Marketing Strategy for Air Asia: Objectives, Segmentation, and Targeting
Verified
Added on 2023/06/10
|21
|4104
|316
AI Summary
This presentation discusses the marketing strategy of Air Asia, including its objectives, segmentation, and targeting. It covers market segmentation and target market analysis, consumer behavior of targeted customers, marketing objectives, marketing mix action plans, and more.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
MARKETING MANAGEMENT
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
Executive summary The marketing strategy is an integral part of the each and every company.Hereis the discussion about the activities and operations of Air Asia. The marketing objectives, marketing strategies and actions for Air Asia have been explained in the task. Along with this, target audience also plays a significant role to increase and enhance the sales and returns of the company. It discusses about the segmentation and targeting strategies of Air Asia. Furthermore, it also explains the marketing mix strategy for Air Asia.Marketing objectives for Air Asia also have been discussed in this presentation.
Table of contents Executive summary Introduction Background statement Market segmentation and target market analysis Consumer behavior of targeted customers 3Marketing objectives Marketing mix action plans Conclusion References
Introduction The primary objective of this presentation is to outline the marketing objectives, market segmentation and action plan of Air Asia. The paper explains that how the company holds a great position in the competitive market to beat the rivalries. It also provides a brief information about the marketing mix, and brandpositioning that help the firm to attain desired mission and vision in the international market.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Background statement Air Asia was incorporated in 1990 with its headquarter is situated in Kuala Lumpur, Malaysia. It is the largest airline in Malaysia measured by destinations and fleet size. The operates its business activities and operations in more than 165 destinations spanning 25 countries. There are approx 17,000 employees working in the company. The company provides unique and effective airline services to the customers across the world. In 2004, flights to China, Macau, Cambodia, Vietnam and Philippines were started with Air Asia Group recording some 90 aircrafts in its base and flying to more than 60 destinations from Malaysia, Thailand and Indonesia.
Market segmentations and target market analysis The market segmentations is a process of dividing the entire market into the different market segmentation. It is an effective and unique concept that helps to beat the competitors in the international market. The market segmentation helps the firm to maximize the profitability and outcomes. It is one of the significant strategies that is exercised by the company to categorize its market into the different segmentation.By using this strategy, Air Asia is able to stand out against the competitors in the global (Pereira and Caetano, 2015).The market segmentation is categorized by the company on the basis demographic, social economic, geography and psychographics. These categories are discussed in detail below. Socio-economic: The socio-demographic factors include educational qualification, buying behavior of the consumers and neighborhood. The socio-cultural factors play an empirical role to uplift the profitability and outcomes (Whyte and Lohmann, 2015).
Demographic: The demographic factors include age, gender, sex, city, and race of the buyers that could have direct impact on the sales and revenue of Air Asia. Along with this, income shows the financial capability of the buyers that travel with Air Asia. It is noted that middle class and lower class people maintain less amount of disposable income as compared to the upper class people. Air travelling is used by the middle and lower class people for some business purpose so they find out the suitable and effective options to make journey effective and unique (Wensveen, 2018). Psychographics: The psychographic factors include personality traits, hobbies, likes, dislikes, and habits of the customers (Amiruddin, 2013). It has been analyzed from the above mentioned analysis that market segmentation helps in understanding and identifying the brand image in the global market. By using this strategy, the company has been able to maintain a dynamic and attractive image in the minds of the customers (Grant, 2016). Once the market has been segmented, the organization can investigate, assess and measure the target audience of the company. There are three different target markets which Air Asia are targeted. These segments are divided as segment 1, segment 2 and segment 4. The target market profile for Air Asia has been detailed below.
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
Segment 1 Income: Low income level(MYR0-MYR 40,000yearly) Social class: Lower social class Usage rate: Low Time: Leisure Value for money: High Segment 2 Income: Middle income level (MYR40,001-MYR60,000 yearly) Usage rate: Moderate Time: Leisure Social class: Middle social class Value for money : High Segment 4 Income: Middle income level(MYR40,001-MYR60,000 yearly) Usage rate: High Time: Business Social class: Middle social class Value for money: High It is noted that segment 1refers to the lower class consumers who travel in twice a year for leisure and maintain high significance on value for money (Al-Obaidi, Ismail and Rahman, 2014). Segment 2 is referred to the middle class people who travel moderately for leisure and have high significance on value for money. Along with this, segment 4 is divided as middle social class target audience who travel frequently for the business activities and functions but also place high significance on value for money (Shuk-Ching Poon and Waring, 2010). The target strategy focuses on the price sensitiveness and value of the services. The consumers who travel for leisure or business want to pay as little as possible to safe and secure a seat on a flight. By using targeting strategy, Air Asia has been able to know and analyze the needs, demands and requirements of the target audience in the international market. No company can survive and grow its business operations and functions without using effective and unique targeting strategies within the organization (Kotler, 2012).
