Marketing Strategies of Etihad Airways: A Detailed Analysis

This report provides a detailed analysis of the marketing management strategies employed by Etihad Airways in its global operations. It begins with an executive summary highlighting the airline's marketing orientation, customer-centric approach, and segmentation, targeting, and positioning (STP) strategies. The report delves into the specifics of Etihad's demographic, geographic, behavioral, and psychographic segmentation, followed by an examination of its differentiation and market focus targeting strategies. The positioning strategy, based on price and service features, is also discussed. Furthermore, the report conducts a SWOT analysis to evaluate Etihad's internal competencies, highlighting strengths, weaknesses, opportunities, and threats. PESTLE analysis is used to assess the external business environment, identifying political, economic, social, technological, legal, and environmental factors. Finally, the report utilizes the Ansoff matrix to determine strategic options for long-term business viability, recommending market development and market penetration strategies, including a new sub-brand for low-cost services. The report concludes with a summary of key findings and recommendations to ensure the airline's continued success.

Running head: MARKETING MANAGEMENT
Marketing management
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the marketing approaches of Etihad Airways being
followed by them in their global operation. In doing so, different models and theories are used to
analyze the current situation of Etihad Airways. It is identified that they are following marketing
orientation. With the help of the marketing orientation concept, customer centricity is the key to
their business success. It is also helping them to design and change their business approaches
according to the taste and preference pattern of the customers. This report also concluded the
segmentation, targeting and positioning strategy of Etihad Airways. It is identified that as Etihad
Airways is operating on global scale, thus, they are targeting different sets customers in terms of
different variables. In this report, demographic, geographic, behavioral and psychographic
segmentation variables are being used and the target segment of Etihad Airways is identified. In
terms of the targeting process, it is identified that they are following differentiation and market
focus strategy. With the help of the differentiation strategy, Etihad Airways is able to offer
distinctive value proposition to the customers, while with the help of the market focus strategy,
the preferences and requirements of the target customer segments are being met and fulfilled
properly. In terms of the positioning strategy, it is identified that Etihad Airways is following
positioning based on price and service features. This report also discussed about the internal
competencies of Etihad Airways with the help of the SWOT analysis. It is identified that the
Etihad Airways is having the advantage of extensive brand value and identity, which is helping
in the operating in different countries across the world. However, on the other hand, it is also
identified that they are having no market presence in the domestic market segments, which is
causing higher operating cost for them. In terms of the opportunity, this report identified that
tapping the developing countries and offering shorter haul services will help Etihad Airways in
gaining larger market share. They are also facing threat due to the ever increasing trend of jet

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fuel price, which will have adverse impact on the cost of operation for Etihad Airways. PESTLE
analysis is also being done in this report and it is identified that differences in the external factors
are the major challenge for Etihad Airways in operating in the global market or in targeting a
foreign country. Based on the limitations and challenges identified in the above done analysis,
Ansoff matrix is used to discuss the potential options for Etihad Airways to enhance their
business viability in the long term. This report recommended that they should follow market
development and market penetration strategy to cater to both existing as well as the new
customer segments. In addition, it is also recommended that Etihad Airways should introduce a
new sub-brand that will offer low cost carrier service and no frill approach to the customers.
These strategies will ensure that long term viability of Etihad Airways will be gained.

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Table of Contents
Introduction......................................................................................................................................4
Marketing process of Etihad Airways.............................................................................................5
Segmentation process of Etihad Airways....................................................................................5
Targeting approach of Etihad Airways........................................................................................7
Positioning strategy of Etihad Airways.......................................................................................8
Critical evaluation of the marketing mix of Etihad Airways...........................................................9
Product.........................................................................................................................................9
Price...........................................................................................................................................10
Place...........................................................................................................................................12
Promotion..................................................................................................................................13
Analysis.....................................................................................................................................15
Determination of the internal business factors of Etihad Airways................................................15
Strengths....................................................................................................................................15
Weaknesses................................................................................................................................16
Opportunities.............................................................................................................................17
Threats.......................................................................................................................................18
Determination of the external business factors of Etihad Airways...............................................18
Political factors..........................................................................................................................18
Economical factors....................................................................................................................19

