AIRASIA SDN BHD EXECUTIVE SUMMARY

ASPIRE CARD

We, the representatives of the employees of AirAsia Company would like to propose for a new product which is a card that will give benefits to customers.

We would like to propose this new product because our airline company has lacked of offering privileges to the customer. The first problem is that customers do not get any privileges or benefits when they buy AirAsia products and services. Apart from that, there are stiff competitions between AirAsia and other airlines companies which could affect AirAsia revenue. Thus, we will introduce Aspire Card as our alternative to compete with other airlines. The objectives of this proposal are to provide more customers privileges(human right) when they are using or purchasing AirAsia products and services, to be one of the chosen airlines by travellers instead of choosing other airlines companies as well as to increase more profit.

The basic procedures taken to prepare this proposal was by select a pro-tem committee, call for a meeting to select Office Bearers/Club committee, identify a suitable design to create the card, work up the budget for launching and produce the card and drafting terms and conditions of the Aspire card.

The total cost is approximately RM 1,249,800 whereby initial payment is RM 1,123,300 and monthly expenses are RM11,500.

The limitations of this proposal are that there are stiff competitions between other airline companies and AirAsia in Malaysia and there are limited destinations in launching Aspire Cards.

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AIRASIA SDN BHD Company proposal Air Asia Company Sdn. Bhd. 1.0 A proposal to create a card.

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1.1 AirAsia Sdn. Bhd is one of the well established companies in the world. Its main goal is to give the opportunity for everyone to fly by giving benefits to the customers. In order to achieve this goal, the board of directors have come up with a new idea which is creating a card. By creating this card, it will bring many benefits to the company in terms of productivity, profits and much more.

1.2 AirAsia Company chose Aspire as their card name which means hopes or ambitions toward achieving something. This shows AirAsias desire to be one of the top preferred airline companies by implementing Aspire card which give the customers more privileges. There are 3 tiers of Aspire Cards that are Sapphire, Ruby and Diamond. These cards have different specializations that will bring different privileges to the customers.

AIRASIA SDN BHD 2.0 Problem statements

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1) Customers do not get any privileges or benefits when they buy Air Asia Products and Services.

Many airline companies have provided more privileges for the customers. These privileges have attracted more customers to go to their airlines. In contracts, Air Asia does not offer more privileges or benefits when a customer buys their product and services. To give customers more benefits, AirAsia must create a new product to the customer which could give the customers more benefits as well as attract them to purchase and use AirAsia goods and services.

2) There are stiff competitions between AirAsia and other airlines companies which could affect AirAsia revenue.

Airline industry has been facing with stiff competition due to the increased number of airline companies in the sector. So, AirAsia should imply various strategies in ensuring that it meets with the competitiveness in the economy. The strategies should include low fare, best customer service, short-haul route and destination, reduction of operating costs, internet services in its reservation system and quality management.

AIRASIA SDN BHD 3.0 Objectives

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1) Provide more customers privileges when they are using or purchasing AirAsia products and services.

AirAsia does not provide more privileges for customer like other airline companies. By introducing Aspire Card, customers can get more privileges and collect points by purchasing Airasia products and services. The points earned by customers can be redeemed with selected items, flight tickets, and theme parks.

2) AirAsia wants to be one of the chosen airlines by travellers instead of choosing other airlines companies.

Nowadays, there are so many airline companies in Malaysia such as Berjaya Air, AirAsia, MALINDO AIR, MAS and many more. Mostly MAS is the chosen airline company among other airlines. To be one of chosen airlines by traveller, AirAsia must implement a new mean to improve its company as well as increase their profit.

AIRASIA SDN BHD 4.0 Specifications of the cards

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1) Collection of points.

AirAsia has decided for every RM100 spent by customer, they will earn 1 point. Customer can spend their money in buying AirAsia merchandises, meals, ticket flight as well as services and accommodations in Tune hotels all around the world.

2) Redemption of Points.

