Introduction
The presented paper is devoted to the in-depth analysis of Saudi Arabian Airlines, or Saudia. It is a flag carrier of Saudi Arabia, with its central office in Jeddah (Gamraoyi, 2016). Its main operational base is located at King Abdulaziz International Airport (Gamraoyi, 2016). The company also has several secondary hubs in King Khalid International Airport in Riyadh and King Fahd International Airport in Dammam (Gamraoyi, 2016). The company offers high-quality and safe transportation services to passengers all over the globe. It is the third-largest carrier in the Middle Eastern region, with a stably high level of revenue (Brand Finance, 2022). The company operates domestic and international scheduled flights to about 100 locations in the Middle East, Africa, North America, Asia, and Europe (Saudia, 2022a). It also managed to cope with the COVID-19 pandemic and adapt to new conditions (Saudia, 2021). It means the company is a strong player in the area.
The company also has several competitors impacting its functioning and strategies. These include Emirates, Etihad, Qatar Airlines, and Oman Air. The given companies function in the Middle Eastern region and provide clients with similar services, such as different types of flights to various destination areas. Under these conditions, Saudia has to adapt its work to hold stable positions in the market and remain attractive to its clients. The following paper delves into the major peculiarities of the company’s work and external and internal factors critical for decision-making. For this reason, branding, segmentation, marketing mix, pricing, management strategies, and other critical aspects are analyzed and discussed within the paper. It will contribute to a better understanding of Saudi Arabian Airlines’ work and offer specific recommendations on how it can be improved.
Marketing Mix
Product, Price, Place, Promotion
The marketing mix is the first concept that should be analyzed in Saudia’s analysis. The term can be defined as a set of actions and tactics used by a company to promote its brand and attract new clients (Chernev, 2019). It consists of four significant elements: product, price, promotion, and place (Dess et al., 2020). These elements are fundamental for any company as they impact its success and the ability to struggle with competitors.
Speaking about Saudi Airlines, the company has a specific marketing mix impacting its popularity and development:
In such a way, the major product offered by the brand is the high quality and safe flights characterised by the high level of comfort. The clients can enjoy long and short-haul flights to various destination points. The product is similar to those offered by other carriers, meaning Saudia requires a specific competitive advantage to succeed. The carrier guarantees safe and fast travel from the Middle Eastern region to more than 100 destination points (Hardiman, 2022). At the same time, the price is comparatively flexible as customers might buy different types of tickets, ranging from business to middle class. It uses specific promotional activities, such as social media campaigns and advertising incentives, to attract new clients and ensure the company benefits from the increased revenue.
Moreover, the concept of 7Ps can be used, meaning that three more aspects should be added:
The concept of 4Cs of Marketing mix can also be used to analyse the company:
In such a way, the 4Cs show that Saudia has stable positions in the market because of its focus on clients, their major needs, and the convenience of communication. It also helps to avoid failures when working with clients.
Analysing the marketing mix, it is possible to recommend reconsidering the current approach to pricing. By introducing more flexible and affordable costs, the airline can attract new clients and ensure they will be loyal (Quang, 2017). It is also possible to improve promotional activities by engaging celebrities, which will popularise the brand and make it a preferable option for new clients.
Differentiation and Competitive Advantage
Differentiation is another essential aspect that should be investigated. It is viewed as the features that make a particular product or service attractive to the target audience and distinguish the company from others (Bryson, 2018). It is also linked to the competitive advantage as the brands with high differentiation levels might offer unique products to customers and increase their loyalty and satisfaction levels. For this reason, it remains an essential element of the business strategy that should be considered during the analysis.
Saudi Airlines correctly realise the critical importance of differentiation. It offers three types of travel classes, such as Saudia first suite, business class, and guest class, which are expected to meet different demands for the level of comfort and service (AlGgamdi, 2020). Additionally, cooperating with Saudi Catering company, it provides passengers with a high-quality and premium menu consisting of various dishes. As a result, the brand remains attractive to individuals with a high income level who are ready to pay for additional services. It might also be considered a competitive advantage vital for the company’s rise.
