1. University of Gujrat
(Hafiz Hayat Campus)
Faculty of Management and Administrative Sciences
Course Title: Product & Brand Management
Course Code: MKT-435
Submitted by Zeeshan Asghar
Roll # 08021220-025
Muhammad Usman
10012720-021
Hassan Mushtaq
07010920-125
Fakhar Gull
Name of Program Coordinator: Mirza Ashfaq Ahmed
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2. Introduction to PIA
Pakistan International Airlines Corporation, more commonly known as Pakistan
International Airlines or PIA (Urdu: ), is the flag carrier airline
of Pakistan.
Pakistan-based company -------- engaged in the provision of air transport services.
Pakistan International Airlines (also referred to as PIA), is the national flag carrier of
Pakistan and the national airline operating passenger and cargo services around the
world. Its main hubs are Jinnah International Airport, Karachi, the Allama Iqbal
International Airport, Lahore and the Islamabad International Airport,
Islamabad/Rawalpindi.
It also serves regional airports, including Peshawar International Airport, Peshawar,
Faisalabad International Airport, Faisalabad and Multan International Airport, Multan
that connect to the main hubs and have flights to the Middle East.
Pakistan International Airlines is the national flag carrier and was established in 1955. It
not only provides transportation services, but its operations extend to providing cargo
services and courier services also. Pakistan International Airlines serves two markets –
Domestic and International. In the domestic sector, it has out performed itself by
stretching its networks to areas where other airlines do not fly.
Pakistan International Airlines PIA can trace its beginnings to the days when Pakistan
still was not a nation. In 1946, Muhammed Ali Jinnah, also known as Quaid-e-Azam,
realized the need for an airline network for the forming country. He called upon the help
of an experienced industrialist Mirza Ahmad Ispahani. Orient Airways, registered in
Calcutta, was formed on October 23 1946, In February 1947, three DC-3 airplanes were
bought from a company in Texas, and in May of that year, the airline was granted a
license to fly. Services were started in June from Calcutta to Akyab and Rangoon. This
was the first post war airline flight by a South Asian registered airline company.
Two months after this service began, Pakistan as a nation was formed. Orient Airways
began relief flights to the new nation, and soon after, it moved operations to Karachi,
where it began the important route from Karachi to Dhaka. In addition, their initial
domestic route in Pakistan was established, from Karachi to Lahore to Peshawar, and
from Karachi to Quetta to Lahore.
The government of Pakistan, realizing the operation was failing economically, asked the
airline to merge into a new national airline that the government was planning. On March
11 of 1955, Orient Airways merged with the Government's proposed airline, becoming
Pakistan International Airlines Corporation. During the same year the airline opened its
first international service, under the PIA name, from Karachi to London Heathrow Airport
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3. in London, United Kingdom, via Cairo International Airport in Cairo, Egypt and Leonardo
Da Vinci International Airport in Fiumicino, Italy using Lockheed Constellations. The DC-
3s continued operating the domestic services in Pakistan.
The most important element of any airline service is the aircraft itself. Currently PIA has
43 aircraft in its fleet. These aircraft are:
Types of Aircraft In Service
Airbus A310-300 12
Airbus A321-200 -
ATR 42-500 7
Boeing 737-300 7
Boeing 747-200 2
Boeing 747-367 6
Boeing 777-240ER 4
Boeing 777-240LR 2
Boeing 777-340ER 3
Total 43
In the international market it faces severe competition, especially due to the fact that
these international organizations are providing fares much lower than Pakistan
International Airlines. Internationally also, Pakistan International Airlines is encountered
with a severe and strong challenge with many renowned international names. Pakistan
International Airlines faces competition with not only international airlines but also with
local airlines on the various routes to the Middle East and the Gulf.
Due to fierce competition and rising oil prices, international aviation industry regulations
and some internal factors such as human resource issues of over recruitment, de-
motivated employees, mismanagement of resources both in case of manpower and
other resources, aged fleet, corruption and lack of accountability PIA is facing a deep
financial crisis. It is losing its market share both in international market and domestic
circuit.
