EVALUVATION OF SINGAPORE AIRLINES' USE OF NICHE MARKETING TO GROW IN THE AMERICAN MARKET

Singapore Airlines is a globally established airline operating out of Singapore. They have a fleet of 129 aircraft flying on 62 routes around the world. In 2018, they were ranked as the world’ s best airline by Skytrax. In the early 2010s, in accordance with the ambition to grow, Singapore Airlines expanded the American market with flights to the USA. This posed a challenge for the airline because of the geographical distance between Singapore and North America With the A350-900 ULR, Singapore Airlines restarted its route to New York with the same ambition of expanding into the American market. However, this time the route only offered business class and premium economy to target, using segmentation as a means to grow in the American market. Thus through secondary research, I aim to find out: How effective has been Singapore Airlines’ decision to reopen the New York route to expand in the American Market through segmentation? This research paper aims to evaluate the effectiveness of Singapore Airlines’ strategy to expand into the American Market by targeting a new market segment. The success of failure of this strategy implemented by Singapore Airlines would determine whether or not the strategy of segmentation on ultra-long-haul flights can be replicated by other airlines. Hence, this research is significant as the findings may predict the future of ultra-long-haul flights such. The research found that the nature of

Singapore Airlines is a globally established airline operating out of Singapore. They have a fleet of 129 aircraft flying on 62 routes around the world. In 2018, they were ranked as the world' s best airline by Skytrax. In the early 2010s, in accordance with the ambition to grow, Singapore Airlines expanded the American market with flights to the USA. This posed a challenge for the airline because of the geographical distance between Singapore and North America With the A350-900 ULR, Singapore Airlines restarted its route to New York with the same ambition of expanding into the American market. However, this time the route only offered business class and premium economy to target, using segmentation as a means to grow in the American market. Thus through secondary research, I aim to find out: How effective has been Singapore Airlines' decision to reopen the New York route to expand in the American Market through segmentation? This research paper aims to evaluate the effectiveness of Singapore Airlines' strategy to expand into the American Market by targeting a new market segment. The success of failure of this strategy implemented by Singapore Airlines would determine whether or not the strategy of segmentation on ultra-long-haul flights can be replicated by other airlines. Hence, this research is significant as the findings may predict the future of ultra-long-haul flights such. The research found that the nature of the cities of New York and Singapore, innovation leading to the birth of the A350-900ULR, and an effective marketing mix employed created the perfect storm for Singapore Airlines to use segmentation to grow in the American market successfully. To understand the significance of the introduction of the route by SIA and to evaluate the extended marketing mix implemented. Market Reports 9 "Airbus Developing Ultra-Long Haul A350-900 Variant for Singapore Airlines." CAPA -Centre for Aviation, 18 Aug. 2015, centreforaviation.com/news/airbus-developing-ultra-long-haul-a350-900-variant-for-singapore-airlines-474426. Date Accessed: 12 July 2019 10 Airbus. "Airbus Launches New Ultra Long Range Version of the A350-900."Airbus, 19 Sept. 2018, www.airbus.com/newsroom/press-releases/en/2015/10/airbus-launches-new-ultra-long-range-version-of-the-a350-900.html. Date Accessed:10 July 2019 11 "Singapore Airlines to Resume Non-Stop US Services with A350-900ULR: a Strategic Imperative." CAPA -Centre for Aviation, 14 Oct. 2015, centreforaviation.com/analysis/reports/singapore-airlines-to-resume-non-stop-usservices-with-a350-900-ulr-a-strategic-imperative-248462. Date Accessed:23 May 2019 12 "Singapore Airlines to Boost US Premium Capacity with Singapore-Newark Service." CAPA -Centre for Aviation, 31 May 2018, centreforaviation.com/news/singapore-airlines-to-boost-us-premium-capacity-withsingapore-newark-service-806073. Date Accessed: 23 To interpret consumer behaviour of business travellers  To analyseSIA"s competition  To understand the advantage gained by using the A350-900 ULR  Aircraft  Existing Studies To discern segmentation and similar strategies adopted by other airlines.

