Customer Value Imperatives - AirAsia

This report examines the customer perceived value in AirAsia airline industry from Malaysia and compares it with its potential competitor Jetstar Australia. It analyzes the value proposition of both industries and proposes a plan to implement a new set of value proposition for AirAsia. The report focuses on functional, social, and psychological values and their significance in creating customer value.

Running head: CUSTOMER VALUE IMPERATIVES - AIRASIA
Customer Value Imperatives - AirAsia
Name of the Student:
Name of the University:
Author Note:

1CUSTOMER VALUE IMPERATIVES - AIRASIA
EXECUTIVE SUMMARY
The primary objective of the particular report is to examine the customer perceived value in
an effective organisation. The organisation chosen for the given description is named as
AirAsia airline industry from Malaysia. The study analyses the value proposition of
customers of the concerned sector. Further, the study focuses on evaluating the same and also
compares the value proposition of AirAsia with its potential competitor Jetstar Australia.
Furthermore, the report sets the benchmark of the value proposition of both the concerned
industries and gets into a conclusion of which production is better. Moreover, the report tends
to establish a new concept of the value proposition for the AirAsia airline industry. Finally,
the study proposes a plan to implement the new set of the value proposition for both internal
and external working conditions of the concerned industry.

2CUSTOMER VALUE IMPERATIVES - AIRASIA
Table of Contents
Introduction................................................................................................................................3
Overview of the Organisation....................................................................................................3
The consumer perceived value...................................................................................................4
Value Proposition.......................................................................................................................6
Benchmarking Value Propositions.............................................................................................9
New value proposition and statement......................................................................................10
Implementation of Value Proposition......................................................................................11
Conclusion................................................................................................................................13
References................................................................................................................................14

3CUSTOMER VALUE IMPERATIVES - AIRASIA
Introduction
As opined by Grant (2016), the crucial question faced by the business firms in the
modern era of building successful entrepreneurship is the ideology of value-driven
aspirations towards its customers. To answer this, the business entities have to create a
broader understanding of the current era of marketing strategies and how they can be used to
enhance the services provided to potential customers. The integration of the globalisation and
change in lifestyle creates a massive impact on the behavioural attributes of the customers.
This has brought the power in the hand of the customers to avail their desired goods and
services with a higher level of freedom of choice. Therefore, every business entity is liable to
persevere their customer value to sustain in the world of entrepreneurship. In this connection,
this report aims to identify the imperatives of the customer value concerning the Malaysian
organisation named – AirAsia (Kong 2018).
Overview of the Organisation
AirAsia is considered as a Malaysian low cost airline industry (Agus 2018).
Commenced back in the year of 1996, the concerned airline has gained the most significant
position in the airline sector of Malaysia with respect to its flight size and point of
disembarkations. The AirAsia airline operates its business into both domestic and
international fleets to above 165 destinations covering a rough estimate of almost 25
countries. The concerned organisation is claimed to have an aircraft rate of utilisation of 60
hours per day on an average. Researchers also found that in the year 2007 AirAsia was
declared as the pioneer of low cost airline travelling in The New York Times (Bowen 2019).
AirAsia has formerly sponsored the Manchester United and Asia Red Tour and at present
indulges into sponsoring several international brands renowned as The Malaysia National
Football Team, Singapore National Football Team and Queens Park Rangers.

4CUSTOMER VALUE IMPERATIVES - AIRASIA
The consumer perceived value
As stated by Pansari and Kumar (2017), the perceived value of customers is the
notion that the outcome of the products and services sold by the business firms is based on
the belief of the customers that those sold products and services are competent enough to
satisfy their desires on not. Specifically, when a business firm markets its brand, it is the
customer that ultimately presents their reviews and reactions to the marketing messages. This,
in turn, determines the state of the paradigm of a business entity. In this connection, with the
help of the following illustrated table, the benefits of the concerned airline industry are
determined in place of the sacrifices the industry has made to persevere their customer value.
Sacrifices did by the industry Benefits received by the industry
Slaughter in the pricing strategies Benefits to the economy
Sacrifice in the Time Schedule Benefits of emotional attachment
Risk and Inconvenience Benefits to the Relationship with customers
Sacrifice in the effort Benefits to Social considerations
Figure 1: Benefits received by AirAsia
(Source: Based on Rowe, Moore and Zemanek 2019)
As depicted in the above table the benefits gained by the concerned industry can be
explained in brief as below.
Benefits to the economy
In the modern era of changing the trend of business, the preferences and demands of
the customers change as well (Moreno-Munoz et al. 2016). According to this theory, the
potential customers of the airline industry demands higher expediency in the exchange of
service. The customers with the changing lifestyle desires to travel with more comfort and
low price. Specifically, the customers' demands the best at the least. In this connection,

