Biman Bangladesh Airlines limited

Project Report

On

Present Marketing Strategy Analysis and Future Strategic

Planning for Biman Bangladesh Airlines

Submitted to:

Mohiuddin Ahmed
DGM Training
Management Development Department

Submitted by:

Iqbal Ahmed Chowdhury, P-33750, Asst. Manager Commercial

A.Z.M. Shamsul Alam, P-34210, Manager Commercial
Md. Lutfor Rahman, P-35577, Engineer Officer
Md. Humayun Kabir, G-50500, System Engineer

December 18, 2018

 Transmittal Letter
December 18, 2018

Mohiuddin Ahmed
DGM Training
Management Development Department
Bangladesh Airlines Training Center

Subject: Submission of Project Report

Dear Sir:

Submitting to you is the project report on “Present Marketing Strategy Analysis and Future
Strategic Planning for Biman Bangladesh Airlines”. We are pleased to present you this report
as a partial requirement of the Senior Management Course.

We have enjoyed working on this report and hope that our work will meet the level of your
expectations.

We will be available at any-time for any further query.

Sincerely Yours,

1. Iqbal Ahmed Chowdhury, P-33750, Asst. Manager Commercial

2. A.Z.M. Shamsul Alam, P-34210, Manager Commercial
3. Md. Lutfor Rahman, P-35577, Engineer Officer
4. Md. Humayun Kabir, G-50500, System Engineer

Page 2 of 25
 Acknowledgements
First of all, we would like to gratify the almighty, for whose endless mercy we could
complete this report successfully.

Although a few words are not enough to express our thanks, we are profoundly grateful to
our project supervisor Mr. Mohiuddin Ahmed, DGM training for his valuable advice,
encouragement, and continuous supervision during the course of our work.

We express our gratitude to Dr. Partha Kumar Pandit, Principal BATC for giving us
opportunity to conduct this project on a topic which is very burning issue for Biman. We
also thank Mrs Sabina Sharmin, Manager Training, Management development and all
instructor of BATC and the guest speakers to sharing their knowledge.

In preparing this report, we received active co-operations from the Managers and Officers
of Biman Bangladesh Airlines Limited. We sincerely express our heart-felt gratitude for their
co-operation, which help us to conduct the project and complete this report. However, we
thank in particular Mr. Ashraful Alam, Director marketing and Sales of Biman Bangladesh
Airlines for his nice interview and support to this project work.

We would like to acknowledge the support of Biman Market Research section for providing
necessary information about promotional activities of Biman Bangladesh Airlines.

1. Iqbal Ahmed Chowdhury, P-33750, Asst. Manager Commercial

2. A.Z.M. Shamsul Alam, P-34210, Manager Commercial
3. Md. Lutfor Rahman, P-35577, Engineer Officer
4. Md. Humayun Kabir, G-50500, System Engineer

Page 3 of 25
 Executive Summary
Bangladesh has an aviation market of about 3.5 million passengers in respect of passenger
travel and about 10 million tons in respect of cargo .The market is expanding rapidly but due
to the different cause Biman Bangladesh Airlines, the national flag carrier has lost its
reputation and carrying less portion of the market. Biman is very much bureaucratic which
makes delay in providing service to its customers.

To help Biman move out from its old-fashioned way of management, to accommodate the
future opportunities and to avert the current crisis and threats, it is extremely essential for
Biman to undertake some immediate strategic initiatives such as policy revise
modernization, proper planning, and service improvement.

The main aim of the project was to analyse the effectiveness of current Marketing Strategy
and to evaluate the need for planning of future Strategy for Biman Bangladesh Airlines.
Moving forward, we have found that Biman has a very good Brand Personality, though,
unfortunately, the product is not very well positioned in the consumers’ perception.
Analysis suggests formulation of dual strategy like Differentiation through service excellence
and innovation together with Focus strategy through Differentiated market targeting for
customer retention. However, recently Biman has taken some marketing initiatives to retain
and improve customer satisfaction. Considering the present conditions, some suggestions
have been made though it is really tough to comment any issue perfectly in this small work.

