Key Concepts In Corporate Communication

Published Date: 23 Mar 2015 Last Modified: 04 May 2017

Air Mauritius, facing fierce competition and thus constantly aims at acquiring new customers as well as strengthening its existing customer base. Promotional efforts made in that direction are based on promotion schemes of varying natures that are conducted by the aviation company. Promotional campaigns of Air Mauritius target primarily leisure tourism, further supplemented but on a minimal basis, by business tourism as well, both of which are reinforced by the tourist leisure attractions and the business facilities of the country respectively.

Corporate communication has become an increasingly important purpose in business organizations. Yet little has been published on the role and function of communication executives. This dissertation reports on empirical study conducted at Air Mauritius with a focus on the Corporate Communications Strategy and the marketing strategies adopted to communicate its products and services. There are very few products that are unique and with increasing competition in the market place, firms have to find ways to differentiate their products from their competitors. To achieve this, firms have to use several techniques to have competitive edge. Firms increasingly need to be focused on quality, competition prices, creativity and innovative products amongst others. To be able to attract and or retain a share of the market, firms are more and more making use of advertising.

This study was carried out to demonstrate that how effectively Air Mauritius (MK) communicates its products and services to its customers and customer base in a sustainable manner. Derived from the constant growth of the National Aviation Company relevant sources, a set of appropriate hypotheses was selected to investigate the communicating efforts of Air Mauritius, which is referred to as 'The Effectiveness of Communicating at Air Mauritius'.

As an effort to benchmarking, the effective indicators were also applied to three other aviation companies, namely, Air France, British Airways and Emirates Airlines that can be comparable to the National Carrier Company in some ways.

Chapter 1: Introduction

Communication is very crucial in this era. All companies, whether producer or service provider, be it profitable or non-profitable organization, has the task of communicating their respective audience. Advertising continues to grow in importance nowadays, as one of the means to convey a message to people, to inform them about their product or service, or to persuade them to try the product or service. There are several main factors which have contributed to this change, namely, improvement in technology, media of communication available, consumer perceptions and consumer behavior.

As a result, with the help of advertising agencies, companies are fully focused on trying to satisfy their clients, in providing them with constant innovative and timely better product and service for customers. Therefore, they are well versed about the factors which will eventually attract more customers, so they are focusing more and more on creativity and design packages and plan campaigns.

The purpose of the study encompasses the importance of customer retention in the airline company because of competition and the emerging airlines like EK and others. Therefore it laid emphasis on the marketing tools and corporate strategies which airline company need to adopt in order to have a competitive edge.

To get the idea on how effectively companies communicate their products and services, an interview was conducted with some of the stakeholders of Air Mauritius Airline Company which is the national carrier of Mauritius.

Problem Statement

An old adage says, "A problem well defined is half solved". Only when the problem is precisely defined that research can be designed to provide to provide pertinent information. The work presented in this dissertation is described and positioned in the context of the effectiveness of communicating at the National Aviation Company, Air Mauritius, in view of building a strong customer base for the enterprise that will also favor economic growth on the national scale.

In an effort to maintain company growth, Air Mauritius endeavors earnestly to provide quality products and services to its customers at an affordable price. However, with a dynamic market, it is demanded of the firm to be flexible enough to constantly adapt to changing customer needs.

Yet, what is more important for any company's survival is to have the necessary customers and meet their unfilled needs. And these customers need to be informed of the presence of a potential fulfiller of their requirements that demand to be satisfied. The same applies to the National Aviation Company as well. Hence, is revealed the importance of advertising. However, the effectiveness of advertising should be such that desired results are obtained. The ultimate goal being that increasingly satisfying present and forthcoming demands, so as to ensure survival and promote company growth.

Aim of the study

The aim of the study is to assess Mk's effectiveness of communicating its products and services to its customers.

Objectives of the study

- To identify the marketing tools used in the organization.

- To identify the major problems encountered by MK airline and its customers.

- To identify the corporate communication strategies and assess its effectiveness.

- To make recommendation on how MK could better compete with other airlines.

Outline of the study

Chapter 1-Introduction

This chapter outlines the purpose of at Air Mauritius (MK) and the layout of the dissertation. The aims and objectives of the study and the problem statement why there is a need for the study.

Chapter 2-Literature Review

In this chapter, the literature review deals with the theoretical background of the topic of study. Definitions, statements, facts and other representative theoretical data are grouped under the heading of literature review to help in the better understanding of the topic at hand. The literature review will provide evidences and all the necessary information about how Air Mauritius communicates its products and services to its customers. Moreover, it also focuses on the effectiveness of corporate communication at Air Mauritius.

Chapter 3-Company Background

Chapter 3 outlines the background of the company's profile following the mission, vision and structure of Air Mauritius. It also depicts the overview of its competitors.

Chapter 4-Research Methodology

This part covers the type of methodology that was used for conducting the survey and how information was gathered. It also highlights the limitation of the survey.

Chapter 5-Analysis and Findings

This part shows the result obtained from the interview conducted with different people working in the aviation sector and customer. Data has been analyzed taking extensive notes during the interview.

Chapter 6-Recommendation and Conclusion

The last chapter identifies the possible solutions for the problems encountered with the shareholders and complains recorded from customers and also what problems the organization encountered about corporate communication, leading to a concluding note of the project.

Chapter 2: Literature Review

Introduction

A literature review in the context of Travel and Tourism exposes very few empirical investigations on the effectiveness of communication. This chapter discusses what effective communication means from point of views and what are the marketing tools that are used by the airline companies in order to promote their products and services. Furthermore it also lays emphasis on the perception of customer's satisfaction of the products and services provided by airline companies.

Lastly this chapter will lead to an understanding of how effective communication can improve corporate communication and satisfy customers to the expected level and why there are some concerns about effective communication in an organization like airline industry and what are the benefits that are there by using effective communication tools and strategic marketing tools.

