Indigo Airlines - International Marketing - Met Students

MET STUDENTSGROUP 7

Sanjana Iyer 19 Rahul Nair 32Rajesh Shetty 47Savio Fernandes 12Ismile Shaikh 43Austin Trindade 55

TOPICS TO BE COVERED

• INDIGO AIRLINES FACTS

• VISION & MISSION

• SWOT ANALYSIS

• PESTEL ANALYSIS

• STP

• PORTER’S 5 FORCES

• LOGICAL FLOWCHART FORENTRY DECISION

• MARKETING PLAN - INDIGO AIRLINES

• COMMUNICATION – CAMPAIGNS & ADS

• THE FLY AHEAD

Fleet size of

93 aircraft ,

considered asone of thelargest in India

NET INCOME of

US$

2.2bn in

struggling Indian market Within short period

of time indigo covered market

share of 27 %

Lowest no of

complaints per passenger

Phase out aircraftolder than

6year to keep

an average agelow

RAHUL BHATIA IS the

Founder of Indigo airlinesunder parent companyInterglobe

Provides service to

38 destination

in India & abroad

Company operates

633

flights daily

Indigo has given the biggest order to airbus of

US$ 25.7

Billion

Indigo operates

the A320

family of aircraft inits fleet

On time performance of

93.4 % as on

November 2014

Only profitable

airline company in India

Single largest

order of 250

brand new

A320neo

aircraft

Fastest aircraft

turnaround times in the industry, while its manpower-aircraft ratio is among the lowest.

Indigo is the

No. 1

airline in Indian Market

• Indigo's stuck to its low-cost, single class model unlike rivals Jet Airways.

• Selling and leasing back planes helps its balance sheet

• Quality and detail key to good service

• It’s all about customer focus Using technology smartly

A d i t y a G h o s h , P r e s i d e n t

R a h u l B h a t i a , M D

INDIGO AIRLINES

MISSION & VISION

S – W – O – T Analysis

1. Low fares2. High Service Quality3. Operational

Efficiency4. Customer Service5. Short haul flights6. Fuel Efficient

Aircrafts

1. Less differentiation2. Short lived

innovations3. Untapped domestic

cargo segment4. No established

alliances5. Lack of product

depth and breadth

1. Increasing middle class population

2. Increase in domestic tourism

3. Booming air cargo business

4. Chartered Services5. Tap International

Destinations

1. Fluctuating ATF prices

2. Economic slowdown3. Government policies4. Technological

advancement in communication

Open Sky Policy/ Deregulation (+)Low Entry Barriers (+)49 % for airlines100% for airportsExtensive airports development planned

Growing Middle Class Income (+)Consistent GDP Growth (+)Hike in average income (+)Growth in Tourism (+)Rising ATF Price (-)

Modernized Airports (+)Better handling of Aircrafts, passengers and Cargo (+)Video-conferencing/VoIP (-)

Growing Middle Class (+)Domestic Leisure Travel (+)Foreign Tourist (+)Status Symbol (+)Security Issues & Terrorism (-)

Legislative Compliance Requirements (+)Allegations of misleading Advertising (-)Anti Competitive Behavior (+)

This analysis is a framework or tool used by marketers to analyze and monitor the macro environmental (external marketing environment) factors that have an impact on an organization

PESTEL ANALYSIS FOR AIRLINE INDUSTRY IN INDIA

Green House & Carbon Emissions (-)Noise Control Levels (-)Infrastructure Capacity (-)

Segmenting Targeting & Positioning

Cost Conscious Passengers

Lower Middle Class/ Middle

Class

Low Cost travelers First time travelers

We first (1) determine which kinds of customers exist, then (2) select which oneswe are best off trying to serve and, finally, (3) implement our segmentation byoptimizing our products/services for that segment and communicating that wehave made the choice to distinguish ourselves that way.