Every points earned by customers can be redeemed with selected items. The items that AirAsia offered are, discount for the selected theme parks, AirAsia ticket flight and as well as services and accommodation in tune hotels all around the world. Discount will be given according to the level of the cards which are Sapphire, Ruby and Diamond. The selected theme parks are Lego Land, Genting Highlands and Lost World of Tambun.

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ASPIRE CARDS

DESIGN

DIAMOND

A touch of luxury

RUBY

The ruby standard of a rewarding lifestyle

SAPPHIRE

A deep loyalty

AIRASIA SDN BHD 3) Privileges of the cards

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Privileges for ticket flight : Priority Boarding Enjoy Priority Boarding which allows you to pre-board the aircraft at the same time as First Class and Business Class passengers, even when youre flying Economy Class. Priority Check-in Sapphire card Priority Check-In allows you to check-in for your flight at any available Business Class counter, even if youre flying Economy Class. Priority Reservation List With Priority Waitlist, even if the flight that you requested is fully booked, you will be automatically upgraded to a higher priority on the waitlist. Excess Baggage Allowance A 5 kg excess baggage allowance will be awarded to you whenever you travel on AirAsia Airline. Not applicable for piece system

Privileges for Theme Parks and Tune Hotels : Discount will be given 5% for every 30 points earned by customers.

Privileges for ticket flight : Priority Boarding Enjoy Priority Boarding which allows you to pre-board the aircraft at the same time as First Class and Business Class passengers, even when youre flying Economy Class. Priority Check-in Ruby Card Priority Check-In allows you to check-in for your flight at any available Business Class and First Class counter, no matter what class youre travelling on.

AIRASIA SDN BHD Priority Reservation List

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With Priority Reservation Waitlist, even if the flight that you requested is fully booked, you will be automatically upgraded to priority waitlist status. Excess Baggage Allowance An additional 50% excess baggage allowance over and above the entitlement of your class of travel will be awarded to you wherever and whenever you fly with us.

Privileges for Theme Parks and Tune Hotels : Discount will be given 10% for every 30 points earned by customers.

Privileges for ticket flight : Priority Boarding Enjoy Priority Boarding which allows you to pre-board the aircraft at the same time as First Class and Business Class passengers, even when youre flying Economy Class. Priority Check-in Diamond Card Priority Check-In allows you to check-in for your flight at any available Business Class and First Class counter, no matter what class youre travelling on. Highest Priority Reservation Waitlist With Highest Priority Reservation Waitlist, even if the flight that you requested is fully booked, you will be accorded the highest priority on the waitlist. Excess Baggage Allowance Aspire diamond members have an excess baggage allowance of additional 100% over and above the entitlement of your class of travel.

Privileges for Theme Parks and Tune Hotels : Discount will be given 15% for every 30 points earned by customers.

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4) Term and conditions

1. There is no expiry date for Aspire points earned by customers 2. Aspire card must be active within one year. 3. This card can only be used to purchase AirAsia products and services. 4. If the customers loss their card, AirAsia can imposed charge RM 50

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AIRASIA SDN BHD 5.0 Procedures 1) Select a Pro-tem Committee.

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To produce the new customers service cards, two representatives were elected from each department to work on the proposal. The representatives were chosen to reflect a true and fair view, unite the Air Asias employees and make sure the project develop according to the plan. End of the selection period, it was decided to chose representative from Human Resource Department heading the project.

2) Call for a meeting to select Office Bearers/Club committee. Staffs in Human Resource Department were called for a meeting to inform them about the plan to produce the new customers service Aspire cards. The company also recruits the staffs to work under new group, Customers Care Unit which focuses on developing the Aspire card.

3) Identify the suitable designs and name for the card.

The company has highlight that the most important part in developing new Customers Service Card is the design itself. It is a psychological way to attract customers attention towards the cards. The management has finalized several d esigns before proceed with the selected one. In addition, the management also tries to find the best name for the card. The card was named Aspire which mean hopes or ambitions toward archiving something.

4) Work up the budget for launching and produce the card.

