In order to make sure that the slogan of “Now Everyone Can Fly”, Airasia had launched Low Fare Campaign in order to attract the customers to fly with a low fare. The objectives of this campaign are to offer low fares to customer to travel and offer discounts to the public in order to encourage more people to fly with Airasia. Moreover, this will lead to new market entry of first-time user. (Thestar, 2007)
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2.0 Airasia Market analysis
2.1 PESTEL analysis
Political Factor
Airasia airline had planned to build a new single-runway airport in Labu, Negeri Sembilan with the Sime Darby in 2009 and been approved by the government. However, the plan has been cancelled due to the Stated-owned Malaysia Airports had tried to stop to build the new terminal and disagreement with former Prime Minister, Tun Mahathir. (Flightglobal, 2009)
Economic Factor
In 2010, Malaysia Government had introduced one government policy which is “10 Malaysia Plan” to the public in order to unleash the growth of economic. The Airport development is one of the plans as Malaysia Government expects the passenger’s amount will increase to 62 million in 2015. A new low cost terminal will be built by the in Kuala Lumpur International Airport for Airasia and has larger terminal. (Midfresearch, 2010)
Social Cultural Factor
Malaysia is the country which has 3 ethnics and the cultures are unique. Airasia believes that the communities are expecting that the airline can treat every ethnic equally. In order to do that, Airasia is practicing the meritocracy culture whereby the employees hired not based on the age and ethnic. (Airasia, 2009)
Technological Factor
Airasia has implemented information technology in running the operations of the airline to save the costs. The information technologies that implemented are yield management system and computer reservation system. The systems can help the airline to save the costs by recording on revenue and transactions in daily operations. (Management of Technology, 2009)
Environmental Factor
Airasia has invested in the latest technology and full utilization of the aircraft in protecting the environment and A320 airbus which is more efficient to operate and more save fuel is used. Airasia ticketless system and near paperless office are the strategies to cut down the waste of paper. (Airasia, 2009)
Legal Factor
In order to operate in Malaysia, Airasia must apply the Air Service License from the Malaysia Civil Aviation. The regulations such as Civil Aviation Act 1969 and Aviation Offences Act 1984 must be followed. (Airasia, 2004)
2.2 SWOT analysis
Strength Analysis
Low Cost Carrier business model is one of the strength of Airasia in order to compete in the airline industry. The second is Airasia has a very strong relationship with the government and the airline industry leaders. The third is well established of brand name in Asia Pacific. (Management of Technology, 2009)
Weakness Analysis
The Airasia main weakness is the airline more reliable on the out sourcing workforce. The other weaknesses are the service resource is limited and the airline is receiving many complaints on the no-refundable of the ticket canceled and the delay of flight. (Management of Technology, 2009)
Opportunity Analysis
The first opportunity is the ever-increasing oil price which enables Airasia to compete with other low cost airline. (Management of Technology, 2009). “ASEAN Open Skies” agreement that achieved which is allows Airasia to run unlimited flights among ASEAN’S regional is also an opportunity. (Wong, 2009)
Threat Analysis
The first threat is the services rates (airport departure, security charges) are controlled by the airline. The other threats are other entrance of low cost airline and the operation cost is increase due to the services that added. (Wong, 2009)
2.3Trend and Current Position
2.3.1 Airasia Trend
In 2009, the low-cost carrier airline that established well had proved that has sufficient power to operate across the region in different market and economic. Airasia airline is the fast-growing and profit earning steadily airline which had increased the profit for the past. Airasia is also able to grow the market share in the Southeast Asia and had introduced the low-cost long-haul carrier whereby can offering the passenger cheaper fare. Airasia has started to have partnership with other low cost airline to reduce the airline operation costs such as ground-handling services. (Flightglobal, 2010)
2.3.2 Airasia and Competitors Current Position
In Malaysia, the main competitor of Airasia is the Malaysia Airline System (MAS) which is Malaysia’s National Airline. In order to compete with Airasia, MAS had launched the first low cost airline which is Firefly. The airline is the test-bed in running low-cost operation. In March 2007, Malaysia Airline System had launched the first community and low cost airline which is Firefly to compete with other low cost airline. The Firefly airline is the test-bed of Malaysia Airline System in running the low-cost operation instead to test for new market segmentation and the Malaysia Airline System will adapt and expand it into national carrier if the operation of Firefly is proven success and gain stability. (Datamonitor, 2008).
Due to the existing of new competitor, Airasia Malaysia has two competitors in Malaysia. However, the prices of airline ticket in Airasia is the main advantage and able to maintain current position as low-cost carrier.
