Cathay Pacific divide its market according to
the demographic segment that is income. It divide market into different seating types such as
business class(upper and main deck), economy class and first class (Kotler, 2017). This assist
airlines to to adequately and efficiently perform the activities and gain success at marketplace.
There are many people who did not satisfied by standardized service so it is important for an
organisation to segment market as the requirement & wants of customer. It assist Cathay Pacific
airline to offer multiple offerings and give better service to their customer which impact
positively on its sales as well as profit level.
Targeting:
It is defined as a procedure of choosing target market from the whole market. It involves
group of buyers for whom organisation produce goods and services, set price, develop
promotional strategies and many more.
Types of target marketing strategy used by tourism business: Target marketing strategy assist
an organisation in deciding segment which is profitable and better for them to serve customers
(McVey and Crosier, 2017). The strategies which is used by tourism sector are as follows:
Undifferentiated marketing: In this strategy, companies target the entire market by one
offer. It is basically a product, service, brand or marketing campaign which targets everyone.
Differentiated marketing: Herein, companies target different segments by different
offerings that is for each segment or it is defined as when organisations develop campaign which
target groups or more than two market segments.
Concentrated marketing: It is also known as niche marketing where an organisation target
few or small segments. In addition to this, Concentrated marketing strategy develop for smaller
groups & are designed for a specific segment.
Target marketing strategy used by Cathay Pacific: The strategy which is used by
company in order to target and attract more number of people is differentiated marketing strategy
(Mihajlović and Raguz, 2018). It give offerings according to the class that is economy, business
and first class. It is determined that company is recently started emphasising on developing brand
image by using extensive advertising with an tag line “Heart of Asia”. In addition to this, it have
an advantage to attract and sponsor people who come Hong Kong on weekends. Moreover,
company target corporate business people and holiday travellers by using differentiated
marketing strategy. Moreover, Cathay pacific develop a marketing campaign in order to target

business travellers that helps in raising sales and profitability of company. MICE travellers is
marketing campaign organise by Cathay pacific in order to target different segments and fulfil
the needs of customer. The company believes that differentiation in service as compare to
competitors is one of the unique way to provide service to customers in attractive and effective
manner (Palmatier and Sridhar, 2017). In order to target right market, it provide training session
to marketing and sales team so that people is target properly at right place and at right time. By
the assistance of differentiated marketing strategy, the company is able to satisfy needs of
customer which in turn assist them to retain customers for longer time period.
Furthermore, differentiated marketing strategy assist companies to complete in niche
segment where rivals do not have a particular offerings. Cathay pacific assist in gaining high
market share & can raise sales level as compare to the sales level, they achieved by using
undifferentiated marketing strategy. Along with this, differentiated strtaegy assiost companies to
attract as well as develop an effective distribution channel that targets different consumer groups
and enhance profitability of Cathay Pacific airlines.
Positioning:
It is defined as a place which a company or brand set in the mind set of customers. Along
with this, it is the willingness to influence customer perception and attain competitive advantage
at marketplace. One of main objective of organisation to position its brand is to develop
reputation and to build an identity of product as well as service in market.
Principles of Positioning: There are various principles that is needed to be consider while
positioning a product, brand and service in market as it assist an organisation to set positive
image towards brand in mindset of customer’s (Phalusuk, ,2018). The principles of positioning
are as follows:
Risk reversal: In order to attract more number of people, it is important for an
organisation to differentiated brand in market. In addition to his, it is beneficial for the compare
as they can easily compete with its rivals in market and attain leading position at marketplace.
USP: Nowadays, people are more aware about new and innovative products coming in
make and also prefer to buy them. If a customer finds something special in products and services,
it will attract more number of people and impact positively on sales and profit of an organisation.
Clear, concise and complete customer awareness: The another principle of positioning is
to provide complete and concise information to the customer’s so that no queries or question is

