Table of Content

Contents
Marketing Audit 2
External analysis 2
Macroenvironment 2
Microenvironment 5
Internal analysis 9
AirAsia Marketing Mix (4ps) 9
SWOT Analysis 11
Marketing Objectives 17
Marketing strategy 17
Action Programs 25
Financial Budgeting 26
Implementation Control 27
References 31
Marketing Audit
External analysis

* Macroenvironment
Political Environment
Government regulates Airline industry heavily as in other country. In Government regulations of
the Malaysian domestic and international aviation industry significantly affect financial
performance of Air Asia. All aspect of Air Asia’s domestic airline operations in Malaysia,
including slots allocation granting of rights under Malaysia’s air service agreements (“ASAs”)
and insurance of AOCs, are subject to regulation by DCA. Aviation activity is managed by the
organization within the MOT called DCA. The objective of DCA is to ensure direct service
provider operates the air transportation (aviation) system is always safe for passenger.
The growth of the AirAsia’s strategy is obtained by increase the flight’s frequencies to the market
that is currently serves and expanding market’s number that is serves. The growth strategy can be
success depends on additional traffic right that is obtained to suitable airports located in targeted
geographic markets of AirAsia.
Ministry of Transport and Malaysia Airports (MAHB) decided to increase the airport tax by RM7
and RM14 with the approval of government at the five airports which is Langkawi International
Airport, Penang International Airport, Kuching International Airport, Terminal 2, Kota Kinabalu
International Airport and the low-cost carrier terminal (LCCT) at KLIA. Air Asia is not happy
with the Ministry of Transport and Malaysia Airports (MAHB) decision and trying to ignore as it
can increase their cost and some more it makes the flight ticket’s price to increase.
Moreover, AirAsia go against the open skies policy that is debated by the government. A large
number of global players will enter into regional market if government applies this policy. Such
as Indonesia airline primarily those owned by the state is affected by open skies policies.
Normally, the Malaysian budget airline could only fly to Soekarno-Hatta International Airport in
Jakarta, Ngurah Rai International Airport in Bali, Juanda airport in Surabaya, Sultan Hasanuddin
airport in Makassar, and Polonia airport in Medan. But now new route is served between
Palembang and Kuala Lumpur.
Economic Environment
Since airline travel’s substantial portion for both business and leisure is discretionary, adverse
financial result is experienced by airline industry during the economy down turns. Decline in
traffic experienced by airline industry including AirAsia as slower general economic condition
since 2000.The subsequent war in Iraq, the outbreak of SARS in the people republic of china,
Hong Kong, Singapore, Taiwan, Vietnam and Canada in November 2002 was exacerbating the
condition.
AirAsia is affected by the AirAsia’s revenue and incurs expenses comes from a different county
in a different currency. But in the financial statement of AirAsia, they will use Malaysian ringgit
to represent it. In mid 1997, volatility and depreciation have been experienced by the Asian
currencies such as Indonesian rupiah, Singapore dollar and bath during the asian economic crisis.
Bank Negara Malaysia interferes in foreign exchange market in order to stabilize the ringgit and
maintained a fixed exchange rate since 1998. But there is no sureness that Bank Negara Malaysia
can still maintain the fixed exchange rate in the future. Fluctuation in exchange rate also has a
material adverse on the AirAsia’s business. As the fluctuation significantly higher domestic
interest rate, liquidity storage and capital or further exchange controls.
Social Environment
Malaysia is a federal constitutional monarchy in Southeast Asia that consist of thirteen states and
three federal territories. It is a multi-cultural and multi-ethnic country that consist of 50.4%of
Malay, 23.7% of Chinese, 11%of indigenous, 7.1%of Indian, and 7.8% of other ethnic. In order
for Air Asia flight to make sure that their passenger understand what they inform and, they use
different language to communicate with their passenger such as Bahasa Malaysia (official),
English, Chinese (Cantonese, Mandarin, Hokkien, Hakka, Hainan, Foochow), Tamil, Telugu,
Malayalam, Panjabi, Thai.
According to the Malaysian’s demographic profile in 2012, there is 60.4% of Muslim, 19.2% of
Buddhist, 9.1% of Christian, 6.3% of Hindu,2.6% of Confucianism, Taoism, other traditional
Chinese religions and 1.5% of other or unknown and 0.8% of none. From time to time, There is
always Muslim religion is more than other religion in Malaysia. In order to large large market,
AirAsia provide halal food.
Passenger’s available amount of disposable income significantly affects the volumes of
passenger and the fares of the seat. AirAsia will increase the fair and customer load factor if there
is an increase in customer disposable income caused by strong economic performance in
AirAsia’s key customer market. And will decrease it when the customer disposal income
decreases.
Moreover, globalization is a must now a day especially for a business. Globalization is one of the
challenges for them. If the companies ignore this challenge they will be left behind.
Globalization requires most of the CEO or managers of the companies to go to other country to
do business. There is a lot of worker would prefer to work in foreign country. Its affect AirAsia’s
frequent flying to increase significantly. Not only business people, most of the students also
prefer to continue their study abroad as they can get new experience and all. When it comes to
holiday, there is a lot of people have their vacation in other country that also affect the
frequencies flight of Asia to increase.
Technological environment
AirAsia use Information and communications technology (ICT) to support all operation in ten
ASEAN country effectively. And it successfully helps AirAsia to reduce operating costs, offer
advance product and serve fast and efficient service to their guest in area such as check flight
schedules, book seats, electronic check-in, and pre-order meals. In 2008, The Association of
Computer and Multimedia Industry, Malaysia (PIKOM), the country’s largest and foremost ICT
industry association gives the airline recognition to AirAsia.
AirAsia’s flight can be booked via internet. Online booking allow AirAsia to enjoy lowcost as it
helps AirAsia to reduce operating cost. The guest’s of AirAsia can only get lowest fare only
through AirAsia’s website. AirAsia keep promoting online booking till now and get rid of
delusion that people are scared to shop online because of network security fears.
Mobile technology is also utilized by AirAsia to spread information to our passenger via
handheld devices. Passenger can also booked airline ticket via SMS. It was developed when
AirAsia collaboration with Maxis Mobile Sdn Bhd, one of the main mobile phone service
provider in Malaysia. And AirAsia will keep expand coverage by collaboration with other phone
service provider company.
