Cover Page

Introduction

This project aims to conduct marketing analysis for Garuda Indonesian airline by identifying
company’s current marketing mix; product, price, place, promotion, people, physical evidence
and process. The product range would be analyzed by applying BCG matrix and Ansoff’s growth
matrix. The price range and strategies would also be discussed. How company is delivering their
services along with their promotional activities would also be a part of the discussion of the
project. In the end the importance of extended marketing mix for aviation would also be
discussed and the recommendations would be provided for the discussed marketing framework
for future improvement.

Discussion

Business of aviation has become one of the most innovative industries that are helping in
empowering monetary and social advancement. This enables the airline sector to interface
people, nations and societies, giving access to worldwide markets, encouraging exchange and the
travel industry just as to improve the connection among the under developed and developed
nations. This sector likewise gives quick transportation arrange overall is required for worldwide
trade and also for the travel industry just as assume an important job in encouraging monetary
development, especially in under developed nations, which thus will increase living expectations
and diminish neediness(Lapian , 2014).

Garuda Indonesia is the national aircraft of Indonesia. Company is open for both domestic and
international operations all through Asia, Australia, Europe and the Middle East. In 1982,
Garuda became the second best aircraft in Asia. This was fundamentally because of the
syndication they had in Indonesia's avionics industry. Be that as it may, since the Indonesian
government provided order no 11/2011 deregulating air transport, Garuda never again
overwhelms the residential avionics benefits in the home country. In 2007 Garuda encountered a
restriction on flights to European Union in any case, In Jun-2010, Garuda continued
administrations to Europe after an all-encompassing EU forced boycott. Garuda endured in that
period as their notoriety was hurt and Lion Air exploited this with an extension intend to catch
the dominant part household piece of the overall industry (Talib, 2018).

Garuda has numerous techniques to contend with different aircrafts on the planet. Firstly, Garuda
Indonesia chooses the correct representatives and trains them strongly to be prepared for sudden
or arbitrary situations. Garuda Indonesia gives an elevated requirement of the determination
procedure of the new worker. Indeed, even out of 8000 new candidates just 20 are picked. it is on
the grounds that Garuda needs the representatives who are proficient in the activity. Garuda
likewise utilizes procedure in joining the large organization, for example, SkyTeam, Bank
Indonesia, etc. to contend to another carrier in the world. For model in the objective market,
innovation and representatives are utilized to manage distinctive sort of client. A few clients are
a business person, teenagers and some are newcomers to flight. This implies the objective market
for Garuda Indonesia dependent on age can not so much be decided. Garuda Indonesia just offers
an incentive to the clients with the presentation of the airplane. Garuda Indonesia didn't dynamic
to give any limited time blend systems for clients (Davimaputra, 2016).

The strategy of marketing mix is playing a vital role in grabbing consumers towards the
products/services with the intention to utilize it. It’s also a factor behind the accomplishment of a
decent showcasing item promoting and advertising administrations in the market. Inclusion is
controlled by the showcasing exercises advertising idea called the promoting blend. The
components of the advertising blend comprise of the considerable number of factors that can be
constrained by the organization in its correspondence and will be utilized to target purchasers
good. The promoting blend is a lot of showcasing apparatuses utilized by organizations to
persistently accomplish their advertising goals in the objective market. The showcasing blend
comprises of four components or factors known as the 4P advertising blend at first and afterward
ventured into 7P‟s when applied to the administrations promoting. They are product, promotion,
place, people, physical evidence and process (Lapian, 2014).

Product

Service standard characteristics showed in Garuda Indonesia administrations dependent on the

astounding help that was created in the 28 addressing "previously, on, and after the flight".
Garuda Indonesia has propelled an administration idea called "Garuda Indonesia Experience".
This administration offers an idea mirrors the real friendliness of Indonesian and presents the
best parts of Indonesia to the travelers. Beginning from the flight reservations to land at the goal
air terminal the travelers will be spoiled by the well-disposed assistance and certifiable
neighborliness that portray Indonesia, spoke to by 'Salam Garuda Indonesia' from the lodge
group. With an uncommon strategic Garuda Indonesia as the banner transporter aircraft of
Indonesia which advance Indonesia to the world, at that point the idea of Indonesian
neighborliness was converted into symbols that depend on human detects. With this idea, Garuda
Indonesia makes an attribute of the crest, while upgrading the picture of Indonesia in the
worldwide world. The idea depends on the Garuda Indonesia Experience "5 detects" (locate,
sound, fragrance, taste, and contact) and incorporates a 28 "client contact focuses"
administrations running from pre-venture, preflight, in-flight, post-flight and post-Journey.
Individuals purchase facilities (services) to tackle issues and get the worth related with benefits.
In this way, item isn't simply formed something substantial yet additionally something
immaterial. The idea of product created by Garuda Indonesia offers a facility that comprises of a
few components: (a) the center item or conventional, for example, a bed on lodging
administration. (b) The normal item, for instance, a happy with sitting area at the air terminal. (c)
The increased item, which enables a zone to another separated item. (d) The potential item, show
(include) and extra advantages that are valuable to buyers or may add to purchaser fulfillment.
This area can give cost focal points to improve exchanging with the goal that customers
reconsider or hard to switch to any other airline company (Lapian, 2014).
 1. Ansoff Matrix

