Marketing Strategy for Service Excellence at Singapore Airlines to continuing attract increasing numbers of international customers
Angelina Yuri Pujilistiyani.Ch
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I. PREFACE
Despite the airlines’ achievements, there were some disquieting signs on the horizon. Competition was intensifying and service quality improving among a number of both Western and Asian Airlines, including Hongkong-based Cathay Pacific, Japan Airlines, Eva air and Thai International and Malaysia Airlines. Thai and Malaysia airline now featured in eye-catching uniforms based on traditional customes. SIA had another point in its favour - the higher margins obtained on airline services in Asia. The Asian carriers did not compete on price among themselves. They preferred non price competition such as better service, more destinations, more frequent schedules and newer fleets. With the entry of American players into the region, however price became a more important feature. In 2000 SIA has achieved remarkable profit in 2000 SIA was the company on the top position within top ten airlines

CUSTOMER PROFILE AND THE PRODUCT LINE

The product line was divided into three classes of travel- First, Raffles (business) and economy. First class accounted for 5% of passengers, Raffles class for 10 % and economy class for 85%. About one million of the seven million seats sold annually were Singaporeans. Revenue from non-Singaporean were proportionally higher since they tended to fly longer distances. On average, the load factor was somewhat higher in Economy class (close to 80%) than in Raffles or First. Passengers who flew Raffles Class on a day time flight might travel First Class on an overnight flight for the extra comfort. Top management believed that the business passengers market held the future for the airline. At the marketing executive meeting everyone was concurred that technology was the key to improving service to this segment of the market. The expectations of these particular customers, were constantly rising and their needs has changed greatly since the previous decade.

SIA has spend 2% of its budget for advertising and promotion. The Singapore Girl had remained a key element in the company’s ads strategy since day one. The aim of the strategy was to impart a feeling romance and luxury service and so it was dominated by image of sarong-clad women against exotically backdrops. The purpose of the modernization campaign was to give another strong message to the market that SIA was leader in aircraft technology.Like most carries, SIA depended heavily on independent agents to sell its service. Since 2000 SIA use Abacus a computer reservation programme with extended array of services including airline and hotel, reservation, ground arrangements and regional travel news.

SIA just has new US$ 50 million training center, designed to drill all employees in the fine art of serving customers. As reported in the Straits Times, Singapore’s leading newspaper, everyone-from the floor sweeper to the deputy managing director-would receive this training. The underlying philosophy was to enable staff to place themselves in the customer position. A lot of the training time was thus experientially based. Key people were sent on special mission to see what other airlines were doing and how customers were handled. Special delay simulation games groomed staff on ways to cope with delay situation, one of the major complaint received from passengers.
One principle remain constant: staff had to be as flexible as possible in their dealing with customers even it took more time and effort. Management constantly reiterated that customers could not be told what to do simply because it suited the company; some passengers wanted to eat as soon as they boarded, others preferred to wait. Customers could not be pigeonholed, they often changed their minds. They might come on board intending to sleep and then decide to watch a movie after all. On long hauls, flexibility was especially important. Most passengers had individuals habits that correspond to their travel agendas, which could include sleeping at the beginning and working later, or vice versa.

Several technological innovation were already applied. One was intallation of small TV screens at each first and business class seat, offering passengers video entertainment. Since other aitlines were also doing this, ensuring variety would be pivotal. Another as satellite–linked air to ground telephone service which, unlike previously, allowed passengers to make calls even when the aircraft was above the ocean. Although these innovation were important, SIA felt they were not enough that there would be innumerable possibilities for adding value to the customers’ total flying experience-but only if the know-how and technology could be applied correctly.

SIA had to satisfy the needs of contemporary travelers, which meant being able to bring the sophisticated technology found in people’s homes and offices into the air. Very little attention has been given to adapting technology strategically for our business. For instances, home audio systems are fantastic. But in the air, they are terrible. We have to close this technology gap and provide modern customers with interesting and useful technology-based services.

In order to survive in the future aircraft market, SIA has plan to improve the three pillar that provide quality experience to the customers : PRE FLIGHT – IN FLIGHT – POST FLIGHT.

II. CASE

1. How can a successful international airline like SIA continue to INCREASE ITS PASSENGERS volumes (especially BUSINESS TRAVELERS) against stiff competitions?
2. Singapore Airline is looking at ways to enhance the already high level of the THREE PILLAR to provide quality experience: PRE FLIGHT – IN FLIGHT – POST FLIGHT by using technologically-based improvements. How far this will be a strong point to enhance SIA competitive advantage?
3. Learning from the success of SIA, how far GIA (Garuda Indonesian Airways) can adopted THE CUSTOMER SERVICE PHILOSOPHY as marketing strategy?

By answering this question, through our in-depth research on the airline industry and SIA, we derive some general lessons for our self and staff to manage in other industries.