Page 4 of 25
 Table of Contents
Transmittal Letter 2
Acknowledgements 3
Executive Summary 4
Table of Contents 5

1 Introduction 7
1.1 Objective of the project
1.1.1 Broad objective
1.1.2 Specific objective
1.2 Scope of the project
1.3 Limitations

2 Organizational Overview of Biman Bangladesh Airlines 8

2.1 Corporate profile
2.2 Vision and mission, and objective
2.3 Biman Organizational structure
2.3.1 Executive body
2.3.2 Operational networks
2.4 Activities of Biman Marketing and Sales Directorate

3 Methodology 13
3.1 Data collection method
3.1.1 Primary data sources
3.1.2 Secondary data sources
3.2 Research Approach

4 Analysis and Findings 14

4.1 Strategic Analysis
4.1.1 Definition of marketing strategy
4.1.2 SWOT analysis of Biman
4.1.3 Competitive environment analysis
4.1.4 Financial performance analysis
4.1.5 How well is the present strategy working?
4.1.6 4 P’s of Marketing
4.2 Findings
4.2.1 Findings through literature review
4.2.2 Findings through analysis

Page 5 of 25
5 Strategy Proposal 22
5.1 Recommended Marketing Strategy
5.1.1 Restatement of vision and mission
5.1.2 Formulation of new Marketing Strategy
5.1.3 Strategic action plan and future positioning
5.1.4 Suggested IMC mix
5.1.5 Others Recommendations
5.2 Conclusions

Bibliography 25

Page 6 of 25
1 Introduction

1.1 Objective of the project

1.1.1 Broad Objective

The objective of the project incorporates analysing the effectiveness of current Marketing
Strategy and to evaluate the need for planning of future Strategy for Biman Bangladesh
Airlines.

1.1.2 Specific Objective

The project is positioned towards achieving the following specific objectives:

a) To understand and define the present marketing strategy adopted by Biman

Bangladesh Airlines.
b) To evaluate the effectiveness of current marketing strategy of Biman Bangladesh
Airlines in terms of it’s Vision, Mission, and Profitability.
c) To find out a suitable marketing strategy, if required, that should be formulated by
Biman Bangladesh Airlines in future to be a successful airline.

1.2 Scope of the project

The scope of the project is to know and analyse the marketing strategy of Biman Bangladesh
Airlines Limited. Present marketing strategy of Biman Bangladesh Airlines has been defined
primarily based on literature review and interview with Biman marketing veterans. Strategic
analysis has been done by SWOT analysis and Porter’s five-force model. The effectiveness of
current strategy has been scrutinized in terms of Biman’s Vision, Mission, and financial
performance analysis. Marketing mix has been analysed; however, detail PESTEL analysis
has not been done. No SFA analysis between probable strategic alternatives has been
performed.

1.3 Limitations
Every research has some limitations. Despite our pursuit for a holistic view on the problem
at hand, due to certain limitations, we could not conduct extensive market research. As
such, findings may not reflect a general norm, and give significant results. Necessary data
and information are neither adequate nor well-furnished. We couldn’t manage sufficient
financial data relating to the cost of route analysis and yield management. Most of our
analysis and suggestions are on the basis of exploratory empirical studies. So, it is difficult to
make specific recommendation about future Marketing Strategy within the existing scope of
the project i.e., without conducting the SFA analysis. Moreover, most of the
recommendations made are up to some extent generic, rather than being specific.

Page 7 of 25
2 Company Overview of Biman Bangladesh Airlines
2.1 Corporate Profile
Biman Bangladesh Airlines, the national flag carrier of Bangladesh has started its journey
from scratch virtually with no aircraft, no ancillaries. It came into operation immediately
after the war of independence. Despite many odds on its journey towards a long and
challenging way to progress, Biman has been able to establish its reputation as an airline of
welcome smile and an ocean of hospitality. Its main hub is at Hazrat Shahjalal International
Airport in Dhaka, and also operates flights from Shah Amanat International Airport in
Chittagong, earning revenue from the connecting service to Osmani International Airport in
Sylhet. Biman's operations are assignedthe IATA airline code BG and the ICAO airline code
BBC, while its call sings is BANGLADESH. The carrier provides international passenger and
cargo service to Asia and Europe, as well as to major domestic routes. It has air service
agreements with 53 countries, but flies to only 15, though it is planning for route expansion
to CAN, MED, MLE, CMB, YYZ, NYC, ROM, MAN, DEL, DPS, TYO etc. in future.

