Marketing Mix of Air Asia

AirAsia Berhad is Malaysia and Asia’s first low cost carrier has made its name synonymous with low fare air travel in the region. Now a household name throughout Asia, Airasia offers lower fares by eliminating most traditional passenger services in order to make air travel affordable and accessible for everyone. Airasia provides a totally different type of service in line with the nation’s aspirations to benefit all citizens and worldwide travellers. Revolutionising air travel by offering fares that are significantly lower than that of traditional full-service airlines, AirAsia has put Malaysia’s airline industry on the world map by making its presence felt and bringing people in the region closer together. Such service takes the form of a no frills -low airfares flight offering, 40%-60% lower than what is currently offered in this part of Asia.

Identify AirAsia’s target market for its product.

Describe the current marketing mix for AirAsia.

Who is AirAsia’s competition?

Give suggestions how AirAsia should improve their services.

(TOTAL: 30 MARKS)

Q1

Target Market is a set of buyers sharing common needs or characteristics that the company decides to serve. There are three key factors to target market that are segment size and growth, segment structural attractiveness, businesses objectives and resources.

The target market of air asia was students, businessman, tourist, and workers who would like to travel to different countries. The level of our education is imperfect in Malaysia compared to another country such as Singapore and because of this reason, Air asia’s air fare promotional fares is as low as rm1 to enable low and middle income family to travel and to provide mobility. When businessmen plan to work at oversea at anytime, they can use the AirAsia and it can reduce the company cost. Next, it’s also target the families. Since every season in a year, there must be many families plan for travelling in anywhere. AirAsia can provide families a lowest cost for the flight and families can enjoy their cheap flight. In addition, reduced price sales is also a target market for AirAsia. They reduced their price to suit all class of their customers. AirAsia saw a need for a lot of low pay salary people who could not afford the money to travel home. So, most people can travel home now with the introduction of services of low fares.

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. Lastly, 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.

Q2

Marketing mix is a combination of marketing tools that are used to satisfy customers and company objectives. Consumers often call the marketing mix “the offering.” There are four marketing mix for AirAsia such as product, price, place and promotion.

PRODUCT /SERVICES

The term “product” refers to tangible, physical products that can been touch and seen or services. It also means defining the characteristics of your product or service to meet the customers’ needs.

a) Guest Convenience

AirAsia believes in providing convenient service to make traveling easier and more affordable for its guests. Guests can make bookings through many ways such as online booking. In August 2003, AirAsia became the first airline in the world to introduce SMS booking where guests can now book their seats, check flight schedules and also to obtain the latest updates on AirAsia promotions from the convenience of their mobile phones in anywhere.

b) Frequent flights

AirAsia’s high frequency service ensures guest convenience is met. The airline practices a quick turnaround of 25 minutes, which is the fastest in the region, resulting in high aircraft utilization, lower costs and greater airline and staff productivity.

c) Ticketless service

This service launched on 18 April 2002, this concept complements AirAsia’s internet booking and call centre service by providing a low cost alternative to issuing printed tickets. Guests no longer need to go through the hassle of collecting tickets.

d) Easy payment channels

In line with its “Easy to Book, Easy to Pay & Easy to Fly” approach, on 1 March 2002 AirAsia became Malaysia’s first airline to enable their guests to pay for their telephone bookings by credit card or by cash at any Alliance Bank branches.

PRICE

Price refers to the value of a product that attracts the buyer to exchange money or something of value for it.

a) Low fare, no frills

AirAsia’s fares are significantly lower than those of other operators. This service targets the guests who will do without the frills of meals, frequent flyer miles or airport lounges in exchange for fares up to 80% lower thanthose currently offered with equivalent convenience. No complimentary drinks or meals are offered. Instead, AirAsia recently introduce ‘Snack Attack’, a range of delicious snacks and drinks available on board at very affordable prices and prepared exclusively for AirAsia’s guests. Guests now have the choice of purchasing food and drinks on board.

PLACE

Place is about the location that the products to the customer, looking at location and where a service is delivered – or whether they need to collect it or will you deliver it yourself. Currently, AirAsia flies to 12 destinations in Malaysia, using a fleet of seven Boeing 737-300s. By the end of the next fiscal year, it will have added four or five new domestic destinations, and increased the frequency of flights to existing ones.

a) Internet booking

Another is infrastructure. One criterion for an efficient low-cost airline is direct booking via the internet – this does away with commissions and credits to travel agents and the cost of processing tickets. While Raja Azmi claims well over half of AirAsia bookings are done via the internet. As Asia’s first online airline, AirAsia offers a new convenience in buying seats by logging on to its website

b) Reservations and sales offices

These are available at airports and town centers for the convenience of walk-in customers.

c) Authorized travel agents

AirAsia also introduced a direct B2B engine to its agents. The internet-based real time inventory-booking engine is the first in Asia. The agents make immediate payment via a virtual AirAsia credit card, developed through one of its strategic partners, Alliance Bank.

