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1. INTRODUCTION The airline industry is one of the fastest growing modes of travel and tourism. But this industry faces numerous challenges over the years. Increasing fuels costs, logistics cost, over- crowed airports and other issues have impacted air travel. Recently the airline industry reformed and repositioned itself on marketing to the consumer. Without marketing effort it is impossible to establish itself in market. . Nowadays, the airline industry is extremely competitive and has become essential to modernize marketing plans to target consumers in order to persuade them to fly and fly with their company. Utilizing the seven P’s of Marketing which are product, price, promotion place, people, process and physical evidence, the airline industry is trying to reclaim consumer confidence as well as present and future business 1 . Aviation has been recognized as one of the fastest growing sectors in India. With the modernization, technological development and fleet expansion, the Indian Aviation Sector has experienced drastic changes in the recent past. Now, a large number of people prefer to travel by air transport due to the lack of time and rising disposable income. Consequently, the domestic and international air traffic in the aviation sector has been registering a phenomenal growth over the past few years. In FY 2010, the domestic air traffic stood at approximately 46 million against 40 million in FY 2009, an increase of about 15 per cent. Indian domestic market is dominated by Jet Airways. Jet JET AIRWAYS MARKETING STRATEGY Page 1

Transcript of essayzone.comessayzone.com/essay_store/897_4eb481a0c7cf0.docx · Web viewJet Airways is the first...

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1. INTRODUCTIONThe airline industry is one of the fastest growing modes of travel and tourism. But this

industry faces numerous challenges over the years. Increasing fuels costs, logistics

cost, over-crowed airports and other issues have impacted air travel. Recently the

airline industry reformed and repositioned itself on marketing to the consumer. Without

marketing effort it is impossible to establish itself in market. . Nowadays, the airline

industry is extremely competitive and has become essential to modernize marketing

plans to target consumers in order to persuade them to fly and fly with their company.

Utilizing the seven P’s of Marketing which are product, price, promotion place, people,

process and physical evidence, the airline industry is trying to reclaim consumer

confidence as well as present and future business1.

Aviation has been recognized as one of the fastest growing sectors in India. With the

modernization, technological development and fleet expansion, the Indian Aviation

Sector has experienced drastic changes in the recent past. Now, a large number of

people prefer to travel by air transport due to the lack of time and rising disposable

income. Consequently, the domestic and international air traffic in the aviation sector

has been registering a phenomenal growth over the past few years. In FY 2010, the

domestic air traffic stood at approximately 46 million against 40 million in FY 2009, an

increase of about 15 per cent. Indian domestic market is dominated by Jet Airways. Jet

Airway operated its services in domestic as well as internationally. Jet Airways provide

world class service to their customer that is way people preferred to travel in Jet

Airways.

2. JET AIRWAYSJet Airways Private Limited is the Indian’s fastest growing private airline. At present it

captures a market share of 27%. Jet operates a relatively young fleet of Boeing 737 jets

and ATR 72 turboprops. It transporting about 7 millions passengers to their destination

in year. Its commitment for punctuality and excellent service attracts large proportion of

travelers. The founder of Jet Airways, Naresh Goyal, an Indian expatriate living in

London. Jet airways started its first international flight in March 22, 2004. Now it

operates many international flight including London and Brussels9.

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2.1 Jet Airways Profile

Jet Airways started its operation on 5 May, 1993 and within a short period of 17 years

established itself as a fastest growing market leader. It establishes its position as one of

the fastest growing airlines in the world. Now-a-days it set to change the way you fly –

for the better! Beside India’s ‘Best Domestic Airline’, Jet Airways has won several

national and international awards.

Jet airways spread its business to

65 domestic and 20 international

destinations span the length and

breadth of India and beyond,

including New York (both JFK and

Newark), Toronto, Brussels,

London (Heathrow), Hong Kong,

Singapore, Kuala Lumpur,

Colombo, Bangkok, Kathmandu, Dhaka, Kuwait, Bahrain, Muscat, Doha, Riyadh,

Jeddah, Abu Dhabi and Dubai. Jet Airways is the first choice of passengers in India. It

sets those standards which other competing airlines will seek to match. Jet Airways

achieve this position by providing a high quality of service and reliable, comfortable and

efficient operations.

