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Case Report | Volume 4 Issue 2 (July-Dec, 2023) | Pages 1 - 10
Marketing Strategy for Aviation MRO Company “Case Study of PT GMF AeroAsiaTbk”
 ,
1
Institute of Technology Bandung, School of Business and Management, Jakarta, Indonesia
Under a Creative Commons license
Open Access
Received
Oct. 18, 2023
Revised
Nov. 8, 2023
Accepted
Dec. 5, 2023
Published
Dec. 21, 2023
Abstract

The COVID-19 pandemic caused an unprecedented period of financial and operational instability, which had a significant effect on the aircraft maintenance, repair, and overhaul (MRO) industry. For MRO company, preparing a successful recovery from the pandemic's harmful effects is currently the most pressing business challenge. The battle for market share among MRO is fierce, and the road to recovery is still challenging. The post-pandemic environment has transformed, necessitating a departure from conventional corporate practices. The evolving behaviors of manufacturers, suppliers, customers, and competitors underscore the necessity for the industry to proactively adjust. Marketing plays an important role in addressing this challenge and managing the interactions between MRO and customers regarding the company's offerings. Marketing also has a significant impact on customer’s perceptions of the company's brand image. For GMF to adapt to the post-pandemic environment, a comprehensive internal and external study is necessary. Several frameworks such as VRIO, Porter's Value Chain, STP, and Marketing Mix help evaluate the company's capabilities, competitive advantage, market segmentation strategies, and tactical marketing elements. Meanwhile, frameworks as PESTEL, Porter's Five Forces, Customer Analysis, and Competitor Analysis provide insights into the macro-environment, market forces, customer behavior, and industry rivals. Integrating these findings via SWOT frameworks helps formulate an appropriate business and marketing strategy that aligns with the current situation and company target. The proposed marketing strategy, leveraging STP and Marketing Mix, determines expansion strategies, market segmentation tactics, and optimal implementation plan to ensure the strategy's practicality and viability within the expected time and resources.

Keywords
INTRODUCTION

The COVID-19 pandemic significantly disrupted the aviation industry's operations and financial stability by unleashing a wave of previously unheard-of difficulties. In comparison to 2019, the amount of revenue passenger kilometers flown by airlines worldwide fell by 66% in 2020 and 58% in 2021 [1]. This resulted in a loss of USD 244 billion in 2020 and USD 146 billion in 2021 for the whole value chain. All aviation sectors saw large losses in 2020 and 2021 amid lockdowns and travel restrictions, except for air cargo carriers and freight forwarders.

 

Under normal operational circumstances, airlines prioritize maintaining aircraft safety, adhering to stringent regulations, optimizing performance, and ensuring seamless operational continuity. However, even during periods when aircraft are grounded, such as during a pandemic, airlines are compelled to undertake prolonged maintenance to uphold the reliability of their fleets. This maintenance is essential for preserving the airworthiness of aircraft that are temporarily out of service. The maintenance and overhaul activities incur substantial costs, accounting for approximately 9.4% of an airline's direct operating costs [2].

 

MRO stands for maintenance, repair, and overhaul. Aviation MRO encompasses all maintenance activities, repair, or inspection done to ensure the safety and airworthiness of an aircraft. The maintenance and overhaul expense of airline’s direct operating costs will be MRO Company’s market value. Due to pandemic, airlines were compelled to ground up to 80% of their fleets [3] and speeded retirement of older and high maintenance aircraft [4] because of worldwide travel restrictions and a decline in passenger demand. The MRO industry suffered a serious setback because of the sharp decline in demand 

 

For its products and services. Due to a sudden drop in business, MRO providers found their hangars and facilities to be strangely deserted.

 

PT Garuda Maintenance Facility AeroAsia Tbk, is an Indonesian company that specializes in aircraft maintenance, repair, and overhaul. Located in the Soekarno Hatta International Airport, it has many offices around the world. The company serves worldwide customers and employs more than 5,000 people. As the largest MRO service provider in Indonesia and one of leading aircraft maintenance facilities in Asia, GMF provides a variety of maintenance services for aviation industry. Originated as Garuda Indonesia Technical Division, GMF exists with more than 70 years of experiences. GMF has customers from more than 60 countries worldwide. As a world-class MRO, GMF has certified by civil aviation authority from more than 20 countries, including FAA (America), EASA (Europe), CASA (Australia), and DGCA (Indonesia). GMF provides a variety of maintenance services, consisting of main products including Airframe Maintenance, Line Maintenance, Engine and APU Services, Component Services, Aircraft Modification, Cabin Maintenance, Material and Trading, and Training Services. Currently, GMF is expanding its business by penetrating the Industrial Gas Turbine Engine and Military MRO market.

 

The following business issue for MRO nowadays is how to start bouncing back from the hard times during the COVID19 pandemic. MRO is one of many industries impacted and suffered because of pandemic strike. After it was announced that the pandemic is over, the aviation industry is gradually expected to reach earlier performance. The airlines and lessors as customers have started looking for MRO availability to perform maintenance for their aircraft to get reactivated. This has brought good news for MRO to generate more sales and revenue after sharply declining from pre-pandemic performance. 

