Integrated Marketing Communication

Malaysia Airline 1

1.0 Executive Summary:

Contained in this paper is an Integrated Marketing Communications plan for Malaysia Airlines. The
target audience of MAS with young families is the focus of the proposed campaign and a great deal
of research has been completed to identify and utilize MAS strengths, weaknesses, opportunities
and threats to prepare a plan most beneficial to the organization. Objectives and tactics have been
designed to fall in line with Malaysia Airlines strong mission and values. This detailed plan includes
marketing, creative, media, and public relations strategies, as well as direct marketing and sales
promotions suggestions. Due to missing of MH307 Malaysia Airline faced huge loss, they used lost
the passenger who used to travel frequently. They have be loss their trust beside in share market
they have been facing major ups and down. In the report I am trying to find out the problem they
have been facing. In the recovery model will shows how they can winning back the customer? As it
was no.1 airliner for international who wants to travel Malaysia beside domestic it was as popular
Air Asia.

















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Malaysia Airline 2

2.0 Introduction:
MAS was founded in 1947 by Malayan Airways. With the formation of Malaysia in 1963 the airline
changed its name soon after to Malaysian Airlines. MAS is the government owned flag carrier airline
of Malaysia. Flights are operated from KLIA and Kota Kinabalu. It also operates transatlantic and
transpacific flights. MAS has received more than 100 awards in the last 10 years such as the
Worlds Best Cabin Crew and 5-star Airline. MAS is listed on the stock exchange of Bursa
Malaysia by the name Malaysia Airline System Berhad.
3.0 Company History:
The story of Malaysia Airlines started in the golden age of commercial air travel. A joint initiative of
the Ocean Steamship Company of Liverpool, the Straits Steamship of Singapore and Imperial
Airways led to a proposal to the Colonial Straits Settlement government to run an air service
between Penang and Singapore. The result was the incorporation of Malayan Airways Limited (MAL)
on 12 October 1937.
On 2 April 1947, MAL took to the skies with its first commercial flight as the national airline. Fuelled
by a young and dynamic team of visionaries, the domestic carrier turned into an international airline
in less than a decade. With the formation of Malaysia in 1963, the airline changed its name to
Malaysian Airlines Limited. Soon after, Borneo Airways was incorporated into MAL. Within 20 years,
MAL grew from a single aircraft operator into a company with 2,400 employees and a fleet operator
using the then latest Comet IV jet aircraft, six F27s, eight DCs and two Pioneers.
In 1965, with the separation of Singapore from Malaysia, MAL became a bi-national airline and was
renamed Malaysia-Singapore Airlines (MSA). A new logo was introduced and the airline grew
exponentially with new services to Perth, Taipei, Rome and London. However, in 1972, the partners
went separate ways. Malaysia introduced Malaysian Airline Limited, which was subsequently
renamed Malaysian Airline System and took to the skies on 1 October 1972. It was later branded
Malaysia Airlines and continues to be the countrys national flag carrier. Malaysia Airlines achieved a
significant milestone in 2012 when it received its first Airbus A380-800 followed by a historic
Malaysian record on 1 July 2012 with the launch of its A380 scheduled service between KL
International Airport and London Heathrow.
On 1 February 2013, Malaysia Airlines became a full-fledged member of oneworld alliance and is
now connected to some 850 destinations in 150 countries across the oneworld alliance network.
The airline holds a lengthy record of service and best practices excellence, having received more
than 100 awards in the last 10 years.




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Malaysia Airline 3

4.0 Background of Malaysia Airlines
Malaysia Airlines System Berhad is also known as MAS in short. MAS is founded in 1947 as
Malayan Airways, but it has change its name as Malaysian Airline System in 1 October 1972. MAS is
the flag carrier which is own by government of Malaysia. MAS headquarters is situated at Sultan
Abdul Aziz Shah Airport in Subang, Selangor. MAS operates flights at its first base in Kuala Lumpur
International Airport, and secondary base in Kota Kinabalu.
Malaysian Airlines System Berhad is the holding company for Malaysias national airlines
carrier, one of the fastest growing airlines in Asia. Malaysia Airlines has two airline subsidiaries,
which is Firefly MASwings. Firefly operates scheduled flights from its two home bases Penang
International Airport and Subang International Airport. The airlines focuses on tertiary cities
although has recently launched services to Borneo from Kuala Lumpur International Airport.
MASwings focuses or inter-Borneo flights. Malaysia Airlines has a freighter fleet operated by
MASKargo, which managers freighter flights and aircraft cargo-hold capacity for all Malaysia
Airlines passenger flights.
MAS are using this type of craft Airbus A330-200 and A330-300. Boeing 737-400, 800 and
400/400. Malaysia Airlines operates a fleet of aircraft with two cabin configurations. Malaysia
Airlines B777-200ER fleet has a two configuration which is Golden Club Class and Economy Class. Its
B747-400 fleet has a three-cabin configuration, also including First Class. Malaysia Airlines premium
cabins and Economy Class have been giving numerous awards for excellence in product and service
delivery.
From a small air service, Malaysia airlines have grown to become award-winning airline with
more than 1000 aircraft, servicing more than 110 destinations across six continents.
Malaysia Airlines also practiced the online booking and buying to make their reservation or
purchasing way easier for passenger. With this online purchasing, the passengers need to fulfil their
details like the destination they want to go and the departure place they want. The payment will
settling via the online banking. Internet user can book their air ticket, hotel and train ticket and rent
car via Malaysia Airlines Website.