III. LITERATURE REVIEW
The Marketing Process
Under the marketing concept, the firm must find a way to discover unfulfilled customer needs and bring to market products that satisfy those needs. The process of doing so can be modeled in a sequence of steps: the situation is analyzed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are made, the plan is implemented and the results are monitored.
Situation Analysis
A thorough analysis of the situation in which the firm finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the firm must understand its own capabilities and the environment in which it is operating.
The situation analysis thus can be viewed in terms an analysis of the external environment and an internal analysis of the firm itself. The external environment can be described in terms of macro-environmental factors that broadly affect many firms, and micro-environmental factors closely related to the specific situation of the firm.
The situation analysis should include past, present, and future aspects. It should include a history outlining how the situation evolved to its present state, and an analysis of trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists.
If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition.
There are several frameworks that can be used to add structure to the situation analysis:
1. 5 C Analysis - company, customers, competitors, collaborators, climate. Company represents the internal situation; the other four cover aspects of the external situation
In order to profitably satisfy customer needs, the firm first must understand its external and internal situation, including the customer, the market environment, and the firm’s own capabilities. Furthermore, it needs to forecast trends in the dynamic environment in which it operates.
A useful framework for performing a situation analysis is the 5 C Analysis. The 5C analysis is an environmental scan on five key areas especially applicable to marketing decisions. It covers the internal, the micro-environmental, and the macro-environmental situation. The 5 C analysis is an extension of the 3 C analysis (company, customers, and competitors), to which some marketers added the 4th C of collaborators. The further addition of a macro-environmental analysis (climate) results in a 5 C analysis, some aspects of which are outlined below.
Company

• Product line
• Image in the market
• Technology and experience
• Culture

• Goals
Collaborators

• Distributors
• Suppliers

• Alliances
Customers
• Market size and growth
• Market segments
• Benefits that consumer is seeking, tangible and intangible.
• Motivation behind purchase; value drivers, benefits vs. costs
• Decision maker or decision-making unit
• Retail channel - where does the consumer actually purchase the product?
• Consumer information sources - where does the customer obtain information about the product?
• Buying process; e.g. impulse or careful comparison
• Frequency of purchase, seasonal factors
• Quantity purchased at a time
• Trends - how consumer needs and preferences change over time
Competitors

• Actual or potential
• Direct or indirect
• Products
• Positioning
• Market shares

• Strengths and weaknesses of competitors
Climate (or context)
The climate or macro-environmental factors are:
• Political & regulatory environment - governmental policies and regulations that affect the market
• Economic environment - business cycle, inflation rate, interest rates, and other macroeconomic issues
• Social/Cultural environment - society’s trends and fashions
• Technological environment - new knowledge that makes possible new ways of satisfying needs; the impact of technology on the demand for existing products.
2. PEST analysis - The analysis of the these four external “climate” factors
Customer and competitor information specifically oriented toward marketing decisions can be found in market research reports, which provide a market analysis for a particular industry. For foreign markets, country reports can be used as a general information source for the macro-environment. By combining the regional and market analysis with knowledge of the firm’s own capabilities and partnerships, the firm can identify and select the more favorable opportunities to provide value to the customer.
PEST analysis - for macro-environmental political, economic, societal, and technological factors. A PEST analysis can be used as the “climate” portion of the 5 C framework. A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm’s control and sometimes present themselves as threats. For this reason, some say that “pest” is an appropriate term for these factors. However, changes in the external environment also create new opportunities and the letters sometimes are rearranged to construct the more optimistic term of STEP analysis. Many macro-environmental factors are country-specific and a PEST analysis will need to be performed for all countries of interest. The following are examples of some of the factors that might be considered in a PEST analysis.
Political Analysis

• Political stability
• Risk of military invasion
• Legal framework for contract enforcement
• Intellectual property protection
• Trade regulations & tariffs
• Favored trading partners
• Anti-trust laws
• Pricing regulations
• Taxation - tax rates and incentives
• Wage legislation - minimum wage and overtime
• Work week
• Mandatory employee benefits
• Industrial safety regulations
• Product labeling requirements

Economic Analysis

• Type of economic system in countries of operation
• Government intervention in the free market
• Comparative advantages of host country
• Exchange rates & stability of host country currency
• Efficiency of financial markets
• Infrastructure quality
• Skill level of workforce
• Labor costs
• Business cycle stage (e.g. prosperity, recession, recovery)
• Economic growth rate
• Discretionary income
• Unemployment rate
• Inflation rate
• Interest rates

Social Analysis

• Demographics
• Class structure
• Education
• Culture (gender roles, etc.)
• Entrepreneurial spirit
• Attitudes (health, environmental consciousness, etc.)
• Leisure interests

Technological Analysis

• Recent technological developments
• Technology’s impact on product offering
•
• Impact on cost structure
• Impact on value chain structure
• Rate of technological diffusion

The number of macro-environmental factors is virtually unlimited. In practice, the firm must prioritize and monitor those factors that influence its industry. Even so, it may be difficult to forecast future trends with an acceptable level of accuracy. In this regard, the firm may turn to scenario planning techniques to deal with high levels of uncertainty in important macro-environmental variables.
3. SWOT analysis - strengths, weaknesses, opportunities, and threats - for the internal and external situation. A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess how well the firm is equipped to deal with them.
SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans. SWOT (sometimes referred to as TOWS) stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT framework was described in the late 1960’s by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D. Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). The General Electric Growth Council used this form of analysis in the 1980’s. Because it concentrates on the issues that potentially have the most impact, the SWOT analysis is useful when a very limited amount of time is available to address a complex strategic situation. The following diagram shows how a SWOT analysis fits into a strategic situation analysis.

