Service Marketing Case

Introduction

In this report, we discuss the service marketing strategies of Cathay Pacific Airway Limited in the SE marketing. The first, we will briefly introduce the company background of Cathay Pacific Airways and the company SWOT analysis. And then we critical analyze and evaluate the Marketing strategy of the company. Finally we provide our recommendations to Cathay Pacific and make a conclusion.

Brief Organization Background

Cathay Pacific Airways is one of the most well known airline company in the world and Cathay Pacific Airways was founded in Hong Kong on 24 September 1946 by American Roy Farrell and Australian Sydney H. De Kantzow. Initially based in Shanghai, the two men eventually move to Hong Kong where they formally established Cathay Pacific. They named it Cathay, the ancient name given to China, derived from Khitan. In 1948, Butterfield & Swire which is now known as Swire Group bought 45% shares of Cathay Pacific.

The airline initial flew routes between Hong Kong, Sydney, Manila, Singapore, Shanghai, and Canton. On 15 May 1986, Cathay Pacific was public and listed in the Main Board of the Hong Kong Stock Exchange. Cathay Pacific City, the headquarters of Cathay Pacific located at Hong Kong International Airport, was completed in the middle of 1999. And now the airline company has a comprehensive network of flights to over 150 destinations.

SWOT Analysis

Strength

Cathay Pacific Airways has the 5 star airline rating and the airline company present in the airline market for a long time. It serves in 5 continents, 36 countries, and over 150 destinations. Cathay Pacific has two loyalty programmes, The Marco Polo Club and the Asia Miles and it is affiliation with “Oneworld” alliance.

Weakness

Cathay pacific suffered largely from the financial crises due to unable to successfully predict the fuel market price. It has the limited control of the terrorist attack due to the inefficient security. It relies too much on international onward moving traffic. It has a limited market share due to the extremely tough competition in the airline industry.

Opportunity

Cathay pacific can gain consumers from different countries by providing more popular international destinations, which can expand its brand globally. The loyalty programs include The Marco Polo Club and Asia Miles rewarded as the “Best Frequent Flyer Program” in Business Traveler Asia-Pacific Awards, hence can gain more confidence of customers. Cathay pacific is now trying to improve its brand image though social media like Twitter, Facebook, RenRen, Flicker, and Youtube.

Threats

Competitors increase in SE marketing. And more competition is from no-frills airlines. The political ramification is similar to handing over of Hong Kong to China which has impact of the development in China mainland. Rising Fuel costs and Labor cost cause financial crises of Cathay Pacific.

Analysis and Evaluation of the Marketing strategy – Product

First of all, the core product of Cathay Pacific Airways (CX) is a ticket for the flight connecting two distant places. Cathay Pacific Airways aims to satisfy its customers’ needs and wants through the tight network of as many destinations as possible with strategic alliances (Stefan Broda, Dennis Damer, Suttinee Keawsuwan, YinTong, and Li Xin, 2014). Based on the Flower of Service, we could divide the supplementary services of Cathay Pacific Airways into the following two types:

1) Facilitating: Information, Order taking, Payment

2) Enhancing: Hospitality, Exceptions

1.1) Information

As we all know, customers often require relevant information about how to obtain and use a product or services. Cathay Pacific provides information like special fares, holiday package and other promotions through internet, email, phone and front-line staffs.

For internet, it sets up a website with 11 language for different regions’ customers. For email, Cathay Pacific offers free eNewsletter to people who subscribe to CXpecials. For phone, there are 3 hotlines for three kinds of usage which are ticket booking: 27473333, flight information: 27471234 and baggage handling: 27477838. For the traditional mode of information offering, customers could ask frontline staffs directly at the CX airport information counter.

1.2) Order Taking

Since customers need to know what is available,