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Malaysia Airline 4

5.0 Malaysian Airlines VISION MISSION - OBJECTIVE

Vision
An airline uniquely renowned for its personal touch, warmth and efficiency
To be the Worlds five star value carrier (FSVC)
To be the airline of excellence
Going beyond expectations
Mission
To provide air travel and transport service that rank among the best in terms of safety,
comfort and punctuality.
Make Malaysia Airlines one of the leading standard bearers for the airline industry in term of
safety, efficiency and quality of service.
To be a profitable airline
Objectives
Highest level of safety
Satisfy legal requirements
Operations are conducted in the most efficient manner
Drive structural cost management
Ability to map efficiency in each area of operations
Position as benchmark in the aviation industry



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Malaysia Airline 5

6.0 Brand Analysis of MAS:
Malaysian airlines (MAS) used to be the national pride of Malaysia. It symbolisms modernity
and the vision to achieve continues growth and advancement for the country. The company gain
reputation as an airline that provided good hospitality for the passengers. It all seems good for MAS;
however MAS keep suffers a lot of losses and declining revenue over the years. In 2011, MAS
recorded a mind-blowing loss of RM2.52 Billions. One might say that it is due to economic downturn
or recession, but other competitor airlines are actually making profits. Among the airlines that
recorded profits is Singapore Airlines, British Airways and Cathay pacific, all the competitors of MAS
reported a profitable year, but why MAS still recorded such a big loss? We need to examine the
marketing mix of MAS in order to find the problem and the solution to the problem faced by MAS. It
is expected that MAS might be bankrupt after second quarter of 2012 if no steps are taken to solve
problems faced by MAS.
7.0 SWOT Analysis
7.1 STRENGTH
Malaysia Airlines has its own abilities of strength of their fundamental business use to
compare itself with other service company based on value, price and services. I have studied and
analysed the strength of MAS, there are points can show the strength in Malaysia Airlines.
7.1.1 Highly recognizable brand name
Malaysia airlines is one of the service companies that established for more than 70 years
being the oldest airlines company in Malaysia and its brand image has been highly recognized.
Malaysia Airlines put a lot of effort on their branding and advertising and major around flight crew.
Malaysia Airlines have their own branding strategy involve its stewardess to promote its airline.
Malaysia Airlines decided to use the going beyond expectation as their slogan to market itself
internationally and promote its excellence of quality service. Using branding strategy will help MAS
to establish strong brand image internationally and locally. MAS airlines has built a strong name in
the airlines service industry.
7.1.2 Increase in yield
Increase in yield mean revenue per passenger kilometre. Implement a highly competitive
and dynamic pricing, Malaysia Airlines are able to maximise yields on peak flights and expand
market share on non-peak flights. The increasing in yields is due to strong load factor to leverage on.
Additional capacity of aircraft will influence yield and yield recovery maybe slower than expected.




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Malaysia Airline 6

7.1.3 Diversified revenue stream
Malaysia airlines generates revenue from various services such as flight operation and
Aircraft cargo. MAS has diversified into related industries such as aircraft ground handling, aircraft
leasing, aviation engineering, air catering and tour operations.
Besides, MAS have revenues coming from non-aeronautical areas such as maintenance,
repair, overhaul and aircraft handling.
7.1.4 Low labour costs
When MAS carried out staff reduction or downsizing, this is due to MAS was overstaffed. Its
staff size reduces by 3,000 or 15%. Reduce of labour will allow MAS to save on labour cost and
increase effectiveness.
A blanket recruitment and training was established to save operating cost. MAS has the
labour cost compare with other airlines. Low labour cost structures and high productivity have more
competitive advantages over company with labour costs.
7.1.5 Accredited by Awards and Recognition
MAS has won various awards from international body and is recognized by the IOSA for
safety practices. In the year 2009, MAS won the 5 star Airline award for the fifth consecutive year as
well as regained the position of worlds best cabin staff. Besides, MAS also recognised as Asias
Leading Airlines the World travel Awards and Best Airlines in Southeast Asia by the Global Traveller
magazine.
These awards showed that MAS continue to deliver better products and services, not only to
satisfy passengers, but also MAS business customers.
7.1.6 Well-trained employees
To improve service level of customer service agents, training was conducted to calculate
good habits and service quality the front line ground staff. To enhance flight safety, training is arm
together with flight safety department introduced to evaluate training footprints for the entire fleet
consistent with the latest in the industry. Its flight attendants undergo extensive training. MAS
airlines use their flight attendants to promote the airline. MAS branding strategy is to provide
hospitable and friendly service to represent good image to the public.





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Malaysia Airline 7

7.2 WEAKNESSES
Weaknesses is the things that MAS does not do well or other airlines company are doing
better. From assessment, MAS still have some weaknesses as other airlines company have.
7.2.1 Low margin
Although MAS has a strong revenue growth, its operating margins are below the industry
average. This is due to the airlines growth plans and MAS competitive disadvantages.
MAS found it is difficult to achieve operating profit margin at sufficient level finance such as
capital expenditure, and other financing.
7.2.2 Weak cash flow
The airlines reporting negative inflow cash from its operations. Several weaknesses were due
to the RM 1.36 million loss which was caused by the increasing fuel prices.
Weak cash flow is due to impairment losses. The amount loss can be recognise in income
statement. Weak cash flow means that spending is more than earning. The amount of loss is
measured is difference between the asset carrying amount and the present value o estimated
future cash flows.
7.2.3 Unprofitable routes
In 2000, the airline suffered further losses lead to mas airlines suspend its flight to
unprofitable routes such as Brussels, Darwin, Honolulu, Madrid, Munich and Vancouver.
Some routes have been discontinue due to insufficient passenger demand. MAS claimed that
it was losing passengers to other carriers on this route because of insufficient capacity.
7.2.4 High costs
Costs include staff costs, handling and landing fees, aircraft maintenance and overhaul
charges. The rising cost of fuel will lead to high cost of operation. Sometimes, higher costs is
because of security and environment policies.
7.2.5 Low Productivity
Marketing skills are inefficient and are only focused on expanding to fast. Ineffective
utilization of resources and partnerships. Low productivity is because MAS was overstaffed. Besides,
Low productivity were due to poor management and poor technology.