The airline was wholly owned and managed by the government of Bangladesh until 23 July
2007, when it was transformed into the country's largest public limited company bythe
Caretaker Government of Bangladesh. The airline's headquarters, Balaka Bhaban, is located
in Kurmitola, Dhaka. The authorized share capital of the company is Tk. 150,000,000,000
divided into 1500,000,000 ordinary shares of Tk. 100 each as per Memorandum and Articles
of Association.

Presently Biman has three Dash 8, four 737-800, four 777-300ER, and two 787-8 aircraft in
its fleet. Biman is in the process of procuring more new generation aircraft such as 787-8
and 737-800 for its fleet. Two more Boeing 787-8 aircraft will be joined in Biman fleet in
2019. Annual Hajj flights, transporting non-resident Bangladeshi workers and migrants, and
the activities of its subsidiaries, form an important part of the carrier’s business.

In addition to its own aircraft, Biman’s ground-handling unit also provides support to
Singapore Airlines, Thai Airways, Malaysia Airlines, Qatar Airways, Emirates, Kuwait Airways,
Oman Air, Saudia, Gulf Air, PIA, Indian Airlines, Dragon Air, Druk Air, etc. at Hazrat Shahjalal
International Airport, Dhaka.

Biman Flight Catering Center (BFCC) has the capacity of producing 8500 meals a day and is
providing cuisine not only to Biman but also to Saudia, Etihad, Malaysia Airlines, Thai
Airways, Emirates, Dragon Air and China Southern Airlines.

Page 8 of 25
The airline’s Reservation and Departure Control System and other communication systems
are fully computerized. Biman is now striving to make the airline more attractive to its
valued passengers by fixing priority on providing more comfort and maintaining schedule
regularity.

Under Skytrax’s five-star rating systems, Biman merits two stars. The carrier is currently
facing competition from local private airlines & some international carriers, which offer
greater reliability and service standards, which is experiencing an 8% annual growth rate,
owing to a large number of non-resident Bangladeshis.

Biman now carries the national flag of Bangladesh to South Asia, South-East Asia and Far-
East, Gulf and Middle-East region and European Countries. A steady progress has been
made with better services ensuring increased passengers. To make Biman passengers feel
“once Biman always Biman” the airline has recently brought in some qualitative changes in
its service concept. Biman has been aiming in achieving the goal of being truly international
commercially viable airline of the region with its warmth and friendliness, care, safety
record, traditional hospitality and comfort of the services it offered. Biman is now flying
even higher with great pride around the globe with the bi-color, the nation’s flag.

Biman is pleased to offer a fine array of duty-free goods on its international flights. Besides,
Biman offers extensive in-flight entertainment for your enjoyment on International Flights.
Biman has introduced online frequent flyer scheme and will continue to improve services
and performance to attract passengers who would choose Biman for their second journey.

2.2 Vision and Mission

Vision:

To establish Biman Bangladesh Airlines in the aviation market as a world-class airlines

Mission:

To provide safe, Reliable, Efficient and Economical air transport services and to satisfy
customer’s exceptions while earning sustainable profit and continuing to be a caring
employer.

Objective:

To provide and develop Safe, Efficient, Adequate, Economical and properly coordinated air
transport services, internal as well as international.

Brand Name and logo:

Biman Bangladesh Airlines; White stork flying across the red sun

Page 9 of 25
2.3 Biman Organizational structure

The airline has been wholly owned by the Bangladesh government through the Bangladesh
Biman Corporation since its inception. In 1977, Biman was converted into a public sector
corporation which afforded Biman limited autonomy, governed by a board of directors
appointed by the government. The authorized share capital was increased to Tk. 2 billion in
1987, and Biman was transformed into a public limited company,the largest in Bangladesh,
in 2007.Biman has a multi-level organization structure. The board of directors headed by
the Chairman is the highest authority where CEO is the top management. It has about 5
layer management supervision. Authority is delegated from highest to downward level.