MICHAEL PORTER’S 5 Forces

• LowProductdifferentiationinbasicservices• Low Switch cost for Customers but high for

airlines• Openskypolicyforforeignentrants• Veryhighset-upcosts• Increasing fuelprices• Shortfall+Highcostofskilledresources-Pilots

• Duopoly in AircraftMarket- Low bargainingpowerwithairlines

• Switch cost to othersuppliers is high

• Shortage of CommercialPilotsinIndia

• LimitedSuppliersofATFinIndia

• High number of buyersfragmented-lowerstheirpower

• With high number of buyers,growthopportunitiesarealsohigh

• Switchcostsareminimalforbuyers

• VerylittleproductdifferentiationinServices

• Mature Industry- Only scope forgrowth by gaining other people’smarketshare

• High bargaining power ofsuppliers

• No sense of brand royaltyamongst customers and caneasilyswitchtootherairlines

• Indirect Substitutes are railways- but notpowerfulasairlines,scorehighlyintraveltime

• However direct substitutes are other LowCostCarriers–sinceswitchcostislow,threatofsubstitutesishigh

• Communication Advancements withTechnology

Do we have products & service that can be marketed abroad?

Should we investigate foreign markets?

Does preliminary screening indicate PT country markets?

Does secondary data analysis indicate a country with high

sales potential?

Do primary (field) data support secondary data?

Is our entry mode the most appropriate mode, given external factors & our objectives?

Is our marketing plan the most appropriate one, given our resources & objectives?

Should we enter the foreign market now?

Operations

Is our performance satisfactory?

Redesign entry mode

Redesign Marketing plan

Delay Entry

Redesign Strategy

Continue to exploit home market only

Withdraw

LOGICAL FLOWCHART OF ENTRY DECISION PROCESS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Other Airlines

Indigo

0%

5%

10%

15%

20%

25%

30%

35%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Market Share

Market Share

MARKET SHARE IN DOMESTIC MARKET

Current Fleet Size of Indian Airline Companies

Expected Fleet Size

CURRENT & EXPECTED FLEET SIZE





sales potential?





Operations


Redesign entry mode


Delay Entry

Redesign Strategy


Withdraw


BIG FISH, SMALL POND

SMALL FISH , BIG POND

DOMESTIC MARKET INTERNATIONAL MARKET



Does preliminary screening indicate ’PT’ country markets?


sales potential?





Operations


Redesign entry mode


Delay Entry

Redesign Strategy


Withdraw


POTENTIAL TARGET MARKETS





sales potential?





Operations


Redesign entry mode


Delay Entry

Redesign Strategy


Withdraw


POTENTIAL TARGET MARKET DATA

4.90%

5.27% 5.30%

2.97%

2.50%

2.81%2.91%

3.00%

4.10%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

0

500000

1000000

1500000

2000000

2500000

2011-2012 2012-2013 2013-2014

Qatar Hongkong Malaysia Qatar Hongkong Malaysia

INTERNATIONAL PASSENGER TRAFFIC TO & FROM INDIA TO THE FOLLOWING CITIES BY ALL AIRLINES FOR LAST THREE YEARS

LCC MARKET SHARE





sales potential?





Operations


Redesign entry mode


Delay Entry

Redesign Strategy


Withdraw


PRIMARY DATA

COMPANYS OVERALL PERFORMANCE





sales potential?





Operations


Redesign entry mode


Delay Entry

Redesign Strategy


Withdraw


CHOOSING THE MODE OF ENTRY

Decision Criteria for Mode of Entry

– Market Size and Growth

– Risk

– Government Regulations

– Competitive Environment/Cultural Distance

– Local Infrastructure

Creating Strategic Alliances

• Types of Strategic Alliances

– Simple licensing agreements between two partners

– Market-based alliances

– Operations and logistics alliances

– Operations-based alliances

27

• The Logic Behind Strategic Alliances

– Defend

– Catch-Up

– Remain

– Restructure

CREATING STRATEGIC ALLIANCES

REASONS FOR ALLIANCES• Commitment and support of

the top of the partners’organizations

• Strong alliance managers arethe key

• Alliances between partnersthat are related in terms ofproducts, technologies, andmarkets

• Have similar, assets sizes andventuring experience

• Tend to start on a narrowbasis and broaden over time

• A shared vision on goals andmutual benefits

Star Alliance27 members

Founded 1997

SkyTeam20 members

Founded 2000

Oneworld15 members

Founded 1999

Rest of Industry(Largest Airlines)

Passengers per year 653.81 million 588 million 512.3 million 1.223 billion

Countries 193 177 155204 (total countries)

Destinations 1,321 1,052 1,0104,000 (total destinations)

Fleet size 4,561 4,634 3,428 11,082

Employees 410,274 481,691 389,788

Revenue Billion US$ 177.42 186.331 143.2311,651.325 (1,550)