Situation Analysis
/ \
Internal Analysis External Analysis
/ \ / \
Strengths Weaknesses Opportunities Threats
|
SWOT Profile
The internal and external situation analysis can produce a large amount of information, much of which may not be highly relevant. The SWOT analysis can serve as an interpretative filter to reduce the information to a manageable quantity of key issues. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats. Strengths can serve as a foundation for building a competitive advantage, and weaknesses may hinder it. By understanding these four aspects of its situation, a firm can better leverage its strengths, correct its weaknesses, capitalize on golden opportunities, and deter potentially devastating threats.
Internal Analysis
The internal analysis is a comprehensive evaluation of the internal environment’s potential strengths and weaknesses. Factors should be evaluated across the organization in areas such as:

• Company culture
• Company image
• Organizational structure
• Key staff
• Access to natural resources
• Position on the experience curve
• Operational efficiency
• Operational capacity
• Brand awareness
• Market share
• Financial resources
• Exclusive contracts
• Patents and trade secrets

The SWOT analysis summarizes the internal factors of the firm as a list of strengths and weaknesses.
External Analysis
An opportunity is the chance to introduce a new product or service that can generate superior returns. Opportunities can arise when changes occur in the external environment. Many of these changes can be perceived as threats to the market position of existing products and may necessitate a change in product specifications or the development of new products in order for the firm to remain competitive. Changes in the external environment may be related to:

• Customers
• Competitors
• Market trends
• Suppliers
• Partners
• Social changes
• New technology
• Economic environment
• Political and regulatory environment

The last four items in the above list are macro-environmental variables, and are addressed in a PEST analysis. The SWOT analysis summarizes the external environmental factors as a list of opportunities and threats.
SWOT Profile
When the analysis has been completed, a SWOT profile can be generated and used as the basis of goal setting, strategy formulation, and implementation. The completed SWOT profile sometimes is arranged as follows:
Strengths Weaknesses
1……..etc 1……etc
Opportunities Threats
1…….etc 1.…..etc
When formulating strategy, the interaction of the quadrants in the SWOT profile becomes important. For example, the strengths can be leveraged to pursue opportunities and to avoid threats, and managers can be alerted to weaknesses that might need to be overcome in order to successfully pursue opportunities.
Multiple Perspectives Needed
The method used to acquire the inputs to the SWOT matrix will affect the quality of the analysis. If the information is obtained hastily during a quick interview with the CEO, even though this one person may have a broad view of the company and industry, the information would represent a single viewpoint. The quality of the analysis will be improved greatly if interviews are held with a spectrum of stakeholders such as employees, suppliers, customers, strategic partners, etc.

SWOT Analysis Limitations
While useful for reducing a large quantity of situational factors into a more manageable profile, the SWOT framework has a tendency to oversimplify the situation by classifying the firm’s environmental factors into categories in which they may not always fit. The classification of some factors as strengths or weaknesses, or as opportunities or threats is somewhat arbitrary. For example, a particular company culture can be either a strength or a weakness. A technological change can be a either a threat or an opportunity. Perhaps what is more important than the superficial classification of these factors is the firm’s awareness of them and its development of a strategic plan to use them to its advantage.

V. CASE ANALYSIS

Based on Literatur Review, I try to make in analysis about :

How can a successful international airline like SIA continue to INCREASE ITS
PASSENGERS volumes (especially BUSINESS TRAVELERS) against stiff
competitions?

1. SWOT Analysis
Streghtness:
The NEW Business Class
The most spacious the world has ever seen. A wide seat, a fully flat bed, an office, an entertainment multiplex, a gourmet restaurant … whatever you wish

Personal Dining Experience
Work, lounge or even dine …. in a fully flat bed that provides ample space.

Extra Touches
we also offer extra virgin olive oil, including natural, truffle, chilli and balsamic vinegar as an alternative to butter to complete your Meal.

Angelina Yuri Pujilistiyani.Ch
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A forward facing 1-2-1 cabin layout offers more privacy and direct access to the aisles. And for each, a spacious wide seat – at least 30 inches across – accommodates all lounging and seating postures for maximum comfort.

The largest full-flat bed in Business Class

Work, lounge or even dine …. in a fully flat bed that provides ample space.Drift off into a restful sleep, surrounded by larger pillows, crisp linen and a duvet.

Your office in the sky. Or you can pause and play.

A centralised, all-in-one Business Panel features laptop power supply and 2 USB ports. Built-in office software allows you to create spreadsheets and presentations, without the use of a laptop. It’s another first from Singapore Airlines. Or unwind with the latest entertainment unveiled on your 15.4-inch personal LCD screen and our 225-CD music collection.