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Malaysia Airline 8

7.3 OPPORTUNITIES
Opportunities are the chances in the industry which could utilized by the company to make it
more positive respond in the market.
7.3.1 Launch of firefly and MASwings
Firefly and MASwings are subsidiaries of Malaysia Airlines. Firefly is Malaysias first
communitys airline. It is expected to gain a potential customer base of 100 million in the Indonesia-
Malaysia-Thailand area. MAS airlines set up firefly for test-bed to manage low cost operation. Firefly
first flight was on 3 April 2007 at Penang. Its headquarter are at Sultan Abdul Shah Airport in
Subang. MASwings first flight was on 1 October 2007. Its headquarter are at Jalan Airport in Miri,
Sarawak. Its Firefly and MASwings have recently completed their fleet renewal exercise, both
operating 7 and 10 ATR72-500 aircraft accordingly.
7.3.2 Expanding passenger traffic
MAS airlines covers several destination in Asia such as japan, china, India and the middle
east. Asia country demand for travel is high. More than 15% of MAS revenue comes from the Asian
region. In February 2010, international passenger demand up by 9.5% year-on-year. In Asia pacific,
passenger traffic grew by 13.5%.
7.3.3 Increasing cargo traffic
There has been an increase in cargo traffic in South East Asian countries. This is due to
growth of export related industries. Hence, MAS airlines benefits from the increase in demand for
air cargo services. In February 2010, cargo traffic improved by 26.5%. In Asia pacific, cargo traffic
posted a significant growth of 34.5%.
7.3.4 Changes in customer preferences
Customers have different needs and desires in term of purchasing. The changes of customer
preferences are because of factors like demographic, psychographic, and geographic factor.
Malaysian Airlines should introduce new concept, it is because human beings can easily having a
change in their life.
Based on the survey and research have been done by MAS, MAS should introducing hot
meal boxes in response to customer preferences. MAS has more menu options available for
customer to choose from. There are Asian and Western meal to suit all customer needs and desires.
A total of 37 menus are available over 8 week cycle rotation to ensure frequent travellers will be
able to enjoy different kinds of meals.



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Malaysia Airline 9

7.4 THREATS
Are factor from external environment of the MAS company which could negative influence
the company.
7.4.1 Increasing fuel prices
The dramatic increase of fuel prices affect most airlines. It is one that influence operating
expenditure for MAS airlines. The increase in fuel price will lead to increase operation costs, this will
lead to losses or lower profit. With increase of fuel price, some airlines gone bankrupt because
airlines financially weak airlines are expected to follow suit. Besides, the poor performance of
economic and market will lead to increase of fuel prices. The weakening of foreign exchange will
possibility increase fuel prices.
7.4.2 High competition
MAS faces strong competition from other airlines. Its airlines faced major competition
internationally from established airlines and new start-up operations. MAS has to deal with local
airlines in the same field is Air Asia. Air Asia is airlines that provide low cost to customers. MAS have
direct competitor that are Singapore International Airways, Thai International Airways, Cathay
Pacific Airways and Garuda Indonesian Airways if compete internationally.
7.4.3 Foreign currency fluctuation
MAS revenue is from different foreign currencies which result in the fluctuations of foreign
exchange rate. The airlines uses foreign currency as strategy to manage risk the risk of foreign
fluctuation. Undertaking this risk will lead to decline in growth. MAS treasury unit in the finance
division handle cash and fund management such as credit management and foreign exchange. MAS
inefficient foreign exchange management could make the company more than $10 million a month.
MAS needed more US dollars to balance its foreign exchange requirement.
7.4.4 Terrorism and Health scare
Terrorism is leading factor of decrease tourism and airlines business. Terrorism might
happen in many ways in certain country or it might happen inside the place such as plane being
hijack. MAS airline serves more than one hundred destinations worldwide. If terrorism happen in
area of Southeast Asia, MAS will have to stop all their operation and flight to the Southeast Asia for
a period of time. This will lead to decrease of confidence in the airlines.
The H1N1 pandemic and swine flu will lead to weaker demand of airline flight. The outbreak
of disease will affect the airlines industry significantly. There are passenger with H1N1 boarding with
Malaysia Airlines will lead to decrease of customer to fly with MAS.



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Malaysia Airline 10

7.4.5 Economy
Changes in economy will directly influence business positively or negatively in many aspects.
In global economic downturn, it will affect all the business worldwide. As one of the airlines
company, Malaysia airlines have lot of collaboration with other company throughout the world. Its
will give a big impact to the company if the big changes in the economy level. When the European
economy is lagging, it will lead to slow growth in demand for air travel.
8.0 Competitors and External Environment
8.1 PEST analysis
8.1.1 Political factors
Political factors are vital to ensure the growth of the airlines industry in Malaysia. With the
peaceful and harmony environment, Malaysia become one of the popular and famous place with
attractive travel destinations. Besides, Malaysia are consists of diversity composition ethnic of the
population and have different cultural and tradition that will attract more tourists. Fair-trade
decisions, antitrust laws, tax programs, minimum wage legislation, pollution and pricing policies,
and many other actions is exists to protect employees, customers, the general public and the
environment are constraints to political factors.
8.1.2 Economic factors
Despite stiff competition in the airlines industry, Malaysia Airlines launched its Everyday Low
Fares promotion. MAS offers a maximum of 30% of the total seats on every flight which are unsold
factor of 70% on each flight with zero cost (excluding fuel surcharge, administrative fee and airport
tax) to attract more customers in the region. Increase income and economic growth will lead more
people to board on aircraft. Global economic recovery will increase growth in load factors. In the
fourth quarter of 2009, MAS returned to operating profitability with RM 3.8 million profit. When the
global facing a downturn, more people will prefer to enjoy flight with low costs.
8.1.3 Social factors
The social factors are element such as beliefs, value, attitudes, opinions and lifestyles of a
person will affect a firm external environment such as cultural, ecological, demographic, religious,
educational and ethnic. Government carried out campaign will help boost tourism and airlines
industry. People are prefer to travel by air is because it is more convenience. The changing of
Malaysia lifestyle will help the growth of the airlines industry in Malaysia. With the increase of gross
national income per capital, Malaysia are become more affordable to travel by air.




