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MARKETING PROJECT

SUBMITTED TO PROF. ADAPA SRINIVASA

RAO

IBS HYDERABAD

Anuj

Gupta-35

Jignesh

Patel - 70

Gaury

Indurkar-

17

Divya

Saluja -27

Shilpi

Sarkar-72

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Contents

AVIATION INDUSTRY ........................................................................................... 3

1.1 Introduction ...................................................................................................... 3

1.2 Porter‟s Five Forces ....................................................................................... 4

1.3 Pestel Analysis .............................................................................................. 5

1.4 Market Share ................................................................................................. 7

KINGFISHER AIRLINES ......................................................................................... 8

2.1 Strategic Alliance with Deccan ..................................................................... 8

2.2 SWOT Analysis ............................................................................................. 9

MARKETING MIX .................................................................................................10

RECOMMENDATION FOR FUTURE STRATEGIES.........................................19

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AVIATION INDUSTRY

1.1 Introduction

The Aviation industry in India is one of the fastest growing sectors globally. The sector has

undergone rapid transformation since the liberalization drive that began in the earlier half of the

decade. The origin of Indian civil aviation industry can be traced back to 1912, when the first air

flight between Karachi and Delhi was started by the Indian State Air Services in collaboration

with the UK based Imperial Airways. It was an extension of London-Karachi flight of the

Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of

independence, nine air transport companies were carrying both air cargo and passengers.

In early 1948, Government of India established a joint sector company, Air India International

Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet

of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took

off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline

companies vide the Air Corporations Act, 1953.. By 1995, several private airlines had ventured

into the aviation business and accounted for more than 10 percent of the domestic air traffic.

Today, Indian aviation industry is dominated by private airlines and these include low cost

carriers, who have made air travel affordable.

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1.2 Porter’s Five Forces

SUPPLIER POWER – High

ATF Fuel Prices.

Food Inflation Might Affect The

Industry As Food Provided By

Kingfisher Is Packed Through

Premium Hotels.

BUYER POWER – Low

Economic and Demographic

Changes.

Higher Disposable Incomes.

Increasing no. of Working Women.

Increasing Awareness.

Exposure to Global Brands.

INDUSTRY RIVALRY

(Moderate to High)

Competitive Pricing is there

Many upcoming players

High exit costs involved

THREAT OF SUBSTITUTES

Moderate to High

Indian Railway has improved

service level and quality. Can

give good competition in future.

Other Modes of Transportation.

ENTRY BARRIERS - High

Very Huge Capital Investment

Till 1991 No Private Player Was

Allowed Due To License Raj

Subject To Strict Regulations

Still Govt. Interference In Pricing

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1.3 Pestel Analysis

POLITICAL FACTORS

Open Sky Policy

India‟s Political environment-Tension with Pakistan, Government‟s inability to

control issues(Riots etc.)

September 11-huge drop in air traffic due to safety and security concerns

Trade relations with other countries have to be good

ECONOMIC FACTORS

High operations cost due to huge demand which resulted in laying off employees at

the time of recession.

There has been huge contribution to the Indian Economy

Rising cost of fuel

There has been huge investment in the aviation sector

SOCIAL FACTORS

People from varied groups have to be catered

Destination, kinds of foods served have to be chosen carefully

Development of cities leads to better services and airports

Employment opportunities

Safety regulations

The status symbol attached to a plane travel

TECHNOLOGICAL FACTORS

Use of internet-online ticket booking,updated flight information and handling of

customers

Restrucutring the existing airports to world class appeal.

The growth of e-commerce and e-ticketing

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Satellite base navigation system

Modernisation and privatization of the airports

Developing green field airports with private sector. For example-In Bangalore,

“Airport Corporation Limited”.

ENVIRONMENT FACTORS

The increase in global warming

The sudden and unexpected behavior of the atmosphere and the dependency on

weather

Shortage of the infrastructural capacity

Tourism Saturation

LEGAL FACTORS

FDI limits

Airlines Acquisitions and the leasing cost.

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1.4 Market Share

Source: http://dgca.nic.in/reports/mar-ind.htm

(Directorate General of Civil Aviation)

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KINGFISHER AIRLINES

KINGFISHER AIRLINES was introduced by Mr.Vijay Malliya on 7th may 2005 , it was a

subsidiary of united breweries holding limited. It was introduced in year 2005. That year itself

kingfisher created hype in the market .it was a late entrant in aviation sector but it managed to

establish a pinnacle position in its near future. Scanning through the performance of kingfisher, it

attained a significant position in Indian market. Mr.Vijay Malliya, the strategist, left no stones

unturned to make KINGFISHER AIRLINES a huge success.