However before proceeding any further, it is required to have an overview on communication.

Communication

A review of relative literature to the research problem found that there are a number of variables effecting communication that can lead to either lack of communication, ineffective communication, or misrepresentation of the message trying to be sent and creating barriers in the communication process. Communication skills are the foundation for success. The ability to communicate effectively and with influence will determine the success in transmitting the message (Palazzolo, 2008). Communication is the exchange and flow of information and ideas from person to another. It involves a sender transmitting an idea to a receiver.

Effective communication occurs only if the receiver understands the exact information or idea that he sender intended to transmit. Many of the problems that occur in an organization are the direct result of people failing to communicate. Leaders of organizations who keep everything inside or cannot communicate a message leave individuals to their devices to try and figure out what they may, or may not, want. This is a failure of leadership and communication (Baldoni, 2003). Faulty communication causes the most problems. It leads to confusion and can cause a good plan to fail.

Communication can be defined as "the concept under which a company carefully integrates and coordinates its many communication channels to deliver a clear, consistent message".

Communication is a two-way process. And the process is a moving and evolving a set of experiences that influence our present and future interaction. As a process, the exchange of messages is ongoing and dynamic. Our internal communication and our exchange with others are continuously changing and adapting. Communication interactions occur during specific social situations, in different physical environments and for a variety reasons and purposes.

Communication in advertising

Advertising is closely related to communication. For an advertisement to be fully recognized, the information being communicated must be received and interpreted by the targeted audience as assumed and conceived by the designers of the advertisement.

According to Lavidge and Steiner (1996), communication is a route with milestones that need to be crossed so as to finally arrive at the end. Going from one stage of progression to another, there exists boosting characteristics that is demanded to be present in the message in the communication for it to be effective within the progression between any consecutive two stages. On the other hand, communication can be obstructed by certain factors, which are mainly human traits that act as barriers to effective communication and may be the reason for regression between any two successive phases within the communication process.

2.6 The stages in the communication process:

The Unawareness stage

The Awareness stage

The Comprehension stage

The Conviction stage

The Action stage

Corporate Communication

Corporate communication can definitely be the best way to outline the look at the way in which the function has developed in companies. Practitioners had used the term 'public relations' until the 1970s to describe communication with stakeholders. This 'public relations' function, which was planned in most companies, largely involved of communication with the press. When other stakeholders, internal and external to the company, started to request more information from the company, practitioners afterward started to look at communication as being more than just 'public relations'. This is when the roots of the new corporate communication function started to take hold. The latter then came to integrate a whole range of specific disciplines, including corporate design, corporate advertising, internal communication to employees, issues and crisis management, media relations, investor relations, change communication and public affairs (Grunig, J.E. and Hunt, T. (1984). An important characteristic of the new function is that it focuses on the organization as a whole and on the important task of how an organization presents itself to all its key stakeholders, both internally and externally.

In other words, corporate communication can be considered as a management function that is in charge for supervising and organizing the work done by communication practitioners in different professional disciplines, such as media relations, public affairs and internal communication. Van Riel defines corporate communication as 'an tool of management by means of which all intentionally used forms of internal and external communication are matched as effectively and efficiently as possible', with the overall objective of creating 'a favorable basis for contacts with groups upon which the company is dependent'(Kotler (1989), Grunig, L.A. (1991),). Defined in this way, corporate communication clearly includes a whole range of 'managerial' activities, such as planning, coordinating and counseling the CEO and senior managers in the organization as well as 'tactical' skills involved in creating and distributing messages to relevant stakeholder groups.

Corporate communication stresses a combined method to dealing communication. Unlike a specialist frame of reference, corporate communication exceeds the areas of individual communication practitioners for example branding, media relations, investor relations, public affairs, internal communication, and crosses these specialist boundaries to join the strategic benefits of the organization at large.

2.9.1 Objectives of Corporate communication

It is generally of having a corporate communication strategy is the idea of a corporate identity that is the basic profile that an organization wants to project to all its important stakeholder groups.

Secondly how it aims to be known by these various groups in terms of the corporate images and reputations that they have of the organization.

To ensure largely reliable method and also in line with the predictable corporate identity, brochures, themes, visuals, logos and advertising campaigns to websites in tone .

For example: the logo of Air Mauritius (MK) has a fish-eating tropical bird symbol " Le Paille-en-Queue".

The corporate communication is geared towards founding promising corporate images and reputations with all of an organization's stakeholder groups. This is only so, that these groups act in a way which ultimately leads to the success of the organization.

This eventually leads to higher purchase of products and services by customers and target market because of favorable images and reputations.

Ultimately it creates appreciation by members of the community in its environment.

Investors will grant financial resources and so on.

2.9.2 Key concepts in corporate communication

Concept - Intervening purpose in line with the values or expectations of stakeholders.

Vision - Anticipated future state: the goal of the organization which is here MK.

Corporate objectives and goals - (Precise) statement of aims or purpose.

Strategies - The ways or means in which the corporate objectives are to be achieved and put into effect.

Corporate identity - The profile and values communicated by an organization

Corporate image - The immediate set of associations of an individual in response to one or more signals or messages from about a particular organization at a single point in time.

Corporate reputation - An individual's collective representation of past images of an organization (included through either communication or past experiences) established over time.

Stakeholder - Any group or individual who can affect or is affected by the achievement of the organization's objectives.

Public - People who mobilize themselves against the organization on the basis of some common issue or concern to them.

Market - A defined group for whom a product is or may be in demand (and for whom an organization creates and maintains products and services).

Issue - An unsettled matter (which is ready for a decision) or a point of conflict between the organization and one or more publics.

Communication - The tactics and media that are used to communicate with internal and external groups.

Integration - The act of coordinating all communication so that the corporate identity is effectively and consistently communication to both internal and external groups.