AirAsia collaboration with IMM Worldwide Sdn Bhd has allowed passenger to book airline
ticket by using mobile phone using WAP technology. So the mobile subscribers will be able to
access to internet to make flight booking and payment can be made directly through their mobile
phone.
Instead of using travel agent, AirAsia begin the nationwide call center in order to manage
passengers’ seat sales. Nationwide call center helps passenger not to pay commission to travel
agent. Not only that, it also allow the seat to be paid by using credit card over the telephone by
the passenger. In addition, AirAsia will keep improving their technology to give further
convenience to Guests through the services of our self check-in kiosks and web check-in facility.

* Microenvironment
Competitor
Tiger Airways is one of the competitors of AirAsia who also known as the low-cost airlines.
Tiger Airways is owned partially by Singapore Airlines. Tiger Airways is based on premises of
providing flyers with low fares by maintaining a low cost base. Main hub of Tiger Airways is the
Budget Terminal in Changi Airport in order to save the operational cost. Besides that, Tiger
Airways had joint venture with Australia and formed Tiger Airways Australia. Tiger Airways
currently flies to 34 destinations where is connecting South East Asian and Australian countries.
In year 2010, Tiger Airways suffered in shortage of pilot. Tiger Airways cancelled at least 10
flights in the four days due to the shortage of pilot. By using online booking, Tiger Airways are
able to cut down the cost of sale and distribution. Customers booking flight ticket through online,
it will bring down the commission that needs to be pay to the travel agencies. Besides that, like
Air Asia, tiger airways focus on ticketless travel will help it to lower the distribution cost by
saving on print and distribution of paper ticket.
Company
Air Asia, the leader of the world’s low cost carrier in airline industry, had gain many supporters
by offering a low cost flight fares. Nowadays, when customers select an airline company, they
are not only look at the service that provided by the airline company, they will also take the price
of the airline ticket into consideration. Air Asia has good management team in order to maintain
the leader of low cost airline.
Air Asia had combined others low cost airlines company in US and Europe strategies in order to
lower the cost and make the work efficiency and effectiveness. For example, Air Asia had
implement Ryanair’s operation strategy, Irish low cost airline, which is no frills and landing in
secondary airport. Passengers can travel without the frills of meals, no movie during the travel,
no newspaper provided and no paper tickets. Besides that, Air Asia set up their hub in secondary
airport, low cost carrier terminal (LCCT) in order to avoid paying higher takeoff and landing fees
in major airport.
Marketing Intermediaries
On March 2011, Air Asia announced that they will joint venture with the world largest online
travel company, Expedia. Expedia is the world’s leading online travel company and operate
localized websites for travelers in the US, Canada, Australia, Malaysia and so on. Expedia
provide one stop online travel service.. Expedia which wish to bring Malaysia’s travelers the best
value deals through the dynamic package which is one stop service and low cost. By joint
venture with Expedia, Air Asia believes that it will bring huge amount of benefits to the travelers.
Expedia will focus on offering the services that are suitable for the local market, providing more
convenience and enhanced access to Air Asia low fares and holiday package. Besides that, as a
travel agent of Air Asia, Expedia will provides travelers with access to Air Asia great deals and
any of Air Asia inventory on any of Expedia’s travel sites worldwide. By this way, Air Asia will
able to exploit more market through the world.The new venture will have the exclusive online
third-party distribution rights in the region for AirAsia and AirAsiaX flights and travel packages
meaning that with few exceptions in the region the only place to find and book AirAsia flights
online will be AirAsia.com, AirAsiaGo.com and Expedia. Taken together with over 130,000
hotels worldwide, this will create a unique set of packages for Asian customers at incredibly low
rates on both the AirAsiaGo and Expedia sites.
Customer
Air Asia runs its business through E-Commerce which focuses on Business to Consumer (B2C)
Business. Nowadays, everyone who wants travel will first think on Air Asia which offer low fare
flight. Air Asia target customer can be easily identifies which is focus on the workers and low
pay salaries earners who would wish to travel around during holiday. It will be hard to them to
pay high air fares. By identify this point, Air Asia come out with the slogan of “Now Everyone
Can Fly”, with no frills and low fares to attract its target market. Air Asia CEO, Mr. Fernandez
said that by introducing a low fare fright will give all those people opportunity to travel if not
more than once in a year. Besides that, by offering the low cost flight, Air Asia is able to attract
students as well. Nowadays, students are like to travel around also. As a student, they do not
have much money to travel; the way that they can save is save the cost of flight. When they want
travel, the will choose the lowest flight, so that, Air Asia will become their first choice. Besides
that, because of the low fare flight, many people back to their hometown by flight instead of by
bus.
Suppliers
After heavy competition from other maintenance services providers, GE Engines Services which
has engine overhaul facility based in Malaysia had been selected by Air Asia to carry out engine
maintenance service on the CFM 56-3 engines which power Air Asia’s fleet of 5 Boeing 737-300
aircraft. GE Engine Services provides overhauling, maintenance, and repair services for aircraft
engines. It operates through a workshop at the Sultan Abdul Aziz Shah Airport, also known as
Subang Airport. GE Engine provides services to Malaysian Airline System and others Asia-
Pacific airlines. GE Engine Services Malaysia SdnBhd was founded in 1997 and is based in
Subang, Malaysia. This company operates as a subsidiary of GE Engine Services.The agreement
calls for GE to maintain 16* CFM56-3B2 engines that power AirAsia's growing fleet of Boeing
737-300 aircraft. GE currently performs maintenance on the CFM56-3 series engines that power
AirAsia's initial fleet of six** Boeing 737-300 aircraft. Maintenance and overhaul work for both
agreements will be conducted at GE Engine Services Malaysia Sdn.
Publics
Financial public is a group of people that has the ability to influence the company obtain funds.
Air Asia top five shareholders are Tune Air Sdn Bhd that hold 26.28% of Air Asia share,
Employees Provident Fund Board that hold 8.06%, Genesis Smaller Companies who hold
5.43%, Wellington Management Company who hold 5.31%, The Nomad Investment Partnership
Lp Cayman who hold 4.91% and the most biggest shareholders, public who occupied
48.51%.Besides that, on 2004, Air Asia had obtain its fund RM50 Million from Public Bank to
partially finance the acquisition and refurbishment cost of two Boeing 737-300 aircraft. The
interest rate that applicable for this loan is 0.30% per annum. Besides Public Bank, Southern
Bank Berhad also had provided a term loan facility of RM50 Million to Air Asia. The objective
of this loan is to purchase and refurbishment of two aircraft from AFS Investment XLIII LLC.