2.3.1 Executive body

According to the company’s organogram, the Managing Director (MD) is the Chief Executive
Officer (CEO) of Biman. There are eight directorates in Biman – Administration, Finance,
Flight operations, Procurement and logistics support, Customer service, Engineering and
Material Management, Project &Planning, and Marketing & Sales – each headed by an
appointed Executive Director of its own. Biman’s management and most of the financial
matters fall under the responsibility of this eight-member Executive Board.

2.3.2 Operational networks

Biman has 202 approved local travel agents - 140 in Dhaka, 32 in Chittagong and 30 in
Sylhet. Biman also has 120 travel agents in nine foreign stations - Thailand, UK and Ireland,
USA, Singapore, Nepal, Germany, Japan/Korea, Canada, and France. Moreover, Biman has
317 Travel Agents Portal (TAP) agents. Besides, Biman has 10 General Sales Agents (GSA) all
over the world. Biman had 23 destinations in its network including 08 domestic
destinations. Due to continuous losses, operation on some destinations was suspended.
This initiative decreased losses. With the introduction of additional aircraft, some of the
suspended routes have been revived. Operation to New York is expected to resume soon.

2.4 Activities of Biman Marketing and Sales Directorate

As a part of the re-organization plan, restructuring of the Marketing Department has been
undertaken to prepare the airline for the highly competitive market environment. The
reorganized Marketing approach places emphasis on revenues from income streams of
passenger, Cargo and other businesses. This directorate comprises the sales, cargo, and
marketing department of which market research section, the tariff, pricing and e-ticketing
section, communication, and reservation section are the constituent. The Responsibilities of
the Market Research section are:
- Collect the Flight performance report in a telex version from traffic
- Plot the collected data in an informative version into the manual sheet
- Convert and compile the data in computerized form to a presentable report

Page 10 of 25
- Compare the flight performance report with that of other foreign carriers provided by
Performance Intelligence Service Association
- Conduct gap analysis and provide report regarding any short fall or surplus with proper
justification

- Conduct analysis for new route and recommend the management

Page 11 of 25
- Prepare budget for the company

Responsibilities of tariff, pricing and e-ticketing section are as follows:

- Fix, revise the price through STC (Special Tariff Committee) by arranging weekly meeting
- Update the revised price in system through GDS (Global Distribution System) weekly
- Update pricing rules and regulation timely
- Maintain liaison with different foreign carriers with the help of SPA (Special Prorate
Agreement) and SRA (Special Re protecting Agreement)
- Develop the system software for launching e-ticketing

To create awareness and to bring Biman to the door of customers, promotional work must
be run on properly and timely. Biman Marketing is not an exception to this. Each and every
year a lot of money is spent for the promotional purpose. Several initiatives are taken every
year to attract more customers to fly with Biman. The followings are some of the initiatives
that the directorate takes: Tourism Travel Fair, Special Offers in different occasions
especially in off-pick time, Newspaper Ad/ Magazines, Radio/TV Advertisement, Car
Advertisement, Sponsorship, Media Conference etc.

The recent major service upgradation of this directorate are E-Ticketing, Internet Booking
Engine (IBE), migration of reservation and SITATEX Services from old generations, Billing &
Settlement Plan (BSP), Cargo Accounts Settlements Systems (CASS), Passenger Intelligence
Services (PaxIS) etc.

Page 12 of 25
3 Methodology
3.1 Data collection method
In this study, both primary and secondary data were used.

3.1.1 Primary Data Sources:

Primary data sources include direct personal observation as two of the team members are
employee of Marketing Section, In-depth interviews with Marketing veterans and data from
revenue section. Several Focused group discussion (FGD) have also been performed. All
sorts of accessible data in the Market Research section of Biman has also been consulted.

3.1.2 Secondary data Sources:

The Secondary sources of data include Annual Report of Biman Bangladesh Airlines Limited,
its Website, literature review, and relevant information published in various newspapers.