By utilizing Ansoff framework as strategic improvement system, Garuda Indonesia can

concentrate on not just contending in Full-Service and Low likewise keep stay alluring in the
market. There are four stages of Ansoff framework:

Existing Business New Business

Existing Mrket SkyTeam Garuda Maintenance

Global Facility aero Asia
Alliance Airlines (GMF)

New Market Citilink Aerowisata

Abascus distribution
systems Indonesia
Aero systems Indonesia

(Ardiansyah, 2017)

 Company under market penetration strategy has joined SkyTeam to gain competitive
advantages and increase their market share in international market
 Garuda has chosen growth strategy of market development by launching Citilink as their
subsidiary offering short distance and low cost flights.
 Company has focused on the creation of product to provide reliable services to their
passengers by maintaining their engine machines. GMF is being made by the company
that focuses on the service and maintenance of the planes.
 Company has used horizontal diversification strategy for the extension of their service
line in the Indonesian aviation industry by launching their subsidiary Citilink for the
customers looking for cheap or low cost flights. Citilink is competing against the aviation
giant Lion air’s domestic subsidiary. Except Citilink, company has other subsidiaries are
well that are similar or non-similar to their business. Aerowisata mainly focuses on
providing services for tourism and hospitality. Garuda Sentra Medika emphasizes on
providing health care services like physiotherapy, radiology, laboratory service etc. the
cardo unit has also been running under the name of Garuda Indonesia Cargo focusing on
providing cargo and freight forwarding services for both international as well domestic
routes. Training center is also constructed by the company named as Garuda Indonesia
Training center for training their flighty staffs. Abacus Distribution System Indonesia
also runs by the company to facilitate travel agents and allowing them to take devices on
rent. Aero system Indonesia is also a subsidiary of the company focusing on providing
consultancy and maintenance services for other airlines companies operating in the
industry (Ardiansyah, 2017).
 2. BCG Matrix

Company’s competitive position in Indonesian airline industry can be seen through BCG matrix
that is the strategic tool will be used to analyze Garuda’s business position in the airline industry
by using two elements growth rate (placed on y-axis) and market share (placed on x-axis) that
would benefit the company to whether to continue, discontinue or offer new services in the
market

Garuda’s Market share and Growth rate

Garuda Indonesia Service market average flight
Market share 28.40% 14.32%
Growth rates 19.22% 17.67%

(Kuntijoroadi, 2008)

Garuda’s position in BCG Matrix

High Low

Stars Question marks

High

Garuda’s growth rate: 19.22%

Industry: 17.67%
Cash cows Dogs

Low

28.4% 14.32%

(Kuntijoroadi, 2008)

According to the above mentioned matrix, it has been analyzed that company is in the star phase
which means company is having the best possible long term opportunities available from growth
point of view. Companies standing at this phase are able to generate more cash because of
having high relative market share in the industry but at the same time they do consume more
cash due to high growth. Garuda Indonesia can easily turn towards cash cows if there is a
decline in market growth rate (The BCG, n.d.).

