Vietnam Airlines Business Strategy Analysis

This assignment provides a comprehensive business strategy analysis of Vietnam Airlines, covering market trends, sales forecasts, profit projections, cost of marketing activities, and implementation control methods. The report outlines the airline's performance in 2018 and 2019, including revenue growth, market share, and profit margins. It also explores opportunities for improvement, such as achieving a 5-star airline rating by 2020. The analysis is based on various reports and sources from Vietnam Airlines, VietNam News, Bamboo Airways, Brands Vietnam, and Vietnam Briefing News.

Assignment 1: Marketing essentials
PHAM TRAN MINH TUAN
F12-151 – F11C
Roberto Ercole

Student Name /ID Number PHAM TRAN MINH TUAN / F12-151
Unit Number and Title Unit 2: Marketing Essentials
Academic Year Semester 2, Academic Year 2018-2019
Unit Assessor Dr. Roberto Ercole
Assignment Number and Title ME2: Marketing Strategy and Application (2 of 2)
Issue Date 8th May 2019
Submission Date 13th June 2019
IV Name Mr. Martin Ortega Azurduy (IV) Ms Doti Chee (Lead IV)
Date 20/6/2019

Table of content
Contents
Introduction ........................................................................................................................... 5
Part A: Compare how Vietnam Airlines and VietJet Air ...................................................... 5
1.1 Services ........................................................................................................................ 5
1.2 Price strategies by the two companies ..................................................................... 7
1.3 Promotion/Communication ........................................................................................ 8
1.4, distribution system .................................................................................................. 10
1.5 Physical evidence ..................................................................................................... 12
1.6 Process ...................................................................................................................... 15
1.7 People strategy: ........................................................................................................ 16
Part B Vietnam airline’s marketing plan ........................................................................... 17
2.1 Executive summary: ..................................................................................................... 17
2.2 Table of content: I put the table of content in the beginning of the assignment .... 17
2.3 Situation analysis: ........................................................................................................ 17
2.3.1: Market analysis: .................................................................................................... 17
2.3.2 Market needs: ......................................................................................................... 17
2.3.3: Market trends: ....................................................................................................... 18
2.3.4: Market growths ...................................................................................................... 19
2.3.5 Vietnam airline macro environment: .................................................................... 20
2.3.6 SWOT: ..................................................................................................................... 21
2.3.7: Competitor analysis .............................................................................................. 21
2.3.8 Company analyze: .................................................................................................. 22
2.4 Marketing objectives: ................................................................................................... 22
2.5 Marketing strategy: ....................................................................................................... 23
2.5.1 Segmentation and targeting: ................................................................................. 23
2.5.2 Market targeting: .................................................................................................... 26
2.6 Marketing positioning and differentiation .................................................................. 27
2.6.1 Positioning: ............................................................................................................. 27
2.6.2: Differentiation: ....................................................................................................... 30
2.7 Marketing mix ................................................................................................................ 31
2.7.1 Price ......................................................................................................................... 31
2.7.2 Place ........................................................................................................................ 31
2.7.3 Promotion ............................................................................................................... 31
2.7.4: Product and services: ........................................................................................... 32
2.8 Budget ............................................................................................................................ 32
2.8.1: Forecast sales ....................................................................................................... 32

2.8.2 Forecast profit ........................................................................................................ 32
2.8.3 Cost of marketing activities: ................................................................................. 32
2.9: Implementation and control ........................................................................................ 32
References ........................................................................................................................... 33

Introduction
Marketing have become one of the most important factor in the successful of an airline, in
order to achieve an efficient marketing strategy, it is important that the marketing department
need create an detail marketing plan for the organization
Part A: Compare how Vietnam Airlines and VietJet Air
1.1 Services
Vietnam airline and VietJet provide a wide variety of product and service for their customer,
the first one is their ticket class. In Vietnam airline they provide 3 type of class for ticket and
they are
 Economy:
 Premium economy
 Business class
For Vietjet they provide ticket class such as:
 Promo
 Premium economy
 Sky boss
We can see that these both airlines provide different type of ticket class suitable for customer,
Economy and promo is lower-tier ticket whereas premium promo is mid-tier ticket and
business is high-end ticket.
Flight Vietnam Airlines Vietjet Air
HANOI – HO CHI MINH CITY 899.000 VND 599.000 VND
HANOI – Da Nang 499.000 VND 199.000 VND
HANOI – Phu Quoc 899.000 VND 499.000 VND
HANOI – Da Lat 2.250.000 VND 900.000 VND
HANOI – Buon Me Thuat 399.000 VND 99.000 VND
HO CHI MINH CITY– Nha
Trang 399.000 VND 58.000 VND
HO CHI MINH CITY– Hue 680.000 VND 199.000 VND
HO CHI MINH CITY– Hai
Phong 1.099.000 VND 590.000 VND
HO CHI MINH CITY– Da Lat 1.350.000 VND 1.370.000 VND
Phu Quoc – HANOI 899.000 VND 499.000 VND
Phu Quoc – HO CHI MINH
CITY 699.000 VND 390.000 VND
Hue – HO CHI MINH CITY 680.000 VND 199.000 VND
HO CHI MINH CITY– Pleiku 399.000 VND 299.000 VND
HO CHI MINH CITY– Hai
Phong 1.099.000 VND 590.000 VND
(Bantinhangkhong,2017)
This is the price comparison chart of one-way ticket provide by both Vietnam airline and
Vietjet, we can see that Vietjet’s price is cheaper than Vietnam airline from 200.000 VND to
500.000 VND.