2.9.3 The Corporate Communication System

The corporate enterprise has two primary communication systems that are inter-related. The internal system directs activities of organizing to achieve goals that are based on the gathering and interpretation of data on expectations and attitudes, and on conditions, from the corporation's relevant environment through external channels of communication. External systems of communication are also used to present relevant information about the internal processes of the corporation to the relevant external environment to attempt to influence the behavior of the various publics. Internal communication processes are directed towards establishment of structure and stability in organizing, while external communication processes are directed towards innovation by facilitating identification of directions for corporate development (Kreps, 1990). Managers and leaders seek co-operation for a productive balance between stability and innovation.

Stakeholders have different interests according to their unique roles in the corporate community. These interests can be reconciled if they are organized to create a more successful enterprise. The goal of business, therefore, should be to serve the public welfare of all stakeholders. There are some problems to be resolved in putting this into practice, but there are compelling reasons why the transition is occurring (Halal, 1996):

• The liberating power of information;

• The benefits of co-operation;

• The rising aspirations of people;

• Democratic ideals being extended into everyday life; and

• The new business model offers increasing productivity and social benefits, without clashing with the profit-centered model of business that it is a logical extension which helps to resolve the ``cultural contradictions of capitalism'' (Bell, 1974

Marketing

Marketing and communication play a major role in all aspects of an organization work. In general, we could define marketing as the action or business of promoting and selling products. Communication on the other hand, could be defined as the use of all available tools to manage the flow of information between an organization and its audiences.

The marketing Guru, Dr Philip Kotler (1989) defines marketing as: "the science and art of exploring, creating and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines measures and quantifies the size of the identified market and profit potential".

Morrison (1996) also defines marketing as the "continuous sequential process which management plans, researches, implements, controls, and evaluates activities designed to satisfy both customers' needs and wants and their own organizations' objectives".

All the marketing activities that will achieve the organization's objectives are stipulated in the marketing mix, which is defined as 'the combination of certain elements and activities that a tourism organization or destination selects to satisfy the needs and wants of the customers in its target markets' (Pearce, Morrison and Rutlege, 1998).

In the marketing concept product is anything which a market receives and ultimately satisfy human needs and wants. The marketing mix, also known as the four Ps, consists of four components, namely, product, price, place and promotion. However, Morrison (1996) suggested that there should be four additional components for tourism, namely, packaging, programming, people and partnership.

Marketing Mix

The marketing mix consists of the types and amounts of controllable marketing decision variables that a company uses over a particular time period. Commonly refer to as the "four P's". The variables are:

Product

The right product or service must be developed for the target market.

Price

A price that gives good value to the customer and adequate revenue to the carrier must be set for the product.

Promotion

Personal selling and advertising must be used, both to communicate information about the product to the customer and to facilitate sales.

place

Appropriate channels of distribution must be found to ensure that the product reaches the target market at the right time in the right place.

These four elements are the controllable marketing factor that should be used to reach the target market.

2.1 Services Marketing

The turn of the century has seen profound changes in the global economy. Services have played a crucial part in these changes, because services are becoming the way organizations meet with their markets (Irons, 1997:4).

Service marketing is not a self-enclosed task but is integral to service. Organization as a whole and the object of the activities people, who are reactive, not passive as compared with a product, (Irons, 1997:18).

Providing a service is a people business. The interaction between customers and service employees is vital for the actual success of service delivery.

2.2 Definition of service

Kotler (1996) defines service as an activity that one party offers another that is essential, intangible and does not result in the ownership of anything. Its production may or may not tie to a physical product.

2.3 Characteristics of service

Services possesses five unique characteristics; namely

Intangibility

Perishability

Inseparability

Variability

Lack of ownership

These above mentioned characteristics differentiate them from goods and create distinctive challenges for service marketers in attracting new customer and keeping existing customer.

Advertising

The key to advertising is communication. The purpose of advertising is to catch the attention of consumers. Advertising is described as being a paid and non-personal communication. There have been interpretations of the Internet making advertising become of a more personal nature. Rosenfield (1997) states, "the Internet is a form of direct marketing rather than advertising". Which is in fact a correct formulation as communications transmitted using the Internet do not fit any of the above descriptions such that they can be effectively classified as being advertisements.

"Because services are intangibles, they can be more difficult to communicate and display than physical goods" (Rathmell, 1974). Thus it is important to provide a substantial description of the services in the mind of consumers so as to reduce the perceived risk they might fear and provide a clear idea of what the service consist of.

Advertising in itself can be decomposed in more specific sub-types. Different types of advertising can be made depending upon what the product or service promoter wishes to achieve at this particular point in time. Another influencing factor in this context is related to the life cycle of the product or service.

2.7 Types of advertising

Kotler (2002) came up with different types of advertising that can be applied to the tourism sector. However, these advertising types can be arguably applied in the context of the travellin industry as well, on the basis that any industry irrespective of its nature of operation, requires an effective advertising to operate smoothly. Those advertising types are:

Informative advertising

Persuasive advertising

Reminder advertising

Competitive advertising

Reinforcement advertising

Collective advertising

2.8 Advertising media

In order to ensure that communication is effective a number of factors should be taken into account. Numerous advertising media exist for businesses to communicate their messages to their targeted audiences and the following media need to be considered:

Newspaper

Magazines

Television

Radio

Internet

Billboards

2.0.1 Marketing orientation

Marketing is a two-way mediating process between the customer and the corporation. A balance is needed between management, which focuses on stabilizing the corporation's change processes, and leadership, which seeks to innovate by focusing attention on the external environment (Kreps, 1990). Therefore, Drucker (1977) has argued that marketing is the business of creating customers, while everything else is a cost- much, but not all, of it necessary to enable and facilitate business enterprise to be productive. He has also revealed the political nature of modern business management (1980), showing that marketing alone cannot deal with all problems ( Ehling et al., 1992). Public relation is a essential and complementary overhead in a liable enterprise. The marketing model views the business enterprise as an organized process designed to create and keep a customer (Levitt, 1969).