That year itself KINGFISHER was awarded as “BEST NEW AIRLINE OF THE YEAR 2005”

by center for Asia Pacific Aviation. In 2006 it was awarded as “SERVICE EXCELLENCE FOR

NEW AIRLINES” by Skytrax. created brand equity for the organization over a period of 5 years

i.e. it enhanced perceived benefits to the organization due to the brand name and goodwill it

commanded in the market.

.Substitute services existed for airlines industry in the form of various other transport systems

like transportation through roadways, railways and sea transport but it did not create any

significant threat for aviation sector because of its unique characteristics like speed flexibility

and time efficiency.

2.1 Strategic Alliance with Deccan

The opportunity of having an equal right to fly overseas and

expand its presence in the subcontinent with a combined

fleet of 80 aircraft.

Kingfisher Airlines - Air Deccan have its commonality of

fleet. With the same family of planes on both sides, there

they enjoyed a significant reduction of cost.

They mutually took the advantages of their respective

operational Merging with Deccan and becoming single

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corporate entity, Kingfisher got efficiencies

They captured a greater business market in both top and end and cut price market in a

fiercely competitive market in aviation industry.

2.2 SWOT Analysis

STRENGTHS

KFA has a strong brand

value and reputation in

the mind of customers.

Quality of service

Route rationalization

First airline to have a

new fleet of airbuses.

Quality and continuous

innovation.

Best R & D

WEAKNESSES

Still not in profit due to

Long Gestation Period of

the Industry.

High ticket pricing

Facing a tough

competition from

competitors

OPPORTUNITIES

The expanding tourism

industry

The non penetrated

domestic market

Tapping the international

market

Catering the untapped air

cargo market

THREATS

Threat from competitors

Infrastructural issues

Hike in fuel prices

Tourism saturation

Economic slowdown

Promotion and

sponsorship is declining

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MARKETING MIX

P‟s

This P explain what range of products or services is been offered by the firm. As the firm grows

ancillary services and products also start growing sometimes related diversification is also

observed thus larger organizations go for vertical integration in order to manage the value chain.

Kingfisher has created its service differentiation by providing quality service and delivering

value to the passengers by creating a lavish and luxurious experience.

Also it provided secondary services like

King Mobile:

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Kingfisher Airlines became the first Indian Airline to launch a range of services on the mobile

platform. Now one can check for flight updates, buy tickets through SMS or access a world of

services through a simple mobile application - anytime anywhere

Little Wings:

Kingfisher Airlines, provides onboard experience which promises to be full of delightful &

unforgettable moments. The airlines call its passengers as ‟guests‟ and as soon as the flight takes

off, they‟ll soon be absorbed in the thrill of stretching their own little wings.

Kingfisher Holidays:

This scheme provides its passengers with King Miles which one can redeem for stay in hotels,

car rentals etc.

Kingfisher Elite:

In today‟s competitive business environment, the pressure on productivity, cost and efficiency

are greater than ever before. Kingfisher Elite offers exclusive travel solutions. One can Fly at

one‟s own convenience anywhere, anytime and choose who flies along with them in the utmost

comfort, safety and privacy. Be it business or leisure, one can select from the range of business

jets and provide the most exquisite service complimented with the highest safety standards,

allowing one to arrive to their destination relaxed and refreshed.

Kingfisher is now to launch 14 more planes for improving the domestic service in the major

cities.

A firm must set a price for the first time when it develops a new product. The firm searches for a

set of prices that maximizes profit on the total mix. Market share to determine prices to

customers and channel patterns. Prices across models and geographic regions have to be

determined.

Prices

Quality

Serives Variety

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The price segments that Kingfisher targets is the higher income group as well as the

upper middle class background.

There are a few segments that are majority of the youth and high lifestyle segments.

The pricing is also done keeping in mind those people who are ready to pay for

luxury.

Initially Kingfisher airlines did not differentiate between business class and economy

class. But eventually they decreased the prices of business class and called those seats

as premium seats.

Fares were very average.

They targeted middle class as well as premium class people. A „Low-Cost‟ option has

been given by the introduction of Kingfisher Red services to compete with other „No-

frills‟ airlines.

The Kingfisher Red serves complementary meals on board, thereby increasing the

perception of „More Value for Money‟ for the passengers

Class of

travel

Load

factors

Day of

travel

Date of

travel

PRICING

STRATEGY

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It is the largest Domestic Airline with a fleet of 60+ aircraft.

Connecting 61 Cities in India including 8 International Destination.

Flight Bookings:

o Book in Person

o Travel Agents

o Online

o India‟s first „flybuysms‟ Service

The process of kingfisher airlines services lays emphasis on the involvement of

channels, front line staff, travel agency offices, offices of tour operators, or so from

where the services flow and reach to the ultimate users.