5CUSTOMER VALUE IMPERATIVES - AIRASIA
AirAsia airlines are examined to be on top of the paradigm in setting their pricing strategies
(Sengpoh 2015). They have set the ideology of servicing the best to their customers at the
lowest cost of travel. This, in turn, not only helps them gain brand and customer loyalty but
also monetary benefits by implementing the theory of lesser the price, more the number of
customers, instead of increasing the price and attracting less number of customers.
Benefits of emotional attachment
As opined by Almquist, Senior and Bloch (2016), customers nowadays are more
attracted towards the company who values the importance of time and provides them with
different reward and loyalty benefits. Delays in flights with no prior reasons and negligence
of the airline staffs lead to wastage of time and increase the waiting time of the customers.
This creates a wrong impression on the mind of the customers. In this connection, the
AirAsia airlines pay a significant focus in maintaining their time of flights and avoiding
negligence that would lead to delays in the departure and landing of the flight times (Marques
2015). Not only has this, the concerned airline industry in order to retain their customers for a
longer span of time, provided them with the benefit of recurrent flyer profit and huge
discounts.
Benefits to the Relationship with customers
As stated by Grant (2016), the experience and feedback of the customers remain to be
the most crucial indicator of the success determination of a business entity. The customers are
considered to be the real king of the entrepreneurship as their reviews and feedbacks indicate
the paradigm of competitive advantage of a company. In this connection, the airline company
AirAsia also ensures that their customers are kept at their priority list and takes the risk of
gaining low input with no compromise in the quality of service supplied (Laudon and Laudon
2016). They do not let their clients feel inconvenient while travelling. They make sure to

6CUSTOMER VALUE IMPERATIVES - AIRASIA
make their travel the most comfortable of all. This, in turn, builds an active and healthy
business relationship between the industry and its potential clients.
Benefits to Social considerations
According to Sekaran and Bougie (2016), the customers in the current business
scenario desires to receive qualitative service and individual attention. In this particular
connection, the AirAsia critically focuses on assessing each targeted potential customer that
satisfies the needs and wants to be perceived by them. AirAsia has frequently made
considerable changes in its product and service cycle (Taneja 2017). They are significantly
put effort into upgrading the system of their long haul business as well as introducing new
innovated first class cabins. This, in turn, brings satisfaction in the mindset of the customers
with respect to obtaining quality service from the concerned airlines and delivers the industry
to be recognised highly in the social considerations.
Value Proposition
According to the viewpoint of Pearson (2016), the value proposition of a business
entity defines the strategical innovation plans of making the offered product or service
attractive in the eyes of its potential customers and targeted market. Value promises that a
business entity is liable to acknowledge and deliver to its clients. In this connection, this
particular report critically evaluates the value proposition of AirAsia in comparison to its
potential competitor Jetstar Airways Australia. In this case, the Value Proposition Builder
Model is used to identify the value of both the concerned airline industries.
Value Proposition Builder Model
According to the above-proposed model, developing and offering the ideology of
value proposition turns out to be a most significant factor that needs to be considered by the
marketing planners of a company while setting up the strategic plan process. As idealised by

7CUSTOMER VALUE IMPERATIVES - AIRASIA
the theory of the concerned model the value proposition identification is majorly analysed
with the help of three primary values, namely- functional, social and psychological
significance.
Figure 2: Showing Value Proposition Builder Model
(Source: By Author)
Functional value
AirAsia is considered as a low cost carrier airline industry (Gumanti et al. 2018). The
primary mission of the concerned airline is to create a convenient and comfortable travel
experience for their potential customers. They are not only focused on comforting their
customers but also provides a homely environment for their employees. The company is
critically focused on gaining the best position in the market structure with its planned values
and missions. Researches show that AirAsia was globally recognised as ASEAN brand in the
Value
Proposition
Builder
Model
Functional
SocialPsychological