Departments should not be allowed to seek individuality and the concern of managers is not to be advance, but how to remove barriers to real co-operative working so that communicating really can add value to business enterprise. The model we seek to build and deploy does not promote the engagement of non-specialists in competition to manage traditional communication departments. Rather we seek to adoptive greater recognition of corporate dependencies, the need for wider participation in constructing meanings, identity, and knowledge (Deetz, 1992), and shared organizational business goals.

Corporate community is the new form of organization governance that shifts emphasis from profit to democracy by joining the goals of all parties by focusing on the needs of the corporation's constituents (Handy (1995). The old profit-centered model of business is too limited and limiting because it ignores the reality that business is both an economic and a social organization. Corporate governance can evolve toward partnership among all stakeholders. The shift from profit to democracy requires the creation of a union of investors, employees, customers, business partners, and the public. Such a corporate community can serve all interests better.

In recent years, however, major changes in corporate governance have been happening. Collaboration with stakeholders is now arising as they gain power and because managers need their support. Institutional investors have become more involved in the management of large corporations, including ``ethical investors''.

The acceptance of strategic management is now prevalent as executives try to control their environment and reduce doubt. Strategy is the art of bringing values and resources together to influence and shape the future (Moore, 1996) is in common usage in the vocabulary of modern management. Strategic marketing is a company-wide that corporate strategic management philosophy which guides the way of working (Brown, 1993). A decision-making perspective may be lacking to deal with the modern business and social environment.

Already under challenge in the 1970s and 1980s, the general model of marketing premised on consumer choice and satisfaction and operation of the four Ps has been criticized as not reflecting reality (Day and Wensley, 1983). Carman (1980) argued that exchange and related concepts such as transaction costs, information alternatives, and power may also be considered as central to marketing. Day and Wensley (1983) criticize the generally accepted theory of marketing as basic and unfinished in considering major elements of both practice and the discipline.

2.2.1 Customer Retention

The Internet is constantly changing the way companies communicate and market to customers. One way that organizations deliver customer service is by responding to customer comments and posts on Facebook, Twitter and other social networking websites. Companies also post messages on websites that alert customers and prospects about upcoming product launches, sales promotions and new publications. Other effective communication vehicles that help companies strengthen their relationships with customers include weekly, monthly and quarterly newsletters, as well as online webcasts. Newsletters and webcasts are common online communication tools for companies that wish to send out a unified corporate message simultaneously to numerous customers, prospects, partners and media personnel.

Chapter 3: Company Background

3.1 Air Mauritius

3.1.1 Background Information

Mauritius is dominated by the tourism industry thus this is where it generates its national income. Just like any other countries, in order to encourage trade, and people to move from one destination to another, the island also has its own national carrier namely Air Mauritius that is the MK airline which has a fish-eating tropical bird symbol "Le Paille-en-Queue".

"The airline industry is a unique and fascinating industry that captures the interest of a wide audience because of its glamour, reach and impact on large and growing number of traveler worldwide" (Chan, 2000). Air Mauritius was set up on 14th June, 1967 one year before Mauritius gained independence, out of two men: Sir Seewoosagur Ramgoolam, the then Prime Minister and Amedee Maingard. They together envisioned a vehicle that would bridge our island to the world in order to achieve economic and cultural emancipation. Forty five years after independence, it is believed that the organization has honored their legacy and accompanied Mauritius in its development fulfilling our status as national airline.

Therefore, it started its operation in August 1972. At that time, the airline company lacked financial support to operate further, the government thus bought 51% and other shares were sold to other organizations and members as well. The company's main base is found at the SSR International Airport, while its main headquarters is in the capital city of the island which is Port-Louis. In addition, the carrier's main partners are: British Airways and the Emirates Airlines. The airline now flies 26 destinations worldwide.

From unassuming beginnings in the early 70's, both the airline and the country grew to become forces to be counted with in the region. In spite of the small size of Mauritius, growth has been spectacular and its remoteness from the global and international financial centers. Air Mauritius has had a major role to play in the country's ability to overcome this geographical disadvantage.

Five years later after operating with a Piper Navajo in August 1972, which was leased from Air Madagascar on a flight between Mauritius and Rodrigues Island, Air Mauritius used a wet leased Boeing 707 to start international operations. Boeing 767s were introduced in 1988, while ATR 42 aircraft had started its service with Air Mauritius one year earlier. In 1988, one Air Mauritius Boeing 767-200ER set a new distance record for commercial twin jets with a flight from Halifax, Nova Scotia, to Mauritius. The duration of the flight was 16 hours and 27 minutes, during which the plane covered no less than 8,727 statute miles (14,042 km).

In December, 2006, Air Mauritius received the last Airbus A340-300 ever built and launched its regular service to London Heathrow and Hong Kong. Air Mauritius is one of the few airlines offering combined airplane and helicopter services. In late 2007, the Boeing 767-200ER planes were replaced by two Airbus A330-200s. No fatal incidents involving Air Mauritius aircraft have been recorded so far.

Air Mauritius has faced many hectic situations, and was about to close its doors. One of the main problems is the get around for instance. The company made a huge amount of loss. It thus changes its whole strategy and restructures it completely. In the year July 2011, its route's network consists of Africa, Asia, Europe, Oceania and Shanghai. Some of them were non-profitable routes. Thus, during the crisis it faced it then halted to fly over these non-profitable routes and started with Milan, Melbourne and Sydney recently on May 2012.

More than just an airline, Air Mauritius acts as an ambassador for Mauritius. It brings to the public, the spirit of this country and its people on each of your fights with the special attention that the Mauritian crew provides, as well as a range of high-quality services. Air Mauritius has received several international awards recognizing the quality of its service on the ground and in flight. Air Mauritius staff is proud to have been voted the leading airline in the Indian Ocean at the World Travel Awards for the last seven years.

