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Marketing Management
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Executive Summary
Cathay Pacific is an international airline company which is renowned for providing better quality
travelling services. The market of Cathay Pacific is segmented on the basis of the preferences of
customers as well as their requirements. The company mainly targets the business travellers who
are less price sensitive and desire for quality services. Cathay Pacific uses different positioning
strategies in order to maintain its performance in a competitive manner. The pricing strategy of
Cathay Pacific is formulated on the basis of the quality standards maintained in the services
offered to the customers. The price structure of the company is divided into three categories
which are economy, business and high–class, on the basis of facilities. On the other hand, the
promotional strategies of Cathay Pacific are implemented with the objective of informing people
about the services offered. From time to time, the company has provided special as well as
seasonal offers along with discounted fares for better competitiveness in the global market. With
this concern, different long term as well as short term promotional strategies have been used by
Cathay Pacific for the purpose of enhancing its performance in the target market segment.
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Table of Contents
Introduction ..................................................................................................................................... 4
Evaluation of the Segmentation, Targeting and Positioning Strategies of Cathay Pacific ............. 5
Segmentation Strategy ................................................................................................................ 5
Targeting Strategies .................................................................................................................... 8
Marketing Strategies of Cathay Pacific ........................................................................................ 11
Pricing Strategies ...................................................................................................................... 11
Promotional Strategies .............................................................................................................. 13
Conclusion .................................................................................................................................... 16
References ..................................................................................................................................... 18
Bibliography ................................................................................................................................. 23
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Introduction
Marketing management is the process through which marketing plans are formulated and are
implemented with regard to promotion as well as price along with distribution of goods or
services. The motive of marketing management is to satisfy the demands of the customers as
well as to fulfil the objectives of a company. It is the process of identifying the preferences of the
customers and delivering products or services accordingly (Kotler & Keller, 2009). The concept
of marketing management also acts as an important determinant factor for the successful
performance of a company. It is in this context that the activities of marketing are performed
with the motive of generating and enhancing profits. In the recent day phenomenon, the
advancement of technology as well as globalisation has created vast challenges for companies to
cope up with innovative market circumstances. Nowadays, multinational companies are required
to adopt these advancements to attain greater competency by promoting innovation (Kotler,
2002).
Focusing on the aforementioned aspects, the report will be based on describing marketing
strategies of Cathay Pacific. The report hereby intends to analyse the segmentation, targeting and
positioning strategies of Cathay Pacific. Furthermore, the report also aims to analyse the pricing
as well as promotion strategies utilised by the company. Stating precisely, the major objective of
the report is to evaluate the performance of Cathay Pacific by analysing its marketing activities
in the international arena and its positioning strategies amid the target customer group.
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Evaluation of the Segmentation, Targeting and Positioning Strategies of Cathay Pacific
Segmentation Strategy
Cathay Pacific is an international airline carrier founded in the year 1946, headquartered at Hong
Kong. The company is operating in almost 42 nations worldwide and provides cargo as well as
passenger services in around 162 routes (Cathay Pacific Airways Limited, 2011). As a matter of
fact, the company serves a large consumer market owing to which, defining consumer segments
becomes quite significant for the company. Contextually, the market segmentation for airline
carrier is developed by Cathay Pacific, based on the perspectives of the customers for providing
the services as well as for sustaining the competitiveness among different competitors in the
international aviation industry. The market of Cathay Pacific is segmented into four major
categories which are discussed as follows:
Large Corporate Customers
The corporate customers are those visitors who often travel through airlines due to commercial
or business purposes. Cathay Pacific targets these customers by formulation of better plans and
facilities. For these customers, the foremost aim of Cathay Pacific is to provide reliable as well
as prestigious services so that they can travel with the company repeatedly. As these customers
are low price sensitive and are quite concerned about quality of services, the organisation is often
witnessed to charge high fares in comparison to other customer segments. Cathay Pacific also
provides various luxury services in order to appeal this particular customer segment. The tickets
for these customers are usually obtained through the administrative department of the company
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to ensure identical quality services (Broda & et. al., 2002).