Jet Airways will achieve these goals together with consistent profitability, long-term

returns for the investors and providing excellent environment for their employee to

growth.

After the acquisition of Air Saharea in April 2007, it renamed as Jet Lite. Jet Lite is a

wholly owned subsidiary of the Jet Airways. Currently Jet Lite operates a fleet size of 24

aircrafts flying to 31 destination in domestic market and around 127 flights operate daily.

Jet Lite also flying to international destination Colombo (Sri Lanka) and Kathmandu

(Nepal).

Naresh Goyal, the founder chairman of Jet Airways. He has over 38 years of experience

in the Civil Aviation sector. Many national and international awards are awarded to

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Naresh Goyal. Under his leadership, Jet Airways has

emerged as one of India’s most preferred airlines.

In 1991, as part of the ongoing diversification programme of

his business activities, Mr. Naresh Goyal took advantage of

the opening of the Indian economy and the enunciation of the

Open Skies Policy by the Government of India to set up Jet

Airways for the operation of scheduled air services on domestic sectors in India. Jet

Airways commenced commercial operations on May 05, 1993.

In these short period of 17 years, Jet Airways become one of largest private domestic

airline and most preferred by frequent travelers due to its high quality of comfort,

courtesy, high quality in-ground services as well as in-flight services9.

 2.2 Jet Airways – Jet Airways Konnect

Jet airways launched other airline with no frills ‘Jet Konnect’ airlines on 9 May, 2009

with eight aircraft on board. Jet airways Ltd launched Jet Airways Knonnect to cover two

tier cities like Ahmadabad, Amritsar, Bengalur, Mubai, New Delhi etc. Jet Airways

Konnect is mainly designed to attract middle class people as the fares they offer are 10-

15 percent economic as compared to jet airways flights. Jet airways Konnect does not

compromise to any aviation experience. The only difference between Jet Airways and

Jet Airways Konnect is that in Jet Airways Konnect, passengers need to buying meal

on board. However all other control of in flight services handle by jet airways and its

employees.

On September 2009, Many Jet Airways pilots went to strike by reporting sick and failing

to turn up for duty. By doing this pilots are protesting against the dismissal of two senior

pilots last by the airline. Due to this strike Jet Airways had to cancel over 160 domestic

flights. This pilots strikes ended after five days which led to cancellation of 800 flights.

According to media due to this strike Jet Airways £4.79millions a day9.

2.3 Jet Airways – International

In March 2004, Jet Airways started its International operation after getting green signal

from Indian Government to do so. Its first international flight operated between Chennai-

Colombo (Sri Lanka).

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In May 2005, Jet Airways started Mumbai-London service and on October 2005, it

started New Delhi-London service. On August 2006, it started Amritsar-London service

and on April 2007, Ahmadabad-London service began.

Jet Airways declared Brussels Airport as its European hub on 2 May, 2007. Jet Airways

want to use this hub for its Trans Atlantic North American operations. It started its

Mumbai-Brussels-Newark service on August 2007 and after that it began Delhi-

Brussels-Toronto service and Chennai-Brussels-New York city service.

After that it started many international service and continue to adding services to new

destination in the Middle East and connecting existing international destinations to

additional cities in India.

2.3 Jet Airways – Market AnalysisJet Airways operates both domestic and international flights therefore it has both

domestic and international competitors.

International competitors: The international competitors are:

British Airways

South West Airlines

Domestic competitors: The domestic competitors are:

Kingfisher

Indian Airline

Go Air

Spice Jet

Indigo

Jet Airways is domestic

market leader. The pi graph

clearly shows that Jet

Airways is hold around 27%

market share.