Special service in flight
Category Vietnam Airline Vietjet
Services for children Under 2 years old:
 Children stroller
 Children cradle
 Special meal for kids
From 2 to 12 years old:
 Special meal for
children
 Portable in-flight bed
for children
The same
Unaccompanied minor
service
From 2 to under 6 years old
 Unaccompanied minor
service
 Accompanied cabin
crew service
From 6 to under 12 years old
 Unaccompanied minor
service
 Accompanies cabin
crew service (Optional)
From 12 to under 18 years old
 Unaccompanied minor
service (optional)
 Accompanied cabin
crew service (optional)
The same
Passenger with disability  Blind Passenger Service
 Deaf Passenger Service
 Wheelchair Service –
free of charge;
 Service dog
accompanying
disabilities
 Disabilities passenger’s
wheelchair
 Accompanies cabin
crew service (optional)
The same
Pregnant passengers Within 32 weeks:
Are accepted as regular
passengers
From 32 weeks to under 36
weeks
Medical clearances are required
MEDIF I and II
From 36 week
Air travel is prohibited
The same

Special case
Medical clearance are required
Category Vietnam airline Viet jet
Cargo  General
 Perishable
 Live animals
 Dangerous
 Wet
 Express
 Vulnerable
 Trucking service
 Dangerous goods
 Perishable
 Valuable
 Live animals
 Pharmaceuticals
 Seafood services
 Vulnerable services
 Express services
Both Vietnam airline and Vietjet airline provide cargo services for transfer goods, we can see
that both brands are provided similar cargo service such as dangerous goods, perishable, etc.
1.2 Price strategies by the two companies
Vietnam airline one-way ticket price from Hanoi to Ho Chi Minh City (Vietnamairline,2019)

Vietjet one-way ticket from Hanoi to Ho Chi Minh city
General polices:
Vietnam airlines:
Vietnam airline are one of the most popular airlines in its industry, If passenger travel with
children under 2 years old, children ticket price will be charge at 10% of the adult price,
children from 2 to 12 years old will be charge at 90% price of adult ticket.
Vietjet:
Vietjet air children ticket will usually mark as the same price as adult, however baby ticket is
free of charge.
The two pictures above have illustrated the information about each flight available on July
2nd, 2019, we can see that there is a clear different between the price range, Vietnam airline’s
ticket price is twice the price of Vietjet air
In conclusion, Vietjet provide their flight ticket at more a affordable price than Vietnam
airline although Vietnam airline ticket is more expensive but it will include in-flight services.
1.3 Promotion/Communication
Vietnam Airlines:
High-end airline
Vietnam airline in customer mindset is “Vietnam national airline”, They mark themselves as
high-end airline brand of Vietnam. Vietnam airline will put services quality is number 1
criterion. Vietnam airline provide service for their customer such as Lotus tax-free shop, In
the industry Vietnam airline is the only airline that have been given 4 stars by Skytrax which
make them the number 1 airline in Vietnam
(Thang Nguyen,2018)
Distribution agent worldwide
In term of buying Vietnam airline ticket, customer will have a wide variety in purchasing
method such as online payment through website, buy ticket in the airport, authorize agent

nearby. These agents will provide customer with flight time, best deal in the day, promotion
such as golden hour, summer sale or pre-order to get the best price.
(Thang Nguyen,2018)
Promotion
Vietnam airline provide lots of promotion for their customer such as summer sale, pre-order
the ticket to get cheaper price in order to attract more customer. In marketing, Vietnam airline
usually cooperate with influence people or celebrities such as football player, supermodel,
politician to become the brand ambassador, Vietnam airline also sponsor many tournaments,
game show.
Vietjet Air
Orientation: Vietjet air customer orientation is youngster, teenager who travel a lot to
explore, people who travel by plane for the first time, and have a low to mid-range income,
that is the reason why Vietjet orientate themselves as an “affordable airline”, because of
identifying the right target Vietjet have achieved great success when it first debut. Vietnam
airline is a high-end airline which their target customer is high incomes, the born of Vietjet
air have create an opportunity for many to travel by plane at an affordable price.
Price strategy:
“Affordable price” is the main strategy that Vietjet air still apply until this day, this strategy
suitable for many customers because it is based on the average income of a normal person in
Vietnam. In order to achieve that “affordable price range”. Vietjet air have to find the most
effective way to optimize the cost by using A320 and A321 airplane which serve for short
flight (5 to 6 hours) these type of airplane will help Vietjet airline saving a huge amount of
cost for food, rest for the crew , gas for airplane, Instead of provide meal include in the ticket
price they will offer in-flight meal separate as a service for customer who needed.
Flight distribution strategy:
In its plan to expand it route, Vietjet air prioritizes international route currently among 76
routes of Vietjet there are 38 internationals routes which take 50% of the total number of air