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4. Pakistan Aviation Industry:
Air Transportation is a fast growing industry, highly capital intensive, highly sensitive to
business cycles, facing increasingly deregulated environment and hence highly
competitive background. The transportation sector holds a very important position in the
economy of Pakistan. Currently it contributes almost 10% in the GDP.
The aviation sector was deregulated just 11 years ago. This encouraged many airlines
that stopped their operation many years back due to Millions of Civil Aviation Authority
dues. Bhoja, Hajvery and Raji were closed down, but they have been granted license
again.
Air Blue and Royal airlines have initiated their operations also and they are the second
already operating in Karachi-Dubai cargo flights.
One market which is not served by the Private Airlines includes all flights to those
domestic which are not profitable. It is required by the government that PIA offers its
services in not so profitable areas, which is a liability of PIA being a semi private
organization. PIA calls it “loss making sector”.
Private airlines have stunned the aviation industry as they charge below cost fares. At
the moment when fuel prices are touching all-time high levels in the international
market, cut-throat competition among private airlines has placed a million-dollar
question about the feasibility of these airlines.
PIA operates in two major markets; Domestic and International. Pakistan
International Airlines has the lion’s share in the domestic market. As it is the oldest and
the pioneers it has the better fleet as compared to its competitors who are
comparatively newer in this segment. Besides this, Pakistan International Airlines has a
huge network of flights through out the country. The number of flights remains the same
during on-season and off-season. Pakistan International Airlines faces competition with
not only international airlines but also with local airlines on the various routes to the
Middle East and the Gulf.
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5. Current Airlines of Pakistan:
Pakistan International Airlines
Aero Asia
Air Blue
Shaheen Air International
Cargo Airlines of Pakistan:
Pakistan International Cargo
DHL Cargo Pakistan
Royal Air Cargo
Star Air
TCS Couriers
MARKET SIZE AND MARKET GROWTH:
The total market size for the year 2006-2007 was 14.199 million passengers as
compared to 14.615 million passengers for the year 2005-2006, therefore resulting to an
in decrease.
PIA BRAND
Brand Characteristics
The product that PIA offers is the transportation routes (both domestic and international)
for passengers (seats) and for cargo (space). PIA is basically an air travel service
provider therefore it fulfills the general characteristics of services (intangible,
inseparable, variable, perishable and simultaneous) as well as it has some tangible
aspects in terms of newspaper/magazine, meals, in-flight entertainment system.
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6. Problems of this Organization
PIA is getting losses for many years. No serious effort is done to get out it from losses.
During the last year Pakistan International Airlines (PIA) has stained a loss of PKR13.4
billion ($207.5 million). Operationally, it was also blacklisted by the European Union
during the year, which hit its bottom line along with its prestige.
Losses for the year have widened slightly from a loss of PKR12.76 billion recorded in
2006.
Pakistan International Airline is currently ranked amongst the top 20 airlines of Asia. It
has the capacity of becoming on top of the list. But due to certain reasons its market
share has been decreasing both in the domestic as well as in the international market.
Although it is still occupying a strong position in the domestic circuit being the national
flag carrier but the current position is threatening for the national flag carrier.
During the last four years the company has beard the accumulated loss in excess of 30
billion rupees, while its total debt is almost reaching 1 billion $. The expenses of the
company are increasing but the profits are decreasing. All the shareholders’ money is
gone and the company is facing the worst financial situation. PIA has lost its market
share in domestic airline market, which has dropped to 69 % in the FY 2007/08. Things
on international front were also not so different for PIA, as national airline’s market
share in the international market dropped from 48 to 43 %. Profitability of PIA is
decreasing. The share price of PIA closed at Rs 5.25 on June 14, 2008.
The company beard the lost of 13.39 billion Rs. In 2007, about 12 billion Rs. in 2006.
Pakistan International Airlines is currently facing a loss of approximately 40 million Rs.
per day.
Problem Description:
According to our research the company is having the problem in the following areas.
The problems for Pakistan International Airlines include:
Lack of Brand Awareness
Low scale advertisements and awareness:
A common Pakistani may even not know about Pakistan International Airlines. No
advertisements and awareness to the organization’s brands in such a modern era of
marketing. Cricket stars and sportsmen are hired on heavy salaries but with no profit to
the organization. Pakistan International already being an ethnic airline is just confining
itself to its own country. No such efforts to enhance the brighter and soft image of the
nation as well as airline are made.
