Customer Analysis and Branding Plan for Air Asia - Marketing Report

This report provides a detailed customer analysis of Air Asia, a major low-cost airline. It begins with a company background and rationale for the analysis, emphasizing Air Asia's global operations and diverse customer base. The core of the report focuses on customer segmentation, exploring demographic, socio-cultural, user-related, and benefit-based segmentation strategies. It examines how income, social class, usage rate, and time influence customer behavior and preferences. The report then outlines Air Asia's targeting and positioning strategies, identifying key target markets based on travel frequency, social class, and travel purpose. The report highlights the airline's positioning as a leading low-cost carrier. The report concludes with a discussion of Air Asia's branding plan, including its brand vision, brand picture, brand strategy, and brand communication methods. The report also provides recommendations for enhancing Air Asia's revenue. This assignment is a marketing report, analyzing the customer segmentation, targeting, and branding strategies employed by Air Asia, a low-cost airline. It covers segmentation based on income, social class, usage rates, and time, along with the company's targeting and positioning strategies. The report offers recommendations to improve revenue.

Running head: CUSTOMER SEGMENTATION ANALYSIS
CUSTOMER SEGMENTATION ANALYSIS
Name of the Student
Name of the University
Author Note

1CUSTOMER SEGMENTATION ANALYSIS
Table of Contents
Introduction......................................................................................................................................2
Company Background.................................................................................................................2
Rationale of the choice................................................................................................................2
Customer analysis and customer segmentation...............................................................................2
Segmentation...............................................................................................................................2
Targeting and positioning strategy..............................................................................................4
Branding plan...............................................................................................................................5
Conclusion and Recommendations..................................................................................................6
References........................................................................................................................................7

2CUSTOMER SEGMENTATION ANALYSIS
Introduction
Company Background
Air Asia Berhad is a low cost based airlines organization of Malaysian origin that is
headquartered near Kuala Lumpur, Malaysia. The Air Asia Group mainly operates the scheduled
international and domestic flights to around 165 destinations in 25 countries of the world. The
major hub of Air Asia is located in klia2 which is mainly a low cost carrier based terminal at the
Kuala Lumpur International Airport or KLIA. The different affiliate airlines that operate under
Air Asia include Thai Air Asia, Indonesia Air Asia, Philippines Air Asia, Air Asia India and Air
Asia Japan that hubs which are located in different countries. The sister airline of Air Asia
named Air Asia X mainly focusses on the operations of long haul routes of the organization
(Airasia.com, 2020).
Rationale of the choice
The major rationale behind the choice of Air Asia for analysis in the report is mainly
based on the huge size of the organization and its operations in various parts of the world as well.
The organization has been able to cater to needs of different types of customers in various
countries of the world. The customer analysis of the organization will be based on the operations
of Air Asia in different parts of the world (Andaleeb, 2016). The process of segmentation,
targeting and positioning will be implemented for the purpose of understanding the customer
groups of Air Asia. The branding plan that has been implemented by the organization will also
be discussed in the report in detail.
Customer analysis and customer segmentation
Segmentation
The segment bases that are used by Air Asia to divide different customer groups of that
include, socio-cultural, demographics, user-situation, user-related and the benefits based
segmentation process. The segmentation process of the organization has been helpful for Air
Asia to analyze the different customer groups who are considered to be a major part of its
processes and profitability that is gained in the industry as well (Anesbury, Winchester &
Kennedy, 2017).

3CUSTOMER SEGMENTATION ANALYSIS
Income – The aspect related to demographics that has been taken into consideration for
the purpose of analyzing the customer group of Air Asia is based on their income levels. Income
is mainly able to indicate that the levels of capability that consumers have gained so that they are
able to travel by using the services of Air Asia. The consumers belonging to different income
groups are attracted towards the services that are offered by various organizations (Armstrong et
al., 2018). The low income and middle income based earners are considered to be more sensitive
in comparison to the customers who belong to the high income group. The levels of disposable
income of the low and middle income based earners are considered to be quite low in
comparison to the consumers who are a part of the high income group. The high priced and high
quality based services that are offered by Air Asia are able to attract the consumers who belong
to the high income group. The prices of services that are offered by Air Asia can play a major
role in attracting the consumers from different parts of the world (Camilleri, 2018).
Social class – Air Asia has also aimed at segmenting its market with respect to the lower,
middle and upper social classes with respect to the expectations, brand preferences and the
purchasing behaviors as well. The social class of the consumers is thereby associated with the
income levels that are gained by them. The consumers who fall under the category of low
income based earner mainly belong to the low social class. The upper social class based
consumers on the other hand can have a negative perception related to the image of the lower
class based consumers (Carter, 2019).
Usage rate – The usage rate is considered to be another major variable that is a part of the
user segmentation process in which Air Asia can segment the market which can be divided into
the low, moderate and the high rates of usage. The disposable income levels are able to influence
the preferences of the consumers and the usage rates are also considered to be quite different in
this case. The consumers who tend to use the service frequently for the business meetings have
higher usage rates. The different consumers who have low usage based rates mainly belong to
the low income category who can use the services of the organization twice in a year. The
disposable income levels of the low income group based consumers are much lower in
comparison to the consumers who belong to the higher income group (DeSarbo, Blanchard &
Atalay, 2017).