3.2 Research approach

This research is an exploratory research. Therefore, the qualitative single-case study
research approach is pursued. Primarily qualitative though a significant number of
quantitative data has been utilized. Direct observations, interviews, and Focused Group
Discussion (FGD) are some of the qualitative approaches taken. Both formal and informal
interview methods were adopted to collect qualitative information concerning various
aspects of current marketing strategy and promotional activities. Besides, we interviewed
several marketing veterans including Biman executives and arranged FGD to help us find out
the right methodology.

Page 13 of 25
4 Analysis and findings
4.1 Strategic Analysis

4.1.1 Definition of marketing strategy

Strategy refers to the choice of business model through which the organization will
compete in the marketplace. Basically, it’s a way of positioning the product or
services,

Several Types of strategy:

 Product diversification

 Product Differenciation

 Niche Marketing

 Low cost provider

 Best service provider

Page 14 of 25
4.1.2 SWOT analysis of Biman

Strengths and Weakness Related Internal environmental elements

Strengths

 Technological resources
A. Biman has new generation aircraft such as Boeing 777
300ER, 787-8 and 737-800 to its fleet.
 Human Resources
B. Experienced manpower/technical personnel
 Physical & financial resources
C. Privileged with Govt. supports

D. Good brand image and ethnic customers’ loyalty

E. Well infrastructure as an airline including well standard

training center

Weakness

A. High political intervention in operation  Human Resources

B. Lack of motivation among personnel  Management

C. Lack of efficiency in management and coordination  Organizational culture

among departments

D. Absence of sales plan and public relation activities.

Page 15 of 25
 Related External environmental
OPPORTUNITY AND THREAT
elements

Opportunities

 Demographic
A. Unexplored market in different parts of environment
world
 Socio-cultural environment
General Environment B. Tourist sectors are expanding; people
Opportunities  Competitors
are getting more affordable than ever
before; Pilgrim travel (Hajj and Umrah is
 Substitute product
also increasing)

A. More anticipated traffic to Qatar in

occasion of World Cup Football 2020

B. Exit of Etihad from Bangladesh, British

Industry Environment airways from Dhaka to London direct
Opportunities route operation provide chance to gain
more market share

C. Can be a potential transit hub among

Middle East, Far East and China

Threats

A. Volatile energy market frequently  Political environment

increasing fuel cost
General Environment Threats  Economic environment
B. Global economic recession sometimes
 Competitors
affecting the frequency of travel
 Economic features
A. Rapid growth of domestic airlines, i.e.
 Competitors
Regent, Novo Air and their expansion in
international routes.
Industry Environment Threats
B. Aggressive pricing and efficient service
by competitors.

C. Increased frequency of Qatar/ Emirates

Page 16 of 25
 to same destinations

4.1.3 Competitive environment analysis

Porter’s five forces of competitive position analysis:

Five forces analysis helps organisations to understand the factors affecting profitability in a
specific industry, and can help to inform decisions relating to: whether to enter a specific
industry; whether to increase capacity in a specific industry; and developing competitive
strategies.

Porters five forces in Biman’s perspective

1. Threats of New Entrants:-

As airlines business is huge capital intensive the threats of new entrance is not intense. But
due to open sky policy competitors are entering into the business from home and abroad.
Regent airways, US Bangla and Novo Air are from home number of giant airlines from
abroad as well as any cargo agency can operate a chartered flight with the permission from
cavil aviation.

2. Threats of substitutes products and services

More and more airlines from abroad and some domestic airlines are offering similar
features of the product with better service.

3. Bargaining powers of customers:-

There are many options for customers due to similar product available in the market. As
such better service or quality product available in lower price e.g. LCC

4. Bargaining powers of suppliers:-

Open sky policy liberalization rules and regulation in Bangladesh’s aviation industries and
facilitate intuition both network and LCC carriers. Network carriers have worldwide market
and LCC has no healthy competitor’s behavior. As such bargaining power of suppliers are
not high.