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7. Over recruitment:
Pakistan International Airlines is a large organization with 18,043 employees. Its fleet
comprises of 43 planes. It operating planes are just 33. It means round about 525
employees per plane. The industry average is being between 150-250 people. This
describes the position of the company clearly. This drives the cost of the company
further.
De-motivated employees:
Pakistan International Airlines is a company which is constantly going in loss. Higher
number of employees and the company already going in loss de-motivates the
employees. The employees do not feel secure themselves in the company and try to
move to other successful organizations. Also certain issues such as centralized decision
making and salary issues also de-motivate the employees taking their attention away
from their job.
Political involvement during recruitment and selection:
Pakistan International Airlines being the government organization has the strong
influence of the politicians and government officials. Reports say that Mr. Tariq Kirmani
was appointed chairmen PIA due to being a friend of Prime minister. Similarly Mr.
Kirmani appointed his own friend Director MIS at a heavy salary. Selection and
recruitment is not done on merit. Current deputy managing director is another example
of this who was a pilot by profession and now deputy managing director still flies some
hours a week to keep his license on.
Lapses in the management:
The PIA’s management is ineffective to resolve and plan at the right time.
Rising fuel prices in the World:
There is been consistent rise in fuel prices in the international market. Fuel prices have
impacted on almost every airline in the world. This has affected Pakistan international
Airlines more than any other airline due to its aged fleet. New planes are fuel efficient as
compared to old ones. In an airline normally 30-35% of expenses account for fuel
expenses but in Pakistan International Airlines this number goes to 45-50%. Due to
these factors PIA has to charge more fare to customers that’s dissatisfies the
customers.
Global impact of 9/11 on aviation industry:
After the 9/11 attacks air traffic has been decreased all over the world. It has affected
Pakistan international Airlines also. Passengers are more inclined towards traveling to
other countries such as European countries. Air traffic in Asia, especially in south Asia
has decreased.
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8. Maintenance problems:
Beside having a large number of engineers, there is always been a question mark on
PIA’s fleet maintenance. Last year European Union banned 20 out of 42 planes were
banned from operating in Europe. This results a 4 billion Rs. loss to the company just
from Europe’s segment to the company. This ban was imposed just due to the lack of
proper maintenance.
Corruption at its peak:
Corruption is a sin that has hollowed Pakistani society bases. Like all other departments
of our country corruption is at its peak in Pakistan International Airlines. Sale of
Roosevelt hotel in Dubai is a clear example of it. The hotel was valued about 1 billion
but it was sold only in 40 millions. The sale of PIA’s kitchen centre in Karachi is another
example of this. There a profit making unit of the company was sold. It was generating
great revenues for the company but was sold confidentially.
Less technology advanced as compared to its competitors:
PIA is competing with the airlines from all over the country especially with the Middle
East airlines which are coming in with heavy investment. Its competitors such as
Emirates and Qatar airways have great capital. Theses Middle East organizations are
putting in newer and newer technology and acquiring greater manpower. PIA being
already in a financial crunch faces a tough task.
Poor image:
With already going in financial loss, 9/11 impact on the industry and above all
incapability of Pakistan International Airlines’ management has badly damaged the
image of the Airline. Due to all such problems the fares of PIA are higher but service is
not up to that class. This also gives a bad image to the passengers.
Lack of training facilities:
Although PIA is running a training and development department in Karachi but it is in
sufficient to feed such a big organization with almost 18000 employees. Special skills
such as engineering, technicians are lacking. If they are there, they are not delivering.
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9. Building brand equity by considering the SIX BUILDING BLOCKS approach
Brand Awareness:
Creating brand awareness is one of the key steps in promoting a product.
Advertisement
PIA is advertising its products (destinations) through different mediums. PIA has
advertised in News papers (DAWN NEWS, THE DAILY NEWS, JUNG and planning for
other newspapers also,);. PIA is also advertising through transports (painted corporate
image of PIA on transport sides). The firm is also advertising through press releases, in
the news articles. Public relations are being made by the employees of PIA which
enhances the firm‟ s image. PIA had sponsored in the Cricket events.
