There are some similarities and differences between marketing strategy of Air Asia and Malaysia Airlines in their pricing strategy, product strategy and promotion strategy.
Topic Sentence 1:
Different pricing strategies are used by Air Asia and Malaysia Airlines (MAS) that reflect their positioning strategy and price objective to compete in the market.
Supporting detail:
To gain competitive advantage, Air Asia is using cost leadership strategies while Malaysia Airlines (MAS) involved in business transformation plan. According to Oliver (2007), Air Asia would need to remain using the cost leadership strategy in order to satisfy customers as their top expectation on low cost airline is price. (Oliver, 1997). By using this cost leadership strategies, Air Asia can effectively gain a lots of customer to grab their service. Besides that, differentiation has become a necessity ever since low-cost airlines entered the market requiring airlines to improve the experience, because if the passenger only made his decision based on price, low-cost airlines with the lowest fares would always be chosen (Deyes, 2008). So that Malaysia Airlines started to involve in business transformation plan in order to low down the cost of the fuel.
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Air Asia using Low cost airlines’ pricing strategy for market stimulation is issuing free tickets and competing in ticket prices setting. According to KHOR YOKE LIM, RAMLI MOHAMED, AZEMAN ARIFFIN & GERALD GOH GUAN (2009), Air Asia want to show that it delivers its promise, so it conducts regular campaigns that offer free or very low cost seats. These free seats are actually offered on availability since aircrafts still have to depart even if there is only one passenger, so this promotion does not affect the company financially. On an average, free seats offered to the public accounted for only one percent of total passenger load while the remaining 99 percent are paid passengers. The campaigns, not only provide publicity for Air Asia, but it adds to its credibility for making good its brand promise by enabling everyone to fly (KHOR YOKE LIM, RAMLI MOHAMED, AZEMAN ARIFFIN & GERALD GOH GUAN, 2009). This strategy is effective because most of the passengers are price sensitive people, so that they might consider purchasing the flight ticket.
The competitive strategy used by Malaysia Airlines is Business transformation program. They want to fight over the big threat such as intense competition, rising cost of fuel in airline industry. According to Five Star Value Carrier: Business Transformation Plan (2008). In the premium market segment, Malaysia Airlines is under tremendous pressure from full service carriers who are striding ahead with ¬rst class products, new and modern aircraft, and fast-expanding routes. On the other hand, in the price driven market segment, Malaysia Airlines is also strongly pushed by low cost carriers with low fares. In a nutshell, Malaysia Airlines must reinvent itself to fend off competition from full service carriers and low cost carriers. It is precisely for this reason that they are adopting a strategy which deals with this dual challenge. For example, they will continue to improve the quality of their product and services and at the same time, reduce the costs so that they can offer low fares. They are also mobilizing the entire airline to become a Five Star Value Carrier: one with products, ¬‚eet and network that are in the league of the world’s premium airlines, with a cost structure and operational discipline to match the best fares the low cost carriers can (Five Star Value Carrier: Business Transformation Plan, 2008).
Concluding: Both companies attempt to lower their flight cost to gain more competitive advantage and customers.
Topic Sentence 2:
Different product strategies also used by Air Asia and Malaysia Airlines (MAS) so that they can provide different kind of services to compete.
Air Asia became the first airline in the world to introduce SMS booking where guests can now book their seats in year 2003 and improved their guest convenience for the customer. This can help Air Asia to build a strong bond with customer. According to Davis, (2002b) and Keller, (2002) building strong brands is one of the most important goals of product and brand management as strong brands will result in the realization of higher long-term and short-term returns for organizations (Davis, 2002b; Keller, 2002).
Both companies Air Asia and Malaysia Airlines also offered frequent flights for customer so that can meet the customers’ needs and grab more competitive advantage. The frequent flight of Air Asia and Malaysia Airlines let customers have enough time to choose.
Non-frills services is provided by Air Asia to lower the cost of the company while Malaysia Airlines initially provides luxury services, but now it also introduced with low price product to compete with its competitors. Majority of the low income group are serving by Air Asia while initially Malaysia Airlines serve the high income group, but it also moves into serving the low income group of customers because of the emerging of Air Asia. Malaysia Airlines provide more comfortable environment for passengers. According to research, 35 per cent of passengers choose an airline on the basis of punctuality, while pricing comes second at around 30 per cent (Deyes, 2008) so that Malaysia Airlines still have their loyalty customers which like their punctuality of the flight.
Concluding: There have some similarity in the product strategies of Air Asia and Malaysia Airlines but majority of the product strategies are different.
Topic Sentence 3:
The promotion strategies of Air Asia and Malaysia Airlines are different but the purpose is alike.
Air Asia is issuing free tickets and competing in ticket prices setting. For increasing the sales of the flights ticket, Air Asia usually will give out free seat or even super low price ticket during the non-peak season. According to the research, Air Asia became the first low fare, ticket less airline in Asia. It offers a simple “no frills” service at fares that are on average significantly lower than those offered by normal full-service airlines (Tengku Akbar Tengku Abdullah, 2010)
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Malaysia Airlines offering RM1 for flight ticket to compete with free seat of its competitors and sometimes the fare of the Malaysia Airlines will be cheaper compare to its competitors although their service is more luxury. Malaysia Airlines want to ensure that their service quality is maintained although the price of the flight ticket is cheaper. Saha and Theingi (2009) found that dissatisfied passengers of low cost airlines prefer to change airlines without complaining; Fisk et al. (1990) and Hart et al.(1990) warned that the negative experiences could create negative word-of-mouth. Nejati et al. (2009) warned that airlines should consistently avoid negative perceptions of their service quality
Some website special promotional deals are offered in Malaysia Airlines website as well. For example, MHcoupon, MHdeals and MASholidays. According to Five Star Value Carrier: Business Transformation Plan, (2008), sale of air tickets via the internet plays a critical role in realizing Financial Services Volunteer Corps. With the improved Internet Booking Facility of Malaysia Airlines, their customers can purchase tickets from the comfort of their home without having to incur the Global Distribution System (GDS) fee which is standard for purchases made via travel agents. In other words, Malaysia Airlines offer their customers the convenience of self-booking without charging them for services they do not really need. The Internet Booking Facility of Malaysia Airlines, together with the Malaysia Airlines Passenger Services System (PSS), will offer customers a hassle-free travelling experience from reservations to ticketing whilst at the same time, substantially reducing operating costs (Five Star Value Carrier: Business Transformation Plan, 2008).
Concluding: The promotion strategies of both company almost the same.
Conclusion :
Rephrase thesis statement
The marketing strategies play an important role for the company to acquire and retain their customer. Pricing strategy, product strategy and promotion strategy of the Air Asia and Malaysia Airlines have similarities and differences. The product strategies of both companies have some differences because Air Asia is more focus on low cost flight while Malaysia Airlines more focus on their services and the comfortable of the environment. Air Asia and Malaysia Airlines should engage more promotional activities to attract more customers and to create awareness of their presence and what services they offer. Others strategies also need to improve to let more people enjoy the flight service with a reasonable price and also provide a comfortable ride for them.
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