5. Rivalry among Existing Firms:-

Global legendary carrier like Emirates, Qatar airways Saudia, Etihad Airways Turkish Airlines,
Thai Airways Cathe Pacific etc, Regional carriers:- Jet Airways , Air India , Mihar lanka, Indigo
Airlines Local carriers:-Novo Air , Regent Airways, US Bangla

Page 17 of 25
4.1.4 Financial performance analysis

Year Total Operating

Total DOC % Profit/ Loss
Actual Cabin
Break Even Cabin
Revenue margin Factor (average)
Factor (average)

2017-2018 3592 crore 4134 crore -15% 72% 107%

2016-2017 3475 crore 3478 crore -0.001% 72% 86.64%

Biman (Market
Area of operation Other Operators
Share) (Market Share)

Passengers 25.75% 74.25%

Cargo 18.82% 81.18%

Fig: Present Operating profit and market share

In its 46 years of operation, the national flag carrier had incurred losses in 26 years and
made profit in 20 years

4.1.5 How well is the present strategy working?

First try to find out if Any effective move made recently to attract customers and improve
market position? Following reasons suggest a weak strategy, weak execusion or both.

 Continual Operating loss except JED, RUH, and sometimes DMM

 Market share is consistently falling

Page 18 of 25
  Hazz operation is supposed to be the major profitable segment; However,
normal operation becomes seriously disrupted in that time.

The weaker a company’s financial performance and market standing, the more its current
strategy must be questioned.

4.1.6 4 P’s of Marketing

Product: Since Biman provides passenger-transportation that is place-utility to its
customers; transportation is the major service of Biman. Beside this service Biman provides
some other services like surface-transportation, and tourism. Biman’s product-mix is
therefore: Any product for service, which is properly marketed, has four layers. They are:

a) Core product: in case of Biman it will be core service. The core service a customer
receives is the transportation of themselves or their cargo.

b) Physical Product: just outer the core service lies the physical service-the physical things of
which the customer comes into contact while receiving the service. They are passenger seat,
and Unit Load Device (ULD). These physical products convey the services to the customers.

c) Auxiliary or peripheral product: auxiliary services are the other services necessary to
make the service accessible to the customer that is the other service available to the
customers along with the core and physical product and these are very related to the core
service, and therefore cannot be separable from them, Reservation, ground services, flight
services etc. are the peripheral services of Biman.

Pricing: The price of the product is basically the amount that a customer pays for to enjoy it.
It is a very important component of a marketing plan as it determines profit and survival.
Adjusting the price of the product has a big impact on the entire marketing strategy as well
as greatly affecting the sales and demand of the product. Biman consider both fixed and
variable cost when setting price including marginal cost of providing the service, ceiling
price for each market segment, competitors price and activities economic condition and
customers behavior. Biman’s Pricing objective: Biman has a pricing objective oriented to the
market. To win the Market and to make a sizable profit Biman has adopted a Special
Incentive Program (SIP) policy. This is lower than the IATA fair. Airlines pricing

Place: Placement or distribution is a very important part of the marketing of a product.

We have to position and distribute the product in a place that is accessible to potential
customers. These are as:-

01. SITA Reservation systems host system

02. Global Distributions System (GDS) Agreement with three company

03. Web Site

04. Biman’s own sales outlets

Page 19 of 25
05. Travel Agency Portal (Web Base Channel)

06. General Sales Agents (Passengers and Cargo or Both)

07. Passengers sales

08. Cargo sales agents

Tasks of distribution Thorough electronic channel:-

1. The tasks of the agents and Biman own sales offices are:

a) Uplift the image of Biman and its services in the market.

b) Promoting its sales.

c) Make tickets and airway-bills available to the customers.

d) Provide customers with information, reservation and other services. objective mainly
depend on the form of the company. In case of National Airlines (Govt. Airlines), the pricing
objective is to maximize the sales growth (e.g. BG). Pricing objective of public limited
company is to maximize the current profit (e.g. BA, EK). On the other hand, for
comparatively new airline, whatever the form of the company, the pricing objective is to be
the service quality leader (e.g. EK).

