Airline Industry Marketing Mix

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AVIATION SECTOR

MADE BY- (Group 11)

ABHISHEK JAYANT ,ANURAN GAYALI , SWADHA AWASTHI ,SUNIL MANOHAR ,NIMESHCHAUDHARI

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Overview of Aviation industry

150+Mil l ion Passeng er

Throughput

450 +

FDI inf low s (US $)

2.19Mil l ion metr ic tonnes of

Cargo

2.2Tri l l ion (US $) of Global

GDP0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2007 2008 2009 2010 2011 2012 2013

Market share Indigo

Jet Airways

Air India

Spicejet

Go Air

29.5%

22.5 %19.1%

19.8%

SourceDGCA and www.ibef.org as on June 26,2014

Government approved 6 new airlines: Air

one, Premier Air,Zexus Air, Turbo Megha,Aircarnival,Zav Airways and TATA-Singapore

airlines.

Establishment of 200 new airports

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So what is Driving aviation?

Economic factors

Over 300 million strong middleclass

Incomes expected to increase atan average of 8.5% by 2015

Increasing preference of privatejets & air charter services by

corporate industry

Emergence of Low cost airlines

Policy factors

Open sky policy

FDI

Licensing policy

Modernization & setting up ofnew airports

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4Ps according to airlines

Product

On ground service:

Check-in service ;Lounge facility at

airport

In-flight services:

Cabin serviceCatering service

Ramp service

Product Place Price Promotion

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Product Place Price Promotion

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Product Place Price Promotion

Used to convey

superiority of aproduct

Cause consumer

backlash

Advance purchase

Excrusion fares

lowest scheduled fares

Restrictions: 14 days or28 days; minimum stay

requirement( 7 days );

high cancellation charges;

cant change the flight

timing or date of travel

Initially offers high

price and thenlowered down

through coupons

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Product Place Price Promotion

Customer Loyalty

ladderOral, written or

electronic

communication

Needs to keep in mind the

image of the countryThe scenic beauty; tourist

attraction; rich cultural

heritages

Travel agentsTour operators

Frontline staffs

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About

Started operations in 2006

By 2014

Largestairline by

Market Share (31.7%)1

Highest profits (Rs. 993

cr)2 in industry

78Airbus- A320s , 508

daily flights , 36destinations 3(6-7 flights

per jet a day)

Ordered 180 Airbus

A320s for $15.6 bn to

complete till 2025 5

Indigo Jet Airways Air India Spicejet

ProductBudget carrier with only economy class travel- Moreflights per destination in select high traffic routes

- On-time service (gets an aircraft ready for its next flight in31 minutes) .Technical Dispatch reliability 99.4 % 4

- Indiasgreenest carrier (with Sharklet wingtip devices

resulting in 15% fuel saving4)

- No Frillsi.e. no free in-flight food and beverages

- Only leased Airbus A320s with replacement in 6 years and

proven track record ofsafety-Indigo as a brandsports as being Indias coolest airlines

with the hottest looking crew .

PriceDifferentiated w.r.t days before travel 6less than 7 days | 7 to 30 days | 30 to 90 days

- Low cost and moderate quality of service

- High seating density and load factor with a low (7+15 kg) 7

baggage allowance which reduces weight and fuel

consumption

-Seasonal pricing and festivals

-Corporate pricing plans

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Indigo Jet Airways Air India Spicejet

PromotionOn time is a wonderful thingSales Promotions includes Bank promotions of (say

10% discount on base fares) with partner banks likeEmirates NBD, ADCB , HDFC , SBI and Mobile

promotions (say Rs. 200 off) using booking using Indigo

Mobile App in Iphone/Android/Windows

Advertisingis mostly through hoardings, print media

and word-of-mouth

Direct Marketing using personalized Emails and SMS.Sponsorshipsin Fashion Shows and college festivals in

accordance to its cool brand image.

