Posted: May 25th, 2022

Low Cost Airline Marketing Communications

Marketing Communications Management for New Brand of Low Cost Airline in Thailand

Low Cost Airline Marketing Communications Management

Opening a new company is always a risky decision, especially during the crisis or in an industry like the airlines industry. But the correct assessment of business opportunities and threats and the correct allocation of financial resources can help counteract these risks raised by the business environment. Therefore, it is important to conduct a thorough market study before addressing the airlines industry in Thailand.

The market entry strategy should be based on the characteristics of the industry sector addressed by the business owners, and on the needs of the targeted customer segments. The airlines industry in Thailand presents certain characteristics that allow for new companies to enter the market, by addressing niche business sectors.

The following pages focus on analyzing the Thai airlines industry, the factors affecting this industry and the companies that address this market, and will propose a strategy for a new low-cost airlines company that intends to address this market. The new company is Bowling Asia Airline. The company intends to target customers with low and medium incomes that travel more or less frequently. This is an opportunity that the company can exploit in its attempt to enter the Thai airlines industry and to gain significant market share based on these customer segments.

In order to develop a suitable strategy for the company in case, it is important to take into consideration the competition in the airlines industry in Thailand. The main competitors of Bowling Asia Airline are analyzed in the paper. The strategy proposed for the company also takes into consideration an approach to the competitors of the company.

1. Situation Analysis

The airlines industry is one of the business activities that have been significantly affected by the global financial crisis. As a consequence, the purchase and consumption behavior of customers has modified in accordance with the incomes modifications experienced by most employees. Consumers tend to orient towards cheaper products and services. Airlines services make no exception.

Therefore, the situation favors established airlines companies that have the financial power that allows them to support price reductions and other promotions intended to attract customers, and to low cost airlines that want to enter the market. The economic situation of consumers in Thailand justifies the need for a new low cost airline company.

1.1. External Factors

The activity of the company is influenced by a series of external factors that include: the economic, legal, social, technical, geographical, and organizational environment.

Economic environment

The country’s economy benefits from a well-developed infrastructure, free-enterprise characteristics, with pro-investment policies, and intensified exports activity (CIA, 2010). Thailand experiences continuous economic growth, following the Asian financial crisis (the Economist, 2010). The country’s economy relies on its exports, which have been significantly affected by the economic and financial crisis (TDS, 2009). In order to counteract the effects of the crisis, the country’s government intends to stimulate investments in the private sector (EconomyWatch, 2010).

Legal environment

Thailand’s legal system is based on civil law and common law. The executive branch is represented by the chief of state, the head of government, and the cabinet. The legislative branch is represented by the bicameral National Assembly consisting in the Senate and the House of Representatives. The judicial branch is represented by the Constitutional Court, the Supreme Court of Justice, and the Supreme Administrative Court (Infoplease, 2010).

Social environment

The country’s population reaches 67,089,500. The urban population is of 33% of the total population (Travel Document Systems, 2010). The characteristics of the country’s population allow for economic developments.

1.2. Company Analysis

Bowling Asia Airline is a new low cost airlines company that comes to support the needs of customers that cannot afford to spend important sums of money on regular flights. The company addresses customer segments with lower incomes that need to fly often, usually because of their jobs.

The company is organized in a flexible structure that is able to adapt to the rapid changes determined by the external environment. In the beginning, the company will function with the minimum number of employees in order to reduce investment costs and the financial capital required from the company’s owners.

The market entry strategy that the company intends to implement on the Thai market is based on providing low cost prices for the company’s products and services that represents Bowling Asia Airline’s competitive advantage, and on providing a series of promotions for customers that fly on a regular basis to certain destinations.

1.3. Market Analysis

The most important challenges that currently affect the low cost airlines market are represented by the recession and the fuel price escalation. In order to counteract the effects of these factors, major companies in this industry buy more aircraft, increase services, and reduce prices (the Times, 2008). This is because specialists in the field consider that growth in this industry is not sustainable, and airlines companies must change their business model in order to remain profitable.

