International Marketing Study Program 2000
Cathay Pacific, Hong Kong
11 January 2000
This morning's program took us to Cathay Pacific City - headquarters of Cathay Pacific airlines. Presentations were given by Olivia Wong (Manager Marketing Communications), Celine Ho (Marketing Manager) and Jesse Lui (Marketing Manager).
Olivia's presentation focused on overall marketing strategy for Cathay. Celine spoke about brand management and incorporated two case studies. Jesse covered tactical promotions.
The key areas covered were:
1. The Product offering as divided into 3 areas:
- strategic (routes covered, flight flexibility, strategic alliances)
- 'hard product' (the physical aspects of the product such as the aircraft itself, lounges, check in facilities etc.)
- 'soft product' (service delivery such as inflight hospitality, entertainment etc. These are people related services which can't be easily mimicked)
The point was made that the hard product aspects of the airline industry are easily copied, which necessitates an emphasis on the soft product aspects as the key point of competitive advantage.
2. Distribution
90% of Asian business is gained through travel agents. Other channels used are direct deals (direct accounts for corporates) and cyber agents (online agencies who source the best deal for the consumer from various airlines).
3. Communications
3.a Brand management
Examples cited were the launching of a new corporate identity in 1994 and a new Hong Kong positioning strategy which focused on an emotional bonding with the city rather than the physical product attributes of the airline.
3.b Tactical promotions
These are short term initiatives targetted at specific customer segments with the objective being to promote an immediate call to action and to put 'bumps on seats' (sic!!!!). Tactics are developed through a yearly marketing plan and are adjusted for local conditions dependent upon the country in which the promotion is being staged.
Examples cited were
- Rejuvination of the Japan outbound leisure market (a promotion aimed at Japanese Office Ladies (OLs) aged 20-35) and
- Super Stop (the promotion of the physical location of Hong Kong as an Asian destination which is within 7 flying hours of any other Asian destination. This is seen as a critical leverage point).
4. Cathay's proposed internet approach
Cyber Agents (as mentioned earlier) have not as yet been successful within the Asian market, largely due to the inability to compete on price. Cathay senior management have identified internet marketing as a key priority for the company. They are looking to progress to a more interactive website where customers can voice their opinions. However, the point was made that unless there are the resources to service this communication medium a bad service experience could in fact result in the loss, rather than gain, of customers.
One of the limitations of internet marketing and service delivery for an Asian based company like Cathay is the desire of the local market to transact directly 'face to face' with another person.
Copy prepared by Mario DeLosa and Kirsten Freeman
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