Professional Documents
Culture Documents
Marketing plan
&
Strategy for Omega airlines
SUBMITTED TO:
SHUBRA BAHEL
SUBMITTED BY:
KARAN GAUR
RACHNA SHARMA
SAGAR DWIVEDI
VIKAS KUMAR JAIN
Table of content
1. Executive summary
objective
scope
Page | 1
Research methodology
2. External environment analysis
Pest analysis
Porter’s five force model
3. internal environment analysis
SWOT analysis
airline industry value chain analysis
4. competitive analysis
5. Ansoff’s matrix for omega airlines
6. STP for omega airlines
7. 7 p’s for omega airlines
8. SWOT matrix
9. Blueprinting model
10. RATER analysis
11. Moment of truth
12. Critical incident
13. Zone of tolerance
14. Service recovery
15. Bibliography
Page | 2
Page | 3
EXECUTIVE SUMMARY
This report is the analysis of airline industry as a whole. ,
competitive analysis is been done and explained in detail. In this
analysis we applied different type of models that have applied to
this analysis and try to get the results whether to enter airlines
service sector is a good decision for Omega or not . Our finding
of results tell that they have made Quit good decision by
entering into this market but they have pay some serious
attention as this is that type of service required huge investment
for entrance and exit both the cases. In this report we find all the
possibilities that might affect to them and at the same time we
suggested them solution to how to get over these problem. We
have formed an marketing plan and strategy for the same their
implication surely help them to enter in this market.
OBJECTIVES
The objective of this report is to study the external environment
of the Aviation Industry in India.
1. Subsequently, internal environment analysis is conducted
for Indian Airlines. With the help of this comprehensive
study, we have prepared a marketing plan for start-up
players.
2. To understand the utilization of strategic marketing tools
like porters five force model ,value chain analysis and
Page | 4
Tows matrix etc. and important factors responsible for the
formulation of corporate strategy
SCOPE
The scope of this report is to analyze various Marketing aspects
of theairline industry which would include the product, brands,
pricing, supply chain and logistics, marketing communications
and advertising, customer segmentation and their characteristics
and critical factors for success in this industry. The report
includes examples from various airlines across the world, but to
maintain specificity it retains an Indian perspective and
compares competitors across the Indian domestic carriers.
RESEARCH METHODOLOGY
Data Source
Page | 5
The data can be collected from two sources, i.e. Primary and
Secondary. Wehave collected the entire data of this project on
Airlines industry fromSECONDARY SOURCES like websites,
books, newspapers and magazines.
Page | 6
CURRENT SITUATION ANALYSIS
PEST Analysis: The Indian Airline Industry
A PEST analysis is an analysis of the external macro-
environment that affects all firms. P.E.S.T. is an acronym for the
Political, Economic, Social, and Technological factors of the
external macro-environment. Such external factors usually are
beyond the firm's control and sometimes present themselves as
threats. For this reason, some say that "pest" is an appropriate
term for these factors. Let us look at the PEST analysis of the
Indian aviation sector:
Political Factors
Page | 7
significance for the airline industry since airplanes were
involved. The immediate results were a huge drop in air traffic
due to safety & security concerns of the people.
Economic Factors
Page | 8
Social Factor
Technological Factors
Page | 10
These technological changes in the environment have an impact
on Air India as well. Better airport infrastructure, means better
handling of airplanes, which can help reduce maintenance cost.
It also facilitates more flights to such destinations.
Page | 11
Porter’s five forces model for airlines industry
1. Threat of New Entrants
Product differentiation:
In low cost carriers, there is not much differentiation in the basic
service that is being provided to the customers. Differentiation
can only be achieved by Value Added Services.
Switching cost:
1. The switching cost is not high. Customers can easily choose
other low cost carriers.
2. The switching cost of an airline company to other
business/industry is high as the exit cost is high.
Page | 13
Setup costs:
Nowadays, venture capital of $10 million or less is
enough to launch an airline.
