Air Asia Essay
Marketing Mix : Air Asia as a brand concept be similar to or is associated with service stipulation, the 8Ps method adopted for service marketing may be competently espoused for its advertising. The 8Ps are: Product – This refers to the stuff or services to be offered by the company. In the case of Air Asia, their services is about low-priced airline services, thus the need for constant review should be bear in mind in order to meet the changing customer expectations. Place –Air Asia are considering the issue regarding availability of services needed by the target market, i.e., current and prospective clients. As seen, Air Asia are now doing the online booking and online ticketing in which clients can avail the services of Air Asia. Aside from this, the company was also committed in extending their services all over Asia. Price – In terms of price, Air Asia fees were priced competitively and guaranteed at low price. Promotion – Air Asia’s most effective ways to communicate to the various target groups to stimulate greater awareness, interest and patronage are somewhat good but not exceptional.
Air Asia are also using TV advertisement, Internet marketing, and billboard advertising. Physical Evidence – In terms of presentation, Air Asia’s services are exceptional. As seen in their offices and aircraft board, Air Asia are known with their well-dressed staff, logos on office doors/ business centers, letter heads, brochures, complimentary cards, consultancy reports, etc. Process – With regards to the process, the business of Air Asia are well management in which makes their business system flawless and customer complaints are easily handled. People – When it comes to people, Air Asia chooses the best suitable person needed by the company. This means that Air Asia expertly identify the capabilities of a person that will reflect the value of Air Asia services. Public Relations – Air Asia stakeholders carefully identify the various publics that can impact on Air Asia to which PR communications can be directed. Such publics include individual consultants, clients, big practices, small practices, other related professional associations, relevant agencies of the United Nations, financial institutions, etc.
AirAsia Key Strategies :Safety First :
Partnering with the world’s most renowned maintenance providers and complying with the world airline operations.
High Aircraft Utilization :
Implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity.
Low Fare, No Frills :
Providing guests with the choice of customizing services without compromising on quality and Services.Streamline Operations : Making sure that processes are as simple as possible. 5.Lean Distribution System : Offering a wide and innovative range of distribution channels to make booking and travelling easier.
6.Point to Point Network : Applying the point-to-point network keeps operation simple and lower costs.
Gaps Model :
CustomerGapGap 1Gap 2Gap 3External Communications to CustomersGap 4ServiceDeliveryCustomer-Driven Service Designs and StandardsCompany Perceptions of Consumer Expectations The main aim of any organisation is to reduce the gap between the expected service and the perceived service i.e. the customer gap,which can be reduced by minimising the four providers gap from the company side.
Customer Gap :ExpectedservicePerceivedserviceCustomer Gap
AirAsia manages the customer expectation by using the following strategies: Customer Satisfaction Towards service quality in AirAsia :Five dimension through which the service quality is measured are the following ways: 1.Reliability2.Assurance3.Empathy4.Tangibility5.Responsiveness. In order to fulfill the customers’ needs, the ultimate concern for Airlines Corporation is the service offered. The contributing factor for the latter is due to the fact that only satisfied customers will have the intention of repeat purchase (coming back again to avail the service). Additionally, they will tend to share their great experiences and benefits with their network of friends. Many people would argue that price is the most crucial element of concern among the customers. However, the service provided is closely related as the most significant concern in the airlines industry. Continuous improvement in the service provided to the customers should be planned and executed to maximize the business performance.
The improvement in CS for airlines industry can be linked with the measurements of service quality such as tangible features (TF), schedule, services provided by ground staff (GS) and flight attendants (FA), online services (OS), food services (FS) and level of passenger satisfaction. According to Brown (1991), SQ is difficult to define because of the intangible nature of the service offering. The definition of quality may differ from situation to situation and from person to person. In this study, CS towards SQ was focused on AirAsia Malaysia. By applying the measurements of SQ like TF, schedule, services provided by GS and FS, OS, FS and level of passenger satisfaction, the researchers have identified the dimension of SQ that affects the CS. This dimension serves as the most critical dimension for AirAsia. By conducting this study, the information and results have practical implications for AirAsia’ managers as they can manage company resources to make improvement for CS.