Another important feature differentiating Saudia from the main competitors is its approach to short and long-haul flights. The company offers business class services for all types of flights and services, which differentiates it from its closest rivals (A warm welcome to business travelers, 2022). As a result, the passengers can enjoy an increased level of comfort during different types of flights. It is a significant factor influencing their satisfaction level and helping to generate a competitive advantage. It also helps to retain customers and ensure high levels of their satisfaction.
It should also be mentioned that the market is characterised by the high risk of new entry. For instance, a new low-cost airline, WIZZ air, entered the segment (Wizz, 2021). It means that Saudia should give more attention to working with segments affected by other companies to ensure it has the platform that can be used to generate a competitive advantage and ensure the constant income of new clients. Otherwise, there is a high risk of failure because of the inability to continue expansion and evolution.
However, investigation shows that it might be not enough regarding the fierce rivalry peculiar to the market. The closest competitors, such as Emirates or Etihad, also offer premium quality services and flights to their passengers, supported by outstanding and diversified food (AlGgamdi, 2020). Under these conditions, it means that the company should focus on supporting its differentiation efforts. Saudia has already proclaimed that it is planning new routes and building new airports in central locations to meet the growing demand for travel (Saudia, 2022a). It will help to generate a competitive advantage and diversify the scope of offerings available to clients. It can also be viewed as a significant contribution to the company’s future rise.
Commoditisation
Commoditisation is an important trend affecting the airline industry and the work of companies belonging to it. It can be described as a specific situation where offerings, services, and products of a particular company become similar to the major competitors’ products (Kotler et al., 2019). It might result from the standardisation of processes, lack of alternatives, or the impossibility of introducing unique proposals (Iacobucci, 2021). It impacts the level of sales and can affect the target audience by reducing their loyalty levels.
Saudi Airlines also experience the effects associated with commoditisation. The company functions within the aviation sphere, meaning it offers transportation services to thousands of clients. However, there are many other corporations with similar offerings and services. It means that the sector remains highly commoditised, and products introduced by competitors are similar to each other. It increases the topicality of efforts aimed at creating new offerings and making them part of everyday functioning. As for Saudia, the company focuses on coping with commoditisation by emphasising the unique character of its products and services (Bangash, 2021). It has various flight classes with an outstanding level of comfort, which differentiates it from other companies. Moreover, the brand views loyal clients as members of an exclusive club with unique advantages and benefits. It helps to avoid high similarity levels.
Another possible solution to the problem might be opening new routes. The aviation sphere remains a highly standardized field with limited opportunities for introducing additional diversity. For this reason, recommending to start flying in new directions, it is possible to help the brand cope with commoditisation. New destination areas will be viewed as a new offering by clients and help to cope with the commoditisation and similarity with other brands (Rothaermel, 2021). The given decision is vital for the brand’s further growth as it will establish the basis for reaching new strategic areas.
Segmentation
Market segmentation is also applicable for the case as it helps to understand the company’s primary focus. It is a marketing strategy implying the identification of specific groups of consumers to design and introduce offerings meeting their interests (Kartajava, Kotler and Setiawan, 2016). Segmentation helps brands to avoid working with too broad population groups and instead focus on smaller segments.
Saudi Arabian Airlines focuses on several vital segments of the market. First, the company’s CEO reports that premium travel is constantly rising in the Middle East (Spagnol and Ellis, 2021). There is a high demand for top-class products and services. For this reason, Saudia focuses on this segment and introduces exceptionally high-quality standards. Additionally, small and medium-sized enterprises are also on the rise in the region, meaning that the company also covers this segment by offering guest-class flights to people who are limited in resources (Al-Medabesh and Ali, 2014). In such a way, the current market segmentation strategy implies focusing on premium and middle-class services to meet the diversified needs of most clients coming from the Middle Eastern region.