However, the airlines market presents different characteristics in different markets. Although the developed countries present fewer options for new companies that intend to address this industry, emerging markets, like the Asian and African ones, provide growth possibilities for low cost airlines companies (Ford, 2005).

2. Air Asia Analysis

2.1. Overview

Air Asia is the company’s main competitor and represents the pioneer of low cost airlines in Asia (the New York Times, 2007). Air Asia was established in 1993 and provides domestic and international flights. The company’s subsidiaries are: Thai Air Asia, Indonesia Air Asia, VietJet Air Asia, and Air Asia RedTix.

The company’s fleet size is of 103 planes. Air Asia flies to 68 destinations. Air Asia’s associate companies include: Air Asia X, Tune Hotels, and Tune Money.

2.2. Segmentation

Given the fact that Air Asia is expanding, the company must fill in its increased capacity while consumer spending is reduced and competition in this business increases. The customer segments that Air Asia addresses are: non-business passengers for short and long routes, price-conscious business passengers for short and long routes, and quality-conscious business passengers for short and long routes.

2.3. Targeting

Air Asia intends to attract customers by exploiting its product differentiation, offering lower costs in comparison with competitors, increasing the number of seats in each aircraft, reducing maintenance fees, addressing new routes, providing numerous regional and international flights.

2.4. Positioning

The company positions itself as the leader on the lost cost airline industry in Asia. This is because Air Asia is the first low cost airlines company in this region. As a consequence, the company has the advantage of being able to initiate moves and strategies on the market, which determine its competitors to follow and to develop strategies in order to adapt to the trends imposed by Air Asia.

The fact that the company is an established brand on the market allows Air Asia to establish the rules in this industry sector, to determine the level of prices in this market, and to determine the type of strategies that are the most suitable for this industry.

2.5. Communications Strategy

The company’s communications strategy is based on Air Asia’s website. The company’s website provides important information on its products and services. The company provides call center services, where interested customer can find out necessary information, and sales office contact information where customers and business partners can express their opinions.

Air Asia has also created a magazine for its customers. The company’s website also allows customers to purchase online packages.

3. Nok Air Analysis

3.1. Overview

Nok Air is another competitor of Bowling Air Asia. Nok Air is a low cost airlines company established in Thailand in 2003. The company’s fleet is consisted of 3 planes. The company provides domestic and international flights to 6 destinations in India, Thailand, and Vietnam. Although Nok Air is a company of a significantly reduced size in comparison with Air Asia, the company represents direct competition for Bowling Air Asia and must be granted attention in accordance with the situation.

3.2. Segmentation

Nok Air focuses on the mid-market in this industry. The company’s fares are higher in comparison with those of other low cost companies, which means the company is not interested in addressing price-sensitive customers.

The company is oriented towards non-business passengers with medium incomes for short and long routes, business passengers for short and long routes, and quality-sensitive passengers for short and long routes.

3.3. Targeting

Nok Air intends to increase its number of customers by providing high quality products and services. However, the company’s fares are higher than those of competition. By introducing such prices, the company is unable to address customer segments characterized by price sensitivity. This limits the customer base of the company.

3.4. Positioning

Given the fact that Air Asia is the leader in the low cost airlines industry, Nok Air is one of the followers. The reduced pcapacity of Nok Air does not allow the company to improve its position on the market. In order to attempt to the leading position in this industry, Nok Air must invest in expanding its business.

3.5. Communications Strategy

The company has developed and implemented an innovative communications strategy in order to attract more customers. Therefore, the company sells its tickets through cash machines, mobile phone networks, convenience stores, and movie rental shops (Sobie, 2006). The company has also organized a series of parties where customers are invited to learn about the company’s products and services and to participate in a series of games and other activities.

4. Bowling Asia Airline Communications Plan

4.1. Context Analysis

Bowling Asia Airline intends to entry the low cost airlines market in Thailand. The characteristic of the market require financial entry barriers. In other words, the company needs substantial capital in organizing its activity. The financial crisis does not provide the ideal conditions for companies that want to enter this market.

Because of reduced incomes, customers that used to fly with low cost carriers on a regular basis have found cheaper transportation means. Some of the low cost airlines companies in Asia complain about significant reductions in the number of customers that purchase their products and services.