How more effective awareness can be made
PIA should advertise on TV channels like other airlines are advertising. BBC and CNN
would be great for advertising, because most of the people watch these channels in the
present days. TV ads give competitive advantage to the competitors of PIA.
Radio Ads
Pia need to advertise there new promotion on radio channels for more effective
awareness about the brand
News Paper ad
Special news paper ads, e.g half paper ads on front page and advertising in Sunday
Special Magzines which most people read.
BRAND RECOGNITION
PIA has high brand recall. It is recognized by travelers all over the country. PIA is a
national airline, operating passenger and cargo services covering eighty-two domestic
and foreign. PIA has earned the Satisfactory ranking in customer satisfaction. This
strong market position gives the company a scale advantage and helps it strengthen its
brand image.
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10. Brand image
Brand image is The impression of a product held by real or potential consumers.
PIA paints the brand image of being the less price taker and providing high quality to the
customers as compare to the competitors.
PIA positions itself as an ambassador of Pakistan in the world. Pakistani expatriates
residing outside the country feels proud when they see an airline of their own home-
country carrying the national flag. This arises the loyalty factor in the hearts of the
expatriates and they prefer to travel by PIA
But today Pia had lose its brand image because of its poor quality services and high
price taker.
And With already going in financial loss, 9/11 impact on the industry and above all
incapability of Pakistan International Airlines’ management has badly damaged the
image of the Airline. Due to all such problems the fares of PIA are higher but service is
not up to that class. This also gives a bad image to the passengers.
Its time for PIA needed to rebuild its image and change the perception of the brand in
the eyes of Pakistani nationals and Pakistanis living overseas, as well as other
international passenger
How Pia can make strong Brand image in its Customer mind?
By properly marketing itself PIA will present a better image to the world. By clearly
describing facilities and projecting its image it will help in growing market share.
Management should ensure the punctuality of flight, in flights services and their
standard must be world class. Safety and maintenance issues for the planes must be
strongly checked. Management’s perspective should be to increase the profitability and
ensure the good image of Pakistan. Security and safety of cargo must be ensured. It
must be management’s responsibility to ensure services to the passengers both in
plane and at airport as well.
Effective campaigning of the special interests tourists’ packages for Pakistan to
increase the travel to Pakistan must be done. Soft and brighter image of Pakistan and
PIA must be enhanced.
Passenger sales must be held responsible to boost sales by introducing different types
of packages. It must also have the responsibility for handling customer queries and
complaints.
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11. Cargo division must be responsible for supplying both perishable and non-perishable
goods in the global market place.
Discipline should be the key factor for the organization. Policies must be clearly defined.
Goals and objectives should be determined for the organization as a whole and
individually as well. Management must assure that each and every person is committed
to his job and the organization is going towards the achievement of its targets.
Modernizing the airline’s fleet is badly needed as well proper maintenance of the fleet is
required.
Better and modern functioning of training and development department. Need for
accountability.
Brand Knowledge:
Brand Knowledge “is a function of awareness, which relates to consumers’ ability to
recognize or recall the brand, and image, which consists of consumers’ perceptions and
of associations for the brand.”
PIA is very easily recognized and recalled because it is named after the country‟ s
name, has green logo and a very memorable slogan. This will help to show a high level
ofawareness about the brand
Brand Elements and Differentiation
Name: Pakistan International Airlines (PIA)
URL: www.piac.com.pk
Logo:
Slogan:
Great People to Fly With
Come Fly with Us
Ba-Kamal loog Lajawab Service
Color: Green
National Flag on aircraft tail
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12. Brand Equity:
The worth of a brand or A brand's power derived from the goodwill and name
recognition that it has earned over time, which translates into higher sales volume and
higher profit margins against competing brands .
What potential challenges exist for brand equity in PIA.
i The major challenge for PIA is to improve its quality image. People go for it for the
domestic travel for the reason that it is relatively better and safer than existing airline,
any good international airline, if it decides to cater Pakistani customers‟ domestic
needs by entering the market, can seriously hurt PIA.
ii. Another challenge is to rigorously train the staff to improve the service perception of
the customer.
Customer Based Brand Equity Model
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13. Criteria for Choosing Brand Elements
Brand elements are those trademark devices that serve to identify and differentiate the
brand. The main ones are brand names, URLs, logos, symbols, characters, slogan,
jingles, packages and signage.