Consumer behavior for Air Asia’s targeted customers It has been analyzed that consumer behavior plays a significant and fundamental role to uplift the profitability and revenue of the firm. A consumer behavior is the study of individuals, organizations, groups and all the activities that are associated with the purchase, use and disposal of goods and services including the consumer’s mental, emotional and behavioral responses that precede and follow these activities and actions (De Mooij, 2010). In other words, it is the study of whether how individual customers, organization and groups buy, use and dispose of goods, services and ideas to satisfy their wants, needs and requirements.It refers to the actions and activities of the consumers in the global market. It is noted that various factors can influence the purchasing power of the consumers in the international market. If the company wants to attain desired goals and objectives, it needs to focus on the purchasing power of the consumers. The consumer behavior includes the favorable inputs, buyer’s predisposed regarding a product and service. Air Asia needs to focus on the marketing strategies to identify and analyze the position and goowill of the company in the international market.
Analyzing the purchasing power of the consumers is quite complex and on the other hand, wide range of behavior models are referred by the company to analyze and identify their own marketing strategies (Ong and Tan, 2010). The consumer behavior can be changed constantly due to various reasons that could affect the sustainability of the firm adversely (Solomon, Russell-Bennett and Previte, 2012). “7”Os of market place are used by the company to understand and evaluate the consumer behavior. The ‘7’Os for Air Asia Company has been detailed below. Occupants: This refers to those who make up the entire marketplace. Singapore airlines, United Airlines, Spice Jet, and Qantas are considered the competitors of the company. Objects: The objective of the firm is to promote the services in the global market. In the object of the company includes business, priority trips and cost tickets for leisure. Occasions: It focuses on the particular occasion, festival and times of travel. The maximum customers of Air Asia include businessman who are seeking for reasonable tickets and low income flyers on leisure trips (Eng et al, 2012). Organizations: Air Asia is involved in the marketing strategies.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Objectives: The reason of buying the services is identified under this case. The business trips and leisure trips are the main objectives (Munusamy and Chelliah, 2011). Operations: It discusses that how the company is operating its business actions and operations in the international market. Online ticketing is very popular in Air Asia’s customers. Outlets: The outlets refer to the place where the buying and selling take place in the location. It is revealed that Air Asia’s target buyers are also affected by many factors that include the following. Social class: The Air Asia customers include lower class and middle class people who maintain sufficient level of income. Reference: It also plays an effective and important role in Air Asia to serve its customers in the competitive market (Hussain, Al Nasser and Hussain, 2015). Need Hierarchy: The behavior of the customers at Air Asia is dependent on the physiological and personal needs, requirements and wants of travel and leisure. Brand perception: It is noted that Air Asia market is affordable for all the flyers in the marketplace that is measured by its low cost travel plans. Brand affinity: It is one of the effective factors that helps in growing and expanding the business globally (De Mooij and Hofstede, 2011). It is further analyzed that Air Asia uses Robinson, Faris and Wind’s model of consumer behavior to analyze and identify the wants and desires of the consumers in the rivalries market.
3 marketing objectives No company can attain success without deciding the marketing objectives and goals. The company is entered in the market by using low cost strategy in the workplace. The business strategy of the firm is to deliver the services at suitable prices across the world (King, 2013). The marketing objectives are decided by Air Asia to stay in the competitive market. In today’s era, the company is facing high and intense competition in the global market. Various strategies are used by the company to analyze and understand the marketing objectives of the firm (Gilligan, and Wilson, 2012). It is noted that Air Asia uses Ansoff matrix to attain competitive benefits in the marketplace. Under Ansoff matrix, Air Asia uses market penetration strategy, product development strategy, market development strategy and diversification strategy. The market penetration strategy focuses on the network and streamlined to enhance the outcomes in the international market. By using product development strategy, the firm has been able to introduce the new services at suitable cost. Apart from this, the organization uses market development strategy to attain long term mission and vision. The firm also uses online advertising and promotional strategies to capture the entire market.
