Introduction to the company

Previously, AirAsia, a low cost carrier caters air flights domestically and internationally
was owned by DRB-Hicom, a government-linked company. However, in 2001, the
heavily indebted airline was bought over by the Tune Company Sdn Bhd owned by Tony
Fernandes. Fernandes turned AirAsia into a profit-making company within two year.
AirAsia’s vision is ‘to be the largest low cost airline in Asia and serving the 3 billion
people who are currently underserved with poor connectivity and high fares’(AirAsia,
n.d). Within a short term period, Airasia, a no frill airline became famous for Malaysian
low cost airline and also Asia’s largest low airfare (Airasia Information Technology, n.d).
Airasia’s vision is to make sure money is not a hindrance to travelling. Airasia is also
popular for their no frill Airasia airfares can be purchased via online
(http://www.airasia.com) or at the Airasia main hub in Kuala Lumpur International
Airport (KLIA), Malaysia. This essay written is to discuss on how Airasia communicate,
deliver and produce the value of product and services to the market. Also, it will study
the target market, positioning, differentiation and marketing mix.

Target Market
Airasia’s market segmentation variables are demographic, psychographic and
behavioural. To meet the slogan ‘Now everyone can fly’(figure 1), low fare strategy was
implemented to fulfil the wants of the lower and middle class earners (social class) who
cannot afford the airfare or to travel abroad to meet their families during special
occasions (Airasia, n.d). Group of customers consisting of adults, children (figure 2) and
disabled people (figure 3) from any age group (figure 2) regardless of gender, whether
male or female (figure 2) who are cost conscious (psychographic) who loves to travel
(lifestyle) both domestically and globally either for leisure or business purposes (usage
occasion).Target market is significant to avoid wastage of time and resources.

Value demanded by target market

The values demanded by the target market are:

● Affordable air ticket that is value for money

● Safety of an aircraft
● Comfortable airline seat and leg room
● Clean surrounding
● Fast and simple self-check in procedure
● Appealing interior of the Airasia’s aircraft
● Good services and facilities
● Variety meals for customer to choose (as food and beverages are not covered by
the low no frills airline
● An enjoyable flying experience
Positioning
Perceptual map

Perceptual map of low cost carrier airline targeted for price conscious travellers (figure
17) (X-axis: high quality of services by the cabin crews, Y-axis: price of airfares)

Based on the perceptual map above, Firefly provides the second highest quality of
services by the cabin crews but charges the highest price compared to the others. In this
case, target market are cost conscious travellers, therefore, most people will not buy
Firefly air ticket as it is more expensive. Airasia offers the lowest airfare price and the
highest quality of services by the cabin crews in comparison with others (figure 17). In
conclusion, AirAsia is the best choice as they provide highest quality of services by the
cabin crews and affordable airfares for the target market. Also, the uniqueness of AirAsia
is their 7th consecutive years of winning the World’s Low-Cost Airline Award, World’s
Best Long Low-Cost airline in Norwegian and Best Low-Cost Airline in Europe, these
demonstrates that the products and services standard provided by Airasia are remarkable.
Moreover, this will further improve the brand image of AirAsia (Skytrax World Airline
Awards, n.d).
Differentiation
Product differentiation is crucial for corporations as it distinguishes the product
differences between rivals which appeals to the target market. One of Airasia’s product
differentiation is the aircraft used to transport customers from one destination to another.
The uniqueness of Airasia is that the aircraft used is the new A330neo aircraft compared
to other low cost carrier (Harty, 2014). The new aircraft has an evidently proven record of
low operating costs which keeps the air fare low for the public, long range flying
capability which can travel for longer distance and high levels of comfort for an
enjoyable flying experience catered specially for Airasia’s customers. (The Star Online,
2014).

In an airline industry, services differentiation is pivotal for the corporation as they

primarily serves customers daily. To attract repeat customers, the services must made in
differentiation compared to the other competitors. In order to achieve success in the long
time frame, the corporation has to build trust to maintain their regular customers.
Excellent customer services provided will most likely gain loyalty from consumers
(Gwinner, Gremler & Bitner, 1998). Hence, Airasia instils important values in their
employees such as caring, passionate, hardworking and more. For instance, AirAsia cater
exclusive services to the disabled guest by providing a care line services centre for any
enquiry and booking (Airasia, n.d). Also, other airlines do provide this services through
email and telephone but to display remarkable concern and care, AirAsia provides live
chat services for the convenience of their customers. Furthermore, Airasia’s
advertisements portray images of fun and friendly cabin crews (Airasia, n.d). The
objective of the advertisement is to show the public that they are providing a fun and
friendly service.

Companies can acquire a strong competitive advantage through the recruitment and
training of the staff and workers (Jerome & Kleiner, 1995). Reputation and image of the
employees play a vital role as it reflects on the quality and image of the company. As for
Airasia, the cabin crews play a big part as a front liner who deals directly with customers.
Thus, Airasia’s cabin crew recruitment strictly requires candidates to possess an
outgoing, fun and stunning personality (Airasia, 2015). In addition, training was provided
and is held in AirAsia Academy for the betterment of the employees. The aim is to
educate and develop high skilled and certified workers. In turn, these enhances skills and
values that will reflect on Airasia’s reputation.