PROMOTION

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. 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.

Q3

Air asia commenced its operation in 2001 launched new routes from its hub in Kuala Lumpur International Airport at breakneck speed, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 (US$0.27) and encouraging people to travel cheaply in Malaysia or neighboring countries example like Singapore, Indonesia, Thailand, and the Philippines. This way,Air asia can boost our country’s travelling industry.

The strategic of air asia is targeting students, businessman, tourist, and workers who would like to travel to different countries. The level of our education is imperfect in Malaysia compared to another country such as Singapore and because of this reason, Air asia’s air fare promotional fares is as low as rm1 to enable low and middle income family to travel and to provide mobility. This allow airasia to become one of the lowest and cheapest airlines in Malaysia compared to MAS.

Airasia also provides online-booking, Web check-in, and customer service to give customer a best service and to compete with another air-line company. Online booking is convenient to customer for purchasing tickets, to check the flight schedule, and enquiries. Other than that, customer service is provided for solving customer’s problem and another services. All the services above has the advantage to provide the best customer service and faster productivity compared to MAS, which is not so productive, inconvenient and bad service given to customers.

Although MAS is government owned and Airasia is a private airline company, and the air asia flight routes are not many as MAS, but, airasia is currently expanding their flight routes till Europe and rare countries such as japan, Cambodia, Tibet and many more. While MAS only have flight routes to major cities like England and America.

The use of the new and latest technology such as the Boeing 747-8 , 9M-AAX, AIRBUS 320-200 and many more. These enormous size of airplanes enables airasia to load more passengers, more comfortable, and more safety to customers. Airasia is one the famous airline in the world and thus, enabling them to win over different awards such as world’s best low cost airlines, asia’s best low cost cargo awards and many more. Although MAS has the same aircraft as airasia, but it is the customer’s trust to use Airasia airline services compared to MAS.

Q4

A few suggestions that could further improve AirAsia’s service and make our lives as customers better. First, Air Asia ground staffs are rude and unkind. Low Cost Carrier Terminal (LCCT) lcct is just like puduraya. A customer was queuing in the wrong check-in counter because he never travel oversea before, first flight at 5 something in the morning. There is no help in lcct, the staffs are arrogant, none of them willing to help him to point at the right direction, so he missed the flight with no refunds, just bloody arrogant ground staffs giving us sarcastic remarks. In addition, there are a lot of cases customer lost their luggage, since reports made but none of them call them back. So, Air Asia should improve their management for the luggage or provide training to all the staffs. AirAsia should offer the service that enables passenger to upsize their luggage allowance online just like what tiger airways does. Passenger could purchase the upsize (in addition to the 15kg) online with the weight they want. It will reduce check in time as passenger doesn’t need to make payment at the airport. Connecting passengers will have to check out their heavy luggage and go through custom and check in again due to point to point service of AirAsia.

Another suggestion would be to provide some check in desks for passengers who wish to check in early (with a small fee) for their connecting flight. Some connecting passengers would like to hop to the city for a few hours and it’s better for them to check in rather than putting the luggage at the storage counter. In addition to displaying information on gate numbers for flight departures, it would be useful for the notice boards to also display counter numbers for checking in. This would greatly facilitate and improve the efficiency of checking in, which is frequently hampered by overcrowding and general lack of space. This is sop in most airports of the world.

Their quality of service is not good, from the research carried and feedback from the users, most customers complained that AirAsia does not follow the scheduling hours of flight, which implies that customers are delayed for a period before traveling. This shabby offering could damage their image and services as customers may seek for alternatives. If AirAsia should work on this, most unsatisfied customer could return and customer will begin to speak of their satisfaction, which will improve their brand image and generate more revenues at the end.

Next, AirAsia should be improve their in-flight dining options, some of the customers complaint about the local food, nasi lemak contains too much coconut milk, which has a tendency to deteriorate with time, causing indigestion. AirAsia should stick to more stable food like sandwiches, burgers and hot dogs.

Refences

Anthony-Claret. (2008). _codewit_. Retrieved October 10, 2011, from