 

The unachieved revenue target in 2023 indicates GMF could not run the business in the usual way looking that the more challenging revenue target in upcoming years and the current industry is changing after pandemic. As explained earlier, behavior shifting is happening from the side of customers, suppliers, manufacturers, and competitors. The global market outlook generally shows a positive trend for the next 10 years. The average global market growth is 4.9% and all regions show an increasing trend in the next future [5]. Basically, the company target is achievable considering GMF customers come from all regions in the world, including airlines, lessors, and other MRO. The main challenge would be how GMF expands the business to new markets and simultaneously retains current customers.

 

Expanding into new markets is a critical strategy for businesses to increase sales and customer base. It involves careful planning, adaptation, and learning from experiences. This approach can tap into untapped demand, diversify revenue streams, address market saturation, and increase revenue potential. Customer retention is crucial for sustainable business growth and sales, offering benefits like repeat business, higher lifetime value, reduced marketing costs, word of mouth, and stability during market fluctuations. Loyal customers are more receptive to upsells and upgrades, presenting opportunities for growth.

 

The business issues identified are closely related to marketing function. The marketing function should play a key role in managing several important connections between the customer and company’s product, service delivery, and financial accountability. It also contributes to perceptions of company’s financial performance, customer relationship performance, and new product performance beyond that explained by market orientation [6]. Based on this, the marketing strategy shall be a key driver to compete and win the battle.

 

Literature Review

In conducting internal analysis, several analysis tools are used such as: VRIO Analysis, Porter’s Value Chain Analysis, Segmentation, Targeting, Positioning (STP), and Marketing Mix. VRIO helps businesses understand the value, rarity, inimitability, and organization of their resources and assets [7], also how these attributes contribute to their overall competitiveness. The Porter’s Value Chain Analysis is a business management concept that was developed by Michael Porter [8], explain that a value chain is a collection of activities that are performed by a company to create value for its customers. The formula Segmentation, targeting, and positioning (STP) is the essence of strategic marketing, consisting of how the company proceeds to segment the market, select the appropriate market target, and develop the offer's value positioning [9]. The marketing mix, commonly referred to as the "4Ps of marketing," is a framework that lists the variables that a business can control to affect customers' purchase decisions [10]. The 7Ps model was later developed to provide a more comprehensive and modern approach to marketing, consisting of Product, Price, Place, Promotion, People, Process, and Physical Evidence.

        

The framework used for external analysis such as: PESTEL Analysis, Porter’s Five Forces Analysis, Customer Analysis, and Competitor Analysis. The PESTEL analysis framework is used to examine and comprehend the external macroenvironmental elements that can have an impact on a company or sector. It is also an analytical tool used to identify key drivers of change in the strategic environment [11. The acronym stands for political, economic, sociocultural, technological, environmental, and legal. Michael Porter [12] created the concept known as Porter's Five Forces to aid in the analysis of an industry's competitive dynamics and attractiveness. It looks at five main factors that affect how a market is competitive: threat of new entrants, suppliers’ bargaining power, and buyers’ negotiating power, threat of alternative products or services, and intensity of competitive rivalry. O.C. Ferrell [13] developed customer analysis using the 6W (Who, What, Where, When, Why, Why Not) method that enables businesses to decently explore target audience and evaluate customer needs and values, key customer segments,   and   opportunities    for further growth. A competitor analysis, also known as a competitive analysis, is the process of identifying and researching competitors in the associated industry. At the end, competitor analysis leads to useful conclusions about how to build competitive advantage [14].

 

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Figure 1: Conceptual Framework

 

The result of internal and external environment analysis will be combined using SWOT framework, a strategic planning tool used by businesses or organizations to assess their internal strengths and weaknesses as well as external opportunities and threats. The SWOT analysis has an original version called the SOFT approach [15]. The next step is formulating marketing strategy by proposing new Segmentation, Targeting, and Positioning (STP) and Marketing Mix to exercise suitable strategy.

 

The conceptual framework for enhancing an MRO company's performance revolves around four key phases. Initially, it begins with analyzing the unachieved target revenue, deciphering the underlying causes through comprehensive internal and external problem analysis. These assessments involve scrutinizing internal operational inefficiencies and external market dynamics that hindered revenue goals. Subsequently, this framework shifts focus towards devising tailored market selection through STP and marketing mix strategies aimed at mitigating identified shortcomings. Finally, the framework concludes with an evaluation of the implemented strategies, tracking their effectiveness in achieving the revenue targets. This iterative process aims to ensure that the MRO company not only recuperates from unmet revenue goals but also establishes a more robust and adaptive marketing strategy to achieve sustainable growth in the post-pandemic landscape.