Air Asia need to pay 1.5% per annum for this loan.
According to Air Asia CEO’S, Tony Fernandes believed that, employees come number one,
customers come number two. If you have a happy workforce they’ll look after your customers
anyway. In order to create a happy working environment, Air Asia provides many benefits to
their employees such as performance bonus, career progression opportunity, hospitalization and
surgical expenses and so on. However, Air Asia workers’ salary are low, it is because of Air Asia
want to save cost. It cause Air Asia had to recruit workers.
Internal analysis
AirAsia Marketing Mix (4ps)
Product
The term “products” refers to tangible and intangible goods. It is anything that can be offered to
the market for consumption or to satisfy the wants and needs. AirAsia is providing travelling
service to its customers. In service sector, people play a very important role in services or
experience. Services usually are produced and consumed at the same time involving the seller
(service provider) and consumer. AirAsia understands that personal service is important as they
are the front line people that the consumers face first hand. Thus, its staffs must have appropriate
skills, attitude and appearance. The customer is greeted, their luggage checked in, they are seated
and they may consume some food on the plane. AirAsia provides convenient service through
many ways. For instance, customers can make booking through mobile phones, check flight
schedules, flight status and any information regarding promotion, price of the ticket or
promotional holiday packages. Now, everyone can access the company’s website whenever and
wherever they want to. AirAsia believes in providing convenient service to make travelling
easier and more affordable for its guest.
The airline provides high frequency, short-haul and point-to-point flights with no transfers. It
implements a quick turnaround time at 25 minutes, which is the fastest in the region, resulting in
high aircraft utilization, lower costs and greater airline and staff productivity. AirAsia’s
Nationwide call centre in Kelana Square is now fully equipped with telephone lines providing
convenient telephone booking services to customers. The call centre now is able to take an
average of 6,000 calls daily. It also offers customers the ticketless service in which they can print
their flight tickets and no longer need to go through the hassle of collecting tickets at the counter
or sales office. In line with its “Easy to Book, Easy to Pay & Easy to Fly” approach, AirAsia
enables its customers to pay for their telephone bookings by credit card or by cash at any banks
that are accepted by the airline.
Price
Price refers to the value exchanged for products in a marketing exchange. In other words, it is the
value or worth of a product that attracts the buyer to exchange money or something of value for
it. In other words, it is. AirAsia is the leading low cost carrier in the Asia. It is a ‘no frills’ airline
and the fares are significantly lower than its competitors, MAS airline. This service mainly
targets customer who is price sensitive or those who can fly without the frills of meals and
beverages, frequent flyer points or airport lounges. It eliminates all non-essential services such as
free in-flight catering and other complimentary services. This helps customers to save up to 80%
of the price paid for equivalent convenience. However, AirAsia has now offers customers the
choice of purchasing food and drinks on board at very affordable prices. In addition, AirAsia
maintains a simple aircraft fleet and route network (point-to-point). Efficiency creates savings
which enables customers to enjoy low fares through.
Place (distribution)
Distribution is about getting the products to the customer. There are channel distributions which
serve as the means of getting the product to the customers. AirAsia is using Boeing 737-300s
aircraft and Airbus A320 aircraft to fly its customers to their destination within Malaysia and to
all ASEAN countries, Australia, New Zealand, China, Taiwan, Japan, Korea, India, Middle East
and Europe. It also flies to more destinations in the Asia Pacific, Middle East and Europe.
Infrastructure has also become one of the factors that help AirAsia to deliver its service to its
customers.
The airline provides direct booking through the internet which contributes to cost saving. It helps
to reduce the cost of processing and producing tickets. It offers customers to buy seats by logging
on to its website. Thus, they do not have to make phone calls or queue to purchase the tickets.
Besides, AirAsia has reservation and sales offices which are available at airport and town centers
for the convenience of walk-in customers. This airline also introduced B2B with its own
authorized travel agents.
Promotion
Promotion involves activities that help an organization to communicate and sell its product to the
target customers as well as generating positive customer’s response and maintaining favourable
relationships with them. AirAsia’s philosophy ‘now everyone can fly’ means giving people the
opportunity to fly with the lowest possible fare and making their dream of flying to their
destination comes true even they only have the less money. It believes that with the lowest fare
that it offers to its customers, they can attract more customers than its rival in the airplane
industries mainly MAS. This airline takes advantage of the school holiday and launch low fares
promotion which helps to attract people attention.
Besides, AirAsia promotes itself through advertisement on pull-down trays. It also offers fares
that would cause people to queue for hours to buy the tickets. AirAsia even gives free tickets
which bring a lot of public to AirAsia and they got more publicity out of that through word-of-
mouth marketing. The airline gave 50 free tickets KL-Bali everyday to support Bali after the Bali
Blast. It offered free seats to Bali instead of stopping the flight. AirAsia also gives promotion of
RM 1 flight during low peak season.
Furthermore, it sells tickets via internet which enables AirAsia to update and inform the current
promotion to everyone. It places the promotion at the front page in its website and sends the
latest promotion through e-mail to make its customers updated. “Easy To Book, Easy To Pay,
Easy To Fly” is another tagline used by AirAsia to encourage people to use online system.
SWOT Analysis
AirAsia is the leading low cost carrier airline nowadays in the world. The achievement that is
achieved by AirAsia indirectly ascertains that AirAsia is one of the best airplane companies. In
order to achieve its successfulness, SWOT analysis is one of the significant strategies and
techniques that must be implemented in order to identify a company internal and external factor
to achieve their goals and objectives. The main factor in the internal and external factor can be
identified through SWOT analysis.
Strength
The links between government and airline industry leaders are strong, in other words, the
management team of AirAsia is strong. The strong management of AirAsia is to maintain as a
low cost airline. This is partly resulted by the diverse background of the executive management
teams. The executive management teams included ex-top government officials and industry
experts. Management team of Air Asia is very good in strategy formulation and execution
.According to Johnston (1996), without protection of national airlines brought about by
deregulation, building alliances as strategy became necessary for many airlines to stay
competitive and gain access to a global market is too huge for any existing airline to dominate.
As a result, building a strong links with airline industry leaders and government is necessary and
become AirAsia Company’s strength. Air Asia had combined with others low cost airlines
company in US and Europe strategies in order to lower the cost and make the work efficiency
and effectiveness. For instance, Ryanair’s operation strategy has been implemented by AirAsia.
