52162406 IndiGo Airlines Marketing Plan
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Transcript of 52162406 IndiGo Airlines Marketing Plan
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H4G9 Great Lakes Institute of ManagementIndiGo Airlines: Market Plan
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Executive Summary
y Indias best performing Low Cost Airline in terms ofprofit
y Established in 2005 as a subsidary of Interglobe
Interprisesy A fleet of 30 aircrafts making 170 flights daily, across
22 destinations in India
y Plans to acquire 125 new aircrafts by 2025
y Plans to serve 100 cities in India, South East Asia,Middle East and China by 2025
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The IndiGo Dream
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Why IndiGo ?
y Emergence of the Great Indian middle class willing tospend money for swifter travel
y For the Individual on the Go,who values time and on-
timlinessy Budget travel is not cheap travel, Quality of Service
Mission Statement :T
o be the best Airline in India by providing the following values to thecustomer:
- Affordable Fairs
- Ontime performance
- Hasslefree Service
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Situation Analysis
y Open Sky Policy
y Deregulations in different spheres
y Low entry barriers to attract new companies
y FDI limits
y 49 % for airlines
y 100% for airports
y
Extensive airports development planned
Macro Environment Analysis: Political
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y Rising income of middle classy GDP growth of more than 8% and expected rate
in two digits
y Average salary increase highest, 14% in the world
y Tourism industry growth: 6 % in 2009
Macro Environment Analysis: Economic
Macro Environment Analysis: Technological
y Modernization of Airports
y Better handling of Aircrafts, passengers & cargoy Developing Greenfield airports with Corporate
collaboration
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y Rising middle class:y 1993 - 1999 : 39.5 to 56.7 million households
y 2005: 300 million households
y
2010: 400 million households (Estimated)y Leisure travel increased by 15 % in 2009
y Number of foreign tourists in 2009-2010: 5.1million
y Status symbol to travel in plane. Glamour.
Macro Environment Analysis: Social & Cultural
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y Changed travelling pattern of consumersy Highest percentage people in age group 20-25
y Educational environment being improved
y Shift towards nuclear family concept increasestravel frequency
y Middle class income above Rs.90,000 pa
(Source: NCAER)
y
High energy cost. The cost of ATF in India fordomestic airlines is almost double than that in theinternational market
Macro Environment Analysis: Demographic
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SWOT Analysis
Strengths High BrandAwarness
Cost Leadership High Efficiency
Innovation Tie Ups
Hassle Free
Weaknesses Less
Differentiation
Too many players Short livedinnovations
Untappeddomestic cargosegment
Opportunities Freight market
Increased
Domestic Airtraffic
InternationalMarkets
Chartered services
Regionalconnectivity
Airport
upgradation
Threats High ATF prices
Competitors
EconomicSlowdown
Poaching Government
policies
Scarcity of pilots Cost inflation
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Segmentation, Target & Positioning
People forBuisness
travelCargo Services
CharterAirways
Leisuretravel/Holiday
People for
Buisness travel
Leisuretravel/Holiday
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NewMarket Expansion
Kolkata, Bodhgaya, Patna, VaranasiBuddhist Circuit
Chennai, adurai, Coi atoreTa il Nadu
Vijaywada, VishakhapattnaAndhra Pradesh
Bhopal, Raipur, Indoreadhya Pradesh
Belgau , angaloreKarnataka
Chandigarh, A ritsarPunja
Port BlairAnda an
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y Geographic
- Region, Rural and Semi-urban areas
y Demographic
-Income, Occupation, Education
y Psychographic
- Socioeconomic Classification, Lifestyle
y Behavioral
- Occasions, Benefits, Usage Rate
Basis for Segmentation
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y Socio-economic revolution is underway.
y Increase in income of Middle class and increase in volumeof aff luent sections of society.