MATERIALS AND METHODS

The research is conducted through qualitative methods in gathering information and knowledge concerning the market and the marketing strategy. The growth of qualitative research can be attributed to an increasing recognition of its value in seeking to define and understand complexity rather than to reduce it [16]. Using company observation and in-depth interviews with key stakeholders, the primary data will be collected to complete the understanding of recent situations. Qualitative method is commonly using the sample size typically range from 3 (three) to 25 (twenty-five) participants [17]. Researchers must be selective to choose the participants as they and their judgements and experiences represent the company condition. In this research, in-depth interviews are conducted along with 8 (eight) key stakeholders that have accountability or responsibility or are closely correlated with the marketing strategy. Furthermore, the research will be supported by additional data from secondary resources, including company annual report, company annual and long-term planning documents, company website, company marketing blueprint, articles, journals, and books.

        

In qualitative research, early triangulation conceptualizations emphasized how many approaches can disclose common viewpoints and realities without making epistemological assertions about the "truth" of the findings [18-19]. Building upon Denzin’s [18] main types of triangulations, this research presents mixed methods triangulation design options: methodological triangulation and data triangulation. The most discussed sort of triangulation is methodological triangulation, which refers to the employment of various approaches in the investigation of a social phenomenon. This research includes three data collection methods: interview to access information from the key informants, direct observation to capture the real time situations, and archival records through company reports and documentations. Denzin [20] described three types of data triangulation which are used in this research: time triangulation, space triangulation, and person triangulation. The data and information associated with this research topics are collected at different points in time of the year, at different setting place such as office room, meeting room, lounge, public areas, and collected from more than one level of stakeholder group such as Board of Director, Vice President, Senior Manager, Sales team, and Customer. Miles and Huberman [21] outline three overall approaches to analyzing qualitative data: data reduction, data display, and data verification/conclusion drawing. Malhotra and Birks [22] put the data assembly in an earlier stage to create a more comprehensive process in analyzing qualitative data. This data analysis method is used in this research to interpret qualitative data and convert it into strategy and implementation plan.

RESULTS

Developing a marketing strategy involves a structured approach to reaching customers, achieving business goals, and creating a sustainable competitive advantage. GMF needs to ensure that its marketing strategy is one that is well-researched, customer-focused, adaptable, and aligned with business goals. Regular assessment and adjustments are vital for its effectiveness.

 

SWOT Analysis

A SWOT analysis helps GMF in identifying their strengths, weaknesses, opportunities, and threats, aiding in the development of marketing strategies. By conducting a SWOT analysis, businesses can develop marketing strategies that are aligned with their strengths and weaknesses and that capitalize on the opportunities and threats in their external environment. The following is SWOT analysis for GMF current situation:

 

  • Strengths: GMF takes pride in the strengths that set it apart in the industry. First and foremost, we offer a highly competitive labor rate, ensuring customers receive top-notch service at a cost-effective price point. The team is comprised of highly skilled and experienced professionals, allowing GMF to handle a diverse range of products and various aircraft types with utmost expertise. The company is dedicated to offering a comprehensive total care maintenance solution, so being preferred partner for airlines seeking efficiency and convenience. GMF also has captive market from airline in group affiliation, Garuda and Citilink, handled by key account management. Moreover, the flexibility in maintenance operations, including adjustable slot scheduling and accommodating additional work, ensures that the services are tailored to customers’ specific needs. The hospitality that is embedded in GMF employees is being added value that customers never get from other MROs. Its state-of-the-art facilities, hangars, and workshops located strategically near the International Airport and logistic bonded zone provide the ideal environment for the team to excel in their work. Lastly, the vast experience in managing MRO business further solidifies its reputation as a reliable and trusted partner in the aviation maintenance industry, positioning GMF as a go-to choose for airline operators seeking excellence in service, quality, and performance

     

  • Weaknesses: GMF faces several challenges that the company is actively addressing. To secure revenue sustainability for the long term, several captive customers are required. Currently GMF depends on the market from group affiliation only, it will be difficult if the company is going to grow exponentially and quite risky for long-term sustainability. Hence, it is necessary for GMF to continuously seek new captive customers from third parties. Moreover, turnaround times are an area that the company is working to improve to become more competitive in the industry. GMF understands the importance of flexible payment terms, but the pandemic created a difficult situation which forced MRO to apply stricter payment for customers. Due to the company’s financial condition after pandemic, the company needs to explore options to secure additional working capital and investment budgets to further enhance capabilities and run the operation smoothly. Additionally, the limited capability of GMF in-house repair team has led to high subcontracting expenses, particularly for engine and APU products and causing the pricing uncompetitive. GMF is committed to addressing these issues, ensuring that our services remain efficient, accessible, and cost-effective, and to better serve customers in the aviation maintenance industry

     

