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Abstract:
The purpose of this study is to discuss the global marketing strategies of Air Asia.
This study starts with the brief background of Air Asia. The main aim of this study
is to evaluating the marketing strategies of Air Asia. To evaluate overall
marketing strategies, the author discussed about Air Asias marketing mix and
expansion strategy, the pros and cons of these strategies of Air Asia. To find out
the effectiveness of Air Asias global marketing strategies, the author compared
air Asias marketing strategies with its main competitor Malaysian airlines
marketing strategies. After finding the result from the discussion, the author
tried to find out the new market for air Asia and proposed a marketing plan. At
the end of the study, the author had given some recommendations for Air Asia to
improve the strategies to go internationally.
Nowshad M Shawon
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Table of Contents
1.
Introduction:.................................................................................................... 3
1.1
2.
1.1.1
1.1.2
Marketing Strategies:................................................................................4
2.1.1
2.1.2
Marketing Mix:.................................................................................... 5
2.1.3
2.1.4
2.1.5
2.2
2.2.1
2.2.2
3. Actions & Decisions would make, if author were appointed as the CEO of Air
Asia:....................................................................................................................... 7
4.
4.1.1
4.1.2
4.1.3
4.1.4
Threat of Substitute:...........................................................................9
4.1.5
Competitive revelry:............................................................................9
4.2
Malaysia Airlines:...................................................................................... 9
4.2.1
4.3 Compare & Contrast of Air Asias strategies with Malaysia Airlines
Strategies:........................................................................................................ 10
5.
6.
Conclusion..................................................................................................... 12
6.1 Recommendations:..................................................................................... 12
7.
References..................................................................................................... 13
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1. Introduction:
Airlines industry is one of the biggest industries in the world. The
marketing competition within the airlines industry is increasing day by
day. Many airlines are coming in the market with innovative ideas of
marketing to make a best place in the competition. Lots of marketing
materials are related with airlines industry. The airlines that are using
those materials innovatively are getting success in the market.
Air Asia is one of the up growing airlines in the world. Air Asia came in the
airlines industry with some innovative ideas which leaded them to get a
good market. In this study, the author analysed global marketing
strategies adopted by air Asia with the help of a case study on Air Asia
researched by Professor Thomas Lawton and Jonathon Doh in 2010.
In this study, the author discussed and critically analyzed about the
present marketing strategies which are taken by Air Asia. The author also
talked about the action and decision should be made in present strategies.
After analyzing those marketing strategies the author discussed about
competitors of air Asia in market and compared Air Asias strategy with
main competitors airlines marketing strategy. To full fill the aim of this
study, the author tried to identify the new market for air Asia.
To be the largest low-cost airline in Asia and serving the three billion
people who are presently underserved by high fares and poor connectivity
(Air Asia , 2012).
1.1.2
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To achieve the lowest cost so that everybody can fly with Air Asia,
2.1.1
Marketing Strategies which are taken by Air
Asia:
Air Asia is adopting an effect marketing strategies. Air Asia is providing
low fare facilities for customers. From case study of Lawton & Dos (2010)
the author found some marketing strategies which leaded air Asia to the
success. The marketing strategies of Air Asia are discussed below:
1. Low Fare: Air Asias main marketing strategy is making available
low cost ticket for travellers. This is very effective strategy taken by
air Asia. This strategy helps air Asia to get a huge market. The cost
of ticket of air Asia is sometimes lower than other transport cost.
According to Lawton & Dos (2008) Air Asia was able to get cost per
available seat kilometre. Air was worlds best low cost airlines in
2007, 2009, 2011 & 2012 (Air Asia , 2012). Air Asia is providing
ticket to the traveller in very lowest cost within short distance
journey, the price is sometimes half than travelling by car or other
transport.
2. Internet Booking: Technology one of the effective marketing
element. Air Asia is using this element perfectly. Air Asia allowed
ticketless travel through internet booking to maintain its simplicity.
Through this strategy air Asia is also reducing the distribution cost
(Lawton & Doh, 2010). On the other hand, this strategy helps
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2.1.2
Marketing Mix:
The marketing Mix is the set of convenient, strategic marketing tools that the business
organization mix together to create the preferred response in the target market. The tools can
be accumulated into four groups. The groups of variables are: Product, Price, Place and
Promotion (Kotler & Armstrong, 2006).