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2.4 Jet Airways – Milestones1993 – Jet airways begin domestic operation flying Boeing 737 jet.

1997 – Kuwait airways and Gulf Air sell their stakes in Jet airways

1999 – A regional network is launched with turboprop aircraft

2004 – First international service are started

2.5 Awards and AchivementsSkytax gave 3 Star rating to Jet Airways.

Best First-Class Service in the World award at Business Traveller’s 20th

annual ‘Best in Business Travel’ awards

Full Service Airline by 2006 Galileo Express Travelworld for the sixth year in a

row

Nice Customer Service by Freddie Awards 2007

Indian Domestic Airline with Spectacular Growth at the SATTE 2006 Awards

Best Business Class & Best Economy Class at the Business Traveller Awards

Best Program of the Year by Freddie Awards 2007 & 2006

Best Elite Level for the second year in a row, at the 21st Annual presentation

ceremony of the Freddie Awards 2008

Best Bonus Promotion by Freddie Mercury Awards 2005

Best Overall in Entertainment at the Avion Awards 2010

India's Popular Domestic Airline at the SATTE 2006 Awards

Best Single In-Flight Audio Program at the Avion Awards 2006

India’s Airline at the World Travel Awards, 2006

Best Technical Despatch Reliability by Beaver 2002

Customer and Brand Loyalty award in the Commercial Airlines Sector

(Domestic), at the second Goyal Awards

Best Cargo Airline of North Asia by Cargo Airline of the Year Awards

Best Domestic Airline award for the 1st consecutive year and the 5th time in

the past two years at the 18th TTG (Travel Trade Gazette) Travel Awards 2007

Service Excellence Award at Global Managers in Jurassic Park, Sudan.

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India’s Most Respected Company in the Travel and Food Sector by Business

world 2003

Runner up for Best Affinity Credit Card by Freddie Awards 2006

Runner up for Best Website by Freddie Awards 5

3.MARKETING MIX OF JET AIRWAYSThe term "marketing mix" became popularized after Neil H. Borden published his 1964

article, The Concept of the Marketing Mix. Borden began using the term in his teaching

in the late 1940's after James Culliton had described the marketing manager as a

"mixer of ingredients". The ingredients in Borden's marketing mix included product

planning, pricing, branding, distribution channels, personal selling, advertising,

promotions, packaging, display, servicing, physical handling, and fact finding and

analysis. E. Jerome McCarthy later grouped these ingredients into the four categories

that today are known as the 4 P's of marketing, depicted below:

1. Product

2. Price

3. Place

4. Promotion2

These four P's are the

parameters that the

marketing manager can

control, subject to the

internal and external

constraints of the

marketing environment.

The goal is to make

decisions that center the four P's on the customers in the target market in order to

create perceived value and generate a positive response.

In addition to the traditional four Ps it is now customary to add some more Ps to the mix

to give us Seven Ps. The additional Ps have been added because today marketing is

far more customer oriented than ever before, and because the service sector of the

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economy has come to dominate economic activity in this country. These 3 extra Ps are

particularly relevant to this new extended service mix.4

3.1 ProductIn airlines industry products are both tangible as well as intangible. ‘Transportation’ that

is ‘From the point of departure to the point of arrival’ is the major product of this industry.

For example London to Bombay is a product. The airlines industry product is quite

complex from other products because it consists of a service of certain tangible

products also. Airline industry comprises of two types of services: One is on ground

services and other is in-flight services. Jet Airways consists of both tangible as well as

intangible products.

3.1.1 On ground services

On ground services of jet airways consists of:

Check-In option: Jet Airways provide check-in for their flight from 48 hours to 2 hours

prior to the scheduled departure time. Jet Airways offers various check-in options to

choose from.

You can save time by checking in online or on your mobile phone or simply visit the

airport and check-in using their new age Kiosk machine to avoid long queues at the

check-in counter.

Airport lounges: Jet airways lounges are fully operational in 8 cities, including Brussels,

Delhi, Mumbai and Chennai.