Additionally, Saudia currently invests in flyadeal, which belongs to the brand. It is a cheap carrier offering services to various clients, meaning the company can access another segment and ensure it can compete with other bands working in the sphere (Seet, 2022). It helps to create the basis for further improvement and attract new clients. For this reason, this partnership is critical for the corporation and its success in the future. It also promotes diversification of major services and guarantees that the segmentation strategy becomes more effective.
The company also offers religious-based flights to meet the demands of the given segment. First, the food provided to passengers meets the major needs and is halal certified (Simple Flying, 2020). Second, there are special places for clients to pray. Additionally, the brand offers additional flights during the Hajj season to meet the unique demands of its loyal clients (Saudia, 2022b). Furthermore, Saudia has seasonal flights necessary to meet the growing demand for air travel peculiar to certain periods (Saudia, 2022a). It is vital for the company’s rise and generation of competitive advantage.
Furthermore, the state plans to open new airlines to satisfy various client segments’ needs. These include international flights to transform Saudi Arabia into a big global hub (Reuters, 2021). For this reason, the airlines will serve expats, local businesses, and local clients with specific needs (Reuters, 2021). Saudia will participate in the process and its segmentation strategy will become more diversified (Walker, 2022). Moreover, tourism in Saudi Arabia has increased, while its GPD reduced by 13% (Yaakoubi, 2020). It offers new opportunities for airlines and tourism to contribute to the revitalisation of the economy (Walker, 2022). Both Saudia and new airlines will help to meet the growing demand for transportation from the tourist sector.
Using the given strategy, Saudia might have some issues because of disregarding the needs of a vast group of clients. The carrier does not offer cheaper flights for those who need fast and cost-saving travel (Yaakoubi, 2020). As a result, many potential clients remain excluded from the process and cannot enjoy the services offered by the company (Althaqafi et al., 2019). At the same time, introducing new class flights requires too many resources and new aircraft, which is impossible regarding the existing market conditions (Al-Medabesh and Ali, 2014). For this reason, Saudia might reconsider its approach to middle-class flights, making them available to a broader group of clients. Its cooperation with flyadeal is one of the first steps toward interacting with a bigger audience and acquiring new loyal clients (Seet, 2022). It will help to generate additional income and continue the firm’s development.
Branding
The fierce rivalry peculiar to the sector means it is critical to create a unique and recognisable brand name that will be attractive and familiar to customers. Under these conditions, branding acquires the top priority, as the process of disseminating the firm’s name and making it respected (Kotler and Keller, 2016). Branding requires specific efforts and activities, such as promotion, advertising, and collaboration with clients and influencers, to ensure the necessary concept and emotions associated with it are created (Marshall and Johnston, 2021). It will help to generate a competitive advantage and overcome other brands.
Saudi Arabia Airlines is an example of a successful branding strategy. Currently, it is one of the fast-growing airline brands in the Middle East (Walker, 2022). Its logo and aircraft are recognised by thousands of passengers in different locations (Althaqafi et al.,2019). It can be viewed as a result of several necessary steps. First of all, Saudia emphasises its premium class and stably growing brand value, which is about $572 million at the moment (Brand Finance, 2022). It attracts attention to the company and creates a recognisable image. At the same time, the company invests in advertising campaigns focusing on the unique nature of the brand and its critical importance to the area (AlGgamdi, 2020). It results in the constantly growing number of clients ready to join the loyal groups.
Saudia also invests in various projects and sponsorships to promote its brand’s name and improve its reputation. For instance, it is one of Formula E’s partners with a new logo designed for this project (Business Traveller, 2022). Moreover, the company makes local sponsorships to bring together people from different parts of the world and ensure they enjoy their cooperation (Business Traveller, 2022). It helps to build a stronger brand name and guarantees it is known to many clients in various parts of the globe. This strategy might also help to find new sponsors and potential partners.