1. In order to overcome the shortfall of aircrafts during the peak
seasons, airlines can utilize an ACMI lease agreement for the
extra aircraft. If the airline has many aircrafts, either owned or
leased, then they can offer their surplus aircrafts in their low
season to another airline that is facing peak season.
Strategic Ma
2. An airline company will bear the cost of purchasing an
aircraft if it wants to start or expand its fleet, leasing allows the
cost to be spread across several years. At the lease term end, the
lease can be renewed or aircraft can be returned, to be replaced
with more modern aircraft.
Fuel prices:
Domestic ATF prices have increased by over 160 per cent from
the beginning of 2005 till last year and by over 80 per cent from
a year-ago levels. In India, oil companies do not import ATF
directly; instead they refine it from imported crude oil. With
rising crude oil prices, imports are becoming expensive day by
day and at the same time, the government is unable to pass on
the full impact of this rise to the consumer. As a result, the state
owned oil marketing companies (almost 95 per cent of the
market is with state owned firms) are forced to sell diesel,
petrol, kerosene and LPG at way below cost, a cost they are
trying to somewhat make up by raising the price of ATF, which
Page | 14
is under their control. As a result prices of ATF in India are
much higher than some of the other Asian countries.
Page | 15
The suppliers are few and thus in better position to bargain as
they always finds customers for their aircrafts.
4. Competitive Rivalry
The aviation industry is a highly competitive industry because of
which it is difficult to earn high returns in this sector. Below are
the major reasons for the high competition in the low-cost
carrier airlines:
• Very little scope for differentiation between competitors’
products and services
S
• Aviation is a mature industry with very little growth. The only
way to grow is by stealing away customers from competitors
Page | 16
• Suppliers of aircrafts are the same, i.e., Boeing and Airbus.
Hence supplier’s bargaining power is high.
• Switching cost of customers is high for low cost carriers, i.e.,
there is no brand loyalty.
5. Availability of Substitutes
The substitute for low cost airline company is the railways. But
this substitute is not very powerful due to the following reasons:
1. Customers use airline transport as it is convenient and saves
travelling time. So trains cannot work as a substitute to save
time.
2. Secondly, many customers use airlines as a status symbol. So
again, trains cannot substitute for prestige.
Page | 17
SWOT analysis of airlines industry
Weakness:
1. Airlines have a high "spoilage" rate compared to most other
industries. Once a flight leaves the gate, an empty seat is
lost and non-revenue producing.
2. Aircraft is expensive and requires huge capital outlays. The
return on investment can be different than planned.
3. Large workforces spread over large geographic areas,
including international points, require continual
communication and monitoring. This can be exacerbated
Page | 19
during operational irregularities, e.g. bad weather.
4. While the business climate can change quickly, airlines
have difficulty making quick schedule and aircraft changes
due to leases, staffing commitments and other factors.
Opportunities:
1. Airline market growth offers continual expansion
opportunities for both leisure and business
destinations. This is particularly true for international
destinations.
2. Technology advances can result in cost savings, from
more fuel efficient aircraft to more automated
processes on the ground. Technology can also result in
increased revenue due to customer-friendly service
enhancements like in-flight Internet access and other
value-added products for which a customer will pay
extra.
3. Link-ups with other carriers can greatly increase
passenger volumes. By coordinating schedules,
airlines can offer service to destinations via a code
share agreement with a partner carrier.
Threats:
Page | 20
1. A global economic downturn negatively affects
leisure, optional travel, as well as business travel.
2. The price of fuel is now the greatest cost for many
airlines. An upward spike can destabilize the business
model.
3. A plague or terrorist attack anywhere in the world can
negatively affect air travel.
4. Government intervention can result in new costly rules
or unexpected new international competition.