Special Fares which are very low but non-refundable

Special Concessions forfamily booking to encourage

travel by air during vacations

PlaceIndigo on Mobilewww.goindigo.comwebsite

Travel agent websites such asGoibibo, Makemytrip, Yatra

EMI options with HDFC, CITIBANK,

ICICI credit cards

Mobile Apps

24 x 7 Indigo Call center

Indigo Airport Counter

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Indigo Jet Airways Air India Spicejet

Product

Virtuallibrary

Cuisines

Specialassistance

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Place

Main hub

secondaryhubs

47

destinations

Indigo Jet Airways Air India Spicejet

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Price

Value formoney

Discount

Indigo Jet Airways Air India Spicejet

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d d

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Product

Specialmeals(diabetic,

jain etc)

Movie screensin flights

Maharajalounge

Indigo Jet Airways Air India Spicejet

di i i di i j

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Place

Delhi ,Mumbai-

major hubs

Subsidiary :Air India

express; airindia regional

Covers total90

destinations

Indigo Jet Airways Air India Spicejet

I di J Ai Ai I di S i j

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Price

Rewardpoints

Premium

pricing

Extra baggagecost is

charged perkg

Indigo Jet Airways AirIndia Spicejet

I di J Ai Ai I di S i j

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Promotion

Air Indiahockey, footballclub, Air Indiacricket teams

Frequent flyerprogramme;

discount forsenior citizen

Konark chakra

Indigo Jet Airways Air India Spicejet

J t Ai Ai I di S i j tI di

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Spice jet (flying for everyone)

Trasportation service

Spice jet airline are using various Aircraft

models for transportation purposes as

shown in table .

This airlines have only economy seats

.Currently spice jet has its 57 planes in

action

In-flight refreshment

In-flight entertainment

Spice add ons

Spice connect

Corporate frequent flyer offer

Domestic travinsure

SR

NO.

AIRCRAFT IN

SERVI

CE

ORDER

S

PASSENG

ERS

(economy

)

1 Boeing 737-

800

36 0 189

2 Boeing 737

MAX

- 42 -

3 BOEING 737-

900 ER

6 - 212

4 BOMBARDIE

R DASH 8 Q

400

15 15 78

5 TOTAL 57 57 479

SPICE JET FLEETPRODUCT

Jet Airways Air India SpicejetIndigo

I di J t Ai Ai I di S i j t

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Product continued....

SpiceMAX (a product that offers you a lot more comfort and convenience)-

Enjoy best-in-class legroom, a lot more personal space to work or relax, and

with priority check-in at dedicated SpiceMax counters at major airports.

SpiceMax seats are available at an introductory starting price of Rs.500.

Spice add-onsThese are host of benefits that

1. includes booking excess baggage up to 12 hours before departure at a

discounted rate,

2. a seat of your preference,

3. guaranteed meal of your choice from the extensive SpiceShoppe menu,

4. SpiceAdd-ons may be selected at the time of booking or even after booking

via Manage my Booking option at spicejet website

Indigo Jet Airways Air India Spicejet

I di J t Ai Ai I di S i j t

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Spicejet is currently operating over 350 flightsdaily to 48 Indian and 10 international

destinations.

The airline flies Boeing 737-800 and 900ERs

to Tier I citiesand Bombardier Dash 8 Q400s

to Tier II and Tier III cities

It has Primary Hubs at Hyderabad ,Delhi,

Chennai.

In April 2011, SpiceJet announced that they

choose Hyderabads Rajiv Gandhi

International Airport as the first and primary

base for its new fleet of Bombardier Q400NextGen aircraft.

From Hyderabad, SpiceJet launched flights to

Aurangabad, Bhubaneswar, Goa, Indore,

Madurai, Mangalore, Nagpur, Nasik, Raipur,

Rajahmundry, Tirupati, and Vijayawada with

the new fleet.

PrimaryHyderabad ,Delhi,Chennai

SecondaryMumbai , Banglore

FOCUS CITIES

Kochi, Ahmedabad, Kolkata

Hubs

From 13 August 2014, SpiceJet will

be starting commercial flights toKathmandu (Nepal) from Bagdogra

Airport in West Bengal (India).

Place

Indigo Jet Airways Air India Spicejet

I di J t Ai Ai I di S i j t

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Innovative pricing has also been central to the company's success. Spice Jet started off its services with a revolutionary pricing of Rs. 99 for the first

99 days. This was followed by air tickets priced at Rs. 500 and Rs. 999 - a pricing

strategythat continues. As a result, the airline's prices compete with first-class

Indian railway fares

It also offers everyday spicy fares, which is very cheap and you can buy yourticket at extremely low fares

Latest pricing strategies

1. Friends and family special

2. Students discount (5% discount on base fair rate)- The scheme is valid on

bookings done online on www.spicejet.comby opting in for student discountscheme.

3. Corporate Frequent Flyer Offer-spiceJet has introduced an offer for the corporate

frequency flyer where they are entitled to a free one-way trip for every six completed one-

way journeys and 2 one-way trip for every ten completed one-way journeys. This is an offer

valid for direct and via flights for corporate bookings only.