Business Model :LOW COST CARRIER (LCC) BUSINESS MODEL
The low cost airlines like AirAsia have changed the definition of airlines that air travel is a luxury and it is only for the upper segment of the population. The key objective of low cost carriers is to increase their reach and provide the services to a large segment. However, the low cost carriers are now facing some challenges in the market.
AirAsia follows the Low-Cost-Carrier (LCC) business model in the airline industry, which can be characterized as below:
Low Cost Carrier (LCC) Business Model
Catering on demand for extra payment
Planes with narrow seating and only a single class
No seat assignment
No frequent flyer programmes Positioning
Non-business passengers, especially leisure traffic and price-conscious business passengers
Short-haul point to point traffic with high frequencies
Competition with all transport carriers Low Operating Costs
Low airport fees
Low costs for maintenance, cockpit training and standby crews due to homogeneous fleet
High resource productivity
Short ground waits due to simple boarding processes
No air freight, no hub services, short cleaning times, and high percentage of online sales
Increasing competition because of increasing number of low cost airline competitors, and aggressive competition against the large or traditional airline companies
Customer decrease because of poor economy
Rising of the fuel prices
Higher labor cost
Route and flight utilization
Safety and security issues of aircraft crash or being attacked
WAYS TAKING TO IDENTIFY THEIR TARGET MARKET:
For AirAsia, the following are some of element identified that AirAsia used to identify their target market and formed a niche market Branding: AirAsia went into intensive General advertisements and other high profile activities, which contributed, to the high offering of their company’s image. They came with a brand “ Now every one can fly” These points of contact with their target customer help them to mold their image, which in turn created loyalty from their customers. Philanthropy: Donating money, services, and/or time can build trust and a positive image for your business. Philanthropy contributes both toward your branding efforts and toward your company’s internal well-being. AirAsia embark on this to build and attract more customers. In early 2005, AirAsia Sdn Berhad flights to select Southeast Asian destinations.
The airline said that was its way of celebrating the completion of three years of successful flying and of saying thank you to the people for their support. “AirAsia’s accomplishments and success today is a reflection of the public’s trust and faith in the company,” said Tony Fernandes (Fernandes), CEO of AirAsia. (Refer Exhibit I for AirAsia’s Free Seats Offer)5. With this incentive and philanthropy, more and more customers are attracted to their business New Product/services Pipeline:
New products in development represent your future sales. AirAsia has extended its services to different part of the world. AirAsia was initially a local company but it has become international with its extension of its services to different part of the world to meet up with their market. AirAsia get feedback from their customers or potential target market, and they designed new services to meet their needs, this practice is ensuring a demand for their products in the future.
Reduced Price Sales:
This was one of the basics of securing a target market for AirAsia. They reduced their price to suit their class of customers. AirAsia saw a need for a lot of low pay salary citizens who could not afford the money to travel home. With the introduction of their services of low fares, most people can travel home and most people that can only afford to travel once could travel up to three times with their cheaper fares. This Limited time sales encourage customers to act. You likely have customers intending to buy but have not “gotten around to it”. Holding a reduced price sale will give them incentive to purchase.
Group Discounts and Offers.
Discounts or other offers to a specific group can help exposure your business to new customers, resulting in a sales surge. AirAsia is a ticketless Airline that allows customers to purchase their ticket online with at a discounted rate. They also have a scheme of group discount and this help to get more target market, especially internet based customers.
Foreign workers and Contractors strategy
AirAsia also target most foreign workers from Indonesia, Singapore, Thailand, China, Macau who may not afford the expensive flight home and offer them the cheap fare which attracted most of them as would go home very often without paying much.
In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing Communication decisions More recently, AirAsia struck an advertising deal with Time, which will have the local mobile phone operator’s logo painted on one of AirAsia’s planes. Moreover, there will be more of these, as well as advertisements on pull-down trays.