Ryanair is an Irish low cost airline with no frills and landing in secondary airport. By this,
passengers can travel without the frills of meals, no movie during the travel, no newspaper
provided and no paper tickets.
Moreover, in order to avoid landing fees in major airport and paying higher takeoff, AirAsia has
set up their hub in secondary airport which is low cost carrier terminal (LCCT). AirAsia take
good care of their employees and put their customers in the second place, which is after their
employees. AirAsia provides many benefits to their employees such as performance bonus,
career progression opportunity, hospitalization and surgical expenses and so on. AirAsia has built
a sizeable market in Thailand due to the 50% stake in Thai AirAsia is hold by Shin Corp.
Moreover, AirAsia has an opportunity to gain big discount for aircraft purchase through cement a
favorable and strong relationship with Airbus. Hence, AirAsia has gained competitive advantage
against other airlines as the aircraft is more fuel efficient compared to Boeing 737.
On the other hand, the brand name of AirAsia is being set up well in Asia Pacific. This is done by
capitalized on promotions through news. Also, AirAsia make convenience for travel agents as
they can make booking and check flight details through GDS (Global Distribution System) by
alliance with GDS. Besides that, AirAsia has gained their competitive advantage compare to
other airline industries through E-distribution. AirAsia has managed their distribution cost
intelligently. Furthermore, AirAsia has fully utilized IT in managing their business. For example,
AirAsia can cut down the cost of travel agent and the commission for travel agent by
implementing Customer Reservation System (CRS). AirAsia also use handled devices to spread
their information to customers through mobile technology. By this AirAsia collaborate with
Maxis Mobile Sdn Bhd. Besides that, AirAsia collaboration with IMM Worldwide Sdn Bhd has
allowed passenger to book airline ticket by using mobile phone using WAP technology. AirAsia
provides convenient service through many ways. The flight services that are provided by AirAsia
are high frequency, short-haul and point-to-point flights with no transfers. In addition, AirAsia
has provided telephone booking services for customers. To convenience customers, AirAsia’s
nationwide call centre in Kelana Square has fully equipped with telephone lines.
Weakness
AirAsia has their weakness in on-time performance. Due to limited aircraft, AirAsia facing the
absent of standby planes when operational problems occur. As a result, passengers will delay
their flights and cannot reach their own destination on time. Indirectly, brand equity of AirAsia
will be eroded. At the same time, confidence of passengers towards AirAsia will be affected
extraordinary for those time conscious business traveler. To avoid and solved the problems,
AirAsia need to improve its on-time performance consistently and aggressively.
On the other hand, AirAsia is facing limited human resource. When unfavorable situation is
happened, AirAsia will found it hard to handle and settle. Hence, management for human
resource should be managed and improved in the most efficient and effective way. A well-trained
and skillful employee is needed for a company to manage its business well and achieve as well
as maintain its marketing position in their own industry or field. With adequate human resource,
AirAsia will be able to compete with its competitors and strengthen its marketing position.
Furthermore, services provided by AirAsia are limited. For the fare that is 4 hours or less than 4
hours, food and beverage are not included in the ticket price. Hence, passengers have to pay
extra money if they ask for food and beverage services. Also, the flight destinations provided for
the passengers is limited. Hence, some of the passengers will tend to go for other airline
company in order to eliminate those inconveniences.
Opportunities
On the other hand, Indonesia is a country which AirAsia has opportunity to build a new market.
Indonesia is a country that consists of a billion people; nonetheless, aviation industry in
Indonesia is puny. Indonesian always flies in the US everyday although their population is small.
Hence, this provided a huge market potential for AirAsia to build their aviation industry in
Indonesia. Due to this market potential, many new players are considering to enter into this large
market to exploit this potential. To compete with other competitors, AirAsia has to improve their
flight services, that is to try their best to fulfill and satisfy the demand and want of passengers.
With satisfied services provided, AirAsia will gain competitive advantage over other rivals and
gain the priority of opportunity to exploit the market potential.
In addition, by offering low cost of airfares, AirAsia will be chosen as the first choice in the
alternative of travelling. Nowadays, people facing more financial problem than before, hence,
they will tend to save their money in order to minimize their expenses. With low cost airfares,
people still can afford to travel overseas even though they are facing financial problems. Besides
that, for those foreigners who are working in Malaysia, for instance Bangladesh, Indonesian and
so forth, they can buy airfare in low cost although they are just a worker with a lower wage. This
is benefit for AirAsia to increase their company’s revenue. Also, this will indirectly promote
Malaysia tourism which in return will set up their brand name well.
Furthermore, AirAsia joint venture with Expedia which is the world largest online travel
company on March 2011 is one of the opportunities for AirAsia. In term of service, Expedia
provided dynamic package which is one stop package service and low cost. Also, Expedia
improved access to AirAsia low fares and holiday package. Moreover, with Expedia’s travel
sites, travellers from worldwide are provided to access to AirAsia great deals and any of AirAsia
inventory. With the new venture, AirAsia and AirAsiaX flight have the exclusive online third-
party distribution rights, that is, the place to find and book AirAsia will be only the AirAsia.com,
AirAsiaGo.com and Expedia.
On the other hand, when people want to travel, they will think of AirAsia which offer low fare
first. This is due to AirAsia apply E-commerce which focuses on Business to Consumer (B2C) in
their business. With B2C, AirAsia focuses on the customers with low salaries in oder to satisfied
their demand to travel around. To attract AirAsia’s target market, they offer no frills and low
fares and at the same time come out with the slogan “Now Everyone Can Fly”. Besides, by
offering low fares enable AirAsia to attract students who have low buying power.
Threats
AirAsia facing diminishing yields per passengers. In Asia region, even though there is an
increase for the overall industry wide demand for travel, however, the demand for fares is still in
less. Passengers pay less for their flight although the numbers of passengers have increased. Full
service airlines not only collect less fare revenue from the passengers, meanwhile, the number of
passengers that will take their flight is also diminished. As a result, to tackle and handle the
threats, it is critical for AirAsia to take appropriate action at the right time. This can be done by
applying differentiation on cost such as controlling and maintaining costs.
Furthermore, the fluctuations of oil price become one of the threats for AirAsia. The hike on oil
price has a direct impact on airline industry as it depends on massive amount of fuel. When oil
price increase, flight schedules have to be reduced. The numbers of flight on the schedules need
to be decreased in order to conserve fuel or the number of paying passengers per available seat.