Managing
Managing is another critical area of the company’s work that should be evaluated. It can be determined as the process of organizing teams and activities to attain current goals (Kotler and Keller, 2016). It encompasses various tasks and spheres, such as maintenance, service elements, and working with partners (Kotler and Keller, 2016). Successful management guarantees the brand’s ability to generate a competitive advantage and evolve, which is critical for the modern business world. At the same time, it might help to resolve some specific tasks and overcome challenges.
Saudia can be characterized by a strong and effective management approach. The company continues to evolve, regardless of the recent challenges caused by the pandemic. It evidences the success of the methods used by its CEOs. Much attention is given to the service element as the carrier presents itself as a top-class and luxurious airline that can meet the most diversified demands (Arab News, 2022). Saudi Airlines provides passengers with unique services, such as various dishes, transportation with comfort levels unavailable to other carriers, and support (Alsini, 2017). As a result, the level of clients’ satisfaction continues to grow, and new loyal clients emerge regularly.
At the same time, it is possible to recommend adding some elements to the existing management approach. First, more diversification and inclusion should be cultivated. It will guarantee the increased performance of all teams and help to resolve various tasks more effectively. Second, the offered services should also be diversified to ensure people with unique needs might be satisfied and start using the carrier’s primary services. It will also promote a better brand’s global reputation and ensure it will continue evolving. Combining these approaches, Saudia might achieve the next levels of performance and generate additional revenues, which is essential regarding the fierce rivalry existing in the sphere.
Experimental Marketing, Customer Relations
Experimental marketing is another essential aspect of the modern business world. It can be determined as a unique marketing strategy, immersing clients within a product or service and making them experience the brand (Iacobucci, 2021). It implies enhanced customer relations and a correct understanding of the existing clients’ needs. At the same time, it might help to boost sales and increase the level of clients’ interest in a specific brand or company. For this reason, it has become a vital aspect of modern companies’ strategies.
Saudi Airlines is a highly innovative company interested in using new methods while working with its clients. For this reason, it also widely employs experimental marketing as one of the methods to cooperate with the target audience. For instance, the Alfursan program is designed for clients to improve their experiences and ensure they move along with the company (Ansari, 2022). They are provided with specific packages making them vital contributors to the future brand’s evolution (Ansari, 2022). The feedback from program members can also be used to improve existing offerings and guarantee that they are becoming more attractive to individuals globally (Ansari, 2022). At the same time, customer relationships are built by providing outstanding service and diversified offerings to meet various needs.
The given approach helps Saudia to evolve and remain one of the fast-evolving brands. However, it is possible to increase the effectiveness of such efforts. For instance, a new experimental marketing campaign describing the main types of offerings can be launched. Clients might visit a model plane with different types of seats and services to experience the atmosphere offered by Saudia and provide their recommendations. It will help to increase awareness and engage customers in decision-making and strategic planning, which is vital for the company that wants to acquire leading positions.
Internet and Marketing
Innovative methods of working with clients are another critical component of the modern business world. For this reason, the Internet has become one of the potent tools for interacting with clients and ensuring they possess the required level of knowledge about a certain company. The Internet and main marketing activities are closely interconnected, and managers give more attention to this tool. It allows brands to interact with their target audiences, collect information about them, and use it to attain better results.
Internet marketing is one of the approaches that is recognized by Saudi Airlines. The company emphasizes its highly innovative nature and cultivates the further digitalization of its activities (Saudia, 2021). For this reason, it introduces multiple methods for clients to cooperate with the brand using the Internet. For instance, passengers can book tickets and select packages using the brand’s official website. Additionally, the company improves its social media presence with its accounts on Twitter and Facebook. It helps to build better awareness and increase the number of clients ready to use the company’s services in the future.
Furthermore, digital marketing using smartphones, social media, and popular websites is viewed as the main priority for the future brand’s development. For this reason, Saudi Airlines continues investing in this segment and supporting the development of its Internet marketing efforts. The company’s Media Center provides clients with access to recent updates and news to ensure they are informed about all changes and can plan their activities. It helps to increase client satisfaction levels and align better cooperation with them.
