Aviation Branding

In the modern world, airlines have to have their own brand to successfully implement any of Porter’s generic competitive strategies. To build a successful brand, number of things has to be considered such as awareness, brand association, image, and brand loyalty etc. There are several reasons of building a brand which are known as to segment the market, differentiate supply, generate demand pull and focus promotional efforts etc. However, the main reason of building a brand can be defined as to make relationship with customers and compete easier against other airlines in the marketplace.

Michael Porter (born May 23, 1947) has established a framework which is called Porter’s generic competitive strategies for analyzing the competitive pressure in all industries in 1980’s. The strategies of this framework are known as the low-cost leadership, differentiation, and niche (focus). He also argued that, although the competing situations of industries are different, there are 5 common competitive forces which the industries have to face. These forces are the “Barriers to Entry”, “The Power of the Supplier Market”, “The Power of the Buyer Market”, “Power of Substitute Products”, and “Rivalry among Industry Members”. Altogether, these forces are called “Porter’s Five Forces of Competition”.

Figure 1. Porter’s Five Forces of Competition (referred from reference 1, p46)

The main purpose of low-cost leadership can be defined as to contain costs to the lowest level relative to rivals to get cost related advantage over the competition in the marketplace. The examples of airlines which using this strategy as a main strategy are all the LCC (Low-Cost Carriers) such as AirAsia, Southwest Airlines and Jetstar and many more. They could gain the cost advantage by reducing the price of flight and reducing the service which were usually provided by the airlines such as face to face ticketing and meals. The main purpose of differentiation is different to the low- cost leadership strategy. The main purpose is to provide high quality product or service which the customer is willing to pay for it. The differentiation strategies maximize its use when the airline can provide the needs and preferences of the customers. An example of differentiation is the slippers which can be gained when fly with Asiana. Asiana airline provides a pair of slippers for each customer so they can rest their feet easier and feel comfortable when its flight time is relatively long. Not like two strategies above, the purpose of niche (often called focus) strategies is to targeting a niche segment of the market while adding value to the product or service. This niche strategy can be divided by three types which are known as the geographical niche, customer-type niche and product-line niche. The airline which uses the geographical niche only concentrated on very defined