FOREIGN TRADE UNIVERSITY

FACULTY OF ECONOMICS AND INTERNATIONAL BUSINESS

----------

GRADUATION THESIS
Major: International Business Economics

APPLYING MARKETING MIX (7Ps) TO IMPROVE

BUSINESS ACTIVITIES OF VIETJET AIR JOINT
STOCK CORPORATION IN VIETNAM
MARKETPLACE

Student’s Full Name : Do Thi Quynh Anh

Student ID : 1314150004
Class : A24 – High quality program
Intake : 52
Supervisor : Nguyen Ngoc Dat, MBA.

Ha Noi, December 2016

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TABLE OF CONTENTS
LIST OF ABBREVIATION ....................................................................................... iii
LIST OF FIGURES ......................................................................................................iv
LIST OF TABLES ......................................................................................................... v
INTRODUCTION ......................................................................................................... 1
CHAPTER 1: THEORETICAL BACKGROUND .................................................... 4
1.1. Marketing strategy definition ......................................................................... 4
1.1.1. Marketing .................................................................................................... 4
1.1.2. Marketing strategy ...................................................................................... 5
1.2. Marketing Mix (7Ps) ........................................................................................ 5
1.2.1. Product ........................................................................................................ 7
1.2.2. Pricing ......................................................................................................... 9
1.2.3. Place (distribution).................................................................................... 13
1.2.4. Promotion .................................................................................................. 17
1.2.5. People ........................................................................................................ 24
1.2.6. Process ....................................................................................................... 25
1.2.7. Physical evidence ...................................................................................... 25
CHAPTER 2: AN OVERVIEW ABOUT VIETJET AIR JOINT STOCK AND
THEIR SEGMENT IN VIETNAM MARKET ........................................................ 27
2.1. Vietnam Aviation marketplace ..................................................................... 27
2.1.1. Market overview ........................................................................................ 27
2.1.2. Airport development .................................................................................. 28
2.1.3. Market share ............................................................................................. 29
2.2. History of development.................................................................................. 30
2.2.1. History ....................................................................................................... 30
2.2.2. Exploiting achievements ........................................................................... 31
2.2.3. Development strategy ................................................................................ 32
2.3. Company structure ........................................................................................ 37
2.4. Competitor in Vietnam marketplace ........................................................... 37
2.4.1. Vietnam Airlines (VNA) ........................................................................... 37
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2.4.2. Jetstar Pacific Airlines (JPA) ................................................................... 38

2.5. Applying marketing mix (7Ps) in VJA’s business activities ...................... 40
2.5.1. Product ...................................................................................................... 40
2.5.2. Price ........................................................................................................... 54
2.5.3. Promotion .................................................................................................. 57
2.5.4. Place (Distribution) ................................................................................... 59
2.5.5. People ........................................................................................................ 61
2.5.6. Process ....................................................................................................... 63
2.5.7. Physical Evidence ..................................................................................... 64
2.6. VietJet Air’ SWOT Analysis ......................................................................... 65
2.6.1. Strengths .................................................................................................... 65
2.6.2. Weaknesses ................................................................................................ 65
2.6.3. Opportunities ............................................................................................. 66
2.6.4. Threats ....................................................................................................... 66
CHAPTER 3: SOME RECOMMENDATIONS FOR VIETJET AIR .................. 68
3.1. Mission ............................................................................................................ 68
3.2. Development orientation of Vietjet air in the next period ......................... 68
3.2.1. Development orientation of Vietnam civil transportation ....................... 68
3.2.2. Development orientation of VietJet Air ..................................................... 69
3.3. Recommendations .......................................................................................... 71
3.3.1. Development the inputs of the firm .......................................................... 71
3.3.2. Recommendation for marketing aspect ................................................... 73
3.3.3. Recommendations for the government .................................................... 75
CONCLUSION ............................................................................................................ 76
REFERENCE............................................................................................................... 77
APPENDICES
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LIST OF ABBREVIATION

Abbreviation Meaning
VJA VietJet Air
VNA Vietnam Airline
JPA Jestar Pacific Airline
WFDSA World Federation of Direct Selling Associations
IMC Integrated marketing communication
GDP Gross Domestic Product
ACV Airports Corporation of Vietnam
ADP Aéroports de Paris
IPO Initial Public Offering
VND Vietnam Dong
US US Dollar
WCHR Passengers requiring wheelchair for ramp
WCHS Passengers requiring wheelchair for step
WCHC Passengers requiring wheelchair for cabin
BLND Blind passengers
DEAF Deaf passengers
EXST Extra seat service
PREG Pregnant women
INF Infant
CHD Children
UM Unaccompanied minors
YPTA Young passengers travelling alone
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LIST OF FIGURES

Figures Title Page

Figure 1.1 7Ps Marketing Mix 6
Figure 1.2 Different between with and without distributor 14
Figure 2.1 Vietnam aviation development compared to other countries 27
Figure 2.2 Vietnam domestic capacities share (% of seats) in 2016 30
Figure 2.3 Meal plans of VJA 35
Figure 2.4 Company structure 37
Figure 2.5 VJA image 43
Figure 2.6 VJA souvenir 44
Figure 2.7 VJA souvenir 45
Figure 2.8 VJA food 46
Figure 2.9 VJA food and soft drink 47
Figure 2.10 VJA duty free catalog 48
Figure 2.11 VJA duty free catalog 49
Figure 2.12 VJA price list 56
Figure 2.13 VJA sky boss first launch 58
Figure 2.14 Connection XML API operation map 60
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LIST OF TABLES

Table Title Page

Table 1.1 Promotion tool kit 18
Table 2.1 Exploit achievement 32
Table 2.2 Total profit 2015 - 2016 32
Table 2.3 Jet star Pacific domestic destination from Ho Chi Minh by 39
weekly capacity in 2016
Table 3.1 Exploiting plan for 2017 70
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INTRODUCTION
1. Rationale
In recent year, along with the development of economy, Vietnam civil aviation
also achieve a lot of remarkable success. Therefore, the aviation industry continue to
change and improve to develop the quality, better service and plays an important role
for the National Budget.
In 2015, Vietnam's aviation market has made encouraging progress with an
average growth rate of 20%. Continue to implement the action program of the
government on international economic integration, Noi Bai international airport in
Vietnam actively invest heavily in infrastructure to meet development needs, trends
global integration. Airports today are expanding in size and infrastructure, modern
aircraft, fully equipped, air services comes increasingly diversified to meet the needs
of the people. The management of the real aircraft moving from classical to modern
methods with the media, technology and innovation. Improvement on equipment is an
improvement in capacity management, professional skills, quality of service and style
of service of staff, trained attendants and fostering domestic and foreign operations.
Vietnam is a potentially lucrative market for air transport. Regardless of the poor and
limited infrastructure system and the economic growth averaging at just above 5% per
year, the sector has experienced a dramatic annual two-digit growth at least over the
past ten years (Kraiser, 2013). According to Vietnam Aviation Authority (2015), there
were up to 17,5 million domestic seats purchased in 2015, increasing by 20,5% in
relation to 2014. International Air Transport Association evaluates that Vietnamese
airlines will possibly double or triple their fleets to serve the huge domestic population
of more than 90 million and the number of foreign visitors annually growing by
approximately 20%.

Besides the advances in technology as well as the development of Vietnam's

aviation industry poses challenges for the aviation business with a more competitive
environment, higher customer demand for the rules, international standards become
stricter. With the fierce competition between the airlines to take over the trust and the
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confidence of consumers, air VJA has adopted several strategic marketing solutions to
improve and enhance the quality of services to serve and satisfy customer needs stand.
The question is proposed that how VJA can stand out, compete with domestic
rivals to show its advantages and which strategy can they apply in Vietnam market
place. This question has lead the author to choose the topic “Applying marketing mix
(7Ps) to improve business activities of VietJetAir Joint Stock Corporation in
Vietnam market place” with the purpose of analyzing the environment and applying
marketing strategy of VJA. Thereby, the author could make recommendation on how
to address the change for the purpose of developing and improve business activities.
2. Objectives of the study
The study attempts to apply marketing mix (7Ps) in VJA marketing strategy in
order to build a marketing strategy to be excluded and unique in the marketplace. The
process will be analyze in 7 factors in 7Ps strategy.
From those projections, the author would give some implications on policies to
promote the development and competitiveness of the market.
3. The scope of the study
Within the framework of a graduation thesis, the author would like to confine the
scope of Vietnam aviation and the study focusing on strategy that VJA apply in
Vietnam market place. Moreover, coming up some implements and some of
recommendation to promote VJA image in Vietnam market.
The research object is VJA and Vietnam aviation market. The main country in
research would be Viet Nam market.
4. Research methodologies
Overall, the study employs statistical collection, information synthetization,
inductive and deductive methods. It collects and synthesizes a number of data and
information to present an overview of theories and arguments in chapter 1, to give out
assessment points in chapter 2. It uses inductive and deductive methods to express
ideas and present supporting arguments throughout the entire paper.

In addition, analysis (including comparison and contrast methods) is employed

very often in chapter 2 to draw comments and conclusions about the agreements’
impacts.
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5. Thesis structure

Apart from introduction, conclusion, references and appendices, the thesis

comprises the following sections as main elements.

Chapter 1: Theoretical background

Chapter 2: An overview about VJA joint stock and their segment in Vietnam market
place.

Chapter 3: Some recommendations for VietJet Air

The author would like to express deep gratitude to Mr. Nguyen Ngoc Dat for his
critical comments and encouraging support as a supervisor. He has employed his
strong research expertise and experience not only to orient the topic, structure the
outline but also to have overall and detailed looks into the study to help the author
accomplish it in a better way.

Being aware of the importance of the thesis, the author has paid serious attention
to study and research. However, due to limited time, reference resources and
professional competences as well as practical experience, the thesis does expose a
number of shortcomings. Thus, any feedback or comment for this study would be of
great value for the author to improve it later on.
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CHAPTER 1: THEORETICAL BACKGROUND
1.1. Marketing strategy definition
1.1.1. Marketing
Until now, there are many term that defined “marketing” in the world (about
2000 definitions). However, these definition basically are not different and the
interesting fact that none of them are exactly true, each of them has a good point to
observe.
According to businessdictionary.com, marketing is defined as “the management
process through which goods and services moves from concept to the customer” and
“marketing is based on thinking about business in term of customer needs and their
satisfaction”.
According to the American Marketing Association (AMA) Board of Directors,
Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large.
Or based on research, Dr. Philip Kotler defined marketing as “the science and art
of exploring, creating, and delivering value to satisfy the needs of a target market at a
profit. Marketing identifies unfulfilled needs and desires. It defines, measures and
quantifies the size of the identified market and the profit potential. It pinpoints which
segments the company is capable of serving best and it designs and promotes the
appropriate products and services.”(Kotler, 2015, p.1-50)
In the book Marketing - Essential techniques and strategies geared toward results,
Alexander Hiam stated that “Marketing is primarily about understanding people and
what makes them buy. It’s getting inside the customer’s head and trying to think as he
or she thinks” (Hiam & Rastelli, 2007, p.2)
In business, marketing is considered as “branding, naming, pricing and the bridge
between paid and earned media. It is not sale” - Gini Dietrich, Chief Executive Officer
of Arment Dietrich said.
In conclusion, basically, Marketing is business’s operation aiming to satisfy the
customer’s needs in the market to earn profit.
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1.1.2. Marketing strategy
Within any company, setting a good marketing strategy plays an important role
in the general marketing activities. Identifying a proper marketing strategy will
effectively create customer value as well as achieve profitable customer relationships.
So, how can the company obtain these goals?
Marketing strategy is the marketing logic by which the business unit hopes to create
customer value and achieve profitable customer relationship. The company decides which
customers it will serve and how. It identifies the total market, then divides into smaller
segments, selects the most promising segments, and focuses on serving and satisfying the
customers in these segments. ( Kotler and Armstrong, 2010, p48)
When the companies take adventures in business, after defining the customer’s
needs and wants at first, they decide the marketing offering, then segment and target
the market that they plan to serve. In fact, the companies are not able to serve and
satisfy all customers in the same way. For that reason, the market is divided into
smaller parts, which include consumers who respond in a similar way to a given set of
marketing efforts. The companies evaluate the potential of these parts and select one or
more to engage. By segmenting and targeting the market, the needs and wants of
targeted customers will be served easier and better. (Kotler and Armstrong, 2014).
Next, the companies have to determine where their position is and how they
differentiate themselves from their rivals in the market. When all steps above are
completed, it means the company’s overall marketing strategy is determined. Under
the guidance of marketing strategy, the companies start to plan the marketing mix
specifically. To achieve the company’s goals, the marketing mix elements are blended
into an integrated marketing program. (Kotler and Armstrong, 2014)
After deciding on its overall marketing strategy, the company is ready to begin
planning the details of the marketing mix, one of the major concepts in modern
marketing.
1.2. Marketing Mix (7Ps)
The marketing mix is the set of controllable, tactical marketing tools that the firm
blends to produce the response it wants in the target market. The marketing mix
consist of everything the firm can do to influence the demand of its products.
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Kotler and Armstrong (2014) claimed that marketing is considered as one of the major
concepts in modern marketing. They also defined marketing mix as: “…the set of
tactical marketing tools that the firm blends to produce the response it wants in the
target market” (Kotler and Armstrong, 2014, p.76).
Marketing mix has become dominant in appraising the growth of marketing
theory and practice. Due to the developments and changes in the commercial
landscape over the last few decades, many marketing thinkers have explored new
theoretical approaches and have expanded the scope of marketing mix concept. Beside
the traditional 4Ps, there have been more new P’s introduced into the marketing field
to help the firms gain advantages in highly competitive environment. Marketing mix
7Ps is the development from the traditional 4Ps.
The product marketing mix consists of the 4 P’s which are Product, Pricing,
Promotions and Placement. The extended service marketing mix places 3 further P’s
which include People, Process and Physical evidence. All of these factors are
necessary for optimum service delivery. Let us discuss the same in further detail.

