brand plan (ppt) - srilankan airlines
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Evolution of Sri Lanka’s Flag Carrier
Air Ceylon, was established in 1947, as a state-owned national carrier. In 1978, it was shut down by the Sri Lankan government due to bankruptcy and Air Lanka was established as the new national carrier. Air Lanka, fully owned by the Sri Lankan Government, was part-privatized to the Dubai-based Emirates Group in 1998, for a ten-year period.
As a result, in 1998, Air Lanka rebranded as SriLankan Airlines.
Today, SriLankan Airlines is the national carrier of Sri Lanka, an award winning airline with a firm reputation as a leader in service, comfort, and safety in the South Asian region, connecting the nation to 65 destinations in 35 countries.
Brand Intent
Vision
Brand Promise
To be the most preferred airline in Asia
“Discover the warmth of a Sri Lankan smile! It is part of a proud
heritage that has warmed countless hearts throughout the ages.
We at SriLankan have combined this endearing trait with state-of-
the-art technology, to make every journey a memorable experience.”
Financial Performance 2012/2013
Source: SriLankan Airlines Annual Report 2012/13
Overview of Financial Performance for the fiscal year 2012/13
2012 2013 Variance
Income Statement
Revenue Rs. Millions 92,868 119,571 ↑ 26,703
Operating Expenditure Rs. Millions 111,776 143,972 ↑ 32,196
Net Loss Rs. Millions (19,778) (21,750) ↑ 1,972
Balance Sheet
Stated Capital Rs. Millions 19,433 32,033 ↑ 12,600
Non Current Assets Rs. Millions 43,735 34,542 ↓ 9,193
Current Assets Rs. Millions 22,073 54,905 ↑ 32,833
Total Assets Rs. Millions 65,808 89,447 ↑ 23,639
Current Liabilities Rs. Millions 58,499 68,685 ↑ 10,186
Ten-year Performance Review (2003-2013)
Source: SriLankan Airlines Annual Report 2012/13
Macro Environment Analysis Political Environment
Unnecessary government intervention and political influence
Government’s foreign relations and ties with other nations
Political unrest in countries served by the airline
Economic Environment
Rise in fuel price
Competition from low-cost carriers
Booming tourism in Sri Lanka post war
Global economic downturn
Social Environment
Increased popularity on overseas vacations
Increase in aging population
Technological Environment
Invention of fuel-efficient and energy saving aircrafts and engines
Emerge of E-Commerce and other digital delivery channels
Legal Environment
The EU’s legislations on carbon emission
Immigration rules and visa procedures to certain countries/regions
Natural Environment
Weather and climatic changes increase flight disruption cost
Sri Lanka’s unique positioning in the world map as a hub in Asia
Industry Analysis
Threat of New Entrants (Low)
• High cost of entry • Low profit margins • Low differentiation
Supplier Power (Very High)
• Only 2 aircraft manufacturers
• High fuel price sensitivity
Buyer’s Power (High)
• No switching cost • Many options to
choose from
Threat of Substitutes (Low)
• Limited modes of transportations to island nations
Industry Rivalry (High)
• Large airlines mainly compete on price, service and frequency
• Budget airlines solely compete on price
• Low profit and growth in the industry
Home Market Share
Source: CAPA Centre for Aviation & Innovata, 2013
Competitor Analysis
Source: CAPA Centre for Aviation & Innovata / SkyTrax Airline Rating
SWOT Analysis
Strengths
52% of local market share
An all Airbus fleet of 21 aircraft
Skilled and committed team of over 5,000 employees
Membership with Oneworld Global Airline Alliance
Government’s support in terms of capital infusion
Sophisticated IT Systems
Opportunities
Government’s foreign relations and ties with other nations
Booming tourism in Sri Lanka post war
Increasing popularity of Sri Lanka as a destination for MICE tourism
10 new fleet of energy saving luxury Airbus on order
Increased popularity on overseas vacations
Sri Lanka’s unique positioning in the world map as a hub in Asia
Weaknesses
Unnecessary government intervention and political influence
Employee Unions
Rising operational expenses
No First Class cabins
Heavy debts to local banks
3-Star rating
Threats
Rise in fuel price
Political unrest in countries served by the airline
Competition from low-cost carriers
Global economic downturn
Weather and climatic changes increase flight disruption cost
Competition from 5-Star airlines
STP Segmenting Strategy
Primary Segment Sri Lanka as the prime segment due to cultural and emotional bond the brand shares with the nation.
Secondary Segment Asia, Europe and Middle East where SriLankan has a significant presence through its route network.
Targeting Strategy
Primary Target Time rich and money rich customers who avail disposable time and disposable income to spend on foreign tours.
Secondary Target MICE (Meetings, Incentives, Conferences and Exhibitions) sector which is poised for vigorous growth post global economic recession.
Positioning Strategy
To position SriLankan Airlines as a carrier where its passengers feel like being at home at 30,000 feet, until they reach their destination.
Points of Difference
Understands Sri Lankans the best by sharing a cultural and emotional bond as the national carrier.