Access to Jet Lounge at New Delhi, Bangalore, Hyderabad, Mumbai and

Brussels

Airport with multiple lounges, guests service, staff assistance with the suitable

lounge.

Passengers of first class or premiere class can access lounge with one

accompanying guest.

Special services: Jet Airways understand the special needs of the some of the

passengers. Jet Airways provide some of the special requirements so that all

passengers can travel in comfort way. Some of the special services are: Infant and child

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care, expectant mothers, unaccompanied minors, guest with disabilities, medical case,

extra seat, travelling with pets etc.

Infant and child care5:

3.1.2 In-flight services The in-flight services of jet airway vary from the different level of class in the aircraft.

Jet Airways consists of three level of classes, First Class, Business Class and Economy

Class.

Seating options: Jet Airways provide three seating options for their passengers:

First Class: Under first class seating, jet airways provide private suites with fully closing

doors, a lie-flat bed seat, mood lighting and a private wardrobe. For entertainment a 23

inch flat screen TV, complete with Bose noise cancelling headphone is provided.

Business Class: For business class also called premiere class, the seating on jet

airways varies from flight to flight. For domestic flights, the seats are extra wide, with

personal screen. For international flights, the seats are in a herringbone formation and

become a lie-flat bed, with 10.6 inch touch screen TV and a reading light.

Economy Class: For economy class, the seats are ergonomically designed so that when

you recline, the bottom automatically moves forward to give more comfortable seating

position. Beside this international flight consists of 10.6 inch touch screen TV and a

reading light.

Beverages, meals and entertainment: Jet Airways offers a wide variety of food,

beverage and entertainment options depending on flights as given below:

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First Class: Jet airways offers large range of movies, TV shows, audio and gaming

options on TV. Food and beverage offers depend on the flight. But on international flight

one can personalize a five-course meal from a selection of world-class cuisines, choose

from a collection of award winning wines, explore the exclusive single malt library or

cocktails, all in the privacy of your suite.

Business Class: For business class, jet airways offer a wide range of movies, TV

shows, audio and gaming on LCD TV. The range of food and beverages depends of the

flight but on international flights, fine dining and beverages are serve with snacks from

the dry bar.

Economy Class: Jet airways offers a wide range of movies, TV shows, audio and

gaming options on LCD TV. Food and beverage availability depends on the flight, but a

range of hot meals and beverages are available to every Economy Class passenger5.

3.1.3 Jet MobileJet Airways provide a real-time fully automatic service to their guests with instant

information on their mobile phone. Using Jet Mobile service, one can access information

related to flight status, schedules, set alerts or automatically receive flight delay

message. Now-a-day, one can also request their Jet Privilege account information or

search for the lowest fares on Jet Airways flights5.

3.1.4 QR CodesJet Airways is first Indian aviation industry that introducing Quick Response (QR) codes.

Jet Airways constantly endeavor to use new and emerging digital technology. Recently

it adopted latest “Quick Response (QR) mobile code access technology”. Using this

technology passengers can access new and additional information about various

offering using their smartphone6.

3.1.5 Mobile SiteJet Airways now tailored its website to fit in mobile phone. Now there is no need to go

and sit on computer to access jetairways.com. You can access it from your GPRS

enable mobile phone5.

3.1.6 Jet MallJet mail is whole new experience of shopping. Jet mail is collection of finest

international poducts that have been put together by ELVY (a partner of Jet Airways).

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Passengers can find jet mail catalogue in all seat pockets. To order an product jest fill in

the order from and hand it over to the crew. You can also order online5.

3.1.7 Concession FaresSince Jet Airways cannot completely cut down their fares, but it come out with an

innovative idea to attract more customers. It offers different concessional fares to

passengers which encourage them to fly with Jet Airways. Jet Airways offers

concessional fares to:

Students

Senior citizen

Cancer patient

Armed forces

Youth fares

Apex fares

Super-apex fares5

3.2. PricingIn airline industry pricing decision play a decisive role. The concept of fair price is very

important for this industry because lot of competition. Pricing can be classified in three

ways:

Cheap value pricing: This pricing decision is taken to undercut the competition and

trigger immediate sale tickets. However under this pricing the profit level low.