Figure 1.1: 7Ps Marketing Mix

(Source: http://www.professionalacademy.com – the extended 7Ps)
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1.2.1. Product
Product is the first and also the key element in market offering, specifically, in
marketing mix. Kotler and Armstrong (2014, p.248) defined product as: “…anything
that can be offered to a market for attention, acquisition, use, or consumption that
might satisfy a want or need”.
Basically, products include tangible objects such as cars, bottles of shampoo,
lipstick, mobile phones, or the others with the same tangible attributes. Services,
events, persons, places, organizations, ideas, or a mixture of these things are also
included in products. Among the forms of product, services are considered more
special to pay attention to because of its importance in the world economy. Services
consist of activities, benefits, or satisfactions offered for sale that are essentially
intangible and do not result in the ownership of anything.
There are three levels in making decisions for any products or services. They are
individual product decisions, product line decisions, and product mix decisions.
(Kotler and Armstrong, 2014)
a. Individual Product Decisions
 Product quality
A product’s ability to satisfy a customer’s needs or requirements is called product
quality. Quality is a very difficult concept, for it has both relative and absolute status,
quality can be subjective. Since product or service performance is affected by product
quality, so are the customer value and satisfaction. There are two dimensions within
the product quality concept: level and consistency. It means the companies should
choose an appropriate quality level to match target market needs and quality levels of
competing products. Besides, the targeted level of performance should also be
delivered accurately and consistently.
The product must meet a quality standard to be successful and a good
manufacturing, or sourcing, company will have quality control procedures to ensure
this. These procedures will vary enormously according to the risk of unacceptable
quality.
 Branding
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A brand is a name, term, sign, symbol, or design, or a combination of these
factors, which identifies the maker or seller of a product or service (Kotler and
Armstrong, 2014). Specifically, the use of brand names, trademarks, and practically all
other means of product identification are also considered branding (Perreault and
McCarthy, 2002).
Nowadays, it seem like there is no product going to markets without brands.
Choosing brand for a product has an important meaning for the success of developing
new products. Branding helps both consumers and sellers in many ways. Based on
brand names, consumers will be able to easily identify and shop for products that
might benefit them. Moreover, brand names and trademarks in branding protect the
sellers in legal perspective to avoid copying from competitors. In some cases, the
sellers can also segment their markets relying on branding. (Kotler and Armstrong,
2014)
In fact, it is not easy to build and manage brands efficiently. There are several
characteristics of a good brand name that should be taken into account when branding.
Perreault and McCarthy (2002) suggested the typical characteristics of a good brand
name as: short and simple; easy to spell, read, and pronounce; can be pronounce in
only one way and in all language; suggestive of product benefits; adaptable to
packaging/labeling needs and to any advertising medium; no undesirable imagery; and
legally available for use (not in use by another firm).
 Packaging and Labeling
Designing and producing the container or wrapper for a product are the activities
of packaging. In marketing, packaging is not just simply holding and protecting the
products, it also means attracting buyers and creating immediate consumer recognition
of a brand (Kotler and Armstrong, 2014). In addition, packaging also supports the
distribution processes by avoiding damage during shipment as well as providing ease
in handling and displaying (Perreault and McCarthy, 2002). Recently, come along with
the development of green marketing concept, the environmental concerns have
become dominant in packaging decisions.
Likewise packaging, labeling plays the role of complementing the appearance of
products. Labeling not only supports in capturing the attentions of buyers, but as well
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provides consumers necessary information regarding the products such as:
manufacture of the product, date of manufacture and expire, instruction, etc. The
products with innovative packaging and labeling, as well as adapted in green
marketing concept can give the companies competitive advantages.
 Product support services
The final important element in individual product decisions relates to customer
services. It is obvious that interacting with customers is the essential part of every
business. Hence, giving much importance to customers is highly recommended.
Designing and building effective support services can help companies differentiate
themselves from competitors, and obtain satisfaction and loyalty from customers after
sale. Nowadays, with the development of high technology, the companies can use
many ways to interact efficiently with customers, for example via phone, e-mail,
Internet, etc. (Kotler and Armstrong, 2014).
b. Product line and product mix decisions
In fact, within a large firm, the sales of only one single or a few products might
not afford to fulfill all financial issues for the firm. Besides, due to the product life
cycle 15 patterns and possibility of mishap with a product, the requirement of creating
more types of products is apparent.
A group of products is called product line when they are closely related. In detail,
products in the product line function in a similar manner and have the same customer
targets. They are marketed through the same types of outlets or put in the given price
ranges as well.
Most vendors sells more than one product in different product categories.
Marketer define the portfolio of products offered to the market as the product mix.

1.2.2. Pricing
Pricing is one of the most important elements of the marketing mix. It is also one
of the most difficult. If the company get it right, it can bring back a lot of profit. Get it
wrong, the company will suffer a huge failure in its hands.
Kotler and Armstrong (2014, p.313) defined price as: “…the amount of money
charged for a product or services, or the sum of the value that customers exchange for
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the benefits of having or using the product or service”. In simply term, price is the
amount of money that a buyer has to pay for a product or service that he or she
purchases.
Typically, companies will calculate their costs and add a suitable mark – up, thus
producing a price at which if the market accepts it they know they will make a profit.
Of course, they will have failed to capture the total potential profit from the market but
will have the security of knowing that the business is profitable from day one,
assuming their calculate are accurate.
Nowadays, pricing is not the most crucial key element in competition by
affecting buyer choice as in history, but it still plays an important role in creating
customer value, and building customer relationships. Comparing to other tools within
marketing mix concept, price is the only tool which produces revenues while the
others represent costs. Price is also the factor that has the highest flexibility. (Kotler
and Armstrong, 2014)
a. Pricing objective
The firms’ objectives of pricing should be taken into account before defining
pricing strategies. Generally, due to a variety of ideas regarding pricing objectives, the
three main objectives that suggested by Perreault and McCarthy (2002) are: profit-
oriented, sales-oriented, and status quo.
 Profit-oriented objectives: There are two subordinate objectives in profit
oriented objective: target return and maximize profits. The aim of target return
is to set satisfactory profit while the aim of maximize profits is to set price to
get as much profit as possible (Perreault and McCarthy, 2002).
 Sales-oriented objectives: Some managers deem that sales growth will lead to
high profit. For that reason, they have tendency to set prices at levels which
minimum profit, and focus on increasing market share in the market. (Perreault
and McCarthy, 2002)
 Status quo oriented objectives: When the profit and market levels of a firm are
achieved as expected, status quo objectives are usually adopted. The price now
tends to be stabilized, besides, managers might want to meet or avoid
competition. (Perreault and McCarthy, 2002)
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b. Major pricing strategy
Setting a suitable price for a product is not an easy task. Customers’ perception
and demand, costs and expenses, as well as competitors’ strategies and prices are the
typical and essential factors that need to be taken into account when setting prices.
Kotler and Armstrong (2014) suggested three major methods for setting price of a
product: customer value-based pricing, cost-based pricing, and competition-based
pricing.
 Customer value-based pricing
Like other marketing mix decisions, pricing decisions must start with customer
value. When buying a product, customers pay an amount of money to get the benefits
of having or using that product; here we call it something of value. If the customers
perceive that the value they receive does not worth with the amount of money that they
had to pay, they will tend to not buying that product. Therefore, in customer value- 17
based pricing, the firms have to analyze consumer needs and value perceptions, then
set prices based on the customer perception of value, not on the costs of production.
(Kotler and Armstrong, 2014)
 Cost-based pricing
There are many kinds of costs in the run of any businesses: costs of producing,
distributing, selling the product, and the fair rates of return for the product’s effort and
risk. Cost-based pricing is based on the factors above. In this pricing, the most typical
setting price method is cost-plus pricing (or markup pricing). (Kotler and Armstrong,
2014)
 Competition-based pricing
Competition-based pricing occurs when a firm sets price for their products based
on competitors’ strategies, costs, prices, and market offerings. This method gives the
firms the ability to focus on their competitors. Once the activities of the competitors
are analyzed, the firms can be able to adjust their prices higher or lower than those of
competitors for competing. On the other hand, the firms need to be aware of losing
profits since the competitive prices are set too low. (Kotler and Armstrong, 2014)
c. Additional pricing considerations
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As price is the most changeable tool in marketing mix, there are many pricing
strategies to follow. Beside three main pricing strategies above, the following pricing
strategies also support the firm’s managing prices in the changes of variable elements
such as costs, demands, or competitive environment, etc.
 Product mix pricing strategies
As mentioned in the product decisions part, a product mix of a firm includes
many product lines. Each product line has related demand and costs, but at different
degrees of competition. For that reason, the five strategies have been suggested for the
firms to manage their product mix prices are:
 Product line pricing: Companies determine cost differences between the
products, customer evaluations of different features, and competitors’ prices to
set prices for various products in a line.
 Optional product pricing: Companies decide the pricing of optional or
accessory products along with a main product.
 Captive product pricing: Companies set a price for products that must be used
along with a main product.
 By-product pricing: Companies set prices at low-value for by-products to get
rid of or make money on them.
 Product bundle pricing: There might be some products that consumers will not
buy separately. Companies combine these products with other products and
offer this bundle at a reduced price to encourage purchases of consumers.
(Kotler and Armstrong, 2014)
 Price adjustment strategies
Price adjustment strategies are usually applied when the firms need to adjust their
basic prices. The aim is to take into consideration the various customer differences and
changing situations. The main strategies in price adjustment are:
 Discount and allowance pricing: Companies adjust their basis price to reward
customers for certain responses under a variety of forms (paying bills early,
volume purchase, off-season buying, etc.)
 Segment pricing: Companies sell a product at two or more prices. The aim is to
allow for differences in customers, products, or locations.
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 Psychological pricing: Consumers usually bear in mind a psychology in terms
of product’s price that: higher-priced products have higher quality. Based on
that, companies use psychological strategy to adjust their prices.
 Promotional pricing: With the aim of increasing short-run sales, the companies
temporarily set their products’ prices below the list price, even below cost.
 Geographical pricing: Companies set their different prices based on geographic
location of customers. Due to the particular geographic location, the companies
will applied more specific strategies within geographic pricing for customers
such as: FOB-origin pricing, uniform-delivered pricing, zone pricing, basing
point pricing, and freight-absorption pricing.
 Dynamic and Internet pricing: Companies adjust prices frequently to meet the
characteristics and needs of individual customers and situations.
 International pricing: Many companies nowadays not only run their business in
domestics but also in international market. Depending on the conditions of
countries that the companies aim to take adventures, the prices will be adjusted
accordingly. (Kotler and Armstrong, 2014)

1.2.3. Place (distribution)

In the marketing mix, place refers to the process of moving products from
producers to the intended user (Marc, 2014a). In order to operate and manage these
processes, the companies need to build a suitable marketing channel that corresponds
with the companies’ objectives. Kotler and Armstrong (2014, p.363) defined
marketing channel (distribution channel) as: A set of interdependent organizations that
help make a product or service available for user or consumption by the consumer or
business user.
When your place of marketing is your own place different rule apply. Every
seller must decide how to make its goods available to the target market. The two
choice are to sell the good directly or to sell them through a third party.
In distribution channel, there are third party companies who act as the wholesaler,
transporter, and retailer: the intermediaries. The basis role of the intermediaries is
simplifying the channel transactions by reducing the total amount of works that the
producers and consumers supposed to do.
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Figure 1.2 will illustrate the differentiation between the channel without
distributor (A) and the channel with distributor (B)