As an IOSA-certified (IATA Operational Safety Audit) airline, for Air Mauritius the safety and security of their customers is their top priority. The fleet consists primarily of Airbus aircraft with state-of-the-art equipment. In addition, the company, approved by the EASA (European Aviation Safety Agency), can perform maintenance on aircraft of European operators.

They are a strategic partner in the tourism industry and are investing to help achieve the industry's growth objectives. With 36,000 tons of cargo carried annually, Air Mauritius also plays a key role in the economic development of Mauritius. The airline carries 1.3 million passengers annually, representing half of the passenger traffic to and from Mauritius. Keeping alive the social and cultural bond that our plural society has with the rest of the world, Air Mauritius connects our island and through it, the Republic's other territories such as Rodrigues, to the five continents (Islander; June 2013)

Accomplishing its role of corporate citizenship, Air Mauritius supports our country in various aspects of its community life facilitating the travel of athletes, patients who are needy for treatment abroad or students who wish to pursue their further studies.

Air Mauritius was first to dock at the new airport terminal with the K053 flight on 11th of March 2013, the eve of National Day celebration. It made a history to dock at the brand new terminal building of Sir Seewoosagur Ramgoolam international airport. Airbus A340 - Le Flamboyant, coming from London landed at Plaisance with about 200 passengers and crew members. They were greeted by Air Mauritius Chief Executive Officer Andre Viljoen who expressed his feeling by saying that air Mauritius was privileged to be the first airline to use the new facilities. He has also underlined the long-standing relationship between the airport authorities, Airports of Mauritius Ltd (AML) and Air Mauritius.

Three parking spaces of the new terminal building are now in operation and the new airport will be fully operational in the course of this year. With the capacity to welcome more than 4 million passengers, the new terminal is already being described as leading airport of the region. Its concept, development, building and management are ensured by ATOL (Airport Terminal Operations Limited).

3.1.2 Mission and Vision of Air Mauritius

The mission of Air Mauritius is to merge and operate its company with integrity, dedication and professionalism while its long term vision is to form part of the leading airlines.

3.1.3 Structure of Air Mauritius

Other Shareholders

49%

Air Mauritius

Holding Ltd 51%

STRUCTURE OF AIR MAURITIUS

Figure 1 - Organizational Structure of Air Mauritius

3.1.4 Some services and achievement by Air Mauritius.

Air Mauritius is operating two direct-weekly flights in Shanghai with the Airbus A340 since January 2013. The flights take off from Mauritius for Shanghai on Thursdays and Sundays and the return flights from Shanghai land in Mauritius on Saturdays and Tuesdays. The number of seats on Shanghai is now of five hundred and nighty six (596) a week.

With this new service, there are now seven flight options to China as follows:

Two direct flights to Shanghai on Thursdays and Sundays.

Two direct flights to Hong Kong on Thursdays and Sundays.

Three weekly flights- Mondays, Wednesdays and Fridays- via Kuala Lumpur hub, from where passengers may connect directly to Shanghai, Hong Kong and Beijing on code share flights (with the partner Malaysia Airlines).

This initiative is in line with our strategy to rebalance towards developing markets. Since the first flight to Shanghai in July 2011, tourist arrivals from China have grown by thirty eight percent (38%). The Air Mauritius website is one of the five finalists for the Travel d'Or Awards, which rewards the preferred French tourism websites in the category "Air Transport". Among the two hundred and seventy five competing websites, www.airmauritius.com received more than one hundred and twenty three thousand (123,000) votes.

The new Air Mauritius website, launched in June 2012, intends to promote direct sales channels even further. With a bold and innovative look and feel the website was design to be user-friendly and to reflect the Mauritian identity, whilst preserving all the functionalities of a traditional airline website (Islander; June 2013).

Moreover, the Air Mauritius banners were very visible at the Standard Chartered Mumbai Marathon. The whole Mumbai team took part in the Corporate Challenge category for the 5th consecutive year. The Marathon is nominated among the Top Ten marathon races in the world. The event was a great opportunity to promote Mauritius. The team dressed in trendy and colorful outfits, gave a good demonstration of the local dance of Mauritius which is the 'Sega'- in the Mumbai style.

In addition, talking about the Kestrel flyer Privilege Card which is a fulfilling family scheme, is that no matter when somebody is travelling, they are connected with miles that are accumulated over three years, allowing them to share awards with five people of their choice (inclusive of nominees). Miles have a lifetime of three years basis and expire on a rolling basis. It depends on the choice of the customer, that he or she may opt to add either the name of the spouse/children or father/mother as the nominees on each travelled sector.

Subsequently, on a purchase of the Business Class ticket, frequent flyers are allowed to upgrade one accompanying nominee or beneficiary from Economy Class to Business Class by redeeming only 75%( seventy five) of the miles normally required.

3.2 Strategic Marketing

3.2.1 Marketing Communication - Advertising

In terms of advertising effected by Air Mauritius, it has to be noted that although the company disposes of its own marketing departments, there is no internal advertising sub section within the enterprise. Neither is it affiliated to any advertising agency, local or foreign by means of a partnership or any other contractual relationship. However, it was previously contracted with Maurice Publicité.

Thus when it has to establish an advertisement it carries out a pitch. This implies that Air Mauritius selects three advertising agencies and draw out a framework to them about what it experts. Then, the agencies come up each with a proposal and Air Mauritius chooses the best proposal that most suit its needs by meeting its specifications and meeting its financial requirements. Due to confidentiality reasons the names of the advertising agencies can be listed.

When undergoing advertising campaigns outside Mauritius, Air Mauritius makes use of the service of advertising agencies in the foreign countries by establishing a framework of the desired results expected.