The process begins at the time of reservation and goes on up to the confirmation of

seats.

By giving details of where to book and how to book kingfisher airlines help in

providing quality services to its customers..

They also offer concession by not charging any cancellation charges and also giving

them options to make a change in the reservation status if they required.

Facilities at the airport, the baggage handling, flight information, also helped in

delivering quality service and making travel a pleasure.

Kingfisher Airline is making every effort to constantly redefine service procedures to

enhance service satisfaction levels.

In aircraft the meal service, in flight entertainment, reading materials, etc enables the

customers to have an enjoyable and convenience.

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COMFORT

PHSYCAL

EVIDENCE

INTERIOR

DESIGINING

Billing system

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At Kingfisher Airlines, the aircraft by itself, the seating configuration which is meant

to be comfortable and spacious and the in flight food food provided, constitute the

physical evidence in this service.

The seating is such that it is comfortable and there is enough leg space.

Kingfisher has introduced new sleeper seats which electric controls for reclining

lumber support, leg rest extension, expanded seat back and thus providing highly

comfortable seating.

Booking offices and ticket counters are extremely spacious and well designed with

good looks.

Domestic lounges are enhanced with good interiors and basic amenities which make

it an ideal place to conduct business, entertain and relax.

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At Kingfisher Airlines, people are the most important. People provide most services that is

selection, training and motivation of the employees.

The airhostess at kingfisher come in contact with the customers in the process of providing the

service, while the cock-pit crew are the employees who contribute to the service product but

there is no direct contact with the customers.

The frontline staff plays an important role in order to make sure that the service has been

delivered to the customers in an apt and an efficient manner. Kingfisher Airline‟s cabin and

ground crew is the hallmark of their services. The quality of staff service is impeccable and the

airline is able to sustain these high quality levels as they experience continued and rapid

expansion people that is the staff deliver high standards of service efficiency, and in a sincere

and charming manner that makes it stand out from the rest of the airlines. The airline also

provides the crew to undergo rigorous training programs.

The airlines has also instituted the Kingfisher Training Academy to cater to the growing demand

for trained service oriented professionals.

As a part of its promotional strategy kingfisher‟s marketing team showcases themselves as the

“the new flying experience” in the aviation industry. Advertisement hoardings at airport

depicted the stylish interiors of the fun liners‟ which led them to the following advantages:-

It has built up a long term image for the product.

This hoardings put by them to repeat the messages many them.

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The artful uses of the color and print led to convey a youthful, fun-filled and world

class image.

Besides this INOX multiplexes in Mumbai publicized KFA‟S special offer for a month.

They promoted greater consumer awareness for prices. This gave Kingfisher a great deal of

competitive advantage with respect to other low cost airlines.KFA was the official travel airline

for the cast and crew of „Mangal Pandey‟ and gave a warm welcome to all the guests who

attended the premiere of the film.

In addition to that KFA as a low cost airline also followed some other promotional strategies

which are listed below:-

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Organized the guest speakers at the seminars and present their ideas on the areas of

their expertise.

Sponsored many cultural events and have celebrity endorsements.

Sponsored sports team and charity events.

Designed image logo for the company.

The organizing of events have given them a lot of advantages to establish their brand name. To

enlist a few:-

It increased awareness of the company and helps to enhance their brand name.

It upraised their corporate image.

These promotional tools helped KFA to express commitment to the community and

social issues.

KFA made use of various fashion shows, celebrity golf matches, New Year parties all

to build its “Kingfisher” brand.

In October, KFA launched “Chill Times Offer” in the month of Augur.

KFA launched many attractive offers to promote its sales like the “King Card” in

association with ICICI Bank, in August 2005. This was meant to create loyal

customers for KFA by providing benefits like privileged access to lounges,

restaurants, free refreshments at airports, access to 180 golf clubs across India, special

invites for lifest.

Thus by implementing all this measures kingfisher succeeded to have a loyal customer base.

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RECOMMENDATION FOR FUTURE STRATEGIES

Can tie up with Corporate and Government Companies by

Providing Unique Travel Solutions for Professional and

Personal Use. Can implement programs implemented by South

West Airlines to penetrate market.

Seek additional distribution channels such as more tie ups and

collaboration.

Market

Penetration

Product

Development

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Collaboration with international carriers, bilateral discussions

over seats and code sharing between the carriers.

Special offerings for first time fliers.

Try to find out new customer group such as old-retired

persons.

Can enter into other Transport Services like Bus Services

between Major Cities and Other Services.

Market

Development

Diversification