Price

Cost/price is a significant component. Most clients will pay for something with included worth if
there is the impression of the additional estimation of an item. Traits ticket costs acknowledged
by Garuda Indonesia as the selective carrier ticket costs at a top notch cost. For instance, the
Jakarta-Singapore course inside 903 miles, its airfares least expensive is $ 111. When contrasted
and Air Asia carrier for a similar course is just about US $ 15. Value said to be costly, modest or
average of every individual isn't really the equivalent, since it relies upon the individual view of
the foundation by the earth and states of life of people. Garuda Indonesia gives solace to the
purpose of accommodation that albeit important 'costly' yet is required by the particular buyer
(premium client). Organization is utilizing skim estimating or premium valuing methodology
which implies the expense of tickets is higher than the contenders. Premium estimating on items
or administrations that are naturally neighborly ought to stress on the use of the value that
considers the monetary expenses and ecological expenses of generation and showcasing forms,
while offering some incentive to the client and a sensible benefit for the business. Garuda
Indonesia offers charges higher than different carriers since it keeps up a guarantee to give better
help and save the earth. Cost is the main component of the promoting blend that gives salary or
income to the organization (Lapian, 2014). On account of Garuda Indonesia, the valuing
approach for a course is based on the maximum cost stipulated by the government since Garuda
Indonesia is a carrier which gives full administrations. In this manner, the estimating made by
Garuda Indonesia won't contend with different carriers which work more as minimal effort
bearers. In any case, Garuda Indonesia can make the current costs efficient. Two key elements
are there affecting pricing policy for Garuda Indonesia includes: the internal and external
environment of Garuda. Internal environment include the factors like the objective of the
company to how to set and achieve marketing strategies, market price etc. whereas external
environment factors involve the certainty and uncertainty of supply and demand, competitors and
other environmental concerns (Rahmawati, 2015). Cost is a segment that straightforwardly
influences the organization's benefit. By staying focused on directing its business utilizing an
assistance arranged procedure just as the financial development and the expansion in the quantity
of travelers upheld an increment in Garuda Indonesia Group’s working income from USD 3,096
million of every 2011 to USD 3,472 million out of 2012, or expanded by 12.1%. The net benefit
of USD 111 million earned by Garuda in 2012, an increase of 72.6% contrasted in 2011(Lapian,
2014).

Place/Distribution

Garuda Indonesia dissemination channels were created through 2 primary channels, direct
channel and aberrant channel, the organization attempted to draw nearer with the clients. Direct
channel comprised of Call Center, Sales Office and Ticketing Office, Website, Garuda Online
Sales (GOS), Bilateral Interline Traffic Management (BITA), and Multilateral Interline Business
Travel Agreement (MIBA), in the meantime Indirect Channel comprised of Travel Agent, GSA
(General Sales Agent), and IBCS (IATA BSP Consolidator System). So as to improve openness
of clients to Garuda Indonesia’s administrations, the organization has included and built up its
branch workplaces, deals workplaces and grew new dissemination idea crosswise over
Indonesia. Likewise, Garuda Indonesia has additionally presented extra kind of direct deals
channel called Mobile Ticketing Counter (MTC). To improve availability between areas in
Indonesia, Garuda Indonesia keeps on extending its system. This system extension isn't just
concentrate on large urban areas in Indonesia, yet in addition stretches out to remote zones in the
nation. Company has extended their business operations in most of the eastern parts of the
Indonesian country with Makassar considered as a center point and has started working another
flying machine Bombardier CRJ1000 NextGen. Presently, Garuda Indonesia serves 63
household courses and 22 worldwide courses, including Asia (Regional South East Asia, Middle
East, China, Japan and South Korea), Australia and Europe (the Netherlands. This
notwithstanding the development, the Company additionally expanded the recurrence of flights,
both local and global divisions so as to have solid intensity and a rule recurrence share in the
local part. Garuda Indonesia has additionally settled collaboration with Etihad Airways, which is
proposed to help the improvement of the course to advertise. Related with the course to
advertise, Garuda understood the requirement for supported endeavors to expand brand attention
to the worldwide network against Garuda Indonesia. So organization has participated with
Liverpool Football Club (Lapian, 2014).

Promotion

Organization is constantly taking promotional exercises to convince their objective clients.

GarudaMiles is one of the special projects dependent on enrollment administration that is given
as a token of thankfulness for steadfast clients Garuda Indonesia. As an individual from
GarudaMiles, so clients can appreciate the numerous advantages and select benefits, for
example, uncommon registration counters at the air terminal, extra gear quotas, need stuff taking
care of, need hang tight rundown for ticket reservation, air terminal parlor access for Garuda
Indonesia, and offers draw from Garuda Indonesia accomplices around the world. Garuda
Indonesia keeps on making advancements in remuneration steadfast clients Number of
individuals as of now arrives at around 750,000 individuals. Other than flight movement of the
individuals from this GarudaMiles add to traffic by 30%, which kept on expanding contrasted
with earlier years. GarudaMiles propelled new items, to be specific Garuda BNI Credit Card.
Benefit to be earned the Garuda BNI Credit Card holder comprises of GFF Mileage reward, 5%
rebate for on location ticket, quick track to GFF Gold, and furthermore access to the Executive
Lounge BNI. Organization is likewise offering new online-based administrations, for example,
arrangement of offices for Missing Mileage Claim Online, e-Newsletters, Online Mileage
Statement, and Online Membership Guide. These online administrations can be gotten to through
the site or sent legitimately to individuals by means of electronic regular postal mail. This online
help notwithstanding quicken correspondence with individuals likewise adds to the cost
proficiency fundamentally. GarudaMiles Platinum individuals can appreciate all through the air
terminal parlor Garuda International goals, an expansion in administration (Lapian, 2014).
Company believes that social media platforms (like Facebook and Twitter) are an important tool
for advertising their business and to grab more new clients and retaining their clients online due
to which company has remained focused on their e-marketing or social media marketing
strategy. Through social media marketing company has ran the campaign under the name
“Brings people together” during Ramadan by offering 10 return tickets free of cost. As
indicated by socialbakers, company has made itself among top 10 brands engaged in social
media activity in 2012. With the successful campaign not only company has earned maximum
clients in that year but also got awarded by social media (Bhattacharya, 2012).