At the same time, the company might use some possible improvements to succeed. First, it is possible to increase the presence on the most popular social platforms as the research shows the direct correlation between the activity in social media accounts and the number of clients (Rothaermel, 2021). It should be considered the place for data collection and feedback analysis (Rothaermel, 2021). It will help the company to remain informed about the recent changes in the market structure and the peculiarities of the target audience. In such a way, by using the newest internet marketing methods, the brand can create the basis for its further development and fast growth.
Pricing and Cost Structure
Pricing is another critical aspect of any company’s work and development. It can be determined as the process of setting a price at which products and services will be sold (Iacobucci, 2021). It is also linked to the cost structure of the company or the aggregate of different types of costs constituting the overall expenses (Kotler et al., 2019). In such a way, any company should find a balance between spending and generating costs to introduce the fairest price and ensure it will be attractive to clients. Otherwise, they will refuse to cooperate with it and start looking for another option.
The cost structure of Saudi Arabian Airlines is comprised of several critical factors. First of all, it includes the maintenance of aircraft, the flight crew, airports and other specialists. Second, the company cooperates with Saudi Airlines Catering service, offering high-quality products and dishes to meet clients’ demands (Spagnol and Ellis, 2021). This factor is also included in the cost structure and impacts the pricing strategy. Moreover, it offers numerous premium services to its clients, which are also included in the price. For this reason, Saudia’s pricing strategy is built regarding these factors, which means that the average cost of a ticket remains high. However, it is supported by the unique nature of all offerings, safety, and quality of transportation.
At the same time, a more effective pricing strategy can be viewed as the guarantee of increased clients’ interest. During pandemic times, variable costs become the key to survival and further evolution (Saudia, 2021). It means that the company should be ready to avoid using a fixed cost model and increase the flexibility of offerings. Prices should be formed regarding the existing demand and paying capacity. It will help to attract new clients and guarantee they are satisfied with the combination of price and quality. It will help to manage the pandemic’s aftermath and generate stable income.
Stakeholders, Sustainability, & TBL
Most influential and powerful modern companies devote much attention to sustainability issues. The term means meeting the current generation’s needs without compromising future generations’ ability to meet their needs (Cameron and Prattico, 2021). Sustainability is also linked to the idea of a triple bottom line (TBL), meaning that the financial, social, and environmental performance of the company is vital for the total cost of business (Cameron and Prattico, 2021). Addressing these aspects, companies might transform into brands with a strong reputation and solid income.
Saudi Arabia Airlines is one of the brands following the ideas mentioned above. First, it emphasises the critical necessity of sustainability efforts. In its recent press release, the brand speaks about the cooperation with the major stakeholders and their combined contribution to reducing the negative impact of aviation on the environment (Spagnol and Ellis, 2021). The company selects aircraft with more effective engines, optimises weight, and uses recyclable materials to help the planet (Fly sustainability, 2022). It contributes to creating a positive image and helping communities affected by the brand. At the same time, the concept of TBL is also essential as Saudia informs its stakeholders about the necessity of addressing the social aspects and helping people to evolve (Fly sustainability, 2022). It implies employee training and local community programs (Fly sustainability, 2022). As a result, the brand benefits from better cooperation with local agencies and clients.
Conclusion
Altogether, Saudi Arabian Airlines can be viewed as a powerful company with numerous opportunities for further development and growth. Currently, it is a fast-growing carrier in the Middle Eastern region, struggling with major rivals such as Emirates, Qatar Airlines, and Etihad. The company effectively uses innovative tools to attract clients and increases its online presence. Offering high-quality and top-class services supported by a unique level of comfort and diverse dishes, the brand attracts an audience with a high income. At the same time, it is possible to offer several recommendations, such as diversifying its offerings to broaden the target audience, introducing a new type of low-cost flight, and increasing the social media presence. its
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Appendices
Appendix A: SWOT Analysis
Appendix B: PESTEL Analysis