Besides that, AirAsia may need to add on additional fees for those items which are previously
free for instance blankets, checked bags and food.
Moreover, the open skies policy became a threat to AirAsia. Regional Government has debated
about the opening up Asia Region skies to foreign carriers in a great length. If the policy is
implemented, a large number of global players will enter into the Regional market. The abundant
of experience in market abroad that hold by the players and financial strength will threaten
AirAsia. Besides that, AirAsia is also poor in airport infrastructure. For example, they have not
enough counter space, lack of gate and also lack of parking bays.
Tiger Airways become one of the threats to AirAsia who also known as low-cost airlines. It is
based on premises of providing flyers with low fares by maintaining a low cost base. Compare
with AirAsia, Tiger Airways saves their operational cost by using the main hub of the Budget
Terminal in Changi. Moreover, Tiger Airways formed Tiger Airways Australia by joint venture
with Australia. There are total 34 destinations which Tiger Airways currently flies which is
connecting South East Asia and Australia countries. Besides that, Tiger Airways cut down the
cost of sales and distribution by using online booking. The commission for travel agencies can be
brought down when customers booked flight ticket online. Moreover, as the same way as
AirAsia, the distribution cost can be saved by providing ticketless travel. Hence, the cost of print
and distribution of paper ticket can be saved.
Airline industry is strictly regulated by government. In Malaysia, AirAsia’s financial
performance is affected by the regulation of Malaysia’s government on domestic and
international aviation industry. Besides that, AirAsia’s profit is indirectly affected by the tax
which is determined by government. The profit of AirAsia which is RM 145 million in 2011 is
decreased about 47.6% when government implemented tax policies. Also, AirAsia is affected by
the AirAsia’s revenue and incurs expenses comes from a different county in a different currency.
Fluctuation in exchange rate will affect on the AirAsia’s business adversely. Moreover, AirAsia
may need to increase their cost or increase the price of their flight ticket as Ministry of Transport
and Malaysia Airports (MAHB) decided to increase the airport tax by RM7 and RM14 with the
approval of government at the five airports which is Langkawi International Airport, Penang
International Airport, Kuching International Airport, Terminal 2, Kota Kinabalu International
Airport and the low-cost carrier terminal (LCCT) at KLIA.
Marketing Objectives
* Achieve and increase 15% of customers satisfaction.
Air Asia develops a new image and service to make sure that their customer can enjoy in high
and good services. However, they confirm their customer made the right choice and tell them
what they just bought and give them something to share with the service.
* By the end of the year, achieve 10% of sales through the services.
Therefore, to increase revenues by increase the customers or the services exist. Air Asia
increasing sales in an existing market through their customers buying histories, both generally
and individually. They may focus on their business growth strategy and distribution of the
services which they are provided.
* Increase 20% of profit to achieve total revenue.
Air Asia may obtain the highest possible level of profit through the sale of their services. This is
the guiding principle underlying the analysis of long run term by a firm. Air Asia continuous
their cost improvement and strong performances to services.
Marketing strategy
Air Asia has always been in the forefront to listen to customers feedbacks and respond to the
needs and fast pace change of market trends. This is important for them to continuously enhance
their services and cater to the diverse profile mix of their customers. In Ansoff Matrix, Air Asia is
creating product development strategy to make their company become successful. Product
development is the name given to a growth strategy where a business aims to introduce new
products into existing markets. This strategy may require the development of new competencies
and requires the business to develop modified products which can appeal to existing market.
a) Target market
Target market can be defined as a group of customers that the business has decide to aim its
marketing efforts and ultimately its merchandise. It can be groups of individuals separate by
distinguishable and noticeable aspects. The Air Asia is the companies which are selling the
airline service. Therefore, characteristic of Air Asia target market is base on the segmenting
consumer markets. In segmenting consumer markets, it can be dividing into four elements which
are geographic, demographic, psychographic and behavioral segmentation. Depending on
geographic segmentation, it is divides markets into different geographical areas. For the example,
Air Asia retains the current target market which focus on the country they fly. Based on the
income in demographic segmentation, Air Asia develops their service for the people who salary
is fall in the lower income in Malaysia which above (RM20, 000) per annum and base to the
customer who their monthly salary is around RM1, 500 and above. That is the reason why the
Air Asia always use the low price strategy to position it is always cheaper than their competitors
like MAS. Moreover than that, they offer low freight to their customer to successful its company
propose that “Now everyone can fly”. Because of Air Asia target to lower income customer, they
have successfully positioning itself in their customer mind where majority of the customer would
choose Air Asia as their choice of transportation. So that, they provide a totally different type of
service in line with the nation’s goal which is to target lower income customers and worldwide
travelers. Following in psychographic segmentation, Air Asia are targets to the social class of the
people. Social segmentation is a more toward the aspects of people lives that affect their buying
behavior. For example, Air Asia target for those who are upper lower in social class especially
for student. While, lower class is those who employment in low-paying wage jobs with very little
economic security. Therefore, Air Asia offers the low price for them to let them can fly to
anywhere. Lastly is behavioral segmentation. In order to penetrate the existing market and
expand revenue, Air Asia is focusing on additional segment based on benefits sought to their
service. Benefit segmentation requires Air Asia to understand and find the main benefits
customers look for in services. Air Asia has exposure it service for people either for convenience
or leisure and there are mainly to the tourists and student.
b) Positioning Strategy
Positioning strategy is to locate the brand in the minds of the people. Therefore, Air Asia will still
remain their brand for low cost and will not change from this concept. Whilst the promise to its
customers is that Air Asia will provide the lowest airfares and it will be the most profitable low
cost carrier in the region. Besides that, it can also increase the sufficient of their customers
through their service. Ai Asia tagline is a powerful sentence as it provides a clear image on the
service core the idea and effective positioning should aim to be at the top of the brand value
pyramid. That is, their customer should relate not only to the brand attribute but also to the brand
beliefs and values. It is necessary for Air Asia to show its leadership position by being able to
offer the lowest airfare to the largest number of routes and destinations and still be profitable. To
show that, Air Asia conducts regular campaigns that increase the sufficient of their customer and
this situation does not affect the company financially. In addition, to further strengthen its
leadership position and differentiate against its competitors, Air Asia must expand its product
offerings. The new product or service comes with instant credibility and a built-in endorsement,
since the brand has already been accepted in the marketplace. Through the strategies mention
above, Air Asia aims to be a leader in the product category of low cost carrier and look what their
competitors have done in well. Moreover than that, Air Asia improve their service not for
customer only but also increase their revenue in long run term. Therefore, they may use their
current profit to mention in the long run term. However, this will provide the better service to
their customer. So that, the Air Asia aims to be the best airline by provide the lowest fares, widest
network of destinations and professional and service.
c) Marketing mix (4Ps)
Product
In Air Asia product development, product can be dividing into 2 categories:
I. Human resource
Skillful employees (Improve attitude and behaviors)
In terms of the human resources aspect, employees of Air Asia play a key role in the success of
its low-cost business model. However, Air Asia may train its employees to be innovative multi-
takers and team players. Air Asia also stresses internal recruitment and relies on its Human
Resources Department for this. Meanwhile, MAS is moving towards greater employee
empowerment and involvement and is using web-based talent management solutions to support
compliance training, reporting, and performance management across its global workforce.
