Marketing Plan and 7Ps Analysis: Vietnam Airlines and Vietjet Air

This report provides a comprehensive comparison of the marketing strategies employed by Vietnam Airlines (VNA) and Vietjet Air (VJA), two prominent airlines in the Vietnamese market. Part A of the report analyzes the application of the 7Ps marketing mix (Product, Price, Place, Promotion, People, Process, and Physical Evidence) by both airlines, highlighting their similarities and differences in service offerings, pricing strategies, promotional activities, distribution channels, and customer experience. The report also includes a detailed comparison of their on-time performance, and PR skills. Part B of the report focuses on developing a marketing plan for VNA, encompassing an executive summary, situation analysis (including market demographics, needs, trends, and environmental factors), marketing objectives, and a comprehensive marketing strategy based on segmentation, targeting, positioning, and differentiation. The marketing mix elements are then elaborated upon, including product development, pricing strategies, distribution channels, and promotional campaigns. The plan also incorporates budgeting for various aspects of operations and marketing, as well as implementation and control measures to ensure the achievement of marketing goals and objectives. The report provides insights into the competitive landscape, market dynamics, and strategic considerations for both airlines within the context of the Vietnamese aviation industry.

Assignment Marketing
Table of Contents
Part A: Compare how Vietnam Airlines and VietjJet Air use the various elements of the 7Ps
marketing mix....................................................................................................................4
SERVICES or PRODUCTION:.............................................................................................4
PRICE:.............................................................................................................................5
PROMOTIONS/COMMUNICATION:.................................................................................5
DISTRIBUTION or PLACE:.................................................................................................6
PHYSICAL EVIDENCES:.....................................................................................................8
PROCESS:........................................................................................................................8
PEOPLE:..........................................................................................................................8
Part B: Produce a marketing plan to meet marketing goals and objectives. The marketing
plan should include all elements of 7Ps marketing mix, with an action plan and measures
for monitoring and evaluating progress and meeting of goals and objectives.....................9
EXECUTIVE SUMMARY:...................................................................................................9
SITUATION ANALYSIS:...................................................................................................10
1. Marketing Analysis...........................................................................................................10
MARKETING OBJECTIVE:...............................................................................................20
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MARKETING STRATEGY:................................................................................................20
1. Marketing Segmentation and targeting........................................................................20
2. Marketing Proportioning and Differentiation..............................................................21
MARKETING MIX:..........................................................................................................22
1. Product...............................................................................................................................22
2. Price....................................................................................................................................22
3. Place...................................................................................................................................23
4. Promotion..........................................................................................................................24
BUDGETING:.................................................................................................................24
1. Flight Operating Budget..................................................................................................24
2. Marketing Budget.............................................................................................................26
3. Training Budget.................................................................................................................27
4. In-flight and airport services...........................................................................................28
IMPLEMENTATION AND CONTROL:...............................................................................29
Reference.........................................................................................................................30
Part A: Compare how Vietnam Airlines and VietjJet Air use the various elements of the 7Ps
marketing mix.
Marketing mix is the process of designing and integrating different marketing elements to
ensure the achievement of business goals (Chand, n.d.). According to Friesner (2013), the
marketing mix is also called 4Ps (prices, place, products and promotions) and 7Ps (process,
people and physical evidence). This part will be comparing the marketing mix between two
Vietnamese airlines, namely Vietnam Airlines and VietJet Air.
SERVICES or PRODUCTION:
Understanding the important role of products in the field of air transport business,
especially in the context of global competition, Vietnam Airlines and VietJet Air have
constantly improved the quality of their services. Both airlines offer services such as seat
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selection, in-flight meal, disability assistance, and many other services. The staff of both
Vietnam Airlines and VietJet AIr are well-trained and professional (Travelus.vn, n.d.).
However, VJA is a low cost airline so they will focus on souvenir items such as cool flying
models, handbags, toys, etc., as a way to increase revenue as well as show that VJA is
responsible to customers. VietJet Air is a low-cost carrier, therefore food and beverage
catering (canned snacks) on planes such as noodles, pho, porridge for VND 30,000 / bowl.
VJA’s late flight situation is also quite good when the rate of on-time flights reaches 67% (VE
MÁY BAY TRUNG THIÊN, n.d.).
About Vietnam Airline, they do not provide any physical products that link customers to
them. In addition to providing fights for passengers, they also have service called “Freight
Vietnam Airlines Cargo”, which provides freight services. For example, if someone wants to
buy something from another, Vietnam Airlines can also act as a carrier, transporting goods
to that customers. Food served on Vietnam Airlines are more diversified with full
sandwiches (such as tuna, mixed, sausage rolls for VND 35,000 / piece) and canned foods.
The rate of on-time flights of VNA is larger than that of VJA, with 90%.
PRICE:
For prices, VNA charges customer higher than VJA. For example, VNA’s fare from Hanoi to
Ho Chi Minh City is VND 3,320,000 while VJA’s fare is VND 2,726,000 (Google.com, n.d.).