However, the same situation can prove to be quite profitable for other companies in this industry. For example, customers that normally fly with regular companies, currently orient towards low cost airlines companies because they cannot afford to pay the high prices of other companies. This usually applies to business passengers.

4.1.1. Marketing Objective

Bowling Asia Airline’s objectives include: increasing the number of passengers by 15% in 6 months, increasing the volume of sales by 10% in 6 months, and reaching a 12% market share.

It is difficult to estimate the incomes that the company can obtain. This is because the fares that the company establishes initially could be reduced in accordance with the response of the public. In other words, if the company does not reach its sales targets, the company should reduce some of the prices or offer a series or promotional prices in order to attract t more customers.

4.2. Communications Objectives

The main objective that the communication plan must reach consists in informing as many customers as possible about Bowling Asia Airline’s services. The communications plan must increase the notoriety of the company in Thailand and in the international markets the company intends to address.

The definition of public relations consists in doing something great and talking about it. This is what the company must accomplish through its communications plan. Bowling Asia Airline must develop a products and pricing strategy that suits the needs of the targeted customer segments. Furthermore, the company must communicate this to potential customers.

It is important that the communication plan addresses the exact customer segments that the company intends to target. Otherwise, the communications plan will be inefficient. In order to reduce costs with the implementation strategy, the company should choose the communications channels that are most suitable for the customer segments in case. For example, in the case of the business passengers that do not watch commercial TV channels, the company should address by using business magazines instead of promoting itself through TV ads.

Also, in order to develop an efficient communications plan it is recommended that the company uses the help of specialized companies. This is because marketing companies are able to conduct thorough market studies that allow them to identify the characteristics of the market and of the targeted customer segments.

They also have the ability and knowledge of selecting the most suitable marketing channels and marketing tools that vary from one business activity to another. Their connections with other companies allow them to get the best price for marketing services, therefore allowing Bowling Asia Airline to reduce communications costs.

4.3. Communication Strategy

4.3.1. Target Audience

4.3.1.1. Primary Target

The main customer segment that Bowling Asia Airline intends to address is represented by young individuals, male and female, aged 20-35, first jobber or students. Their income varies between 300-600 and 15,000-30,000 baht per month. They have mainly white collar jobs. These customers have at least a high school diploma.

Given the economic characteristics of this customer segment, the company must take into consideration that these customers are price sensitive. They are mostly oriented towards promotions regarding the prices of the products and services that they intend to purchase.

The reason for selecting this difficult customer segment relies on the fact that Bowling Asia airline assesses the potential of these customers. If the company manages to attract these customers with certain incentives, they can become loyal customers and address the company for a longer period of time.

As mentioned above, they are students or first jobbers. As they develop their careers and financial status, the company can benefit from their development and create a solid customer base that Bowling Asia Airline can rely on.

4.3.1.2. Secondary Target

The secondary customer segment that Bowling Asia intends to target is represented by older individuals, male o female, aged 50-65. These customers are also price sensitive. Given the fact that some of them are retired, their incomes do not allow for expensive travel packages. Therefore, the company intends to provide travel packages that satisfy the needs of this customer segment.

Some of the members of this customer segment use airlines companies for vacation travel purposes. The company should identify the preferred destinations of these customers and make efforts into addressing them. This could help the company develop a loyal customer base. The use of promotional campaigns in certain period would also help the company gain significant market share and increase the number of customers that purchase the company’s products and services.

4.3.2. Pull, Push, and Profile Communication Strategy

Given the fact that push strategies are developed in order to promote the company’s products and services to wholesalers and retailers so that the company forces its products on the distribution channel, the business activity of Bowling Asia Airline does not support this type of communications strategy.

The pull strategy ensure direct communication with the customers, which means the company should focus on this type of communication in order to reach its communication objectives. The company should therefore develop and implement an aggressive advertising campaign that targets the customers through numerous marketing channels.

The message of the advertising campaign should be differentiated in accordance with each customer segment it addresses. This is because these customer segments have different characteristics, are motivated by different factors, and require different marketing channels for communications.