routes with the total number of inland flight hours. Vietjet is planning and preparing for long-
hour flight by using latest airplane.
In order to provide better services, Vietjet air have cooperate with many retail corporations
such as Walmart, for international routes Vietjet air have signed an agreement with Japan
airlines and agreed with US and South Korea. In 2019, it is expected that they will open the
first route to US
“Sexy brand”
Unlike many other brands which only focus on developing their industry, Vietjet air is also
known as “sexy airline in Vietnam”-the most notorious airline.
Although this marketing strategy have brought many negative comment and response to the
airline, but it has made the popular of vietjet air skyrocket, in addition according to CAPA
Vietjet brand identity is 98% which is relatively high.
Summary: Both Vietnam airline and Vietjet air have different strategy for the customer
because their orientation is different, Vietnam airline aims for mid to high income customer
where as Vietjet air aims for low-income customer.
(Kenh14,2018)
1.4, distribution system
Vietnam airline distribution system is directly handling the ticket to customer, so it does not
have a franchise. Their distribution channel is included 27 booking office, 422 retails agent.
Intermediate distribution:
 Retails agent will represent and selling ticket for Vietnam airline
Vietnam
Airline
Intermediate
distribution Customer

 Vietnam airline will sell ticket through their booking office
 Customer can purchase ticket from post office
 Order ticket online through their official website
 Order ticket through phone
Vietnam airline product flow chart:
Product => transport => represent office => retail agent => customer
The ticket process can be transport directly to customer or through represent office and retail
agent.
Vietnam airline negotiate flow chart:
Product ↔ Represent office ↔ retail agent ↔ customer
This negotiate flow happened in the process of exchanging ticket between customer and
represent office and retail store in order to achieve satisfaction for both sides.
Vietnam airline owning flow chart:
Production => Customer
This represent the ownership transfer between Vietnam airline to their passenger
Vietnam airline payment flow chart:
Product <= represent office <= Retail agent <= Customer
-------------------------------------------------------------
Customer can purchase ticker through retail agent or represent office as well as booking
office
Vietnam airline information flow chart:
Product ↔ transport ↔ represent office ↔ retail agent ↔ Customer
↕ ↕ ↕
Customer will do research on price, ticket class, services… , Vietnam airline will research on
customer needs which make this become a two-way flow process
Vietnam airline promotion flow chart:

Product ↔ Represent office ↔ retail agent ↔ customer
Vietnam airline will provide promotion, create deal and sale to attract more customer
Vietjet air:
Vietjet air choose to distribute their ticket through represent office and online website
through www.vietjetair.com. Vietjet air provide customer 81 destination ( 17 domestic and 64
international routes), Because Vietjet air orientate themselves as “affordable airline”, they
provide and create many promotion, sale which make the distribution of Vietjet air can be
apart from direct selling.
Product Transport Represent Office Retail Agent Customer
Intermediate distributor
1.5 Physical evidence
Vietnam airline:
Location of retail agent:
These retail agents have to meet the requirement of Vietnam airline, these retail agents must
be place in crowded resident, center of the city, large space for customer. Retail agent’s
infrastructure such as board sign, transaction section, table chair, etc.… have to be
synchronize with the image , brand , design of VNA in order to attract customer when they
are inside as well as outside the retail agent , this will make the custom impress by
professional style and trust when using the service.
Airport’s infrastructure: (Vietnam airline,2018)

From board sign and instruction sign to lead customer to airlines procedure vendor, to service
vendor in airport’s lobby must ensure the variety of language in order for foreign customer to
understand. In the waiting room must be equipped with television, air conditioner for
customer to entertain while waiting for their flight.
Vietnam airline’s waiting room : (Vietnam airline,2018)
Vietnam airline’s airport lobby for check-in procedure: (Vietnam airline,2018)
Vietnam airline’s uniform and logo:

This is one of the most iconic element of Vietnam airline because it expresses the traditional
custom of Vietnam. Vietnam airline’s logo represent a lotus which is an iconic image of
Vietnam, the lotus has been well-known by many people from the world it also expresses that
this airline is powerful, ambitious for development.
Vietjet air:
Vietjet air logo is mainly red and yellow which represent the enthusiasm that they want to
provide the flight experience to their customer at the most affordable price
For waiting room and lounge in Noi Bai , all airline will share the same waiting room and
lounge so the infrastructure will be the same to VNA
For uniforms Vietjet use the same color as their logo which is red and brown represent the
enthusiasm and really beautify, Vietjet air uniform have been classified as on of the most
attractive uniform in the industry