Softest leather, a height adjustable table, a vanity mirror, your personal coat hook and space at the seat for your cabin bag. Everything is designed with your comfort in mind.

The latest entertainment, including Audio-Video On Demand, is unveiled on your 15.4-inch personal widescreen LCD. A centralised, all-in-one Business Panel features in-seat power supply, video input and 2 USB ports. Built-in office software allows you to create documents, spreadsheets and presentations, without the use of a laptop.

All of this facility only available on flights from Singapore to Barcelona, Hong Kong, Milan and Paris. Soon to Zurich, Seoul, San Francisco and progressively to other cities.

Weaknesses
Market Survey about customer opinion of Business Class SIA:
Boeing 777-300ER
The seats it self are huge, but too flat. Some contouring would have been good to enable “sit up” support. But no complains about the personal space especially with the cabin’s 1-2-1 layout. Also forward space between seat and screen (which are now huge by the way, 14 inch I think) is cavernous with loads of well though out amenities built into the forward areas of the seat. (flanking left and right of the screen). On the left you have a ‘make up mirror’ while on the right you’ve a power source, internet line, space for knick-knacks etc. In your arm rest are also very useful cubby holes. All in all these seats are great as they can lie flat and the entire shell of the seats and forward areas are linked providing passengers ability to lie completely flat, fully supported. Can’t wait to try these planes out on longer haul flights. Mine was a short jaunt between S’pore to Hong Kong. (review by Alex Lim)
Airbus A340-500
A reasonable flat-style sleeper seat. Controls are somewhat complicated and it has a very high basic seating position. Seat reclines to an 8 degree residual angle so the old song- ‘Slip sliding away’ is relevant if you are not appropriately dressed to make sure you do not slip down. (review by Anthony Wierzbicki)

Threats
Survey data from SKYTRAX Research:
Sleep rating
SIA ****
South African Airways*****
British Airways *****
Air New Zealand*****
Virgin Atlantic*****

Seat rating
SIA ****
Air new Zealand *****
Bristish Airways*****
South African Airways*****
Virgin Atlantic*****

STAR Rating
(at rating data uses multiple ranking factors to establish the final Star Ranking level) Items assessed in the Star Ranking include:

- Seat pitch
- Seat configuration
- Seat width
- Upright comfort
- Lounge comfort
- Lie flat comfort
- Seat privacy
- Ease of access
- Seat controls
- Footrest
- Legrest
- Headrest
- Cushion comfort
- Lumbar support
- Massage option

Result:
SIA****
Air New Zealand*****
British Airways*****
South African Airways*****
Virgin Atlantic*****

Competitor research:

British Airways

*5 Lounge Comfort
*5 Lounge Cleanliness
*4 Bar & Beverages
*4 Catering
*4 Washroom / Showers
*2 Internet / Wifi
*4 Staff Service

The British Airways Lounge (Terminal Four) in the early afternoon was a bit busy with all the seating overlooking the tarmac full. At one end of the lounge there are several computers offering Internet access, Wi-fi is accessed for a fee.
The Lounge now serves a better selection of hot and cold food. On this day a choice of Pasta Arabiata or Shanghai Noodles was on offer and being prepared by a chef in front of you. Fridges are well stocked with a wide range of alcoholic and non- alcoholic beverages. On occasion there is a short wait to use the Molton Brown showers but this time it was straight in. The shower rooms have enough room for your bags and are clean and comfortable. Overall a pretty good Lounge facility.
Singapore Airline

*3 Lounge Comfort
*4 Lounge Cleanliness
*3 Bar & Beverages
*2 Catering
*4 Washroom / Showers
*3 Internet / Wifi
*3 Staff Service

A very small lounge with no window, down side. Singapore Airlines, Thai Airways and Air New Zealand are all sharing this tiny lounge as SQ is the only Star Alliances carrier with lounge here. Very basic lounge. Wifi is great, no hot food, just pastries, snacks, fruits and several kinds of juice and soft drinks. One internet outlet only if you do not have laptop for yourself. I understand this lounge only cater 4-5 flights everyday. Simply too basic and small for premium passengers, this lounge can only handle one load of aircraft at one time. The good thing is the lounge just located right beside the gate as PER international terminal is really small.
Air new zealand

*5 Lounge Comfort
*5 Lounge Cleanliness
*4 Bar & Beverages
*5 Catering
*4 Washroom / Showers
*5 Internet / Wifi
*5 Staff Service