4CUSTOMER SEGMENTATION ANALYSIS
Time – Air Asia aims at using the time based variable for the purpose of dividing the
consumer market of the organization. The time based variable can be mainly categorized into the
business and leisure aspects. The low-income based consumers who plan to go for leisure
holiday are able to monitor the tickets on a continuous basis. The travelers who go on the
business trips can pay higher prices for the services that are offered to them by Air Asia. The
business trips can also pay higher prices for the tickets for the purpose of booking them in
advance (Dolnicar, Grün & Leisch, 2018).
Value for money – The value for money based aspect has also been taken into
consideration by Air Asia for the purpose of segmenting the market of the organization. Value
for money based aspect is considered to be important for the organization so that it is able to
divide the consumers into low, moderate and high income groups. The consumers who belong to
the high income group are interested in the value for money that is provided to them by the
services of Air Asia. The economic recession has a huge impact on the proper reduction of
expenses that are faced by Air Asia (Gonchar, Gorokhova & Ponomarenko, 2019).
Targeting and positioning strategy
The target market profile of Air Asia can be developed in an effective manner after the
process of segmentation is completed. Three different target markets are taken into consideration
by Air Asia for the purpose of developing and offering the services. The first segment or
Segment 1 of consumers of Air Asia travel twice a year for the leisure related activities and the
consumers provide high importance to the value for money that is offered by the organization.
The second segment or Segment 2 mainly comprises of the middle social class consumers who
travel on a moderate basis for leisure and also provide high emphasis to the value for money
(Iyer et al., 2019).
The fourth segment or Segment 4 is mainly based on the middle social class based
consumers who can travel on a frequent basis for business related activities and they also provide
huge importance to the value that is gained for amount of money that is offered for the services.
The economic climate has a huge impact on the price sensitive nature of the consumers and the
company also needs to offer them with best value for the prices that are provided by them. The
price sensitive nature has however been able to enhance the frequency of travelers who use the
domestic and international services that are offered by the low cost carriers or LCCs. The

5CUSTOMER SEGMENTATION ANALYSIS
consumers who aim at travelling for business or leisure based purposes aim paying for a secure
booking on a flight (Lancaster & Massingham, 2017).
Positioning – Air Asia has been able to position itself as a leader and the biggest low cost
carrier in Asia. The organization mainly believes in a hassle-free, no-frills and low fare based
business concept that related to the philosophy of the organization of reducing the costs of
operations and enhancing the efficiency of business activities as well. The efficiency related to
operations of Air Asia in the industry is able to enhance the affordability of the air travel based
activities that are performed by the organization (López-Lomelí, Alarcón-del-Amo & Llonch-
Andreu, 2019).
Air Asia has been able to spark the revolution in air travel in order to enhance the
affordability of air travel. The consumers of Air Asia have also aimed to choose the services that
are offered by the organization with respect to the low costs and low prices of the services as
well. The service quality of Air Asia is however sometimes not considered to be up to the mark
by the high income group based consumers. Air Asia will thereby aim at maintaining its position
as a leading low cost carrier and the organization also hopes to move towards offering the better
levels of services to the consumers (Nalca, Boyaci & Ray, 2018).
Branding plan
Brand vision - The vision that has been developed by Air Asia is considered to be a
major aspect that is related to proper formation of the branding plan of the organization. The
vision statement of Air Asia mainly states that “Now everyone can fly”. The major aim of
operating of Air Asia in the airlines industry has been captured effectively within the vision
statement. The corporate value that has been gained by Air Asia has been able to enhance the
efficiency and has helped the organization so that it is able to maintain the low cost based
structure. The measures that are implemented by the organization are mainly based on the
reduction of costs and high utilization of the aircrafts as well (Paluchová, 2017).
Brand picture – Air Asia has been highly aware of the consciousness related to needs of
the consumers and to project itself as a major low cost based carrier. The vision of the
organization is also a major part of the brand picture that has been developed by Air Asia in the
airlines industry.