Promotion: Promotion is a very important component of marketing as it can boost brand

recognition and sales. Promotion is comprised of various elements like:

Biman is far away from modern promotional activities. It has been coming up all traditional
promotional activities. It has very poor budget on publicity and advertising. It has only some
publicity campaign through sports sponsorship. But these are not sufficient. It has some
yearly incentive plan forReport the agents. But the actual benefits of this incentive do not
reach to the original customer.

4.2 Findings

4.2.1 Finding through Literature Review: customer’s perspective

From the literature review we figured out the following assumption on consumer
satisfaction about the service quality of Biman Bangladesh Airlines:

 Most of the passengers believe that quality of customer services is poor because of
lacking customization in providing service according to the level of customers and
flight delay is a regular problem. Biman does not maintain it flight Schedule on time.
It often delay flight schedule without showing any excusable reasons. The online
ticketing system is most of the time down and online ticket cannot be purchased at
that time.

Page 20 of 25
  Luggage handling service is not good and time consuming thought catering is good.
Employees are not empathetic to the customers. Lack of planning in improving service
quality is another shortcoming.

Due to the above-mentioned shortcomings Biman is now in a very bad shape. It has fallen
into severe financial crisis. Furthermore, this organisation is also suffering from lack of
strategic planning to overcome all other drawbacks. In the decision making process, Biman
cannot working as independently because of having Ministerial influences. Sometimes
emergency situation cannot meet immediately for complex bureaucratic system.

Biman is obliged, by legislation, to prioritise national interest over commercial ones, and not
to be a purely commercial airliner. The government is exercising the power as given by the
ordinance in its activities. In this context, the government is utilizing Biman to render
services for the nation, e.g. operating government VVIP flights, relief flights and hajj flight,
and carrying perishable items at cheaper rates.

As a consequence of being a state-owned corporation, Biman has suffered from being

politicized in many aspects. It has been politicized such as- operating domestic flights with
wide bodied aircraft, political intervention in recruitment and promotions, decision-making
under political influence. Corruption in different sectors of Biman is another significant
barrier that is making it difficult for the organization to break away from loss making ways.

4.2.2 Findings through Analysis

Findings related to specific objectives may be depicted as follow:

Objective 1: It can be theoretically inferred from the vision and mission of Biman
Bangladesh Airlines that it is supposed to follow Broad differentiation strategy which is not
in line with its Strength and Weakness. However, Practically, Biman has no clear set strategy
as of today. It is running with traditional sale strategy.

Objective 2: At present Biman is owning simply 25% market share while it was market
leader with 60% share back in 1990. As market share and profitability shrinks gradually,
present strategy, whatever it may be, is clearly not working.

Objective 3:
New Strategy is required along with restatement of vision and mission as a market
challenger.
Analysis suggests formulation of dual strategy like Differentiation through service excellence
and innovation together with Focus strategy through Differentiated market targeting for
customer retention.

Page 21 of 25
5 Strategy Proposal
5.1 Recommended marketing strategy

5.1.1 Restatement of vision and mission

Vision and mission of Biman needs to be restated in order to formulate a successful
strategy, because those are too generic.

Proposed vision: To be a truly intercontinental airline promoting Bangladeshi identity,

culture and values to the world.

Proposed mission: To raise customer satisfaction by providing air transportation and related
services at optimum prices, marked by genuine ethnic hospitality, commitment to safety
and consistent quality delivered by passionate people.

5.1.2 Formulation of new marketing strategy

Strategic Marketing Objectives:

To increase 10% Middle Eastern, South East Asian, and European profitable market share
within 2020.

Proposed New Marketing Strategy:

Theoretically, the current market share suggests to be the market challenger in respect of
Biman. (Market share shrinks significantly in last few decades). However, detail analysis
recommends a combination of Product differentiation and focused marketing strategy
aiming at customer retention. Differentiated market targeting may be used in this case
where firm target several segments and develops distinct products/services with separate
marketing mix strategies aimed at various groups.

5.1.3 Strategic action plan and future positioning

Following action plan should be followed to achieve the objectives:

1. Main target segments shall be blue collar expatriate Bangladeshi workers and
middle class economical businessmen & tourists.
2. Placing aircraft in line of market size and demand; Induction of Charter flight
concept for Cargo Carriage.
3. Improve Suitable transit connectivity in existing route to widen market size.
4. Improvement of flight schedule services (ensuring 90% OTP by next year and 100%
by 2020); if any problem occurs, inform the passengers as soon as possible before
the flight.
5. Recruitment of new innovative business graduates in vital positions.