Small and Medium Sized Corporate Customers
Small and medium sized corporate customers are the second important market segment for
Cathay Pacific. The small and medium sized corporate customers are also facilitated with almost
similar services which are provided to the large corporate customers. However, unlike large
corporate customers, the fares for the services play an important role for this customer segment.
To be mentioned, the tickets for these customers are normally obtained from varied travel
agencies (Broda & et. al., 2002).
Tourists
Tourism is considered to be the most important sector for Cathay Pacific to obtain greater
profitability and thereby enhance the market share. Since most of the tourists are price sensitive,
they readily acquire the varied promotional offers as well as tour packages. Due to this reason,
Cathay Pacific provides varied tour packages as well as promotional offers for targeting the
tourist customer segment (Broda & et. al., 2002).
Students and Others
The fourth important customer segment of Cathay Pacific comprises students and other
infrequent travellers. In order to entice these market segment, Cathay Pacific provides several
promotional offers such as discounted ticket facilities for students as well as other groups of
customers which include senior citizens as well as employees who are required to travel for
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varied purposes. These types of customers are low concerned in regard to services offered as
well as comfort, and are observed as quite sensitive toward price (Broda & et. al., 2002).
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Summarising the above segmentation strategies of the company it can be stated that the company
used to perform several services in accordance with the requirements as well as preferences of
customers of these different market segments. For instance, the economy class services of
Cathay Pacific are mainly acquired by employees of small businesses as well as budgeted
customers along with tourists. On the other hand, the business class services are mostly acquired
by large as well as medium sized customer segments. Ultimately, the high class facilities are
mainly acquired by high profile customers with greater spending power including managers of
big multinationals as well as premium travellers who can afford the luxurious services (Broda &
et. al., 2002).
Targeting Strategies
Although there are four different market segments considered by Cathay Pacific, the foremost
target of the company has been observed as the market segment of commercial travellers who are
mostly quality sensitive rather than being price sensitive. Cathay Pacific mainly targets the
business travellers who arrive from Hong Kong, Europe, North America as well as Asia. These
business travellers can readily invest money for entertainment as well as other aviation services.
The company also targets these customers with the motive of sustainable growth and also to
enhance its long-run performance in terms of providing better services and ensuring
competitiveness in comparison to other airline companies (Broda & et. al., 2002).
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Positioning Strategies
Positioning strategies are the strategies which are developed with the intention of assisting the
company to secure better position in the market by understanding its strengths as well as
weaknesses. Positioning strategies of Cathay Pacific are implemented for securing a competitive
place in the airline industry. The positioning strategies also assist Cathay Pacific in determining
and improving the brand image (Karadeniz, 2009). There are several steps which are required to
be followed for effective formulation of positioning strategies. The steps include recognition of
competitive frame and identification of the level of competition within the market. Moreover,
selection of appropriate marketing mix strategies is also required for implementing effective
positioning strategies. However, it is worth mentioning that in order to ensure effectiveness, the
positioning strategies must be monitored for determining its appropriateness for a specific market
(eBooks, 2009).
Michael Porter had stated three kinds of strategies which can be used by a company in order to
position itself in the market. Those strategies can be further identified as segmentation strategy,
cost leadership strategy and differentiation strategy (Sullivan, n.d.). Cathay Pacific follows
differentiation strategy for targeting customers and accordingly offering services in an enhanced
manner. As a part of its differentiation strategy, Cathay Pacific intends to provide ample ranges
of quality services in accordance with the requirements as well as preferences of the customers.
It is in this context that the customers of Cathay Pacific are provided with comfortable space,
enhanced features (such as standard interior layout) along with better catering facilities. All these
services assist Cathay Pacific for acquiring a better position and competitiveness in the target
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market segment (SlideShare Inc, 2012).
