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Part Two

Understanding the Marketplace and Consumers

TOMS Shoes

on how TOMS executes its strategy within the constantly changing marketing environment. After viewing the video featuring TOMS Shoes, answer the following questions about the marketing environment: What trends in the marketing environment have contributed to the success of TOMS Shoes? Did TOMS Shoes first scan the marketing environment in creating its strategy, or did it create its strategy and fit the strategy to the environment? Does this matter? 3. Is TOMS' strategy more about serving needy children or about creating value for customers? Explain.

"Get involved: Changing a life begins with a single step." This sounds like a mandate from a nonprofit volunteer organization. But in fact, this is the motto of a for-profit shoe company located in Santa Monica, California. In 2006, Tom Mycoskie founded TOMS Shoes because he wanted to do something different. He wanted to run a company that would make a profit while at the same time helping the needy of the world. Specifically, for every pair of shoes that TOMS sells, it gives a pair of shoes to a needy child somewhere in the world. So far, the company has given away tens of thousands of pairs of shoes and is on track to give away hundreds of thousands. Can TOMS succeed and thrive based on this idealistic concept? That all depends


corporate culture, encouraging pilots to cook breakfast for engineers each quarter to thank them for looking after their aircraft. As CEO, Fernandes ensures that he is accessible to all his staff by giving them his mobile telephone number. Air travel in Asia is heavily regulated, but. Fernandes has played a crucial role in lobbying for its deregulation. In mid-2003, Fernandes engaged the support of the former prime minister of Malaysia, Tun Dr. Mahathir Mohamad, to network with neighboring countries in an effort to develop an open-skies agreement. Since then, Indonesia, India, Thailand, and Singapore have granted landing rights to AirAsia. Although it has limited resources, AirAsia has been able to fulfill its customers' needs by collaborating with partners. For instance, it appoints authorized travel agents to cater to travelers who are uncomfortable with making their bookings over the Internet. Travelers without credit cards can also pay for their tickets by cash at any Alliance Bank branch in Malaysia. With the right partners and a strong marketing strategy focusing on the promise of low fares and good brand experience, AirAsia has evolved from an ailing company into one that netted a profit of $14.4 million by its third year of operation.

AirAsia: The Sky's the Limit
Low-cost carriers (LCCs) provide an alternative for price-sensitive business and leisure travelers to maintain their travel plans at lower costs. AirAsia, Asia's leading airline, was established with the dream of making air travel possible for everyone and it is now one of the world's best low-cost airlines. AirAsia was the first airline in Asia to introduce the budget, nofrills airline concept. It was founded in 2001 by CEO Tony Fernandes and his three partners when their company, Tune Asia Sdn Bhd, bought the fledgling AirAsia, a Malaysian government-linked airline. Since then, the growth of this LCC has been the envy of many. It started with two old Boeing 737s serving the domestic market in Malaysia. Today it is a publicly listed company boasting a large fleet of aircrafts flying to over 61 domestic and international destinations. It flies 108 routes and operates over 400 flights daily from hubs located in Malaysia, Thailand, and Indonesia. AirAsia is widely known as the "Ryanair" of the Far East as it focuses on providing convenient and affordable air travel for the mass middle-class market. In 2001, the domestic market was dominated by the national carrier, Malaysia Airline System (MAS), whose high prices created a pent-up demand for low-cost air travel. AirAsia...
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