Presented by

Neelutpal Saha (222012)

Shan Lal (222021)
Mrinmoy Sarkar (222011)
Pankaj Srivastava (222014)
 AGENDA

•Aviation Industry
•About IndiGo Airlines
•PEST analysis
•Porter’s 5 forces analysis
•SWOT and TOWS analysis
•Competitive Strategy
•STP
•Product Mix
•Market Leader Strategy
•Branding and Promotional Strategy
•The road ahead
•Recommendations
 AVIATION INDUSTRY

Total domestic passengers carried by the scheduled domestic airlines between

January and May 2013 were 25.998 million, as against 25.808 million during the
corresponding period of previous year thereby registering a growth of 0.74 per
cent, revealed the statistics from Directorate General of Civil Aviation
No-frill carrier IndiGo lead in terms of market share with almost 30 per cent of
the pie, followed by Jet Airways-Jet Lite combine at 25.3 per cent, Air India
Domestic at 19.2 per cent, Spice Jet at 17.5 per cent, and Go Air at 8.3 per cent
for the month of July 2013.
The air transport (including air freight) in India has attracted foreign direct
investment (FDI) worth US$ 456.84 million from April 2000 to July 2013, as per
the data released by Department of Industrial Policy and Promotion
 ABOUT INDIGO

Indigo is an Indian airline company headquartered at Gurgaon. It is a low cost

carrier and the largest airline in India with a market share of 30.3% as of September
2013. IndiGo is one of the fastest growing low cost carriers in the world. With its
fleet of 72 new Airbus A320 aircraft, the airline offers 447 daily flights connecting
to 35 destinations.

Indigo was set up in early 2006 by Rahul Bhatia of InterGlobe Enterprises and
Rakesh S Gangwal, a United States-based NRI. InterGlobe holds 51.12% stake in
IndiGo and 48% is held by Gangwal's Virginia based company Caelum Investments

On 17 August 2012, Indigo became the largest airline in India in terms of market
share (27%), In August 2013, the Centre for Asia Pacific Aviation ranked Indigo
amongst the 10 biggest low-cost carriers in the world.
 MARKET SHARE

India’s largest airline by passengers carried, reported a more than sixfold increase
in profit to Rs. 787 crore for 2012-13—the low-fare airline’s fifth consecutive
profitable year. Revenue rose 65.4% to Rs.9,458 crore, according to data
submitted to the Directorate General of Civil Aviation
 WHY IS THE MARKET LEADER?

Indigo's stuck to its low-cost,

single class model unlike rivals Jet Airways.
Selling and leasing back planes
helps its balance sheet
Quality and detail key to good service
It’s all about customer focus RahulBhatia,MD
Using technology smartly

AdityaGhosh,President
 PEST ANALYSIS

This analysis is a framework or tool used by marketers to analyze and monitor

the macro environmental (external marketing environment) factors that have an
impact on an organization

Political:
Political: Socio- Cultural:
Open
OpenSkySkyPolicy/
Policy/Deregulation
Deregulation(+)
(+) Growing Middle Class (+)
Low
LowEntry
EntryBarriers
Barriers(+)
(+) Domestic Leisure Travel (+)
FDI
FDILimits
Limits(+)
(+) Foreign Tourist (+)
49
49%%for
forairlines
airlines Status Symbol (+)
100%
100%forforairports
airports Security Issues & Terrorism (-)
Extensive
Extensiveairports
airportsdevelopment
development
planned
planned
 CONTD
Economic:
Growing Middle Class Income (+)
Consistent GDP Growth (+)
Hike in average income (+)
Growth in Tourism (+)
Rising ATF Price (-)
Technological:
Modernized Airports (+)
Greenfield Airports (+)
Better handling of Aircrafts,
passengers and Cargo (+)
Video-conferencing/VoIP (-)
 PORTER’S 5 FORCES ANALYSIS OF
AVIATION INDUSTRY

It is a simple framework for assessing and evaluating the competitive strength

and position of a business organization (in short the micro-environment)

Threat
Threatof
ofNew
NewEntrants
Entrants

Low
LowProduct
Productdifferentiation
differentiationininbasic
basicservices
services

Low
LowSwitch
Switchcost
costfor
forCustomers
Customersbut buthigh
highfor
forairlines
airlines

Open
Openskyskypolicy
policyfor
forforeign
foreignentrants
entrants

Very
Veryhigh
highset-up
set-upcosts
costs

Increasing
Increasingfuel
fuelprices
prices

Shortfall
Shortfall++High
Highcost
costof
ofskilled
skilledresources-
resources-Pilots
Pilots
 CONTD…