1.6 Process
Vietnam airline:
Procedure in transport services of VNA are shown through booking reservation process and
check-in flight procedures during passenger service process:
VNA’s check-in procedure and ticket service are provide through 2 method, the first one is
buying ticket directly from retailer and booking office or online through Vietnam airline
website.
Customer reservation Issue the ticket and payment
(Ticket process in booking office/agent
1, Customer provide personal
information
2, Staff will receive, execute the
information and then place the
reservation
3, Customer confirm personal
information, ending the
reservation process
6, Support and customer
service (if needed)
5, Customer purchase and
receive the ticket.
4, Staff will hand out the ticket
after confirm with customer

(Online ticket process through VNA official website)
Vietjet air: The same as Vietnam Airline, customer will have to check-in in Noi Bai airport at
the Vietjet Vendor
1.7 People strategy:
Vietjet air:
Aims at youngster travel often, people with low income. Vietjet flight crew is also high-
skilled and have been training carefully to operate with advance aircraft, their attendant also
training carefully to ensure that customer is satisfy with service
Vietnam airline:
The people element can be express through VNA labour source, the number of employees
working in VNA are 20904 people with 19000 are local and the rest are foreign, Pilot and
mechanic are 2 main priority of VNA. Labour with college and master are 33% and 50% are
high school graduate level and the rest are mechanic worker. VNA’s average employee age
are 34,5 and they divide their employee into different department:
On-ground Department: Ticket department, business department are 30% of total employee.
This department responsible for contact with customer such as place ticket order, procedure,
etc., this department will guide customer until they successfully receive the ticket. Therefore,
communication skill, attitude, uniform, professional expertise is important because it will
affect the service quality of VNA.
Flight Department: The total number of flight attendant crew is 1578 people with 95% of
them are from 30 to 40 years old which are describe as rejuvenating workers VNA. The
number of flight crew and internship are approximately 345 people, 148 people include mail
pilot and support pilot, the rest are internship. The current number of pilot can only serve
75% of VNA’s flight target, in order to achieve the target VNA will have to hire from 120 to
140 foreign pilot.
VNA’s Flight crew VNA’s on-ground crew
1, Customer access VNA official
and buy
2, Customer print the ticket
through email
3, Support and customer service
(ineeded)

Part B Vietnam airline’s marketing plan
2.1 Executive summary:
Vietnam airlines can be described as the flag carrier of Vietnam, it is the most iconic airline
in Vietnam. Vietnam airlines established in 1956 by the Vietnamese government, the birth of
this airline have opened another chapter of aviation industry in this country back then
Vietnam airline only served domestic flights (Vietnam airline,2019). However, after the war
they started to international flight including SEA countries, China. In 1993, Vietnam airline
make their turning point by becoming the national flag airlines of Vietnam. In this Vietnam
airline’s marketing plan will consist of 6 part which are: Situation analysis, marketing
objective, marketing strategy, marketing mix, budgeting, implementation and control.
2.2 Table of content: I put the table of content in the beginning of the assignment
2.3 Situation analysis:
2.3.1: Market analysis:
In 2018, Airline industry in the world have overcome bigger difficulty is the increase in price
of fuel which up to 24% of 24,296% of airlines total expense equivalent to 188 billion USD
result in significant decrease in these airline profit. However, Airline industry still achieve
positive result. According to ITAT, total customer in the world was 4,343 million increase
6,2%, total travel distance was 8,225 billion KM. Revenue and profit after tax of airline
industry in the world in 2018 were 854 billion USD and USD and 32,3 billion USD.
In Vietnam, 2018 continues to witness the outstanding growth rate of Vietnam’s aviation
industry, Tourism have played a big part in this outstanding growth. Vietnam have welcome
over 15,5 million tourism customer an increase in 19,9% compare to last year. The total
transport market in 2018 reached 63,7 million an increase of 14% compare to 2017. In the
market has the participation of 68 foreign airline from 25 countries and 4 domestic airlines
operating in 48 domestic routes connecting to Hanoi, Da Nang, Ho Chi Minh City with 18
local airports. (Vietnam’s airline annual report,2018)
2.3.2 Market needs:
Vietnam’s aviation market is forecast to increase rapidly, boosted by the development from
the participation of private airline and improved infrastructure.
Hence, it is essentials to boost improve the aviation infrastructure as well as quality in
services.
In the beginning of 2019, Bamboo airway were allowed to organize commercial flight which
result in more choices for customer.
As experts have said before, Vietnam’s Aviation industry have become more competitive,
intense, on the other hand customer will benefits from this because they will have more
choices on service because the price will be drop and the quality of service will be improved.
The appearance of new growth airline will benefit more passenger because they would have
more opportunities to travel by air with affordable prices.