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8.1.4 Technology factors
Malaysia Airlines provides online service for booking air ticket with hotel booking, car hire,
purchase train ticket, and travel insurance. In 2009, MAS implemented passenger services system
(PSS). PSS is to ensure faster service delivery, quicker online purchase, miles redemption options
online and new services. MAS have introduced MASholiday, the online promotion is for customers
to book holiday packages online. MAS upgrade its in-flight entertainment system with Matsushita
System 3000i on Boeing 747 and Boeing 777, the system have digitized on-demand audio and video
media include new games, SMS and interactive flight information on all classes.
8.0 Market Analysis
8.1 Market segmentation
A complete market analysis and segmentation will require a specific passenger and destination
survey. Based on that we could follow up which segment traveler used to travel by Malaysia Airline.
Which are given below:
Business Purposed 20%
Government and International Organizations 10%
Regional Resident Personal and Leisure Travelers 15%
Diaspora Personal and Leisure Travelers 10%
European Personal and Leisure Travelers 5%
Seasonal Holiday Travelers- 10%
The business travelers have a higher tendency to travel via full-fare MAS since the airline
provides additional services such as wheel-chair assistance and in-flight telephone calls.
8.2 Media segmentation
Media is a mean possibility of medium that tend to reach the audiences. Media such as
television advertisement, advertisement board, magazine advertisement and etc. media
segmentation is often being used by companies to promote its products or services using that
media. MAS always used magazine advertisement as a medium to promote its services and help the
growth MAS in the airlines industry. It is a best decision for MAS to advertise in magazine
advertisement in travel magazine and business magazine, It is because travel and business magazine
reader are from businessman or traveller. If traveller and businessman who are attract to the
advertisement in the magazine, they would choose the airlines because it give passenger a general
of the airlines services.




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8.3 Demography segmentation
Element such as gender, age, income, and education level are common demographic
variables. Airlines services is focus to those who like to travel, business purpose and etc. example,
MAS have split its airlines in to three different classes that is executive, business and economy class.
Executive class usually are most luxurious class in airlines services and it is the most expensive
compare with business and economy class. Major of Airlines Company has removed first class
because it is highest service in airlines service. For business class airlines are medium class services
and it is more expensive but cost less than executive class. Many airlines use business as the highest
level of service Economy class also known as coach class and it is the cheapest compare with
executive and business class airlines services.
8.4 Lifestyle purpose segmentation
Lifestyle segmentation investigates the consumer attitudes, values, behaviours, emotions,
perception and interests. Lifestyle segmentation is to segment a market, MAS can identify the
segmentation variable from lifestyle statement, words, pictures and etc. Qualitative research
provides the insight, the conceptual knowledge and the consumers language to design the
questionnaire about consumers lifestyle. To design a market segmentation questionnaire for
airline, MAS must conduct depth interviews to create questionnaire. The questionnaire will include
a behaviour section such as frequency of flying, how to purchase tickets, who travel with, income,
occupation, purpose of travel by airlines, money spend on airlines tickets and etc. In person
interview and internet-based interview are frequently use by airlines industry. In person interview
produce more accurate answers. The internet is valuable for segmentation studies, respondent can
paying full attention and take time choose their own opinion.
8.1.4 Price segmentation
Price segmentation is common and widely practise by airlines industry. The different in
household income allow MAS to generate segmentation for price dimension. If consumer incomes
range from low to high, then MAS should offer low-priced, medium-priced and expensive services.
Example, Executive class is airlines service for those are higher income passenger and for business
purpose such as CEO or director of a company, Business class airlines are usually for the medium
income group such as traveller and business purpose for businessman, Economy class airlines is
focus for low income group.






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9.0 Market Strategy
Malaysia Airlines strategy is to transform its airlines in to Five Star Value Carrier (FSVC).
There are 5 Strategy which is:
9.1 5 Star
MAS must improve its products and services to develop it become high quality products and
services.
9.2 Lower Costs
MAS should reduce its structural and operational costs. So it will able MAS to offer lower fares to
being competitive in the airlines market.
9.3 Competitive Fares
If MAS has lower costs structure, it will be able for MAS to offer low and competitive fares to
consumer. It will give MAS competitive advantages to compete in the airlines market and make
profit.
9.4 Increase customers and revenue
With high quality services and products at low fares, it will attract more consumers choose to fly
with Malaysia Airlines. This will generate more revenue and help in MAS growth.
9.5 Grow network and build capacity
With more revenue, MAS invest in growing its network and building its capacity. By invest in
growing its network, MAS will open up more routes and purchase more planes to gain sustainable
growth.
10.0 Other competitor analysis
Porter Five Force of industry analysis model (Malaysia airlines)
Threat of new entrant
International Entrants
International entrant
The international competitor are airline such as Singapore International Airways, Thai
International Airways, Cathay Pacific Airways and Garuda Indonesian Airways. Exists of competition
is due to outdated regulatory system. Government tend to increase usage of KLIA as the main hub in
Malaysia, international airline have to sign MOU to allow landing on KLIA. Government which sign
agreement with international airlines will gives threat to Malaysia airlines such as Air Asia and MAS.