8CUSTOMER VALUE IMPERATIVES - AIRASIA
year of 2018. Their main functional objective with respect to consideration of value
proposition remains to be advancing with the implementation of new and advanced
technologies to improve their existing products and services leveraging its fare to the lowest
rate possible. This benefits the people to travel anywhere and anytime with ease and
monetary benefits.
In lieu of this, the mission statement of Jetstar Airlines is to provide air travel with
the core value for safety and punctuality (Law and Breznik 2018). This benefits the
customers to travel comfortably and on a timely basis. Researchers also found that the Jetstar
air industry is focused on providing in-flight meals and entertainment available during the
flight hours. In terms of an Australian airline, Jetstar focuses on attaining a sustainable future
for its industry. Jetstar is promising to focus on innovating its function process to real-world
applications. It was also examined that Jetstar was considered as one of the safest flights to
travel in the endless years of 2016-2018.
Social value
As considered with the working process of AirAsia airlines it was analyses that the
social missions of the concerned air industry lie in wishing their guests to reach to their
destinations on an accurate time basis (Taneja 2016). They ensure that their customers
receive the highest priority while travelling by their air industry. They have thereby set their
social value proposition in a manner that their potential customers do not shift to other
airlines and thrive on choosing them continuously. They are also focused on providing their
clients with the best quality food at the most affordable price. Understanding the concern that
not every individual travelling is interested in buying the food on the flights, the AirAsia has
thereby set a marketing strategy of cutting off rates by providing massive discounts and
offers.

9CUSTOMER VALUE IMPERATIVES - AIRASIA
The exception to this, the Jetstar airlines main focus remains in the financial stability
in the ticket rate for both themselves and their clients (Hunter and Lambert 2016). It was
examined that recently Jetstar has focused on providing their clients with carbon-neutral
travel. They also support the development projects not only in Australia but also in Asia and
New Zealand. However, they do not focus on providing in-flight food with low and
affordable price to the clients. Researches show that they lack behind in efficiently studying
the market structure.
Psychological value
AirAsia airlines, understand the mentality concern of the customers to have a safe and
secured flight (Taneja 2017). In this connection, the air industry spends an ample amount of
time in arranging safety travel for their clients. They majorly focus on eliminating any risks
that may occur during the journey. They ensure that every individual working in the industry
is potential enough to take up any threat and harmful situation that might occur during travel.
They train and develop their employees accordingly and append a lot of effort to look
forward to the safety and security of their customers. In this connection, the concerned airline
industry does not believe in the theory of refunding the money to the customers who missed
the flight or cancelled the same. They consider it invaluable to repay the money just because
the client could not make it travel and they were prepared to provide complete comfort to
them.
In lieu of this, the Jetstar airlines also focus on providing safe flights to their
potential customers, but somehow fails in giving them a service full of comfort. It does
ensure punctuality of trips and have extended their board priorities to gain more customers
but have reportedly failed in satisfying the psychological needs of the customers as done by
the AirAsia airlines. The absence of in-flight food and prioritised corporate social

10CUSTOMER VALUE IMPERATIVES - AIRASIA
responsibility makes the Jetstar air industry to lack behind in the sector of satisfying the
mindset of the customers (Taneja 2016). In this connection, the study further focuses on
comparing the value proposition of both the air industries.

11CUSTOMER VALUE IMPERATIVES - AIRASIA
AirAsia Jetstar
Competitive Advantage of 78.7%. Competitive Advantage of 97%.
Regular flights and fewer delays. Lacks behind in maintaining timely flights
as compared to AirAsia.
In-flight food available. No in-flight food available.
Reported to have 20, 000 employees. Reported to have only 5,000 employees.
Higher number of fleets and routes. Lower as compared to AirAsia.
Figure 3: A Typology of consumer value proposition
(Source: By Author)
Benchmarking Value Propositions
Based on the above shreds of findings, the study tends to examine that the value
proposition of AirAsia lies far ahead in paradigm as compared to that of Jetstar airlines. This
statement can be brought into light by explaining the following points.
 The competitive advantage gained by the AirAsia is recognisable higher than that of
Jetstar. The studies examined that the competitive advantage gained by Jetstar was
only 78.7% in 2018 to that of 97% of AirAsia (Lohmann and Spasojevic 2018).
 Although Jetstar focuses on providing low fare rates and punctuality of timely flights,
it was examined that their price of tickets was higher than that of AirAsia and also
that AirAsia ranked higher in providing regular flights and fewer delays (Truong
2016).
 The study also brought a conclusion that Jetstar air industry does not provide their
clients with affordable in-flight food as compared to AirAsia (Chen et al. 2019).
 The employee, as well as the customer number, largely varies between both the
industries. AirAsia is reported to have over 20,000 employees to that of only