Figure 1.2: Different between with and without distributor

(Source: Kotler and Armstrong, 2014, p.364)
a. Types of distribution channels
There are different ways that the companies can choose to provide products and
services to customers. Among them, the two typical types of distribution channels are
direct and indirect marketing channels (Kotler and Armstrong, 2014).
Direct marketing channel is applied when a producer sells its products directly to
consumers without any intermediaries. This method provides companies the
advantages of controlling over the products completely. Furthermore, according to the
WFDSA (World Federation of Direct Selling Associations), the direct selling also
provides the convenience and benefits in consumers’ perspective such as: home
delivery, or generous satisfaction guarantees (Boundless, n.d.).
In contrast, indirect marketing channel requires one or more intermediaries to
deliver companies’ products to customers. This method is recommended for the large
producers who sell their products through many retailers. Though, there are several
issues regarding the increase of distribution costs, less controllability, and also greater
channel complexity needed to take into account. (Marc, 2014a)
b. Types of intermediaries
In many cases, the companies cannot afford to handle all activities to deliver their
offers to customers. That is when they need the supports from intermediaries. Besides,
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due to the differences in terms of objectives or strategies, the choices of intermediaries
between companies will be varied. Even though there are many sale models existing in
the markets, they are grouped into two typical intermediaries: retailers and
wholesalers.
 Retailers
Basically, all activities involved in selling goods or services directly to final
consumers for their personal, nonbusiness uses are called retailing. In fact, retailing is
very familiar with people since it occurs everywhere in daily life. In addition, most
businesses whose sales come primarily from retailing are called retailers. 21 In
retailing, the major store retailer types are specialty store, department store,
supermarket, convenience store, discount store, off-price retailer, and superstore
(Appendix 1).
 Wholesalers
The nature of wholesaling is similar with retailing, but opposite in the end users
since it sells goods and services to those buying them for resale or business use.
Consequently, the firms that engage primarily in wholesaling activities are
wholesalers. The major types of wholesalers are merchant wholesaler, broker, agent,
and manufacturers’ sales branches and offices (Appendix 2) (Kotler and Armstrong,
2014).
c. Channel design decisions
Channel decisions play a significant role in marketing since it directly affects
other marketing decisions. Selecting an appropriate marketing channel is not an easy
task since it requires high levels of investments and efforts. However, it is obvious that
an effective and efficient marketing channel gives the company the substantial
advantages in the competitive market. The important channel design decisions include:
analyzing consumer needs, setting channel objectives, identifying major channel
alternatives, and evaluating those alternatives. (Kotler and Armstrong, 2014)
 Analyzing consumer needs
Since delivering customer value is the core idea of marketing, the channel design
decisions begin with analyzing consumer needs. The marketers should focus on what
their customers truly want in term of where, how, and which to buy. From Kotler and
 16
Keller (2009), these aspects are reflected through five channel’s service outputs. These
outputs are: lot size, waiting and delivery time, spatial convenience, product variety,
and service backup.
It is understandable that consumers usually refer fast delivery, large assortment,
and varieties add-on services as well. However, the greater service outputs, the higher
channel costs and also, higher prices for customers. The key is that the companies
must seek for the solutions to balance the services outputs and consumers’ needs.
 Setting channel objectives
After analyzing consumers’ needs, the companies should set their marketing
channel objectives which regard targeted service output levels. The idea is trying to
minimize the channel costs while the customers’ requirements in terms of service
output levels are still satisfied. Besides, the other factors that might affect channel
objectives and design should be taken into account are: product characteristics,
competitors’ channel, economic conditions, and legal constraints. (Kotler and Keller,
2009)
 Identifying major alternatives
There are varieties of marketing channels that the companies can choose to
deliver their offers to costumers, each type of channel contains both advantages and
disadvantages. In addition, each alternative is indicated through: the types of
intermediaries, the number of intermediaries, and the responsibilities of each channel
member.
 The types of intermediaries
The companies choose which types of channel members to work with in order to
carry on their channel works. The options can be merchants (wholesalers, retailers),
agents (brokers, manufacturers’ representatives, sales agents), and facilitators
(transportation companies, independent warehouses, banks, advertising agencies).
 The number of intermediaries
Besides choosing the types of intermediaries, the companies also have to
consider how many intermediaries to use in distribution channels. In order to consider
the number issue, there are three strategies suggested: intensive distribution, exclusive
distribution, and selective distribution (See Glossary).
 17
 The responsibilities of each channel member
The distinct terms and responsibilities of each channel member are necessary to
create the win-win collaborations. The suggested issues, which should be given out in
the agreements are price policies, conditions of sale, territory rights, and the specific
services to be performed by each party. (Kotler and Keller, 2009)
 Evaluating the major alternatives
When the identifications of major alternatives are done, the companies now
evaluate the selected ones. The criteria used for the evaluating processes are:
 Economic criteria: The likely sales, costs, and profitability of different channel
alternatives are compared.
 Control issues: The controllability of the alternatives towards the whole
channels is determined.
 Adaptability criteria: The alternatives should have high ability to adapt to
changes of the environment. (Kotler and Armstrong, 2014)

1.2.4. Promotion
Promotion covers all those communication tools that can deliver a message to a
target audience. After planning and developing a good product, setting a suitable
product price, and making it available to customers, the companies now need to
communicate their value propositions to customers (Kotler and Armstrong, 2014).
The aim is to increase the consumers’ awareness in terms of their products, leading to
the increase in sales, and also creating brand loyalty. Similar with other tools of
marketing mix, the information and activities in the companies’ promotion also affect
the buying decision of customers.
According to Kotler and Armstrong (2014, p.429), the promotion mix (or
marketing communication mix) of a company is: The specific blend of promotion tools
that the company uses to persuasively communicate customer value and build
customer relationships.
From the definition above, it can be seen that the main objectives of the
promotion mix are making customers aware the existence of the products and
 18
persuading them to buy those products instead of ones from competitors. In another
word, promotion mix is considered the communication aspect of the marketing mix.
a. The promotion mix tools
As mentioned, the company uses the specific blend of promotion tools for its
promotion activities, these tools are: advertising, sales promotion, personal selling,
public relations, and direct marketing.

Advertising Sales Public Sales forces Direct

Promotion relations marketing
Banner ads Contest Annual reports Catalogues Incentive
Billboards sweepstakes Charitable Internet programs
Booklets Coupons donations E-mail Meetings
Broadcast ads Exhibits Community Fax Presentations
Brochures Gifts relations Mail Samples
Directories Low-interest Corporate Telemarketing Trade shows
Inner- financing magazines TV shopping
Packaging Product Lobbying Voice mail
Leaflets demonstrations Media
Motion Rebates Press kits
pictures Sampling Public events
Outer – Tie-ins Publication
packaging Trade shows Seminars
Pamphlets Trade-in Speeches
Point of allowances Sponsorships
purchase
displays

Table 1.1: Promotion tool kit

(Source: Kotler and Armstrong, 2014, p.385)

 Advertising
According to the American Marketing associate, advertising is the placement if
announcement and persuasive messages in time or space purchased in any of the mass
 19
media by business firms, non – profit organizations, government agencies, and
individuals who seek to inform and/or persuade members of a particular target market
or audience about their products, services, organization or ideas. Advertising is by far
the most popular means if reaching a target audience because it is a cost – effective
way to build awareness in the minds of an audience. And through repeated exposure,
the audience accepts product’s positioning and comes to trust the product to delivered
the promised benefits.
This tool includes any paid forms of non-personal presentation and promotion of
ideas, goods, or services by an identified sponsor. Advertising allows the companies
communicating with a large number of people concurrently. Advertising is appeared
mostly through mass media such as television, newspapers, magazines, and also web
pages, posters, brochures, etc.
 Sales Promotion
Most advertising does not deliver sales quickly. Advertising works mostly on
mind, not on behavior. It is sales promotion that works on behavior. The customer
hearts of a sale, an offer of two for the price of one, a gift, or a chance to win
something. Now the customer acts.
Sale promotions are short-term incentive to encourage customers to make a
purchase. Sale promotion, which comprises a wide – ranging set of incentives, has
been spinning out of control. Sale promotions are popular with vendors because
customers easily recognize the value a sale promotion offers saving. The examples of
sales promotion are coupons, season discounts, loyalty programs or even a contest, etc.
 Personal selling
Personal selling represents the personal presentation by the firm’s sales force.
The main purpose of this tool is making sales and building customer relationships.
Personal selling usually occurs between person to person, in some cases are over
phone or email.
 Public relation
Public relations, like sales promotion, comprises a diverse set of tools. Public
relations can be quite effective, although it tends to be underutized in the promotion of
products and services.
 20
The main tasks of public relation are building good relations with the company’s
various publics. This is done by obtaining favorable publicity, building up a good
corporate image, and handling or heading off unfavorable rumors, stories, and events.
Similar to advertising, public relation can be occurred through newspapers, talk shows,
or social network, etc. However, depending on the situations, the fee for public
relation may or may not be paid.
 Direct marketing
While advertising covers the large number of people, direct marketing only
focuses on some targeted individual consumers, and connects directly with them. The
aims are to obtain the immediate response and cultivating customer relationships.
Telemarketing customized letters, emails, or text messages are the common methods
used in direct marketing. (Kotler and Armstrong, 2014; and Marc, 2014b)
b. Developing effective marketing communications
It is not easy to build effective marketing communications since it is influenced
by many factors. Vargas (2005) claimed that the factors which influence the selection
and effectiveness of a marketing communication are: nature of the market, nature of
the product, stage in the product life cycle, price, and funds available for promotion.
For that reason, it is necessary to carefully follow the steps in developing effective
marketing communications.
Kotler (2000) stated the eight steps in developing effective marketing
communications as: (1) identifying the target audience, (2) determining the
communication objectives, (3) designing the message, (4) selecting the communication
channels, (5) establishing the total communications budget, (6) deciding on the
communications mix, (7) measuring the communications’ results, and (8) managing
the integrated marketing communication process.
 Identifying the target audience
Developing an effective marketing communication starts with a clear target
audience. The audience can be potential buyers of the company’s products, current
users, or individual, groups, particular publics, or the general public. The target
audience is a critical influence on the communicator’s decisions in terms of what, how,
when, where and to whom to say (Kotler, 2000). In another word, identifying the
 21
target audience simply means understanding them in terms of their way of thinking,
factors that motivate their purchase decisions, or even their living environment.
 Determining the communication objectives
After defining the target audience, the marketing communicators now determine
the audience response. Normally, there are three main response stages that most of
consumers pass through on their way to making a purchase: cognitive, affective, and
behavioral stage.
At first, the consumers may only know little or even unaware the product, the
companies need to communicate with customers to build the cognitions in terms of
their products. Assume that the consumers already know about the product, the
companies in this stage should determine the feelings of consumers regarding the
products. Lastly, the marketing communicators lead the customers to making
purchases.
Briefly, the response stages of consumers can be considered as the “learn-feel-
do” sequence, the orders of this sequence can be changed according to the levels of
customers’ involvement in the product category. Determining the right sequence can
give the communicators particular advantages. (Kotler, 2000)
 Designing the message
Once the target audience and communication objectives are defined, the next task
is producing a message to achieve the objectives. Ideally, an effective message should
concurrently gain attention, hold interest, arouse desire, and elicit action . In Kotler’s
point of view (2000), four major issues that the marketing communicators have to
handle when formulating the message are: message content, message structure,
message format, and message source.
 Message content
In determining message content, the communicators have to figure out an appeal,
theme or idea that will create the desired response. There are three types of appeal:
rational, emotional, and moral. Rational appeals relate to the audience’s self-interest
since they claim that the product will produce certain benefits. Emotional appeals
attempt to stir up negative or positive emotions that will motivate purchase. Moral
appeals are directed to the audience’s sense of what is right and proper. (Kotler, 2000).
 22
 Message structure
Basically, there are three typical message structure issues for the communicators
to handle. The first issue is whether to draw a conclusion or leave it to the audience.
The second one is whether to present the strongest argument first or last. The final
issue is whether to present the one-sided argument (mention only the product’s
strengths), or a tow-sided argument (touting the product’s strengths while also
admitting its shortcomings). (Kotler and Armstrong, 2014)
 Message format
The message format is suggested should be strong. Depending on particular
mediums, the communicators will make decisions regarding specific aspects. For
instance, for a print ad, the communicators have to decide on headline, copy,
illustration, and color, etc. (Kotler and Armstrong, 2014; and Kotler, 2000)
 Message source
In fact, messages delivered by highly credible sources are usually more
persuasive. For that reason, the chosen sources have to be satisfied in three
perspectives: expertise (specialized knowledge the communicator possess to back the
claim), trustworthiness (how objective and honest the source is perceived to be), and
likability (source’s attractiveness). (Kotler, 2000)
 Selecting the communication channels
After the message was designed, the companies now select the channels of
communication to carry the message. Kotler and Armstrong (2014) stated the two
common types of communication channels are:
 Personal channels: involve two or more persons communicating directly with
each other (face to face, person to audience, over the telephone, through
emails).
 Non-personal channels: media that carry message without personal contact or
feedback. These channels include major media, atmospheres, and events.
 Establishing the total communications budget
How much to spend for the marketing communications? This is one of the most
challenging issues for most of marketers since the total budgets are varied from
 23
companies to companies. The four common methods used to set the total budget for
promotion are:
 Affordable method: Setting the promotion budget at the level management
thinks the company can afford.
 Percentage-of-sales method: Setting the promotion budget at a certain
percentage of current of forecasted sales or as a percentage of the unit sales
price.
 Competitive-parity method: Setting the promotion budget to match competitors’
outlays.
 Objective-and-task method: Developing the promotion budget by defining
specific promotion objectives, determining the tasks needed to achieve these
objectives, and estimating the costs of performing these tasks. The sum of these
costs is the proposed promotion budget. (Kotler and Armstrong, 2014)
 Deciding on the communication mix
When setting the total budget for promotion is done, it is time to allocate the
budget over the five promotion mix tools: advertising, sales promotion, public
relations, personal selling, and direct marketing. Each tool has its own unique
characteristics and costs. Therefore, the communicators should blend these tools
carefully to achieve effective marketing communications. (Kotler and Armstrong,
2014)
 Measuring the communications’ result
After the marketing communications were processed, their impacts should be
measured. The communicators can ask the target audience issues regarding the
message or product. For examples: whether the target audiences recognize or recall the
message, how many times they saw it, how they felt about the message, their previous
and current attitudes towards the product and company, and so on. Moreover, the
communicators can also collect behavioral measures of audience response (how many
people bought the product, liked and talked about it, etc.). (Kotler, 2000)
 Managing the integrated marketing communication process
Due to some relative factors such as the proliferation of new types of media or
the growing sophistication of consumers, the companies need to widen their range in
 24
terms of communication tools, messages, and audiences. That when the integrated
marketing communication (IMC) becomes necessary. Once being implemented
accurately, IMC will improve the company’s ability to reach the right customers, with
the right messages, at the right time, and in the right place. (Kotler, 2000)

1.2.5. People
All companies are reliant on the people who run them from front line Sales staff
to the Managing Director. Having the right people is essential because they are as
much a part of your business offering as the products/services you are offering.
People are particular important in marketing in marketing because marketing should
take the lead, so it is necessary to find the right people in the right position
As a firm, there are several qualifications to build a team.
 Recruitment and assessment
Find a good candidate for the job is one way to build the system. The company
need to look into the candidate job application and the information that person
provides. It is necessary to find employees that work with the job and complete it in
the best way. Managers must to find the right candidate for the right position.
Whether at the recruitment stages or later, we may wish to assess the abilities of an
individual. The first judgment is not really suitable for the work. Yet it is not easy
because there are many factors that can contribute to the numbers and manager should
assess a candidate from a much wider perspective.
 Training and development
After recruiting and find the right person for the right job, new employees should
be trained and develop for better performance. A certain job requires training for
working accuracy and professional. New employees must know what they supposed to
do and what they are hired for. They need to get used with the work and need training
to know more about the work. The first thing that the job requires is proficient.
Working without flaws, working fast and professional are the first priority for a new
member. Training follows a simple cycle. First, explanation – the trainer explain how
to a particular job. The demonstration – the trainer demonstrates the function to the
trainee. Then imitation – the trainee imitates the trainer and performs the function.
Then consolidation – if the trainee has shown understanding of what is required then
 25
the trainer leaves him or her alone to consolidate this piece of the job before returning
at a later date to check that this is still working and, if so, to reach a new skill using the
same cycle of explanation, demonstration, imitation and consolidation.
Being trained and master the job, they need develop and working more creative.
Working area now is not in one aspect and require in one traditional form. People need
to develop and need to find the way that work with best efforts. Development consists
of giving an individual more and more challenges in order to develop their abilities an
confidence. This can be done both on the job and alongside the job. In a large
organization, there will be many opportunities to test an individual’s qualifications for
additional responsibility in projects, test markets, etc.
 Team building
An important aspect of people management is team building. In every work and
every task, people have to interact with each other. A firm require a team that work to
enhance the profit and productivity. No one in the firm can work alone. All tasks have
to been through steps of people and these people have to know how to work with each
other.

