Marketing Research On Airasia

Submitted by Aizhanok on January 30, 2011
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Table of Contents Executive summary 1. Introduction……………………………………………………………… 1. Positioning on market…………………………………………………… 2. Environmental analysis 1. External factors using PEST ……………………………………………… 1. Political factors 2. Economic factors 3. Social factors 4. Technological factors 2. Internal factors using SWOT ……………………………………………… 3. Stakeholder analysis……………………………………………………… 3. Strategic assessment 1. Observing Airasia’s goals, visions and values 2. Strategic Action Programs 4. Recommendations …………………………………………………….. 5. Conclusion ……………………………………………………………….. References

(ASEAN Affairs. AirAsia has become one of the most successful airlines in the Southeast Asian region and the pioneer of low cost and no frills travel in Malaysia. ENVIRONMENTAL ANAYSIS . (Annual report 2009) 1. hassle free. (Annual report 2009) 2. and Indonesia. Hong Kong. Airasia’s success has taken flight through the continued confidence of our guests who prefer a no-frills. low fare and convenient option in air travel. Positioning on the airline market AirAsia is a name synonymous with low fares flights. to detect weaknesses for further converting into strong ones and Stakeholder analysis helps to determine the most important stakeholders and their influences to the company’s performance. China. Airasia routes Source: google pictures Serving the underserved has helped make Airasia popular with masses. INTRODUCTION Everything started with a simple goal: How to free air travel from the clutches of the elite and make it so affordable that “Now Everyone Can Fly”. Philippines. Vietnam and Myanmar. Thailand. (Marketing Intelligence & Planning. India. Laos. 2010) 1. Brunei. such as SWOT. 2009) [pic] Picture1. cultures and cities. the group employs close to 7500 staff and its short history AirAsia owns 90 aircraft and has carried more than 90 million guests. AirAsia operates more than 3500 flights a week. AirAsia is now proud to be truly ASEAN (Association of South East Asian Nations) carrier. linking communities. Now. Together with partners Dato' Tony Fernandes set up Tune Air Sdn Bhd (Tune Air). (Economist. PEST and Stakeholder analysis. and recommend areas for improvement in response for the company. 2009) With over 132 routes linking three continents (shown on picture 1). quality service and dependability. Macau.Appendix Executive summary This report is prepared with objective to audit and assess the impact of external and internal factors on the company. Cambodia. SWOT analysis enables to see the strong positions in the market. The scope of the report includes a few environmental tools. an airline holding company then bought over AirAsia. AirAsia is engaged in providing air transportation service and now airline flies to over 60 destinations from hubs in Malaysia. Singapore.

3. The benchmark interest rate in Malaysia was at 2.60 percent of growth in the last reported quarter.1 Political factors On 65th IATA annual general meeting Prime Minister Dato’ Sri Mohd Najib Bin Tun Haji Abdul Razak (08.tradingeconomics. which is very important for identity of its strategies.2009) informed that country's economy has a stable political environment and flexible economic policies. Singapore. during the holiday times they are willing travel to hometowns and abroad. Aviation authorities have started to pressure AirAsia to discontinue the practice of unassigned seats for security reasons." .com) 2. AirAsia’s CRS (Open Skies by Navitaire) has helped it to grow at a dramatic pace in the past couple of years "Navitaire's Open Skies technology has truly enabled Airasia's growth from 2 million passengers to 7. with the right cultural and nationalistic approaches are made.90 percent in July of 2010.06. (www.1. Technological factors Information and communications technology (ICT) has allowed AirAsia to reduce operating costs and provide fast.7 million passengers in less than two years.75 percent. electronic check-in. There are 4 core elements of PEST analysis: political.1. social and technological.2.4. Chinese and Indian are concentrated in capital city Kuala Lumpur. Open Skies scaled easily to accommodate our growth. 2. the more need there will be journeys to homes and in the countryside. Japan -14%. AirAsia. 2. And government keeps policy to support aviation industry as a key sector of business by helping airlines to reduce fuel consumption and efficient service in areas including: check flight schedules.1. We can examine these factors in the airline industry to realize Airasia’s future external threats and opportunities. and pre-order meals. Socio-cultural factors In SE Asia. The trial currently involves Malaysia Airlines. One of the major export partners of country is US -20%.1. Countries like India. The more people are employed in cities over 15 million people. adapt and react to those factors. (www. Working force of Malaysia consisted from three races as Malay. economical. We expect contributions from assigned seating to be diminished outside Malaysia because competing LCCs will be offering both low fares and free assigned seats.1. These markets are potential opportunities for Airasia in future.miti. Economical factors Malaysia is a rapidly developing economy and relatively open-state market economy. T he increase in costs to assign seats is assumed to be negligible. 2. China and Bangladesh are booming at the moment and are creating large middle-classes within their respective countries. the main social issue will be the urbanization of the populations of some key countries within Asia’s market and The Gross Domestic Product (GDP) in Malaysia contracted at an annual rate of 2. Last reported inflation rate was at 1. book seats. for making plan. External factors using a PEST analysis In PEST analysis we investigate macro external factors for company.