In,2037 IATA forecast that the number of passengers will be 8.2 billion. Supported by the
high demand in the Asia-pacific region. Vietnam was one of the five market with the highest
growth rate in customer with China, US, and the India.
According Mr. Dinh Viet Thang, with the population of 90 million people, Vietnam’s airline
industry should have the investment of more domestic airline to increasing choice for
customer as well as meet the high demand of air travel in the recent years.
In December 2018, Hai Au and Air Asia have signed an agreement of understanding on
creating a low-cost airline in Vietnam. Vietstar airline also asked permission for organizing
commercial flights. Vietravel also plan to create an airline. These developments have shown
that Vietnam’s aviation industry is an interesting market.
Improving quality:
With the rapid growth and competitive market of Vietnam aviation market. Hence, the
improvement in service quality and customer experience have become important than ever
for carriers.
In major airport such as Noi Bai or Tan Son Nhat, overloading has become a major factor that
affect the service quality. In the aviation industry there are three essentials factor: Airline,
infrastructure and operation. It is important that carries develop these 3 factors constantly as
well as maintain the growth rate. (Bizhub,2019)
Noi Bai airport port pick up area (bizhub,2019)
2.3.3: Market trends:
One of the popular aviation market trends in nowadays is hybrid which is combine aviation
with tourism. Mr. Tuan, executive of Vietnam tourism stated that aviation and tourism are 2
interrelated industry, Aviation is “the wings” for tourism to growth becoming one of the most
important factors in Vietnamese economy.

With the policy to encourage the establishment of new domestic as well as international
airline will be an opportunity for Vietnam’s tourism and aviation industry to growth
smoothly. According to general orientation, by 2020, tourism will become a key economy
sector in Vietnam by contributing 10% of GDP, total budget revenue reaches 35 billion USD.
By 2020, Vietnam will exploit 23 airports, upgrade 21 existing airports, invest in Van Don
international airport, Phan Thiet and Long Thanh. Increase the number of flights, encourage
the development of aviation activities associated with tourism.
The Government’s decision to open the flight permission have open many opportunities for
investors such as Bamboo Airway aviation of FLC group, Vietstar airline, Sky Viet to allow
local people to travel by plane with an affordable price. (Bamboo airway,2018)
2.3.4: Market growths
Growth of Vietnamese aviation market (Vietnam airline annual report,2018)
For domestic, aviation industry in 2018 have achieve 32,9 million customer equivalents of
6,9% growth rate but a decrease compares to 2017 (9,9%). The domestic aviation industry
tends to slow down the growth rate after the development period (2013-2016)
International:
In 2018, The total market reached 30.3 million passengers, an increase of 19% over the same
period of which the development of affordable airline segment reached 38%, the growth of
traditional air segment was 14%. The strong growth of affordable aviation increases the
competition of international tourism market, Especially in SEA and north east Asia.
Rent:
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Total Market Domestic International Rent
GROWTH OF VIETNAMESE AVIATION MARKET
Series 1

The total charter market in 2018 reached 4.1 million, up to 39% over the same period.
Growth of charter rental market is mainly located in Northeast Asia and China. (Vietnam
airline annual report,2018)
2.3.5 Vietnam airline macro environment:
Economy:
Vietnam airline cargo transport is inevitable to the fluctuation in the economy, such as the
speed of GDP growth rate, inflation rate, control and reform inflation, shortage of fuel
sources, the government fulfils the AFTA’s and WTO agreements will be directly affect the
source of goods trading in the market which means that it will affect the output goods of
Vietnam airline. However, if Vietnam airline economics in the past were affect by the
financial crisis which make the fuel price to went up significantly from 2004 till today but
Vietnam airline continues to growth stronger with the growth rate that is higher than any
transportation sector in the country. (Lan anh,2018)
Natural and social:
Vietnam geography is suitable for the development of aviation industry, located at the edge
of SEA between the international airways connected from east to west, north to south is
suitable for building flight routes between US-Australia with short flights in SEA and inland
Vietnam.
With the characteristics of Vietnam airline flight network built with high exploitation
frequency, good transit services in Hanoi and Ho Chi Minh City which create competitive
advantage with transporting goods to Indochina , SEA, bringing Vietnam become a regional
air hub, compete with popular transit center like Hong Kong, Bangkok, Singapore. Vietnam
airline will actively cooperate trade with international carriers to expanding routes, overcome
the limits.
Choose partner to join the global alliance in accordance with the development trend of the
world and actual capacity of Vietnam airline. Therefore, natural elements of Vietnam will
contribute to significantly increase the declared output. However, this advantage has not been
fully exploited (Lan Anh,2018)
Technological:
The characteristics of the aviation industry are the rapid development and application of new
technologies and advance technology because this is a special type of business that requires
safety, exploration. If there is mistake occur, it can lead to accident and the consequences will
be devastate and cannot recover the damage. Vietnam airline flight crew are always upgraded
with new and advance technologies, mainly used famous aircraft manufacturer such as
Airbus, Boing combined with structural improvement, fuselage engine, conditioning system
control to improve the operational efficiency and range of aircraft. The development of
science and technology have created new generation of aircraft, better specification meet the
requirement of domestic airline such as longer range, stronger engine thrust, larger aircraft
capacity, lower noise, more fuel economy, etc. That’s the generation of aircraft Boeing 777,
Boeing 767, Airbus A320, A321, etc. Those are type of aircraft that Vietnam airline are using
in the operation. This is one of the most important factors that determining the quality and

