Harvard Case - Malaysia Airlines: The Marketing Challenge after MH370 and MH17
"Malaysia Airlines: The Marketing Challenge after MH370 and MH17" Harvard business case study is written by Neeraj Pandey, Gaganpreet Singh. It deals with the challenges in the field of Marketing. The case study is 14 page(s) long and it was first published on : Jun 1, 2015
At Fern Fort University, we recommend Malaysia Airlines implement a comprehensive rebranding and marketing strategy focused on rebuilding trust, emphasizing safety and reliability, and leveraging digital channels to connect with a global audience. This strategy should prioritize customer experience, transparency, and emotional connection to regain lost market share and foster long-term loyalty.
2. Background
Malaysia Airlines faced a devastating blow to its reputation and brand image following the disappearance of MH370 in 2014 and the downing of MH17 in 2014. These tragedies, coupled with pre-existing challenges like intense competition and rising fuel costs, placed the airline in a precarious position. The case study explores the marketing challenges faced by Malaysia Airlines in the aftermath of these events and the need for a strategic approach to rebuild trust and regain market share. The main protagonists of the case study are the airline's management team, tasked with navigating the crisis and formulating a successful marketing strategy.3. Analysis of the Case Study
To analyze the case, we can utilize a framework that integrates marketing, branding, and crisis management principles.SWOT Analysis:
- Strengths: Malaysia Airlines boasted a strong brand heritage, a well-established global network, and a loyal customer base before the tragedies.
- Weaknesses: The MH370 and MH17 incidents severely damaged the airline's reputation, leading to a decline in passenger confidence and market share.
- Opportunities: The airline could leverage its existing brand equity, invest in advanced technology and safety measures, and capitalize on the growing demand for air travel in emerging markets.
- Threats: Intense competition from low-cost carriers, fluctuating fuel prices, and the potential for future security threats posed significant risks.
Marketing Mix (4Ps):
- Product: Malaysia Airlines needed to reinforce its commitment to safety and security by investing in advanced technology, rigorous training programs, and transparent communication.
- Price: The airline could explore competitive pricing strategies to attract price-sensitive customers while maintaining profitability.
- Place: Leveraging its existing global network and exploring partnerships with other airlines could enhance its reach and convenience.
- Promotion: A comprehensive marketing campaign was crucial to rebuild trust, communicate safety measures, and promote the airline's value proposition.
Consumer Behavior Analysis:
The tragedies significantly impacted consumer behavior. Passengers became more risk-averse, prioritizing safety and reliability above all else. Understanding the evolving needs and concerns of potential customers was critical for crafting effective marketing strategies.
Competitive Analysis:
Malaysia Airlines faced fierce competition from both full-service and low-cost carriers. The airline needed to differentiate itself by focusing on its unique selling propositions, such as its commitment to safety, premium service, and cultural heritage.
Brand Positioning:
The airline needed to re-establish a clear and compelling brand positioning that resonated with its target audience. This involved emphasizing safety, reliability, and the unique Malaysian experience.
4. Recommendations
To address the challenges, Malaysia Airlines should implement the following recommendations:
1. Rebranding and Trust Building:
- Transparency and Communication: Establish a transparent communication strategy with clear and consistent messaging about safety measures, investigations, and updates.
- Emotional Connection: Develop a marketing campaign that acknowledges the tragedies and expresses empathy for the victims and their families.
- Safety and Security Focus: Highlight the airline's commitment to safety and security through investments in advanced technology, rigorous training programs, and partnerships with leading aviation experts.
2. Digital Marketing and Customer Engagement:
- Social Media Engagement: Utilize social media platforms to actively engage with customers, address concerns, and build a sense of community.
- Content Marketing: Create compelling content that showcases the airline's commitment to safety, its cultural heritage, and its unique travel experiences.
- Customer Relationship Management (CRM): Implement a robust CRM system to personalize communication, track customer preferences, and provide tailored offers.
3. Strategic Partnerships and Alliances:
- Code-sharing Agreements: Explore partnerships with other airlines to expand its network and offer more travel options.
- Joint Marketing Initiatives: Collaborate with tourism boards and travel agencies to promote Malaysia as a destination.
4. Product Development and Innovation:
- Enhanced In-flight Experience: Invest in improving the in-flight experience, offering enhanced comfort, entertainment, and connectivity.
- Sustainable Practices: Embrace sustainable practices to appeal to environmentally conscious travelers.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with Malaysia Airlines' core competencies in providing safe and reliable air travel and its mission to connect people and cultures.
- External Customers and Internal Clients: The recommendations address the needs and concerns of external customers, seeking to rebuild trust and confidence. They also aim to motivate and empower internal clients, such as employees, to deliver exceptional customer service.
- Competitors: The recommendations consider the competitive landscape, aiming to differentiate Malaysia Airlines through its focus on safety, reliability, and the Malaysian experience.
- Attractiveness: The recommendations have the potential to improve the airline's financial performance by increasing passenger demand and revenue.
6. Conclusion
Malaysia Airlines faces a significant challenge in rebuilding its brand image and regaining lost market share. By implementing a comprehensive rebranding and marketing strategy that prioritizes trust, safety, and customer experience, the airline can overcome these challenges and emerge as a stronger and more resilient brand.
7. Discussion
Other alternatives not selected include:
- Price-Based Strategy: Focusing solely on price reductions to attract customers could undermine the airline's brand image and profitability.
- Aggressive Advertising Campaign: A purely promotional approach could be perceived as insincere and could backfire if not executed carefully.
Risks and Key Assumptions:
- Risk: The effectiveness of the rebranding and marketing strategy depends on the airline's ability to consistently deliver on its promises of safety and reliability.
- Assumption: The recommendations assume that the airline has the resources and commitment to implement the necessary changes.
8. Next Steps
The following timeline outlines key milestones for implementing the recommendations:
- Month 1-3: Develop a comprehensive rebranding and marketing strategy.
- Month 4-6: Launch a transparent communication campaign to address concerns and rebuild trust.
- Month 7-9: Implement digital marketing initiatives to engage with customers and build a community.
- Month 10-12: Introduce new product and service offerings to enhance the customer experience.
By taking these steps, Malaysia Airlines can rebuild its brand image, regain lost market share, and position itself for long-term success.
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Case Description
The chief executive officer of Malaysia Airlines (MAS) had the daunting task of sustaining a business that had suffered the tragic loss of two of its airliners in a span of just four months. Prior to this, a US$392 million loss, as well as the inability to compete with lower-cost carriers, had posed a great challenge to MAS. Management was planning to initiate a cost-cutting strategy to manage pricing and the competitive challenges of the aviation industry when these incidents shocked the world. The disasters greatly impacted customer confidence, as reflected in the company's declining booking rates and stock prices. With its reputation severely damaged, MAS was faced with many hard-hitting questions from various stakeholders about the airline's prospects. Many felt there was a need to transform the entire business model. The top executives pondered various options, including a rebrand of the airline, a new discounted pricing structure to build volume, a private equity infusion, a merger and filing for bankruptcy. Each option would have to be considered very carefully, as the changes made to the business would decide the future of MAS.
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