Therefore, Air Asia may take steps to protect their intellectual capital in the event of staff
turnover by having some plans like employees training program for key personnel to the staff.
Maintaining favorable relationships between staff especially airline hostess and customer also
one of the strategies Air Asia can be implementation. Air Asia may be implementation employees
training program in types of communication skill for their staff like airline hostess to make sure
they must be friendly communication with their customer through the services they provided.
However, Air Asia may develop a high and soft voice of employees when they communication to
their customer like airline hostess can use a volume that is appropriate for the setting. Speak
more softly when they are alone and close to their passengers and speak louder when they are
speaking to larger groups or across larger spaces. Moreover than that, Air Asia can improve their
employee’s communication skill by training them use the right words when then communicate
with their passengers like use the correctly vocabulary when they deliver the message to the
passengers. This type of purpose for training will help Air Asia understanding more about their
customer. It helps the employees directly understand their customer and what really matters to
them. And with the well communication skills, it will helps employees see someone’s emotions,
understand their emotions, and communicate at the level of emotions to powerfully connect
between the employees and customers in a way people rarely experience.
II. Equipment on services
Guest Service (Seat and food)
Air Asia can improve their convenient service to make travel easy and more comfortable for its
guests. Therefore, location of where Air Asia sits on long-haul flight plays a bigger part in the
overall experience and comfort for their guests. They may provide options for those that want
benefits including large seat, maximum leg room, locate near exit doors and those with baby
bassinets. This will offer extra comfort, convenience and suit for their guest. Moreover than that,
they can allocate seat numbers to their customer let them have their own seat during travel time
such as provide pre-selecting of their customer seats according to the preferences before they fly.
According to this strategy, they can look upon the customer services and provide such as
excellent customer services. Based on their customer feedback receive, this marketing strategy
can be use to provide more information on economy seats not only for Air Asia X flights. For the
food services, Air Asia can improvement in the variety of in-flight dining options, the local food
such as Nasi Lemak contains too much coconut milk, which has a tendency to deteriorate with
time and causing indigestion. Because of this situation, Air Asia can provide to more stable food
such as sandwiches, burgers and hot dogs and they are less smelly too, especially on board. In
addition, for the food condition, Air Asia may provide hot food to serve for their customer. They
can build in food warmer to make sure that food is in better condition before they serve to their
customer.
Call Centre Services
In call centre service, Air Asia may be provided convenient telephone booking services to their
customers and takes an average of calls daily. For the example, they can reduce transfer line
when the customer call in and increase the toll free system. This will be able to their customers to
book for their ticket as fast as possible. While, Air Asia can issues resolved in a single call by one
customer service representative who speaks clearly, understands their customer needs and has
access to customer records quickly. They can have customer-friendly experiences including an
easy-to-use menu with a minimum of clutter to quickly reach a representative to reply their
customer. Besides that, they can adequately 24 hours service for call centre to make sure that
their customer problem is solve in an efficient manner.
Service for “Disable Passengers
Air Asia can involve a service to protect the “Disable Passengers” like physical, sensory
disability and hearing impairment to understand their needs better. They can provide the special
facilities in their departure hall like create a special seat for them and emergencies services.
Therefore, Air Asia may set up a small emergencies centre inside the departure hall which
includes the necessary for disable passengers like a battery powered wheelchair and sickbed.
Moreover than that, Air Asia can employment some doctor and nurses to work in the
emergencies centre to make sure that the disable passengers can get the treatment immediate and
in short time period. For the on time traveling services, Air Asia may provide two seats or get
comfortable seat for disable travelers which related to their disability. This is because of safety
reasons for them and make sure that they can easily to move with the area. Besides that, Air Asia
can create a new oxygen mask and lifejacket for the disable passengers. This is because when
emergency situation happen, they can get the things easily with the capability they can.
Price
Implementation new maintenance
Because the increasing of oil prices, Air Asia may developed a simpler method to implement
condition-based maintenance systems on aircraft. The project managers can implementing
condition-based maintenance systems base integrate a wide variety of software and hardware
components, each one developed to monitor a single supplier system such as an engine,
hydraulic or braking system. It can help to reduce the cost of management. However, if oil is
difficult to imitate and without substitutes, Air Asia can joint-venture with another company such
as oil firm to get the cheaper price of the oil. This will become an industry standard with the
signing of an agreement by the two companies to grant rights for its use. Through to this
situation, it may provide a standard for systems to share their information and resource and the
new binary implementation maintenance delivers this efficiently. With this strategy, Air Asia can
reduce the price of oil and innovative and affordable technology solutions for aerospace
application easily. For the example, the large purchase of A-320s would make Air Asia on of the
relatively few low cost airlines operating this aircraft. With the record of fuel accounting, there
are almost 50% of the total operating costs for the airline is spending on A-320s. So that, joint-
venture can helps the Air Asia lower their fuel usage. Moreover than that, Air Asia can develop a
single aircraft type to have substantial cost savings and the maintenance was being simplified
compare to old aircraft. It also helps to spare parts inventory, infrastructure and equipment needs
were reduced and better purchase terms could be negotiated. Air Asia may establish a joint
venture with Thai Air Asia and Shin Corp Airline Company. Shin Corp is owned by the family of
Thailand’s Prime Minister, there have around 900 million baht will be invested in Thai Air Asia
and Shin Corp has financial strength in information technology (IT) and telecommunications
which are support by Air Asia to grow in Thailand. Air Asia with its political powerful can well
grow up to bite and therefore it should enforce such political advantages in order to extend the
growth in Thailand. Besides that, because of Air Asia create the product development strategy it
may be certain increase in the price of the ticket, but still consistent as a low cost Airline
Company in Malaysia. Whereas, for the ticket price to disable passengers, Air Asia may reduce
the price for them compare to the normally customer. This is because it related to what kind of
services Air Asia provide to their customer.