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10.1 Local entrant
The exists of Air Asia which is low cost and budget airlines are competitor for Malaysia
Airlines. Air Asia is trying hard to compete with MAS through promotion and advertisement to
attract many local passengers to use Air Asia to travel within Malaysia.
10.2 Bargaining power of Buyer
Price, quality of service, convenient and comfort are concern to customers.
With a lots of airlines company in the market, customer are able to choose which airlines
that suit their need. In the international market, SIA and UAE are providing better quality services
to compete with each other to attract more customers to travel with their airlines. In the local
market, Air Asia compete with MAS by providing low cost services to its customer.
10.3 Bargaining power of Supplier
The main supplier of MAS aircrafts and accessories is Boeing. Boeing are major supplier of all
aircrafts and services, but Airbus put a lots of effort again and again to enter the supplier market.
MAS have been using Boeing aircraft and part since its established. Besides, MAS mechanic are
more familiar with Boeing aircrafts. Therefore, MAS is hard to change to another supplier. With
limited of MAS can choose from, Boeing can increase its price in aircraft and parts.
10.4 Substitutes
Where time is matter in long distance travel, air travel almost cant replace with other
alternative. Sea and land journey can be replace with other mode of transportation. In long
distance travel, other mode of transportation are not convenience, time-efficient, and comfortable
if compare with travel by air. So MAS dont have to worry about threat or exist of other mode of
transportation to air travel especially long-distance travel. But for short distance journey, customer
prefer would to use on land transport such as car and bus. For short distance travel, MAS is one of
the option that customer can choose from.
10.5 Competitive Rivalry
In the regional market, Singapore Airlines is a big and strong competitor that is well known for
its services that will give negative impact to Malaysia Airlines. In the international market, there are
a lot of Airlines Company that compete in the market lead to competitive price and quality of
services. For example, US and European airlines merged to form a large airlines group in order to
compete in the large competitive market.
11.0 New Strategy:
MAS said on it needs a thorough review of operational processes and current plans to
survive the "harsh business environment". That echoes previously unsuccessful attempts to turn the


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company around. MAS unveiled a business plan in late 2011 that failed to achieve its target - turning
a profit by 2013, by ending unprofitable routes and investing in new aircraft.
Since MH370 disappeared, MAS shares have slumped 20 percent. Its market value has
tumbled about 80 percent over the past five years. The airline had said last month that its passenger
numbers for March had dropped close to a monthly low in the wake of MH370's disappearance. Its
next traffic update, on seats sold in April, is due within days. For the past two years, the Singapore-
based technology executive flew MAS for business trips to Kuala Lumpur every fortnight. Since flight
MH370 disappeared, though, they has shunned the airline. "If it's just the incident alone, they
would think it's an isolated one, but right after it, there were a couple more breakdowns with the
planes and that kind of really eroded confidence I had for MAS," said the 31-year-old, who won't
even take the airline for leisure now.
12.0 PESTEL Analysis
12.1 Demographic Environment
Population of Malaysia in 2009 was 25,715,819 and estimated population growth rate was
1.72%. By the population growth in 2010, it is approximately 28.3 million populations in Malaysia. It
shows a huge market in terms of potential. It is definitely positive sign with a positive population
growth rate.
12.2 Economic Environment
GDP growth of Malaysia in 2010 is 8.9% in 2nd quarter and unemployment rate is 3.7% in
1st. As one of the company airlines, Malaysia Airlines has many connections throughout the world
the world and it will give a big impact to the company if there are any changes in economy level.
12.3 Social-cultural Environment
As a developing country, Malaysia has increase the number of professionals who earn more
and travel much more frequently overseas. Thus, they want the services that can offer them time
efficiency and good services. MAS has responded to them by offering business class ticket that offer
the 5-stars services.
12.4 Technological Environment
MAS also practiced the online booking and buying to make their purchasing way easier for
passenger. With this online purchasing, the passengers need to fulfill their details like the
destination they want to go and the departure place they want. The payment will be settling via the
online banking.



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12.5 Ecological Environment
The world has been shocked with the wave of Influenza A (H1N1 virus) global pandemic and
SARS. These situational factors have somewhat changed the perception of airline travelers to some
degree by claiming that it is no longer safe to travel by air.
12.6 Political-legal Environment
If there is terrorism happen in the area of Southeast Asia, MAS need to stop their flight
destination for a certain time. MAS characterized by government intervention and control. Due to
this, fares charged in Malaysia were the lowest in the region. Foreign airlines were unable to
compete at such a low fare which adversely affected the overall industry and also the profits of
MAS.
13.0 Current issues of Malaysian Airlines:
Malaysian Airlines are in a position of crisis. The company has incurred a net loss of RM 1.2
billion in the first three quarters of 2011 alone. Almost 40% of the total routes in which the airline
operates is incurring losses. The position of the company is even more tenuous as compared to the
crisis which the company faced in 2006. The market of aviation is becoming competitive with the
entrance of the low cost carrier (LCC) in the market and the growth of the Middle Eastern full
service carriers and even the revival in the fortunes of Asian full services such as Garuda, Japan
Airlines and Thai Airways.
Malaysian Airlines had not focused on the premium segment of the market, even the quality
of the product has fallen. The major marketing efforts of the company were focused on tactical
sales promotion instead of brand building. Even with great efforts from the side of the sales team
the profits generated is really low which is quite low to cover the increasing cost structure.
Demand in the Asian aviation industry is quite strong. Throughout Asia there is a huge
growth in the disposable income of the people, access to the credit card is increasing and a cross
border trade is very popular, with well-developed infrastructure and population of south east Asia
alone is around 500 million there are huge growth potential for the aviation industry so in order to
revive from its current status Malaysian Airlines has a great plan for success.
14.0 Facts at present issues:
The black box emits a signal which can be picked up hundreds of miles away... still no sign of
wreckage more than 36 hours after disappearance from radar
No adverse weather conditions
No kind of distress signal sent
The pilot has (had) over 18,000 hours of flight experience, since 1981
The plane model has no significant history of safety or mechanical failures


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This kind of thing has been going on there for a while. Blair and Bush were declared to be war
criminals by the Kuala Lumpur War Crimes Commission in 2011, which has had a great impact on
their worldwide reputations. The War Crimes Commission has been recently attacking Israel for its
treatment of the Palestinians. That never goes down too well, especially when Israelis are involved
in managing the situation on the streets of Kiev. It's another way of raising the threat level for
Putin.
15.0 ANSOFF Matrix Analysis:
The Ansoff matrix provides the basis for a Malaysia Airline objective setting process and sets
the foundation of directional policy for its future, they used Ansoff matrix as a model for setting
objectives along with other models like Porter matrix, BCG, DPM matrix and Gap analysis etc. By
using Ansoff matrix Malaysia Airline also used in marketing promotional activity. The application of
Ansoff matrix entails four possible product/market combinations:
Market penetration
Product development
Market development
Diversification
The four strategies entailed in the matrix are elaborated below:
Ansoff Product-Market Growth Matrix