1.2.6. Process
The delivery of your service is usually done with the customer present so how the
service is delivered is once again part of what the consumer is paying for.
Process methodology manages customer service, and an organization’s capacity to
offer service, handle protests, and anticipate any issues before they really happen.
Processes essentially have inputs, throughputs and outputs (or outcomes).
Processes include direct activities and indirect activities. Direct activities add
value at the customer interface as the consumer experiences the service. Many
processes are supported by indirect activities, often known as back office activities,
which support the service before, during and after it has been consumed.

1.2.7. Physical evidence

Services as we know are largely intangible when marketing. However customers
tend to rely on physical cues to help them evaluate the product before they buy it.
Therefore marketers develop what we call physical evidence to replace these physical
 26
cues in a service. The role of the marketer is to design and implement such tangible
evidence. Physical evidence is the material part of a service. In the service industries,
there should be physical evidence that the service was delivered. Additionally,
physical evidence pertains also to how a business and its products are perceived in the
marketplace.
Corporate image and identity are supported by signs, symbols and artefacts of the
business itself. This is all important to the physical evidence as a fundamental element
of the services marketing mix.
There are many examples of physical evidence, including some of the following:

 The building itself (such as prestigious offices or scenic headquarters). This

includes the design of the building itself, signage around the building, and
parking at the building, how the building is landscaped and the environment
that surrounds the building. This is part of what is known as the services cape.

 The interior of any service environment is important. This includes the interior
design of the facility, how well it is equipped, internal signage, how well the
internal environment is laid out, and aspects such as temperature and air
conditioning. This is also part of the services cape.

 Packaging.

 Internet/web pages.

 Paperwork (such as invoices, tickets and dispatch notes).

 Brochures.

 Furnishings.

 Signage (such as those on aircraft and vehicles).

 Uniforms and employee dress.

 Business cards.

 Mailboxes.
 27

CHAPTER 2: AN OVERVIEW ABOUT VIETJET AIR JOINT STOCK AND

THEIR SEGMENT IN VIETNAM MARKET

2.1. Vietnam Aviation marketplace

2.1.1. Market overview

With a growing GDP and over 90 million people, Vietnam is projected to be one
of the fastest growing aviation markets in Southeast Asia over the next 10-20 years.
Particularly, with the ASEAN Open Skies policy being in effect since January 2015,
which allows airlines to fly freely throughout the ASEAN member states in a unified
air transport market, and with Vietnam joining several free trade agreements (FTAs)
including the upcoming TPP, the passenger and cargo air transport in Vietnam will
have more opportunities to grow. Continued strong market growth presents
opportunities for U.S. companies as Vietnam makes large investments in airport
construction and upgrades, aircraft fleet expansion, air traffic service enhancements,
aircraft maintenance and overhaul capacity and service development.

Figure 2.1: Vietnam aviation development compared to other countries

(Source: World Bank Data in 2015)
 28
Aviation is one of the top priority sectors for development by the government of
Vietnam as it is critical to the country’s economic growth. The aviation sector is
overseen and managed by the Civil Aviation Administration of Vietnam (CAAV),
which reports to Vietnam’s Ministry of Transport.
According to the CAAV, the annual passenger growth rate was 14.9 percent for
the period 2010- 2015. By 2015, the number of passengers reached 63 million (18
million international, 45 million domestic) annually. CAAV estimates the passenger
traffic through airports will reach 122 million by 2020 with an average growth rate of
14.2 percent per year for the period 2015-2020. By 2030, passenger air traffic is
forecast at 322 million per year, a 10.2 percent annual growth rate.
The freight market grew at 10.7 percent between 2010 and 2015, with 0.96 million
tons of cargo (0.62 million international, 0.34 million domestic) through airports in
2015. Freight traffic will increase to 1.8 million tons by 2020 with an average of 12.8
percent growth per year for the period 2015-2020. By 2030 the freight traffic is
forecast to reach 7.3 million tons of cargo, a 15.3 percent growth per year for the
period of 2020-2030.

2.1.2. Airport development

Vietnam will need continued investment in new terminals, longer runways and
upgraded equipment to meet the increased passenger air transport, which will grow at
14.2 percent a year for the period between 2015 and 2020, as estimated by CAAV.
Airports Corporation of Vietnam (ACV) – a state-owned entity, established in
February 2012 after the merger of the Northern, Central and Southern Airports
Corporations, currently manages and operates a network of 21 airports throughout the
country, of which eight are international and 13 are domestic. ACV plans to equip the
airports with necessary equipment to ensure safety, security and efficient operations,
including instrument landing systems, lighting systems, X-ray machines, firefighting
vehicles, ambulance vehicles, lifting vehicles, power vehicles, etc. In addition, ACV is
calling for investment in more airports to increase the number of airports in the
country to 23 by 2020 and 25 by 2030.
To achieve this ambitious plan, ACV is sourcing investment through various
means, including the equalization of ACV; and the Private-Public Partnership (PPP)
 29
investment model. In November 2015, ACV launched an IPO to sell a five percent
stake to the public and become a stock company. ACV is planning to sign a strategic
partnership with Aéroports de Paris (ADP) in 2016, with ADP owing 7.4 percent of
the firm. Recently, ACV has moved away from using ODA (official development
assistance) to using the PPP model as a source of investment capital to develop
airports. This will allow ACV to exploit the best technologies and services from many
countries in its airport development projects, and thus provide more opportunities for
U.S. aviation companies in supplying airport technologies and services.
There are some main projects of maintenance and development

 Tan Son Nhat Airport (Ho Chi Minh City)

 Noi Bai Airport

 Danang Airport

 Quang Ninh Airport

 Phu Quoc Airport

 Chu Lai Airport (Quang Ngai)

 Lao Cai Airport

2.1.3. Market share

There are three main carrier in Vietnam market share which are VJA, Vietnam
airlines and Jetstar Pacific.
 30

Figure 2.2: Vietnam domestic capacities share (% of seats) in 2016

(Source: CAPA – Centre for aviation)
For the first four months from Jan-2016 to Apr – 2016, Vietnam Airline hold
44%, VJA took 41% and Jetstar Pacific accounted for 15%.

2.2. History of development

2.2.1. History
VJA Joint Stock Corporation is operated under the trading name as “VJA” so
called VietJet . Established since 2007, VJA (VJA) is the first private airline in
Vietnam which is licensed to operate with charter capital of 37.5 million USD. VJA
has marked the development of the low-cost carrier, prestige and quality. Not only
that, VJA was the top choice of passengers when required to move by air.
 25 December 2011, the first flight from Ho Chi Minh City to Ha Noi was
operated
 June 2013, VJA opened the first flight to Bangkok,, Thailand and cooperated
with Thailand airline to open international flight.
 31
 September 2013, VJA signed to order 100 airplane of Airbus production. In
November and December 2014, VJA received 2 of 100 on the contract,
upgrading to 20 airplanes in total
 23 October 2014, VJA was honored in top 10 of best low – cost carriers in Asia
in Smart Travel Asia Magazine
 31 January 2015, VJA marked the 10 million guests.
VJA is operating an intensive flight network in Vietnam and is planning to
expand its operation throughout the Asia-Pacific region. The airline’s mission is to
meet the increasing travel demands of domestic and international travelers by
providing punctual flights and a high quality of service, helping to lead the Vietnam
aviation industry into a new era. VJA is already well-known in Southeast Asia for
providing passengers with a wide range of flying routes as well as its trademark fun
and friendly service and easy to use online booking and purchase systems.
VJA has been honored with prestigious prizes in Vietnam and in the world. At
the“Budgies & Travel Awards”, held in London, VJA, along with SpiceJet (India),
EasyJet (England), Southwest (USA) and AirAsia X( Malaysia), was shortlisted in the
category for “Top 5 Best New Route Launch.”
VJA has also awarded as “The Airline with Cultural Creative and Entertainment
in-flight Programs” by the Asian Record Organization and earned a “Golden Star
Award for Quality” from Business Initiative Directions (B.I.D), Switzerland.
Furthermore, the airline earned Merit of Distinction by Ministry of Transport of
Vietnam in two year continuously, Vietnam National Administration of Tourism &
Vietnam Tourism Association and was declared “the most friendly transportation and
best promotion Airline in Vietnam” by Spend & Use Advisory Magazine

2.2.2. Exploiting achievements

During 2016, VJA has make some achievements and improvements compared
with 2015. In 2016, VJA exploit 9.3 million passengers with total air crew of 29
aircrafts and total of 58355 flights.
 32
2016 2015

Aircraft crew 29 61%

Passengers (millions) 9.3 66%

Exploiting flights 58355 67%

Domestic 28 47%

International 12 240%

Total hours flying 113234 84%

Expense on km (exclude fuel) 2.34 -14%

Employees 1.869 72%

Table 2.1: Exploit achievement

(Source: Vietjet air performance report in October 2016)
Until October 2016, VJA contributed on national budget directly and indirectly
2000 billion vnd. Total profit increased 155% compared with 2015. Compared to
2015, the number of aircraft crew increased 61%, the amount of passengers also raised
66%. The total hours of flying increased significantly with 84%. Meanwhile, the
expense decreased 14% which is the good sign for the low – carrier like VJA.

2016 2015 Different rate

Total profit of selling 11,747,678 7,811,491 50%

Total profit of flying 10,990,990 6,928,363 59%

Table 2.2 : Total profit 2015 – 2016

(Source: Vietjet air performance report in October 2016)
With the increasing of passengers, the total profit selling increased 50%
compared to 2015 which is a good sign for the development of VJA. The total profit of
flying also rise up to 59% rather than in 2015.

2.2.3. Development strategy

a. Domestic strategy
Vietnam is a potential market with the high growth rate. VJA understand and
takes advantages of the domestic market. VJA put strong investment into Vietnam
 33
market to push the net profit. Even the growth of low – cost carrier in Vietnam is still
lower than other market in area such as Philippines or Malaysia, specialists consider
that Vietnam and Myanmar will be the highest growth in low – cost aviation industry.
Especially, VJA aims at fame and popularity more than money. Therefore, they
win the customer’s trust and attention. Maybe that strategy doesn’t make sense,
however, VJA still continuously improve its image and reputation.
With the particular characteristics is cost huge amount in 2 or 3 first year model,
the priority thing that investors should do is increase the fund capacity. This situation
is exactly with VJA for the upcoming IPO to attract international investors.
VJA manage tightly the input and output of money and make sure the quality of
service. Therefore, the ticket fee are collected early from 3 to 6 months or 9 months
before taking off. Meanwhile, other expenses such as gas, renting plane fee, ground
services, etc. can be paid lately within 1 month. Based on that, the firm can balance
between input and output.
With domestic flight, VJA continuously open more flights with the frequency of
500 flight per week. “Domestic segment of VJA increases from15% to 40% in 2016” –
Mr. Brendan Sobie –analyst said. Moreover, Vietnam is a potential market. In 2016,
the Congress had gone through the GDP growth rate is 6,7% , which is the highest rate
within 6 recent years. Along with this, the fuel price is estimated to reduce to 11% and
45 million guests – increased 19% compared with 2015. With the development
strategy, Vietnam planned to have more than 26 airports in 2020 and in the progress of
develop and extend Noi Bai International Airport and Tan Son Nhat International
Airport. VJA takes advantages of the development and build trust on domestic
customers. It aims at the stable development with great profit
However, the pushing domestic segment is just a small step and a base for VJA
to enter to another larger market. VJA want to co-operate with other air carriers for a
better benefit and larger flight. Until 2016, VJA connected and opened flight to
Thailand, Singapore, Korea, Taiwan, Malaysia, China and Myanmar.
b. Low – cost strategy
 34
VJA operate according to a low – cost carrier model with high quality services.
The purpose is that create more chance to fly with low cost for Vietnam citizens and
international guests. VJA proposes variety of ticket fee for customer with 12 standards
price for customers to select such as Promo, Eco, Flexi, etc.
Understanding of the need of traveling, VJA issue many discount strategy with 0
dong for one – way to many domestic destinations. Buyers only charge for the fuel and
services and tax price. Customers are encouraged to book the ticket early through VJA
website and choosing the proper payment method.
To have low – cost strategy, VJA cut down some expenses that customers might
not need during the flight:

 Reduce the printing price of ticket check in

 Use only 1 kind of plane

 Eliminate meal plan services and magazines

 Reduce costs at the airport

 Diversified extra services such as luggage transportation services

With domestic flight, Vietjet apply non – meal on the flight. It doesn’t provide
meal plan included in ticket price which can reduce money for customers who don’t
have demand of eating during the flight. It doesn’t mean that Vietjet doesn’t have any
meal on the flight. They still prepare for the meal with the customers who want to have
something to eat and want to choose the food which is not really expensive.
 35

Figure 2.3: Meal plans of VJA

(Source: Vietjetair.com)
Vietjet also has an exclusive discount for membership or VIP of sky boss.
Customers can upgrade their accounts and become VIP customer which can waiting in
Sky boss waiting room and choosing seats or ticket discount. Vietjet also applies
discount strategy with corporate or firm customers who have to travel a lot. A firm
open account in VJA system is enjoyed many policies which can save 50% expenses
when booking ticket or setting the plan early or cancel the tickets with great refund.
c. Sky boss strategy
Mention to VJA, people think of low – cost carrier, but then now Vietjet has just
launched a whole new dimension that is sky boss.
Sky boss is a new level of Vietjet to serve luxury guests. Understanding that Vietnam
is developing and people have more money and want to spend for a better service.
Vietjet introduce sky boss as a luxury class compared to Vietnam Airlines. Sky boss is
more unique and more convenient than the others. It has its own style, more
fashionable and more VIP with:
 36
 Private check – in

 Private security portal

 Luxury waiting rooms with luxury furniture, private and quiet sector, a bar with
snack and cocktails, free Wi-Fi and internet, updated magazines and
newspapers, etc.