Daily departures: 18,521 16,323 14,296

ALLIANCES

MembersAdria AirwaysAegean Airlines - 2010Air Canada - FounderAir China - 2007Air India - 2014Air New Zealand - 1999All Nippon Airways - 1999Asiana Airlines - 2003Austrian Airlines - 2000Avianca - 2012Brussels Airlines - 2009Copa Airlines - 2012Croatia Airlines - 2004EgyptAir - 2008Ethiopian Airlines - 2011EVA Air - 2013LOT Polish Airlines - 2003Lufthansa - FounderScandinavian Airlines-FounderShenzhen Airlines - 2012Singapore Airlines - 2000South African Airways 2006Swiss International Air Lines – 2006

TAP Portugal - 2005Thai AirwaysInternational - Founder

Turkish Airlines - 2008United Airlines – Founder

MembersAeroflot - 2006Aerolíneas Argentinas - 2012Aeroméxico - FounderAir Europa - 2007Air France - FounderAlitalia - 2001–2009 Aeree Italiane - 2009China Airlines - 2011China Eastern Airlines - 2011China Southern Airlines - 2007Czech Airlines - 2001Delta Air Lines - FounderGaruda Indonesia - 2014Kenya Airways - 2007KLM - 2004Korean Air - FounderMiddle East Airlines - 2014Saudia - 2012TAROM - 2010Vietnam Airlines - 2011Xiamen Airlines – 2012

MembersAir Berlin -2012American Airlines - FounderBritish Airways - FounderCathay Pacific - FounderFinnair- 1999Iberia Airlines - 1999Japan Airlines - 2007LAN Airlines - 2000Malaysia Airlines - 2013Qantas - FounderQatar Airways -2013Royal Jordanian - 2007Sriklankan Airlines -2014S7 Airlines - 2010TAM Airlines -2014

Africa(AH) Air Algérie(MD) Air Madagascar(UU) Air Austral(HM) Air Seychelles(MK) Air Mauritius(W3) Airk Air(AT) Royal Air Maroc

Asia(AK) Air Asia(NX) Air Macau(PG) Bangkok Airways(DZ) Donghai Airlines(LY) El Al(EK) Emirates(EY) Etihad Airways(G8) Go Air(GF) Gulf Air(HU) Hainan Airlines(6E) Indigo(9W) Jet Airways(7C) Jeju Air(JT) Lion Air(W5) Mahan Air(WY) Oman Air(PK) Pakistan Airlines(PR) Philippine Airlines(BI) Royal Brunei Airlines(SC) Shandong Airlines(3U) Sichuan Airlines(SG) Spice Jet(9C) Spring Airlines(UK) Vistara(TR) Tiger air(IY) Yemenia

North America(AS) Alaska Airlines(F9) Frontier Airlines(HA) Hawaiian Airlines(B6) JetBlue(WN) Southwest Airlines(NK) Spirit Airlines(VX) Virgin America(WS) WestJet

Australia(SB) Air calin(PX) Air Niugini(TH) Air Tahiti Nui(FJ) Fiji Airways(VA) Virgin Australia

South America(AD) Azul(G3) Gol Transportes Aéreos

Europe(EI) Aer Lingus(BT) Air Baltic(JU) Air Serbia(U2) Easy Jet(BE) Fly be(IG) Meridiana(ZB) Monarch Airlines(DY) Norwegian Air Shuttle(PC) Pegasus Airlines(FR) Ryan air(UN) Transaero(PS) Ukraine Intl Airlines(U6) Ural Airlines(UT) UTair Aviation(VS) Virgin Atlantic

Star Alliance27 members

SkyTeam20 members

Oneworld15 members

Rest of Industry(Largest Airlines)

STRATEGIC ALLIANCES - ONE WORLD

POTENTIAL TARGET MARKETS

HUB

Australia

Japan

South Korea

Malaysia

EUROPE

AFRICA

SOUTH AMERCIA

UNITED STATES OF AMERICA

ASIAMIDDLE

EAST

$783bn World Revenue $140bn One World Revenue $2.2bn Indigo Revenue

Vision of One world

To be the first choice airline alliance for frequent international travellers

• Making global travel smoother, easier, better value and more rewarding.

• Offering travel solutions beyond the reach of any airline's individual network.