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Social factors.............................................................................................................................20
Technological factors.................................................................................................................20
Legal factors..............................................................................................................................21
Environmental factors................................................................................................................21
Determination of the strategic options for Etihad Airways...........................................................21
Recommendations..........................................................................................................................22
Conclusion.....................................................................................................................................24
Reference.......................................................................................................................................25

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Introduction
In the current business state of affairs, it is getting more important for the contemporary
business entities to review and determine their internal and external business environmental
factors due to the fact that business environments are getting changed rapidly in the current time
and it is important for the business entities to cope up with these changes and gain competitive
advantages (Urbancova 2013). On the other hand, it should also be noted that determination of
the external and internal factors will also help the entities to design the value proposition
according to the current market trends and fend off the intensity of the competition. Thus,
environmental analysis is more important for the companies operating in the highly competitive
industry.
Global airline industry is one of the most competitive sectors in the recent time and it is
highly competitive in the Middle Eastern region. This is due to the reason that there are number
of big airline brands operating in this region namely Emirates, Etihad and Qatar airways
(O’Connell and Bueno 2018). Hence, it is important for each of them in gaining competitive
advantages to stay ahead in the competition. In this report, the case of Etihad Airways will be
discussed. It is second largest airline based in the United Arab Emirates (Berghofer and Lucey
2014). Their operation started in 2003 and as of now they are operating more than 1000 flights
each week. It is also reported that Etihad Airways is having one of the largest fleet of aircrafts of
both Airbus and Boeing built models. With their worldwide operations, Etihad Airways is also
known for their effective and innovative marketing practices. It is identified that they are
following marketing orientation in their business operation as their business strategy is getting
evolved as per the change in the market trend.

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This report will discuss about the current marketing process of Etihad Airways including
their approach to segmentation, targeting and positioning strategies. In addition, the current
marketing mix elements of Etihad Airways will be critically evaluated in order to identity the
gap areas. Different strategies marketing tools including SWOT, PESTLE and ANSOFF matrix
will be used to determine the business threats and opportunities for Etihad Airways. On the basis
of the identified factors, a few recommended factors will be discussed that will ensure their long
term business viability.
Marketing process of Etihad Airways
As discussed in the previous section, Etihad Airways is following marketing orientation.
This is due to the reason that as per the concept of marketing orientation, change in the business
is being implemented based on the change in the customer requirements. In the case of Etihad
Airways, their business approach is also getting changed on the basis of the change in the market
trends. This is helping Etihad Airways in meeting the needs and wants of the target customers
with the change in time. However, their major marketing approach can be identified by analyzing
their targeting and segmentation strategies. The following section will discuss about the
segmentation, targeting and positioning approach of Etihad Airways.
Segmentation process of Etihad Airways
As discussed, Etihad Airways is operating on global basis and thus their approach
towards the market segmentation is also diverse. In the following sections, the market
segmentation approaches of Etihad Airways will be discussed based on different variables.
Demographic
segmentation
In terms of the age groups, customers aged between 25 and 50 are being
considered as the core target group. This is due to reason that this age group

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includes the majority of the earning members and professionals and
businessmen. Hence, they prefer air travel for business purposes. On the other
hand, customers below the age of 25 are also the target customers of Etihad
Airways but considered as the secondary target customers. This is due to the
reason that these customers are not the earning members and thus not having the
financial capability of availing the flight services but they accompany the core
customer segment (Camilleri 2018). This should be noted that the core customer
segment is not only targeted as the business travelers but also as the tourists. In
the case of tourists, the secondary customer segments helps in revenue
generation for Etihad Airways. Age group over the age of 50 is also considered
as the secondary target segments. This is due to the reason that they also travel
for business or tour but not as frequent as the core target segment.
In terms of the gender diversity, both the male and female customers are
targeted as airline service is not gender specific. In addition, customers from the
high income groups are are only targeted because Etihad Airways offer
premium service over the no frills budget services (Andaleeb 2016). Thus, only
the higher end customers can avail the premium services of Etihad Airways and
in accordance to that, the service process is designed.
Geographic
segmentation
In terms of the geographic segmentation, services of Etihad Airways are
available across the world but only in the metropolitan locations. Thus, they are
connected with only the top cities across the world. This is line to their target
segment and preferences. Thus, it can be concluded that Etihad Airways is
having extensive yet limited geographical presence in the global market.

