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AirAsia Berhad is a Malaysian low-cost airline and the largest low-cost airline in
Asia. AirAsia runs scheduled domestic and international flights to more than 165
destinations spanning 25 countries. AirAsia was established in 1993 and founded by a
government-owned conglomerate, DRB-HICOM. The airline was bought by former
Time Warner executive Tony Fernandes and Kamarudin Meranun's company Tune
Air Sdn Bhd for the total of one ringgit with US$11 million worth of debts. The
company turned profit in 2002, opened some new routes and sell their flight ticket at
the price of 1 ringgit. This approach did attract customers and rapidly earning market
shares. AirAsia built a great and dense service network with some countries such as
AirAsia China, AirAsia India, AirAsia Japan, AirAsia X and others. (AirAsia, 2021)
AirAsia is quite successful in airlines industry. However, things changed during
Covid-19 as demand for air travel collapse due to the pandemic. AirAsia facing a
cliff-like drop of sales since Covid-19. Thus, AirAsia did take few approaches in
order to survive and sustain during this pandemic. First, AirAsia shrinks their fleet
size by returning leased planes to lessors and plan to return more in few years of time.
Besides that, AirAsia closed its Japan affiliate in early October 2020. AirAsia is also
negotiating with plane manufacturer Airbus regarding the reduction of pending
orders. (South China Morning Post,2020) Moreover, AirAsia started to focus on
online businesses. AirAsia established food delivery services, online shop and online
groceries. AirAsia found another way out to sustain their business during Covid-19
pandemic.
Market segmentation is the process of dividing a target market into smaller and
more clear categories. There are four bases of market segmentation which are
demographic segmentation, psychographic segmentation, behavioral segmentation
and geographic segmentation.
Under the geographic segmentation, the geographic characteristics of AirAsia’s
target market is certainly Asian citizens. The name of the company and their
development in different Asia countries shows that AirAsia is targeting Asian. For
example, AirAsia affiliates are from Asia like Thailand, Japan, Indonesia and others.
However, AirAsia did target Europe citizens as there is AirAsia X which flies to
Australia and United States of America.
Under the demographic segmentation, AirAsia did not target a specific
demographic group. AirAsia is more concern about the budget of customers. Thus, as
a low-cost airline, AirAsia is targeting on low to medium income of customers.
AirAsia developed its services for those who earned around RM20000 a year in
Malaysia.
For psychographic segmentation and behavioral segmentation, AirAsia targets
people that want to travel for leisure or business purposes. In order to motivate the
purchasing of tickets, AirAsia makes sure the ticket is easy to buy, simple to check in
and guarantee the price is low. AirAsia also targets family members distance far away
that can’t meet up due to the expensive travelling fee. Thus, AirAsia offered low price
tickets and help those family members have chances to reunion.
The marketing mix refers to the set of actions, or strategies that an organization
utilizes to promote its product and brand in the market. Marketing mix is consists of
price, product, promotion and place. (What is Marketing Mix? Definition of
Marketing Mix, Marketing Mix Meaning - The Economic Times, 2021)
Price refers to the value that is put for a product. It depends on different
perspective such as the costs of production, market targeted, market ability to pay,
supply-demand and other factors no matter direct or indirect. The organization may
set several types of pricing strategies which are related to the overall business plan.
Pricing is able to differentiate with competitors and improve the image of a product.
Product refers to a goods or service designed to fulfill consumer needs and
demand. It is significant to determine what differentiates it from competitors in order
to effectively market a product or service. The product or service is required to
guarantee its quality, otherwise it will be useless no matter how good is other
elements of the marketing mix.
Place refers to the location of sale. It is significant to consider the type of product
sold when deciding the areas of distribution. Basic consumer products like stationary
are mostly available in many shops. However, premium consumer products are
mostly available only in specific stores. Another consideration for placing strategy is
whether to place a product in a physical shop, online store or both.
Promotion is referring to all the actions take on the purpose of making the
product or service aware by the consumers. This involves advertising, word of mouth,
press reports, sales promotion, campaign and others. Organization can construct
information that incorporates details from the other elements of marketing mix when
trying to reach their target consumers.
