Customer Value Imperatives - AirAsia: A Comparative Analysis Report

This report offers a comprehensive analysis of customer value imperatives within the AirAsia airline industry, a Malaysian low-cost carrier. It begins with an executive summary and introduction, followed by an overview of AirAsia's operations and market position. The core of the report focuses on customer perceived value, examining the benefits and sacrifices associated with AirAsia's strategies, including pricing, emotional attachment, customer relationships, and social considerations. The study then delves into AirAsia's value proposition, utilizing the Value Proposition Builder Model to assess functional, social, and psychological values, and compares AirAsia's approach to that of its competitor, Jetstar Australia. The report concludes by proposing a new value proposition and outlining implementation strategies for both internal and external operational aspects of AirAsia, offering valuable insights for business development and customer-centric strategies in the airline industry.

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