 Free 20kg luggage or a golf collection

 Adjustable schedule and changing the date and flight without extra cost

 Private car service for transportation from waiting room to the plane

 Free one snack and one drink during the flight

 Private seats on the plane and can choose the seats

Vietjet aims on target of businessman, artists, etc who often travel and want a
comfortable and quiet place on the plane.
With the launching of Skyboss, Mr. Luu Duc Khanh – CEO of VJA said that “The
new planes that VJA received will serve the flight that Skyboss members often book.
The appearing of Skyboss brings multiple options for VJA customers. This kind of
class has various convenience compared with other classes, which is used for
customers want to explore new and unique experiences during the flights. In fact,
many businessman, artists, customers having busy schedules often flying with VJA are
needed to comforts that help them to save time, working in waiting room or relaxing
for the new and important things. Our slogan is “Enjoy flying”, therefore, we create
chance to fly for everybody depending on each individual’s need with the best services
in the new modern carrier” . Moreover, compared with the price of luxury class of
Vietnam airlines, price of skyboss service is cheaper and reasonable but the quality are
still the same.
With its success, until Jan 2016, Skyboss serves 9810 guests for this services.
More and more businessman and VIP customers start to use Skyboss rather than
luxury class of Vietnam Airlines
 37
It doesn’t mean that the appearance of Skyboss will delete all the purpose of VJA
as low – cost carrier. Vietjet still continues develop all classes with reasonable price
with many discount for another class.

2.3. Company structure

Figure 2.4: Company structure

(Source: Vietjetair.com)

2.4. Competitor in Vietnam marketplace

In the competition in domestic market, VJA meet two strong competitors which
are Vietnam Airlines and Jetstar Pacific Airline. Meanwhile, Jetstar Pacific Airline is
the direct rival in the low – cost segment in Viet nam marketplace.

2.4.1. Vietnam Airlines (VNA)

April 1993, Vietnam Airlines was officially established as the country’s national
flag carrier. On the 27th May 1995, Vietnam Airlines Corporation was born with the
gathering of 20 aviation enterprises and the airline itself as the core business.
Vietnam Airlines is a big competitor who is a “big brother” existing from the
earliest day of Vietnam Aviation history. Until June 2016, Vietnam Airlines accounts
for 44% of domestic market share. VNA owns many wide body aircraft such as
Boeing 777-200, Boeing 777 – 300, Airbus 330 – 200 and Airbus 330 – 300, besides,
it owns narrow body aircrafts such as Airbus 320, Airbus 321. In 2015 – 2020, VNA
 38
intend add more to aircraft crews 33 aircraft model A32, hire long – range aircraft
B777/A330 and add more new modern aircraft Boeing 787-9 Dreamliner and Airbus
A350-XWB. VNA has capabilities of big carrier with stable reputation and abilities of
operating many flights with great frequency.
With the advantages of the large aircraft crew and the popularity, VNA always
keep its place in Vietnam market. In the report of profit and revenue, until November
2016, VNA has said it earned more than US $1.6 billion as revenue and US $71.6
million as pre – tax profit which rising 32.5% compared to the same period as last
year. It can’t be denied that VNA still keep the largest market share in Vietnam market
with the huge number of profit and revenue. VNA said that they have been completed
most of the target setting for this year. Moreover, VNA has big advantages on the
ground so that it still keep the number 1 position in domestic market.
However, ticket price of VNA is still quite high for people with medium and low
income or students, therefore, they are still hesitant to book tickets from VNA. This is
an advantages that VJA can take over the low – cost segment of VNA.

2.4.2. Jetstar Pacific Airlines (JPA)

Jetstar Pacific Airlines is redesigned from Pacific Airlines, however, in recent
years, JPA operates not really efficiently. The evidence is that JPA only accounts for
15% of total domestic market share, which is smaller than VJA – a younger carrier.
However, JPA has made some big moves with changing all 5 old Boeing 737 -700
aircrafts to Airbus A320 aircraft and the adjustment of company structure. Moreover,
JPA has worked with VNA to have more domestic airline with reasonable price.
Thanks to the co-operation and VNA reputation, JPA has been more popular, which is
a threat to VJA. Until November 2016, JPA’s passenger traffic grows by 38%
compared to 2015 and 3.6 million VND revenue in 2016. JPA has planned to extend
more with the plan of buying more aircrafts in 2017 and 2018, they are seeking for
approximately six deliveries for both years.
Along with develop the aircraft crew, JPA also focus on improve images and try
to deliver their images to the customers. One of the recent actions is the supportive for
the flood victims in flood – affected. During the recent flood in Nghe An, Ha Tinh,
 39
JPA and VNA has announced that they will supply free ticket and free deliver for
charity organizations and agencies on their daily flight from Ha Noi to Ho Chi Minh
City. These two flight carrier has been working together to increase profit and images.

Rank Airport Jetstar pacific VJA return VNA return

return frequency frequency frequency

1 Noi Bai Airport 48 146 138

2 Da Nang Airport 22 83 77

3 Phu Quoc Airport 21 28 42

4 Vinh City Airport 11 28 14

5 Hai Phong Airport 10 40 21

6 Thanh Hoa Airport 10 14 7

7 Nha Trang Airport 8 26 27

8 Chu Lai Airport 7 7 7

9 Tuy Hoa Airport 7 0 0

10 Hue Airport 7 7 28

11 Pleiku Airport 7 7 7

12 Quy Nhon Airport 7 7 14

13 Buon Ma Thuot 5 7 21
Airport

Table 2.3: Jetstar Pacific domestic destination from Ho Chi Minh by weekly
capacity in 2016
(Source: CAPA- Centre for Aviation & OAG)
It can be seen that compared flight per week of three carrier, JPA is the one
accounted for the smallest amount among three big carrier. Despite the help and co –
operation with VNA, JPA still grow slow compared to VNA and VJA.
However, according to customer’s feedback, JPA’ services are not really good
and work unprofessional. Based to this, VJA should consider rival’s weakness to come
up a suitable strategy to avoid this situation.
 40
2.5. Applying marketing mix (7Ps) in VJA’s business activities

2.5.1. Product
2.5.1.1. Product variety
VJA has made a wise move in product. They offer a wide range ticket for
customers choose. In a flight, it depends on the seat, price, services
a. Promo Ticket
Promo ticket is a ticket in the discount sector of VJA. VJA often operate a lot of
discount time such as discount everyday with 9000vnd per ticket from 12pm to 4 pm,
etc. in which promo tickets are issue.
 Advange of this kind of ticket is very cheap which includes tax and other fee.
 Promo ticket includes 7 kg carry – on baggage
 Customer can select seat with reasonable fee
 The changing of day and time is required two days before the departure day.
Customers are not allowed to change the journey or change customer name
 The new ticket price must be equal or higher than the previous one. If the fee is
smaller than the previous ones, the difference price would not be returned to the
customers. If the fee is higher, customers have to pay the fee before changing
the journey status.
 Difference price is applied for each customer/one flight/one time changing. The
first online ticket can be adjustable on the website.
 All ticket fee would not be refunded if customer cancel tickets at any time or no
show up at the airport at least 30 minutes in domestic flight or 45 minutes with
international flight before departure time.
 This type of ticket doesn’t include checked bags. However, with the first 15kg
checked bags, there would be a discount price. Customers have to pay the fee
before handle the checked bags
 Promo tickets cannot be returned or refunded in any condition.
b. Eco ticket
Eco ticket is the type of ticket that more flexible than Promo ticket
 41
Eco ticket aim at customers having medium income with more flexible services
 The changing of day and time is required two days before the departure day.
Customers are not allowed to change the journey.
 The new ticket has to be equal class as Eco or Flex ticket. Customers have to
pay the difference fee before changing the ticket
 Eco ticket includes 7 kg carry – on baggage
 Difference price is applied for each customer/one flight/one time changing. The
first online ticket can be adjustable on the website
 Ticket booking from ticket room or call center are often more expensive than
booking direct from the website.
 All ticket fee would not be refunded if customer cancel tickets at any time or no
show up at the airport at least 30 minutes in domestic flight or 45 minutes with
international flight before departure time
 This type of ticket doesn’t include checked bags. However, with the first 15kg
checked bags, there would be a discount price. Customers have to pay the fee
before handle the checked bags
 Eco tickets cannot be returned or refunded in any condition
 If customer can’t join the flight, he can save for another flight or change to
other people name with extra money
c. Sky boss ticket
Sky boss is a new type ticket of VJA. It is a luxury class compared with
lotusimles of Vietnam airlines. Target customers are businessman, artists and people
need to travel a lot and want to have private sector. Skyboss is ticket with privileges
 The changing of day and time is required one day before the departure day.
Changing the day prior departure time have to perform in VJA customer service
center or ticket room.
 The new ticket price has to equal or higher than the previous one. Customers
have to pay the difference price before changing
 42
 Skyboss ticket can be adjusted online or on the ticket room or through Call
Center without any extra fee.
 All the ticket fee would not be refunded if customers cancel or change late less
than 2 days prior the planned flight
 Ticket fee cannot be refunded but can reserve and save for another flight
 Customers can enjoy private waiting room in the airport with free Internet, free
wifi and luxury furniture
 A free drink and snack is provided during the flight.
 Customer can choose the seat without any extra cost.
 Skyboss includes 10 kg carry – on baggage and free 30 kg checked bags
 This class also consists of private and priority check – in, private security
entrance.
 Private car is provided if customers have to travel to the plane.
2.5.1.2. Design
VJA focus on the value that the airline is a young and energetic one. With the
image of young crew, unlike the other airlines with uniform is ao dai or formal clothes,
VJA choose shirt with shorts. This show the energetic of the crew and the youth.
VJA choose two theme color red and yellow which are the color of the Vietnam
national flag. This shows the love of country and the colors show the energetic of the
crew and show the strength of the airline.
 43

Figure 2.5: VJA image

(Source: Vietjetair.com)
2.5.1.3. Services
In traveling industry, service is one of the most important element making the success
of the firm. VJA really focus on improving and developing the services to make sure
to satisfied the customer.
a. In – flight services
During the flight, all flight crews are trained to work best to satisfy and meet
customer’s need. Beside the basic need in flight, VJA supply extra services for further
demand of customers. As a new-age airline that constantly strives to innovate and
improve on its services, VietJet is proud to offer customers the most satisfying flying
experiences possible. On every single flight, passengers can relax in a luxurious
leather-covered seat and choose one of nine delicious hot meals on offer or select a
souvenir from the in-flight VietJet shop.

 Souvenir services: VJA produce many souvenir that have VJA symbols with
energetic and youngful style for all ages. It is a symbol and a memory for
customer of reminding flying with VJA.
 44

Figure 2.6: VJA Souvenir

(Source: VietJet Air services)
 45

Figure 2.7: VJA Souvenir

(Source: VietJet Air services)

 As the ticket often don’t include food, VJA sell food during flight for customers
who have need to have a meal with different choice. The menu is diversity with
food, drink and fruit. Mainly dishes are vietnamese cuisine with symbol of
every part of the country. Moreover, the price of them are reasonable. VJA also
offer snacks during the flight for customers who want snacks and soft drink.
 46

Figure 2.7: VJA Food

(Source: VietJet Air services)
 47

Figure 2.8: VJA Food and soft drink

(Source: VietJet Air services)

 Vietjet launches promotion for duty fee shop on board in the international
flights. Passengers will be able to view in VJA’s duty free catalogue to browse
for hundreds of luxury items such as perfume, cosmetics, wine of famous
brands. All items are committed to be genuine with high quality and tax
exemption, helping customers save more money than in shopping center. “We
have always wanted our customers to ‘Enjoy Flying’ and now they can enjoy
shopping with VietJet too, We’re delighted to be the first Vietnamese airline to
introduce an in-flight duty free service in international flights and we believe
that our passengers will find a variety of high-quality top notch products on
offer,” said Mr. Desmond Lin, Business Development Manager of VietJet.
Customers can pay by many kinds of currency such as the US dollar,
Vietnamese dong, Singapore dollar, Thai baht, Taiwanese dollar and Malayian
ringgit.
 48