In addition, Air Asia uses diversification strategy is also used by the company to increase and enhance the demand of the products and services (Peng, 2013). In diversification strategy, the organization provides special offers and discounts to the customers to attract and retain the maximum number of customers globally. By using diversification strategy, the firm further also has been able to attain sustainability at the workplace (Yang and Konrad, 2011). Along with this, the organization has been able to distinguish its products and services from the competitors by initiating diversification strategy. The diversification helps the company to maximize the use of potentially resources in the international market. The three marketing objectives of Air Asia have been discussed below. The company wants to offer the products and services with best excellent quality at appropriate prices in the international market. The company has make agreement with Expedia to attract more and more passengers globally. It should make more agreements with travel companies and collaborate with maximum number of local providers (Mellat Parast and Fini, 2010).
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
The company is focusing on the advertising and promotional strategies to cope with rivalries in the marketplace. Effective distribution channels shall be used by the firm to be a leader in the airline industry. Free seat promotion or Mega Sale promotion and some other promotions are done by Air Asia to strive with competitors. The other aim of the company to increase the sales and profits in the coming years (Lu et al, 2012). Social media and online marketing are becoming the most penetrating marketing tools and methods to influence the consumer behavior. Besides this, the organization is collecting feedback and reviews from the customers to improve the services and products of the firm. In addition, Air Asia wants to create a globally recognized ASEAN brand. Along with this, the company wants to attain the lowest costs so that everyone can fly with Air Asia. It also wants to maintain the highest quality products by reducing the cost and enhancing the service levels (Sun, Jiao and Tian, 2011). The core values include passionate, caring, safety conscious, full of integrity, hardworking and fun. The main vision of the firm is to the biggest low cost airline in Asia who is serving the 3 billion people in the marketplace (Zikmund et al, 2017). In this way, marketing objectives play a foremost role in marketing plan.
Marketing mix action plans for Air Asia over these 3 years planning period The marketing mix is one of the significant factors of action plan that helps to expand and flourish the business globally. The marketing mix is initiated by Air Asia to overcome the rivalries in the competitive market. The marketers provide a right and appropriate guidelines for the business with the help of marketing mix strategy (Leonidou and Leonidou, 2011). This strategy also helps the organization to make unique and effective decisions in the workplace. The marketing mix strategy also helps the firm to fulfill the demands and requirements of the business. An effective and unique marketing mix reflects branding, positioning, and competitors analysis. The marketing mix entails 7 elements include product, price, promotion, place, process, physical evidence and people. The marketing mix for Air Asia has been discussed below. Product:This is one of the significant factors that can help the company to hit the competitors in the marketplace. This strategy focuses on the products and services. By using this strategy, the company has been able to gain long term advantages in the near future. The firm is introducing online portfolio that describes its services, tickets, flights and facilities etc. The organization also focuses on the email newsletters for the upcoming years. By using product strategy, Air Asia has been able to differentiate its products and services from the competitors in today’s modern world.
Price:The firm also uses pricing strategy to attract the maximum number of clients in the international market. The organization focuses on the prices of the competitors to set the appropriate prices of the airline services. The ongoing pricing in its marketing mix include the following. Offers and special discounts on the occasion. Frequent value added services in the market Smooth FOREX mechanism within its ticketing department. Place:Online promotion and advertising are done by the company. The online advertisements, social media, and ticketing services have made it valuable sufficient for global travel agents such as Expedia turning for collaboration with it. This strategy helps the company to sustain the maximum passengers in the global market (Lovelock, 2011). Promotion:The promotion and advertisement are done by Air Asia on the web, though its instagram, feedback, and twitter pages. The other promotional activities include seminars, sessions and programs. By using promotional strategy, the organization has been able to promote its airline services in the international market.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
People:It is one of the effective and unique strategies that help the firm to flourish the business globally. Effective management team is used by the company to introduce new services in the global market. Effective leadership style is used by the firm to conduct the business operations in the global market. An internal communication system is developed by the company to motivate the employees to perform roles and responsibilities. Process:It is one of the important factors of the marketing mix. Effective and unique process is used by Air Asia to sustain the profitability. The company uses customer complaints handling systems, customer priority systems, management of the total customer experience and customer queuing system. Process is the significance factor of the market mix strategy (Lovelock, 2011). Physical evidence:It has been noted that Air Asia provides various types of physical evidence. Documentation is also done by the company effectively and efficiently. By using marketing mix strategy, Air Asia has been able to carry out the business functions and activities successfully and efficiently. The marketing mix strategy also helps the firm to strive with rivalries in the international market.