Value of money pricing: Under this method, products are sale at average price and is

emphasized that customers get excellent value for money at this price. Under this price

airline able to achieve good profit.

Premium pricing: In this method, the prices are set above the market price either to

reflect the image of quality or the unique status of the product.

Pricing of Jet AirwaysThere are three level of classes in Jet airways that is first class, business class and

economy class. These classes influences the pricing strategy of jet airways. Higher the

class means higher the pricing and lower the class mean lower pricing. For example the

pricing of jet airways flight between Bombay-London varies as given below:

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First Class: Rs. 3,21,628

Business Class: Rs. 1,13,184

Economy Class: Rs. 49,000

Beside these there are some other factors that affect the pricing of jet airways. One of

the major factor is seasons. For instant the pricing of London flights in Christmas

season is higher compare to other seasons.

3.3. PromotionIn airline service, there is intense price competition and the solution to this is to develop

a differentiated offer, delivery and image. A company that innovates regularly may help

to retain its customers. Services are intangible product and to be successfully promoted,

they have to be personalized.

Travel agencies play a key role in promoting airlines services. Word-of-mouth is the

best form of publicity and it has a significant role to play in promoting airline services.

There are many other ways to promote airlines. For instance, media play an important

role in promoting airline industry through television and other modes.

Promotion of Jet Airways

It gives its Club Premiere passengers travelling on domestic routes within India

the opportunity to own some of the world’s most respected brands.

The first offering from the new service named “Jet Good Life” is an original

masterpiece by the renowned Master of Art, M.F.Hussain, in association with

ABM AMRO Van Gough Preferred Banking.

Jet airways has for the past three years been rewarding its customers under “Jet

Elite Surprise” umbrella where prices worth Rs. 3 crores have been given in

association with the several key sponsor brand such as Sony, IBM, Rolex, Tissot,

Ford, Toyota etc.

Jet airways in collaboration with Citibank offers a Visa card also known as

Platinum and Business Card for its Jet Privilege members who are the regular

flyers with jet.

Shahrukh Khan a famous bollywood actor is a member of Jet airways and

therefore he has appeared in their TV commercials6.

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3.4. PlaceThe airline industry is very much different from other therefore this face of marketing

mix is more to do with the networks they are involved in. The distributions of airlines are

depend on the access to certain destination and airports. However, airlines who aspire

to be a dominant global leader would have few options on this front. Easy accessibility

should be the main criteria in selecting the place.

The air transport organisation has to make sure that the prospects don’t face any

difficulty while buying tickets and make necessary arrangement for the confirmation of

the booking.

Place of Jet airwaysJet airways should ensure that it has an office which easily accessible to the airport.

This make the reservation, confirmation and other flight enquires or detail to be checked

easily and quickly. In case office is not nearby the airport, it should at least leave a

contact number of its concerned department with the customers.

The electrifying ambience of the offices put lifetime image of the company in the mind of

the customers. In Chatrapati Shivaji Internation Airport, Mumbai, Jet airways office

helps the passengers in making it easy to approach the office in case of an emergency.

3.5. PeopleIn the service industry there is

direct contact between the service

provider and the user in the course

of production and consumption of

service. Thus the service provider

have extra ordinary abilities like

he/she should be competent,

caring attitude, responsible, take

initiative and have ability to resolve

difficult situations.

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While delivering the service, the airline should ensure that the service is delivered as

promised otherwise it give negative impact on the customers. The people involved in

the airline industry can be referred to as the ‘Airline Personnel’. The airline personnel

can be Flight Crew Members or Ground Crew Members.

The jet airways ticketing agent come under direct contact with customers they are

known as ground crew members. While in flight services, air hostess and other cabin

crew come in direct contact with the passengers. These are known as flight crew

members.