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Behavioral
segmentation
In terms of the behavioral segmentation, the loyal and frequent flyers are given
more preferences as they are the continuous flow of revenue. In addition,
customers seeking luxury and quality service process are also being targeted.
This is due to the reason that the higher end service of Etihad Airways is
designed as per the preferences of this benefit seeking customers (Venter,
Wright and Dibb 2015). Different tourists segments are targeted based on
different festive seasons in different locations across the world.
Psychographic
segmentation
In terms of psychographic segmentation, customers with higher end lifestyles
are the target segment as their preferences matches with the service process
quality of Etihad Airways. In addition, customers in terms of different religious
beliefs are also targeted and they are offered personalized services.
Targeting approach of Etihad Airways
The targeting process of Etihad Airways will be evaluated on the basis of Porter generic
strategies. In terms of the generic strategies, Etihad Airways is following differentiation and
market focus strategy. However, cost leadership approach is not being followed by them due to
the reason that cost based marketing is not being done by them. Moreover, cost leadership
process is not applicable for the premium positioning of Etihad Airways. In terms of the
differentiation strategy, they are differentiating in terms of the service elements, augmented
services and physical evidence (Zehir, Can and Karaboga 2015). For example, almost all the
competitors of Etihad Airways are using the Airbus or Boeing flights. Thus, the core service
element is same for all the airliners. In this case, Etihad Airways is differentiating on the basis of
livery, which is distinctive and unique. The internal designs and colors of the aircrafts and

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maintained unique to offer the customers differentiated experience. Moreover, differentiation is
being maintained in terms of cuisines and ground services. This is helping Etihad Airways to
cater to their high end customers by offering a sense of distinctiveness for the customers.
On the other hand, this is also identified that Etihad Airways is following market focus
strategy. This approach is also well matched with the premium positioning of them. With the
help of the market focus strategy, Etihad Airways is designing and offering the service on the
basis of the preferences of certain customer segments. As they are not catering to mass market
segments, thus they are designing the service elements as per the taste and preferences of the
premium customers (Urde, Baumgarth and Merrilees 2013). This is ensuring that all the
requirements and expectations of the target customers of Etihad Airways are getting fulfilled and
satisfied. These are the two ways by which Etihad Airways is targeting their segmented
audiences.
Positioning strategy of Etihad Airways
The core positioning strategy Etihad Airways is based on service features. This is due to
the fact that they are positioning their services on the basis of the benefits to be gained by the
customers in availing their services. For example, the added services being provided to the
customers to and from airport by Etihad Airways are being used as positioning factor. This is
helping them in managing the differences with that of their competitors. Price based positioning
is also being followed by Etihad Airways (Maarit Jalkala and Keranen 2014). This is being done
to leverage on their premium positioning. The high price points of them are ensuring that Etihad
Airways is gaining an exclusive tag among the target audiences and their higher quality of

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service is getting promoted. Thus, it can be concluded that the airline service of Etihad Airways
is getting positioned on the basis of price and service quality.
Critical evaluation of the marketing mix of Etihad Airways
Product
The core service of Etihad Airways is providing flight services to the passengers. In
addition, they are also operating cargo services as well. The actual product level of Etihad
Airways is the major differentiating factor with their competitors. This includes airport lounge
services and dedicated on boarding and off boarding the flight. The distinctive services being
offered to the passengers at the airports are helping in creating exclusivity among the customers.
Augmented services of Etihad Airways include the optional holidaying services for the
passengers, frequent flyer program and transportation services (Masarrat and Jha 2014). These
are also helping in enhancing the satisfaction and loyalty level of the passengers. It is also
identified that Etihad Airways is offering personalization services to the customers mainly in
terms of cuisines. This is due to the reason that food habit of the passengers is different with the
different social backgrounds of the passengers. In this case, they are offering cuisines according
to the taste and preference pattern of different customer segments. There are more
personalization services being offered to the business class passengers by Etihad Airways. On
the other hand, the usage of the latest aircrafts such as Boeing Dreamliner and Airbus A380 is
also helping Etihad Airways in providing the updated services to the customers (Petrescu et al.
2017). This is due to the reason that these aircrafts are having the latest technologies and service
facilities that are helping in managing the passengers. It is also identified that with the use of the