Bargaining
BargainingPower
Powerof ofSuppliers
Suppliers

Duopoly
DuopolyininAircraft
AircraftMarket-
Market-LowLowbargaining
bargaining power
powerwith
withairlines
airlines

Switch
Switchcost
costto
toother
othersuppliers
suppliersisishigh
high

Shortage
Shortageof
ofCommercial
CommercialPilots
PilotsininIndia
India

Limited
LimitedSuppliers
Suppliersof
ofATF
ATFininIndia
India

Competitive
CompetitiveRivalry
Rivalry
Very
Verylittle
littleproduct
productdifferentiation
differentiationininServices
Services
Mature
MatureIndustry-
Industry-Only
Onlyscope
scopefor
forgrowth
growthby by gaining
gainingother
other
people’s
people’smarket
marketshare
share
High
Highbargaining
bargainingpower
powerof ofsuppliers
suppliers
No
Nosense
senseof ofbrand
brandroyalty
royalty amongst
amongstcustomers
customers and
andcan
caneasily
easily
switch
switchto
toother
otherairlines
airlines
 CONTD

Bargaining
BargainingPower
Powerof ofBuyers
Buyers
High
Highnumber
numberof ofbuyers
buyersfragmented-
fragmented-lowers
lowerstheir
theirpower
power
With
Withhigh
highnumber
numberof ofbuyers,
buyers,growth
growthopportunities
opportunitiesare
arealso
also
high
high
Switch
Switchcosts
costsare
areminimal
minimalforforbuyers
buyers

Availability
Availabilityof
ofSubstitutes
Substitutes
Indirect
IndirectSubstitutes
Substitutesare arerailways-
railways-but
butnot
notpowerful
powerfulasasairlines,
airlines,
score
scorehighly
highlyinintravel
traveltime
time
Travel
Travelbybyair
airisisaastatus
statussymbol
symbol
However
Howeverdirect
directsubstitutes
substitutesare
areother
otherLow
LowCost
CostCarriers
Carriers–since
–since
switch
switchcost
costisislow,
low,threat
threatofofsubstitutes
substitutesisishigh
high
 S.W.O.T ANALYSIS

A tool that identifies the strengths, weaknesses, opportunities and threats of an

organization. The method of SWOT analysis is to take the information from an
environmental analysis and separate it into internal (strengths and weaknesses)
and external issues (opportunities and threats).

Weaknesses:
Weaknesses:
Strength:
Strength:
1.Less
1.Lessdifferentiation
differentiation
1.Low
1.Lowfares
fares
2.Short
2.Shortlived
livedinnovations
innovations
2.High
2.HighService
ServiceQuality
Quality
3.Untapped
3.Untappeddomestic
domesticcargo
cargo
3.Operational
3.OperationalEfficiency
Efficiency
segment
segment
4.Customer
4.CustomerService
Service
4.No
4.Noestablished
establishedalliances
alliances
5.Short
5.Shorthaul
haulflights
flights
5.Lack
5.Lackof
ofproduct
productdepth
depthand
and
6.Fuel
6.FuelEfficient
EfficientAircrafts
Aircrafts
breadth
breadth
 CONTD…

Threats:
Threats:
Opportunity:
Opportunity: 1.High
1.HighATF
ATFprices
prices
1.Increasing
1.Increasingmiddle
middleclass
classpopulation
population 2.Economic
2.Economicslowdown
slowdown
2.Increase
2.Increaseinindomestic
domestictourism
tourism 3.Government
3.Governmentpolicies
policies
3.Booming
3.Boomingair aircargo
cargobusiness
business 4.Technological
4.Technologicaladvancement
advancementinin
4.Chartered
4.CharteredServices
Services communication
communication
 TOWS ANALYSIS

TOWS analysis is a method of strategic analysis used to study the environment of

the organization and its interior

SO:
SO: WO:
WO:
1.Increase
1.Increasedomestic
domesticdestinations
destinations 1.Plan
1.Planto
togo
gointernational
international
2.Upgrade
2.Upgradeto tolong
longhaul
haulaircrafts
aircraftsasas 2.Expand
2.Expandto tofreight/cargo
freight/cargoservices
services
per
perdemand
demand 3.Diversify
3.Diversifyto
toChartered
Charteredflight
flight
3.Offering
3.Offeringaffordable
affordableinternational
international services
services
holiday
holidaypackages
packagestotothe
themiddle
middle 4.Loyalty,
4.Loyalty,Rewards
Rewardsandandother
other
class
classtravelers
travelers Customer
Customerretention
retentionprograms
programs
 CONTD