The profile strategy ensures the development and implementation of the company’s corporate promotional objectives. This means that the company should initiate and maintain a continuous dialogue with the customer segments is addresses.

4.4. Integrated Communication Plan

4.4.1. Above the Line Communication

As mentioned above, the different characteristics of the customer segments targeted by Bowling Asia Airline require that different marketing channels are used in the company’s communication strategy (AllExperts, 2006). Therefore, it is recommended that the company develops a series of TV commercials that are aired during the periods when the company’s potential customers are most likely to watch TV.

Newspapers and magazines also represent a communication channel that the company should address. Bowling Asia Airline should buy promotional space in newspapers and sports and business magazines.

4.4.2. Below the Line Communication

In order to reach its communications objectives, it is required that Bowling Asia airline also uses below the line communication. In this case, the company should focus on tourism and travel exhibitions and trade fairs. Sponsorships of certain events, like sports competitions, are also recommended. This helps the company reach a larger audience for its communication strategy.

4.4.3. New Media Advertising

Some of the customer segments addressed by Bowling Asia Airline require modern advertising techniques. This refers to websites, blogs, and search engines. The company should create its own website where Bowling Asia Airline presents the company’s activity, its products and services, and other useful information for the company’s customers. In addition to this, the company’s website should provide the opportunity to purchase travel packages online.

A series of blogs regarding travel and tourism can promote Bowling Asia Airline’s products and services. Search engines are also quite useful in increasing the notoriety of the company.

4.5. International Launch

The company will develop an international launch campaign for the UK. This is because this destination is one of the most preferred destinations for Bowling Asia Airline’s customers. In addition to this, the UK market presents significant growth potential for the company. This would allow Bowling Asia Airline to expand its activity in other countries also.

5. Conclusions

The economic environment that characterizes world nowadays has determined a series of factors to influence the activity of existing companies and the development of companies that intend to enter certain markets. The environment is quite unstable, making it difficult for companies to anticipate their sales volume or to determine the purchase and consumption behavior of their customers.

Bowling Asia Airline intends to entry the low cost airlines industry in Thailand. Competition is quite strong in this region, which makes it difficult for the company to develop a significant customer base. Therefore, the company should provide low prices in comparison with its competitors in order to attract more customers. The company should also focus on developing and implementing a sustainable marketing campaign that allows the company to increase the number of customers and to gain market share.

Reference list:

1. Thailand (2010). Central Intelligence Agency. The World Factbook. Retrieved November 6, 2010 from https://www.cia.gov/library/publications/the-world-factbook/geos/th.html.

2. Low-Cost Airlines Hit by Recession and Fuel Price Escalation (2008). The Times. Retrieved November 6, 2010 from http://business.timesonline.co.uk/tol/business/columnists/article3662046.ece.

3. Ford, N. (2005). Low Cost Airlines Increase Market Share. African Business. Retrieved November 6, 2010 from http://findarticles.com/p/articles/mi_qa5327/is_315/ai_n29225741/.

4. Does Low Cost Mean High Risk? (2007). The New York Times. Retrieved November 6, 2010 from http://www.nytimes.com/2007/12/23/travel/23prac.html?_r=1&ref=yourmoney.

5. Sobie, B. (2006). Nok Air’s Patee Brings Advertising Tricks to the Industry. Flightglobal. Retrieved November 6, 2010 from http://www.flightglobal.com/articles/2006/09/15/209012/nok-airs-patee-brings-advertising-tricks-to-the-industry.html.

6. Above the line Advertising (2006). AllExperts. Retrieved November 7, 2010 from http://en.allexperts.com/q/Marketing-1090/above-line-advertising.htm.

7. Thailand Economy (2009). Travel Document Systems. Retrieve’d November 7, 2010 from http://www.traveldocs.com/th/economy.htm.

8. Thailand (2010). The Economist. Retrieved November 7, 2010 from http://www.economist.com/countries/thailand/.

9. Thailand’s Economy (2010). Economy Watch. Retrieved November 7, 2010 from http://www.economywatch.com/world_economy/thailand/.

10. Thailand (2010). Retrieved November 7, 2010 from http://www.infoplease.com/ce6/world/A0861510.html.

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