Marketing Strategy for Air Asia: Objectives, Segmentation, and Targeting

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.

MARKETING
MANAGEMENT

Executive summary
The marketing strategy is an integral part of the each and
every company. Here is 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 brand positioning that help the firm
to attain desired mission and vision in the international
market.

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.

 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.

 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).

 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.

 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
The above 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.

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