  • Opportunities: Global economic growth has been projected to increase 2.7% in 2024 and 3.0% in 2025 [23] affecting significant rise in passengers, fueled by a heightened desire for travel and tourism. This surge presents an opportunity for airlines to expand their customer base and enhance their service offerings. Additionally, fleet reactivation programs provide a chance for airlines to modernize their fleets, improving operational efficiency and environmental sustainability. The Indonesia government's support, evidenced by increased budget allocations for infrastructure around Rp422.7 trillion in 2024 and 20% rise in defense spending through 2024 [24], creates a favorable environment for the aviation sector to thrive. The broad customer base, spanning the globe, offers airlines a chance to diversify and cater to a wide range of preferences and needs. The burgeoning growth of aircraft leasing and aftermarket services further opens avenues for strategic partnerships and revenue generation. Moreover, technological advancements present an opportunity to develop added value, improving services, efficiency, and overall customer experience. The development of new technologies like Artificial Intelligence (AI), robotics, big data analysis, block chain, and Internet of Things (IoT) helps in predictive maintenance to reduce cost and aircraft downtime [25]. The current concerns about safety and health, coupled with airlines' net-zero goals [26], offer a unique opportunity to design and promote programs and services that prioritize sustainability and passenger well-being, aligning with evolving consumer expectations in the aviation industry. Analyzing and leveraging these opportunities can position airlines strategically in the dynamic global aviation landscape

  •  

  • Threats: The aviation industry faces a myriad of threats that necessitate careful consideration. High inflation and elevated interest rates [27] pose a significant risk to companies, impacting their financial condition and potentially constraining investment capabilities. The technological complexity inherent in the industry demands substantial investments to develop and maintain cutting-edge capabilities, posing a financial threat to companies unable to keep pace. Disruptions in the supply chain, triggered by factors like a surge in demand or geopolitical conflicts such as a world war [28], coupled with tight payment terms from suppliers, may lead to parts and materials scarcity, affecting operational continuity and financial stability. Even though most MROs experience similar situations, the regional competitors will remain a threat if GMF cannot provide a competitive advantage. Stringent regulatory measures, exemplified by requirements like hangar door specifications from EASA [19], can impose additional costs and complexities on companies, further challenging their ability to adapt. The pursuit of net-zero goals, while commendable, often entails additional costs that may strain financial resources. Moreover, limitations imposed by part manufacturers on MRO capability development, as they enter the aftermarket services arena [29-30], present a threat to the industry's competitive landscape, potentially limiting options for companies seeking to enhance their offerings and stay competitive in the market

     

 

Figure 2: Segmentation and Targeting

 

Proposed Segmentation, Targeting, Positioning (STP)

As a fundamental framework used in marketing strategy development, GMF consistently adopt STP to help crafting a focused marketing strategy by enabling businesses to target specific customer segments with tailored products, services, and messages that address their unique needs and preferences. The following is proposed STP strategy for GMF:

 

  • Segmentation: In response to the dynamic shifts within the post-pandemic landscape, GMF recognizes the imperative need to refine its market segmentation strategies. Amidst these challenging times, the company is poised to implement a more intricate and nuanced approach to cater to varying customer needs. The proposed market segmentation strategy hinges on two pivotal indicators: customer category and customer journey.

 

        Under the customer category segmentation, GMF envisages delineating its market into six distinct groups to better target and strategize its initiatives:

 

  • Key Account Customer: referring to airlines within group affiliation with significant number of fleets and trusting total care maintenance to GMF

     

  • High Growth Customer: encompassing major carriers with extensive fleets and diverse operational needs, necessitating tailored and comprehensive maintenance solutions

     

  • Medium Growth Customer: consisting of smaller airlines operating on a regional scale, requiring more localized and cost-effective maintenance

     

  • Seasonal Customer (for Hajj and Cargo): including airlines seeking specialized maintenance and aircraft customization for preparing seasonal events such as Hajj season and for Cargo fleet activation

     

  • General Aviation Customer: catering to corporate and private aircraft owners seeking specialized and swift maintenance services to minimize downtime

     

  • Retail Customer: comprising emerging airlines or ventures entering the aviation realm, necessitating flexible and cost-efficient maintenance solutions

 

In delineating the customer segmentation further, GMF envisages stratifying these diverse customer categories into three distinct groups based on their customer journey within the aviation maintenance realm.

 

  • The 1st Stage Group: encompasses those in the early stages of the customer journey, encompassing the awareness and consideration phases. Within this bracket lie airlines that have not yet engaged with GMF as customers but are either within the outreach scope or have issued tenders, albeit without fully establishing trust in GMF as their maintenance provider. 

     

  • The 2nd Stage Group: represents the middle stage, primarily focusing on the purchase phase. This group comprises airlines that have previously entrusted their aircraft maintenance to GMF but have not engaged with the company on a repetitive or consistent basis

     

  • The 3rd Stage Group: encompasses the top stage, encapsulating the retention and advocacy phases. This group comprises airlines that have demonstrated steadfast trust in GMF's aircraft maintenance services, showcasing consistent engagement by repeatedly choosing GMF as their preferred maintenance provider. Notably, these customers extend their trust by engaging in repetitive purchases and sourcing multiple products or services from GMF's offerings. Beyond mere transactions, this group of customers transcends conventional buyer-seller relationships by actively advocating for GMF within their industry circles, recommending GMF's products and capabilities to other stakeholders

 

Targeting

After meticulously defining the segmentation structure for GMF's market, the subsequent pivotal step involves the strategic determination of which segments warrant focused attention. This critical decision-making process is integral, aiming to optimize the available resources while driving maximal results to elevate company performance. Within the group affiliation segment, where customers represent a captive market, GMF's strategic focus resides in nurturing and sustaining existing relationships while steadfastly delivering on the agreed-upon Service Level Agreements (SLA).

