52162406 IndiGo Airlines Marketing Plan

7/29/2019 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

52162406 IndiGo Airlines Marketing Plan

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