Particular
Malaysia Airline
Airasia
Firefly
Airfare
Non
RM15
RM130
Service Charge
RM9
Non
Non
Surcharge
RM76
RM47.50
RM51
Total
RM85
RM62.50
RM181
(Prices Comparison for one person one way ticket to Pulau Langkawi during promotion)
(Reference: Amdtaufik, 2008)
3.0 Objective
3.1 Corporate Objective
The first objective of Airasia is to become the largest low cost airline organization in Asia by provide services to 3 billion people.
Second objective is to attain with the lowest cost and lead to everyone can fly.
The third objective is to maintain the product quality and reduce the costs.
3.2 Communication and Marketing Objectives
The first communication objective of Airasia is to promote the organization, services and products through the effective communication program to the customers.
The second objective is to make sure that there is a communication relationship between the Airasia and the customers and the relationship can be strengthen through the campaign awareness and brand reputation.
The third objective is to expand the communication and media strategy in order to create brand or product awareness to the customers in order to achieve the organization goal.
The last communication objective is to maintain the good relationship with the customers and keep updating customers with organization information’s.
(JobDB, 2011)
4.0 Marketing Communication Tool – Low Fare Campaign
4.1Advertising
In order to communicate with the target audience, Airasia is using advertising as a tool in introducing the products and services. One of the important advertising media that frequently used is the social media. The advantages of using social media are the internet enable the interactive capabilities, high selectivity by the users and the cost is low.
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In Airasia, the organization strongly agrees that social media is playing an important role in order for the organization to do advertising and build a consumer group that contributing trust to brand and value. Nowadays, the internet had made the people able to connect with the whole world people easily and more time is spending for online. By using social media, the messages of the products and services can be reaching out and able to share out the content of message effectively. Besides that, the social media is able to provide a channel of communication for the organization to run the activity such as low fare promotions, new product launching and news announcement. Moreover, the social media able to create a communication platform for the Airasia to connect with the people and enable the people to have more understanding on the organization. (Airasia,2009)
Airasia had started the corporate blog (www.blog.airasia.com) in 2008 and Facebook (www.facebook.com/AirAsia) in 2009. The effectiveness and efficiencies of the social media enable Airasia to reach the number of fans and creating a strong relation community. For the community, they are able to get the latest information about the campaign that launched by Airasia through the social media. (Airasia, 2011)
Another method of Airasia to run the advertising is using the Airspace advertising whereby the unique and effective way of advertising can be done to reach all the customers who take the flight. With the new approach of advertising and more cost saving, the messages can be reaching to large coverage of passengers. This allows the messages of the campaign directly communicate with the passenger and can across effectively whether on the ground or in the sky. The advertisements of the campaign can be placed in the auto boarding pass, the information counter, sales office and on the passenger’s seats. (Airasia, 2010)
Besides that, Airasia use newspaper as advertising media. By using the newspaper, the messages of the campaign can be more flexible to access to the different coverage of markets and the target audiences are different. The newspaper medias that used by Airasia in Malaysia are Star, Sin Chew Daily, China Press, Berita Harian and others.
(Lee and Johnson, 2005)
4.2 Direct marketing
Direct marketing is an interactive system that can helps the organization to personalized communications between them and the customers. With the help of computer and internet development nowadays, the organization is able to run two way communications for their products and services. (Lee and Johnson, 2005)
In order to increase the awareness of the organization to the customers, Airasia is using direct marketing in order to encourage the interactions between organizations and allow users to be more understanding on the brand. One of the direct marketing tool that used by Airasia is the Yahoo Mobile. Airasia is promoting and sending the messages to the customers by using other website.
Airasia has corporate with Yahoo Mobile whereby the organization allows Airasia mobile website to put the banner advertisement on the Yahoo mobile homepage, yahoo mail and yahoo search. The mobile users just need to access to the Yahoo Mobile and click to the Airasia banner, the link will automatically connect to the Airasia Website.
By this, the customers can book the flight tickets, checking the ticket booking status and access to the promoting campaign. These services and information assessment through mobile technology has lead to the increasing in awareness of the organization and campaign promotion.
Moreover, this direct marketing method had lead to the good responses from the users whereby the total click to the website is 108,405 clicks and the rate is 1.78 percent after 28days launching. (Mobilemarketer, 2009)
4.3 Public Relation
There are many activities that can be carried by the public relation in order to communicate to the related party. In Airasia, one of the activities that carried out by the Public Relation is the Corporate Social Responsibility. The features in this concept are the organization shares the values and joyfulness in with the related parties. Airasia is celebrating the times of joy with the communities, practicing the communities’ value and traditions and delivering cares to them. There are few area that focused by the Airasia in caring out this activity. The first area is the organization work place. Airasia is practicing the meritocracy culture and the employees are hired due to their performance and ability. The elements like gender, creed, age and ethic are not considered in the hiring process. By practicing the meritocracy culture, Airasia believe that they can strive to exceed the community’s high expectation and provides equally treatment to all the communities.