 In AirAsia, the low cost air services are the basic product strategy in its marketing
mix. AirAsia focuses on delivering convenience to customers through great services
and provides frequent flights and dependable point-to-point connectivity. AirAsia has
improved its payment service through offering efficient payment channels and
facilities to customers such as ticketless service. This approach is essential especially
during Covid-19 pandemic as people don’t need to buy ticket at the counter. AirAsia
allowed their customers to buy or book their ticket online. (Air Asia Goes Ticketless
and Launches “EASY TO PAY” Channels, 2021) Moreover, AirAsia established new
service in order to sustain during pandemic which are food delivery, online shopping
and online groceries. (airasia.com | For Everyone | Flights, Hotels, Activities & More,
2021)
AirAsia is focusing on low pricing and a no frills policy. AirAsia prices its
services and tickets very low. This encourages the people to choose AirAsia for their
flight. Prices are decided by the class of travel, load factors of AirAsia, dates of flight
and competitor pricing in the airlines industry. During Covid-19 pandemic, AirAsia is
needed to decrease their price in order to attract customers. (Team, 2021)
AirAsia has huge operations spread across 165 destinations over 25 countries. It
provides both domestic and international flights on its routes. Distribution channels
for tickets consists of internet booking, reservation and sales offices and authorized
travel agents. However, AirAsia is more focusing on online channels during Covid-
19. (Team, 2021)
For the marketing mix of promotions, AirAsia is more concern about building
customer value. The Big Loyalty Programme is one of the most successful campaign
operates by AirAsia. The BIG SHOTs or privileged customers get BIG Points for
every transaction they made and redeem the points in order to obtain free tickets for
their flight. (About AirAsia BIG, 2021) AirAsia always provides price based
promotions. Moreover, AirAsia engages in popular promotions through advertising on
social media like Facebook, (Ashraf, 2021) through print ads or through billboard
advertising especially on highways. However, the sales dropped a lot during
pandemic. Thus, AirAsia ran a promotion offering Malaysia-based customers
unlimited flights to all AirAsia X destinations for a year for RM499t. (Covid-19:
AirAsia, like other low-cost airlines, fighting for survival | New Straits Times, 2021)
Moreover, AirAsia offered 6 millions promo seats to domestic and international flight
(Post, 2021) and conducting a three-day sale on all domestic flights in Malaysia
during pandemic. (AirAsia launches three-day promo following govt’s decision to
allow interstate, inter-district travel, 2021)
Although marketing mix strategy was utilized to enhance the effect for
optimizing marketing efforts, it started no to be that useful anymore. This is because
marketing is evolving and the market changes very fast. The long-term data collection
became a limitation especially during emergencies such as Covid-19 pandemic.
Marketing mix required long period of time and high cost for data collection.
Moreover, the marketing mix is internally oriented and doesn’t consider consumer
behavior.The marketing mix did not notice building relationships with the customers
became a significant marketing focus. Lastly, it is unable to give specific insights for
personalized marketing. (Inácio, 2021)
There are a lot of similar airlines company compare to AirAsia. AirAsia as a low-
cost airline is competing with other low-cost airlines too. Those airlines are Scoot,
Tiger Airways, Jetstar and other low-cost airlines or budget airlines. All of these
airlines have similar marketing mix strategy as AirAsia. Thus, AirAsia will have to
compete with these airlines by having more promotion, better service, more
convenience to customers and lower pricing.
In conclusion, an organization can market their product successfully through a
proper positioning and marketing mix. The organization need to collect sufficient data
and information for it to make the best decision. With proper positioning and
marketing mix, the organization is able to simplify and combine different concepts of
marketing into one which will make marketing more easier to carry out and manage.
Moreover, it allows an organization to change its marketing activities depend on its
resources, conditions of market and customer needs. However, the organization is
required to prepare for emergency situations such as Covid-19 pandemic. The
organization will have to make quick decision in order to solve the issues and sustain
the business. This is because the original marketing mix strategy may not be suitable
anymore in different situation. This is best shown in AirAsia where AirAsia will have
to change their original marketing mix strategy to a new one. For example, when the
airlines is unable to operate, AirAsia established food delivery service and online
business which is completely different from its original marketing mix strategy.

(1465 words)
References

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