performance results of Vietnam as well as the competitive advantages of Vietnam aviation
industry. (Shira,2018)
Political:
The stability in pollical is one of the most important factors that influence the development of
a nation’s economy as well as its business strategy, this factor is often taken into
consideration before making investment to expand the market especially in the direction of
development flight routes of air transport business. Such as the security problem in Iraq and
Thailand recently which airline usually cancel the fights to these intensive areas mainly for
securities and political issues in these areas is unstable and carriers don’t want to put
themselves into high-risk position.
Vietnam airline is under management of the government, this is an advantage because they
will be backed and support by the capital, business protection as well as policies special
finance in difficulty due to the impact of terrorism, war and fuel price, etc. are currently hold
a monopoly position in Vietnam. However, the domestic legal system step by step complete
become more transparent and consistent with the integration trend (ASEAN, WTO, APEC,
etc.). on the other hand, is an opportunity Vietnam airline to confirm its position in the
aviation industry market. (Shira,2018)
2.3.6 SWOT:
Strengths
 Flight crew is young
 High experience maintain team
 Level of safety is high
Weakness
 Distribution system
 Price
 Line up in airport
Opportunities
 Meet the need of tourism
 Support by government
Threats
 Slow response to affordable airline
 Still depend on suppliers
2.3.7: Competitor analysis
Vietnam Airline is highly competitive in domestic airlines like VietJetAir, JetStarAir .. In the
future, cheap airline services continue to open and competitive levels are getting higher and
higher.
Along with competition in the domestic market, Vietnam Airline must also brace themselves
compete with carriers from countries in and outside the region. In 2013, ticket prices for
flights from Europe to Vietnam decreased significantly. As before, these routes VNA
competes primarily with airlines not from France and Germany, now when German airlines
must give way to airlines from the Middle East, VNA is forced to compete with very strong
opponents. While VNA has only 4 routes to fly Western Europe (Paris, Frankfurt, London,
Moscow), the Central Airlines East has flight routes to all cities in Europe.

2.3.8 Company analyze:
Mission statement: As a flag carrier, Vietnam Airline wants to be the bridge between
Vietnam and other countries in the world and “bring Vietnam cultural to the world” (Vietnam
Airline, 2008).
Company objective: Maximize profit over 15% compare to last year
Increasing market share by 20% in the next 5 years
Improve the quality of product in the next 5 years
In next year, 30 million international and inland flight will be increase by 8% compare to last
year. Cargo and transported good will be increase up to 22% equivalent to 350 thousand tons
Market share will be 10% in 2023
In the next 2-year, marketing can be up to 12 to 14% of total cost sale, estimated 700 million
VND
2.4 Marketing objectives:
Vietnam airline’s marketing objectives
Specifics Attract more customer and hold the number
one position in Vietnam’s aviation industry.
In addition, Vietnam airline will transfer at
least 44 million passengers in 2019 and
continue to attract more customer
Measurable in the next 4 years, Vietnam airline have to
achieve growth rate of 14% each year and
negotiate and open new flight routes to
increase the diversity in flight services.
Achievable With the support of government, brand
name and high-tech infrastructure and
equipment, high qualified employee.
Vietnam airline will achieve this objective
less than 4 years.
Realistic Vietnam airline currently are one of the
most influence carriers to country’s
economy, the development of this airline
will bring positive impact to the country
business environment since it is contributing
at least 10% to the total country GDP
Time-bound From 2019 to 2024

2.5 Marketing strategy:
2.5.1 Segmentation and targeting:
Geographic segmentation:
Variable Potential categorization
Routes Asia (China, Cambodia, Laos, Thailand,
Japan, Malaysia, UAE)
Vietnam airline Asian route (Vietnam
airline,2018)
Country Japan
Climate Winter: Dry, sunny temperature rarely drop
below 0 Celsius, Snowy in certain area
Spring: Temperature not to hot but not to
cold either, not much rain in this season.
Famous cherry blossom bloom in this
season
Summer: Begin in June, rain for 3 to 4-week
benefits for farmer to plant rice, often hot
and humid, average temperature about 30
Celsius.
Autumn: Light breeze and cooler
temperature around 8 to 10 Celsius suitable
for organizing exhibition, music concert and
sport event
Hour of sunshine Depend on certain city, in Hokkaido
average from (1484 to 1869 hours)
(Vietnam airline,2018)
Variable Potential categorization
Routes Europe (UK, Russia, Spain, France,
Germany, Italy, Netherland)

Vietnam airline Asian route (Vietnam
airline,2018)
Country England
Climate Winter: Cold, frequently rain, snow, average
temperature is about 5 Celsius
Spring: Snow can occur but less than
winter, the day are longer, the temperature
can be cold, winter-like average about 14
Celsius.
Summer: Not very warm but warmest in
UK, low temperature is around 14 Celsius,
high around 23 Celsius, a little bit of
sunshine.
Autumn: Cold, Cloudy and rainy, the day
are short, sun is rarely to be seen.
Hour of sunshine Average 55 hour per year.
(climatetotravel,2018)
Variable Potential categorization
Routes North American (USA)
Vietnam airline Asian route (Vietnam
airline,2018)
Country USA
Climate Spring: average temperature 12 Celsius,
weather is unstable which make in the end
of April can occur thunderstorm.