Financial Reports
To understand the impact of SIA"s strategy on the annual revenue of the airline Existing Interviews of SIA Executives To obtain SIA"s perspectives Supporting Primary Source Email to SIA To determine SIA"s perspective on the financial performance of the route

Evaluation of Methodology:
To determine the authenticity, accuracy, and credibility of the information obtained would be cross-examined by checking it across varied sources. In order to analyse a source and identify its limitation, the origin, purpose, value and limitation of each source would be determined before data can be extracted. This would allow to bring in perspectives and determine the correct value and limitations of sources chosen, adding depth to the research. The financial information obtained is often window dressed, thus multiple sources will be looked at to validate it. The financial information obtained only limits to sales revenue, thus an email correspondence will be used to get official acknowledgement of the financial performance route.

Analysis and Discussion:-
Product and Market Development "The Ansoff matrix (1957) is an analytical tool to devise product and market growth strategies, depending on whether businesses want to market new or existing products in new or existing markets 19 ." The Ansoff Matrix is used to analyse the growth strategy implemented by SIA. SIA wanted to achieve growth in the American Marketorganicallyby increases operations 21  product of "the premium Singapore-New York route 22 " with an altered marketing mix.Thus, the strategy of product development is implemented.
Another perspective on SIA"s strategy would be that with the new route, by not focusing on economy passenger, focuses on targeting a new segment of business travellers 23 , who travel more frequently, tend to minimize travel time, and prefer quality, comfort, and convenience over price. 24 . Thus, one may consider SIA"s strategy to be market development 25 .
SIA has used this strategy in a highly competitive market to gain an advantage by challenging some existing players like Delta Airlines with the thrust of offering direct flights. SIA intensified the competition in the market, leading Delta to decide to pull out services from the route 26 .
Both strategies are medium risk, as in both cases there is an unknown variable. In the case of product development SIA was unaware of how the customers will perceive and respond to a premium route; in market development, SIA was unaware about the behaviour and expectations of the new market of business travellers.
Although the strategy in both views holds medium risk, SIA decided to implement the strategy effectively by segmenting theAmerica Market to focus on business travellers.

Using Segmentation to Target Business Travelers:
"Market segmentation is the process of splitting the market into distinct consumer groups to better meet their needs" 27 . SIA segmented the market by using demographic, geographic, and psychographic segmentation . "In demographic segmentation, the market is divided into groups on the basis of age, income, occupation, nationality, family life cycle, and social class 28 ." "Geographic segmentation calls for dividing the market into different geographic units such as nations, states, regions, or cities 29 ." "In psychographic segmentation, buyers are divided into different groups on the basis of lifestyle or personality and values or habits 30 ."In doing so, they have created a consumer profile, "a description of a customer or set of customers that includes demographic, geographic, and psychographic characteristics, as well as buying patterns, creditworthiness, and purchase history. 31 Oct-2016." CAPA -Centre for Aviation, 16 June 2016, centreforaviation.com/news/singapore-airlines-to-commence-nonstop-singapore-sanfrancisco-service-in-oct-2016-565891. Date Accessed: 26 Apr. 2019 26 Wei, Toh Ting. "US Carrier Delta Air Lines Set to Exit Singapore Market.", The Straits Times, 3 Aug. 2019, www.straitstimes.com/singapore/transport/us-carrier-delta-air-lines-set-to-exit-singapore-market. Date Accessed: 3 Oct. 2019 *For the purpose of this essay, "product" refers to "service", which is the route. As segmentation on this route satisfies DAMAS (Differential, Actionable, Measurable, Accessible, Substantial) 37 , a set of criteria for assessing successful market segmentation, it can be concluded that the market has been segmented appropriately.
SIA has assessed consumer profitability and has identified the business travellers as its key market segment to successfully tap with the "premium" route to grow in the American Market.
It can be inferred that the newly launched route is profitable for SIA. Using the A350-900 ULR minimises operating costs 40 , which increase SIA"s profit margins. SIA have made the mistake of operating this route when it was unprofitable, the relaunch indicates that it may indicate the route"s profitability, as one can infer that SIA learnt from its mistake.
Business Travellers are highly profitable consumers. Statistics show that approximately 80% of revenue for most airlines comes from business travellers 41 , as they are willing and able to pay a high price for high quality service. Furthermore,they regular and repeat travellers who stay loyal to their preferred airline by following of airline loyalty programmes 42 .
Cell C 1 P 1 symbolises selling profitable business class seats on the route to high profit business travellers to yield maximum profitability.
As business travellers make up a small fraction of the broader American Market, SIA followed the strategy of Niche Marketing 43 , targeting a specific and well-defined market segment of business travellers 44 .To offer a value proposition to its target market, SIA modified its marketing mix on the route.
However, the Niche Market of business travellers does not offer a wide scope for growth since the market is significantly smaller and is growing slower rate than the broader market 45 . It may be argued that substantial growth may not be possible in the American Market by solely targeting business travellers, as the target market may be saturated in the long-run once SIA has established themselves. If SIA intent to significantly increase the volume of passengers carried in the American Market, segmentation may be ineffective.
Segmentation is followed by targeting. "Targeting refers to the market segment(s) that a business wishes to sell to. Appropriate marketing strategies are then developed for these target markets" 46 The effectiveness of segmentation strategy can be ascertained by The Marketing Funnel. "The Marketing Funnel highlights the progression of the the target market at each from aware to loyal 48 ."In addition to attracting new customers, It is vital for SIA to retain and harvest sales from existing ones. This aligns with its objective to strengthen its premium position and build brand loyalty 49 . Satisfied customers are SIA"s customer relationship capital or relational capital, "one of the three components of intellectual capital, and the value created by having, nurturing , and managing a company's relationships with its customers. 50" The analysis of the marketing funnel indicates that most of the consumers of SIA on the route are Triers and Recent Users, as the route was launched recently 51 .However, the analysis has limitations since it makes a generalization about SIA"s target market. It is likely that SIA, with its global reputation and prominent frequent flyer programme 52 , already has loyal customers on this route who frequently travel on the route.
To convert Triers and Recent Users into Most Often Used and Loyal customers, SIA has alteredelements its marketing mix to strengthen its premium position to grow in the American Market by appealing to business travellers.