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2.1.3
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2.1.4
After discussing the marketing strategies of Air Asia, the author of this
study found some pros of air Asias marketing strategy. They are given
bellow:
Effective Low fare strategy: Low fare strategy of air Asia was
really very effective. Air Asia became best low cost airlines in 2009,
2010, 2011 and 2012. This strategy helped air Asia to attract
customer.
Made strong marketing base: Through the low fare marketing
strategy, air Asia made a strong base of marketing.
Customer Loyalty: Air Asia focused more on customer loyalty and
air Asia is successful in this case because they are getting many
permanent customers. Air Asia also has a loyalty programme called
BIG. In every transaction with air Asia, travellers get points and it
influences them to travel with air Asia (Air Asia , 2012).
Going to be the biggest airlines: One of the most important
strategies of air Asia is to increase number of aircraft. By 2014, air
Asia is planning to get over 140 aircraft in their fleet. It is helping air
Asia to be the biggest airline in the world.
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2.1.5
Low profit: As air Asia is offering very low cost ticket, they are
losing the profits. Domestic air ticket is sometimes less than bus and
car transport cost, as a result air Asia is getting very low profit which
is not a very good for an business organization.
Large amount of risk: Air Asia is not serving in the most of the
countries in the world as renowned airlines do. Although air Asia
started its international journey in 2004 but they has lots of aircraft
in the fleet. From study of Lawton & Doh (2008), the author found
that, by 2014 air Asia is going to increase its fleet to 140. This is a
big risk of investment, as air Asia still not serving enough countries.
Difficult to maintain standard: Air Asia is earning very low profit
compare to the services. If they continue to serve low cost ticket
and gain low profit, it will be difficult for air Asia to maintain the
good standard.
2.2.1
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2.2.2
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4.
Lawton and Doh (2010) talked about the competitors of Air Asia in some
different aspect. Such as, Japan airlines and All Nippon airways as low fare
airlines in Japan, Malaysian airline as a low cost airline in Malaysia,
Singapore airlines, jet airlines, Thai airways, Nok air, etc. According to
Lawton and Doh (2010) the main competitor of air Asia is air Malaysia.
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4.1.1
Barging Power of Suppliers:
Fuel and aircraft companies are main suppliers of airlines industry. The
aircraft and fuel companies are doing completion among themselves; as a
result the barging power of suppliers is low in this case (Lawton & Doh,
2010).
4.1.2
Barging Power of Buyers:
As there are lots of low fare airlines are in the market, travellers are
looking for better service and they can change the choice of airlines
without any hesitation. So barging power of buyers is high for Air Asia
(Lawton & Doh, 2010).
4.1.3
Threat of New Entry:
Low fare strategy is very successful in the airlines market. Most of the
airlines are now adopting this strategy. Many new companies are
interested to the airlines business as people are travelling frequently in
airlines instead of other transport because of low fare. So, threat of new
entry in this industry is high (Lawton & Doh, 2010).
4.1.4
Threat of Substitute:
Threat of substitute is low for Air Asia, as travelling by car for long
distance is expensive than airline ticket. Even the cost of travelling by
other transportations for same distance is same (Lawton & Doh, 2010).
4.1.5
Competitive revelry:
Competition in airlines industry is very high, if we can see closer that, if an
airline low its ticket price other airlines also do the same things, even for
sales promotion and discount same attitude have seen.
4.2.1
1. Low Fare Airlines: According to Lawton and Doh (2010) as air Asia
introduced low cost air in Malaysia; suddenly Malaysian airlines
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consider this business model and gave low fare air ticket to the
travellers.
2. Sales Promotion: Malaysian airlines focus more on sales promotion
rather than advertising (Malaysia Airlines , 2011). According to Lawton
and Doh (2010) Malaysian airlines started giving discount on limited
seat when air Asia was giving low cost fare to the travellers.
3. Alliance: Malaysia airline is going to join one world, one of the largest
alliances of the world. Through this step, Malaysia airlines with get
benefits of huge network, increasing traffic via combined network and
infrastructure. Moreover, through the alliance Malaysia air will get
respective geographical strength (Malaysia Airlines , 2011). On the
other hand, alliance will do advertising on behalf of Malaysia Air which
is the greatest benefits for Malaysia air.
4. Branded Customer Experience: According to Malaysia airlines
(2011) customers are Malaysia airs main priority. Malaysia Air will
increase customers satisfactions through their pre flight, during flight
and post flight. Moreover, Malaysia airlines will invest more money on
new tools and process to keep brand promise.