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15.1 Market development
When a company follows the market development strategy, it moves beyond its immediate
customer base towards attracting new customers for its existing products. This strategy often
involves the sale of existing products in new international markets. This may entail exploration of
new segments of a market, new uses for the company's products and services, or new geographical
areas in order to entice new customers. For example, Malaysia Airline try to able to attract new
customers when existing consumers identified new uses of their baking soda (Christensen et al,
2005).
This growth strategy is where the business seeks to sell its existing products into new
markets. Here are four possible ways of approaching this strategy:
New geographical; for example, exporting the product to a new country.
New product dimensions or packaging.
New distribution channels.
Different pricing policies to attract different customers or create new market segments
(niche).
Beside the unions need to wake up to reality and appreciate that market conditions are such
that unless you get rid of a large number of staff, the airline will be on my list of brands that wont
make it past 2016. Where the organization is the brand. Many MAS staff are trying really hard but
they are let down by those that dont care. Current middle management systems dont seem to be
working. Fix them. The six principles to turning around an airline and used successfully by Air
Canada, ANA and Aeroflot and probably being used by MAS (a logical assumption bearing in mind
the influx of management from Air Canada) include a zero compromise on quality of customer
service, investments in staff training and better internal and external communications. The
company is failing miserably in all these activities and needs to carry out a comprehensive review
and overhaul of current practices and service providers in these critical areas.
Forget about the big idea. In the social economy, when consumers not companies define
brands and those consumers are spoilt for choice and rarely believe what advertisers tell them, the
one size fits all clearly defined brand positioning campaign is a futile exercise that does nothing
more than waste valuable funds. In this case, RM550 millions of valuable funds. Focus instead on
consistent, ongoing, personalized engagement with each of your very diverse audiences.
And start with your Enrich database! Segment that database in a way that allows you to
deliver value to relevant segments today and not segments that belong to the 1980s. Travelers are
segmenting into smaller niche, groups and individual travelers and they are willing/able to manage
the whole process themselves. Talking to them requires more than an advertising campaign.



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If their global advertising campaign did make a prospect visit there site and then had to go
through the ridiculous moves required to enter a destination or departure city, theyd soon leave
thinking, if they cant make a simple fix like that, what are they not fixing on their aircraft or
elsewhere?
Because its so important, there database gets a double mention. A chunk of MAS brands
profitability will come from their existing customers. Instead of spending RM550 million on an
outdated advertising campaign that seems to want to acquire and retain customers, start to use
what is probably one of the most comprehensive databases in South East Asia, properly. Focus.
These one-size-fits-all advertising campaigns are an expensive exercise in nave futility. Put an end
to them now. If Im repeating myself its because the marketing budget is being wasted on outdated
mass market models. Dont do social, be social. Pushing one size fits all advertising campaigns out
across social media is pointless. Its not a television or a radio so dont use it like one. Social is
dynamic and you need to be dynamic to get the most out of it. Stop using your Facebook as another
broadcast platform. And stop ignoring negative comments and blog posts and instead, engage with
the authors.
15.2 Diversification
Diversification strategy is distinct in the sense that when a company diversifies, it essentially
moves out of its current products and markets into new areas. It is important to note that
diversification may be into related and unrelated areas. Related diversification may be in the form
of backward, forward, and horizontal integration. Backward integration takes place when the
company extends its activities towards its inputs such as suppliers of raw materials etc. in the same
business. Forward integration differs from backward integration, in that the company extends its
activities towards its outputs such as distribution etc. in the same business. Horizontal integration
takes place when a company moves into businesses that are related to its existing activities.
Beside they can iintegrate all there solutions to make it easier for consumers to use them.
40% of business travelers and 25% of leisure travelers in Asia now use mobile or tablets for travel
but as far as people can work out, the MAS app integrated with customer online profile. They can
stop spending huge amounts of money on forgettable mass market advertising campaigns and start
building a brand. Train their staff, and start with MAS customer relationship staff. Whoever is doing
it now isnt doing a good job. Find someone who really wants it and make staff the best in the
world.
One last comment on segmentation. Each segment within each country has completely
different requirements for value. In Indonesia small businesses employ 80% of employees. In
Malaysia, SMEs account for as much as 99% of businesses. In Japan, 20% of leisure travel is by the
over 65s. Not many legacy carriers have remained profitable following the intense competition in
the airline industry. Even without the massive interference of the governments of the past, MAS has


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found it tough to adapt to increased customer expectations, LCC competition, fluctuating fuel prices
and rising costs.
The days of using cost cutting and outdated mass marketing communications campaigns to
drive restructuring plans are over. The future will require an even more nimble approach and a
focus on delivering value to diverse segments on their terms. Only then can MAS out maneuver
budget airlines and other new entrants into the market and become profitable once again.
16.0 Target Market
Malaysia Airlines: MAS does provide domestic and international flight services, majority of
the customers of MAS are international flight customers. It is actually show that MAS have a certain
target market with high income. There just a few groups of people in Malaysia who can effort to pay
for the cost to fly because of the high rate of airlines tickets. Target market also included business
traveler. Malaysia Airlines (MAS) has unveiled a new business plan aiming to restore profitability by
significantly cutting capacity and increasing focus on the premium sector, which includes the launch
of a new regional premium carrier in 1H2012.
Several business units including maintenance, cargo and ground handling are to be spun-off,
most likely in 2012, as part of a bid to free up capital required to fund rapid fleet renewal and the
reinvigoration of MAS core business. MAS will swiftly phase out its B747-400 and A330-200 fleets
over the next year, leading to a 12% reduction in total capacity.
The decision to draft yet another new business plan at MAS, which has made multiple
turnaround attempts over the years, hardly comes as a surprise following the landmark partnership
agreement forged in Aug-2011 with long-time rival AirAsia. The agreement, which included an
equity swap and the appointment of AirAsia Group CEO Tony Fernandes to the MAS board,
inevitably required MAS to downsize and abandon its attempt to compete with AirAsia at the low
end of the market.
MAS will now focus entirely on the premium sector and adopt a strategy already deployed at
leading Asian airline groups Cathay Pacific and Singapore Airlines (SIA). But MAS has a long and
tough road ahead in winning premium customers and achieving the sustained profitability it hopes
the new business plan will generate. MAS vision to become the preferred premium carrier will
certainly lead to vigorous attempts by Cathay and SIA to defend their turf, positioning MAS as the
underdog once again.
Malaysia Airlines (MAS) is optimistic of achieving its 50% growth target in the Indonesia
market this year following the encouraging growth recorded in the first quarter of 2013. Area
Manager for Indonesia Roslan Ismail said the vibrant Indonesian economy over the past five years
had driven the national airline to continue recording double-digit growth and in Q1 2013, it chalked
up growth of 40%. For the Kuala Lumpur (KL)-Jakarta route, MAS registered growth of 70% in Q1,