        

The Sales and Marketing department in GMF assumes a pivotal role, channeling efforts towards third-party customers outside the group affiliation, particularly targeting the high-growth, medium-growth, and seasonal customer categories. These segments boast a surplus of fleets and possess substantial market potential, aligning with GMF's objectives despite the current constraints on resources. This strategic emphasis is underpinned by the recognition that maintaining key customers with significant value and profitability is more feasible and impactful than managing numerous customers with comparatively smaller values. By simultaneously approaching lessors is important as they wield decision-making authority concerning maintenance providers for their aircraft.

 

Should GMF possess additional resources and capacity, the exploration and approach towards the general aviation and retail categories become viable avenues to diversify the company's portfolio and augment revenue streams. This segment should be considered as a secondary target. This calculated approach to segment prioritization is geared towards maximizing returns, strategically focusing efforts on high-value targets while judiciously exploring additional avenues to fortify GMF's market presence and augment its overall performance within the aviation maintenance industry.

 

Positioning

Group Affiliation: GMF's positioning strategy for customers within the group affiliation segment revolves around fostering enduring partnerships and delivering impeccable service that aligns with the Service Level Agreements (SLA). Recognizing this customer segment as a captive market, GMF's primary focus is on maintaining and fortifying existing relationships by consistently delivering exceptional value and meeting or exceeding predetermined service expectations. The company positions itself as a trusted and reliable partner committed to providing top-tier maintenance services tailored to the specific needs and requirements of these affiliated customers. GMF emphasizes its expertise, reliability, and efficiency in delivering high-quality maintenance solutions, ensuring adherence to stringent industry standards and compliance obligations.

 

Through a customer-centric approach, GMF prioritizes open communication, proactive engagement, and personalized support to address any concerns promptly and efficiently. The goal is to solidify trust, instill confidence, and reinforce GMF's reputation as the go-to maintenance provider within the group affiliation segment. GMF's positioning strategy involves showcasing its track record of successful collaborations, emphasizing its ability to consistently deliver on promises and surpass expectations. The company strives to highlight its unique selling propositions, such as specialized services, adherence to timelines, cost-effectiveness, and a deep understanding of the specific requirements of the affiliated customers. Additionally, GMF may seek opportunities to further enhance its value proposition by offering value-added services, continuous improvement initiatives, and innovative solutions that align with the evolving needs and expectations of these customers. This approach aims to cement GMF's position as a reliable, responsive, and indispensable partner, fostering long-term relationships and driving mutual success within the group affiliation segment.

 

Primary Target

GMF's positioning strategy towards third-party customers outside the group affiliation, specifically targeting high-growth, medium-growth, and seasonal customer categories, is centered on tailored solutions, agility, and responsiveness to their evolving needs. These segments, representing promising growth opportunities, require a strategic approach that emphasizes adaptability, reliability, and value creation to solidify GMF's position as a preferred maintenance provider.

 

The 1st stage group signifies a crucial opportunity for GMF to employ strategic outreach initiatives, fostering brand recognition and building credibility. These airlines require targeted engagement strategies focused on educating them about GMF's value proposition, showcasing the company's capabilities, reliability, and commitment to excellence. By emphasizing success stories, highlighting competitive advantages, and demonstrating GMF's alignment with industry standards and best practices, the aim is to instill confidence in potential clients and convert these prospects into loyal customers. This early-stage customer journey group represents a significant potential growth area for GMF, demanding tailored approaches and persuasive communication strategies to effectively transition these prospects into trusted partners within the realm of aviation maintenance.

 

Understanding and addressing the nuances within the 2nd stage group is paramount for GMF's sustained growth. Delving deeper into this segment requires a more specific analysis to uncover why these customers have not returned to GMF for subsequent maintenance needs. The reasons might stem from internal customer issues or maintenance provider-related concerns, encompassing factors like pricing discrepancies, extended lead times, or perceived shortcomings in the quality of service that failed to meet customer requirements. Engaging with these customers necessitates a tailored approach involving meticulous feedback gathering and active dialogue. GMF must initiate candid conversations to comprehend the precise pain points, concerns, and expectations of these clients. Through comprehensive assessments, GMF can realign its strategies to address these specific concerns, fine-tuning its offerings to better meet customer expectations. Whether it involves recalibrating pricing structures, optimizing service delivery timelines, or enhancing quality assurance measures, the objective is to rectify these issues, reinstating trust, and fostering lasting partnerships with these mid-stage customer journey clients, thus securing their recurring business and loyalty.