According to Lim, Mohamed & Ariffin (2009), the tagline ‘Now everyone can fly’
(figure 1) encloses the brand vision. Every word signifies a meaning behind it. They also
pointed out that the word ‘now’ encapsulates that formerly, air travel was deemed to be
an extravagant living, however now with the existence of Airasia, wealth will not be a
constraint to travelling. Also, the word ‘everyone’ indicates that each and everyone has
an opportunity to fly in spite of age, gender, social class, status and more. Furthermore,
the big red AirAsia (figure 18) cursive writing on a white background display boldness,
fun and simplicity. Moreover, Lim, Mohamed & Ariffin (2009) stated that the tagline
‘Now everyone can fly’ (figure 1) conveys a message to the public that AirAsia offers the
lowest air fare to the community. This is the image differentiation between Airasia and
other airline companies in comparison.

Marketing Mix

Product
The product is divided into 3 levels which are core, actual, augmented product. By
purchasing the air ticket, the consumers are able to core benefit from the time-constraint
transport. An example of an actual product is the Airasia air ticket to Australia.
Moreover, augmented product is when the customers receive the value before, during and
after the flight. For instance, Airasia provides customer loyalty program named ‘AirAsia
BIG’ (figure 4). Customer are able to earn points by flying more frequently with Airasia.

Price
Airasia practices customer-segment pricing and time pricing. Customer-segment pricing
is that different customers pay at a different price for the same product and services. It is
evidently shown that Airasia charges cheaper airfare deal for children compared to adults.
For instance, air fare from Guangzhou to Kuala Lumpur, for children it is RM 302.08,
whereas for adults it is RM 357.08 (figure 16). Furthermore, time pricing is when prices
are charged differently from time to time. For instance, early bird customers are charged
at a lower rate (figure 6). Also, cheaper deals are offered during the non-peak season
compared to the peak season (figure 5) to encourage more people to fly.

Promotion
Airasia offers attractive airfare promotions to the public through social media such as
Twitter, Facebook (figure 15), digital media for instance websites and mass media such as
advertisement through television, radio, newspaper (figure 7) and more. Further
information regarding the booking of deals and airfare offered can be obtain via Airasia’s
website. Variety of deals are offered ranging from many destinations and time period to
cater the wants and needs of the society. Also, for a rise in sales of the air ticket, AirAsia
offers free seats and further discount for the airfares during the non-peak season and
publishes in the internet and newspaper (figure 5).

Place
Airasia encourages customers to purchase airfare via online by offering cheaper deals
compared to at the sales counter. There will be an online 24 hours reservation system in
the airasia website for the convenience of the customers to do online booking any time
anywhere (figure 8). Customers also can purchase directly via sales counter in the airport
(KLIA) (figure 9). Also, there is a covenant between the travel agencies and Airasia that
there is an inclusion of airfares in their tour package (figure 10). By doing so, public can
follow the tours organized and also fly with Airasia.

People
Airasia strictly recruits qualified people to be their staff. For instance, for safety reasons,
Airasia employs experienced pilots (figure 11). Another example, to hire cabin crew
members, interested applicants have to go through numerous of procedures including
fulfilling the academic and height requirements before proceeding to the next stage. They
also have to go through interview, health check and many more. AirAsia’s staff also
receive first class training in AirAsia academy so that they will be more skilful,
responsible, hardworking and well-mannered. In turn, AirAsia staff are not only full of
integrity but caring, passionate, fun and safety conscious towards the customers which
positively affects the image of the company.

Process
The process consist of checking in procedure, flight information, facilities at the airport,
quality of services delivered and reservation. Airasia provides mobile check-in procedure
(figure 12) and E-boarding pass for the convenience of the customers (figure 13).

Physical evidence
Physical evidence of the quality of the service is important as it persuades the customer
that they are receiving a distinctive product. Airasia shows physical evidence on the
ground and in the flight. Sales counters have a clean surrounding with helpful and
friendly workers (figure 9). The aircraft also have a good interior design with good
ambience (figure 14) that will attract and convince the customers that they are receiving
exclusive services.

(1647 words)
Appendix

Figure 1 Figure 2

Figure 3 Figure 4
Figure 5 Figure 6

Figure 7 Figure 8 (www.airasia.com)

Figure 9
 Figure 10

Figure 11 (https://www.linkedin.com/title/captain-at-airasia)
Figure 12

Figure 13
 Figure 14

Figure 15 (https://www.facebook.com/AirAsia)
Figure 16 (https://booking.airasia.com/Flight/Select)
Figure 17 (www.farecompare.com)

Figure 18
Reference list

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/special-guests.page

Airasia. (n.d). All for one. One for all. Retrieved from http://www.airasia.com/my/en/
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Airasia Information Technology. (n.d). Airasia Background. Retrieved from http://airasia

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Gwinner, K. P., Gremler, D. D., & Bitner, M. J. (1998). Relational benefits in services
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Harty, J. (2014, December 15). AirAsia X Places Firm Order for 55 A330neos. Airways
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firm-order-for-55-a330neos/

Jerome, L., Kleiner, B.H., (1995). Employee morale and its impact on service: What
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Lim, K. Y., Mohamed, R., & Ariffin, A. (2009). Branding an airline: A Case Study of
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Skytrax World Airline Award. (2015). The World's Best Low-Cost Airlines in 2015.
Retrieved from http://www.worldairlineawards.com/Awards/worlds_best_
lowcost_airlines.html

The Star Online. (2014). AirAsia X to buy 55 A330neo planes for RM53.3bil.
Retrieved from http://www.thestar.com.my/Business/Business-News/2014/12
/16/AirAsia-X-to-buy-55-A330neo-planes-forRM533bil/?style=biz