Again it is obvious that AirAsia started offering fares that were unheard of in Malaysia, people were lining up for hours Provider Gap-1 :Listening Gap : CUSTOMERCOMPANYCustomerGapGAP 1Company Perceptions of Consumer ExpectationsPerceived ServicesExpected Services Customer Relationship Management (CRM) :In long term, customer relationships should be fostered for AirAsia to maintain competitive advantage and profitability. When planning and implementing CRM application, management is recommended the following approaches:
1. Customer segmentation – mileage-based segmentation is inadequate, rather should focused on value-based and needs-based approaches can guide
investment decisions and drive greater insight into the needs of highvalue customers. 2. CRM initiative development – to differentiate from other competitors, AirAsia should not adopt the “fast follower” approach to CRM initiative development, i.e. learning from other competitors’ approach (e.g.installing kiosks for fast check-in). AirAsia should implement CRM program in favor of investing in initiatives with a high return, which respond to the needs and desires of their own customers 3. Organizational design and management – AirAsia needs to train the employees, empowering them with a complete view of the customer and clearly articulating the employee’s role in the CRM strategy.
Customer Relationship Program (key Functions) :Traveling planning Site personalization for on-line customer to create travel plan, bundled services information, flight notification systems, and gate information displays etc. Reservations and ticketing ITA search engines, roving agent check-in, kiosks, internet check-in, and phone check-in etc. Frequently flyer program membership-based or point-based rewarding scheme offering to the applicable customers.Campaign management Email campaigns and promotion.
Customer care Web-based self service such as e-ticket booking and reservation, online baggage tracing, RFID baggage tags, internet in lounge, and in air Internet services. Business intelligence Dynamic, updated, multi-dimensional reports that helps management to do analytics in various areas such as customer profiles.AirAsia Brand value Pyramid : Employees And Customer Role In Service Encounter : 1.Customer Role : The Consumer Role of Dependence
One experiential role for some consumers is being dependent while receiving service. The theme of dependence arose during informants’ discussions of consuming a service in which they have limited knowledge or expertise. The dependent consumer feels vulnerable and uncomfortable in the service setting and needs the service employee to provide guidance and assistance during consumption as illustrated in the following interview excerpts: “I felt more secure because I’m getting a service done that I have no idea about. He made me feel at ease like he was in control, like he knew what was going on. When you don’t know anything about something you want to feel that way. You know like a doctor should make you feel that way. It’s the same kind of thing.”
“When you buy a tennis racket there’s a lot of stuff you want to know. At first I was nervous to ask this guy. He’s a pro. What if I ask him a stupid question. Will he think I’m an idiot or something. I didn’t want to ask him any questions. Then he started talking to me, explaining about the tension of the racket, stuff like that. He made me feel more comfortable right away. It makes you feel more comfortable to ask questions.” The Consumer Role of Autonomy
In contrast to the dependent consumer stands the autonomous consumer. The theme of autonomy was revealed most frequently in informants’ descriptions of shopping in retail stores, where they indicated a desire to be on their own while shopping for clothing. Self service is an essential and desired part of their consumption experience.
2.Employee Role :
The Consumer Role of Mutuality – The Employee Role of Cooperation The emergent themes of mutuality and cooperation are discussed together to emphasize their close interrelationship. It is difficult to tease apart differences in the meaning of mutuality and cooperation since the two themes flow together within the interview dialogue. Mutuality represents the consumer’s role in the service encounter, while cooperation describes the service employee’s role. The themes of mutuality and cooperation emerged for the most part while informants were describing satisfying service experiences. Consumers received their desired service with the mutual cooperation of the service employee. The service encounter takes on an air of synergy and coordination as exhibited in the following two passages: “It’s satisfying because of the interaction by the waiters. They make the fondue at the table. They explain all the different ingredients that they are putting in there.
It makes you feel important since they’re taking the time to talk to you. It’s the interaction rather than at a place where they just come and take your order and then come back with your food.” (wf, mid 20s) “I went to a car stereo place. The person there like totally helped me. I could tell he wasn’t just trying to get me to buy the most expensive one. He was looking for what I wanted. He didn’t immediately start showing me top of the line things. He said, what was it about your old car stereo that you liked? What features were the most important to you? That made me feel comfortable that he was not just trying to make a buck. He was really looking to get what I wanted and needed.” These passages reveal a sense of care and concern for the consumer by the service employee.
The consumer is given a sense of status and importance that results from the service employee’s treatment. The relationship moves beyond the mere interaction of consumer and service employee to a mutual process of human cooperation and coordination. The roles of mutuality and cooperation may come closest to representing the ideal of service quality. Consumers and service employees understand their roles and work together in giving and receiving service. Informants’ satisfying experience arose from interacting with employees who were responsive, assuring, and empathetic while providing service.