12CUSTOMER VALUE IMPERATIVES - AIRASIA
approximate of 5000 in Jetstar. The annual range of customers flying through AirAsia
is reported as 32% higher to that of Jetstar (Li 2016).
 The number of fleets and the routes covered by AirAsia is recognisably higher than
that of Jetstar (Bonin 2013).
New value proposition and statement
The unique value proposition of the concerned AirAsia air industry can be specified
with the help of the following future concepts that are to be strategically implemented in the
industry.
Inbound Logistics
At present, AirAsia airlines are focused on implementing a fleet of both Boeing and
Airbus in its coming future as compared to that of only Airbus fleet at the current time
(Laboda 2018). The concerned industry is also trying to keep its focus on efficient fuel
control and also implementing their routes of travel within the inbound logistics in order to
attract more customers as well as unveil more substantial amount of profitability. They are
even planning to save their cost of investment spent on training and development and
increase their focus and investment on innovation technologies and promotional strategies.
Sales and Marketing
In the viewpoint of understanding and analysing the needs of its potential clients the
AirAsia is focused on creating campaigns (Chan 2014). The study examined that the
concerned air industry beholds a recognisable brand name in the market that creates a
significant impact on their sales procedure. It sponsors the biggest brand reality game show-
The Amazing Race Asia that is concerned with the American series. The AirAsia airline is
also known to sponsor the renowned football team Manchester United and raise its
standards. However, at current, the company is planning to sponsor other well-known brands

13CUSTOMER VALUE IMPERATIVES - AIRASIA
and groups in order to promote themselves in the market and thereby, increase their sales and
marketing prospects.
Operations and Services
As examined with the help of the study it was analysed that AirAsia runs with the
ideology of low cost carrier (Hirsh 2017). Along with this, the company is significantly
focused on self-automation efficient technology through which the customers are to self-
operate the needs to travel. They can book tickets, print and check the availability of tickets
through the means of online communication. This, in turn, reduces congestion and the cost of
the counter for the customers. Currently, the industry is also focused on offering free food
and drinks to its customers in order to gain their attraction. The company also allows the
customer to have hassle-free travel from carrying tickets with the help of considering the
availability of e-tickets. Altogether the services concerning the production and modification
of goods and services offered by the industry are also taken into consideration.
In this connection, the new value statement province by the AirAsia airline industry is
termed as – The primary mission is to bring comfortability to the clients. The main aim is to
become the leading global airline industry in terms of convenient, high quality and affordable
experience to its customers.

14CUSTOMER VALUE IMPERATIVES - AIRASIA
Figure 4: Showing Consumer perceived performance
Implementation of Value Proposition
As implied by Payne, Frow and Eggert (2017), the three vital tools while considering
the application of the value proposition concept are:
 Resonate – Unless and until there is a requirement to purchase the goods or services
offered by a business entity, the customers will not be interested in the same.
 Differentiate – In order to have differentiation, the company should highly consider
their pricing strategies, or there is a high risk of customers to switch from one
company to another.
 Substantiate – The company should be genuine enough to gain its brand and
customer loyalty.
Based on the above mentioned new value mission statement, the study tends to
examine the requirements and challenges needed to be faced that would prove beneficial to
ANA AIRASIA JETSTAR PEACH

15CUSTOMER VALUE IMPERATIVES - AIRASIA
the customers. In this connection, the below-mentioned steps can be considered to implement
the new value proposition plan.
Define
The process of value proposition should clearly define the 4U value. In case of any
discrepancies occur in the working of the business and are to be evaluated and solved within
a less period. The considerable 4U’s are- Unavoidable, Urgent, Unworkable and Undeserved.
If a solution offered is to explain the current agenda in AirAsia; these four U's will help in
addressing the urgency of the problems.
Evaluate
The discrepancies that are addressed needs an adequate evaluation of the same. This
can be done with the help of the breakthrough process. The first incorporation of innovation,
business models and theories and recognisable technology will help open up the potentialities
of a breakout.
Measure
After the evaluation of the needs, the next stage is to measure the same. In this
connection, the managers of the industry are to focus on the revenue and cost ratio for the
customers to adapt. A successful business entity delivers the best magnitude of improvement
by its passing status.
Build
The final step is to build the selected potential customers. The concerned industry
should put efforts to differentiate its products and services with respect to price and quality.
The guests should gain a high level of perceived value that would help them remain in the
same company for a more extended period of time.

16CUSTOMER VALUE IMPERATIVES - AIRASIA
Conclusion
Analysing the above report, it can be concluded that value proposition plays a vital
role in the working process of an organisation. The focused organisation on this paper was
AirAsia airline industry, a low cost air industry of Australia. It was examined that the
concerned industry considers its employees and its guests as family and treats them with the
utmost sincerity. They majorly focus on fulfilling the demands and wishes of its every guest
and provides them with the most comfortable air travel at the most affordable rate. Moreover,
the company at current is highly focused on innovating its goods and services offered in order
to gain the highest brand and customer loyalty.

