Marketing strategy for Indigo

Mark@Inc.
Adding flight to your wings

Aditi S. Dhabu 0014/49

Kunal Joshi 0172/49
Akshay K. Mahajan 0180/49
Relook at the current segmentation process
 Existing segments (identified in Existing Segmentation New segmentation
case) not mutually exclusive
• Corporate • Reliability
collectively exhaustive
• SME • Consumer Insights • Comfort
 Need for segmenting based on
• Leisure • Literature Review • Price
benefits sought - based on in-
• VFR • Price-quality
depth interviews with 42 people
• Student • Service flexibility
and literature review
Purpose-based segmentation Benefit-based segmentation

Segment Description Favourability to Indigo

Outcome
Target Segments
“I need efficiency • Seek reliability, sensitive to delays, switch brands easily
and punctuality” • Low price sensitivity
High
• Reliability
• Seek benefits from FFP, catering and flexibility • Price
“I want comfort”
• Price is most irrelevant
Low
• Price-quality
“I am hard-pressed • Personal benefits of minor importance
on price” • High price sensitivity
Medium
“I am price- • Seek mix of price and quality Next Step
conscious and • Low tolerance to delays, ready to pay premium for High
quality seeking” punctuality Analysing current
“I want flexibility • High decision autonomy positioning w.r.t. new
across all offerings” • Hard to address due to multiple benefits sought
Low segmentation process
 Positioning Strategy– Aiming that spot in consumer’s mind
Objective of our study
Assess current positioning
Analyze positioning & brand personality with respect to new TG
Suggest measures to strengthen and fortify positioning further

Consumer Insights Big Insight 1 Big Insight 2 Big Insight 3

with Brand Personality & Positioning

Parameters Analyzed in 42 in-
depth interviews Brand Personality
•In-flight behavior
•Travel habits, needs

Resonance
•Post flight evaluation Talkability &
•Perception of IndiGo Reinforcement
Enhance involvement by
Leading Global LCCs Analyzed improving brand talkability to
Current Positioning
fortify positioning

• On Time Insights 1 2 3
• Low Cost
• Hassle-free Next Step
• Courteous Entire consumer experience should Product &
resonate brand personality Promotion Strategy
 Positioning Strategy– Aiming that spot in consumer’s mind
PRODUCT STRATEGY PROMOTION STRATEGY

Planning Phase Aim

Value-seeking Segment prefers booking hotels/cabs Improve Talkability,
with flight tickets Customer Involvement

Cross-sell ibis-InterGlobe Hotels (group synergy)

Pre-flight Waiting Phase Channel: Social Media

Most travelers buy beverages & light snacks at the airport
- Price is a major deterrent Driver for Success : Volume of visitors
Tie-up with shops for a discount for IndiGo
customers

Post-travel Phase DEALS CONTENT

Booking cabs after flight adds to hassle Groupon Deals for booking CONTESTS like
Pre-paid cab booking at destination available before well before the travel date “My IndiGo Story” depicting
even boarding the flight- cuts down the hassle and sharing awesome travel
Last minute deals through experiences
social media for increased
Observations Recommendations interaction
 Going global – identifying geographies for growth
Macro-economic trends Future plans Industry trends LCC market Proposed airports
(growth, industry, aviation (geographic (competitive (players, (Growth sectors &
Region Verdict
sector, ease of doing expansion, landscape, costs, competitor their distances upon
business, ATF prices) aircraft deliveries) new sectors) moves) entering)
Addis Ababa, Nairobi,
Africa
Cairo, Morocco

Europe Istanbul, Brussels/Paris

Dubai, Doha, Abu

Middle East
Dhabi

North America Atlanta, New York

Rio de Janeiro, Sao

Latin America
Paulo, Venezuela
Colombo, Dhaka
South Asia

Hong Kong,
North Asia
Guangzhou, Shanghai
South-East Bangkok, Singapore,
Asia Jakarta