This reflects that Vietnam Airlines is a more advanced airline than VietJet Air, targeting a
higher income group while VietJet targets a lower income, most Vietnamese. In addition to
VietJet Air’s low price, Vietjet also offers promotional prices, in which tickets are cheaper in
a short period of time. Vietjet Air’s price strategy, has achieved business goals.
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Although Vietnam Airline has such a high price, it focuses on secondary products (including
all services provided before the fight, on the plane, after landing), collecting feedback from
customers to make the perfect product they provide.
PROMOTIONS/COMMUNICATION:
Both Vietnam Airlines and VietJet Air use some common promotion methods such as
advertising on TV, Internet, fairs, etc. Along with that are promotions for customers for
customers on special occasions such as Tet holiday, combined with direct marketing to
promote brands, products and services to customers.
However, the first difference between VNA and VJA is PR. As an official carrier, Vietnam
Airlines sponsors national, cultural, social, educational, sports events and community
supports. With national events, VNA participates in sponsoring most major national events
such as the APEC Summit, Women’s Summit, etc., support the overseas Vietnamese
community. In addition, VNA also strengthened coordination in promoting tourism in
collaboration with the Vietnam National Administration of Tourism to build a TV show
“Hidden Beauty”, “SVietnam” to introduce cultural features and highlights, Vietnamese
society, country and people (Xemtailieu.com, 2015).
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About VietJet Air, it has many impressive PR skills. In 2013, VJA invited Ngoc Trinh with a hot
model group and bikini to pose on the plane, making it famous. With the new 2018
calendar, VietJet Air still pursues the images of bikini models. Latest, VJA shocked the
community in bringing models to Vietnam flight. (Wattpad.com, n.d.).
DISTRIBUTION or PLACE:
Currently, Vietnam Airline and VietJet Air are applying the distribution method through: the
traditional channel is the box office of the company and its agents, new online channels.
However, Vietnam Airline expanded its network more than VietJet Air. Vietnam Airline can
take its passengers around the world like America, Asia, Europe, Africa, etc. In addition, the
wide network of accessible locations worldwide provided by Vietnam Airline has fulfilled
their business goals, to make VNA more accessible to people and bring them to more places.
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However, because VietJet Air is still a young infant company of an airline company and
because of its low cost core, VJA is only open to Asian and domestic (Vietjetair.com, 2018).
Therefore, the only option to fly to places other than Asia is through Vietnam Airline
PHYSICAL EVIDENCES:
When flying Vietnam Airlines or VietJet Air, their customers are presented with something
that can represent the physical evidence of the service, for example, spacious seating with
comfortable foot room, flight magazine, flight scent, in flight blankets and meals are
provided. Furthermore, both airlines have luxurious lounges for VIP passengers, which offer
a variety of different foods and drinks, free WIFI, a wide variety of newspaper and
magazines, beautifully decorated TVs and a wide screen.
PROCESS:
Vietnam Airlines and VietJet Air bring value to their customers through many different ways,
called process in 7Ps. Both airlines have common processes such as booking process, check-
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in process, etc. However, Vietnam Airlines is a high-end airline, so they provide in-flight
entertainment systems such as movies, games, etc. For VietJet Air, although an economic
airline, does not provide any of these.
PEOPLE:
The people factor in these two airlines has some common things that all airlines need to
have are: aerial parts (pilots and flight attendants) and underground parts. The aerial parts
must ensure safe and professional flight operation to meet customer requirements. All
pilots and flight attendants are trained to meet international standards and safety.
As for the underground team, it is necessary to promote its services to customer likes
buying air tickets etc. This team recruit people having good languages and good skills to
promote brands to customers.
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Part B: Produce a marketing plan to meet marketing goals and objectives. The marketing
plan should include all elements of 7Ps marketing mix, with an action plan and measures
for monitoring and evaluating progress and meeting of goals and objectives.
EXECUTIVE SUMMARY:
Vietnam Airlines is a civilian airline first established in 1956 by Vietnamese government,
with the name Vietnam Civil Aviation. This is a young and creative airline with Vietnamese
cultural brand. Despite many fluctuations, Vietnam Airlines (VNA) has reached out to the
world market and become a well-known, trusted and chosen brand (Vietnamairlines.com,
2018).
According to (Vietnamairlines.com, 2018), VNA has successfully implemented over 141
thousand flights with nearly 22 million passengers safely transported. The consolidated
revenue of the Corporation reached a record high of VND 98,950 billion, an increase of 1.9%
compared to the plan. On the basis of adjusting and balancing resources effectively,
Vietnam Airlines achieved pre-tax profit of VND 3,312 billion, exceeding the plan by 36.8%;
in which the parent company contributed VND 73,227 billion in revenue and VND 2,418
billion in pre-tax profit, exceeding 23.4% of the target set by the General Meeting of
Shareholders.