The company has done with many researches in order to estimate the cost to produce the Aspire card. The total cost need to be defined first before initial deposit payment need to be paid by the company. With that, the monthly expenses also can be obtained. The costs allocate need to be including the administrative cost, advertising cost, selling and distribution cost and also other related expenses. Besides, the management also has to approximate the cost for the launching ceremony as it need expose from the mass media to the public.
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5) Drafting terms and conditions of the card. Customers always right. So, to maintain the customers right without any problem in the future, the company has already developed the terms and conditions of the Aspire cards. With that, the customers will know the limits on using the Aspire cards. In addition, the customers will be more responsible of the Aspire card; as such the Aspire cards must be active within one year.

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AIRASIA SDN BHD 6.0 Budget

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COST PER ITEM QUANTITY UNIT (RM) Cost of product creation

TOTAL COST (RM)

1) Variable cost

> 30,000

5.00

150,000

Launching expenses

1) Launch day 2) Launching team (working/hour) 12 hours X 50L 3) Rental place for launching ceremony 20

10,000 12,000

20,000

Other Expenses

1) Printing expenses (A4 Brochure Printing) 2) Utilities (per month)

300,000

0.08

24,000

12

5,000

60,000

Advertising expenses

1) Electronic Media (40 seconds/each) 2) Reading Materials Newspapers (white and black/weekly) Magazines (colour pages/monthly)

30 spots

1700

51,000

52 12

900 5,000

46,800 60,000

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Marketing and selling expenses

1) Utilities (monthly)

12

3,000

36,000

Administrative cost

1) Labour cost (6hours X 5days X 52weeks)

1560hours X 50L

10

780,000

Total Cost Initial Payment Monthly Payment

1,249,800 1,123,300 11,500

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AIRASIA SDN BHD 6.1 Advertising Policies

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The new service of AirAsia will be advertised according to below: 1) Advertising in mass media.

As the company has set up a launching ceremony, so the new service can we advertise in various medium after the press launches ceremony. There are a lot of mass media approaches that can be used. As an example: newspapers, business magazines,

advertise in television, business directories and etc. Other than that, we also can advertise using the billboards. 2) Advertise in our own magazines the 3 sixty.

As the Air Asia already has their own in-flight magazines, we can use this advantage by introducing our new customers benefit service in business segment. With that, we can show the collecting points rates and the product that can be redeeming by using the collected points. In addition, we can provide catalogues to show the product that can be redeem using collected points.

3) Advertise at the airport.

Air Asia not only advertises the new customer services in mass media but also with their provided facilities. As an example, on the airport they can promote it at the screens that show the travel destination. In addition, they also can use in seat in-flight entertainment screen in the airplanes.

4) Advertise in digital marketing.

As we all know, digital media is one of the most favourable medium that preferred by people today. So, one of the initiatives is advertise by using company websites. Other than that, the company can use social application such as Facebook and Twitter to promote the advantages that can be obtained by the passengers using the collected
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points. If there is any promotion regarding the redemption, it also can be announced here.

6.2 Launching Strategies

As the company already has the partnership with several hotels, so the launching ceremony will be held in the selected hotel. For launching ceremony in Malaysia, the company already chooses PARKROYAL Kuala Lumpur, Kuala Lumpur. For launching ceremony in Asian county, the company already Bangkok as there is numerous number of flight to the county. So, with that Air Asia will have a lunching ceremony in JW Marriott Bangkok Hotel, Bangkok.

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AIRASIA SDN BHD 7.0 Limitations

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1. There are stiff competitions between other airline companies and AirAsia in Malaysia. In order to adjust with the stiff competition in the airlines business, airlines industries tend to come up with various businesses models and business new strategies to be competitive. Airlines adopt strategic model to expand their market reach as well give better and satisfying service delivery to their target market. Besides, they also need to come out with new attractive product.

2. There are limited destinations in launching Aspire Card. Even though AirAsia is one of the established companies, there is also limited destination in launching the new card in other countries. It is because the number of flight travelled in certain routes is not as much as any popular destination. With that, the company has to decide for make a launching ceremony in popular destination demand by the traveller.

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