US. and disaster and affect | |on-line. opportunities and threats is the SWOT analysis. |• Full service airlines start cut costs to compete | |• Scrapping of Fiscal tax in Indonesia will encourage more |• Entrance of other LCCs | |overseas travel. (table1) Table1. |customer confidence | |• Frequent flyer program. |• Service resource is limited by lower costs | |• Very strong brand recognition. weaknesses. |• Government interference and regulation on airport | |distribution and awareness. new long-haul routes. to Europe. strong marketing reach. Internal factors using SWOT analysis One tool that marketers use to assess an organization’s strengths. | |government officials. SWOT |Strengths |Weaknesses | |• Strong management team consists of industry experts and ex-top |• Large numbers of customer complaints. terrorist attack. |• Increase in operation cost in producing value-added | |• Ongoing industry consolidation has opened up prospects |services | . (Journal of Marketing Education. |deals and passenger compensation | |• Strategically located in heart of SE Asia.2. similar to those used by major |• Aviation regulation and government policy | |carriers. |• Non-central location of secondary airports | |• Simple proven business model that consistently delivers |• Brand is vital for market position and developing it is | |that lowest fares |always a challenge | |• Single type fleet minimize maintenance fee and easy for |• Heavy reliance on outsourcing | |pilot dispatch | | | | | |Opportunities |Threats | |• AirAsiaX. Australia. 2010) Let’s look at the Airasia’s strength points. |• High fuel price decreases yield | |• Internet development and 3G coverage allows bookings to be done|• Accident.

|Mass media business partners | | |influence |Fans. customers. Employees Provident Fund Board. Obviously creditors highly influence the business. as shown on table2 major shareholders of company are Tune Air Sdn Undoubtedly. Nomad Investment Partnership. Solicitors. IATA. which also provides hotel and tour bookings. As in every business customers and suppliers have high influence to company’s performance and airline industry is not an exception. Senior | |of |influence |countries. Lembaga Tabung Haji have a high degree of influence to the company. 3. Genesis.|for new routes and airport deals reliance on online | |• High fuel prices will squeeze out unprofitable competitors |sales Source: www. Government of ASEAN |Shareholders.airasia. Creditors. The main stakeholder in face of Government had granted Investment Tax Allowance (ITA) for 160% capital allowance on qualifying Capex. Stakeholder matrix | | |Importance of Stakeholder | | | |Unknown |Little/No |Some importance |Significant | | | |importance | |importance | |Influence |Significance |Tourists. and Board of Directors which handle the business have same degree of influence on company as shareholders who also of high importance for its success. | |stakeholde| |Auditors. |management(Board of directors).30%-5. Increasing number of travelling tourists will affect the airline companies’ revenue including Airasia. | |r | |Raiders |Paypall. Oakland |suppliers/contractors.50% interested | . other business partners | | | |Unknown | | | Source: www. Stakeholder analysis |• System disruption due to heavily | This analysis helps to identify the organization’s stakeholders and evaluate the importance and influence of them on organization’s performance. Stakeholder matrix of Airasia is given below. Malaysian government | | |Somewhat | | | | |influence | | | | |Little/No |Trade associations. and AirAsia had secured aircraft financing for 60 A320 aircraft by taking 12 years financing at 5.

Air Bus 320’s cost economics far superior if it is compared with Boeing 737-300 which help to save up to RM300million on Hard ware expenditure. Observing Airasia’s goals.rate (Kuwait Finance House Malaysia Berhad). | . visions and values AirAsia creates values through the following vision and mission (table3): Table3.airasia. 3. Furthermore. Airasia key strategies |AirAsia Key Strategies | |Safety First |Partnering with the world’s most renowned maintenance providers and complying with the | | |world airline operations. Airasia values |AirAsia Values: | |Vision |To be the largest low cost airline in Asia and serving the 3 billion people who are currently | | |underserved with poor connectivity and high assuring lower costs | | |and higher productivity. embracing technology to reduce cost and enhance | | |service levels | Source: www. | |Mission |• To be the best company to work for whereby employees are treated as part of a big family | | |• Create a globally recognized ASEAN brand | | |• To attain the lowest cost so that everyone can fly with AirAsia | | |• Maintain the highest quality product. shown below on table4: Table4. STRATEGY ASSESSMENT 1. | |High Aircraft Utilization|Implementing the regions fastest turnaround time at only 25 AirAsia makes the low fare model possible and create values through the implementation of the following key strategies.