The lounge is quite big and very stylish. It offers a wide selection of drinks (alcoholic and non alcoholic) and some very good snacks (sandwiches, cheese, salad etc.).
Seating is very comfortable and the showers are quite nice. There is a business center with free internet access. Only the “childrens area” looked a bit old and dirty, but all in all a very nice lounge with exceptionally friendly staff.
Oppurtunity to improve passenger in business class:
SIA must improve weaknesses to be the leader in business class:
• Provided food to eat amounts and less often
• provide more nutrition on passenger diets
• Tended to be impatient and resented having to wait
• Provide facilities in airport lounges-such as showers and
fax machines – all available in the sky
• provide customers with luxurious comfort and service at a business class price. The key feature will be the introduction of the revolutionary lie-flat seat. The comfortable leather armchair and ottoman transform into a truly lie- flat bed measuring six foot seven-and-a-half inches (202 cm) and up to 33 inches (84cm) wide at the shoulders.
• Add excellent facility in other flight, not only for flights from Singapore to Barcelona, Hong Kong, Milan and Paris. Soon to Zurich, Seoul, San Francisco and progressively to other cities.
• AVOD allowing the customer to play, pause, rewind and forward on demand just like they can with DVDs and videos at home. More choice than ever before from a potential 780 hours video content - with blockbuster films, comedies, lifestyle and travel programmes, dramas, documentaries and sport.
The in-flight entertainment system from United States-based Rockwell Collins has the ability to be upgraded to include features such as internet and e-mail access, text messaging and multi-player games in the future.
• Customer message:
Contex: Customer business requires them to be in new york for an important meeting at 9.30 a.m, Tuesday morning, yet time is at a premium; they need to be in Singapore all day Monday, and back on Wednesday
Complexity: The problem with business travel is that a night slumped in an airline seat is no way to prepare for a key meeting: you step off the plane and info the boardroom with tired eyes and crumpled suit
Challenge: How to travel overnight, and still perform at their best next morning??
Core Message: Business World gets you there, rested and refreshed, looking and feeling their best
How?
Evidence 1: Offer the best schedules, enabling them to depart after a full day’s work in the city, and arrive in plenty of time for the opening of wall stret
Evidence 2: they can dine in supper lounge before departure and, once on boarde, sleep undisturbed, with pillows and duvets, only waking up as SIA staff touch down
Evidence 3: On arrival, you can take a shower in SIA arrivals lounge while their clothes are pressed and, after a quick breakfast and checking of their email , head
• Advertising is key in changing perceptions, promoting” The World Business Class Favourite Airline” through memorable images of business people from around the world coming together. Focus on Travel experience
• In addition, SIA must ongoing strategy to focus on key products and services for its premium class passengers using combined expertise to develop the new seats and other cabin enhancements. Better to ask business travelers and flight attendants participated in the research and development of the new seats and other amenities. The result is the world Business Class, designed to make the Business Class travel experience more comfortable, productive and customized for each passenger’s needs.
• Continues its emphasis on serving Business Class customers in international travel by unveiling Business Class, which features a new lie-flat seat that provides more comfort and adjustability, travelers will have the capability of making this innovative Business Class seat adjust to their personal preferences, as opposed to having to adjust to seats that have only a few positions, which are in use by a number of competing airlines. Business Class passengers can fly more comfortably, work more productively and enjoy the flight with expanded entertainment features and dining options.”
• Ergonomically-Advanced Seat Design. The new, highly-adjustable, lie-flat seat allows passengers to customize the setting to their personal preference. Passengers can individually adjust any component of the seat, including the seat bottom, seat back, leg extension and leg rest, resulting in infinite flexibility of seat positions. They can select one of the convenient preset positions to sit up, recline or lie flat and then further fine-tune the comfort settings to suit their individual preferences. The seat features a memory setting so that passengers can easily return to a favorite seat position throughout a flight.
• Stretch Out and Relax. The new seat extends to a length of 77 inches. Raise the privacy divider and drop the outer armrest to gain a seat width of 23 inches. Unique Track Forward Feature. Business Class seat is the only Business Class seat in the industry that has the ability to move forward while in the upright position. This allows customers to move the seat forward so they are offset from their fellow passengers for added privacy and comfort. Tracking forward also allows travelers to move closer to the tray table and powerport. Industry-First Interlocking Tray Tables. the only interlocking tray table offering in Business Class. The innovative tray table design has two separate tables — one drops down from the seat back, and a second lifts from the center console. The tables can be used separately or together to create one large work or dining surface.
• In-Flight Theatre On Demand. features a portable entertainment device with a monitor allowing passengers to view it hands-free in the seat back or remove it and place the unit in the best location given their chosen seat position. Customers also receive headphones to complete their audio or video sound experience. Inflight entertainment language options vary by market and aircraft and can include English, Spanish, Portuguese, French, German, Japanese and Chinese.
• Fine Food and Wine. Customers have long enjoyed SIA Business Class for the excellent cuisine and award-winning wines. To complement the meal, SIA maintains a lot of different wine lists that are specially selected for various markets.
• Larger Overhead Bins. Designed to accommodate “wheels first” luggage, the bins are larger and extend lower when open, making storing and retrieving luggage easier.
• Connectivity for the Future. High speed /broadband internet conection during flight. Understands that real-time broadband connectivity is important to its business customers and was the first airline to liberalize its cell phone policy. SIA should introduce global satellite phone service, offer this service to its customers on international flights flown with widebody aircraft and is actively engaged with suppliers to further enhance the travel experience in the future with real-time broadband connectivity options.
• Enhancements that Count. The hard-shell exteriors of the new seat preserve each passenger’s space. Powerports located in the seatback are convenient and easier to access than powerports traditionally located on the floor or under the seat. A hook on the seatback and an amenity kit that doubles as a shoe bag are perfect for keeping personal belongings close at hand. Forward-facing seats and luxurious duvets offer added privacy and warmth in-flight
• Now, airlines are fully realizing business travelers’ importance. New all-business-class airlines have mushroomed over the past year. And traditional carriers are upgrading their premium-class services, especially on international flights.
• Think customer, not product; horizontal, not vertical. Thinks about entire experience of the business traveler leaving home, parking, checking-in, flying, arriving, and doing what they need to do at their destination.
• Managing People Effectively to Deliver Sustained Service Excellence
The Five Key Elements of SIA’s Human Resource Management Strategy

