While relying, in any percentage, on renewable energy may be expensive, it often receives support not only from the government but also from its customer base, who may be willing to pay a premium price for the products that Airbus may produce.
Intellectual property laws and other data protection laws are, as mentioned earlier, in place to protect the ideas and patents of companies who are only profiting because of that information. If there is a likelihood that the data is stolen, then Airbus will lose its competitive edge and have a high chance of failure.
Discrimination laws are placed by the government to protect the employees and ensure that everyone in Airbus is treated fairly and given the same opportunities, regardless of gender, age, disability, ethnicity, religion or sexual orientation.
Health and safety laws were created after witnessing the horrible conditions that employees were forced to work in during and directly after the industrial revolution. Implementing the proper regulations may be expensive, but Airbus must engage in it, not only due to the law but also out of Airbus’s personal feeling of ethical and social responsibility to other human beings.
Laws are also placed to ensure a certain level of quality or reasonable price for certain products to keep the customer safe and prevent them from being provided. The industries this applies to find often their costs elevated.
Other factors that affect the Airbus organisation
The effective execution of internal performance plans, including cost lessening and productivity efforts
Product performance risks, as well as programme development and management risks
Customer, supplier and subcontractor performance or contract negotiations, including financing issues;
Competition and consolidation in the aerospace and defence industry;
Significant collective bargaining labour disputes
The outcome of political and legal processes including the availability of government financing for certain programmes and the size of defence and space
Research and development costs in connection with new products
Legal, financial and governmental risks related to international transactions
Legal and investigatory proceedings and other economic, political and technological risks and uncertainties.
Airbus target market: who are their clients?
Airbus uses a combination of diverse segmentation strategies for marketing; such as demographic, geographic, and psychographic strategies to cater to the customers of diverse countries. Specific target marketing strategy is used by Airbus this organisation caters for a different set of customers. The airline design company has re-invented themselves as the carrier offering a value-based aircraft which are technologically advanced, appealingly designed, safe & secure and their related services. Incorporating the four Ps of marketing, the organisation managed to be the cornerstone of aircraft manufacturing, landing customers like China Inc, Emirates and AirAsia.
China Inc. is one of the biggest customers for Airbus. It operates under the subsidiary of China Airlines Ltd. This airline encompasses the provision of international air passenger transport and freight services. Its biggest core business comprises of air passenger transport in regular or occasional international charter contract; air cargo services; civil aviation international airport and transit of aircraft management services; aircraft merchandise sales; aircraft catering etc.
The airline is fully controlled and governed by the Chinese government. The airline flies to major destinations in North America, Europe and Asia. It is a long-haul carrier with a fleet of 90 passenger and cargo jets, it largely relies on Airbus A330 and Boeing 747 planes for intercontinental flights. Passenger flights make up two-thirds of the company’s annual income, with the balance coming from cargo services and onboard sales of duty-free goods.
Their biggest airline Airbus A380 is commonly ordered by Emirates Airlines, making them one of their biggest customers for passenger aircraft. Emirates operates a mixed fleet of Airbus wide-body aircraft and is one of the few airlines to operate an all-wide-body aircraft fleet. Emirates is the largest Airbus A380 operator with 112 aircraft in service and a further 11 on order. The Airbus A380 has become an essential part of the Emirates fleet, particularly on long-haul high-traffic routes.
AirAsia forms part of the biggest customers of the Airbus aircraft. Its main aircraft are the Airbus A320-200. The airline ordered 200 planes to the value of US$18 billion in the year 2011, making this airline the biggest customer.
Adding value for their clients includes the following:
increasing passenger capability and lower fuel cost of the Airbus A320 aircraft
Ensuring quality and reliability to continue to win orders during the economic downturn
Ensuring they maintain being the organisation that brings the most modern and comprehensive aircraft family on the market, complemented by the highest standard
Ensure that ordered aircraft are delivered to customers on time, on cost and quality
Safety must be prioritised at all-time in the design, building and performance of the aircraft’s
Incorporating exceptional quality into the aircraft without increasing the price
Decision process customers undertake under the B2B organisation
The decision-making process in Business to Business organisations is different from a Business to Customer (B2C). elements such as pricing, payment approaches, repeat purchases, relationships, and the role of a purchaser at an organization play an integral role in the decision process.
B2B buying circumstances are not considered as impulsive and are discussed sensibly among various stakeholders. Figure1 shows the typical stages of the business buying process
Figure1: Stages of the business buying process
The main difference between B2B and B2C is who the buyer of a product or service is and the process of purchasing is different.