Additional Characteristics of Target Market
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Strategic Focus and Plan
y One type of airplane - brand-new Airbus A320s
y One type of fare - low
y One type of customer service - professionaly One type of route - serving destinations within
India
y One way to deal with delays and cancellations honestly
Core Competencies
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Sustainable Competitive Advantage
Resources
Aircrafts
Human Resources
Brand Equity
Social Capital
Employeerelationship
Fuel
Value
High
High
High
High
High
Costly toImitate
No
No
Yes
Yes
No
No
Easy tosubstitute
No
No
No
No
No
No
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y Be visible go all out to project yourself as theFuture Market Leader
y
Go Local Connect with the Middle classy Focus on your Core Competencies and market
them
y Aim to compete with Railways in the long run
Market Strategy
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Market Research
The Five Indian Flyers: Market Share (Mar 2008)
14.7%
11.9%
23%26%
17.8% IndiGo
spiceJet
Kingfisher
JET AIRWAYS
AIRINDIA
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The Five Indian Flyers: Business
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The Five Indian Flyers: Financials
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The Indian Flyers: Customer Satisfaction
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Consumer Preference
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Competitive Forces
Highly Volatile OilPrices
Multiple MarketPlayers
Limited PriceCeiling
Threat fromPotential Entrants
Highly CompetitivePrices
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Market Penetration and Price Differentiation
Pricing Strategy
y Low Cost And High Quality of Service
y Price to be diffrentiated with respect to days beforethe travel.
y High seating density and load factor.
y No frills such as free food/drinks or lounges
yTargeting segments locally based on seasons andfestivals
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Components of Pricing
y Base Farey User development Fee (based on airports)
y Air Fuel Surcharge (Variable on ATF Prices)
y Passenger Service Fee
y Load Factor ( Average Seat Per Mile)
y Ticket booking prior to travel based on number ofdays.
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Price Determination
Kolkata to Bodhgaya/ Chennai to Coimbatore (425KM):1) Passenger Service Fee Rs 225
2) Fuel Surcharge Cost
ATF Prices Rs 47843.50 / KL
Average seat capacity 180
Load factor 70% (125-135 occupancy)
Average mileage 2.9625 L/ km
ATF cost per passenger Rs 480
Crew members 2 pilots + 4 airhostess (Rs 6.5 lakhs/100
hours) = Rs 52/ person
Capital cost Rs 2.25 Crores/ month as cost of the
Plane (Maintenance + Insurance)
Assuming 1 flight per day Rs 1466So overall the Fuel surcharge
Cost per seat Rs 480+ Rs1466+ Rs52 = Rs 2008
3) Base Fare : Minimum Base fare ofRe 101 which would change based
on the days booked prior to Travel
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Price Differentiation ofBase fare based on day
of booking prior to Travel
More than
15 days priorto travel
With otherfixed, Basefare would
vary 101-501
Within 14 days
of Travel The Base fare
could upto reachupto 1500s
With in 7
days of travel The base fare
could reachupto 4500
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Promotional Strategy
Communication Objectives-Indigo will be promotingthe below three things majorly as part of its advertisingprogramme-On-time performance , Affordable fares andHassle free passenger experience.
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Advertisement Strategy
y Hoardings at airports with focus on Best on timeperformance
y Advertisement through social networking medium-Facebook,Twitter,YouTube etc
y Collaboration with Multiplexes in major cities topromote the airline and its special offers
y Advertisement hoardings in multi-storeyed buildingsand offices
y Advertisements in magazines targetting Urbanpopulation
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Advertisement Strategy contd..
y Sponsering fashion shows, talent hunts, New Yearparties etc
y Collaboration with consumer banks, credit cardcompanies, hotels, ticketing websites to promote
special offers, discounts and cash backy Giving IndiGo promotion a local flavour by promoting
in regional languages in respective sectors
y Sending special offer details to frequent fliers by sms,
email etc
y Targeting foreigners in Tourist circuits
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Advertisement through SocialMedia
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The IndiGo Advantage
y Multiple Short haul point to point flights
y Using only one type of aircraft to minimizeMaintenance overheads
y
LeanOperating Strategy to maximize efficiencyy Minimum turn around time, keeping Aircraft in air
for most of the time
y Employee welfare and resultant loyalty
y Making Low budget flying a pleasant experience
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References
y IndiGoAirline - www.goindigo.com
y Interglobe www.interglobe.com
y India Ministry of Civil Aviation - http://civilaviation.nic.in
y India Directorate of Civil Aviation - http://dgca.nic.in
y AirportAuthorityof India - www.airportsindia.org.iny Wikipedia www.wikipedia.org
y Bureau of Civil Aviation Security (India) http://bcasindia.gov.in
y http://www.ibef.org/industry/aviation.aspx
y Outlook Magazine
y IndianRailways www.indianrail.gov.in
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Thank You
-Priyank-Purnendu
-Rachna
-Rahul Raj
-Rahul Jain