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large aircrafts such as A380, the average cost per passenger is also getting reduced for Etihad
Airways. Thus, the profitability is also getting increased for them.
However, in this case, it should be noted that even though there are different services
being offered by Etihad Airways but the points of differences are low with their competitors.
This is due to the reason that other airliners such as Emirates are also offering the same sets of
services to their passengers. Thus, it is important for Etihad Airways to enhance their
differentiating factor over offering diverse services to the passengers. It is also identified that
even though the majority of the revenue for Etihad Airways are coming from the economic class
passengers but services are fewer for them compared to the business class passengers. Hence,
Etihad Airways are offering different and various augmented services to their passengers but
those are not covering the larger market segments (Alkaabi 2014). This is ensuring that the
desired outcome from the augmented services for the customers is not at par to the expected
level. Maintaining the different fleet from Boeing and Airbus is cost expensive for the Etihad
Airways. This is due to the reason that different aircrafts are having the requirements for
different maintenance and skills of the staffs. This is also creating complexities in the fleet
management system of Etihad Airways. The customer service process is also not homogenous
with the presence of different aircrafts in the fleet.
Price
It is identified that Etihad Airways is following different pricing policies for their
business class and economic class passengers. This is due to the fact that premium and higher
pricing is charged for the business class passengers and more economic pricing for the economic
class. However, the economic class pricing of Etihad Airways is higher compared to some of

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their competitors. This denotes that premium pricing policy is being followed by Etihad Airways
if being compared with the entire price level of the industry. The major benefit that is being
gained by them from the initiation of the premium pricing is higher profit margins, which is
ensuring their business viability (Davcik and Sharma 2015). On the other hand, premium pricing
of Etihad Airways is also helping in maintaining their premium positioning in the market, which
is the key attracting factor for the higher end customers. Moreover, with the classification of
their pricing policy, Etihad Airways is also being able to cater to different customer segments
across the income level. It is also identified that Etihad Airways is following the concept of
festive pricing and where certain discounts and offers are being provided to the passengers
during the festive season (Liozu and Hinterhuber 2013). In this case, they are following market
adaptability approach due to the reason that festive seasons are different in different regions and
cultures and the offers are being provided to the customers based on the regions. This strategy is
beneficial in gaining the short term passenger traffic during the festive seasons especially the
tourists.
However, on the other hand, there are few limitations also being identified in terms of the
current pricing strategy of Etihad Airways. One of the major limitations is the niche target
segments. Even though the profit margin of Etihad Airways is favorable enough due to their
premium pricing but it is not effective in increasing the market share. In the current competitive
aviation sector, it is important for Etihad Airways to increase their market share in order to
achieve the business viability. However, with the relatively higher pricing compared to their
competitors, it is difficult for them to cater to larger customer segments (Sengupta and Wiggins
2014). The adverse impact of the premium pricing of Etihad Airways is evident in their declining
market share compared to their major competitors such as Emirates. This should also be noted

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that economic pricing being charged by Etihad Airways for the economic class passengers is
relatively higher to the economic pricing level of their competitors. Hence, the potential
advantages of initiation of the economic pricing are not getting reflected in the sales revenue of
Etihad Airways.
Place
Place or distribution is important to ensure the proper and ideal market reach for Etihad
Airways. It is identified that they are having their presence in all the continents across the world
and have their connectivity with almost all the major countries across the world. Thus, it can be
concluded that Etihad Airways is having intensive distribution approach. The major advantage
that is being gained by them is tapping all the major economies across the world. In this case, it
should also be noted that passenger traffic is maximum in the international routes between the
major cities (Burghouwt 2016). Thus, Etihad Airways is operating in the most potential routes.
However, on the other hand, it should also be noted that due to the intensive distribution strategy
of Etihad Airways, they are losing out in different other potential markets. In the recent time, the
smaller routes are showing more growth compared to the established routes, which are being
leveraged by the new entrants and smaller airline brands.
In terms of the forward service process of Etihad Airways, Omni Channel approach is
being maintained due to the fact that both online and offline mediums are being used in
providing services to the customers. Ticket booking services are being provided through
different channels including the online mediums and third party ticketing agents. Thus, the
customers are having extensive access in availing the service of Etihad Airways. However, in
this case, it should be noted that ticket booking system of Etihad Airways is not well penetrated