Process, Physical evidence and People

Process is the most important part of providing successful customer service. It involves in overall
functions of the company that has to be implemented just according to current technological
systems and plan of actions systematize by the staff. Garuda Indonesia needs to improve in
processes like on time performance. Company has failed a lot of delays in arrival and departures.
Work territory appearance relates just to the non-plan parts of the administration condition,
which are innately factor in nature. Garuda Indonesia worked measure of 140 flying machines to
help its activity all through 2013, improved from 106 units in 2012. In 2013, the Company
achieved 36 new airplanes comprised of 2 Airbus. Garuda Indonesia finishes the inside lodge
and finishing its administration with the "5 detects" idea. Garuda Indonesia created 2 (two)
official parlor with green planned at Soekarno Hatta International Airport Jakarta and Ngurah
Rai International Airport Denpasar Bali, both is outfitted with different offices, for example,
business focus, remote web association, reviving territory, reflexology machine, shower, nursery
room and space to revere. Individuals assume a critical job in administration associations,
particularly during the administration conveyance process when the members have
communications with clients. Garuda Indonesia has made a culture called FLY-HI comprising of
all the factors that have to be in their employees like they must well-organized and strong,
faithful, client centric, sincere and transparent and united to fill in their positions. Garuda
Indonesia has consistently been and stays focused on constantly improving the nature of staff
through arrangement of preparing and learning programs (Lapian, 2014).

After a thorough study we can say that the above mentioned marketing mix elements process,
physical evidence and people are somehow affecting business as we have seen the example of
Garuda Indonesia. People are the human assets of any organization, in airline industry they are
also playing a vital role without them no marketing strategy can be develop and executed
successfully. Physical evidence again an important tool for capturing more customers because
customers want neat and tidy environment like in airline industry, the service cabin must be
clean, the air buses and air craft’s interior and exterior must be well maintained, the overall
environment should be spotless and refreshing to provide comfort to their passengers. Process
also considered as the important one for example Checking process, boarding process and OTP
(on time performance) if company is lacking there than is a great chance that customer would get
annoyed due to un-comfortability they would get. So airline industry should have to be focused
towards these three marketing segments as well for enjoying fruitful profits and to retain their
leading position in future (Lapian, 2014).

Recommendations

 Garuda Indonesia to improve the socialization of its new flying machines activity that can
construct the view of open and aircraft clients so as to comprehend the prevalence of new
flying machines; to upgrade the innovation based minimal effort advancement using web
to get to Garuda Indonesia's site or to convey news about the greatness and prevalence of
Garuda Indonesia in the internet based life; to give various seats in economy class for
advancement value like the cost of aircrafts in the class of Low Cost Carrier (LCC) to
assemble the open recognition that the cost of Garuda Indonesia ticket is in conformity
with the buy intensity of Indonesian shoppers.
 So as to accomplish maintainable development and reinforce showcase predominance full
help transporter in Indonesia, Garuda Indonesia which as of now is the main premium-
class carrier in the residential market needs to fortify its key situation in this premium
through improved nature of administration.
 Numerous visitors are visiting Indonesia for the most part the volcanoes which implies
their arrival places are not the air terminal city. These explorers give chance to Garuda
like the vagrant laborers (TKIs). Garuda can offer a support of get you to the final
location.
 Surface vehicle can be given from the air terminal to the tourist’s final place. Touristic
final locations, for example, Bromo is simpler as an enormous number of individuals on
the Surabaya flight are going Bromo.
 Company can enhance their services while issuing travel pass and can be avail by
applying online or visiting ticket office for the students for travelling various times in a
year for any location in Indonesia it would be a tempting offer that will create more long
term customers for the company.
 People go on Umrah throughout the year. Garuda need to collaborate with the umrah trip
specialist to redirect those venturing out from Malaysia to fly Garuda. One of the
principle contenders is Air Asia and Saudi Airlines. Garuda should seriously think about
having flights to Jeddah from Surabaya and Aceh.
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