Elements of the Marketing Mix:
To decipher how SIAhas manipulated the marketing mix to target business travellers the seven Ps model is used 53 . "The seven Ps model refers to the marketing of services, such as flights, which includes three additional Ps (people, processes and physical evidence) with 4Ps in the marketing mix (product, price, promotion and place). 54 "

Product:
The product is the "premium" service offered between Singapore and New York by SIAthrough the use of the A350-900ULR, 5556 SIA improves operating efficiency, which maximize the profit margin on this route, making the In addition, the route fills a gap in the market that was created when it was previously closed. Furthermore, the product is credible as SIA is the "world"s best airline," as ranked by Skytrax in 2018. 57 The SIAis the only airline that offers non-stop flights on the route, 60 implying that the demand is relatively price inelastic due to lack of competition 61 . Operating a non-stop flight is a USP, the main aspect of the service that differentiates SIA from competing airlines. Furthermore, business travelers are relatively price insensitive 6263 . This suggest that SIA can charge higher prices to obtain greater total revenue. But the data above indicates that the non-stop flight is competitively priced ate $5,361 which is 12% lower than the 1 stop fight offered by China Eastern Airlines at $6,085.
However, one can infer that in order to prevent the price from dissuading consumers from choosing SIA, the price is kept competitive. This indicates that SIA is using segmentation to an extent, as they are keeping the price competitive to potentially attract customers from the broader market interested in SIA"s offering, encouraging potential customers to try SIA"s offering. This has allowed SIA to become a priority choice, leading SIA to effectively position itself in the minds of the target market by offering them a valued proposition.However, the analysis of pricing has limitations, as pricesoffered by airlines are dynamicin nature and tend to change depending on season and availability.

Place:
For the purpose of the study "place" refers to the destinations of this route. Targeting business travelers was a good decision as thetwo cities of Singapore and New York are global financial hubs 64 with high levels of commercial activity that creates a presence of business travelers. The route is also attractive to those working on the East Coast in cities like Boston, as it is the only direct connection to Singapore. This makes the route feasible 65 and ensures traffic on the route to generate enough revenue for SIA to grow, expand, and increase its presence in the American market.

Promotion:
To generate brand loyalty and preference from the target segment, SIA focused on usage of below the line promotion in the form of a "Corporate Travel Programme" to target business travelers by meeting the travel needs of large businesses 6667 .In addition, SIA promotes the route with its Highflyer business loyalty programme 68 , proving members 5 points for every $0.7 spent.SIA uses above the line promotion to create awareness for the route through emails, print ads, and social media.Also, the routecreatesrecognitionforitself for beingthe world"s longest flight 69 , which has allowed SIA to gain valuable coverage from the media.