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in the market. This denotes that their tickets are not available with any of the third party ticketing
agents. This approach of distribution of Etihad Airways is in the line to the premium positioning
of them. It is causing Etihad Airways in losing out a good opportunity from the untapped
markets. This can be concluded that Etihad Airways is following limited approach of distribution
similar to their pricing strategy (Qteishat, Alshibly and Al-ma'aitah 2014). In this case, the
official website of Etihad Airways is the solution and the official website of them is accessible
from any regions. Hence, customers can avail the ticketing services without the presence of third
party ticketing vendors.
Promotion
In terms of the promotional activities, Etihad Airways is following extensive approach
involving all the available mediums. They are involving the online and offline mediums and thus
Omni Channel approach is being maintained. It is identified that in terms of offline mediums,
television commercials and outdoor advertisements are being initiated. Television commercials
are being promoted in the up-market channels such as the urban news channels and tour
challenges where the potential customers of Etihad Airways can be tapped. In terms of the
outdoor advertisements, Etihad Airways is practicing billboard promotion and sponsorships.
Billboards advertisement in the posh locations is helping Etihad Airways to gain the brand
identity and communicating their services to the potential customers (Verhoef, Kannan and
Inman 2015). On the other hand, Etihad Airways is sponsoring different sports clubs such as
Manchester City FC, which is contributing in the worldwide recognition of their brand (Al
Masari and O’Connor 2013). They are also having their presence in different tour fairs and
business fairs. Thus, it can be concluded that the promotional approach of Etihad Airways is
extensive and gaining huge publicity and brand recall from the market.

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In terms of the online mediums, social media marketing is one of the most popular
mediums being used by Etihad Airways. They are having their official accounts and on different
social media platforms such as Twitter and Facebook. Communicating through these social
media accounts is helping Etihad Airways to engaging with the customers. This is also ensuring
that the feedback of the customers is gained and the services are being offered accordingly.
Hence, expectations and requirements of the customers are getting satisfied through
communicating with the social media accounts. Apart from the online and offline mediums,
frequent flyer programs of Etihad Airways are also helping in promoting their services among
the potential customers. This is due to the reason that frequent flyer program of Etihad Airways
is offering number of benefits to the frequent customers as loyalty benefits (Manser Payne,
Peltier and Barger 2017). This is generating positive word of mouth among the existing
customers as well as earned media for Etihad Airways in tapping the new and potential customer
segments. Thus, it can be concluded that promotional activities of Etihad Airways are extensive
as well as effective in nature.
However, on the other hand, it should be noted that absence of mass market mediums
such as print media is restricting the reach of the promotional activities of Etihad Airways. This
is due to the reason that print media is having the maximum market reach among other available
traditional mediums. Moreover, engagement with the potential customers through the offline
mediums of Etihad Airways is also limited. This is due to the reason that they are having
majority of the customer engagement activities in the online mediums (de Carvalho and
Campomar 2014). Thus, it can be concluded that even though Etihad Airways is following
extensive promotional activities but they are not being able to meet the expectations of the entire
target segment.