3.6. ProcessThe actual procedure, mechanisations and flow of activities by which the service is

delivered is known as process. The mode by which airlines delivers their services are

informing, guiding and helping the customers. The airlines are constantly making every

effort to redefine the procedures in order to enhance the level of service satisfaction.

Jet airways always ready to helps its customers by informing right and accurate status

of the flights detail in order to achieve customer satisfaction. They are striving hard to

enhance the level of satisfaction of the customers that is from being good to become the

best.

Jet airways provide numerous of check in options in order to make the flight procedure

easy and comfortable. The customers can choose the following check-in options: Airport

check-in, Tele check-in, Web check-in, Kiosk check-in and Sms check-in

3.7. Physical EvidenceThe environment in which the service is be delivered and where the service industry

and the customers interact is known as ‘Physical Evidence’. The exterior look of aircraft

should be good and it is well maintained. It must have elegant interior and well-designed

seats.

Jet airways ensuring to deliver quality services to its customer continuously. The

aircrafts of jet airways have good exterior and also maintained in an excellent manner.

The interior maintain in such a manner that passengers pleasant, comfortable and enjoy

the flight6.

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4. RECOMMENDATION

Jet airways can tie up with corporate and Government companies by providing

Unique Travel Services for distribution and personal use. It can also implement

the program implemented by South West

Airlines to penetrate market.

For product development it can seek additional

distribution channel such as more tie up and

collaboration. It can also collaborate with

international carriers, bilateral discussion over

seats and code sharing with carriers.

For market development it can offer more

discount and attractive offers to first time fliers.

It can also try to find out new customer group such as retired old people to

increase market share.

For diversification it can also enter to other transport sector such as bus services

to major cities.

5. CONCLUSONAirline industry can have a tremendous growth in the market provided it uses the

marketing mix in right and effective way. Jet airways a leading airline has recognized

the need and requirement of the customers and has applied the 7 P’s of marketing in an

effective way in order to ensure optimum customer satisfaction. One can also say the

Jet airways is the most preferred domestic airline in India and it has earned a brand

name for itself by achieving a pre-eminent position by offering a high quality of service

and reliable, comfortable and efficient operation. Jet airways has also upgraded the

concept of domestic airline travel to a world class domestic airline.

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REFERENCES

1. Stephen Shaw, 2007; Airline marketing and management, Ashgate Publishing Ltd.

2. Cuningham, W., Glisson, L., Harris, J., Lorenzo-Aiss, J., 1996, Airline Industry

strategic Alliances: Marketing and Policy Implications, MCB University Press

3. Victor T.C Middletorn, Jlan Fyall, Michael Morgan, Ashok Ranchhod, 2009, Marketing

in Travel and Tourism 4th edition.

4. Service Marketing Mix, the 7’s P, online access on 10 June, 2011

http://www.marketingteacher.com/lesson-store/lesson-marketing-mix.html

5. Jet Airways official Site, Online access on 10 June, 2011

http://www.jetairways.com/EN/IN/Home.aspx

6. Jet Airways adopt QR code, online access on 14 June, 2011

http://www.mobilemarketingmagazine.co.uk/content/jet-airways-adopts-qr-codes

7. The marketing mix, online access on 15 June, 2011

http://www.thetimes100.co.uk/theory/theory--the-extended-marketing-mix-7ps--319.php

8. The marketing mix, online access on 15 June, 2011

http://www.thetimes100.co.uk/theory/theory--the-extended-marketing-mix-7ps--319.php

9. Jet Airways India Pvt Limited – Company History, online access on 20 June, 2011

http://www.fundinguniverse.com/company-histories/Jet-Airways-India-Private-Limited-

Company-History.html

11. Jet Airways – India, online access on 20 June, 2011.

http://in.omgpm.com/affiliate/case_studies/jet_airways.aspx

JET AIRWAYS MARKETING STRATEGY Page 15