Memorobility: A necessary condition for building brand equity is achieving high level of
brand awareness. PIA is very easily recognized and recalled because it is named after
the country‟ s name, has green logo and a very memorable slogan. The research
results show a high level of brand, slogan, and logo awareness.
Meaningfulness: Brand elements can take all kind of meaning, with either descriptive
or persuasive content.
A very important criteria is that the brand elements should provide
(i) General information about the nature of the product category
(ii) Specific information about particular attributes of the product.
Pakistan International Airline provides the general information about the product
category as well as some specific information i.e. country of origin, but it does not
provide information about specific benefit by brand name, slogan or logo.
Likability: Criteria for likability is that brand elements should be fun and interesting, rich
in visual and verbal imagery, and aesthetically pleasing. PIA brand logo has a rich
visual imagery that evokes a sense of national connect in the mind of the customer.
Also, the brand name style, and logo are aesthetically very pleasing.
Transferability: Transferability of brand elements means they should be transferable
across product categories and across geographical boundaries and culture. PIA‟ s
name, slogan and logo suggest it is an airline, so transferability across product
categories is limited. Also, as Pakistan is not enjoying a positive image around the world
at the moment, the brand elements transferability across geographical boundaries and
cultures is limited. For example, given the fact that American culture presently
dominates the world, American Airlines can successfully operate in most countries if it
wishes so. But at the moment Pakistan International Airline cannot leverage the country
name.
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14. Adaptability: Brand elements should be flexible and updatable. PIA has successfully
been updating some of its elements, for example slogan. The brand name and logo is
also easily updatable with a touch of creativity.
Protectability: Brand elements must be legally and competitively protectable. The
brand elements of PIA are protectable both in terms of legal and competitive sense, and
are registered. Also, PIA is a national flag carrier which makes its brand elements
legally and competitively protectable. The fact that the brand is named after the
country‟ s name, it is unlikely that the brand name will be copied internationally.
POP’s
Schedule Airline and Cargo Facility
Domestic and International Flights
Economy Class
Online Booking/e-Ticketing
POD’s
National values are strongly associated with PIA
Domestic (All Major Cities)
Economy Plus/Business Class
Holiday Packages
Boeing 777-200LR
By making effective promotion of our brand PIA we can attain majority of people
attention easily by effective communication with our customer by using Mass Media &
internet. Positive thing is People are aware of the signs, slogan, symbol
and URL of PIA are highly memorable, and people are well aware with these.
A large majority of the respondents were able to recognize the slogan and logo of PIA,
but not associated nowadays air travel with PIA because of less services provided and
high fare charged . But we can attain majority of people attention easily with effective
communication with customer via using Mass Media as few people aware of the online
services PIA is providing through its URL, and finds online reservation very convenient.
And by offering various packages and discount to our customer.
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15. Brand Differentiation:
The brand differentiation is basically brought by positioning of brands. Positioning is the
place which the brand makes in the minds of the customers or in market.
Competitive Position of PIA
Differentiation
Competitive Moves
• PIA is having 48.4% market share internationally and 65% domestically, and PIA
has the Market Leader Competitive Move in Pakistan.
• Competitor Attack Strategy
• The attack strategy of PIA against its competitor Air Blue is Flanking Attack
Strategy.
Positioning of PIA
PIA‟ s existing Positioning Strategy
Currently PIA positions itself within the following positioning strategies.
1) Positioning by attributes.
2) Positioning by price and quality.
3) Positioning by product user.
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16. Positioning by Attributes
In this strategy PIA positions itself in the mind of the consumers as the reliable air
transport service provider. Because from all the airline companies of the world PIA has
the least crash rate. By positioning the reliability attribute of the airline in the minds of
the consumers, people prefer to travel from PIA. Because of the safety attached with
the PIA. Attribute of speed is also attached with this positioning strategy of PIA. No
matter the flight takes-off half hour late but it will reach to the destination on the exact
time i.e. will not be late. characteristic of safety is also associated with the airline as PIA
has the following certifications.