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he told Malaysian reporters here. Two more destinations that are becoming a favorite among
passengers are KL-Medan (Northern Sumatra) and KL-Denpasar (Bali).
Roslan, who will be transferred to Tokyo, Japan on July 1 after three-and-a-half years of
service in Indonesia, said the growth was contributed by demand from the middle-class group who
have chosen MAS for their vacation overseas.
In 2010, MAS saw a growth of 11% in the Indonesian market, compared with 15% in 2011 and 28%
in 2012. Bernama
17.0 Brand Positioning
Brand positioning strategy Clear, engaging, unique and relevant to the target audience
Delivering a positive emotion to the audience rather than just good through providing the
benefits needed by every single target audience
Delivering high perceived value as the customer is ready to pay for the service which meet
his changing needs through changes in our products.
Able to adapt changing market
Consistent across multiple marketing and advertising medium (print, online presence etc.)
Echoed within business internally and externally
18.0 4 P of Malaysia Airline
In order to achieve marketing objective, Malaysia Airlines need to have strategy must have
different elements in the marketing mix. Marketing mix is the combination of tools that are used by
Malaysia Airlines to satisfy customer need and achieve company objective and goal. The 4Ps in the
marketing mix strategy are refer to product, price, place and promotion. The goal is to decide the 4P
on the customers in the target market in order to create perceived value and generate positive
feedback.
18.1 Product
The term product refers to tangible, physical products as well as service. It also means
defining the characteristic of product or service to meet the customer needs.
18.1.1 Nationwide call centre
Customer can use English, Malay, Mandarin and Tamil when they call Malaysia Airlines call
centre. Call centre service is available from 8am to 10pm on weekdays and from 9 am to 6pm on
weekends. The call centre number is 1300-88-3000 and it handle calls from Malaysia, Singapore and
brunei. For those who are living outside Malaysia, they can call 603 7843 3000.



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18.1.2 e-Ticket
An e-Ticket is an electronic ticket. With an e-ticket, customer no longer need to collect paper
tickets. With e-ticket, customer no need worry about ticket lost or being stolen when traveling.
After booking has been confirmed, an e-ticket reference and detail will be sent to your e-mail when
registration. If you have booking reference, e-ticket and photo identification, then you are ready to
travel. To purchase ticket online, customer need a valid credit card.
18.1.3 Easy Payment
To book ticket and purchase online, customer need to have a valid credit card. Currently,
MAS online booking only accepts a valid Visa or MasterCard.
18.2 Price
Price means the value or the worth of a product that a buyer are willing to pay for it or
exchange the product value for money.
18.2.1 Everyday Low Fares
Malaysia Airlines have launched its Everyday Low Fares programme on 6 May 2008.
Everyday Low Fares offers 1.3 million RM 0 for all domestic routes operate by Malaysia Airlines and
Firefly. The Everyday Low Fares programme offers a maximum of 30% of the total seats on every
flight which are unsold factor of 70% on each flight. Therefore, Malaysia Airlines is make earnings
from fuel surcharge, administrative fee and airport tax. Since the launched of this programme till 14
may 2008, Malaysia Airlines has sold more than 150,000 seats. Malaysia Airlines the programmes to
all ASEAN routes operated by Malaysia Airlines. This programmes has been strongly opposed by Air
Asia which claim that directly business model with Malaysia Airlines and not allow budget carrier
compete with national airlines.
18.3 Place
Distribution is getting the products to the customer, looking at a location where a service is
delivered.
18.3.1 Internet booking
Malaysia Airlines internet booking system is launched in august 2004. To strengthen is online
booking service, Malaysia Airlines is planning a major expansion on its booking facility by the end of
2005. Using the internet booking system, its allow MAS to reduce airlines distribution cost
significantly. MAS is partnership with GRSNetwork to reduce its distribution cost and to simplify the
ticketing process. MAS web-site allow customer faster access to information to their traveling needs
and use Malaysia Airlines products and other services. MAS is expected to cut distribution costs by
more than 50% when it adopt an Internet-based distribution network. The use of internet allow
customer access to MAS inventory worldwide.


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18.3.2 Sales Offices
These are available at airports counter and town canters kiosk for the convenience of walk-in
customers.
18.3.3 Improve Customer service
The Customer service operations use to cope with the higher passenger load and additional
flights. With the expansion of customer service, it will increase the operational budget. The increase
of operation cost is due to higher staff costs, hire and maintenance of equipment, passenger layover
and delay costs, passenger sales expenses and other expenses.
18.4 Promotion

Promotion means the various aspects of marketing communication. The communication of
the product with the goal will generating a positive customer response.
18.4.1 Malaysia Airlines Travel Fair (MATF)
Malaysia Airlines Travel Fair is to offer attractive air fares and holiday packages. During 22-24
February 2011 at the fair, there will a 70% discount off from current market. Besides, there are also
deal offered is buy 1 get 1 free promotion on business class for airlines to Asean cities such as
Xiamen, Kunming, Macau and discounted golden holiday packages for domestic and international
travel. The company plan to use this travel fair to raise the Malaysia brand awareness and stimulate
demand. The company will get to explore opportunities of businesses of organise travel fair in
selected international markets.


