Case analysis: SIA’s services culture

8 Agustus, 2008

Like automobiles, in the early phase of the airlines industry, airlines were regarded as the provider for basic transportation by means of air. Providing basic transportation was the core product/services of an airline, just as if Ford Motors was with the Model T cars. Thus, airlines industry had been heavily regulated by the IATA, left little room for differentiation.

Nevertheless, Singapore Airlines (SIA) management quickly realized that the only thing to differentiate them self from competing airlines was is in providing on-air services for passengers. This understanding is probably derived from the competitive nature of the company. Unlike many other airlines, SIA did not have the luxury of government protection. From the start, Singapore government mandated that SIA have to be a profitable business, competing naturally with other airlines.

To provide service, SIA first has to understand the needs and wants of its customers. Just like any other market, airlines passengers came from different consumer segments in terms of demography as well as psychography. Opportunity lay open from middle to top class and business passenger that are well accustomized to being serviced in their traveling itinerary.

Therefore, it is a good idea to bring services on air, into the cabin. First, SIA had to educate consumers that traveling is not merely moving from place to place. Traveling should be comfortable and pleasant. That is when SIA began to provide freebies in economy class: free drinks, free headsets, free amenities etc. The notion was emphasized by the ‘Singapore Girl’ campaign that portrayed the hospitality of SIA’s aircrew.

Overtime, SIA had succeeded in shifting or changing the airlines industry from focusing to core services (basic air transportation) to augmented product/services (meals, entertainment, amenities). This is only the start. SIA has to go further, building a strong foothold in services as competitors quickly follow SIA’s path.

Services Culture

SIA strength in services lies in consistency of quality across the organization. Services are not mechanical, a function, following processes written in manual books. Services in SIA are becoming a culture.

SIA began with allocating larger portion of their resources (money, time and people) for training, to build competency. Services are intangibles, performed by human thus competence is key to quality. SIA did not stop in service competencies. Services properties have to be assimilated in each person in the organization, mainly aircrews. It has to be performed with sincerity. SIA expanded their training program by emphasizing on soft skills.

Supporting the services culture is the company policy that promotes decision making by staff in handling customer’s requests. Most important, SIA developed various methods of service quality measurement so the company could keep track of what service level they have achieved, and areas need improvement. After all, you cannot manage what you cannot measure.

Later on, SIA relied heavily on research to capture customer’s insights, their needs and wants. The Kris Flyer and PPS program further deepen SIA’s ability to dig into customers mind, serve them better and build loyalty.

Complete 8P of Services Marketing

After clearly defining segmentation, target and positioning, SIA showed how the 8Ps of services marketing are applied:

  1. Product: SIA differentiate their airline from competitors with excellent in-flight services.
  2. Price: SIA pricing has been perceived as worth the value by the customer but still competitive with other airlines.
  3. Place: SIA have covered major cities in Asia, Europe, America and Australia.
  4. Promotion: The Singapore Girl campaign was a great success in projecting the experience in flying with SIA. The ad triggered a high level of recall, even higher than 40 other airlines advertisements.
  5. Process: SIA continuously improve all the service process. SIA spend 30% of resources in the products and service area to constantly reviewing systems and procedures.
  6. People: SIA is conduct intensive training for new aircrew and refreshment training for existing aircrew. SIA empowers staff to make on the spot decisions in servicing customer.
  7. Physical Environment: SIA constantly replace old aircraft with the new ones, provides personalized entertainment in economy class, and innovative seat beds for premium passengers. SIA increase the value of the service by providing the right physical environment.
  8. Productivity and Quality: SIA have various measurement systems to track their performance and quality of service.

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