Conclusion Theabove mentioned analysis shows that how the company uses marketing strategies to gain competitive benefits. Here is the discussion about the marketing objectives, marketing strategies, consumer behavior, segmentation, and targeting strategies of the company. The above mentioned limelight event indicates that how Air Asia has been able to make a dynamic image in the eyes of the customers. Along with this, the paper also discusses and outlines the action plan that has been made by Air Asia. It also discusses that how consumer behavior influences the services and products of Air Asia Company. The above analysis shows that marketing mix plays an empirical role to make effective action plan for next three years.
References Al-Obaidi, K.M., Ismail, M. and Rahman, A.M.A., 2014. Passive cooling techniques through reflective and radiative roofs in tropical houses in Southeast Asia: A literature review.Frontiers of Architectural Research,3(3), pp.283-297. Amiruddin, N.H., 2013. Price, service quality and customer loyalty: A case of Air Asia.South East Asia Journal of Contemporary Business, Economics and Law,2(1), pp.34-40. De Mooij, M. and Hofstede, G., 2011. Cross-cultural consumer behavior: A review of research findings.Journal of International Consumer Marketing,23(3-4), pp.181-192. De Mooij, M., 2010.Consumer behavior and culture: Consequences for global marketing and advertising. Sage. Eng, A.J., Lee, S.C., Tan, P.P. and Yeoh, C.Y., 2012.A study of consumer satisfaction toward service quality in Airasia Malaysia(Doctoral dissertation, UTAR). Gilligan, C. and Wilson, R.M., 2012.Strategic marketing planning. Routledge.
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
Grant, R.M., 2016.Contemporary strategy analysis: Text and cases edition. John Wiley & Sons. Hussain, R., Al Nasser, A. and Hussain, Y.K., 2015. Service quality and customer satisfaction of a UAE-based airline: An empirical investigation.Journal of Air Transport Management,42, pp.167-175. King, B.E., 2013. Transactional and transformational leadership: A comparative study of the difference between Tony Fernandes (Airasia) and Idris Jala (Malaysia Airlines) leadership styles from 2005- 2009.International Journal of Business and Management,8(24), p.107. Kotler, P., 2012.Rethinking marketing: Sustainable marketing enterprise in Asia. FT Press. Leonidou, C.N. and Leonidou, L.C., 2011. Research into environmental marketing/management: a bibliographic analysis.European Journal of Marketing,45(1/2), pp.68-103. Lovelock, C., 2011.Services marketing: People, technology, strategy. Pearson Education India. Lu, W.M., Wang, W.K., Hung, S.W. and Lu, E.T., 2012. The effects of corporate governance on airline performance: Production and marketing efficiency perspectives.Transportation Research Part E: Logistics and Transportation Review,48(2), pp.529-544. Mellat Parast, M. and Fini, E.E.H., 2010. The effect of productivity and quality on profitability in US airline industry: an empirical investigation.Managing Service Quality: An International Journal,20(5), pp.458-474.
Munusamy, J. and Chelliah, S., 2011. An investigation of impact of service strategy on customers' satisfaction in the budget airline industry in Malaysia: a case study of air Asia.Contemporary Marketing Review,1(1), pp.1-13. Ong, W.L. and Tan, A.K., 2010. A note on the determinants of airline choice: The case of Air Asia and Malaysia Airlines.Journal of Air Transport Management,16(4), pp.209-212. Peng, M.W., 2013.Global strategy. Cengage learning. Pereira, B.A. and Caetano, M., 2015. A conceptual business model framework applied to air transport.Journal of Air Transport Management,44, pp.70-76. Shuk-Ching Poon, T. and Waring, P., 2010. The lowest of low-cost carriers: the case of AirAsia.The International Journal of Human Resource Management,21(2), pp.197-213. Solomon, M., Russell-Bennett, R. and Previte, J., 2012.Consumer behaviour. Pearson Higher Education AU. Sun, X., Jiao, Y. and Tian, P., 2011. Marketing research and revenue optimization for the cruise industry: A concise review.International Journal of Hospitality Management,30(3), pp.746-755. Wensveen, J., 2018.Air transportation: A management perspective. Routledge. Whyte, R. and Lohmann, G., 2015. The carrier-within-a-carrier strategy: An analysis of Jetstar.Journal of Air Transport Management,42, pp.141-148. Yang, Y. and Konrad, A.M., 2011. Understanding diversity management practices: Implications of institutional theory and resource-based theory.Group & Organization Management,36(1), pp.6-38. Zikmund, W.G., D'Alessandro, S., Winzar, H., Lowe, B. and Babin, B., 2017.Marketing Research: Asia-Pacific Edition. Cengage AU.