WT:
WT:
ST:
ST: 1.Create
1.Createaatie-up
tie-upwith
withother
otherLCC
LCC
1.Effective
1.Effectiveincentive
incentiveprogram
programtoto players
playerslike
like Air
AirAsia
Asiafor
forthe
theIndian
Indian
prevent
preventtalent
talentdrain
drain customer
customerbasebaseto
toprovide
providelast
lastmile
mile
2.Sign
2.Signanti-poaching
anti-poachingagreement
agreement connectivity
connectivity
with
withcompetitors
competitors 2.Offer
2.Offerbusiness
businessclass
classseats,
seats,
3.Continue
3.Continueto tosuccessfully
successfullyhedge
hedge continue
continueinnovation
innovationofofvalue
valueadded
added
fuel
fuelprices
pricesby
byimporting
importing services
serviceswhile
whilefocusing
focusingononcost
cost
optimization
optimization
 SEGMENTATION, TARGET AND
POSITION

Segmentation, targeting, and positioning together comprise a three stage

process. We first (1) determine which kinds of customers exist, then (2) select
which ones we are best off trying to serve and, finally, (3) implement our
segmentation by optimizing our products/services for that segment and
communicating that we have made the choice to distinguish ourselves that
way.
 PORTER’S SCA MODEL

A firm possesses a Sustainable Competitive Advantage (SCA) when it has value-

creating processes and positions that cannot be duplicated or imitated by other
firms that lead to the production of above normal rents

Cost Leadership and Competencies

•Avoiding in flight services
•No free meals
•Strategic use of disposable bags for quick cleaning of aircrafts before
landing
•Highest no. of seats
•Light weight seats
•Internet Reservations
•Cost and Service Culture
•Human Resource training on efficient processes
•Centralized operation controls Centre
•Highest no. of CAT III compliant pilots
 CONTD…

Operational Efficiency
•Low turnaround time
•Aircraft Utilization
•On-time performance for time sensitive travelers
•Young fleet of aircraft (hence less maintenance issues)
•Lower employees per aircraft
•Fuel efficient engine
•Zero inventory of components
•Same configuration of all aircrafts providing flexibility in allocation

Positioning
•Limited Passenger Service
•Low price tickets
•Point to point routes
•Frequent and reliable departures
 PRODUCT MIX

Giving a feel of the Product inside a Service Wrapper: Consumers are

demanding not products or features of products but the benefits they will be
offered
The airline product consist of two types of Services: On the ground Service, In
flight Services.
MARKET LEADER STRATEGY
 BRANDING

IndiGo’s media campaign has focused more on customer service and

less on pricing where it is hard to be competitive, and the airline’s avant-
garde branding has been a major differentiator.

IndiGo’s same-day return flights from major Indian cities, extra seat pitch (2
inches more than India’s industry standard) and new aircraft.

IndiGo’s check-in counters feature banners saying “India’s Coolest Airline” and
check-in queues have “Cut The Red Tape” signs.
 PROMOTIONAL STRATEGY

Communication Objective: IndiGo promotes the following three things majorly as

part of its advertising program- On time performance, Affordable fares and Hassle
free Passenger experience
 CONTD…

Advertising Strategies:

Hoarding at airports with focus on Best on Time performance

Advertisement through social networking medium like Facebook, Twitter, etc.
Collaboration with multiplexes in major cities to promote the airline and its offers
Hoardings in multistoried buildings and offices
Ads in magazines targeting urban population
Sponsoring fashion shows, talent hunts, new year parties, etc.
Collaboration with consumer banks, credit card companies, hotels, ticketing
websites to promote special offers, discount, cashback etc.
Promoting in regional languages in respective sectors thus giving a local flavor
Sending special offers to frequent fliers through sms, email, etc.
 THE ROAD AHEAD

•IndiGo will have over 45% of the capacity of

all low-cost carriers in 2016-17
•It will get delivery of fuel-efficient A-320 Neos
from end 2015
•12-13 new cities will be added in two years,
taking the total destinations to 40 by 2016-17
•It plans to increase frequency on the India-Dubai
and India-Muscat routes
 RECOMMENDATIONS

Building on strength
Meet the Global challenge and increase its footprint
Cost Control
Increase depth by venturing into cargo and chartered airlines
Continue being close to the customer by being consistent in their services and
comfort to customers
Come up with innovative offerings
Provide exciting and affordable travel packages
Increase tie-ups with hotels and banks
Differentiate themselves even more by improving media and communication
channels thus improving the overall communication plan
Continue to improve organizational development, which is a critical to airlines
THANK YOU 