The following is a list of the main stages involved in B2B buying:
Step 1: Recognize the Problem/ Identifying a need
This is where an airline company like AirAsia comes to a unanimous decision that they have a shortage of aircraft to fulfil their goal of expanding to new routes around the globe.
Current aircraft are small in terms of capacity to meet the demand as per their scheduled flights
New flight routes are established and not sufficient aircrafts available to carry the demand of the routes
Business is being expanded to cater for a private jet client, thus a new executive aircraft is required
Step 2: General need description
What kind of aircraft is required, size etc.
Long-distance aircraft of short route aircraft
Passenger/ Commercial aircraft or private jet
Step 3: Develop product specifications to solve the problem
Buying centre participants assess the problem and need to determine what is necessary to resolve/satisfy it
Required seat capacity
Size of cabin and cockpit
Step 4: Search for and evaluate possible products and suppliers
Evaluation of company files and trade directories and contacting different suppliers
conduct a value analysis an evaluation of each component of a potential purchase; examine quality, design, materials, item reduction/deletion to save costs, etc.
conduct vendor analysis a formal and systematic evaluation of current and potential vendors; focuses on price, quality, delivery service, availability and overall reliability
Evaluate the Airbus and Boeing to determine which manufacturer meets specifications in terms of technology, design etc.
Step 5: Proposals
Invitation of different manufactures for bidding
The suppliers are given the required specifications of the aircraft and they must price accordingly
Step 6: Select product and supplier and order product
This step uses the outcomes obtained from Step 4
Due to orders being big in B2B organisations, customers can decide to procure from different suppliers to minimise the risk. This is referred to as multiple sourcing
Alternatively, the customer can decide to buy from a single supplier this is known as sole sourcing. Risk is higher on this type of sourcing
Boeing or Airbus as there are the biggest manufacturers in the industry
Step 6: Order-routine specification
The customer at this stage prepares the final order to the desired supplier/s with the desired specification.
Procurement is in progress
Step 7: Evaluate Product and supplier performance
Compare products with specs
Results become feedback for other stages in future business purchasing decisions
After delivery of aircraft, the supplier must do customer surveys, to determine whether or not the need was met. See figure 2
figure 2: Supplier feedback
Business Feedback Loop: Firms need to compare products with specifications. The results become feedback for other stages in future business purchasing decisions.
Environmental sustainability issues
Conservationism is concerned with harm to the ecosystem caused by global warming, resource depletion, toxic and solid wastes, litter, the availability of freshwater, and other problems. Other issues include the loss of recreational areas and the increase in health problems caused by bad air, polluted water, and chemically processed food. Countries have resorted in compiling and enforcing regulations governing industrial commercial practices affecting the environment, these laws are a framework to protect the environment from harm and any deviations or nonconformity leads to hefty penalties. Industries are striving towards environmental sustainability while generating profits without harming the environment.
A different initiative that inspires environmental sustainability:
The Aircraft Fleet Recycling Association (AFRA) assists airlines to manage unused or obsolete aeroplanes in an environmentally responsible way while maximizing their value. Unused aeroplanes are recycled through the organisation in a manner that is not harmful to the environment. AFRA states that airplanes could be recycled in a way that offered both economic advantages to operators and environmental benefits.
Plans can be put in place to reduce carbon dioxide (CO2) intensity by and eliminate hydrocarbon emissions and dust.
Focus on improving fuel and CO2 efficiency, reducing noise pollution, and developing low-carbon alternative fuels.
Airlines can achieve good returns for their retired aeroplanes while promoting responsible recycling and developing safe and sustainable solutions for the reuse of aeroplane parts and assemblies from older aeroplanes.
Investing in industry-specific Spillage kits with adequate absorptive materials.
This Report outlines the marketing framework including counteracting factors that would see the Airbus diversify and grow exponentially as an organisation. One of the biggest challenges in the aviation sector is to continue to allow the global economy to prosper and grow responsibly while diminishing effects on the global ecosystem. The challenge remains in developing a framework accommodates all the stakeholders and moves the industry forward.
The carbon footprint of the aviation industry makes up an estimated two percent of the global CO2 emissions, according to the United Nations Intergovernmental Panel on Climate Change. Market demand and competition will continue to drive new product innovation and improved fuel efficiency solutions based on technology and operational efficiency.
Air transportation plays a vital role in sustained global economic growth. An estimated eight percent of the world’s growth in the gross domestic product can be directly attributed to air travel according to IATA (International Air Transport Association)