Air Mauritius makes use of the different media to advertise its products and services. It advertise through newspapers; posters that are displayed at different places, for instance, at travel agents; magazines such as Islander, billboards, sponsorship such as races, Zee Awards; the Internet; and television and radio on a rare basis.

3.2.3 Customer Research

Through a customer research process, Air Mauritius identifies the users of its product and understands the needs and preferences of each market segment. It also assesses customer satisfaction through research on different levels of current product on ground and in the air and highlight area of improvement. Moreover, it performs a competitive benchmarking to assess the performance of Air Mauritius product as compared to competition. Thus it can craft marketing strategies in line with the company's objectives.

3.2.4 Loyalty Programme

There is a membership scheme at Air Mauritius known as the 'Kestrel Flyer' Programme which was launch on 01 April 2002. It is a loyalty programme that rewards passengers for being loyal and flying with the airline. Three types of cards issued to passengers depending on the points obtained through travelling with Air Mauritius.

The 'Kestrel Flyer' red card is obtained from the first flight with Air Mauritius. Points are accumulated with every purchase effected at Air Mauritius. The 'Kestelflyer Plus' or silver card is obtained after accumulating 20 000 points in 24 months. Finally the 'Kestrel flyer Elite' or gold card is obtained after accumulating 100 000 points in 24 months.

Depending on the type of cards the holders have, they can benefit from newsletters, family points, extra baggage allowance, priority waitlist, helicopter services discount, free ticket and use of Air Mauritius designated lounge worldwide.

3.1.4.4 Service Recovery

The service recovery aims at turning mishandlings into opportunities, meet customer's expectations and thus customer retention, bring satisfaction and value as regards to the service offered, foster lost trustworthiness and confidence and thus winning back the customer, and enhance customer and employee relationship.

3.2.5 Product Design

Here Air Mauritius aims at presenting a competitive offering in terms of airline soft and hard products. Which keep Air Mauritius to the expectation of the passengers in all classes of travel, support over all branding strategy of the company, reflect the airline brand values and deliver the brand's promises, provides a basis for differentiation with competitor airlines, build satisfaction and loyalty and ensure coherence in product and loyalty and ensure coherence in product. After the product implementation there is constant follow-up.

3.2.6 Overview of the main competitors

Having made use of a benchmarking technique, it became essential to have the relevant information on the benchmarked companies, such that this process of benchmarking could be effectively streamlined, hence coming up with correct results.

British Airways

British Airways was established in 1974 under the name of Imperial Airways and is among Europe's leading international airlines. The airline's major operation is the transportation of international and domestic tourists.

British Airways (BA) flies to about 220 destinations in over 90 countries. Its main hubs are Heathrow and Gatwick. British Airways operates with about 310 aircrafts comprising of Boeing 747s, Boeing 777s, Boeing 767s, Boeing 757s and Airbus A319/320s. It is also one of the largest fleets in Europe.

British Airways had appointed M&C Saatchi's as its advertising agency until November 15, 2005 when the contract came to an end. As from that date the airline appointed the Bartle Bogle Hegarty (BBH) as its worldwide creative advertising agency. This agency was chosen for its excellent insight, creative skill and established track record of delivering effective advertising.

In addition to promotional advertising campaigns, the company has established an "Executive Club scheme". This aims at offering customers of British Airways the opportunity to accumulate points known as 'BA Miles' that will allow them to several awards such as free tickets.

Air France

Air France was founded in 1993 and was the national airline of France until it merged with the Royal Dutch Airlines-Koninklijke Luchtvaart Maatschappij (KLM), the national airline of the Netherlands, and is now a subsidiary of the "Air France-KLM" company.

Air France flies to about 187 destinations around the world. The main hub of Air France-KLM is the "Charles de Gaulle International Airport" and secondary hubs are "Orly Airport" and "Saint-Exupery International Airport".

The French aviation company disposes of a fleet of 373 aircrafts consisting of the Airbus A318, 319, A320, A321, A330-200 and Boeing 737-500, 747-300, 747-400, 777-200EF, and 777-200ER. Certain aircrafts are used for short-distance flights while others for longer flights.

The French concentrates enormously upon advertising as a means of attracting and retaining customers. Advertising campaigns conducted by airline are extremely consistent. The image of a blue sky is always used in advertisements to emphasize the slogan "Making the sky the best place on earth".

Air France's advertisements Centre on communicating the company's capabilities at benefiting and better serving its passengers. The airline is a holder of the SGS (Societe Generale de Surveillance) Qualicert Certification.

In their latest advertising campaign, Air France came up with a print media consisting of six visuals representing the passenger's interest as assured by the airline. This campaign aimed at demonstrating the physical and mental well-being; and the quality of service that the traveller will obtain by travelling by Air France. Moreover, two motives were also created based on the same concept.

Emirates Airlines

Emirate Airlines, also known as Emirates, was founded in May 1985 and started operating as a commercial passenger airline as from the 25th of October 1985. Based on Dubai, in the United Arab Emirates, Emirate Airlines is the propriety of the Emirates Group.

The airline flies to about 80 destinations with a fleet size of 92. Its main hub is the Dubai International Airport.

Emirates are one of the airlines in the world that replies upon its communication process to help in making the brand one of the latter's major assets.

This year, Emirates advertising campaigns have been involved in communicating an assortment of the most important products, new destinations and added services.

Emirates advertising efforts are communicated through print media, electronic media, and internet and media relations. For instance, when Emirates launches new aircrafts the advertising campaign is done through a variety of print ads, websites, direct mailing, radio advertising and many others.

Also, Emirates' in-flight magazines were changed to suit the needs of its passengers and were renamed 'Open Skies'. To meet the needs of potential passengers of different nationalities advertisements via the Internet has been designed in different languages such as English, French, Russian, German, Italian, Japanese and Chinese.