Winter: in Miami temperature can reach 22
Celsius whereas Chicago temperature is -5
Celsius, it is dry and cold in this season,
snow will occur frequently
Summer: Hight temperature and humidity,
north-east of the country usually have a dry
and windless weather, average temperature
around 27 Celsius.
Autumn: Average temperature around 25
Celsius, most beautiful season the country
Hour of sunshine Depend on certain city, Pennsylvania total
hours of sunshine are 2021 hours
(seasonyears,2017)
In geographic segmentation we can see that, Vietnam airline support all fight routes for
customer to choose which increase the diversity in their products and services. In tourism
season the percentage of sale will be much higher than average since the demand of
passenger is high. For example, in the spring in Japan the season of cherry blossom people
will want to travel to the japan to witness one of the most beautiful landscape in the years
which make the number of flights to japan will increase significantly. in order to flight to
japan in tourism season they can purchase or order the ticket online as well as directly from
booking office, in order to attract more customer in tourism season promotion such as sale
and combo are best choice because customer will have the opportunities to travel with
affordable price.
Demographic segmentation:
Variable Potential categorization
Type of customer Traveler and businessman
Income Average to high-income
Type of ticket Promotion class, economy class, business
class
In demographic segment, our client aims are traveler and businessman that need to travel
often, for traveler income’s can range from average to high, for businessman’s income is
usually high. Traveler will be suitable for promotion and economy class because they will
often travel from place to place in short time, with there 2 type of ticket they will have more
option to travel with a reasonable price, I predict that traveler will become one the most
important customers because the demand is increasing from time to time. On the other hand
business people will often flight long trip due to their jobs so they will want the comfortable
experience as much as possible, for businessman business class will be suitable because it
will reduce their time in procedures such as line up for check in, etc. They also need to relax
on the airplane due to long flight time average 4 to 13 hours with business class they can have
relax on bed and have the highest quality service on the plane.

Behavioral segmentation:
Variable Potential categorization
Occasion Summertime, holiday
Loyalty Average
Usage rate Mostly occasional users
Expenditure Average to high spenders
In summertime and holiday is 2 occasion that we will receive a large amount of customer,
most people who travel on these 2 occasions will choose to pre-order the ticket to secure their
seats and can travel at a much more affordable price. However the degree of these type of
customer is average because they only choose the brand when they got the ticket at good
price, if they can find another carriers with cheaper price they will switch and use that airline,
the usage of these type of customer are most occasional users which means that they only
travel on summer or holiday. Because of summertime and holiday, customer will usually
travel in large group such as family or friend or company in order to secure their seats at
reasonable price so their level of expenditure will be ranging from average to high. Therefore,
my recommendation is creating a combo or sales for customer who travel in a larger group in
order to attract more customer.
Psychographic segmentation:
Variable Potential categorization
Upper High income
Lower middle Average income
Working class Low income
Lower class Low income
We can see that our target client will be lower middle to upper class based on their level of
income they will use our services more often that working class and lower class. Hence, we
still need to create affordable ticket to open more opportunities for working and lower class.
2.5.2 Market targeting:

(Thang Nguyen,2018)
As we can see that economy class is one of the most popular ticket class when customer use
the service because it is affordable and suit their need, but economy class will have low time
sensitivity and high price sensitivity. Whereas business class and premium economy class
will be less popular due to its high price and not suitable for the needs of customer, in the
char business class will have high time sensitivity but low-price sensitivity. Hence, my
recommendation is organizing sale and combo for people who pre-order the economy class,
for business class we need to improve service, promotion by using influence people,
celebrities to attract customer purchase this class.
2.6 Marketing positioning and differentiation
2.6.1 Positioning:
Specific product attribute
High price
Low quality High quality
Low price
Vietnam
airline
Bamboo
airways
Vietjet
air
Jetstar
pacific

Positioning maps of airline in Vietnam
As we can see in the map, Vietnam airline hold the number one position because they are
providing best quality services, a long with the ticket price including in-flight meals,
blankets, headphone and other service. Ranking number 2 is the new establish bamboo
airway, bamboo airway also have a development similar to Vietnam airline but at a lower
quality service and price, because this is a new born airline so it still lack of experience in the
industry but recent feedback have shown that in the future bamboo airways can become
stronger. For Vietjet air and Jetstar pacific, these airline aims are low-cost airline, they focus
on affordable price than services, they ticket will not include meal like Vietnam airline or
Bamboo airway, every service such as meal or blanket will be charge in the plane.
Positioning by benefits
Positioning map of carries in Vietnam
We can see that, Vietnam airline still hold the number one position in respect and preference
criteria because they are a national airline that have dominated the market share from the
beginning of aviation industry not only that Vietnam airline also have a long-time tradition
because it is the first airline in Vietnam which make them have a high brand awareness and
recognition, they also have lots of loyal customer. On the other hand, jetstar parcific and
Vietjet are private airline, for vietjet in recent year have rapid growth due to their operating
direction which is low-cost carriers.