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Analysis
Thus, from the above analysis of the marketing mix elements, it is being identified that
Etihad Airways is having number of limitations as per their current approach. Majority of the
limitations of the current strategic intent of Etihad Airways are due to their premium positioning,
which is restricting the potentiality of tapping the huge mass market customers. In the analysis, it
is also identified that each of the marketing mix elements of Etihad Airways is designed as per
the taste and preference pattern of the premium and higher end customers. Hence, this the
expectations and requirements of the premium and higher end customers are being satisfied by
the service approach of Etihad Airways and the probability of emergence of positive word of
mouth from them is more. This proves that Etihad Airways is following market focus strategy in
their business operation. In the following sections, recommended steps to overcome the
identified limitations in the marketing mix analysis will be discussed.
Determination of the internal business factors of Etihad Airways
Strengths
Extensive market presence of Etihad Airways across the world is one of their major
strengths due to the reason that currently they are having connectivity across 55 countries. This is
helping them in catering to larger customer segments and increasing the revenue. In addition, it
should also be noted that the more countries will be covered by Etihad Airways, the more will be
their global brand identity (Pearson and Merkert 2014). As they are already operating in over 55
countries, Etihad Airways is enjoying huge brand recall and identity across the world. With the
coverage and connectivity with more than 55 countries, Etihad Airways is tapping the most
profitable and popular routes in the world. Extensive branding activities of Etihad Airways are

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also beneficial getting good recall value from the customers. For example, sponsoring
Manchester City FC is helping Etihad Airways to gain their identity in the European region as
well. The strategic location of the operating base of Etihad Airways is also giving advantages to
them. This is due to the reason that they are based in Abu Dhabi, which is enabling them in
tapping the both European and Asian market. Extensive fleet being managed by Etihad Airways
is also their advantage due to the reason that this is enabling them to cover the worldwide routes
and change the frequency of flight services according to the demand.
The employee management process or mechanism of Etihad Airways can also be
considered as their strength because it is helping them in offering best service quality to the
passengers. Service quality is more important and relevant for Etihad Airways because they are
positioning their service on the basis luxury and premium services. In this case, the skills and
expertise of the employees determines the service quality (Fan and Lingblad 2016). Etihad
Airways is also known for their management of the diverse workforce across their global
operation. Thus, the internal management approach of Etihad Airways can also be considered as
their strengths, which is making the differences with their competitors.
Weaknesses
One of the major weaknesses of Etihad Airways is their higher operating cost. This is due
to the reason that they are operating only in the international routes and not in any domestic and
shorter haul routes, which is increasing their cost of operation. In the case of international routes,
rules, regulations and standards to be followed are more compared to the domestic routes. On the
other hand, the customer potentiality in the international route is also low compared to the
domestic routes. Thus, due to the international route only approach of Etihad Airways, they are

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losing out at the high traffic routes in different domestic regions. Another major weakness of
Etihad Airways is the lack of narrow bodied aircrafts as they are only operating wide bodied
aircrafts. These wide bodied aircrafts are suitable for the longer haul routes but also involves
higher cost of operation including the higher fuel cost (Vidovic, Stimac and Vince 2013). In this
case, the risks of negative profitability from this wide bodied aircrafts are also more. This is
because of the fact that number of seats is more in these aircrafts and Etihad Airways is having
the need for more passengers to recover the cost from the aircraft.
As of now, flight services of Etihad Airways are covering only the leading and popular
routes across the world. However, due to the intense competition in these routes, profitability and
market potentiality is getting reduced for Etihad Airways. However, lack of their presence in
other growing and emerging routes is causing adverse impact on them. They are more depended
on their existing operating routes. Etihad Airways is not having any base in the western regions,
which is difficult for them to cater to the potential markets in the western European and
American regions. As of now, Etihad Airways is offering only to and fro services from their
Middle Eastern base to the western countries, which involves more cost in the transportation
process.
Opportunities
One of the major opportunities available for Etihad Airways is tapping the newer target
segments by introducing the shorter haul services. If Etihad Airways can introduce narrow
bodied aircrafts for the shorter haul flights, then they will be able to operate in different domestic
routes and shorter routes. This will increase their target customer diversity and larger target
audience (Wang 2014). Introducing the existing services in newer routes will also prove