In order to maintain sustainable growth as well as performance, Cathay Pacific had developed
and implemented certain positioning strategies. For instance, the company had invested for the
development of capacity of its fleet. Moreover, Cathay Pacific had also adopted strategies to
become socially responsible to acquire the position of an environmentally recognised company.
The company has correspondingly devised many promotional strategies to maintain its position
as one of the leading airline companies on a global prospect. For instance, premium economy
class cabins have been established on long-haul aircrafts for providing superior luxurious
services (Cathay Pacific Airways Limited, 2011).
Furthermore, new business class lounges had been initiated by Cathay Pacific in Frankfurt as
well as at San Francisco International Airport. Besides, Cathay Pacific has also formulated
strategies for developing the reservation as well as check-in systems along with on-line ticket
changing functions through the use of advanced technology. Additionally, the company has
successfully developed as well as provided varied luxurious facilities by implementing
innovative technologies for gaining competitive advantage in the aviation market (Cathay Pacific
Airways Limited, 2011). From an overall point of view it can be stated that these are the varied
strategies which are adopted as well as implemented by Cathay Pacific for its enhanced
performance in different market segments. The positioning strategies have aided the company to
perform as well as provide services in a sustainable manner assisting it in accomplishing the
determined objectives effectively.
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Marketing Strategies of Cathay Pacific
Pricing Strategies
Pricing is often regarded as one of the most significant elements of marketing mix strategy. It is
in this context that pricing strategy assists a company in determining the positions with regard to
the products or services. Pricing also has an influence on the promotion techniques as well as
distribution channels to be acquired by a company concerning a particular service dimension.
Correspondingly, it can be observed that the pricing strategies of Cathay Pacific depend on the
marketing strategies developed with regard to the target market segment (National Informatics
Centre, n.d.). Pricing strategies of Cathay Pacific are formulated with the objective of defending
the company in case of intense price competition and for adjusting with the preferences of
customers. Moreover, pricing strategies also enable to maximise profit and to improve market
share in different market segments (Kotler, 2009).
The pricing strategy of Cathay Pacific depends largely on the quality of services offered to the
customers. The revenue generated through pricing is thus determined by varied factors such as
knowledge of the market as well as management of revenue along with awareness of customers
with respect to cost. The pricing strategy for Cathay Pacific is developed on the basis of
organisational structure as well as the features which are provided to the customers.
Additionally, the pricing policy of Cathay Pacific is formulated on the basis of the preferences as
well as requirements specified by customers and are categorised into economy, business and first
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class service segments. The economy class fare usually consists of usual fare; whereas, business
as well as first class services are charged with high fares for offering enhanced services and
facilities (Doganis, 2012). However, it is worth mentioning in this regard that the pricing policies
which are formulated by the company are required to be approved by the government as well as
by the International Air Transport Association (IATA) (Knorr & Zigova, 2004).
Cathay Pacific has also devised varied promotional as well as seasonal offers for acquiring more
varied market segments by satisfying their requirements. The pricing strategies also assist the
company in generating greater profits for sustainable growth. Furthermore, in order to maintain
its position as a differentiated aviation company, Cathay Pacific also focuses on providing varied
promotional or special offers, especially to its frequent customers. The company can also be
observed to make use of penetrating pricing policies for creating a better brand image than its
competitors in the targeted international market segments. Moreover, Cathay Pacific has also
maintained fares in accordance with the cost incurred in its supply process as well as to sustain
its position as a leader in terms of the product and service quality (Baidu, 2012). Hence, by
analysing the pricing strategies of Cathay pacific, it can be stated that while determining the
price of its products or services, the company tends to be highly dependent on the preferences or
requirements of the customers, the quality offered and also the objectives which are to be
accomplished for its sustainable growth and development.