Figure 2.10: VJA duty free catalog

(Source: VJA Services)
 49

Figure 2.11: VJA Duty free catalog

(Source: VJA Service)
b. Special services
 50
 Wheelchair service:
+ Wheelchair service is a service which is an offer for disabled or medical passengers
with incapable of moving, including:
- Passengers requiring wheelchair for ramp (WCHR) are passengers who can make
steps and walk to/from cabin seat, but need an assistance for distance to/from aircraft
across ramp
- Passengers requiring wheelchair for step (WCHS) are travelers who can not rise/dive
steps, but rather can advance toward/from lodge situate, requiring help for separation
to/from air ship crosswise over slope and up/down strides- Passengers requiring
wheelchair for cabin (WCHC) are passengers who completely immobile, requiring
assistance to/from aircraft, up/down steps and to/from cabin seat
+ Conditions of acceptance:
- Requests must be made at least 48 hours before departure time of the flight through
VietJet Ticketing office or Call center.
- Passenger's health are alright to make the flight. If there should arise an occurrence of
disease, travelers must finish medicinal freedom to guarantee healthy enough to make
the flight (as Passengers required for restorative leeway before takeoff).
- The greatest number of travelers requiring wheelchair on every flight is constrained
rely on upon individual service.
- Passengers requiring wheelchair for step(WCHS): be acknowledged when go with
went with traveler, who is from 18 years old or more established, sufficiently sound to
help WCHS travelers up/down strides and on board; each went with traveler is
acknowledged to go with just 01 WCHS.
- Passengers requiring wheelchair for lodge (WCHC): We don't give wheelchair gear
on board; If travelers concur with the condition: we acknowledge for carriage as
WCHS.
 Service for Blind passengers (BLND):
+ Service for Blind travelers is an administration offered to travelers, who lost the
capacity to detect the visual incompletely or totally, and require unique backings.
+ Conditions of acknowledgment:
- For went with BLND traveler: We acknowledge for carriage of went with visually
impaired traveler as ordinary traveler; went with traveler is required from 18 years old
or more seasoned, sufficiently sound to help BLND travelers; Each went with traveler
is acknowledged to go with 02 BLND..
- For unaccompanied BLND passenger:
 51
• Requests must be made at least 48 hours before departure time through VietJet
Ticketing office or Call center.
• BLND passengers who are able to self-service in all itinerary is accepted carriage.
• BLND passengers must have assistance from relatives at departure and arrival
terminal.
 Service for Deaf passengers (DEAF):
+ Service for hard of hearing travelers is an administration offered to travelers, who
lost the capacity to detect the visual somewhat or totally, and require exceptional
backings.
+ Conditions of acknowledgment:
- For went with DEAF travelers: We acknowledge for carriage of went with hard of
hearing traveler as typical traveler; went with traveler is required from 18 years old or
more established, sufficiently sound to help DEAF travelers.
- For unaccompanied DEAF travelers:
• Requests must be made no less than 48 hours before flight time through VietJet
Ticketing office or Call focus.
• DEAF travelers who can self-benefit in all schedule is acknowledged carriage
+ Service for hard of hearing travelers is an administration offered to travelers, who
lost the capacity to detect the visual halfway or totally, and require unique backings.
+ Conditions of acknowledgment:
- For went with DEAF travelers: We acknowledge for carriage of went with hard of
hearing traveler as typical traveler; went with traveler is required from 18 years old or
more established, sufficiently solid to help DEAF travelers.
- For unaccompanied DEAF travelers:
• Requests must be made no less than 48 hours before takeoff time through VietJet
Ticketing office or Call focus.
• DEAF travelers who can self-benefit in all agenda is acknowledged carriage
 Extra seat service (EXST):
+ Additional seat administration is an administration offered to travelers, who are
larger than usual, require 2 neighboring seats on load up in a similar flight; or the
administration offered to travelers requiring 2 adjoining seats for more advantageous.
+ Conditions of acknowledgment:
 52
- Please contact with our ticketing workplaces, operators, Call place for EXST
prerequisite.
- Application toll as traveler book 1 more ticket at the season of booking
administration.
 Pregnant women (PREG):
+ Pregnant ladies are required to educate us at the registration counter and fulfilled
conditions beneath:
+ Pregnant ladies are required to sign the waiver of responsibility frame
+ Pregnant ladies more than 27 weeks – 32 weeks:
- Passengers exhibit maternity endorsement shape fulfill conditions taking after:
• The testament is affirmed by maternity specialist.
• The testament must not be over 7 days old from the date of travel
• Health finding of pregnant and baby are sufficient to make the flight. On the off
chance that Health conclusion of pregnant and baby are sufficiently bad to take the
flight, are required to finish restorative freedom (as Passengers required for medicinal
leeway before takeoff)
+ Pregnant ladies more than 32 weeks: We reject carriage.
+ Pregnant with twin or more kids; or being pregnant by manual sperm injection; or
fetal advancement is strange: are required to finish therapeutic leeway (as Passengers
required for restorative freedom before flight)
 Passengers required for medical clearance before departure:
+Passengers required for therapeutic leeway before flight is a traveler who has no less
than one of the criteria beneath:
- Passengers who can't enjoy themselves amid the flight because of mental issues
- The harmed travelers, ailment or wellbeing condition can bring about truly effect to
alternate travelers on the flight.
- Pregnant travelers, include: Pregnant with twin or more youngsters; or being
pregnant by manual sperm injection; or fetal advancement is anomalous.
- Infants with strange wellbeing status or rashly conceived kids
- Passengers who may have their medicinal condition exasperated amid the flight: lung
sicknesses, ear or nose ailments, recently broken bone, recently surgery, recently being
pregnant by manual sperm injection, genuine sensitivity, and so forth.
 53
- Passengers with infectious malady: chicken pox, aspiratory tuberculosis, measles,
parotitis, and so on.
+ Conditions of acknowledgment:
- Conditions of went with travelers:
+ Being ready to move and administer to himself amid the flight, acknowledge
carriage without went with travelers
+ Being not able move and administer to himself/herself amid the flight: acknowledge
carriage when go with went with travelers, who is from 18 years old or more
established, sufficiently sound to help travelers; each went with traveler is
acknowledged to go with just 01 traveler required for medicinal clearance before
takeoff.
 Infants; Children; unaccompanied minors; young passengers traveling alone:
+ Infants (INF):
- Infants are travelers who matured under 02 years on the date of takeoff.
- Conditions of acknowledgment:
• Infants with normal wellbeing status. If there should arise an occurrence of Infants
with strange wellbeing status or rashly conceived youngsters are require for restorative
freedom (as Passengers required for therapeutic leeway before flight)
• We reject carriage INF under 14.
• INF are required going with goes with, who is from 18 years old or more seasoned, is
not traveler requiring unique help as WCH; BLND; DEAF; Passengers required for
restorative leeway before flight.
• Each grown-up going with 01 INF and INF helps on a grown-up's lap.
• The greatest number of INF on every flight rely on upon individual flying machine.

+ Children (CHD):
- Children are passengers who aged from 02 years to under 12 years on the date of
departure.
- Conditions of acceptance:
• CHD are required traveling with accompanies, who is from 18 years of age or older,
is not passenger requiring special.
• An adult travel with maximum: 1 INF and 1 CHD under 6 years old; or 02 CHD
under 6 years old; CHD from 6 or older: no limitation.
 54
+ Unaccompanied minors (UM):
- Unaccompanied minors, who aged from 02 years to under 12 years on the date of
departure, traveling alone.
- We do not provide UM service.

+ Young passengers traveling alone (YPTA):

- YPTA are passengers, who aged from 12 years to under 14 years on the date of
departure, traveling alone.
- Conditions of acceptance:
• Accept carriage YPTA only on domestic flights.
• Requests must be made at least 48 hours before departure time via VietJet Ticketing
offices and Call center.
c. Seat selection
VJA offers the seat selection for Promo and Eco ticket. Passengers want to have
a better seat or want to enjoy the view of the sky can choose this selection for
comfortable.
 Hot seat is providing for people who want sit in the quiet zone with
businessman and in the front of the plane. And of course, this type of seat also
allow passengers have the priority of leaving the plan first.
 Extra room seat provide passengers to have more room for stretch their legs,
relax and enjoy the space. Customers with tall height might feel comfortable
with the seats. However, this service is only for people with 15 years – old
above and excludes pregnant woman and the elder.
 The other seat (including seat aside and near the window). Because all seats in
flight are randomly choosing, passengers can pay small amount 30.000vnd
($1.25) for choosing seat aside for better moving or seat near the window for
sightseeing. Especially, passenger travel with companies might want to buy this
service for siting with friends and family.
Passenger can easily book these services online on the website, Call center,
through Vietjet ticket office or contact with ground office before flight.

2.5.2. Price
VJA is a low – cost carrier who aim the target of low and medium income
passengers. Therefore, the price is very cheap and reasonable for customers to buy.
 55
Normally, the tickets price is range from 1 million to 2 million vnd round trip. It is
quiet reasonable for students and low income people.
a. VJA is a wise company while cutting some unnecessary costs for a cheaper
price.
 VJA cutting the price to print boarding pass. Passengers can print by
themselves or show the code on their cell phone to check – in. Unlike other
carrier print the boarding pass by hard papers, VJA replace it by printing in the
cheaper paper with smaller size and less expensive.
 The carrier understand that each kind of aircraft has a different way to operate.
If the firm buy different types of aircraft, it is necessary to train all staff how to
operate which cost money and time. Therefore, VJA only use 1 or 2 kinds of
aircraft (usually Airbus A320 or Boeing 737) to reduce the cost of training and
repairing.
 VJA take care of excessive employees. After flight, the flight attendant can
clean the plane. They can work different job to save costs.
 Normally, tickets includes meals during the flight or snack. Due to these snack
and food, the price will be more expensive. VJA cut down all the food during
the flight to save cost. This is a good move because some customers don’t like
the food on the plane but they still have to pay for it or if customers want
another dishes, they have to pay extra money to have it. During VJA flight,
customers can order sepated dishes to enjoy during the flight and who don’t
want food don’t have to pay money for that.
 Ground expenses also are cut down for better price.
 56

Figure 2.12: VJA Price list

(Source: VJA website)
As the figure, the Promo price is quite cheap for customers, therefore, promo
always sold out for months. Customers who want to have a better deal should book
tickets early for cheap price. VJA tickets are cheap but if book earlier, it would be
cheaper.
b. Discount
One element that making the reputation for VJA is that discount. The airline
always has good deals and discount almost every day for customers. They often offer
discount in promo ticket or if customers want to upgrade, they have only charge a little
fee for this.
A famous deal in the year is that domestic ticket often range about 290.000vnd to
390.000 vnd for one way in a particular time such as from 12pm to 4pm. Because of
the good deal, in the first two day of summer discount , VJA sold 1675 tickets and in
the fourth day the number increased to 2056 tickets. All of the discount tickets are
opened automatically according to the situation of the flight and the seat of each flight.
There is no such situation like saving place or reserving more than 48 hours.
Some customers afraid that the discount will affect to the quality of service but
according to representative of VJA, there would be no different between the ticket or
 57
the services. Everyone are treated equally in VJA, therefore, nothing is concerned
about it.

2.5.3. Promotion
VJA promote a good promotion to improve their image in the customer vision.
a. Advertising
At the first year of coming, VJA shocked the audiences with the vision of bikini.
With the idea of the attendant wearing bikini, the company using this concept to
promote the company’s image. VJA is known for its young and attractive flight
attendants who wear bikini on the flight to the beach locations. Therefore, the images
have make an impression to the customers with the shocking pictures. This is a
shocking advertising but it works. The company is popular with people if you mention
about bikini airline.
“You have right to wear everything you like, either bikini or the traditional ao
dai” said Miss Nguyen Thi Phuong Thao – VietJet Air CEO, referring to the
traditional long tunic worn over loose pants. “We don’t mind people associating the
airline with bikini image. If that makes people happy, then we are happy”. VJA also
take risks while showing bikini show during the flight to advertise the image of the
company. However, the company didn’t ask for government permission, they were
fined for 20 million vnd for that action. The company did leave a strong impression on
the passengers. Their adverting about the airline works. With the young image, the
company want to escape from the traditional images of ao dai and formal way, and
with the bikini image, they make a big move to the audience.
VJA also sponsor for some famous competitions in Vietnam for extending the
image. In 1 eposite of “The face”- Vietnam, contestors travel from Ho Chi Minh City
to Nha Trang by Vietjet air flight. A representative of VJA and three coachs of the
games chose the winner of that challenge. The contestors wore the bikini with the
color that same with the color of the airline and taking picture in Nha trang beach. This
is a way that VJA advertises its airline and saving its image on the audience. Not only
on television show, VJA also sponsors in many social and charity program such as
Hue 2016 festival: Hot air balloon fiesta, Music night to reminding composer – Trinh
cong son, Vietnam IRONMAN 70.3, Miss Vietnam, Miss Universe, Forbes 30 Under
30, etc.
b. Public relation
 58
Furthermore, VJA also broadcast their images by website and through social
media. Running ads in Facebook nowadays is popular strategy. Young people often
spend time to surfing web and facebook. Social media plays an important role to
spread the images and the company to the world and to customer. VJA often update
reviews of customers on their site for further understandings, also with discount and
the information of the corporation.
In the first launch of “bikini airplane”, VJA hired hot girls with hundreds of
followers and fans to be the representative of VJA. Or recently, VJA also hired Hari
Won – a favorite singer as the representative for this 0vnd discount. For the skyboss
services, Miss Vietnam 2009 Mai Phuong Thuy has been the one that present for the
luxury service of the firm. Along with Mai Phuong Thuy, singer Kyo York also
appears as the representative for the service.

Figure 2.13: Skyboss first launch

(Source: Vietjetair.com)
c. Sale Promotion
After shinning and becoming popular with the vision of bikini, VJA come back
to normal inform which are shirts and shorts. However, it doesn’t mean that VJA will
give up and delete the image of bikini. The firm plan to take a full shot of calendar
with the theme of bikini. They hope that this plan will help the firm promote the image
and become more popular with the unique uniform and unique calender. There would
be no airplane in the whole world take the bikini shots as the carrier’s calendar to give
to the customers.
d. Sale force
 59
There are many tourism fair where the carrier promote their image and
popularity. It is also the chance for sale ticket. In Tourism fair in Ho Chi Minh city in
September 2016, VJA took advantages of the fair to promote and spread the trade
mark to the customer. Every day, VJA’s kiosk in the fair sold 700 domestic tickets
with 0 vnd to go to and go from Ho Chi Minh City with the flying time from 12/10 to
20/12 including holidays. These tickets were sold in the time of 12 pm to 2 pm and 3
pm to 4 pm. People lined up and register the tickets online. Moreover, VJA also issue
some promo code for customer with 10% or 20% off for the next flight. Of course, this
ticket didn’t include tax or other related fee.