Page 22 of 25
 6. Inclusion of more middle range (200-250 passengers) fuel-efficient third generation
aircrafts in the fleet.
7. Offering attractive incentives to the local and international travel & tour agencies.
8. Rebuilding a positive brand image to the passenger (especially for the business and
tourist sector) through aggressive advertising.

5.1.4 Suggested Integrated Marketing Communication (IMC) mix

Suggested IMC mix, categorized into three main parts, may be depicted in the following
ways:

Mass Communication
•Billboard
•Magazine and Newspapers
•Social Media

Promotion
•Loyalty programs
•Discounts and special campaigns
•Tour packages

Public relation
•Corporate Collaboration
•Events
•Sponsorship

5.1.5 Other recommendations

Other Recommendations to supplement the Strategic Action Plan may be as follows:

 The dilemmas in the governance of Biman need to be settled down through bringing
in necessary changes in the Ordinance.

 Experts on commercial airline and aviation industry should be appointed in the

executive positions

 Management should develop strategies to improve service quality such as:

improving the schedule of airplane, providing prompt service, hassle free check-in,
boarding and luggage services etc.

 Management should provide an informative feedback on the employee’s

performance using rewards and punishment.

 Biman can determine some discount for loyal customers or passengers who use
their strategic partners’ services.

 Biman needs to keep its website continuously updated so that the clients can get
the latest and complete information.

Page 23 of 25
  In-flight service must be improved. Steps may be undertaken to ensure
professionalism among the cabin crew, and make provision of proper flight crew
training to ensure that quality service can be rendered by them.

 Biman should consider closing down the continual loss-making routes and divert the
flights to the profit-making ones.

5.2 Conclusions
Evidence from the study suggest that the Biman Bangladesh Airline management should
develop strategies to improve service quality such as meeting passengers’ desired service
levels, improving the schedule of airplane, providing prompt service and service
information, visually appealing facilities and service materials, hassle free check-in, boarding
and luggage service so on. These strategies will enhance airline image and result in retaining
existing passengers and enticing passengers from other airlines. Biman should strive to keep
a good safety record and an on- time performance in order to attract potential passengers
knowing that reliability is one of the most important requirements of airline operations.
Generally, airlines that have a short fall in any of their service attribute should increase their
level of controlling, commanding, monitoring, and coordinating because what is needed is
just doing things the right way. Airlines that experience any form of shortfall in the
Assurance dimension should engage in the training of their employees to evaluate their
performance consistently. Employees should engage on training courses on a regular basis
and should bear in mind that the behaviour of employees is often instrumental in bringing
about desired outcome. Management should provide an informative feedback on the
employee’s performance using differential rewards and punishment.
The Executives need to redefine the goals and the objectives and modify the organisational
structure, reengineer job design on the necessary specification, likewise training,
monitoring, rewarding and punishing the employees. Management need to optimize the
allocation of its resources by evenly spreading their resources to areas of poor service
quality and a withdrawal of little resources from area of very high service quality.

Page 24 of 25
Bibliography
1. Chayapoj Lee-Anant and Worarak Sucher; Marketing Strategies of Star Alliance:
An In-depth Analysis of Asian based Airline Members
2. Maria Hossain, Internship report On Discussion of Four P’s of Biman Bangladesh
Airlines
3. Philip kotlar, 14th edition , Marketing Management
4. Stephen Shaw, Airline marketing management 04th edition
5. The daily ProthomAlo, April 17, 2012
6. Diganto, “Biman Bangladesh Airlines In-flight Magazine,” issue 43
7. www.biman-airlines.com
8. http://www.quickmba.com/marketing/research/
9. http://www.thefinancialexpress-bd.com/2010/03/30/96310.html
10. http://www.ti-bangladesh.org/research/EX_Summary_Biman_Eng.pdf
11. Boeing online information-www.boeing.com

Page 25 of 25