6CUSTOMER SEGMENTATION ANALYSIS
Brand strategy – The brand strategy of Air Asia is mainly based on the major principles
that include value, uniqueness, credibility, sustainability and fit. The tagline of Air Asia is
mainly based on the clear image that is developed by the firm in order to maintain its operations
as a low cost based carrier (Schlegelmilch, 2016).
Brand communication – The communication strategy implemented by Air Asia is based
on the sponsorships that are offered by the firm in order to enhance the visibility of the brand in
different industries. Print media and advertising are considered to be an important part of the
brand communication process implemented by Air Asia. The major idea of Air Asia is mainly
based on the brand extension that the organization aims at implementing for the purpose of
attracting consumers from various parts of the world (Wirtz & Lovelock, 2017).
Conclusion and Recommendations
The report can be concluded that an organization Air Asia is mainly able to cater to the
needs of low, middle and high income group based customers. The segmentation, targeting and
positioning based activities that are performed by Air Asia has been able to support the
organization so that it is able to offer its services to the effective target consumers. The branding
plan of Air Asia has been able to influence the position of the firm in the airlines industry. The
organization has also been able to communicate its brand value to the consumers in different
parts of the world with the help of brand communication.
The major recommendations that can be provided to Air Asia for the purpose of
enhancing its revenues in the industry are as follows,
Air Asia can aim at providing high quality based services to the customers who
belong to high income group.
Air Asia can aim at increasing its fleet of flights in order to maintain the quality of
its flights and offering the services to the customers who expect better quality and
service levels.

7CUSTOMER SEGMENTATION ANALYSIS
References
Airasia.com, (2020). Cheap Flights Around The World | Airasia. [online] Airasia.com. Available
at: <https://www.airasia.com/flights/> [Accessed 17 April 2020].
Andaleeb, S. S. (2016). Market segmentation, targeting, and positioning. Strategic Marketing
Management in Asia, 179-207.
Anesbury, Z., Winchester, M., & Kennedy, R. (2017). Brand user profiles seldom change and
seldom differ. Marketing Letters, 28(4), 523-535.
Armstrong, G. M., Kotler, P., Harker, M., & Brennan, R. (2018). Marketing: an introduction.
Pearson UK.
Camilleri, M. A. (2018). Market segmentation, targeting and positioning. In Travel marketing,
tourism economics and the airline product (pp. 69-83). Springer, Cham.
Carter, L. L. (2019). Equivalence and Research Design Optimization for International Market
Segmentation. Journal of Marketing Development and Competitiveness, 13(3).
DeSarbo, W. S., Blanchard, S. J., & Atalay, A. S. (2017). A new spatial classification
methodology for simultaneous segmentation, targeting, and positioning (STP analysis)
for marketing research. In Review of marketing research (pp. 95-123). Routledge.
Dolnicar, S., Grün, B., & Leisch, F. (2018). Step 9: Customising the Marketing Mix. In Market
Segmentation Analysis (pp. 245-254). Springer, Singapore.
Gonchar, V., Gorokhova, T., & Ponomarenko, A. (2019). Segmentation and positioning in the
marketing practice of the company. Journal of Modern Economic Research, 1(1), 39-53.
Iyer, P., Davari, A., Zolfagharian, M., & Paswan, A. (2019). Market orientation, positioning
strategy and brand performance. Industrial Marketing Management, 81, 16-29.
Lancaster, G., & Massingham, L. (2017). Markets and customers: consumer and organizational
buyer behaviour and marketing strategy. In Essentials of Marketing Management (pp. 33-
59). Routledge.

8CUSTOMER SEGMENTATION ANALYSIS
López-Lomelí, M. Á., Alarcón-del-Amo, M. D. C., & Llonch-Andreu, J. (2019). Segmenting
Consumers Based on Their Evaluation of Local, Global and Glocal Brands. Journal of
International Consumer Marketing, 31(5), 395-407.
Nalca, A., Boyaci, T., & Ray, S. (2018). Brand positioning and consumer taste
information. European Journal of Operational Research, 268(2), 555-568.
Paluchová, J. (2017). Consumer segments in an international context. In Consumer trends and
new product opportunities in the food sector (p. 480). Wageningen Academic Publishers.
Schlegelmilch, B. B. (2016). Segmenting targeting and positioning in global markets. In Global
marketing strategy (pp. 63-82). Springer, Cham.
Wirtz, J., & Lovelock, C. (2017). Positioning Services in Competitive Markets. World Scientific.