-European Aviation Safety Agency (EASA)
-IATA Operational Safety Audit (IOSA)
-Civil Aviation Authority of Pakistan ( in accordance with the International Civil Aviation
Organizations Standards)
Positioning by Price and Quality
In this positioning strategy, PIA can paints the image of being the less price taker by
providing high quality to the customers as compare to the competitors. Examples is
given below
Introduction of New Additional Low Cost Flights Packages
“PIA express” PIA introduced additional low cost flights. PIA express at 20% less fare.
1)This facility is available in Business Plus, Economy Plus & Economy C lass.
2) No meals.
3) Stand by fares applicable.
Positioning by Product User.
PIA positions itself as an ambassador of Pakistan in the world. Pakistani expatriates
residing outside the country feels proud when they see an airline of their own home-
country carrying the national flag. This arises the loyalty factor in the hearts of the
expatriates and they prefer to travel by PIA.
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17. Vision Statement of PIA
PIA‟ s existing vision:
“To be a world class profitable airline, exceeding customer expectations through
dedicated employees, committed to excellence.
Faults :
Vision Statement of a company is usually about the goal, that they want to achieve in
the near future. PIA‟ s visions statement is presentably mixed up the mission statement
because it’s stated in the vision statement of PIA that they want to become the world
class airline exceeding customer expectations through dedicated employees committed
to excellence.
Many years back PIA was the world class airline but due to financial crisis and some
other issues related to the management, PIA failed to achieve the goal of remaining the
world class airline. So it is very clear that Pakistan International Airline does not fulfill
the vision in its core sense.
So it needs a revised vision statement
Revised Vision Statement of PIA:
“Company vision is to Cover more locations, domestically and Internationally by being
the World best and most profitable airline company. Also to be an airline carrier that
has the most dynamic workforce to guarantee the best flight possible for every
passenger.”
The Revised Vision Statement is company oriented.
The Revised Vision Statement includes all the necessary features that should be there
for a comprehensive vision statement for PIA.
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18. RECOMMENDATIONS for PIA
PIA should upgrade its fleet as it’s causing the airline higher operating cost and PIA is
incurring loss .PIA should purchase new Airplane with twin engines these will reduce
the operating cost of PIA Airline should focus on the customer’s satisfaction, refund
process should be quick so that customer remains loyal to brand.
(i) There should be clear and even distribution of work and only qualified person should be
appointed on jobs.
(ii) There should be improved service standards and that should focus on quality. PIA
should offer its services of reservation and seat confirmation with by SMS and flight
confirmation message should also be sent via SMS to the passenger.
(iii) PIA should give more incentives to its frequent flyer as it will generate more brand
loyalty by giving better incentives to the customers
(iv) Marketing department must deliver in order to create a strong figure for the
organization. It must be responsible for creating more sales and getting more market
share. Providing awareness about the good characteristics of the organization. Getting
information on related field and report to the top officials.
Decentralization:
PIA should decentralize its structure that would lead to the easy management and
increased motivation.
Transparent policy adoption:
PIA should adopt transparent policy that employees should be promoted on merit
basis. And Chairman of PIA should be appointed from with in the organization. Union
should support it, it will motivate the employees and PIA will grow in profit.
(i) By purchasing new fleets the repairing cost decreases and attracts the customers
that cause to decrease the cost and increase the revenue of PIA. Fleet modernization
will bring more security, safety, less maintenance expenses and will project a brighter
image of the airline.
(ii) Training and development of employees will prepare the employees for current tasks
and for future challenges.
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19. Marketing policy:
PIA should adopt good marketing policies so that it will bring higher profit and maximum
utilization of its available resources, Business sector should be attracted to operate at
full potential.
i. Modernizing the airline’s fleet is badly needed as well proper maintenance of the
fleet is required.
ii. Must take advantage of the increment in the air transportation especially towards
Middle East countries and India.
iii. Better and modern functioning of training and development department
iv. Need for accountability.
Things to attract passengers from a passengers point of view
* On time flights
* Newer aircraft e.g. Boeing 737 are ok or B777.
* Extra services on board like amenity kits in Economy too!
* A variety of newspapers and magazines
* More services at the airport
* Lower prices!!
* Quicker, transit to next flight. For example I would take a cheaper flight if the
connection time was less and cheap.
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