See Appendix 1 for further details on each geography Favorability for IndiGo’s
next phase of growth Low High
 Going global – designing the market strategy
 Continue with LCC model
Gradually

Product
move to
orange
Europe sweet spot
Benefits by 2016
North Asia
Cost
3 China, Japan, Korea
2  Consumer segmentation is consistent across
S-E Asia geographies => keep the TG consistent as in

Promotion
Africa 1 India => Keep positioning & personality same
1 Indonesia, Malaysia,
Philippines  Enter each market with the 3S communication
e.g. “Sheikh it Baby” campaign for Dubai
India  Re-inforce low-cost, hassle-free and on-time
Middle-East as strong PoP; 3S as PoD
Dubai, Abu
Dhabi, Doha  Hub-and-spoke model with a difference –
distance between hubs and India to be less

Place
Chronological order Order Year of entry Area Hub Other major cities than 8 hours (to keep only 1 aircraft size and 1
of entry based on: skill base to reduce costs)
1 2013 Middle-East Dubai Doha, Abu Dhabi  New hubs to fuel growth post 2015-16
1.Growth sectors
2.Region growth 1 2013 South-East Asia Singapore Bangkok, Jakarta
3.Density of Indians  Pricing to be based on regional sensitivities:

Price
2 2014/15 North Asia Guangzhou Hong Kong, Shanghai ATF prices, infrastructure, aviation
3 2015-16 East Europe Istanbul West Europe penetration, LCC penetration
 Appendix 1
Analysis of geographies for future growth – sample analysis
Macro-economic trends Future plans
(growth, industry, aviation
sector, ease of doing
business, ATF prices)
Strong state protectionism
AFRICA
Poor safety records
High taxes
Under-developed infra
Strong recovery in Libya
7 of 10 highest growth
economies present in Africa
19% rise in ATF costs
EUROPE
Slim growth forecasts
Emissions trading scheme
Industry trends
(geographic (competitive landscape,
expansion, aircraft costs, new sectors)
deliveries)
Aircraft delivery peaking Downfall of SAA, power base
in 2013, negligible by Power shifting to East Africa
2017 Next growth in China-Africa
Growth in traffic post from Nairobi, Addis Ababa
Biggest hurdles – cost,
regulatory pressures
Aircraft delivery strong 2012 - year of bankruptcies
till 2022 Healthy growth rate of 8%
Expansion likely to East Turkey-Africa showing
Africa growth
Other regions were analysed using the similar framework
LCC market Proposed airports
(players, competitor (Growth sectors &
moves) their distances upon
entering)
Currently untested Addiis Ababa
Fastjet trying to make a Nairobi
pan-Africa LCC network Cairo
Ryanair set base in Morocco
Morocco
High penetration (30%) Istanbul
NAS ordered 321 planes
by 2022, launching long-
hauls to NY and London
Big 3 airlines starting LCCs
Easyjet operating in 49 out
of top 100 market pairs
Appendix 2
Key References
 “Customer segmentation revisited: The case of the airline industry”, Teichert et al, August 2006
 “Success Story: Airline Segmentation Model”, Cogent Analytics, 2012
 “The State of Airline Marketing”, Simpliflying, April 2013
 “North Asia’s LCCs”, Peter Harbison, 2012’
 “InterGlobe to open 13 ibis hotels across India by 2015”, The Hindu Business Line”, March 2013
 Indian Aviation Industry outlook, IBEF, last updated: June 2013
 “Special Report - Putting the Pieces Together”, IATA, 2013
 “Civil Aviation: Turbulence Ahead?”, McKinsey & Company, August 2013
 Analysis of the Indian Aviation Industry, CRISIL Research, 2010
 Airlines in the BRICS, Euromonitor, April 2013
 “A new formula for airline profits”, Forbes, February 2007
 Country Aviation Outlook reports, CAPA, 2013