profit opportunities) for new long-haul routes to US. | |Point to Point Network |Applying the point-to-point network keeps operation simple and lower costs. internet shopping to keep that level of price. PEST.|Low Fare. Airport and Planning – prepare the comprehensive report (includes cost calculation. Maldives and Japan within 4-5 months. 2010) Product – US is one major trading partner of country.05. Recommendations In SE Asia. No Frills |Providing guests with the choice of customizing services without compromising on quality and services. China and Bangladesh are booming at the moment and are creating large middle-classes within their respective countries. This market is a potential opportunity for AirAsia in the future. Stakeholder analysis summary of directions for Airasia given to take into the consideration in the future: Price – as price is company’s competitive advantage. 4.2010) HR Commercial and HR Business Development – create new products and promotions based on customer needs and wants within 6 months. Countries like India. which gives opportunity to create long haul route to US and some other EU countries by analyzing the demand of airline . Japan. | |Streamline Operations |Making sure that processes are as simple as possible. the more need there will be for journeys to homes in the countryside. Germany. also look for new ways of improving quality services for decreasing the customers complaints within 3 months. 27.airasia. HR Communication – find new ways of improving communication with guests of company and staff. Strategic Action Programs According to analyzed information following strategic action plans are recommended for consideration: Group CEO. The more people are employed in cities over 15 million people. | |Lean Distribution System |Offering a wide and innovative range of distribution channels to make booking and traveling easier. Based on overall company strategies. Deputy of CEO – create new vision for company to be world’s best low fare airline and prepare the comprehensive business plan for 5 years within 7-9 months. (Wall Street Journal. with the right cultural and nationalistic approaches made. the main social issue will be the urbanization of the populations of some of the key countries within AirAsia’s market and demographic. COO together with Regional Head (RH) of Finance and RH of Strategy. look for ancillary services as cargo. | Source: (Accidental Travel Writer. SWOT.

which will include age.2010 – 2010.airasia. Conclusion The aim of this report was to carry out marketing audit of Airasia Asia’s largest lowcost no-frills airline. recommended to make the LCC building more structured and use clear route directions. Promotion – multi-nationality of country gives great opportunity to increase the sales during holidays. providing promotions and special packages. ASIATravelstips. this information will be helpful for marketing department for market segmentation and selection of future target market. From this it became evident that the organization operates in a complex environment with fast changing influences that affect its business both beneficially and unfavorably.service in particular area. like making promotions for Chinese New Year.html>. monthly income. “Airasia X partners with Paypal”. available at < http://www. hassle free and convenient option in air travel. concentrated on low fare flights. which may help to save time as well for customers as for staff. Anders Gustafsson. Deepavali of Indians and Hari Raya for Malays and others. (Emerald journal. “Speech at the 65the IATA annual General meeting by Dato’ Sri Mohd Najib Bin Tun Haji Abdul Razak Perdana Menteri . and get outside consultation on improving process overall. correct allocating of resources (airplanes). key linkages and the superior cost performance.09. Process – according to large number of complains on service delay and cancellation.airasia. LIST OF REFERENCES Airasia’s official website. available at . 2010) Packaging – appearance is important on service market. available at < http://www. In general Airasia’s marketing strategies are on high level comparing with others. It also enabled identification of some of the sources of Airasia's competitive advantage: core viewed in period of 10. available at Dato’ Sri Mohd Najib Bin Tun Haji Abdul Razak. 10 June 2008. which follow the idea of collecting points to buy tickets or use other services of company. viewed 14 September 2010.2010. Emerald Journals. viewed on 16. operational process of company needs improvement through training pilots and front office staff for time management.09. AirAsia Berhad. Fredrik Ekdahl & Bo Edvordson. unique resources. Also membership cards can be suggested to increase sales. “Customer focused service development in practice”. However. 24 June 2010.html >. serving guests who prefer a nofrills. it also became clear that the organization still has a lot to learn from best practice.09. quick check-in for convenience of flow of guests.2010. viewed on 28 September 2010. One of the privileges of card will be Airasia’s annual report for 2009 for 17th General Meeting. occupation of guests.

Lewis. “Airasia Plans Thai Listing by 2011”.com/free-essays/70582. Steward & Bruce R. Michele D. William Giles. “A Comprehensive Analysis of Marketing”. Marketing Intelligence & Planning. available at < http://online. Wall Street Journal.html>. available at < http://www. available at < http://www. available at . Michael Taylor. April 2010.09. 2010. “Cheap. “AirAsia launches online Megastore”.com/ >. 27 May 2010. Office of Prime Minister of Malaysia. available at < http://www.2010.full. but not nasty”. Accidental Travel Writer. Asia-Pacific region.economist. viewed 16. available at .miti.>. viewed 09 September 2010. viewed on 21 September 2010. viewed on 17 September 2010. Hamdan Mohamad. viewed on 19 September 2010.emeraldinsight. http://www.2010.wsj. available at .com/content/32/1/75. Phisanu Phrom Chanya. The voice of Southeast Asia. The Economist. 21 June >. viewed 12 September >. viewed on 15.tml >. 19 March 2009. viewed 12 September 2010. Official site of Kuwait Finance House. Malaysia. Business.09. Encyclopedia of nations. viewed on 16 September .09.Malaysia”.aseanaffairs. 27 March 2009.06. Malaysia International Trade and Industry Report. available at < http://www. “Making SWOT Analysis work”. available at < http://www.pdf. ASEAN Affairs. Asia-Pacific region.2009. 24 July 2010. available at .kfhonline. BBC News. viewed on 16. Nigel Piercy.2010.sagepub. Malaysia country profile. Journal of Marketing >.com. viewed on 26 September 2010. “Airasia celebrates trainee graduation”. available at < http://jmd. Ministry of International Trade and Industry.

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