Emirates has boosted its brand awareness through sponsorships and promotions such as major horse racing events in different part of the world namely the Dubai World Cup, Melbourne cup Carnival, Australian Jockey Carnival in Sydney and the FEI European Endurance Championship. Emirates also associate itself in other major sports events such as golf and rugby.

Through media relations Emirates promotes positive media coverage and recognition of the airline via its group of thirty 'Public Relations Agencies'. These three airlines, that is, British Airways, Air France and Emirates were also chosen not only because they are the main competitors of Air Mauritius, but also, because they are long haul flights.

3.3 Air Mauritius SWOT Analysis

Strengths

Pricing Power - Customers typically rebel against price increases by switching to competing products, but if a company has pricing power, customers will continue using Air Mauritius's products and services. Air Mauritius has the capability to charge customers higher prices.

Innovative Culture - An innovative culture helps Air Mauritius to produce unique products and services that meet their customer's need. "Innovative Culture (Air Mauritius)" has a major impact, so an analyst should put more weight into it.

Financial Leverage - This allows Air Mauritius to use their balance sheet to expand their business and increase their profits.

Economies of Scale - Economies of scale is the cost advantages that Air Mauritius obtains due to size. The greater the volume, the greater the advantages.

Asset Leverage - Asset leverage allows Air Mauritius to use their best operational assets to expand their business and improve their market share.

Cost Advantage - Lower costs lead to higher profits for Air Mauritius. A low cost leader can weaken rivals on price.

Unique Product - Unique products help distinguish Air Mauritius from competitors. Air Mauritius can charge higher prices for their products, because consumers can't get those products elsewhere.

Technology - Superior technology allows Air Mauritius to better meet the needs of their customers in ways that competitors can't imitate.

Weaknesses

High Debit Burden - A high debt load increases the risk that Air Mauritius goes bankrupt if they make a poor business decision. Increasing risks can increase Air Mauritius's debt interest payments.

High Staff Turnover - High staff turnover can hurt Air Mauritius's capability to compete, because replacing valuable staff is expenses.

Online Presence - The online market is essential for displaying information and selling products. A weak online presence can result in lost opportunities for Air Mauritius.

Opportunities

International Expansion - International markets offer Air Mauritius new opportunities to expand the business and increase sales.

Financial Leverage - Leveraging the balance sheet allows Air Mauritius to quickly expand into other markets and products, especially in fragmented industries.

Acquisition Synergies -

Online Market - The online market offers Air Mauritius the ability to greatly expand their business. Air Mauritius can market to a much wider audience for relatively little expense.

Innovation - Greater innovation can help Air Mauritius to produce unique products and services that meet customer's needs.

New Services - New services help Air Mauritius to better meet their customer's needs. These services can expand Air Mauritius's business and diversify their customer base.

New Technology - New technology helps Air Mauritius to better meet their customer's needs with new and improved products and services. Technology also builds competitive barriers against rivals.

Loosening Regulations - Looser regulations allow Air Mauritius to perform in a way that is most advantages for them and their customers.

Emerging Markets - Emerging markets are fast growing regions of the world that enable Air Mauritius to quickly expand.

New Products - New products can help Air Mauritius to expand their business and diversity their customer base.

New Markets - New markets allow Air Mauritius to expand their business and diversify their portfolio of products and services.

Threats

Bad Economy - Having a bad economy, potential customers may lose interest and may not chose Air Mauritius as their flight or chosen organization.

Volatile Currencies - Volatile currencies make Air Mauritius's investments difficult, because costs and revenues change so rapidly.

International Competition - International competitors are numerous and difficult to combat, because they can have many competitive advantages that give them an advantage over Air Mauritius.

Intense Competition - Intense completion can lower Air Mauritius's profits, because competitors can entice consumers away with superior products.

Government Regulations - Air Mauritius can be affected by the changes made to the rules and regulation of the state's rules and regulation.

Change in Tastes - Consumers can change their tastes very quickly. Air Mauritius depends on knowing which goods and services consumers want.

Political Risk - Politics can increase Air Mauritius's risk factors, because governments can therefore quickly change business regulations which will then negatively affect Air Mauritius's business. "Political Risk (Air Mauritius)" will have a long-term negative impact on this entity, which subtracts from the entity's value. "Political Risk" is an easy qualitative factor to overcome, so the investment will not have to spend much time trying to overcome this issue.

Volatile Costs - Volatile costs mean Air Mauritius has to plan for scenarios where costs skyrocket. Cautious planning leads to development delays that can negatively affect Air Mauritius.

Volatile Revenue - Volatile revenue makes planning difficult, which could delay key investments in Air Mauritius's business.

Substitutes Products - The availability of substitute products hurts Air Mauritius's ability to raise prices, because customers can easily switch to another product or service.

Chapter 4: Research Methodology

4.1-Introduction

This chapter depicts the method used for assessing Air Mauritius's (MK) effectiveness of communicating its products and services to its customers and also about the corporate communication of the organization alongside the views of the stakeholders. This method used aim to gather an in-depth understanding of human behavior thus investigating the why and how of the study. Hence smaller and focused sample are more often needed than large samples. Therefore, Air Mauritius being a prestigious organization, had to be focused on the qualitative research method.

4.2-Research Design

The aim of the study was to assess MK's effectiveness of promoting its products and services to its customers and knowing about the corporate communication of the organization. Many aspects were considered in the research design.

4.3-Research Type: Qualitative Research

This survey gathered qualitative research only as the method used was an interview which had to be conducted with targeted sample size. The main methods used in this research are observation, interviews and documentary analysis and for this survey, interview was opted as best as observing the targeted sample was a bit difficult.

4.4-Questionnaire Design

Questionnaires are not normally the prominent method in qualitative research as they commonly require subjects to respond stimulus and thus sometimes they may not act naturally but however, they have their uses. Mostly, when they act as a means of collecting information from a wider sample that can be reached by an interview. The questions were set in order to facilitate the interview as the subjects dedicate their precious time and therefore the questions that need to be asked were prepared well in advance. It consisted the covering letter and the questions of 1 page.