People:
Delivering high on quality quotient to keep the route "premium", SIA crewmaintains a high service standard, ensuring the best experience for itspassengers. Its crew was ranked as the best in the world by Skytrax in 2018 70 . A high-quality personalized service from the crew keeps consumers satisfied, increasing brand loyalty andgenerating referrals. This enables SIA to make customers progress along the marketing funnel.

Process:
The process consists refers to the inflight service and facilities. The product caters to people for whom "time is money" 71 , offering convenience to business travelers wanting minimize travel time with a direct flight 72 .SIA have stated, "the route was designed with customers well-being in mind 73 ," indicating that SIA are following a marketoriented approach by focusing on the needs of business travelers. "Lie-flat beds" catch sleep and "in-flight wi-fi" offers connectivity vital for business travelers. Lounge access, gourmet dining, and a powerful entertainment system add to the amenities 74 . These features indicate that SIA assure seamless experience to the traveler as suggested by reviews online 7576 , enabling the airline to differentiateits offering from competitors and gain a competitive edge

Physical Evidence:
The business class seats, ranked as the best business class seat in Asia by Skytrax 78 , and the comfortable cabin of the new A350-900 ULR ensure comfort 7980 . Furthermore, the dining experience has won the Kayak award for "favorite inflight food and beverage" 81 .
Modifying the marketing mix to focus on business travellers enables SIA to provide high quality service, setting a benchmarkand gaining a competitive advantage. Aligning with SIA"s mission statement 82 , this strategy provides high quality services to business travelers. This has led SIA to effectively create value for target consumers and prospects available to enhance the return on customers. The analysis indicates that the marketing mix to appeals to business travellers, which is essential to effectively carry out segmentation to achieve growth.Without altering the marketing mix, SIA may not be able to target business travellers. With the altered marketing mix, SIA follow service differentiation, "the act of designing a set of meaningful differences to distinguish the company"s service offering from competitors" service offerings 83 ." Through this SIA is able to makeits offering relativelyunique.
Porters Generic Strategies: Figure 9:-Porter"s Generic Strategies 84 "Porter suggested four "generic" business strategies that could be used to gain competitive advantage. The strategies relate to the extent to which the scope of a business' activities are narrow versus broad and the extent to which a business seeks to differentiate its products 85 ."SIA targets the relatively narrow market segment of business travellers with the Singapore-New York route, which is made unique with the modified marketing mix, implying that SIA is following a focused differentiation strategy.

Focus Strategy: Differentiation:
A differentiated service offering focusing on the needs of business travelers allows SIA to position itself as a premium high-qualityservice in the minds of the target market. This appeals to business travellers 86 , who prefer quality, allowing SIA to gain a competitive advantage.
A. SIA"s Premium Positioning on the Singapore-New York Route SIA has effectively positioned itself as a premium service offering to appeal to business travellers. "Positioning is the act of designing the company"s offering and image to occupy a distinctive place in the target market"s mind. The end result of positioning is the successful creation of a market-focused value proposition, a cogent reason why the target market should buy the product. 87 " The positioning map was created by using pricing data 88 previously analysed and official airline ratings from Skytrax 89 . However, since pricing is dynamic and perception of airlines varies, this analysis is limited. Regardless, it depicts how SIA have positioned themselves in the 1 st quadrant as a premiumservice. This suggests that the claims made by the airline are genuine 90 . The positioning map indicates that introducing this route has allowed SIA to meet its strategic objective of strengthening its premium position 91 .