These elements are emphasized in successful human resource management, especially in the field of strategic human resource management, and they have been shown to lead to higher company performance. However, many service firms have not been able to implement them successfully.
• Motivating through rewards and recognition
Once a firm has hired the right people, trained them well, em-powered them and organized them in effective service delivery teams, how can it ensure that they will deliver service excel-lence? Staff performance is a function of ability and motivation. Reward systems are the key to motivation, and service staff must get the message that they will be recognized and rewarded for providing quality service. Motivating and rewarding strong service performers is also one of the most effective ways of retaining them.
Understanding that many service businesses fail because they do not utilize the full range of available rewards effec-tively, SIA should offers various forms of rewards, including interesting and varied job content, symbolic forms of recognition and performance-based share options. It recently introduced equity-linked incentives for staff and linked more variable components of pay to individual staff contribution as well as to the company’s financial performance.
• Achieving Cost-Effective Service Excellence at Singapore Airlines
we believe is SIA’s core competence: cost-effective service excellence. It is relatively easy to deliver excellent service if one pours money into doing so. What is much harder to do is to deliver service excellence in an efficient manner, in other words implementing a strategy that integrates differentiation and cost leadership. How has SIA managed to achieve this? In common with other organizations with a reputation for service excellence, SIA displays characteristics such as top management commitment, customer-focused staff and systems, and a customer-oriented culture. However, our research has provided further insights into how SIA develops and maintains a reputation for service excellence, which its achieves through what we call the ‘five pillars’ of SIA’s activity system. These pillars are rigorous service design and development, total innovation, profit and cost consciousness ingrained in all employees, holistic staff development, and reaping of strategic synergies through related diversification and world-class infrastructure. These five pillars of SIA’s cost-effective service excellence are supported, operationalized, and made real to everyday decisions and actions through a self-reinforcing activity system of virtuous circles, presented in the chapter. The core competence of cost-effective service excellence, and the cultural values supporting it, are ingrained into both the hearts and minds of employees as well as into organizational processes. This may help explain why SIA’s competitive advantage has been sustained for decades. While it is easy to copy single elements, it is much harder to reproduce an entire, self-reinforcing, activity system.
SIA has started to employ biometric technologies to enhance the customer experience while at the same time raising security and efficiency. We suggest that sustaining competitive advantage through the strategic use of technology involves developing innovations that have a significant positive impact on the customer experience and also entails significant business process redesign to make the processes difficult to imitate.
• Innovation as a Key to Sustained Service Excellence
Continues the theme of service excellence with a focus on innovation. It sheds light on SIA’s ability to be a serial innovator, introducing many firsts in the airline industry and sustaining this innovative orientation over decades in the face of intense cost pressures, industry crises and the push towards commoditization. These challenges include, firstly, how to consistently satisfy the sky-high and rising expectations of customers; secondly, how to deal effectively with the tension arising from offering uniform service that is at the same time personalized; and, thirdly, how to approach a large number of services in a holistic manner to attain consistent excellence in all related processes and subprocesses. SIA’s innovation process, characterized by the seamless combination of hard, structured and rigorous innovation that is centralized with soft, emergent and continuous innovation that is undertaken by different functional departments. This competence is further enhanced through an integrated customer and front-line staff feedback system that provides valuable insights on innovation.
• Provide allow mobile phones for inflight. useInflight mobile phones ‘part of customer service’. Emirates will provide this facility next month. This is part of a commitment to customer service rather than a way of making money, it has been claimed. Does not consider this service a profit centre, it is an investment in customer service. Experts say that business travellers are likely to make good use of the service.A voice call on a short-haul journey tends to be part of the business day. Passenger maybe travelling to or from a meeting and most of the people they are likely to call are in the same time zone. Mobile technology company AeroMobile, which is working with Emirates, has said that it is considering implementing onboard mobile services on a number of other airlines. And better SIA follow this soon

Singapore Airline is looking at ways to enhance the already high level of the THREE PILLAR to provide quality experience: PRE FLIGHT – IN FLIGHT – POST FLIGHT by using technologically-based improvements. How far this will be a strong point to enhance SIA competitive advantage?