Place
Retain the current place strategy
To Air Asia, because they towards the product development strategy while they are not much
focus on the place strategy. So that, Air Asia remain the current place strategy which they have
already development. They offer more fillies to different destinations and innovative range of
distribution channels to make booking and traveling easier. Besides, Air Asia has reservation and
sales office for the convenience of walk in customer.
Promotion
Members Card
Another marketing mix in price of Air Asia is they can create a members card for their customer
who are spend more than RM25,000 in Air Asia per year. With this member’s card, their
customers can get the discount rate and free travel. Through to this, Air Asia airline may give a
discount around 50% when their customer purchases the ticket in advance for about 3-4 weeks
with member’s card. People who are travelling for fun are elastic demand for the company. This
is because they need low price. Air Asia also can carry pricing strategic so that it can charge their
price according to people, season and situation. For this member’s card, Air Asia may provide
different type of the card such as memberships, silver, gold and platinum Card. The number of
benefits to obtain increases, the higher the type of card that their customer have. This will help
their customer to get cheaper price of the ticket when join with their memberships. Air Asia can
offer a reward and point system that is managed through member’s Cards, which function to
provide complementary services so long as to remains a loyal, continuous customer. There are
different levels of member’s card can attain as incentive to stay buying and selling items to Air
Asia throughout the entire quest, though all items purchase and sold. Air Asia maintains a point
count that stems directly from the amount of items purchase in their store. However, each of the
travel has a different take on how points are actually accumulated. For every 10 times spent, Air
Asia customers can gains one point towards the next membership. With the accumulated point,
the Air Asia member can give discount rate on their travel.
Advertising
Advertising is a 'paid for' the communication. It is used to develop attitudes, create awareness,
and transmit information in order to gain a response from the target market. Therefore, Air Asia
may find sponsors to pay for the advertising message and fee. They may develop advertising
through mass media outdoor advertising. Air Asia may delivery of advertising messages to
recipients of outdoor advertising to their customer. This will help their customer know the
information as fast as possible. Besides that, buses are another great advertising media to cater
for customer choice of advertising mode. It is medium commonly used by advertisers to reach
the public with their message. Usually, this takes the form of promoting commercial brands, but
can also be used for public campaign messages. Therefore, Air Asia may find another
transportation company to support their advertising like bus (such as Five Stars travel) taxi or
travel company. It can be very cost effective method of communicating with large audiences. By
paying for the advertising space, Air Asia can control what it wants to say and to some extent to
whom the message is sent. This is because it can attract the customer to see toward the
advertising. According to this method, because Air Asia can be know as a low cost Airline
company, so that they can deliver the message which related to their positioning and they can
also put some interesting picture to inform, persuade and remind their customer. Moreover than
that, Air Asia also can deliver their message to customers through the magazines method. The
type of magazines Air Asia can be advertising is which related to travel like the magazines name
Virtual Malaysia. This is because this type of advertising is provide more information related to
the travel and leisure publication that features exotic destinations plus a myriad of travel products
and services in the country.
Action Programs
Month | Action | Department | Cost(Price) | Note |
January | -Advertising through outdoor and email advertisement - launch membership card |
-Marketing and Sales | -8000-12500(26000) | |
February | -Advertising through magazine and email advertisement -Purchasing new
aircraft(First Phase) | -Marketing and Sales-Strategy, airport and planning and Engineering |
-7000-100000/month | -Installment payment until February 2014 |
March | -Reshuffle employees -Training for Service employees | -Human Resource | -6000-8000 |
|
April | -Advertising through outdoor and email advertisement -Training for Service employees |
-Marketing and Sales-Human Resource | -7000-6000 | |
May | -Advertising through newspaper and email advertisement-Training for Service employees |
-Marketing and Sales-Human Resource | -7000-5000 | |
June | -Evaluate performance of new and trained employees-Evaluate the profit or loss for
purchasing new aircraft | -Human Resource-Finance | | |
July | -Advertising through magazine advertisement and email | -Marketing and Sales | -8000 | |
August | | | | |
September | -Advertising through outdoor advertisement and email | -Marketing and Sales |
-7000 | |
October | -Advertising through outdoor advertisement and email | -Marketing and Sales | -7000 | |
November | | | | |
December | | | | |
| | | 1188500 | |
Financial Budgeting
| Period ended | Period ended |
Note | 31/12/2013 | 31/12/2012 |
Revenue | 5,826,800(+20%)(forecasted) | 4,855,667 |
Operating Expenses | | |
-Staff costs | (497,900) | (458,900) |
-Depreciation of property, plant and equipment | (586,544) | (502,311) |
-Aircraft fuel expenses | (1,529,045)(-18%) | (1,864,689) |
-Maintenance and overhaul | (75,957)(-15%) | (89,362) |
-User charges and other expenses | (350,487)(-10%) | (389,431) |
-Aircraft operating lease expenses | (1,298,323) | (98,323) |
-Travel and tour operating expenses | (24,894) | (34,812) |
-Other operating expenses | (248,573) | (185,073) |
Other income | 130,740 | 104,729 |
|||
Operating Profit | 1,320,923 | 1,337,728 |
|||
Finance Income | 68,241 | 62,683 |
Finance Costs | (392,102) | (380,571) |
|||
Core Net Income | 997,062 | 1,019,840 |
|||
Foreign Exchange gains/(losses) | 601,946 | 582,824 |
|||
Profit before tax | 1,599,008 | 1,602,664 |
|||
Current Taxation | (35,801) | (20,812) |
Deferred Taxation | (77,732) | (67,028) |
|||
Profit after tax | 1,485,475 | 1,514,824 |
Note:
1. RM63500 of Advertising and cost of launching member ship is added into “Other operating
cost”
2. RM39000 of cost of training for employee is added into “Staff Cost”
3. RM1200000 of the cost of purchasing new aircraft is added into “Aircraft operating lease
expenses”
4. 15% of fuel expenses are forecasted to be reduced by 18% annually with the purchasing of
new aircraft.