The airline’s feet continued to be expanded with the addition of 2 large-size Airbus A350-
900 and 3 new generation narrow-size Airbus A321NEO aircraft – superior aircraft with fuel-
saving engines, helping reduce environmental emissions and increase exploitation
efficiency. VNA has cooperated with many domestic and international airlines such as Delta
Airlines, Aeroflot, Air France, etc. In addition, they have many subsidiaries and affiliates such
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as Vietnam Air Mechanical Company (VAECO) and Tan Son Nhat Cargo Services and
Forwarding Company. (Vietnamairlines.com, 2018).
Vietnam Airlines will deploy many main marketing strategies to increase brand awareness
and overall market share. Even these marketing strategies will help them gain competitive
advantages over their competitors, especially using 7Ps to achieve business goals.
SITUATION ANALYSIS:
1. Marketing Analysis.
1.1. Market Analysis.
Marketing Analysis Vietnam Airlines
Market Demographics Population size: Any passengers want to fly.
Age: Any.
Income: from $400 to over $2000.
Sex: Male or Female
Social Class: Most are middle class and upper class.
Special Passengers: Politician.
Market Needs 1. Ticket prices decrease slightly.
2. Some customer incentive programs.
3. More discount programs.
4. Improve the quality of online ticket sales channels.
Market Trends 1. Ensure many passengers use VNA’s products and services (Nguyen,
2018).
2. Expand flight routes to different countries (Blueswandaily.com,
2018), and also promote Vietnam to the world.
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3. There are appropriate strategies to compete with other airlines
such as VietJet Air, Jestar, etc. (Travelus.vn, n.d.).
Market Growth Higher demands for flight.
The number of products – services advertised increased.
Macro Environment (Vu, 2015)
Economic
Vietnam Airlines’ cargo transport business is inevitably affected by
fluctuations in the economy, such as GDP growth rate, inflation rate,
level of control and reform. In addition, the situation of scarcity of fuel
sources, the Government fulfilling the commitments of AFTA and the
commitment of joining WTO, will directly affect the source of goods
traded in the market, which means that it will impact to Vietnam
Airlines’ freight transport.
Technology
Vietnam Airlines’ feet is always upgraded with new aviation
technology, mainly using the technology of famous aircraft
manufacturers such as AIRBUS, BOEING, etc., combined with structural
improvements, fuselage, engines, control systems to improve the
operational efficiency and range of aircraft.
The development of science and technology has created new
generations of aircraft with better specifications to meet the
requirements of civil air transport capacity is larger, noise level is
lower, fuel economy is more, etc. That is the generation of Boeing 777,
Boeing 767, etc., which VNA is operating. This is one of the important
factors determining the quality, economic efficiency as well as the
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competitive advantage of air transport products.
Environment
The geographical position of Vietnam is quite favorable for the
development of the aviation industry, with its position at the edge of
Southeast Asia, located between the international air route from east
to west, from North to South suitable for to build a network of routes
between the US and Australia with short flights in Southeast Asia and
the interior of Vietnam.
With features on VNA’ route network built on the “axis – nan” model
with high exploitation frequency, good transit service in Hanoi and Ho
Chi Minh city, creating competitive advantages with the channels
transport international goods to / from Indochina, Southeast Asia; step
by step bringing Vietnam into a regional air hub, directly competing
with major transit centers such as Hong Kong, Bangkok and Singapore.
Political - Social
The stability of the political system is one of the factors that greatly
affect the development of a country’s economy as well as the business
strategy of businesses, which is often taken into consideration before
businesses investment decision to expand special markets in the
direction of developing air routes of air transport enterprises.
Vietnam Airlines is one of the companies under the management of the
Government, this is the advantage of being backed by capital, business
protection, special financial policies during difficult periods due to the
effects of terrorism, war and epidemics and fuel prices, etc., currently
hold a monopoly position in Vietnam.
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However, the domestic legal system has been gradually improved,
more transparent and in line with the integration trend (ASEAN, APEC,
WTO, etc.), especially international aviation law to participate in
business. In Vietnam, this will limit the protection of the State for
Vietnam Airlines, but it is also an opportunity for Vietnam Airlines to
re-affirm its position to competitors in the air transport market.
1.2. Competitor Analysis.
1.2.1. Direct and Indirect competitor.
For flight service, if passengers want to fly inland or neighboring Asian
countries, apart from Vietnam Airlines, they can choose VietJet Air,
Jetstar, Bamboo Airway, etc. However, airlines such as VietJet or Bamboo
cannot compete with Vietnam Airline if passengers want to fly to other
countries likes the United States, Europe or Australia. Those with lower
incomes can fly at airlines such as VietJet Air or Jetstar Pacific without
having to fly Vietnam Airlines or Bamboo Airways, to save costs.
In addition, if passengers want to free shipping from one location to
another, in Vietnam there is no alternative airline, and the only and best
option is still to use Vietnam Airline services.
1.2.2. Strengths and Weaknesses of selected competitors.
There are some strengths and weaknesses of VietJet Air, based on (CAPA -
Centre for Aviation, 2017).
Strengths Weaknesses
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