2.5.4. Place (Distribution)

With this aspect, VJA has two ways of distribution
a. Offline .
VJA has ticket office all around the country. Customers can contact to the ticket
center to order the tickets. They just need to come to the office and tell where and
when want to go and the representatives will take care of the rest. Their office spread
from the south to the north of the country and off sea. Some websites also are the third
party that guarantee to buy tickets and seek for the services. This way of distribution is
quite popular because these party have technology advance. They have private
facebook, therefore, every time VJA has issue discount, these website will introduce
exactly the price including taxes and other expenses. It would be convenient for
customers because if customers have questions, they can chat directly to the agents for
further information.
Also, VJA set up travel fusion to connect and work with the one that want to be
third party to distribute VJA’s ticket. Connection with XML API is considered as a
channel to distribute VJA’s tickets, especially for agent or third party want to sell VJA
ticket directly on website or through apps. Connection allows users find the best deal
and best information for the flight. Thanks to technology strength, VJA choose to
work with travel fusion, moreover, travel fusion is leading in the technology area with
best services.
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Figure 2.14: Connection XML API operation map

(Source: VJA distribution operation)
Requirements is that members have to pay for travel fusion a membership fee per
year for the maintenance and repairing the system and 2$ for successful sign up.
Furthermore, members have to understand the requirement, time and sign the contract
with travel fusion. Based on travel fusion, VJA can find the agent or third party to
representative and deliver ticket all part of the country and other place in the world.
b. Online
Besides selling through third party, VJA also distribute its tickets through its
official website. Through website, customers can find the discount, the information
about the flight, seat situation and situation of the flight. Price of all the departure time
of everyday is listed in the website for passengers to choose. Everything works
automatic and it is signed for many languages such as English, Vietnamese, Korean,
etc. It would be easy for foreign customers to take a flight to go to different part of
Vietnam. Below the website are VJA information such as email or phone number.
Customers can email to the service center or call direct to them for further information.
VJA also provide directly selling service through phone call. In VJA website,
they provide a call center number for booking tickets which work 24/7 including
holidays. Customers just need to pick up the phone and call the center where and
 61
when to go, they will book a ticket immediately and fast. Through call center, VJA
allow customers to reserve the ticket and the seat for 48 hours. Furthermore, if a group
customers more than 10 people call to book tickets, they will be offered 10% off for
the total fee.

2.5.5. People
For all companies, People is one of the most important element for the company
to operate smoothly. VJA also concentrate on this factor
a. Recruiting
VJA has plan to recruit the crew and employees with experiences. They have
private channel and website to concern about the employment only. Recently, VJA
posts and finding 4 pilots, 1 flying crew, 1 ground handing and 1 documentation
officer.
With the pilot job, VJA requires standard flying hours with certificate of their
current plane. Moreover, in order to operate good performance during the flight,
attendants have to have a medical certificate, requirement of last flight, no history of
accident or criminal record with a certain level of English that can communicate well.
All of the proven documents must be valid and true.
Crew attendant. As Vietnam’s fastest growing airline, Vietjet is constantly
expanding its fleet while also extending its flight network throughout Vietnam and
across the region. To facilitate this dynamic growth, Vietjet is also currently seeking
dynamic, customer-focused candidates to join the airline’s famously fun and friendly
cabin crew:
- Attractive income and benefit
- Friendly, professional and fun working environment
- Unlimited training and promotion opportunities.
- Creative and challenging minds for improvement
b. Training
VJA also focus on training their employees to improve working productivity
especially pilots and crew attendants.
Even pilots of VJA are skillful and rich of experience, they still have to join to
training program such as examination, training and enhance ability at examination
center in the area and oversea center of Airbus. In 2015, VJA has operated 635
training programs with total 14453 hours for 7429 attendants, which are 132% higher
 62
than in 2014. Besides, VJA also train 60 new pilots to move from cadet to substitute
pilots for 36 pilots. VJA Training center always guarantee to supply enough
employees to serve attendant crew for the firm.
Moreover, plan maintenance employees are the ones that VJA focus training too.
In 2015, VJA hired and trained 50 engineers B1/B2 for repairing and maintaining the
aircraft. The firm also sent engineer to Airbus center to train to operate the aircraft
program more effective. VJA always maintain to operate the AirFase- Flight Analysis
Database system for better analysis and upgrading the rate of analysis flight to 90,36%
excess Airbus’ advice which is 90%.The firm also organize 12 courses about Safety
Management System to train for 211 employees which included 137 flight attendants
and 74 technical staffs.
c. Customers
Nowadays, with the present of many airline in the market, customers have right
to consider and choose which one is better. With the highly understanding and the
development of the Internet, customers can easily compare and contrast each type of
airline. Therefore, which airline doesn’t cause impression on customers, that airline
would be disappeared on the market at any time.
VJA understand the important of this. They focus on services and security. VJA
operate the security of customer information with the application of the technology to
secure the information. All the information that VJA uses booking are secure tightly
by the system. They also prevent third party access to take the information. They
collect private information only for booking situation only and without other purpose.
Customers private date can be eased at any time that customers request to delete.
Besides providing private information for checking and working with the system or
collect information to the government, VJA guarantee to secure the information in the
safe way. With some customers reveal personal information for third party, VJA
prohibit these parties to expose or leak these private information for public or another
party.
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2.5.6. Process
With the development of technology, almost every flight process are working
through the automatic system with the control of computer.
a. Process of booking tickets
Normally, customers can book ticket online therefore, the process that company
take the request also online. These are steps to booking a ticket through automatic
system of VJA.
 Step 1: Log in to www.vietjetair.com. Select departure and arrival location, one
way or two ways, departure and arrival date, number of passengers, children.
 Step 2: Select time and price fares
 Step 3: Full in your information and contact list
 Step 4: Select add on services like: Checked baggage, seat selection, hot meals,
travel insurance… and confirm
 Step5: For payment, customer can chose to pay the ticket through Visa Card,
Master Card, domestic ATM card which register to online banking or pay the
ticket through authorized booking agents.
 Step6: Confirm booking: The system will show all of the booking information
and contacts, click on “Yes” with terms and conditions of transport.
 Step7: Finish booking: According to personal information and flight selection
that are confirmed before, the system will process booking. After that, flight
route is verified, including the ticket information, ticket code and payment time.
The system will send ticket code through the register email (Email that
customer used when booking the ticket) in 5 minutes from the time customer
finish payment in the website. If customer do not received e-ticket through
email, they can contact with call center for further support.
VJA call center working 24/7 including holiday. Therefore, customers can call
and ask about their flight at any time. According to survey, 98% customers are
satisfied with the service that VJA supply.
b. Process of check – in
There are two ways check – in nowadays.
 With the development of technology, VJA provides a service called web check
– in which means that customers can check – in by themselves without going to
the airport early and stand in the line. Customer can check – in at home. After
 64
finishing check – in, customers can go to airport and print the boarding pass.
The process would be more easier and take less time.
 Customers can check in right in the airport. After booking the tickets, they will
receive the booking code which is sent to email or by texting. Customers have
to go to airport 1 hour earlier with domestic flight and 2 hours with
international flight. Passengers go to VJA kiosk that serving check – in and
checked bags for boarding pass and arrange the seats. After check – in, they can
find the gate printed in the tickets and waiting for departure time.
However, understand of the time and some problem that occurs during the
checking time, VJA extend the late boarding time for passenger for 30 minutes before
departure time. And the time to close the check in kiosk would be 40 minutes with
domestic flight and 50 minutes with international flight.

2.5.7. Physical Evidence

Physical evidence includes simple things such as uniform, infrastructure,
equipment,etc.
a. Employee uniform
As a young company with energetic and youngful image, VJA designs a unique
uniform which is different from other carrier. The picture of the young staffs are red
shirts and shorts which are comfortable and dynamic. The uniform is unique and
impressive which catch customer’s attention and curiosity. Also with the basic color is
red – the main color of Vietnam national flag, VJA shows the love of the country
through simple uniform.
One way of marketing is shocking the audience. Vietjet Air did shocked the
audience while in the first launch, they introduce their flight with the image of bikini.
The airline want to transmit a message which is every one can do and can wear
anything they want. As long as the customer are happy, VietJet Air is also happy.
b. Financial capacity
Vietjet air have a strong financial base. In the first day of establishing, VJA is
formed by 3 main and biggest shareholders which are T&C Corporation, Sovico
Holding and HD bank with the first share capital of 600 billion vnd (about 37.5 million
dollars at the time of contributing). In the end of April 2009, Sovico Holding bought
all the stocks of T&C Corporation and became the biggest shareholder with 70% of the
shares. At the first start, the financial ability of VJA was very strong and stable which
is necessary for a first start firm.
 65
After several years operating, VJA has become the second largest airline in the
area owning 41% of the market share. The airline achieved many success during the
operation. In the bank statement in 2015, the airline had announced that during this
year the firm earn 1000 billion vnd as the net profit. The financial ability is stable and
stringer every year. Moreover, VJA plans to issue 30% of the stocks on IPO in the end
of 2016. With this big move, the airline will attract many foreign and domestic
investors. For the upcoming IPO, VJA show the chance and ability to take the market
and develop.

2.6. VietJet Air’ SWOT Analysis

2.6.1. Strengths
In Vietnam marketplace, VJA has many strengths that help it grow and develop

 VJA has huge financial potential and capability to control the risk about finance
and regulations. In early 2016, VJA informed that their revenue increased by
205%, reached 10.900 billion VND while net profit was 1000 billion VND.
With the upcoming IPO, VJA intended to sell 30% of capital for foreign
investors, which can bring a huge financial strength for them.

 New flight crew with rapidly development and modern aircraft: VJA constantly
add more new modern aircraft into the crew in order to meet market’s demand.

 VJA owns young, enthusiastic, professional staffs. As the image of VJA is

young and dynamic, the staff also express the image and the idea of the firm.
They are professional, fast, proactive within any flaws. Moreover, the flight
crews are trained monthly with high hours of studying for better services.

2.6.2. Weaknesses
Despite strength, there are some weakness still existing in VJA system

 The experience of aviation industry is still weak. VJA joined the aviation
industry in 2007 compared to other carriers VJA is still young and need more
experience, therefore, there are still things that VJA needs to learn to adapt and
work on domestic market.
 66
 Managing program still meets some difficult. The organization have difficulty
in operation. There are still mistakes existing in the system causing the slow
development of the firm.

 Discount program doesn’t work effectively. There are some discount program
that customers can’t book. Some of the discount program cause confusing for
customers which lead to misunderstanding and buying the wrong sections.

 Delay flights. Although VJA ordered 100 Airbus aircraft, it takes long time to
produce them. VJA opens more flight which cause demand greater than supply.
Flights have to delay to wait for the aircraft to come and take time to process
such as cleaning and refueling.

2.6.3. Opportunities
As Vietnam is a potential market for low – cost aviation industry, there are many
opportunities opening to VJA

 Potential market and rapid development. Vietnam is a potential market with the
high demand of flying especially for low – cost carrier. People tend to fly more
to save time and save money, therefore, chances for VJA are more opened

 Technology development. With the development of technology, the services

during the flight are more changing and more convenient.

 Aircrafts are improved with better quality, safer, more modern, less fuel
expense and reasonable price. VJA has just signed a contract of buying 100
latest aircrafts of Boeing B737 MAX 200 which are the latest models with the
possibility of saving 20% fuel for the previous model.

2.6.4. Threats
There are also a lot of threats that VJA has to face:

 More competitors. As the market is potential, more and more foreign low – cost
carrier want to enter to the market. The competition becomes more strict.
Customers have more choices which lead to losing segment to another
competitors.
 67
 Increasingly fuel expense. The fuel expense rises day by day, which cause a
problem for low – cost carrier.

 Customer demand. Customer’s trends are changing every day, higher and
higher. This requires VJA to improve and develop for better system and better
services

 Unpredictable weather condition. With the climate change, the weather is

becoming harder and harder with storms, rain, etc. which might effect on flight
industry and cause delay or cancel the flight at any time.
 68

CHAPTER 3: SOME RECOMMENDATIONS FOR VIETJET AIR

3.1. Mission
Vision of VJA is to become the most preferred and prestigious airline in Vietnam
and in the region
Slogan of VJA is “Enjoy Flying”
Mission:
 To develop and operate on intensive flight network. To achieve breakthroughs
in aviation industry.
 To make air transport more popular in Vietnam and in the region
 To provide satisfaction to passengers with excellent service and a friendly smile
Core value
 Safety
 Fun and Friendly
 Affordable Price
 Punctuality

3.2. Development orientation of Vietjet air in the next period

3.2.1. Development orientation of Vietnam civil transportation

Vietnam Aviation has settled some goals for the 2020 as below
 Vietnam avian will develop quickly but stable, safe and efficient in all operation
aspects including the airport system, flying management system, air cargo and
services which can help Vietnam aviation to become focusing economy and to
be a part of economic development and ensure the national security, integrate
with other countries’ avian in the area. Specifically, in the period 2010 – 2020,
steps by steps develops deeply for the air cargo liberalization and air services.
 Air traffic must become the safest, most popular and convenient way to travel,
which can be a great part of development and industrialization of the country.
Until 2030, Vietnam would become the country having the most developing
aviation in the area and in the world.
 69
 Until 2020, airline can be exploited mainly from the south then spread through
the country with the high frequency and with two biggest airports – Noi Bai
International Airport and Tan Son Nhat International Airport.
 Until 2030, continuing to open more domestic airways, opening more ways to
inter-city, even the ways connecting with Ha Noi and Ho Chi Minh City.
Moreover, Vietnam aviation also will focus on developing the airway according
to multi – purpose cargo transportation, make sure stable development and
connect tightly with other types of transportation.
 Total market of passenger transportation would increase 14% in 2015 – 2020
and 7,5% until 2030.
 Total market of cargo transportation would increase 18% in 2015 – 2020 and
14% until 2030.
 Passenger services in airport would increase 13.6% in 2015 – 2020 and 7,7%
until 2030.
 Cargo services in airport would increase 17% in 2015 – 2020 and 14% until
2030
 Transportation quantity of all airlines in Vietnam:
+ in 2020, 63 million passengers and 63725 million passengers per km; 1 million tons
and 1580 million ton per km cargo.
+ in 2030, 132 million passengers and 125000 million passengers per km; 3,2 million
tons and 3400 million tons per km cargo.
 Quantity of exploiting airports:
+ in 2020, 123 million passengers and 3,1 million tons cargo
+ in 2030, 260 million passengers and 11,3 million tons cargo
According to these numbers, it can be seen that Vietnam Aviation set pretty high
goal. To completing these goals, Vietnam aviation has come up some policies to
support.

