MALAYSIA AIRLINES BRAND REPUTATION
By critically analyzing Malaysia Airlines and providing other case studies, this report provides adequate information to meet its aims. Company background Malaysia Airlines is the flag bearer airline of Malaysia. It was formed in 1972 after the split of Malaysia-Singapore Airlines following a disagreement between the shareholders. The shareholders of the firm were the Singaporean and Malaysian governments. These two shareholders had different growth options; the Singaporean government opted for international growth while the Malaysian government opted for domestic growth followed by regional expansion (Picard et al. Malaysia Airlines generates the biggest chunk of its revenue from the Malaysia-China route. Therefore, the loss of flight MH 370 which was en route to Beijing led to a serious dent in the firm’s financial performance (Picard et al.
Flight MH 370 had 153 Chinese citizens on board and the airline's inability to find it has caused more havoc for it. Malaysia Airlines has bagged six awards for exemplary hospitality. It was named best Asian airline in 2010, 2011 and 2013. Barely four months later, the MH 17 aircraft was shot down in Ukraine on its way to Kuala Lumpur International Airport. To add salt to injury, the airline had not been found MH 317. During this time, the firm experienced a lot of public backlashes and its sales went down tremendously. Flight cancellations also followed as customers were scared of flying with them (LeHardy and Moore, 2014). • Financial constraints – Malaysia Airlines has had financial tumbles since 2010 when its profit streak ended. the firm appointed Christoph Mueller in 2015 to lead the airline.
Barely a year into his tenure, he announced his resignation citing personal issues. The firm poached Peter Bellew to run and restore its glory given his role in Ryanair which is an Irish airline success. Peter Bellew served for almost one year before he announced his return to Ryanair where he would serve as Chief Operating Officer. In 2017, the firm announced that Izham Ismail who is a former pilot will take over the task of revamping the airline. 2) Functional components In order to build a brand reputation, a firm also has to provide high-quality goods and services. It also has to deliver these goods and services in an exceptional manner. Brand reputation built as a result of offering high-quality goods and services is harder to eliminate as compared to the creation of perceptions.
Businesses that leverage on the production of quality goods and delivery of high-quality services can build a positive brand image (Ramaswamy and Ozcan, 2016). However, those that do not deliver high-quality goods and services cannot build a positive brand reputation. These factors were vital both in building the brand reputation and destroying it. Before the crash, all aspects of Malaysia Airlines were positive including its cash flow but after the crash, things changed for the worst (Farooq et al. The same factors that applauded its positive brand reputation were vital to shaping it to where it currently stands. The RepTrak Model measures the corporate reputation of a firm using seven pillars. Below is the RepTrak Model: 1) Emotional factors The RepTrak Model measures the trust, feeling, admiration and esteem and use these parameters to calculate the brand reputation.
It is because of this positive track record that Malaysia Airlines can operate today despite the incidents in 2014 (Suki, 2014). Investing in the best aircrafts and proper service delivery aided Malaysia Airlines to achieve a positive brand reputation. 3) Corporate factors These factors include corporate citizenship, financial performance, proper leadership and governance, proper workplace policies and innovation. In the hitherto depicted period, Malaysia Airlines posted positive financial results and had increasing revenues from 2001 and in some years even posted double-digit growth (O’Connell and Williams, 2005). This improves admiration for the firm. In an industry where trust is vital such as Aviation and Banking, brand reputation is everything for a business. Having built a positive brand, Barclays PLC has been able to wither global economic recessions and depressions because depositors trust the institution as well as the Financial Conduct Authority in the United Kingdom.
Barclays PLC has posted exemplary results when other institutions in the UK struggled with losses (Mbama and Ezepue, 2018) • Managing shareholder value – Brand equity is an intangible asset. Just like intellectual property, the value of a brand is an indispensable asset to any firm. Nestle is termed as the most valuable food company on the planet although it is not the most profitable food company due to the size of its assets column (Randrianasolo, 2017). Tech giants such as Microsoft and Google, receive thousands of applications each year, therefore, they can select the best candidates from a wide selection pool (Keller, 2016). • Enhanced productivity- Firms with a positive brand image can lower their operating as a result of an increased output hence they are able to operate at an optimum.
For instance, Proctor and Gamble PLC is able to lower its production costs as a result of its brand image which makes their products more marketable and desirable. When a firm attains economies of scale such as Proctor and Gamble PLC, its costs are reduced as it attains more efficiency and thus it is more productive (Keller, 2016). Proctor and Gamble can produce more units at a lower price without harming the quality of its products. Public outcry and blame on management is among the reasons the firm could not get back on its feet. Its reputation was tarnished and it did not have any further leverage, flight cancellations followed as customers felt scared to fly using this airline. Below are recommendations that Malaysian Airlines can employ to regain its brand image in a sensitive industry such as the aviation industry: 1) By understanding its brand identity Malaysia Airlines should understand its brand and accept where it is.
The airline can adopt the brand identity prism developed by Kapferer in 2008. It is a vital tool for brand identity. Culture is the set of beliefs behind the brand. Normally these beliefs are based on the product’s country of origin. Relationship refers to the connection instilled by a brand. Reflection refers to the stereotypical user of the brand and is used as a tool for identity. Finally, self-image is the way people about themselves when using that brand (Rajagopal, 2008). It highlights the six levels of meaning that a brand is able to deliver as depicted below: Brand meaning Explanation Attributes High quality and professional service in Malaysian Airlines aircrafts. Personalized 5-star quality services. Benefits Comfort throughout the trip Value for money Values Freedom and pride in Malaysia Culture Nationalistic pride Federative connection Personality Service-oriented Professional and organized User People who pride themselves in their nation Business people looking for the best prices on international flights Conclusion This report analyses various aspects of brand reputation.
Using Malaysia Airlines as a case study, this report recommends that Malaysia Airlines can regain its lost glory by understanding its current brand identity and adopting relevant recovery strategies. This report uses various brand strengthening strategies employed by industry leaders such as the brand prism. and Dall'Olmo Riley, F. Defining a" brand": Beyond the literature with experts' interpretations. Journal of Marketing Management, 14(5), pp. Farooq, M. S. Keller, K. L. Reflections on customer-based brand equity: perspectives, progress, and priorities. AMS review, 6(1-2), pp. King, B. Deep ocean search for Malaysia airlines flight 370. In Oceans-St. John's, 2014 (pp. IEEE. Mbama, C. and Williams, G. Passengers’ perceptions of low cost airlines and full service carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines.
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