• Providing a common commitment to high standards of quality, service and safety.

• Delivering its airlines with savings and benefits greater than any can achieve by itself.

Stat’s of One world

One world current member airlines and members elect:

• Serve more than a 1000 destinations in 155countries.

• Carry more than 510 million passengers a year

• Operate combined fleets totalling some 3,500aircraft.

• Offer more than 14,250 flights a day - an average ofone world airline departure or arrival somewherearound the world every three seconds around theclock.

• Generate more than US$140 billion in annualrevenues.

Why an Alliance with One world?

• One world enables its member airlines to offer services beyond what any individual carrier can provide by itself or bilaterally with another partner.

– Global coverage

– Better value

– More rewards and recognition

– More miles and points

– More lounges

– Smoother transfers

– Superior quality

– Greater support





sales potential?





Operations


Redesign entry mode


Delay Entry

Redesign Strategy


Withdraw


THREE STAGES APPROACH

MARKETING PLAN - INDIGO AIRLINES

STAGE 1TANGIBILITY & INTANGIBILITY

STAGE 2MARKETING MIX - 7 PS

STAGE 3RECOMMENDATIONS

Build on strength Meet the Global challenge

and increase its footprint Increase depth by venturing

into cargo and charteredairlines

Continue being close to thecustomer by being consistentin their services and comfortto customers

Come up with innovativeofferings

Increase tie-ups with hotelsand banks

Continue to improveorganizational development,which is a critical to airlines

Price: Value for Money Pricing/ Load factor/ Seasonality/ Competitive

pricing /Profit margins

Place: Tour operators/ Online/ Travel Agent/ Affiliated with companies &

Overseas Market, Website

Promotion: ADVT In Partner alliance countries, press Launch & loyalty

Programme

People: Team of skilled & competent flight and ground crew members & Employees

Process: International standard practiced globally by oneworld

Physical Evidence – The service itself

Product/Service: The air transport serviceINDIGO AIRLINES

INTANGIBLE RESOURCES

Brand Equity/Reputation

Social Capital

Brand AwarenessEmployee Relationship

MAJOR COMPETITORSGo Air, Jet Airways,

Spice jet, Air India

Vistara Airlines, Air Asia

TANGIBLE RESOURCES

AircraftsHuman Resources

Fuel

Communication – Campaigns & Ad’s

Sponsoring fashion shows, talenthunts, new year parties, etc. Collaboration with consumer banks,credit card companies, hotels, ticketingwebsites to promote special offers,discount, cash back etc.

Hoarding at airports with focus on Best on Time performance Advertisement through social networking medium like Facebook, Twitter, etc. Collaboration with multiplexes in major cities to promote the airline and itsoffers Hoardings in multistoried buildings and offices Ads in magazines targeting urban population

Sending special offers to frequent fliers through sms, email, etc.

Promoting in regional languages in respective sectors thus giving a local flavor

Communication – Campaigns & Ad’s





sales potential?





Operations


Redesign entry mode


Delay Entry

Redesign Strategy


Withdraw


SPORTS

TOURISM

HOSPITALITY

WIDE CULTURE

INVESTMENT OPPORTUNITIES

MANUFACTURINGHUB

RISE OF START UPS

GROWING SCIENTIFIC RESEARCH

MOVIES & MUSIC

INDIAN INTERNATIONAL

CELEBRITIES

INSPIRATION

EASY LIVING

GLOBAL PRESENCEGROWING POPULATIONFOR CONSUMPTION

SPACE ROCKET GROWTH

INDIA A LUCRATIVE DESTINATION





sales potential?





Operations


Redesign entry mode


Delay Entry

Redesign Strategy


Withdraw


DOMESTIC PERFORMANCE

EXPECTED FUTURE PERFORMANCE EVALUATION

THE FLY AHEAD

• Indigo will have over 45% of thecapacity of all low-cost carriers in 2017-18& become a large market player in LCC

• It will get delivery of fuel-efficient A-320Neo from end 2015

• Long haul flights capacity will betested and practices would be putin place for his operations in nearfuture.

• It plans to be the majorcontributor for ONE WORLDAlliance in gaining the marketshare in Asia's & Middle East

THANK YOU

Indigo Airlines - International Marketing - Met Students

Education

Transcript of Indigo Airlines - International Marketing - Met Students