arise by customer towards brand or product. If the product occur a question in mind of
customer’s than its affect negatively on brand image that might decline market share of
company.
Inordinate value: one of the most essential principle is offer the appropriate deal to
customer so that they did not make comparison and buy the product as well as services.
Importance of positioning in gaining success: Positioning plays an important role as it build
market differentiation due t which companies earn higher profits (Schultz, 2018). By positioning,
it is easy for an organisation to raise customer base and attain competitive advantage at
marketplace. Positioning builds positive mindset of customers and spread positive word of
mouth that directly leads to raise in sales and market share of an organisation.
Positioning strategy used by Cathay Pacific: The higher authorities of Cathay pacific airlines
position brand as Hong Kong based airline that gives quality service to customer’s in market.
The company uses various social media application such as LinkedIn, Instagram, Facebook,
YouTube in order to promote awareness and position brand positively in market (Shah, Azhar
and Bhutto, 2019). In addition to this, Cathay pacific airline is conducted a new branding
campaign named as “People and service” by using integrated media plan. Furthermore, it made
a video of how their crew members give service to customers and post it to social platforms
which assist them to develop high reputation and enhance sales level of company (Suryaningrat
and Mussry, 2018).
CONCLUSION
From the above study, it has been analysed that segmentation, targeting and positioning
plays an important role as it increases overall performance and productivity of an organisation. If
it is appropriately develop then company get fails and did not retain in market for longer time
period. One of the most element of segmentation is demographics that involves segmenting
market as per age, income level, marital status and many more. Companies required to focus on
income level of customers as it assist in fulfilling needs and raise customer base of an
organisation. In order to target market, it is important to identify market needs and trends and it
can be done by using differentiated marketing strategy. Companies can emphasise on using
social media applications in order to aware and position brand effectively at marketplace.

REFERENCES
Books&Journal
Armstrong, G. M., and et. al., 2018. Marketing: an introduction. Pearson UK.
Basil, D. Z., 2019. The Fundamentals of Social Marketing. In Social Marketing in Action (pp.
23-44). Springer, Cham.
Deepak, R. K. A. and Jeyakumar, S., 2019. Marketing management. Educreation Publishing.
Kotler, P., 2017. Philip Kotler: some of my adventures in marketing. Journal of Historical
Research in Marketing.
Kotler, P., and et. al., 2017. Marketing for hospitality and tourism.
McVey, D. and Crosier, A., 2017. Generating insight and building segmentation models in social
marketing. Social marketing and public health: theory and practice, 109.
Mihajlović, I. and Raguz, L., 2018, April. Transformation of Business of Travel Intermediaries
in Terms of Dynamic Changes in Macro environment–Towards New Challenges. In 2018
International Conference on Applied Mathematics & Computer Science (ICAMCS) (pp.
77-7709). IEEE.
Palmatier, R. W. and Sridhar, S., 2017. Marketing strategy: Based on first principles and data
analytics. Macmillan International Higher Education.
Phalusuk, C., and et. al.,2018, July. SERVICE FAILURES WITHIN SERVICE DELIVERY
NETWORKS: A QUALITATIVE STUDY IN TRAVEL AND TOURSIM INDUSTRY.
In 2018 Global Marketing Conference at Tokyo (pp. 604-605).
Schultz, D. E., 2018. From STP to PAR: Moving communication planning from the past to the
future. Applied Marketing Analytics, 3(4), pp.286-290.
Shah, S. A., Azhar, S. M. and Bhutto, N. A., 2019. Halal marketing: a marketing strategy
perspective. Journal of Islamic Marketing.
Suryaningrat, W. M. and Mussry, J., 2018, July. THE USE OF NEW WAVE MARKETING TO
FORMULATE MARKETING STRATEGY OF A NEW ONLINE BUSINESS CASE
STUDY PAMPERPOP. COM. In 2018 Global Marketing Conference at Tokyo (pp.
1608-1608).
Wroblewski, L., 2017. Culture Management: Strategy and marketing aspects. Logos Verlag
Berlin GmbH.
Online Reference:
<https://toughnickel.com/industries/Cathay-Pacific-Competitive-Advantage-Strategy>