Shivani R.

STP MODEL
It is important for a company to use its limited resources in a judicial manner. Hence, any
company needs to work towards maximizing profits at all possible stages. The three-step STP
model will help achieve positive perspective of the company by the consumers. The three major
elements include: Segmentation, Targeting and Positioning. Briefly, they can be explained in
the following way: Segmentation is about identifying the population that requires/needs your
product or service; targeting is selecting within the decided segment which best represents
opportunities for the brand in terms of its objectives, and positioning is designing the product
or service of the brand to directly appeal to the target population.
In case of Malaysia Airlines, considering the tragic events of 2014, and the subsequent loss of
customer credibility, they have to be very careful in their STP approach to build a reputable
image. Although the airline industry is majorly segmented based on economy class, business
class and first class, it is not limited only to this kind of segmentation.

Flyers willingness to pay for an extra service is just one aspect. It is prudent to look into the
first element of this model, segments of the consumer base. Five other market segments apart
from the purchasing capacity of different onboard services are:
Urgent travelers: They might not be frequent flyers but expect flights availability to the
destination and comfort. This category might be a small sector but, brings instant appreciation.

Loyal to loyalty programs: As the name suggests, it’s mainly based on trying to pick the best
deals through loyalty programs, these flyers need encouragement through small incentives to
make a bigger decisions.

We’re off again: Flyers in this segment are highly experienced travelers like retired people,
for a luxury holiday, they are mostly loyal to few airlines and its important to keep them in the
loop to ensure strong trust among customers.

Business travelers: Since this is a large sector, and the decisions are usually taken by the
company on behalf of the flyer, United airlines can have tie-ups with major companies and
offer best deals.

Budget conscious: This also is a small category, it mainly consists of infrequent flyers and
those who are highly price sensitive. But, this kind have higher probability of choosing costlier
flights in expectation of higher quality service. It’s important to have few budget flyers as well
to ensure good reputation among all kinds of flyers.

The second element is targeting, keeping focus on the right kinds than all kinds of consumers
is important as it brings more stability and good will to the company. Malaysia Airlines can
adopt selective specialization by offering unique services and price charts to various kinds of
segments. Since, airline industry is a vast space to explore, it will be beneficial if they explore
market specialization targeting to create diversity within the services provided to broaden its
horizons.
The third element of this model is positioning, since united airlines is targeting all kinds of
flyers, it’s important to position their flight timing and provide better prices at peak hours. They
Shivani R.

can ensure availability at odd yet highly preferred timings. Although this pricing shouldn’t be
very drastic as the consumers become suspicious of safety and services.
BCG MATRIX:

This tool helps in assessing the company’s

current product portfolio. It helps to
establish a strategic long term plan for the
company, as it helps decide what kind of
products and services to be created,
modified or discontinued to ensure higher
and stable consumer experience.

The two dimensional diagram shows

market growth rate and market share. This
helps in analysing the experience curve of
the company. Based on this curve, the
company can decide on investments and
disinvestments for benefit and growth of
the company.

The current position of Malaysia Airlines is very vulnerable as the airlines market is highly booming
sector. The airline industry in today’s world is very vast and full of options. The customers are given a
wide array of options like services, comfort and price range. Though the functioning of the airlines is
an expensive business and mostly runs on poor profits, it is important for the company to build a strong
consumer base. Here, the main aim of Malaysia Airlines is to build the trust back in the consumers.
Though, the time has passed since its downfall due to recession and accidents, still people do remember
the tragic loss and they have to reassure that it was an accident and had no fault of theirs, that they will
put in their best possible efforts to avoid any such incident in the future.

Hence, the current position of Malaysia Airlines, falls under the category of ‘Question mark’. This
means that the company’s currently have low market share, but a very fast growing market. The
company’s main aim at this stage is to make profits to sustain in the market and become a ‘Star’, this
step needs abundant flushing of investments, it can be burdensome but worth a try to perform at its best.
If steps are not taken to improvise the condition it might end up in a position full of debts forcing it to
become a ‘Dog’ and eventually liquidation of the company. But, since it is a strong and rapid growing
airline industry in one of a major Asian market, it will be easy to bounce back into being a profitable
business. This can only be achieved only if the right kind of marketing steps are taken to prove safety
and unique offering to the public.

However, the company needs to invest substantial amount of capital to regain and capture market share
from its competitors by being unique and safe at attractive pricing. But this uniqueness can’t be very
burdensome on the company, as it might cause more harm than good to the company and its
shareholders.
Shivani R.