Price

Indigo Jet Airways Air India Spicejet

Indigo

Jet Airways Air India Spicejet

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Price strategies(continued)

4. SpiceJetsSBI titanium card

a) 5% cash back

b) Discount voucher of Rs 500 on joining

c) 5 in flight meal vouchers

d) 5vouchers of 5kg wavier on excess baggage

5. Indian armed forces discount-25% discount on base fare forIndian Armed forces bookings are provided

6. Excess baggage charges

within limits

a) 05 kg =Rs. 750 extra

b) 510 kg =Rs. 1500 extra

Indigo Jet Airways Air India Spicejet

Indigo Jet Airways Air India Spicejet

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Promotional techniques Brand campaign

1. Its tagline 'flying for everyone'

a) The airline has also rolled out print campaigns across all leading newspapers from

May 20, one day after the formal launch of the airline Basically the idea behind the

campaign was to empower the ordinary people the power to flyb) Entered in the market with Rs99 for 99 daysfollowed by Rs500 and Rs999ticket

price

Promotion through banks like SBI is providing special Spicejet SBI Titanium Cards

for spice jet users

Advertisingis mostly through hoardings, print media and word-of-mouth

Direct Marketing using personalized Emails and SMS

Another strategy that came in way was booking return ticket and pay for one way

only.

Principal sponsors of Sunrisers Hyderabad

Promotion

Indigo Jet Airways Air India Spicejet

Indigo Jet Airways Air India Spicejet

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Promotion continued...

In July 2014, SpiceJet announced up to 50 per cent discounts afterJetAirwaysannounced the same scheme.

Present strategies adopted are.-

1. On time guarantee -SpiceJet will issue an e-Voucher ("Voucher") [On

Time Guarantee Voucher]to such passengers whose flight has either

been delayed beyond the scheduled departure time of the flight/cancelled.

For delays:

a. Between 60 to 119 minutes: Voucher worth INR 500/-

b. Beyond 120 minutes: Voucher worth INR 1000/-

c. In case of cancellation of the flight: Voucher worth 1000/-2. Friends and family

Indigo Jet Airways Air India Spicejet

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Survey Analysis

5%

46%

18%

11%

20%

Overall Consumer Preference

Go Air

Indigo

Air India

Jet Airways

Spicejet

53%32%

16%

Time of boarding

Morning

Evening

Afternoon

39%

11%

50%

Ticket Purchase Time

1 to 3 m

less than 7 d

7 d to 1 m

27%

69%

1% 3%

POS Ticket

Airline Website

Travel Websites

/ Apps (like

makemytrip)

Airline Stores

Travel Agent

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Freebies Safety Value for

money

Hospitality On Time

Performance

Parameter wise Preferences

Indigo

Spicejet

Air India

Jet Airways

Go Air

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Bibliography

Marketing management by Philip Kotler, Kevin Lane, Abrahan koshy,Mithileshwar Jha; Word of mouth, Chapter 18, Pg- 489, 490;Chapter-16 Designing and managing integrated marketingcommunications, Pg- 429

Marketing management by Philip Kotler, Kevin Lane, Abrahan koshy,Mithileshwar Jha; Role of research Chapter-1,Understandingmarketing management, Pg-50

Marketing management by Philip Kotler, Kevin Lane, Abrahan koshy,Mithileshwar Jha; Target markets, positioning andsegmentation,Chapter-1,Understanding marketing management,

Pg- 11 Marketing management by Philip Kotler, Kevin Lane, Abrahan koshy,

Mithileshwar Jha; Chapter- 14, Designing and managing integratedmarketing channels

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1. http://en.wikipedia.org/wiki/IndiGo2. http://www.thehindu.com/business/Industry/indigo-fy13-profit-

rises-to-rs-993-crore/article5163806.ece

3. https://content.goindigo.in/Information/Press

4. http://strategicmoves.wordpress.com/2013/10/31/indigo-airline-

cracking-the-profitability-code/5. http://articles.economictimes.indiatimes.com/2011-01-

13/news/28428535_1_airbus-aircraft-rahul-bhatia-airbus-a320s

6. http://www.cleartrip.com/graphs/

7. http://www.yatra.com/baggage-allowance.html

8. https://book.goindigo.in/9. travel.cnn.com/mumbai/life/brand-story-behind-indigo-044435