17CUSTOMER VALUE IMPERATIVES - AIRASIA
References
Agus, A., 2018. The influence of Perceived Service Quality towards Customer Satisfaction
and Loyalty in Airasia Self Check-in System. The Journal of Social Sciences Research,
pp.766-775.
Almquist, E., Senior, J. and Bloch, N., 2016. The elements of value. Harvard Business
Review, 94(9), pp.47-53.
BONIN, J.R., 2013. INTERNATIONAL AIR TRANSPORT LIBERALIZATION IN EAST
ASIA: A REGIONAL APPROACH TO REFORM (Doctoral dissertation).
Bowen, J., 2019. Low-Cost Carriers in Emerging Countries. Elsevier.
Chan, J.K.L., 2014. Understanding the meaning of low airfare and satisfaction among leisure
air travellers using Malaysian low-cost airlines. Journal of Vacation Marketing, 20(3),
pp.211-223.
Chen, K.H., Chang, F.H., Chen, Y.L. and Chen, P.M., 2019. The Relationships between
Corporate Credibility, Service Convenience, and Consumers’ Use Intentions: Toward
Ticketing Apps for Low-Cost Carriers. Sustainability, 11(3), p.810.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Gumanti, T.A.G.A., Savitri, E., Nisa, N.W. and Utami, E.S., 2018. Event Study on the Crash
of AirAsia Plane: A Study on Travel and Leisure Companies Listed at Malaysian Stock
Market. Jurnal Akuntansi dan Keuangan, 20(1), pp.20-26.
Hirsh, M., 2017. Emerging infrastructures of low-cost aviation in Southeast
Asia. Mobilities, 12(2), pp.259-276.

18CUSTOMER VALUE IMPERATIVES - AIRASIA
Hunter, J.A. and Lambert, J.R., 2016. Do we feel safer today? The impact of smiling
customer service on airline safety perception post 9–11. Journal of transportation
security, 9(1-2), pp.35-56.
Kong, G.J., 2018. AIRLINE INDUSTRY IN MALAYSIA: SERVICE QUALITY AND
CUSTOMER SATISFACTION. In ASIAN CONFERENCE ON ENTREPRENEURSHIP
(ACE 2018) ENTREPRENEURSHIP ON THE “ONE BELT ONE ROAD” (p. 90).
Laboda, A., 2018. The future of ab initio professional flight training. Aviation International
News.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education
India.
Law, K.M. and Breznik, K., 2018. What do airline mission statements reveal about value and
strategy?. Journal of air transport management, 70, pp.36-44.
Li, X., 2016. Economic and policy analysis of high-speed rail and interactions with air
transport.
Lohmann, G. and Spasojevic, B., 2018. Airline business strategy. The Routledge companion
to air transport management, pp.139-153.
Marques, R., 2015. The future of airline business models (Doctoral dissertation).
Moreno-Munoz, A., Bellido-Outeirino, F.J., Siano, P. and Gomez-Nieto, M.A., 2016. Mobile
social media for smart grids customer engagement: Emerging trends and
challenges. Renewable and Sustainable Energy Reviews, 53, pp.1611-1616.
Pansari, A. and Kumar, V., 2017. Customer engagement: the construct, antecedents, and
consequences. Journal of the Academy of Marketing Science, 45(3), pp.294-311.

19CUSTOMER VALUE IMPERATIVES - AIRASIA
Payne, A., Frow, P. and Eggert, A., 2017. The customer value proposition: evolution,
development, and application in marketing. Journal of the Academy of Marketing
Science, 45(4), pp.467-489.
Pearson, S., 2016. Building brands directly: creating business value from customer
relationships. Springer.
Rowe, W.J., Moore, M.E. and Zemanek Jr, J.E., 2019. Three-tiered sponsorship: a study of
decision heuristics across multiple levels of sports sponsorship.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Sengpoh, L., 2015. The Competitive Pricing Behaviour of Low Cost Airlines in the
Perspective of Sun Tzu Art of War. Procedia-Social and Behavioral Sciences, 172, pp.741-
748.
Taneja, N.K., 2016. Thought Leadership Pieces. In Airline Industry (pp. 224-316). Routledge.
Taneja, N.K., 2016. Designing future-oriented airline businesses. Routledge.
Taneja, N.K., 2017. Simple-Flying: optimising the airline business model. Routledge.
Truong, D., 2016. Developing Airline Segmentation Based on The On-time
Performance. International Journal of Aeronautics and Aerospace Research, 3(5), pp.131-
140.