Implementation Control
There are 3 stages for implementation control which are:
1. Establish performance standards
* Improved services to achieve customer satisfaction
In response to the plan we have chosen to focus which is the product development, we decided to
introduce new service in the existing market. As we are going to improve our services in terms of
services provided by employees and quality of facilities, there will be additional cost occur. We
are a company that produces services. Improving services also refer to improving the ability of
the employees to serve. Front desk employees and in flight employees are in the front line to
provide service to customers as they are the one who bring the services to the customers in
person.
By providing training for services employees such as steward and stewardess, we are able to
satisfy customer’s need in time. The quality of employees will be consistent and are able to give
the impression to the customers that services provided by every single employee are equally
good. There will not be any employee who provided lees satisfied services or incorrect
information. Every services employee is considered as the sales person in the personal selling.
Roles of services employees are to deliver correct and useful information and provide superior
quality of services. Besides training, we will have meeting among groups of employees to
discuss the problems founded when they are working or serving customers and ways to
overcome as well. Each group leader will need to pass up brief report weekly. And there will be
monthly meeting among leader of the groups. These meeting are organized as we know that the
people who implement the plan are the employees who are providing the services. It is better to
get the feedback from the people who implement it. By doing this, we are able to create a brand
awareness of having the better services with a lower price.
Besides the intangible services, we will also improve the facilities in the airport and in the plane.
We will do research to find out the most comfortable seats for customers by allocating as low
cost as possible. We do comparison with other competitors on the quality of facilities and do
survey to know which part of the facilities need to be improved. We will figure out the most
economical way to improve the quality of facilities at same time satisfy the need of our
customers. We will compare among suppliers and sign long-term contract to have a cheaper price
of products. Through the improvement, we are able to improve the efficiency and effectiveness
of our system and increase customer satisfaction as well.
* Increased sales to achieve additional revenue.
We figure out that the cheapest airline is the impression given by our company. However, this
will not be our core competency for long term if we do not have sustainability. In other words,
other airline will also imitate our idea as being the one who provides the cheapest services.
Therefore, in the long term, we tend to become the company who provide better services but
only charge a bit higher of price compared to the current price.
We believe that charging a 10% higher of price for better service will attract more customers. As
our past image is providing cheapest price but not focus on the quality of services, customers
who want a more enjoyable flight will rather choose our competitors by paying more. For normal
people, travelling is not an occasional activity due to lack of free time from working or studying.
Therefore, some customers may want to enjoy in the trip as it will be a rare opportunity to take a
flight. Paying a bit more but have a more pleasant trip is the image that our company want to
create. This idea comes out with additional cost but we will not allocate more of our costs on
customers and we will take it as our investment for long term. Therefore, the first step to achieve
this goal is to reduce long term cost. The main cost of our company is fuel expenses and we are
going to buy new aircraft which are more fuel efficient. The short term cost will increase due to
the additional cost for purchasing new aircraft but it is estimated that an 18% of fuel expenses
will be omitted annually. From the forecasted sales and budgeting, we believe that we are able to
make profit at the same time create the desired image. This image will help us to become the first
mover in this strategy and lead us to the success among competitors. We will be able to have a
brand new image while other competitors are still maintaining low price but not better services.
Other competitors will need time to catch up this trend as this idea and image require longer time
to be effective. During these times, we are able to corner this market and enjoy the advantage of
first mover.
2. Evaluate the desired and actual performance
* Improved services to achieve customer satisfaction
* Unsatisfied performance of employees
Employees are the key factors in maintaining good quality of services. However, to achieve the
goal of having consistent services from each of the employees is difficult. We will have a
practical and academic test for trained employees after they have gone through the training
process. There are some employees whose performance does not reach the standards. This may
due to different personality that makes them more suitable in other departments.
* Sources of feedback
Unlike products, we cannot know the actual performance of our services until we have began to
provide our services. We also cannot actually test the functions and quality of our “products”
internally as it will be a totally different situation in serving a real customer. Customers who are
the one can give us the feedback whether the services have been improved. It takes time to
identify if our training is on the right path to improve quality of employees.
* Unable to fulfill the aim to have meeting
It is because the employees who carry out the meeting is not responsible enough and employees
are not active in providing suggestions and idea for improvements. The group leader may not be
able to pass up the report on time or they just pass up reports with no comments. Persistency in
carrying out these feedback meeting is not an easy task as every employees have their own task
every day.
* Increased sales to achieve additional revenue.
* Slow growth in revenue due to ineffective promotion
This may because the advertising is not convincing enough to make customers believe that they
only have to pay 10% more than before to have a much better services. People may think that
there might be terms and conditions under this benefit.
3. Taking corrective actions
* Improved services to achieve customer satisfaction
* Unsatisfied performance of employee
We value our employees as every of employees are experts in this industry and it will be tougher
to hire new employees who are not familiar with our working environment.
For every 10 unqualified employees, we will arrange a qualified senior to take care of them
while working. The qualified employees will have to guide them and also evaluate their
performance within a certain period of time. If there is no improvement in the performance of the
employees, we may consider switching the employees to other department which is not people
approach.
* Unable to fulfill the aim to have meeting
Motivation should be given to the employees who take part in the process of improving the
quality of employees’ services. Empowerment is one of the ways that motivate them as they will
feel they are part of the important decision of company. Groups that give the best solution or
participating in the whole process enthusiastically will be given rewards. The rewards maybe a
certificate or benefits of flight, depends on the decision made by HR managers.
* Sources of feedback
Setting a small survey before people enter our website is a good way to know the feedback of
customers. Before the survey, there will be a 20- second advertisement about the new benefits
that will be provided to the customers. Questions to be set may include: “Do you aware of the
new benefits provided by our company?” Do you know that you just need to pay 10% higher
than the usual price to get the benefits?” Are you willing to pay a maximum of 10% more than
the usual price which is probably $30 to $80 without any additional cost to have better services
and seat which is more comfortable in flight?” “If not, how much more are you willing to pay for
better services or you prefer the current services and cheaper price? ” Through this survey, we
are able to know that the awareness about the new idea and whether our customer can accept the
increase in price.
* Increased sales to achieve additional revenue.
* Slow growth in revenue due to ineffective promotion
Advertisement should focus more on the better services as well as the small changes in price.
The idea of no additional costs for better services should be implanted in the mind of every
single customer. A series of creative and short advertisement on TV should be designed to attract
and remind the customers that they can have better trip by paying an additional costs of less than
$100. The advertisement should let the customers feel that the value of benefits is much more
than the costs they pay and they will be more willing to accept the new concept of this.
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