Positioning by usage occasion:
High Holiday
Low work usage
High Work
Low holiday usage
Usage occasion map of airline in Vietnam
Most customer will choose Vietnam airline for work such as business trip or conference
because Vietnam airline service is excellent and suitable for people travel for business, they
have meal include in the ticket, waiting lounge for customer. On the other hand, bamboo
airway is versatile people choose this carrier for work as well as holiday because this airline
is newly established, so they have lots of offer and promotion for customer, they also have
meal include in the ticket which is convenient. For Viejet, people will choose this airline
mostly for holiday because the ticket is cheap, lots of offer for customer but it is not suitable
for business because their service is still not good as Vietnam airline and meal is not include
in the ticket.
Vietnam
airline
Vietjet Bamboo
airway
Jetstar
pacific

Positioning against other competitors:
High innovative
Low effective High effective
Low innovative
Compare to another competitors map
As we can see Vietjet have high innovative because they have been promoting their brand
efficient by using influence people and sexy girl to attract the attention. On the other hand,
Vietnam airline is not as innovative as Vietjet but they know how to use their strength and
maintain high effectiveness in operations
2.6.2: Differentiation:
Vietnam airline different from other carriers is because they direct themselves as high end
airline, they will aim for highest quality customer, as well as bringing the most enjoyable
experience for customer. For example, they often offer meals and blanket for customer,
another brand usually charge this as a fee. Vietnam airline also have good customer service
which can solve customer problem within 24 hours.
Vietnam
airline
Vietjet
Bamboo
airway
Jetstar

2.7 Marketing mix
2.7.1 Price
Price is an effective tool for compete in aviation industry, therefore price policies need to
meet this requirement. Investigate the market to ensure that the retail price is acceptable with
the demand, Customer pay for ticket will get what they want. Continue to expand to reduce
the price in flight routes, in order to compete another affordable carrier. The first is to cut
down the fee to achieve the reasonable price, sometimes carrier will have to accept lost. The
second is to build the perfect customer service. Vietnam airline need to focus on service
product such as meal, inflight service and support, collect customer feedback. Finally, is to
adjust the price system carefully to boost the operation of distributor.
2.7.2 Place
Vietnam airline
Intermediates Customer
Vietnam airline distribution system is directly handling the ticket to customer, so it does not
have a franchise. Their distribution channel is included 27 booking office, 422 retails agent.
Intermediate distribution:
 Retails agent will represent and selling ticket for Vietnam airline
 Vietnam airline will sell ticket through their booking office
 Customer can purchase ticket from post office
 Order ticket online through their official website
 Order ticket through phone
2.7.3 Promotion
Press promotion: Is a tool that aim at people who use business class, people who use
domestic magazine such as Lao Dong,etc. for foreign there are travel Tr., VNA can put their
promotion in these magazine.
Television Ad: Use short promotion to introduce the brand name. Increase the frequent
information about aviation on the new, VNA can also cooperate with influence people or
group such as actors or football player to promote their brand.
Internet: VNA can promotion through their website, introduce about the brand name, product,
the process in using the services.

2.7.4: Product and services:
Ticket order and receive: VNA booking office and website will also open for Customer to
purchase ticket as fast as possible
Exchange ticket: Purchaser can exchange the ticket in the booking office and website as long
as it is still inactive.
Renew ticket if it is lost: VNA will only accept to renew customer ticket if is still inactive
Airport services
Food Vender: In Noi Bai airport will be available vendor for customer when they need
Tax-free shop: in here will sell product that will not include taxes
Waiting lounge for passenger to wait for their flight (Economy, business)
In the plane, customer can entertain with different type of magazine, music, movie show, etc.
2.8 Budget
2.8.1: Forecast sales
 In next year, 30 million international and inland flight will be increase by 8%
compare to last year. Cargo and transported good will be increase up to 22%
equivalent to 350 thousand tons
 Market share will be 10% in 2023
 In the next 2-year, marketing can be up to 12 to 14% of total cost sale, estimated 700
million VND
2.8.2 Forecast profit
 Revenue and profit in the next year will be increase up to 13% and 5% compare to
last year
2.8.3 Cost of marketing activities:
 Domestic: commission is 0% and 1,5% international discount revenue
 Northeast Asia: Commission is approximate 6%, VNA will discount agent of 1% and
1,5% of revenue
 In EU: 5% for commission and price policy and other product policies
 In 2019: Improve stock and sustain 4-star airline
 In 2010: Improve to achieve 5-star airline
2.9: Implementation and control
 Monthly finance statement is requiring for every month to check and fix if there is
error
 Set up specific and detail schedule to achieve the aims
 Use quality control method

References
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Hybrid - xu hướ ng ha ng kho ng mớ i chie!m lĩ#nh thi$ trướ ng 2019 -. [online]
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