The second area that focused is helping the communities to pass the hard time. There was an earthquake happened in 2009 and had shocked many communities in Indonesia. At that moment, the Airasia decided to lend a hand and running the “charity flight” to help the victims to go out from that place. Moreover, the Airasia in Malaysia is also helping out in providing the cargo space to deliver the goods for the victims. Airasia always help the victims of disaster and providing joyfulness and hope to them.
The last area that focused is minimizing the environment impact in creating greener environment. The first thing Airasia do is promoting the recycle concept to the work place environment and encourage paperless system office to be run. Moreover, self service check-in options is encouraged by the organization in order to helps in reduce the need for expensive airport infrastructure. The efficient and simple ground environment is the main policy in protecting the environment. (Airasia, 2009)
5.0 Airasia Marketing Strategies
5.1 Pull and Profile Strategy
Airasia is using the Pull Strategy to deliver the low fare campaign information directly to the end-user customers. The purposes of the messages delivered are to increase the campaign awareness, encourage the customer’s involvement and to influence the customer perception. By these, the customer behavior and perception may be changed and lead to the purchasing of the products. Moreover, Airasia use this strategy to encourage and attract the customers to purchase airline through the website channel. For Airasia to complete and deliver the pull strategy, the method that use can be deliver the message through the social media or website by offering the low fare promotion to the customers. (Fill , 2006)
Airasia is using the Profile Strategy which is using different messages in target all the stakeholders that related. The stakeholders of Airasia are customers, employees, regulators and the local communities. This strategy is including the pull selling which is requires high promoting to attract the customers and push strategy which is forces from the organization to increase the customer demand. By using this strategy through different marketing communication tools to deliver different message, Airasia is able to build up the awareness of the low fare campaign and the perception of communities toward the campaign. (Fill , 2006)
5.2 Unique Selling Propositions
In order to be unique selling proposition, the strategy that used by Airasia is low cost carrier and has come out the vision of in becoming the largest low cost airline in Asia and makes the dream of average income people to fly happens. The slogan that implement for the strategy is “Now Everyone Can Fly” whereby the tickets prices are lower. To become differently from others airline, Airasia has implementing few strategies in order to make sure that the low fare model is possible to run.
The first strategy that Airasia apply is the Safety First strategy on the maintenance of the airplane. The organization is follow the others world airline operation safety strategy and partnering with the world’s recognize repairing and maintenance manufacturer.
The second strategy is the High Aircraft Utilization where the Airasia implementing the fastest turnover time in make sure the cost can be lower and productivity is high.
The third strategy is low fare and no frill whereby providing the services without promises on the quality.
The last strategy is providing more different distribution channels such as Airasia Mobile and booking website for the customers to check the booking and the flight schedule information’s.
(Airasia, 2010)
6.0 Airasia Communication Campaign Cost Outline
Cost
2008
2009
Revenue
RM 2,81,526,000
RM3,072,049,000
Marketing Communication Campaign Cost (Avdertising, Direct Maketing and Public Relation)
RM 5,630,520
RM 61440980
(Reference: Airasia, 2009)
Airasia is using 2% of the yearly avenue to invest in the marketing communication campaign in order to create awareness of products and services among the communities. (Low, 2010) The costs that spend for 2008 are RM 5,630,520 and RM 61440980 for 2009.
7.0 Methods of measuring the effectiveness of the marketing communication
There are few methods that Airasia can use to measure the effectiveness of the marketing communication in the “Zero Fare” Campaign. The first method is the Pre-Testing whereby the marketing communication concept, targeting group and behaviour are pre-test before the launching of campaign. This test can be done by the qualitative and quantitative method which is giving out survey forms and collect opinions.
The second method is Post-Testing whereby the effectiveness of marketing communication is evaluated after the campaign launching. Airasia can use the behavioural test to measures the responses and perception of consumer on the marketing communication after “Zero Fare” campaign was launched. Moreover, Airasia can also use the sales test which is the measures on the sales and then will get result on the marketing communication effectiveness.
The third method is Tracking Studies which is the study is involves the collection data of the consumer perception toward the campaign. Airasia can use the interview method to collect the data of consumer perception on the marketing communication of the campaign and what message that gets from the campaign. By this, the organization is able to more understand on the consumer perception and a good record for future marketing communication plan.
The fourth method is Likeability test which is testing the level of consumer enjoyment on the marketing communication of the campaign. The result will lead to the sales result and the consumer satisfaction result.
(Fill, 2006)
Total word count: 2986 words
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