Bm individual assigment anamika_pgp30183

Brand ManagementUB Group’s Extension into Kingfisher Airlines

AnamikaPGP30-183Section A

Initial Years

Founded in 2003 and started operations in May 2005 by India’s biggest liquor baron, Mr. Vijay Mallya

Started as a wholly-owned subsidiary of United Breweries Group

Entered the market when Indian Aviation Industry saw the outbreak of low cost carriers

First and only Indian Airline to order the Airbus A380 and ordered 15 Airbus Aircrafts in a deal valued at $3 billion

Ended operations in 2012, and license revoked in 2013

Brand Building

• Established as a luxury airline – one of the finest in India• Introduced a number of innovations and market-firsts

to redefine the experience of flying

• Elevated consumers to the level of “guests” and endeared itselftowards them

• First Airline to introduce in-flight entertainment system on domestic flights - live TV entertainment, headphones.

Brand Extension

Parent Brand• One of the largest conglomerates in India• Largest Indian manufacturer of beverage alcohol• Annual Sales of $4 billion and market capitalization of $12 billion

The Airline Industry

• Indian scheduled airlines carried 67.73 million passengers in 2014 compared to 61.42 million in 2013• Air traffic grew between 20 to 40 percent since 2003, and projected operating profits for 2016 is $1.29 billion

EDIT THIS _ GMID DATABASE

Indian Airline Service Market Size, 2014-2019(projected)USD million

Market share of Kingfisher in 2012 before it ended operations – 5%

Kingfisher had flown 11.26 million passengers and captured a 27.6 percent market share in

2008

In May 2009, Kingfisher had the highest market share in the industry

But due to the financial issues It faced, the markets share came down to as low as 5 and

later 3 percent in 2012

Market Share

The thought behind becoming the largest airline carrier

• Airlines

Product (Service) -

• Faster travel compared to other modes of transport• Basic amenities like minimum comfort, punctuality,

appropriate baggage handling etc.

Core expectations from Airline Services –

• Meets most of the core expectations from the service• Pioneer of bringing luxury, glamour and lifestyle to the skies• Focused on services like tele-ordering, free food• Ignored lower order needs like punctuality and low prices

What Kingfisher Airlines Provides –

Luxury - Entertainment

Comfort –Leg Space, Food

Convenience – Punctuality, Baggage Handling

Economy - Price

Hierarchy of Flyer’s Needs

PRODUCT Kingfisher First | Kingfisher Class | Kingfisher Red

Coverage and Destinations – • In 2009, Kingfisher had the largest coverage with 74 domestic an 3 International destinations• In 2012, Kingifisher Airlines was operating in 31 cities in India, due the financial problems and a

number of terminated destinations

Other Airlines• Air India – 59 Domestic and 31 International• Jet Airways – 53 Domestic and 16 International

PLACE

Kingfisher Route Map

Advent of LCC implies customers are price sensitive

Are the value added services

worth the increase in prices?

Increase in process by 300-400 INR for a free meal might not be very appealing to

LCC consumers

Selling food on flight might be a

better idea

PRICEKingfisher First – Highest prices, focus on business class

Kingfisher Class – Aspirational Premium Economy service focused on growing middle class

Kingfisher Red – Low fare service focused on price conscious middle class

Compared to other Airlines Service Brands, Kingfisher has a higher price in every class of service

Even the low cost carrier service class, Kingfisher Red has in flight entertainment and free meals

PROMOTION

Ambush Marketing by Kingfisher through Hoardings

Kingfisher promoted luxury and glamour – the two points of difference of the brand.• Kingfisher Calendar• Celebrity ambassadors – Yana Gupta

Deepika Padukone

POSITIONING• With its three different brands, Kingfisher served the entire market of Airline services• The positioning of the brand is of an Airline which provides both low cost services, along with the luxury

experience. • The advantages and disadvantages of this positioning:

The luxury services add to the cost and drive away highly price sensitive customers. Hence, this is difficult to sustain.

The two benefits serve to different set of customers, and more than serving both the sets together, this might prevent focus on any single segment

But there was a possibility that the entire markets shifts towards one segment, in this case Kingfisher would have had an advantage

• Kingfisher could not, or chose not to position itself as a punctual service, or low cost service provider.

BRAND EQUITY

Airline Service that gives you frills and valueadded services at low cost

Experience luxury, vibrancy, association with glamourwhile flying

Business class- immediate associationAspirational middle class – Suitable for their needs

Price sensitive consumers – Not the most appealing

Great flying experience leading to more frequent flying. Brand loyalty of the high class. Turned around image of LCC

Largest Airline Brand with the highest market share in 2009

The Decline

• With all the frills and promotional costs involved, Kingfisher was always running in losses since it started operations

• These losses increase further after the acquisition of Air Deccan, later renamed Kingfisher Red, the LCC of KFA

High Cost of Operations

• Kingfisher’s debt started mounting and it defaulted on most of its loans• Got classified as willful defaulter• License revoked in 2013

High Financial Burden

To utilize the equity of the parent brand, United Breweries, Kingfisher Airlines used “luxury” and “glamour” as the brand mantra. But in order to target all the segments of the market, it failed in doing so

and finally went out of business

REFERENCES

1. Wikipedia, "Kingfisher Airlines", en.wikipedia.org/wiki/Kingfisher_Airlines, Last accessed on: 20th September, 2009.

2.CAPA, http://centreforaviation.com/profiles/airlines/kingfisher-airlines-it

3. Rajiv Fernando, Surekha Pothraju, "Kingfisher Airlines - The 'Funliner' experience", 2006. www.icmrindia.org

4.Makemytrip, History of KFA, http://www.makemytrip.com/flights/kingfisher-airlines-history.html

5.Euromonitor – GMID, http://www.portal.euromonitor.com/portal

Thank You