 

The top-tier customer segment or 3rd stage group is crucial for its sustained success and market dominance. These clients not only ensure steady revenue but also act as influential evangelists for the brand, serving as living testimonials to GMF's reliability, quality, and value proposition in the competitive aviation maintenance landscape. GMF's strategic focus is on retention and advocacy. Retaining loyal customers requires a commitment to excellence, ensuring seamless service, competitive pricing, and tailored solutions. Consistent communication, personalized attention, and understanding of their specific requirements are critical. GMF must also harness the advocacy potential of these clients by leveraging their satisfaction and positive experiences. Initiatives like referral programs, success stories, testimonials, and platforms for clients to express satisfaction can significantly amplify GMF's reputation and credibility. The goal is to cultivate enduring, mutually beneficial partnerships, solidifying loyalty and leveraging their influence to expand its market reach. This holistic approach reinforces GMF's industry standing and fosters exponential growth through organic promotion of its services.

 

GMF's positioning strategy for these third-party customer categories revolves around flexibility, reliability, and value creation. By offering tailored solutions, responsive services, aligning with the growth trajectories of these segments, and adding hospitality as unique value which most of the competitor do not have, GMF aims to establish itself as a trusted and adaptable maintenance partner capable of meeting the diverse and evolving needs of high-growth, medium-growth, and seasonal customers outside the group affiliation.

 

Secondary Target

GMF's positioning strategy for secondary target markets, namely the general aviation and retail customer segments, involves a strategic approach aimed at diversification and revenue augmentation. In these segments, where additional resources and capacity permit exploration, GMF positions itself as a versatile and adaptable maintenance provider catering to the distinct needs of these customer categories.

 

For the general aviation segment, GMF positions itself as a trusted partner offering tailored and specialized maintenance solutions for private and smaller aircraft operators. The emphasis lies in providing personalized attention, quick turnaround times, and high-quality services to meet the unique requirements of this market. GMF showcases its expertise in handling various aircraft models, ensuring compliance with safety standards, and delivering reliable, cost-effective maintenance solutions. 

 

In approaching the retail customer segment, GMF positions itself as a reliable and accessible maintenance provider catering to individual aircraft owners or smaller enterprises. The focus is on offering flexible maintenance plans, responsive customer service, and a range of service packages suited to their specific needs. GMF aims to build relationships founded on trust, affordability, and the ability to cater to individual preferences, ensuring that each customer receives personalized attention and value-added services.

 

The company's positioning strategy for these secondary markets revolves around highlighting its adaptability, expertise, and commitment to delivering high-quality maintenance services tailored to the unique needs of the general aviation and retail customer segments. By leveraging its capabilities and resources, GMF aims to diversify its portfolio, tap into new revenue streams, and establish itself as a go-to maintenance provider for these specialized segments, fostering growth and expansion beyond its core customers.

 

Proposed Marketing Mix

GMF develops marketing strategy using Marketing Mix framework that provides a structured approach to design and implement a comprehensive strategy that addresses 7Ps as key elements. By carefully considering all elements of the marketing mix, the marketing strategy implementation will be right on target and help GMF to achieve the company goals. Marketing mix that could be adopted by GMF can be explained as follows:

 

  • Product: In addition to GMF's established core competencies in aircraft maintenance and its related products, the strategic move into military defense and the industrial gas turbine engine markets proved pivotal, particularly during the challenging period of the pandemic. These diversified product lines served as significant contributors to GMF's resilience amidst adversity. As the aviation industry progresses into the post-pandemic era, it becomes imperative to not only sustain but adeptly manage the continuity of these diversified business ventures. While offering the products, GMF focuses on providing comprehensive solutions to meet aviation industry needs. It entails offering a total care solution package, catering to the diverse requirements of customers aiming to revitalize their aircraft fleets. Additionally, a maintenance program addressing safety, health concerns, and aligning with airlines' net-zero goals is emphasized, underscoring commitment to sustainable practices and being part of upselling and cross selling sales activities.

     

Understanding that every aircraft type has a defined lifecycle, GMF needs to proactively forecast and anticipate the forthcoming dominant aircraft types in the market. This strategic foresight is crucial for the company to prepare its capabilities for future market demands while ensuring the sustained relevance of its existing capabilities. For current capabilities, especially in engine and component products, GMF should enhance in-house capability of part repair to reduce subcontractor expense and gain more profit. Anticipating the emerging trends, GMF aims to direct its attention toward developing capabilities for aircraft types like the Boeing 737 Max and Airbus 350. The rationale behind this strategic move stems from the projected surge in demand for these specific aircraft types and customers' intentions to incorporate them into their future fleets. This forward-looking product development strategy is not only geared toward immediate gains but also signifies GMF's commitment to long-term sustainability and its proactive stance in aligning with the evolving needs of the aviation industry. By investing in these emerging capabilities, GMF endeavors to fortify its position as an innovative and adaptable industry player, poised to meet the demands of the future aviation landscape and solidify its enduring presence within the market