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opportunity for Etihad Airways due to the reason that this will increase the global market
presence of Etihad Airways along with increasing their connectivity with more locations. Hence,
the customers availing these routes will now have the option of Etihad Airways. Enhancing the
personalized services to the passengers in the airports will also increase the business
opportunities for Etihad Airways (Scotti and Volta 2017). This is due to the fact that strategic
relationship with the airports will help Etihad Airways to create a distinctive experience for their
customers and it will also ensure the differentiated approach of them.
Threats
One of the major threats for Etihad Airways is the emergence of new competitors. This is
due to the reason that already they are facing huge competition in the forms of Emirates and
Qatar Airways along with other foreign airliners. Thus, entry of new competitors will further
pose challenge for Etihad Airways. Another major and potential threat for Etihad Airways will
be the increase in the price of jet fuel. Price of the jet fuel is ever increasing and it is likely to
follow the same trend in the coming years. Thus, the more will be the cost of the jet fuel; the
lower will be the cost of operation for Etihad Airways (Lim and Hong 2014). With the intense
competition in the market, it will be difficult for Etihad Airways to increase the fare rate and
their profit margin will be affected. Political relationship between the countries will also affect
the business of Etihad Airways due to the reason that they will not be able to continue their flight
services between the two countries indulged in adverse relationships.
Determination of the external business factors of Etihad Airways
Political factors

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There are number of challenges to be faced by Etihad Airways in terms of political
factors in operating in the global market. This is because of the fact that political environment of
the home country and the host country of Etihad Airways is different and it is important to
continue with the flight services by aligning with these differences. Middle Eastern region is one
of most politically disturbed regions with adverse relationship between the countries and
presence of terrorism (Huettinger 2013). Thus, it is a risky affair for Etihad Airways to ensure
their business viability. In addition, adverse political environment in the operating country will
also reduce the incoming of tourists, which will also have implications for Etihad Airways.
Economical factors
Economical conditions of the country and on global basis are having direct impact on the
business implications of the airline industry. This is due to the reason that airline services are
expensive and depends on the affordability of the customers. Thus, in operating in the global
market or in a new host country, it is important for Etihad Airways to determine the economical
condition of the target market. For instance, if the economical condition of the country is
witnessing declining trend, then the purchasing power of the average customers is going reduced.
In this condition, Etihad Airways will not be able to have potential premium customer segments
and business viability will get lost. Emergence of the global economic downturn will also pose
huge challenge for Etihad Airways in their global market operations. Emergence of global
recession will create negative economic environment across the world and finding in the
economy will get reduced (Ovtchinnikov 2013). Thus, the potential customers for Etihad
Airways who will pay for the premium flight services will get reduced. In the case of global
operation, the risks of economic recession will be more for Etihad Airways compared to
operating in the home market only. This is due to the reason that loss will be more in the case of

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global operation. In the global operation, Etihad Airways will face different intensity of
competition from different airliners. Different countries are having different sets of competition
with home grown brands and Etihad Airways will face this different competitive scenario in the
global market. This will create difficult for them to maintain their standardized business strategy.
Social factors
Flight services are still being perceived as the higher end and premium services due to the
fact that it is the most expensive mode of transportation. Thus, airline industry is still operating
in a limited market segment. In this case, Etihad Airways is offer premium and higher end
services. This is further limiting their potentiality in the market. One of the major challenges for
Etihad Airways in operating in the global market is the growing trend towards the low cost
carrier services (David 2013). With the emergence of the concept of price sensitivity among the
customers, it is getting more difficult for Etihad Airways to maintain their business viability.
Technological factors
Technological factors are relevant for Etihad Airways due to the reason that technological
advancement determines their effectiveness in fending off the competition. Technological
development is more rapid in terms of the aircrafts and the latest aircrafts are being used by
them. However, in operating in the global market, Etihad Airways will have to invest more
capital in developing technology for the global market. The differences in the infrastructure in
different countries in terms of technological factors will be challenging for Etihad Airways. For
instance, the separate lounge facilities being offered by them in different airports might not be
available in different new regions (López-Bonilla and López-Bonilla 2013). The Airbus A 380

