Malaysia Airlines

Executive Summary

Malaysia Airlines (MAS) is the government-owned flag carrier airline of Malaysia. Malaysia Airlines operates flights from its home base, Kuala Lumpur International Airport. Malaysia Airlines is listed on the stock exchange of Bursa Malaysia under the name Malaysian Airline System Berhad (MYX: 3786).

Malaysia Airlines operate its relationship marketing by offering Grads for Students and Enrich). Grads is a frequent flyer program with benefits designed for students. Enrich by Malaysia Airlines is a frequent flyer program for frequent travelers that comprises a variety of airlines, banks, credit-card issuers, hotels and lifestyle retailers around the world.

The purpose of this study is emphasizing on relationship marketing. We examine the models of relationship marketing use by MAS Airlines. The study also focuses on loyalty program and how to develop, maintain and its limitations. Here we also study other model which is suitable for the company. As a last part, we make some recommendations to the company.

Company Profile

Malaysia Airlines had its humble beginning in the golden age of 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 government of the Colonial Straits Settlement to run an air service between Penang and Singapore. The result was the incorporation of Malayan Airways Limited (MAL) on 12 October 1937.

With the formation of Malaysia in 1963, the airline changed its name to Malaysian Airlines Limited and soon after, Borneo Airways was incorporated into MAL. In 1965, with the separation of Singapore from Malaysia, MAL became a bi-national airline and was renamed Malaysia-Singapore Airlines (MSA). However, in 1973, the partners went separate ways; Malaysia introduced Malaysian Airline Limited, which was subsequently renamed Malaysian Airline System, or simply known as Malaysia Airlines..

The airline holds a lengthy record of service and best practices excellence, having received more than 100 awards in the last 10 years. The most notable ones include being the first airline with the "World's Best Cabin Crew" by Skytrax UK consecutively from 2001 until 2004, "5-star Airline" in 2005 and 2006, as well as No.1 for "Economy Class Onboard Excellence 2006" also by Skytrax UK.

Traditional Marketing and Relationship Marketing

As marketing has entered the 21st Century, a significant change is taking place in the way companies interact with customers. The traditional view of marketing as a simple exchange process or a concept that might be termed transaction-based marketing is being replaced by a different, longer-term approach.

Traditional marketing strategies focused on attracting consumers. The goal was to identify prospects, convert them to customers, and complete sales transactions. But today's marketers realize that, although it remains important, attracting new customers is truly an intermediate step in the marketing process. Marketing efforts must focus on establishing and maintaining mutually beneficial relationships with existing customers. These efforts must expand to include suppliers and employees, as well.

The concept, called relationship marketing, refers to the development and maintenance of long-term exchange relationships with individual customers, suppliers, employees, and other partners for mutual benefits. In relationship marketing, the term customer takes on a new meaning. Employees serve customers within an organization as well as outside it. They must apply the same high standards of customer satisfaction to inter-departmental relationships as they do to external customer relationships. Relationship marketing recognizes the critical importance of internal marketing to the success of external marketing plans. Programs that improve customer service inside a company also raise productivity and staff morale, resulting in better customer relationships outside the firm.

Relationship marketing gives a company new opportunities to gain a competitive edge by moving customers up a loyalty hierarchy from new customers to regular purchasers, then to loyal supporters of the company and its goods and services, and finally to advocates who not only buy the company's products but recommend them to others by converting indifferent customers into loyal ones, companies generate repeat sales. The cost of maintaining existing customers is far below the cost of finding new ones, and these loyal customers are profitable ones.

Effective relationship marketing relies heavily on information technologies such as computer