3.2.2. Development orientation of VietJet Air

Development strategy until 2020
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+ Continuing build VJA brand to be one of the popular brand in the country and the
area; diversified services and improve the operation and services.
+ Successfully issuing IPO in the end of 2016.
+ Opening more domestic airways, develop stably. Make sure that these airways bring
profit.
+ Maintaining brand policy based on the developing of service quality especially
ground services, Skyboss services and customers cabin.
+ Continuing completing and automatically 100% exploiting operation based on
advance process.
+ Reducing 15% expenses and control the gasoline undergo.
+ Maintaining the youngful, energetic, dynamic and saving environment to every
employees
Besides, based on the results achieving in the 2016 and 2015, VJA set the plan
for 2017

2017 2016

Aircraft crews 42 45%

Passenger (millions) 15,1 62%

Exploiting flights 91863 57%

Domestic 31 11%

International 17 42%

Total flying hours 164666 45%

Expense on km (exclude fuel) 1,74 -74%

Table 3.1: Exploiting plan for 2017

(Source: VJA performance report in October 2016)
Predictably in the end of 2017, VJA will exploit 42 aircrafts with total of 91862
flights, and carry 15,1 millions passengers, total time turning is 27 minutes and on –
time flying is 90%. VJA has plan to develop new airways with more 3 domestic
 71
airways. With the aim of bringing satisfaction for customer, VJA will continue
improve services quality. To accomplish these goals, VJA has to overcome the
weaknesses and develop the strengths.

3.3. Recommendations

3.3.1. Development the inputs of the firm

a. Using the amount capital
Capital is the necessary element for all business operation. With VJA, capital is
necessary for buying more aircraft, equipment, maintain the competitive capacity in
the domestic field. All the challenge about capital makes the firm to think carefully to
have logical adjustment. First, the firm should take full advantages all possibilities to
develop the capital. It is make uses of all the loans of the banks and credit fund. Also,
bring the company stock to the IPO and issuing the stocks are the best way to get more
fund from the investors.
Then the capital are stable, the firm should consider to cut down the cost
logically of some unnecessariness expenses. The firm can cut down the frequency or
pause some airways that don’t bring back profit but still cost a lot. Moreover, with the
competitive market, the firm should take step by step and develop each project in order
to avoid spending all money in one period of time. Some unnecessary project can be
delayed for other urgent project to operate. Along with this, it is unnecessary to hire
more employment to avoid the excessive in some department. The firm can increase
working hours but have to come up with truth reason for the employees not feel of
being make use of working. But the firm should calculate properly for employees not
working too much, keep the working hours in acceptable level.
b. Strengthen and enlarge co – operation
Under any circumstances, co – operation only happen when both parties find the
profit in the contract. Cooperating with VJA should be extended in many aspects:
+ Cooperating with international organizations for human resource training process
+ Working with other carriers to open more airways, increase transit possibilities and
bring up some airways with reasonable price.
 72
+ Cooperation open the opportunities to learning the process of other biggest carrier in
the world for a better operation.
+ Moreover, cooperation is the chance to open relationship with other friends to create
a healthy business environment.
It is obviously that VJA give prominence to cooperation, which can brink
positive effects to the firm. However, the firm need to evaluate the opponents in very
aspects before deciding to cooperate to make sure that the cooperation can bring back
equal profit to both parties.
c. Completing co-ordinate process
Co – coordinating operation of all department during working process will affect
to the process of the whole company. If one part of the department works not properly,
the goals will not be completed. In VJA, there are two coordinating process
+ Co-ordinate internal process: VJA has the intention to build the simple structure with
the aim of saving time to communicate between departments. All the department
concern with each other will be placed next to for properly working. VJA also have a
internal network that employees can communicate by email or chat through the
network. By this, the process will operate more quickly and convenient. However, the
firm still need to improve the efficiency of the internal network for better operation in
the future.
+ Flying coordinating process: This is the process involving with many department
before the flight take off such as check – in department, luggage inspection part,
ground handling, adding fuel and repairing the plane and the flight crew. Until now,
check – in process is still time – consuming, boarding process and transit process are
sill complained by the customers. In this problem, the airports should take
consideration to come up with idea to deal with it in professional way, especially 2
biggest airports – Noi Bai International Airport and Tan Son Nhat International
Airport with the high rate of passengers both domestic and international flight. To VJA
aspect, even delay situation still happen, operating process are operate better. In recent
time, the controlling department need better coordinate with other department to settle
reasonable flight schedule to reduce and avoid the rate of delaying and cancelling the
flight.
 73
3.3.2. Recommendation for marketing aspect
a. Developing price strategy
VJA is an airline that work in price aspect pretty good in the domestic nowadays.
However, the firm still should have more adjustments to cut down the unnecessary
cost to reduce the price to compete with other low – cost carrier.
+ The firm should investigate to each market and each region to find the best price to
propose to passengers.
+ It is necessary to cut down the ground expense. Some customers complain that even
the price of VJA is every cheap, when calculate the total price, it is still quite a lot.
There are some expense that the firm can cut down and save more money.
+ Focusing on the services. Even the price is cheap, the service is bad, customers are
willing to change the airline and move to another flight. Therefore, the firm must focus
to improve the performance of the services in – flight or on the ground to prove with
customers that even low price, the services are still perfect without any flaws. The
flight attendants serve all class and all type of tickets equally with the best they can.
From that, customers will feel comfortable with their choice and choose to come back
again.
b. Solution to deal with delay and cancel flight situation
It can be said that the situation of delaying and cancelling is the popular situation
to all airlines not only low – cost carrier. No carrier can stop this situation but they can
find the way to reduce maximum of the quantity of the flight that is cancelled and
delayed which can seriously effect on customers.
Through researching and studying the situation, it can be seen that technical
problem, commerce and previous stage are the 3 main reason
+ Technical problem is the most problem that causing delay and cancel. This comes
from the engine problem such as before taking off, technical engineers detect the
problems; as the maintenance the aircraft before but all the plane already have
schedule then the flight must be cancelled.
+ Commerce problem: there are some flights which few passengers, these flight must
be cancelled.
 74
+ Previous flight. The previous flight come back late, and the cleaning and
maintaining the plane take time too, therefore, the airline have to delay to finish the
works before customers get on the plane.
With the technical problem, the firm can totally controlled. It is mainly based on
the operation of the flight control department. This department have to work with
technical department to schedule the repairment and maintenance for the aircraft. The
schedule must be calculated to make sure all the planes being maintain before
problems are detected. However, in realistic it is quite hard to control. Some aircraft
are repaired properly but in the last minute, the engine start to have problem. Or the
mixing the flight schedule can be caused by the need of customers and the airlines
want to serve as much as possible. Or some airplanes are hired from other airplane
manufacture, until return process will causing the disorder of the flight. On the other
hand, it is unpredictable to calculate the amount of customers to serve and to settle the
flight. Therefore, the increasing of the aircraft is necessary to have plane to replace for
the plane problem.
With the previous flight problem, the flight control department need to analyze
the market need reports which is supply by the strategic market department, therefore,
organize the transit flight better. The completing the in ground process before taking
off such as luggage, check - in is the necessary, because these steps often takes a lot of
time. When cancelling or delaying, the priority work is to announce and explain to
customers the reasons and instruct them to doing the next part. If customers have
further questions, staffs have to explain clearly without any annoying attitude. Then
the flight control department have to calculate and help customers to get in the earliest
flight. Compensating for customers are also a good action to take to insure the
customer’s interests and keep the reputation of the firm.
With commerce problem, it can be easily handled than the others. VJA intended
to set a separated department to observe the booking each flight. If the departure day is
approaching, there is few passengers, the airline should confirm that the flight is
cancelled. Customers being announced can find the alternative flight in other days for
alternative option. The firm also need to compensate for customers of this
inconvenient.
 75
3.3.3. Recommendations for the government
Vietnam government has determined to develop the air industry as the main
focus. With the goals that VJA has been stated, the cooperation of the government
plays an important role of completing those targets.
+ Creating the opening the environment for the airline to develop. Transportation
department should build new and upgrade infrastrure systems as road systems,
airports, etc for better operation in the domestic market and international market.
+ Investing to upgrade the big international airports such as Noi Bai International
Airport, Tan Son Nhat International Airport, Da Nang International Airport, etc.
because these are the biggest airport in the country with the huge number of visitors.
+ Completing the law system. The government need to build a complete regulation
about air industry to avoid misunderstanding and conflict with other business laws.
From this, airline can work stable with a clear business for better operation.
+ Support VJA to issue IPO successfully to attract foreign investors.
+ Tax is also a issue that the firm concern. Government should issue some favorable
taxes such as reducing fuel tax for air industry, reduce or ease the import tax on new
technical engines.
+ Government and Tourism Department should form the strategy to attract foreign
passengers to travel in Vietnam or push the number of domestic customers.
With the help from the government and the positive changing of VJA to correct the
minors of the weakness, the effective of Marketing – mix policy will be better.
 76

CONCLUSION
With the fact of Vietnam joining to the international market, VietJet Air has to
face with many obstacle and new competitors. But the firm still develop stably in spite
of young age of development. In this hard scenario, the airline still catches up with the
technology and improve the Marketing – mix strategy to attract customers. Appearing
to customers with the modern aircraft crews, large opening airways, diversified
youngful and energetic flight crew, VJA has been always attractive to the customers in
and outside the country.
Cooperative development is the common trend of all airline globally. VJA has
success in working and forming Thai – Viet Airline to spread the popularity of the low
– cost carrier. From that, VJA can develop the readily potential and overcome the
weaknesses of technology, human resources and lack of aircraft.
Even though the airline has been achieve remarkable performance, there still
exist some limit that needed to overcome. Especially with the situation of integrating,
the firm meet the competitions from internal competitors and external competitors in
the domestic market.
Through these contents above, the graduation thesis did complete these missions
below:
 Mention to all the literature information about marketing and marketing mix
(7Ps)
 Introduce about VietJet Air Joint Stock Corporation and Vietnam Aviation
Industry
 Analyze and apply marketing mix (7Ps) in VietJet Air business for better
performance and bring out some recommendation for the company.
I hope that with these proposals and the efforts of VietJet Air employees, the airline
will develop and achieve further performance in the future and become the best airline
in Vietnam.
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REFERENCE

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1. Hiam, A. and Rastelli, L. (2007). Marketing. 1st ed. Hoboken, NJ: John Wiley.
2. Kotler, P. and Armstrong, G. (2014) Principles of Marketing: global edition. 15th
ed. Pearson Education Limited.
3. Kotler, P. and Armstrong, G. (2010). Principles of marketing. 13th ed. New
Jersey: Pearson Education, Inc., pp.48-60.
4. Kotler, P. (2005). According to Kotler. 1st ed. New York: AMACOM.
5. Pearson, D. (2014). The 20 Ps of Marketing. 1st ed.
6. Goi, C. L. (2009) A Review of Marketing Mix: 4Ps or More? International Journal
of Marketing Studies.
7. Performance report in October 2016 of VietJet Air Joint Stock Corporation

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cho-du-lich-quoc-te-tp-hcm/> .

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 APPENDICES
Appendix 1
Major Store Retailer Types (Kotler and Armstrong, 2014, p.398)
Type Description
Specialty store A store that carries a narrow product line with a deep assortment,
such as apparel stores, sporting-goods stores, furniture stores,
florists, and bookstores.
Department A store that carries several product lines – typical clothing, home
store furnishings, and household goods – with each line operates as a
separate department managed by specialist buyers or merchandisers.
Supermarket A relatively large, low-cost, low-margin, high-volume, self-service
operation designed to serve the consumer’s total needs for grocery
and household products.
Convenience A relatively small store located near residential areas, open long
store hours seven days a week, and carrying a limited line of high-
turnover convenience products at slightly higher prices.
Discount store A store that carries standard merchandise sold at lower prices with
lower margins and higher volumes
Off-price A store that sells merchandise bought at less-than-regular wholesale
retailer prices and sold at less than retail. These include factory outlets
owned and operated by manufacturers; independent off-price
retailers owned and run by entrepreneurs or by divisions of larger
retail corporations; and warehouse (or wholesale) clubs selling a
limited selection of goods at deep discounts to consumers who pay
membership fees.
Superstore A very large store that meets consumers’ total needs for routinely
purchased food and nonfood items. This includes supercenters,
combined supermarket and discount stores, and category killers,
which carry a deep assortment in a particular category.
Appendix 2
Major Types of Wholesalers (Kotler and Armstrong, 2014, p.416)

Type Description
Merchant wholesalers Independent owned businesses that take title to all
merchandise handled.
Brokers and agents Do not take title to goods. Main function is to facilitate
buying and selling, for which they earn a commission on
the selling price. Generally specialize by product line or
customer type.
Manufacturers’ and Wholesaling operations conducted by sellers or buyers
retailers’ branches and themselves rather than operating through independent
offices wholesalers. Separate branches and offices can be dedicated
to either sales or purchasing