 

  • Price: In the current aviation landscape, where airlines engage in fierce competition to reactivate their fleets and accommodate the surging passenger demand, the availability of maintenance slots falls short of meeting the escalating requirements of existing MRO services. This presents a prime opportunity for MRO entities, like GMF, to leverage dynamic pricing strategies. By implementing the right pricing mechanisms, GMF can optimize returns while effectively utilizing its current resources and capacity. Such a strategy enables GMF to not only retain existing customers but also attract new customers by offering competitive pricing aligned with the heightened market demand. GMF's flexibility in accommodating tight schedules and urgent maintenance needs can be factored into the cost breakdown. By offering an early slot booking discount and implementing additional charges for schedule adjustments, customers are encouraged to secure slots in advance while providing flexibility, ensuring smooth operations.

     

Anticipating fluctuations in workload during low seasons, GMF can adapt by implementing adjusted pricing strategies to sustain market absorption. During these periods, the profit margin targets can be temporarily adjusted lower than peak season standards, allowing GMF to cover fixed costs while maintaining operations, even with reduced profitability. This strategic approach to pricing not only ensures GMF's competitiveness in peak periods but also facilitates sustained market presence and operational continuity during fluctuations, showcasing adaptability and resourcefulness in meeting industry demands. Concerning payment terms, GMF will be more attractive for third party customers with substantial sales value to offer flexible payment terms or implement credit limit schemes as long as the project is estimated to generate high profitability

 

  • Place: GMF's current facility in Cengkareng stands as a bastion of advantages, boasting a strategically advantageous location that caters to customers from across the globe. By augmenting its facility with a bonded zone, GMF amplifies the convenience factor for its customers. To further fortify its distribution channel and ensure wider accessibility of GMF products to customers, the company is contemplating the deployment of its technicians and engineers to various international airports. This strategic move aims to capture a broader segment of the line maintenance market, commencing with airports frequently traversed by GMF's primary customers. Recognizing that line maintenance serves as a potential entry point for new customers to acquaint themselves with GMF's services, this initiative intends to establish a front-facing presence that showcases the company's prowess and reliability. Moreover, GMF explores the option of dispatching offshore experts to customer locations, a pragmatic approach that can offer expediency, cost-effectiveness, and efficiency, especially for customers facing specific maintenance requirements or those unable to transport their aircraft to GMF's facility. This approach signifies GMF's adaptability and commitment to providing tailored solutions that align with diverse customer needs.

     

In an endeavor to expand its international footprint and capture a larger market share, GMF considers the feasibility of forging strategic partnerships or establishing new facilities in Cengkareng or alternative locations. Leveraging its strengths in managing MRO services and labor provision, GMF envisions collaborative partnerships that extend beyond its core capabilities. Such collaborations may involve partners offering complementary aspects such as hangar or workshop facilities, financial backing, access to capital, or tapping into promising markets. This multifaceted approach reflects GMF's proactive stance toward enhancing its global presence, diversifying service delivery channels, and capitalizing on strategic collaborations to propel its growth trajectory. By leveraging its strengths while strategically partnering with entities that complement its capabilities, GMF aims to cement its position as an industry leader, catering to a broader customer and seizing lucrative opportunities in the aviation maintenance landscape

 

  • Promotion: Promotional activities stand as a crucial mandate for GMF, serving as the cornerstone to elevate brand awareness, spotlight their diverse range of products and services, and ultimately bolster the company's revenue streams. This strategic initiative is pivotal, as it not only aids in attracting new customers but also in retaining existing customers, fostering loyalty, and amplifying the company's market presence. GMF's promotional approach requires a meticulous adjustment in alignment with the company's specific objectives, allocated budget, available resources, target market dynamics, and an astute awareness of competitors' strategies. To maximize the impact, GMF can combine its marketing activities into three distinct approaches: Above the Line (ATL), Below the Line (BTL), and Through the Line (TTL) marketing strategies.

     

The ATL marketing strategy primarily revolves around broad-reaching advertising endeavors, utilizing online platforms such as social media sites including Instagram, LinkedIn, and expansive website presence. Although these efforts enhance brand visibility and image, quantifying precise results and Return on Investment (ROI) becomes challenging. Contrastingly, BTL marketing focuses on more targeted customer engagement, employing courtesy visits, tailored content, and personalized interactions that resonate with specific customer segments. This approach facilitates a clearer assessment of impact and effectiveness, providing tangible insights into its outcomes. GMF top management or senior leaders can be involved in this promotion activities to show that targeted customers are valuable. TTL marketing, the integration of ATL and BTL approaches, aims to target specific customer segments while also casting a wider net for broader impact. It involves active participation in MRO events or exhibitions, offering a robust blend of both targeted engagement and expansive visibility. However, this approach can be costlier due to its active participation in events.