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5.1European Market:
By 2013, air Asia need to join any alliances, the author would
recommend star, sky team or one world in the selection. By joining
any alliance, air Asia will get a global network and it will helps in
advertising the brand and expanding globally.
By 2014, air Asia should join in new market, initially air Asia has to
take UK, Spain, Italy, USA and Canada in accounts.
By 2015, Air Asia should focus on other countries in Europe and
America.
Customer satisfaction is very important in airlines industry, in this
case customers pre flight, during flight and post flight service
should be quality service.
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Air Asia already made a good domestic market with low fare
strategy, now its time to give quality service to the customer
rather than low fare ticket.
In upcoming years, air Asia need to increase sales promotion rather
than low price ticket, such as discount for regular customer or get
three for two etc.
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6. Conclusion
Air Asia is a possible biggest airline in future. It has a great possibility to
enjoy a profitable international market. Air Asia is mainly an Asia continent
based airline. It established its market through low fare strategy. This
strategy is very successful domestically and internationally.
In this study, the author discussed about Air Asias marketing strategy
according to the case study which is researched by Lawton and Doh
(2010) and other resources. The author found some marketing strategies
which are adopted by Air Asia. As a CEO of Air Asia the author tried to
make some decision on Air Asias marketing strategies. The author
discussed Air Asias competitors and found that Malaysia Airlines is the
main competitor of air Asia and compare the strategies between two
airlines. To full fill the requirements of the study the author proposed a
new marketing plan for air Asia which can help Air Asia to explore
international market.
6.1 Recommendations:
After discussion on Air Asias marketing strategies, the author found some
strength and weakness of air Asias marketing strategies. If air Asia can fix
it weakness in marketing strategies than it would be easy for air Asia to
make a good position in global market. The author would like give some
recommendation on Air Asias overall marketing strategies which can help
Air Asia to overcome the weakness of air Asias marketing strategies.
Air Asia should join any alliance as soon as possible because joining
any air alliances will help air Asia to go internationally. Firstly,
alliance will help Air Asia to enjoy a global network, partnership with
other airlines through alliance can helps to make new market in
Europe and America. Secondly, alliance can help Air Asia to do
advertisement globally, the alliances always represent its member
airlines name, and so in this process air Asia can get the opportunity
to do advertising globally. Thirdly, through sharing distribution
centre, check in, boarding staff and computer system Air Asia can
reduce the operational cost. Last but not least, code sharing is the
main facilities of alliances. Through code sharing, Air Asia can
reduce the risk of lose in total.
Air Asia should focus more on service standard rather than low fare
strategy. We have to agree that, low fare strategy gave Air Asia a
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7. References
1. Air Asia (2012) Corporate Profile. [Online] Available at:
http://www.airasia.com/ot/en/corporate/corporateprofile.page?
[Accessed 9 Oct 2012].
2. Blacharski, D (2006) Superior Customer Service. Florida: Atlantic
Phublisher.
3. Daniels, J. D., Radebaugh, L. H. & Sullivan, D. P. (2004) International
Business. 10th ed. New Jersey: Pearson Prentice Hall.
4. ferrell, O., Hartline, M. & Lucas, G (2002) Marketing Strategy. 2nd ed.
London: Thomson Learning.
5. Kleymann, B. & Seristo, H (2004) Managing Strategic Airline
Alliances. Hampshire: Ashgate Publishing.
6. Kotler, P. & Armstrong, G. (2006) Principles of Marketing. 12th ed.
New Jersey: Pearson.
7. Lawton, T. & Doh, J (2010) The Ascendance of Air Asia: Building a
successfull budget airline in Asia. Ontario: Richerd Ivey School of
Business Foundation.
8. Malaysia Airlines (2011) Business Plan: Our Way Forward. [Online]
Available at:
http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/cor
porate-info/Malaysia%20Airlines%20Business%20Plan.pdf [Accessed
11 Oct 2012].
9. Malaysia airlines, n.d. Our Story. [Online] Available at:
http://www.malaysiaairlines.com/uk/en/corporate-info/our-story.html
[Accessed 11 Oct 2012].
10. Mills, J.E. & Law, R., eds (2004) Handbook of Consumer Behavior,
Tourism, and the Internet. New York : Haworth.
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16. Tuten, T.L (2008) Advertising 2.0: Social Media Marketing in a Web
2.0 World. Westport : Greenwood Phublication.
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