4.5-Sampling Techniques

For this survey, and as far it is a qualitative research, where it seeks to simplify the general issues, the representative or realistic is desirable. This part covers persons, time and places. The sample is developed through personal contact and recommendation as the research proceeds.

4.6-Ethics

For this research, a qualitative method has been used. Each questionnaire consisted of a cover letter, which states the purpose of the survey. The interview was carried out in confidentiality and anonymity. The ethical aspect was considered with great importance during the survey. The participants were ensured that all in information obtained or any views will remain confidential and anonymous and that is will be strictly used only for academic purpose only.

4.7-Sample Size

The target samples were the Air Mauritius head office, a travel agent and an MK customer. They were all above 18 years old. And they were thus chosen because they could give appropriate information and sometimes are precise on what they are answering.

4.8-Data Collection

The interview was carried out in different days in the month of April 2013 and each set of questions were brought along for the interview. And during the interview, my friend and 1 took notes and mostly the notes were taken by my friend and I was the one asking those questions. Thus data was collected through intensive notes taking and no recording were done as it was against the participant's willingness.

4.9-Data Analysis

For analyzing the data, the answers were interpreted as per the questions of each participant and thus referred to the views of the author's in the literature review and further argued where necessary and how each of them differ in their point of views.

4.0.1-Limitation of the study

This study has accessed the effectiveness of MK's promotion about the products and services to its customers. Future study can use a much larger sample size and conduct the interview. There need to be more extensive research, which focuses on the corporate communication and they promotion of MK.

As with any data collection instrument, there are strengths and weaknesses associated with every approach. Several key limitations of the survey bear mentioning, most obvious are the small sample size. While this research was intended to be limited in scope, due to time, a larger sample would have had many benefits.

4.0.2-Summary

This chapter shows the methodology that has been adopted for the research. Information has been obtained on the Mk's effectiveness of promoting its product and services to its customers.

Chapter 5-Analysis and Findings

5.0-Introduction

This chapter gives an in-depth analysis of the survey which had been carried out at Port-Louis, travel agency, head office and a customer of MK airline. The respondents have been interviewed according to the questionnaire so as to assess their perceptions with regard to the effectiveness of MK's promotion of its products and services to its customers.

5.1-Demographic

There were five respondents in all from which there were three men and two women. Therefore, its shows that more men than women who have responded to the interview.

5.2-Participants' views

This section provides an answer on how the participants agreed or disagreed on the corporate communication strategies used in their organization and how they have responded to the questions asked during the interview. Referring to the question 10 in Appendix B and question 7 in Appendix C and lastly question 9 in Appendix D, the answers were different because for the staff of Air Mauritius the corporate communication strategies used were knowledgeable to him as he knew what are they meant and therefore, explained that there is a board of meeting which is carried out on a regular basis and information are passed on to the other members and they also adopt the Management Steering Committee to ensure that the directors are made fully aware of the different issues and risks affecting the company's image and reputation. Whereas the travel agent is the sole proprietor and for her there was no corporate communication strategies adopted as such, as she has a secretary and the communication is done effectively via phone, mail and face-to-face communication.

In addition, talking about the customer, the man was really satisfied with the service of Air Mauritius and he was willing to travel by Mk whenever travelling abroad. For him, corporate communication means nothing as he does not know about it and so far he is getting what he wants he is happy, but he did say that the food quality need to be improved and he came to know about Air Mauritius on radios, television, internet and word of mouth.

As mentioned in the Appendix B question 3 and 4, Appendix C question 6 and Appendix D question 4, which was on the marketing strategies of MK used and adopted and the answers were that for the staff he was reluctant to reveal the marketing strategies adopted by MK as it was a confidential matter and because of competition the organization can not reveal such information and moving to the travel agent, she said, she promotes her agency through internet, brochures and word of mouth and concerning the marketing for MK it was again proved confidential. And the customer got acquainted to MK through the radio, word of mouth and internet.

Moreover, referring to the question 7 in Appendix B, question 3 in Appendix C and question 7 in Appendix D which illustrates the customer complaints and what are the complaints they have encounter personally as customer and stakeholder. MK staff reveal that there is no complaints recorded and this is may be that can be against the policy of the organization to reveal such information and he does not want to disclose anything which can ultimately tarnish or harm the reputation of the organization. And the travel agent mentioned that working with Air Mauritius is beneficial as many people opt this airline as it is the national carrier and it has opened to large destinations and the drawbacks are that there are now competitions around and thus MK is somehow losing customers. And personally for the customer, the complaint was on the food quality of the airline, according to him, it should be improved.

5.3-Effectiveness of corporate communication at MK

Corporate communication at MK is adopted as there is a great need of good communication between departments and among stakeholders. It is the key to success and there is a department at Air Mauritius head office based on corporate communication so it therefore, reflects the importance and the effort of the organization towards implementing the corporate strategies for the betterment of the work environment and also the well-being of the stakeholders and customers.

5.4-Conclusion

The findings for the survey are presented in this chapter. As for the results of the survey, it has been found that there is corporate communication strategies adopted by Air Mauritius but still it needs to improve some of its services and therefore, it is necessary for the organization to create new marketing concepts in order to attract customers as there is competition. Air Mauritius may be the national carrier but still The Ministry needs to take more necessary Emirates (EK) prevails because of its excellence service and food quality. The Board of Directors and along with the help of the Government who is the 51% shareholder of the Air Mauritius airline company, need to take actions in order to improve the quality of the environment at Air Mauritius and also to educate the staff and crew of Air Mauritius on the importance of the retention of customers and on how to improve service quality.

Chapter 6- Recommendation and Conclusion

6.0-Introduction

Chapte