Strengths Weakness
Product Expensive and
differentiation requires huge
Advance capital
Opportunities technology Large workforce
Link with other Environmental
carrier condition
Market growth
Page | 21
Highly trained
staff
Competition High attrition in
Infrastructure top brass
issue Global economic
Threat downturn
Government
intervention
Page | 22
Breaking of cost in percentage
35
30
20 infrastructure
35 hrm
25 procurement
30 technological
25 procurement
20 technological
15
10 hrm
5
0 infrastructure
Category 1
Page | 23
Market share of airlines in India
Airlines
7.39; 7%
Page | 24
Ansoff’s matrix for Omega
Product
developmen
Current market Omega t strategy
Market
developmen
t strategy
If we put omega into this matrix then result would be that they
are trying to develop new differentiated airlines in the niche
market of premium segment it means they try to develop a new
market only for those who wants to fly only in luxury.
Page | 25
STP for omega airlines
• Segmentation
Geographic Region
Density
Social Classes
Income Level
• Targeting
Omega express
Page | 26
Business class
Omega premium
• Positioning
Lifestyle
Benefits
Quality
Luxury
This is the possible STP for the Omega airlines as they are
playing in premium segment so they have to position them in
this condition where upper class society have reach and what
they believe to live in.
Product
Page | 27
On the ground services include a convenient airport with
car parking facilities, duty free shopping, quick and
efficient cheeking of baggage, efficient services at
reservation counter, transport to the airport.
In flight services
Services provided are intangible and is highly variable. The
air hostess are trained to provide polite warm and courteous
services The courteous service that the representatives at the
baggage counter, reservation counter provide goes a long way in
developing customer loyalty. The travel agents of the airlines
also need to be efficient and polite.
connecting flights
through check-in,
tele check in,
Page | 28
food on board,
and complementary gifts etc.
Air concessions are given to school students, old people
etc.
small 8”television screen for every passenger.
STD facility for 5 minutes
The Enhancing services
Online booking
Spa and body massage
Different types of cuisines
Customized pick up and drop services
Pricing
Premium pricing:
Place
Distribution channel
Consolidation:Thedirectsaleofticketsfromairporttothepass
enger onthe airline desk.
Tour Operator/ TravelAgent: Customers
approachtravelagentsortouroperatorswhobooktheticketsfro
mtheairlineandtakecommission. E.g. SOTC
Affiliated with companies:As then ame defines, airlines
gets affiliated with companies who carry all its trips with a
same airline who in turn gives special discounts or offers
in return.
Direct through homel eased system, e.g. Phone, fax, email
and also online e-booking.
Promotions
Advertisements
People
Process
Physical evidence
Page | 31
Personal valets
Gourmet cuisine
F
s
t
B Blue printing for omega airlines a
a g
c
Physical evidence e
k Reservation Receiving tickets Arrival at airport Obtaining
through agents or Immigration/Boarding
other channels pass
s
t
a Line of interaction
g
Custom clearing Boarding the Alighting the Baggage retrieval
e flight/interaction aircraft
with crew:
experiencing
ambience
Line of visibility
Selecting aircraft Recruitment and Training and scripting
selection development
Page | 32
line of internal physical relation
QualityDimensions:RATER Analysis
Page | 33
from persont on person,industry to industry. Even depend upon
the product on offer.
Page | 34
Moment of truth
• Making areservation
• Gettingtickets
• Boarding
• Flying
• Retrievingbaggage
Critical incidence
Zone of tolerance
Page | 35
level of
servicebelowwhichheisdissatisfiedwiththeserviceprovidedbythe
airline company.
Thisincludeseasyavailabilityoftickets,quickinformationabout
reschedulingoffightsoranyotherimmediatechangesmade,cleanair
crafts, hygienic food,safekeepingofbaggage
andadequatesafetymeasures(oxygen masks,parachutes)incase
ofanemergency.
Service recovery
2ndstep: listeningtothecustomers.
3rdstep:avoid defendingthecompany
andofferarationalexplanation.
4th step:offersomeextrabenefits
5thstep:haveaproperfollowupandmakesurenomistakesthistime,s
Page | 36
o thathecaneasilyforgetabouttheservicefailure andis retained.
Bibliography
Page | 37
Discounted IA fares to take on no-frills Deccan Times of
India
Page | 38