Serves the ‘guests’ with traditional hospitality warm smiles and gastronomic delights onboard to make them feel ‘at home’.
Point of Parity A full frill legacy carrier
Objectives
Key Success Factor Objective
Brand Upgrade SriLankan Airlines to a 5-Star rated airline by Q4-2015/2016 from its
present 3-Star rating offered by SkyTrax.
Performance Breakeven the balance sheet by reducing the operating loss by 100% through
the ‘Re-fleeting’ process by Q4-2015/2016.
Communication Launch a Facebook promotion to increase the existing fan base from
200,000 to 1,000,000 by Q4-2013/2014 backed by a digital advertising campaign.
Employees
Set Service Level Agreements (SLAs) by Q1-2013/2014 for the front line staff
to align them towards delivering a consistent and a 5-Star service to the
customers.
Customer Increase the number of passengers carried by a further 1 Mn during the fiscal
year 2013/2014 from 4.25Mn in 2012/2013.
Growth Strategies
Market Penetration Strategies Strategy Tactics
Increase Promotion
• Offer special discount coupons on Twitter and Facebook that could be utilized when purchasing tickets/ holiday packages through corporate website.
• Conduct a monthly draw on Facebook to offer buy-1-get-1 free ticket to the selected winner.
Product Improvement
• Carry-out continuous passenger surveys using advanced technology to obtain customer feedback on all aspects of products and services to provide a seamless customer experience.
• Improve onboard ambience through cabin refurbishment, installation of modern in-flight amenities and other comfort essentials.
Strategy Tactics
Increase Regional Presence
• Introduce services to un-tapped and un-served territories in North and
East Asian territories and re-launch services to abandoned European
territories.
Fleet Expansion
• Expand the fleet with new wide-bodied fuel efficient aircrafts to
accommodate new revenue generating destinations and increase seat
capacity.
Market Development Strategies
To create an emotional attachment to the brand in the customer’s
mind by making them convinced that the feel of ‘homeliness’ and
the sense of ‘belongingness’ they experience by flying SriLankan
will not be replicated by flying any other airline in the world.
Competitive Strategies
Differentiation
Marketing Mix Strategy
Product Monitor and ensure consistent improvements in service delivery of front line staff, cabin
ambience, technological advancement and on-time performance.
Price Use yield management techniques to capture more revenue by setting differentiated pricing based
on the time of booking. i.e (14 days advance, within 14 days and last minute bookings)
Place
Incorporate experiential elements in the cost effective e-commerce platform to effectively deliver
the flexibility, responsiveness, control when customers plan and book their flights through
corporate website.
Promotion
Launch an interactive social media (Facebook) campaign to increase the fan following and to
use this cost effective platform to increase the brand equity whilst strategically integrating other
media tools such as BTL advertising, Event/Sports sponsorships, Public Relations and Publicity to
communicate the brand message synergistically and consistently.
People
Align the front line staff with the brand’s values by providing adequate training on managing
customer interactions, improving service quality and ensure consistency to make the SriLankan a
5-Star rated airline.
Process Streamline the service delivery process (reservation, inventory and departure control system)
through the comprehensive passenger service system - Amadeus Altéa Suite.
Physical Evidence Continuously monitor the quality and maintain the standards of all ‘tangibles’ at every customer
touch point especially with the main focus on cabin staff attire, cabin cleanliness and ambience.
Marketing Mix Strategies
Brand Development Strategy
To introduce the premium first class cabin product with the upcoming
Airbus A330-300 and Airbus A350 XWB aircraft as a vertical line
extension to the existing two-class layout of economy and business.
The first class cabin will preliminary be limited to the selected business-
oriented long haul routes flown by SriLankan Airlines to offer the
premium passengers with sheer luxury.
Vertical line extension - Up-market Stretch
Budget
Marketing Budget - 2013/2014
Rs. Mn Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Advertising (BTL & Digital Media)
100 25 25 25 25
Social Media Promotions 30 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Sponsorships 90 2 1 1 30 1 1 10 2 1 1 10 30
PR and Publicity 10 2 2 2 2 2
Branding & Refurbishments 50 10 10 10 5 5 5 5
Merchandising 10 2 2 2 2 2
Research 10 2.5 2.5 2.5 2.5
Total 300 21 39 18 60 8.5 7.5 20 4.5 38 11 17 58
Evaluation & Control Key Success
Factors
Indicator of Achievement Time Frame Control Review
Frequency
Brand 5-Star rating from
SkyTrax Q4-2015/2016
Continuous tracking of
service delivery
improvements at all
customer touch points
Quarterly
Performance Break-even balance sheet
(Zero Loss) Q4-2015/2016
Track cost savings on
fuel due to the ‘Re-
fleeting’ process
Quarterly
Communication 1 Mn Facebook fan base Q4-2013/2014 Track campaign
effectiveness Monthly
Employees Satisfactory level of
front line service delivery Q1-2013/2014
Track improvements in
quality of service
delivery of front line
staff and customer
satisfaction
Monthly
Customer Carriage of 5.2Mn
passengers Q4-2013/2014
Measure effectiveness on
yield management & seat
capacity planning
Monthly
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