I would like to analyses some factor that can be competitive advantage of SIA:

1. Analyses the airline industry as a whole, reviewing its historical development, important trends over time and key aspects of the industry’s economics. Issues discussed include the impact of government intervention; uncontrollable factors such as oil prices and political events; factors such as the perishability of seats, seasonality of demand, and long time horizons in infrastructural decisions that inject additional levels of complexity; airlines’ fixed and variable direct operating costs and their indirect operating costs; and lastly the chronically poor and volatile performance of the whole industry. Key trends in the industry, such as the formation of alliances and the emergence of budget carriers, are examined. Lastly, strategic imperatives for airlines are considered, such as adopting cutting-edge technology, controlling costs and raising productivity, managing alliances effectively, avoiding the herd instinct, and overcoming commoditization.

2. Focuses on SIA itself, looking at its impor-tant strategic choices and resource deployment decisions, in order to get a broad understanding of the company’s superior performance. Factors discussed include its young fleet, low staff costs, global revenue base, striving for efficiency, brand reputation, response to crises, and alliance and acquisition strategies. In addition to their significant individual impacts on SIA’s performance, these factors also interact with one another, thus enhancing the magnitude of their impacts. A key conclusion drawn from this analysis is that SIA’s superior performance is attributable to a complex array of strategic decisions which have been highly consistent over time

3. I believe is SIA’s core competence: cost-effective service excellence. It is relatively easy to deliver excellent service if one pours money into doing so. What is much harder to do is to deliver service excellence in an efficient manner, in other words implementing a strategy that integrates differentiation and cost leadership. How has SIA managed to achieve this? In common with other organizations with a reputation for service excellence, SIA displays characteristics such as top management commitment, customer-focused staff and systems, and a customer-oriented culture. However, our research has provided further insights into how SIA develops and maintains a reputation for service excellence, which its achieves through what we call the ‘five pillars’ of SIA’s activity system. These pillars are rigorous service design and development, total innovation, profit and cost consciousness ingrained in all employees, holistic staff development, and reaping of strategic synergies through related diversification and world-class infrastructure. These five pillars of SIA’s cost-effective service excellence are supported, operationalized, and made real to everyday decisions and actions through a self-reinforcing activity system of virtuous circles, presented in the chapter. The core competence of cost-effective service excellence, and the cultural values supporting it, are ingrained into both the hearts and minds of employees as well as into organizational processes. This may help explain why SIA’s competitive advantage has been sustained for decades. While it is easy to copy single elements, it is much harder to reproduce an entire, self-reinforcing, activity system

4. SIA’s investments in biometrics, further illustrating the two pillars of rigorous service design and development as well as total innovation. SIA has started to employ biometric technologies to enhance the customer experience while at the same time raising security and efficiency. I suggest that sustaining competitive advantage through the strategic use of technology involves developing innovations that have a significant positive impact on the customer experience and also entails significant business process redesign to make the processes difficult to imitate. continues the theme of service excellence with a focus on innovation. It sheds light on SIA’s ability to be a serial innovator, introducing many firsts in the airline industry and sustaining this innovative orientation over decades in the face of intense cost pressures, industry crises and the push towards commoditization. I first present senior management’s perspective of the key challenges they face in delivering sustained and cost-effective service excellence. These challenges include, firstly, how to consistently satisfy the sky-high and rising expectations of customers; secondly, how to deal effectively with the tension arising from offering uniform service that is at the same time personalized; and, thirdly, how to approach a large number of services in a holistic manner to attain consistent excellence in all related processes and subprocesses. This also to address SIA’s innovation process, characterized by the seamless combination of hard, structured and rigorous innovation that is centralized with soft, emergent and continuous innovation that is undertaken by different functional departments. This competence is further enhanced through an integrated customer and front-line staff feedback system that provides valuable insights on innovation.

5. SIA’s human resource management processes, a crucial aspect of any service business, where people, especially front-line staff, are a core part of the offering and the most visible element of the service. I analyzes the five elements forming SIA’s human resource management and how each of these elements reinforces its service excellence strategy. The five elements are stringent selection and hiring of people, extensive training and retraining, formation of successful service delivery teams, empowerment of the front line, and staff motivation. Even though these service elements are simple to state, very few firms have been able to implement systems that deliver the desired results. The reason we undertook this study was to gain a deeper understanding of the factors that can help a company achieve sustainable success in extremely tough industries, based on a detailed study of the strategy and the organizational features of a company that has achieved just that.

6. I believe apply to any company that aims to achieve sustainable competitive advantage, the holy grail of strategy. I do not aim to provide the answers but rather to suggest useful strategic principles and to help executives ask the right questions.
It is so hard to be successful in the airline industry. I then proceed with strategic lessons, which relate to the need to be clear about the company’s generic strategy (or a combination of generic strategies); the need to achieve high levels of strategic alignment among strategy, capabilities, organization and market demands; the importance of nurturing and investing in capabilities and core competencies that support the strategy; and finally the need to understand and foster strategic innovation. I then examine SIA’s institutional context and suggest that, even though SIA has definitely gained from being located in a supportive institutional context, this is far from a comprehensive explanation of its success. Its success can ultimately be traced to robust strategies, seamless execution, and continuous vigilance and realignment.