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18.4.2 Deals
Malaysia Airlines web-site, there are special promotion for member and non-member.
There are more advantages if become a member. If register as member, you are able to purchase air
ticket with discount price and enjoy exclusive member only fares. In Malaysia Airlines web-site,
there are special deals such as deals of the day, balik kampong, MHcoupon, MHdeals, and
MASholidays. Deals of the day allow customers enjoy big saving on your next. This deals include
exciting destinations at a fantastic prices. Balik kampong deal is for those who always feel homesick.
This promotion offer amazing low prices and all balik kampong bargain. MHcoupon is a new way
allow customer to enjoy exclusive saving on Malaysia Airlines flight. The online coupon comes in the
form code, it does not required printing or cutting necessary. Redeeming coupon is easy, just key in
the coupon code when booking for flight ticket. MHdeals is a free application that use iphone GPS
sensor to locate airport around you and display the best Malaysia Airlines deals. Besides, with the
use of the application, customer of MAS will get latest tourist information to explore the tradition
and natural beauty of Malaysian holiday destination in borneo. MASholidays is a deal that provide
holiday package that suit a variety of budget. It include holiday package within Malaysia and outside
of Malaysia at an attractive price.
19.0 Malaysia Airlines Integrated Marketing objective
To develop brand awareness
To increase consumer or business demand for a product category
To change or influence customer beliefs or attitudes
To enhance purchase actions
To encourage repeat purchases
To build customer traffic to physical sales centre, websites or other marketing channels
To enhance firm/brand image
To increase market share
To increase sales
To reinforce purchase decisions
20.0 Advertising Plan:
Malaysian Airline System Bhd (MAS) is undertaking a thorough review of its business plan
and all avenues are being explored to ensure the national carrier's long-term sustainability. The plan
would be shared with the relevant stakeholders at the appropriate time when the necessary
approval and endorsement have been obtained.
"Winning back customers and a relentless cost focus will be part of the airlines' recovery
plan and these two exercises are critical enablers to energize its recovery," the tag they going to
follow up though out new advertising plan. Since the disappearance of Malaysia Airlines flight


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MH370 on 8 March 2014, the airline's focus has been in supporting and caring for the needs of the
families and loved ones of the passengers and crew onboard. More than two months have passed
since the tragedy, the airline continues to work hard to return the company to recovery and to
support a sustainable future albeit a more challenging outlook. "Safety remains an integral part of
Malaysia Airlines' service delivery and the airline ensures maintenance is done in accordance with
strict compliance to stringent regulatory requirements and obligations. "Winning back customers
and a relentless cost focus will be part of the airlines' Recovery plan and these two exercises are
critical enablers to energize its recovery."
21.0 Advertising Objectives:

Malaysia Airlines advertising objectives is to become An Airline of Excellence. Describes
how the airline reinforced the Total Quality philosophy in its service culture and improved
customers perception of its quality as a strategy to achieve this aim.

22.0 Sales Promotion:
Malaysia Airlines from RM85 Promotion Air Fares 15 24 May 2014


Enjoy up to 50% OFF Discount for Malaysia Airlines flight tickets. Travel from 19 Aug 2013 to 31
May 2014 with MAS flight tickets booking promotion.
Malaysia Airlines launches Super Saving promotion for selected domestic and international
flights with all-inclusive fares from as low as RM85 one-way fare or RM170 return fares for domestic
flights and international one-way fare from as low as RM301 fly from Kuala Lumpur to Bali. Other
great international destinations include KL Delhi (RM663) and KL Mumbai (RM712).


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Booking Period: 6 December 2013 13 December 2013
Travel Period: 9 December 2013 30 June 2014 (Domestic), 12 December 2013 30 June 2014
(International)

Check out some Super Saving promo fares offered by Malaysia Airlines:

Domestic

RM85 (Economy one-way) from KL to Johor Bahru, Langkawi, Penang
RM135 (Economy one-way) from KL to Kota Kinabalu, Kuching, Sibu
RM170 (Economy return) from KL to Johor Bahru, Langkawi, Penang
RM270 (Economy return) from KL to Kota Kinabalu, Kuching, Sibu

International
RM301 (Economy one-way) from KL to Denpasar-Bali
RM663 (Economy one-way) from KL to Delhi
RM712 (Economy one-way) from KL to Mumbai
RM459 (Economy return) from KL to Denpasar-Bali
RM1229 (Economy return) from KL to Delhi, Mumbai




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23.0 Conclusion:
MAS though currently does not have a strong presence in the region, the macro
environment of Asia presents vast opportunities to enlarge the companys market shares. The
Airline businesses are closely linked to economic activities in Asia and the world. As such, MAS
needs to be cognizant with the business cycle so that it can to take full advantage of such effects
especially when there are changes in discretionary income and consumer spending patterns. The
company should also keep in mind that increases in the demand of fuel and limited supply can lead
to higher fuel price that will decrease the yield. Last but not least, the impact of crisis such as 9/11
(2001) and SARS outbreak (2003) was able to hit the airline industry badly and as such they continue
to pose serious threat to airlines.




















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24.0 References:

2014. [ONLINE] Available at: http://www.net-temps.com/careerdev/crossroads/print.htm.
[Accessed 18 April 2014].

Malaysia Airlines Unveils Major Network Restructuring Program. 2014. Malaysia Airlines
Unveils Major Network Restructuring Program. [ONLINE] Available at:
http://www.asiatraveltips.com/travelnews2001/4October2001Malaysia.htm. [Accessed 28
April 2014].


http://www.malaysiaairlines.com/cn/en/corp/corp/info/history/our-history.aspx

SWOT analysis and for Malaysia Airlines (MAS) 2014. SWOT analysis and for Malaysia
Airlines (MAS)?. [ONLINE] Available at:
http://answers.yahoo.com/question/index?qid=20070509063139AAGyiLn. [Accessed 28
April 2014].