Quantitative Effectiveness:
In order to determine how effective, the strategy of segmentation to grow in the American market has been, data from SIA"s financial reportbefore and after the route was launched would be compared 92 .
After the route was launched, the number of weekly flights offered in American Market rose to 72 from 65 93 , an 11% increase.   Revenue from America between April 2018 and April 2019, after the route was introduced, has increased from $1,140.30 Million to $1,548.20 Million, a $407.90, 36%, increase; however, this data is not available exclusively for the specified route. Therefore, the exact quantitative contribution of the new route towards the increase in revenue cannot be determined. Furthermore, this data does not explicitly state that SIA is growing by targeting new consumer groups more effectively through segmentation. Although, several sources suggest that the routehas been successful 96979899100101 .
Another reason for this growth may be the influence of external factors,like higher costs from competing airlines and greater revenue being generated from SIA"s other routes in America. Despite this, by viewing SIA"s position in the American Market before they implemented this strategy, it can be stated that significant growth was achieved after this strategy was implemented.
Another perspective to the analysis is flight occupancy on routes operating in the American Market.  This chart shows that the flight occupancy has increased after the Singapore-New York route was launched. However, the increase in flight occupancy has been consistent for the 2 years. Hence, there is no evidence to suggest that the new route has increased flight occupancy. Furthermore, there is no link between market growth and flight occupancy. Nevertheless, since flight occupancy is not maximised it can be inferred there is greater potential for growth in the American Market 103 .
In 2018-19, post the introduction of the Singapore-New York route, SIA carried 59,000 more passengers in the American Market than they did in 2017-18 104 , implying a possible increase in market share. Post the introduction of the route, the number of passengers in the American Market has increased. Naturally the new route contributed to the increasing number of passengers; however, the exact contribution cannot be determined.
Furthermore, the revenue per passenger per kilometre has increased by 7.7% after the Singapore-New York route was launched 105 . This serves as evidence for the fact that the use of segmentation is vital for growth in the American Market. Segmentation targets business travellers, who pay a higher price than economy class passengers on other SIA routes in the American market 106 . Therefore, by carrying more business class passengers SIA generates more revenue by averaging greater revenue per passenger per kilometre.
The analysis of the data suggests that SIA"s decision to reopen the New York route to grow in the American Market through segmentation has been effective 107 . This is also evidenced by the email 108  Occupancy % on American Market routes flight has "delivered solid load factors" and is "performing within expectations." Furthermore, the SIA"s recent decision to increase the number of weekly Singapore-New York flights by using another A350-900ULR aircraft suggests that the strategy has been successfulfor SIA 109 .
The data used has limitations. SIA"s improved performance in the American market could be caused because of better performance on SIA"s other routes in the American Market such as flights to Los Angeles, San Francisco, Seattle and Houston 110 . The extent to which these routes contributed towards growth in the American Market cannot be determined.
The positive performance in all indicators evaluated suggests that the strategy aligns with SIA"s objective of maximising returns for shareholders. SIA"s newly launched route certainly contributes towards growth in the American Market; however, the extent of the contribution cannot be determined.

Conclusion:-
"How effective has been Singapore Airlines" decision to relaunch the New York route to grow in the American Market through Segmentation?" The research concluded that the use of segmentation played a vital role for SIA to achieve growth in the in the American Market. Using the technological advancement of the A350-900ULR to launch the non-stop route for business travellers has allowed SIA to strengthen its premium position. Demographic segmentation has ensured that the target market has the ability to pay a higher price for the "premium" non-stop route. Geographic segmentation is used to ensure that there is traffic on the route. Psychographic segmentation is used to target passengers who value comfort, quality, and convenience over price as well as brand loyal members of the KrisFlyerprogramme.
Geographic, demographic, and psychographic segmentation forced SIA to modify its marketing mix to appeal and provide a value proposition to business travellers. This has enabled SIA to offer better customer service that differentiatingit from other airlines by positioning itself as premium high-quality service on the Singapore-New York route, allowing SIA to ensure high consumer satisfaction and retain customers. This in turn gave SIA a competitive advantage. This ensures that the target market progresses from aware to loyal on the marketing funnel, which will strengthen SIA"s premium position. This has allowed SIA to accomplish its mission 111 of delivering services of the highest quality to its customers.
Finally, the analysis of the quantitative effectiveness found that SIA"s strategy has been successful, maximising returns for the benefit of its shareholders and employees. There has been a positive impact on revenue, passengers carried, occupancy, and revenue per kilometre per passenger; however, the data used to reach this judgement has limitations as it is not specific to the route. Regardless of the fact that the exact contribution of the route towards growth in the American Market cannot be determined, all parameters evaluated suggested that the route played a vital part in achieving growth in a competitive market.
In conclusion, the nature of the cities of New York and Singapore, innovation leading to the birth of the A350-900ULR, and an effective marketing mix employed to appeal to business travellers created the perfect storm for SIA to use segmentation to successfully grow in the American Market. Bibliography:-