Learning from the success of SIA, how far GIA (Garuda Indonesian Airways) can adopted THE CUSTOMER SERVICE PHILOSOPHY as marketing strategy?

MAINTAINING THE CUSTOMER SERVICE PHILOSOPHY

1. The underlying principle that customer came first must carried through at all levels of the organization. How customers were handled at each each contact was considered of paramount importance.

2. GA must spend money for excellent training center, designed to drill all employees in the fine art of serving customers.Everyone-from the floor sweeper to the deputy managing director-would receive this training. The underlying philosophy was to enable staff to place themselves in the customer position. A lot of the training time was thus experientially based. Key people were sent on special mission to see what other airlines were doing and how customers were handled. Special delay simulation games groomed staff on ways to cope with delay situation, one of the major complaint received from passengers.

3. Staff must be flexible as possible in their dealing with customers even it took more time and effort. Management constantly reiterated that customers could not be told what to do simply because it suited the company; some passengers wanted to eat as soon as they boarded, others preferred to wait. Customers could not be pigeonholed, they often changed their minds. They might come on board intending to sleep and then decide to watch a movie after all. On long hauls, flexibility was especially important. Most passengers had individuals habits that correspond to their travel agendas, which could include sleeping at the beginning and working later, or vice versa.

4. Staff must learn that customers were happier when given a choice. Offering more meal variations automatically reduced the number of unhappy people. Menus typically changed by other airlines no more than four times a year. Information technology enabled chefs to fine-tumed meals and immediately withdraw any dishes that were poorly received. Although there will more cost associated with such tactics, but management firmly must believe that these effort distinguished GA from its competitors.

5. Complaints must encouraged as they providing insight problems. Once they received, something could be done to rectify the situation; all complaints will track down and follow up. Traveler will invited to submit these complaint in writing. While some customers- typically Americans, Germans and Australians-readily compiled, others were less willing to so in writing. These customers were specifically questioned in follow-up surveys. At the airport in Jakarta, staff were encouraged to do everything possible to deal with legitimate customer problems. Senior cabin crew members met every Monday morning for feedback and exchange sessions with service support personnel. One ritual practiced was to address the crew from the control center just before takeoff about topical issues, special promotions and other issues, special promotion and other issues relevant to services.

V. SUMMARY

SIA’s strategy and organization, such as its core competency of cost-effective service excellence, its innovation capabilities and its human resource management practices.
I end with some strategic lessons that we believe apply to any organization that aims to achieve sustainable success in hyper-competitive markets

For over three decades, SIA has managed to achieve what many others in the aviation industry can only dream of: cost-effective service excellence that is reinforced by effective human resource management and a positive company culture and image. In this chapter, we discussed the role of SIA’s leadership and the five key elements constituting SIA’s human resource management strategy (i.e., stringent selection and hiring of people, followed by extensive training and retraining, formation of successful service delivery teams, empowerment of the front line, and motivating staff ), which have helped SIA to build and sustain service excellence at levels consistently above the competition over three decades. The recent crises and the emergence of budget carriers require SIA to sustain its focus on achieving cost-effective service excellence and, if necessary, reexamine some aspects of its recipe.

But, still there complaint about SIA services from buiness class passenger, they still not comfortable and disappointed by the SIA Spacebed - felt as if I was sliding down towards the floor and struggled to sleep, also found it difficult to get in and out of the seat when it was fully extended. Sia must improving thw weaknesses as soon as possible.

Finally, the research findings permitted the construct of a policy framework for securing sustainable competitive advantage. The research yielded useful insights for theory and model building. In respect of enhancing customer service to achieve sustainable competitive advantage in the SIA, the research findings suggested a Service Culture Development Model that will ensure that customer service excellence can be maintained and delivered consistently, leading to a sustainable competitive advantage in the marketplace. In respect of enhancing customer service through the development of competencies in every employee and throughout the organisation, the research findings suggested a new Customer Service Model, where additioning technology competencies development programme becomes the excellent. In order to create a service culture throughout the entire organisation, a customer service-oriented organisation will ensure that all employees, including top management personnel, participate in the comperehensive traning programme.

VI. REFERENCE

1. Loizos Heracleous &Jochen WirtzNitin Pangarkar, Flying Highin a CompetitiveIndustry- Cost-Effective Service Excellence at Singapore Airlines. Mc Graw hill Publisher
2. http:///www.netmba.com/marketing
3. AllenTeh keat Beng, 2006. Emotional Intelegence. Customer Service and Sustainable Competitive Advantage,University of Australia. Thesis
4. http://www.airlinequality.com/Forum/sia.htm
5. Peter Fisk, 2006. Marketing Genius. Capstone publishing Limited, England (206, 245 6, 319, 380-83)

6.John A.Qulch and friends, 2000. Strategic Marketing cases for 21st century Asia.
Prentice Hall Publisher , Singapore (3200

7. Sri wahyuni Astuti, 2004. Manajemen Pemasaran. UT Publisher, Jakarta