Air Asia Marketing

Topics: Airline, AirAsia, Low-cost airlines Pages: 9 (2811 words) Published: September 15, 2011
Contents
Table of Content

Background Information........................................................................................................... 2

Company Analysis.................................................................................................................. 2 I. Segmentation………………………………………………………………………………2 II. TOWS…………………………………………………………………………………….3

Marketing Challenge…………………………………………………………………………7

Recommendation……………………………………………………………………………..7 I. Tap into the growing Asian Market………………………………………………………..7 II. Capitalize on the corporate business………………………………………………………13

Conclusion……………………………………………………………………………………15

AirAsia
Background Information
AirAsia is Malaysian low-cost airline that provides both domestic and international flights. AirAsia started operating on 18 November 1996, it pioneered low cost travelling in Asia. In 2001, the airline which was heavily indebted was purchased by Tony Fernandes's company Tune Air Sdn Bhd. Under his charge, AirAsia has become one of the biggest low cost airlines operating in Asia today. Its main hub is based in the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). As such, AirAsia consumers tend to be from the lower to middle income population. Thai AirAsia and Indonesia AirAsia are subsidiaries of AirAsia and are based in Suvarnabhumi Airport, Thailand and Soekarno-Hatta International Airport, Indonesia, respectively. Company Analysis

I. Segmentation
AirAsia target market segment consist of three different but overlapping segments that were segmented according to Geographic Segmentation, Demographic Segmentation and Psychographic Segmentation. AirAsia is targets mainly the Asian market, hence the name AirAsia. As such, they do geographic segmentation by focusing their services primarily in Asia. Being a low cost airline, they are targeting the low to middle income group (demographic) and the cost-conscious travellers (psychographic).

II. TOWS
In order to find the current marketing challenges faced by AirAsia and to determine what are the possible solutions that they can implement, taking into consideration their opportunities and take advantage of their strengths, the TOWS analysis model (Threats, opportunities, weaknesses and strengths) will be used. Threats | Opportunities |

* Intense competition (i.e. Tiger Airlines, Singapore Airlines) | * Asia’s middle class growth * ASEAN Open Skies * Increasing oil price| Weaknesses | Strengths |
* Fair availability | * Well established brand name * Low cost leader in Asia |

Threats
What was once a relatively small market of low-cost airlines when AirAsia was first established, AirAsia not only has to face indirect competitors such as non-budget airlines (i.e. Singapore Airlines), ferries (i.e. Kuala Perlis Langkawi Ferry Service Sdn Bhd) and buses (i.e. Aeroline, now they are also threaten with intense direct competitors such as Tiger Airways and Jetstar Asia Airways.

Opportunities
Countries in Asia, such as China and India, are up-and-coming huge potential markets in the future. In China, there were already 130, 000, 000 consumers just in the middle class range in 2006. It is estimated to increase to 340, 000, 000 in 2016, a 162% growth from 2006 as shown in the graph below. This is beneficial for AirAsia as it means that their targeted consumers (low to middle income) will grow exponentially in the near future.

ASEAN Open Skies is an agreement, targeted for 2015, to allow unlimited flights between all the ASEAN’s regional air carriers, both full services and low-cost airlines. The rationale for the Open Sky agreement is to promote competition in the airline industry. Due to its strong brand name and “low-cost” culture among its workforce, AirAsia is more likely to gain from this agreement. The increasing oil prices may seem like a threat to AirAsia, however being the low cost leader in Asia, this can actually be...
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