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Promotional Strategies
The promotional strategy is the other significant component of marketing mix strategy which is
adopted with the notion of creating better awareness of the services as well as products amid the
customers. Based on a similar philosophy, the promotional strategy in Cathay Pacific is
formulated with the motive of informing as well as influencing the purchasing decisions of
customers. It also assists in steering change within the preferences and requirements of the
customers in accordance with the availability of better quality services or products. The
promotional strategies of Cathay Pacific are adopted with the objectives of expanding the market
by targeting new customer segments as well as to enhance current market position. Moreover,
promotional strategy enables to provide varied information about the services as well as added
features which are intended to be offered to the customers. It is in this context that by using
promotional strategies, Cathay Pacific can differentiate its products and services from other
competitors (Pierce College, 2008).
The promotional strategies used by Cathay Pacific can be identified as advertisement,
differentiated services and special offers among others. Cathay Pacific uses advertising medium
with the aim of keeping the customers aware about the quality and features of its services. The
promotional strategies of the company are further segregated in long term as well as short term
objectives. As a part of its promotional strategy, Cathay Pacific can be observed to attempt
restructuring its sales agent system for stabilising the fares. The company also used promotional
techniques such as animated figure or famous characters for building a unique brand image amid
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its targeted customers (Baidu, 2012).
With this concern, the company has also designed its promotional theme stating ‘service straight
from the heart’ in order to describe about the services offered to the customers. Cathay Pacific
has numerous contracts with different hotels as well as travel agencies which help to provide
special offers to regular customers and tourists with residential and accommodation facilities
along with different tour packages. The company has also improved its catering facilities and
other promotional features over its past performances providing enriched dishes from eight
renowned restaurants of the Miramar Group and four restaurants of the Swire Hotels Group.
These special offers as well as revised fares are further used by Cathay Pacific for promotional
strategies. Furthermore, Cathay Pacific has launched a personal website for having valuable
communications with regard to the financial and other significant information with the concerned
stakeholders including its customers (Cathay Pacific Airways Limited, 2011). The company also
sponsors community activities with the aim of acquiring the position of an environment friendly
company as well as for developing positive brand image in aviation industry (Broda & et. al.,
2002).
Promotional strategies of Cathay Pacific can further be observed as formulated with the objective
of informing the customers about the special offers as well as seasonal fares which are to be
offered. With this aim, the company utilises mass media promotional techniques such as
magazines, televisions, internet as well as hoarding for promoting the offers provided. The other
promotional strategies used by Cathay Pacific are discount fares and study tours for the students
and the educational institutions (Baidu, 2012). These are the varied short term as well as long
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term promotional strategies which are formulated by Cathay Pacific for enhancement of
performance and for building competitiveness. The different promotional strategies used by
Cathay Pacific have assisted the company to deal with intense competitions.
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Conclusion
Cathay Pacific is an international airline carrier company. Since its establishment, the company
has been performing in an effective manner providing quality services to its targeted customers
with the assistance of its competitive strategies. The services which are offered by Cathay Pacific
have assisted the company to acquire better competiveness in the international market.
Moreover, the pricing strategies as well as promotional strategies are suitably formulated as well
as implemented by the organisation for its enhanced performance. From the above analysis, it
can be observed that the pricing policy of the company is devised on the basis of preferences of
the customers as well as with due emphasis on the quality of services offered. It thereby enables
the company to recognise and maintain its position as a leading company in comparison to other
airline service providers in the international market. The price structure of Cathay Pacific is
divided into economy, business and high class in accordance with the service requirements of the
customers. The economy class consist of general fares and is often reviewed to be appropriate for
regular customers. The business and the high-class consumer segments are however served with
higher fare charges which are usually suitable for corporate employees as well as managers.
It is in this context that the promotional strategies of Cathay Pacific are implemented in order to
make people aware about the quality of services current rendered by the organisation. With this
concern, Cathay Pacific offers varied special as well as seasonal offers for increasing its
customer base and competitiveness in the international market. It also offers varied tour packages
as well as hotel facilities for tourists.
Conclusively, it can be stated that the strategies
implemented by Cathy Pacific, deciphers a significant contribution towards the overall business
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competency in the recent business context.
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