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aircrafts used by Etihad Airways will not be able to get accommodated in every airport. Thus, the
service standards will be different for Etihad Airways in tapping in the foreign markets.
Legal factors
All the airliners follow the authority of IATA and their rules and regulations are being
adhered to. However, individual countries are having domestic aviation laws and standards that
should be followed by the airliners. Thus, in operating in the global scenario, Etihad Airways
will have to follow the different domestic aviation law in different countries. These laws will
also include the investment standards (Ulrich 2016). Thus, Etihad Airways will have to the
investment rules such as the capping of foreign investment in the aviation sector is different in
different countries. Thus, there will be fewer challenges that will be faced by Etihad Airways in
terms of the legal factors.
Environmental factors
Airliners are one of the major contributors of carbon in the environment and there are
already number of legislations and standards being followed in reducing the same. In the case of
Etihad Airways, they are operating the latest aircrafts, which are fuel efficient and lower carbon
emitter. In operating in the global market, Etihad Airways will face different environmental laws
in different countries and this will create complexities in their standardized service process
(Kahn and Nickelsburg 2016).
Determination of the strategic options for Etihad Airways
Market development
With the help of the market development strategy,
Diversification
With the help of the diversification process,

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Etihad Airways will be able to cover more foreign
countries with their existing flight services. This
will help them to cater to larger customer
segments across the world for their existing
services.
Etihad Airways can enter in any related business
segment of airlines in a new market. This will
involve more cost for them but will also help in
becoming a business conglomerate. For instance,
Etihad Airways can enter in tour and tourism
business in a new market known for tourist
destinations.
Market penetration
With the help of the market penetration strategy,
Etihad Airways should introduce their existing
services in more cost flexible approach to further
penetrate in the market. For instance, Etihad
Airways can introduce the low cost flight services
to cater to the mass market customers.
Product development
With the help of the product development
approach, Etihad Airways can introduce new
services in their existing market to cater to new
customer segments. For instance, they can
introduce catering facilities in the existing
markets.
Recommendations
 It is recommended that Etihad Airways should introduce a new sub-brand for operating in
the low cost carrier segment. This will help them to cater to the cost sensitive customers
and coping up with the newest trend in the market. In addition, offering low cost carrier
services will help Etihad Airways to tap the growing markets in the developing countries.
These countries with huge population and market opportunities are the hot breeding
ground for low cost carrier services. Thus, introduction of sub-brand will ensure that
Etihad Airways is catering their existing customer segment as well as the new segments.

24MARKETING MANAGEMENT
 It is recommended that market adaptable approach should be initiated by Etihad Airways.
This is due to the reason that standardized approach will not be applicable in all the
countries. For example, the current fleet of wide bodied aircrafts will not be applicable in
doing business in the smaller countries. In this case, they will require narrow bodied
aircrafts. This market adaptable approach should be followed in terms of customer
service also due to the reason that customers from different regions across the world are
having different sets of expectations and cultural differences.
 Etihad Airways should have separate base in the western regions to cater to the American
market. This is due to the reason that American market still is the leading market for the
airliners without having base in the region; Etihad Airways will not be able to cater to the
local market.
 It is recommended that in terms of the pricing strategy, Etihad Airways should initiate
market and competition based pricing strategy. This is due to the reason that with the help
of the market based pricing strategy; the ticket cost of Etihad Airways will be comparable
with the pricing of their competitors. If the price points can be remained same, then the
differentiation in terms of the service elements by Etihad Airways will be more
competitive for the customers. They will prefer the flight service of Etihad Airways if
greater value propositions can be offered in the same price points.
 Lastly, it is recommended that Etihad Airways should follow market development and
market penetration strategy in order to manage their existing as well as new markets.
With the help of the market penetration strategy, they will be able to enhance the
profitability further from their existing market by targeting the different customer

25MARKETING MANAGEMENT
segments. On the other hand, with the help of the market development strategy, Etihad
Airways will become a truly global airliner.
Conclusion
Thus, it can be concluded that the current marketing activities and approaches of Etihad
Airways are well effective and efficient enough to deal with the current market challenges. In
this report, it is identified that they are following marketing orientation in order to design their
business approaches as per the market trend. In addition, it is also identified that even though
they are having effective choice and approach of marketing mix elements but a few limitations
are also identified over each of them. This report also analyzed the external and internal business
factors of Etihad Airways and a few challenges are identified from this analysis also. On the
basis of the identified challenges, this report recommended a few strategies. These strategies will
help Etihad Airways to ensure their long term business viability.

26MARKETING MANAGEMENT
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