 

For GMF's promotional efforts to yield optimal results, it is imperative that the sales and marketing teams involved in these activities are equipped with comprehensive training. This includes honing their selling techniques, communication skills, and negotiation prowess, ensuring they adeptly represent GMF's value propositions and effectively engage with potential and existing customers. This comprehensive approach to promotional strategies not only solidifies GMF's market position but also lays the foundation for sustained growth, customer retention, and an expanded market reach within the competitive aviation maintenance industry

 

  • People: In GMF's service delivery, the term encompasses all personnel directly or indirectly involved in the provision of products or services, ultimately shaping the overall customer experience. It becomes imperative for GMF to discern and identify the specific touchpoints in the customer journey where personnel interaction plays a pivotal role. Recognizing the criticality of various phases from initial contact to project completion and post-project activities, GMF must grasp the significance of each employee's role at these junctures. These individuals serve as the face of the company, impacting the brand image and customer perception. Therefore, it is paramount that every employee involved in these critical phases receives comprehensive education and training. Equipping them with a robust skill set and a deep understanding of their responsibilities can be achieved through a structured regimen of training, briefings, coaching, and mentoring sessions. These developmental efforts should be enshrined within a meticulously crafted personnel competency manual, ensuring standardized practices, and upholding the company's service quality standards. By fortifying their personnel with knowledge, skills, and a customer-centric approach, GMF aims to empower its workforce to not just meet but exceed customer expectations, thereby fortifying the company's brand image, fostering customer trust, and sustaining long-term relationships in the competitive aviation maintenance landscape

     

  • Process: The comprehensive journey that customers embark upon, spanning from their initial contact with GMF to the post-purchase support they receive, significantly shapes their overall satisfaction. For GMF, standardizing these intricate processes becomes paramount, necessitating the integration of Accountability, Responsibility, Consulted, and Informed (ARCI) frameworks into business policies, guidelines, and work instructions. However, this standardization must exhibit flexibility to accommodate the diverse needs of various customer types. The execution phase demands diligent oversight, mandating routine monitoring to ensure absolute compliance with established processes and preempt any potential issues that could precipitate delays in the overall workflow. Each process within this framework should have designated control points, facilitating continuous assessment and improvement of their effectivity and efficiency. Ultimately, every step of these processes, as perceived by customers, significantly shapes their satisfaction levels with GMF's services. Hence, meticulous attention to these procedural details is imperative, as it directly correlates with the perceived quality of service and plays a pivotal role in cultivating customer satisfaction and loyalty within the competitive aviation maintenance industry

     

Physical Evidence: Physical evidence serves as a pivotal factor influencing customers' perceptions of GMF's products and services. To entice and captivate new customers, GMF strategically employs a total care solution, leveraging tangible displays of its comprehensive and compliant facilities, workshops, and set of tools. The showcasing of Hangar 4, touted as the largest narrow-body hangar globally, alongside the cutting-edge engine gantry system and test cell, stands as a testament to GMF's prowess in the aviation maintenance arena. Facilitating easier customer access to the GMF facility becomes paramount, employing the slogan "seeing is believing" to underscore the importance of firsthand experience. Embracing technology, GMF may opt for an online virtual tour, ensuring accessibility and allowing potential clients to experience GMF's facilities remotely at any time. While these tangible displays create crucial first impressions, the crux lies in GMF's ability to sustain exemplary quality, competitive pricing, punctual delivery times, and excellent service. Ensuring consistency in these key areas is paramount in retaining customers and cultivating enduring relationships beyond the initial impressions garnered through physical evidence. The convergence of tangible displays and consistently excellent service provision cements GMF's reputation as a reliable and proficient aviation maintenance provider, fostering long-term customer loyalty and trust in the company's capabilities

CONCLUSION

The COVID-19 pandemic significantly impacted the aviation maintenance, repair, and overhaul (MRO) sector, leading to financial and operational instability. The industry faces a critical challenge in recovering from the pandemic's negative effects, with intense competition for market share. The post-pandemic landscape necessitates a shift from traditional corporate methods, with changing customer, supplier, manufacturer, and competitor behaviors highlighting the need for strategic adaptation. Marketing plays a crucial role in managing customer relationships, service delivery, and financial transparency, as well as influencing opinions about the company's financial performance, customer relations, and product launch.

        

It becomes essential for GMF to conduct a thorough internal and external analysis to conform to the post-pandemic environment. Companies may create business and marketing plans that leverage their strengths, fix their shortcomings, take advantage of outside opportunities, and reduce risks thanks to this analytical fusion. Due to resource limitations, there is a need for innovative market segmentation methods. GMF are being pushed to concentrate on market segments and create a special value offer for these segments that is in line with the more ambitious overall business goals. To successfully traverse this terrain, GMF will need to implement a marketing strategy that is both highly detailed and methodical, making use of the marketing mix framework to ensure that all its components are holistically considered and interrelated. This all-encompassing plan must be broken down into implementable action plans, giving designated tasks to the appropriate departments and encouraging a coordinated effort toward GMF's recovery and strategic goals.

 

Acknowledgment

The authors would like to appreciate patients who agree to participate and follow the study protocol patiently.

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