INTRODUCTION TO MARKETING (MKT410)

ASSIGNMENT TITLE: ANALYSIS ON THE MARKETING MIX

NAME OF COMPANY : AIRASIA AIRLINES

TYPE OF BUSINESS : LOCAL AIRLINES INDUSTRY

PREPARED BY:

 NUR KAMELIA KIRANA BINTI RAYMY SHAHROMANN (2021808794)

 NUR ADAWIYYAH BINTI MOHD RADZI (2021453994)

 NURUL IZZAH AMANI BINTI MOHD ZAKI (2021850228)

 MUHAMMAD ZUL HELMIE BIN MD NOOR (2021847348)

 NUR ALIZA BINTI JOHA ZULKIFLI (2021871468)

PREPARED FOR:

DR RIZUWAN BIN ABU KARIM

SUBMISSION DATE:

24TH JANUARY 2022

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 TABLE OF CONTENT

DETAILS PAGE
EXECUTIVE SUMMARY 3
INTRODUCTION 4-7
MARKETING MIX (PRODUCT) 7-9
MARKETING MIX (PRICE) 9-11

MARKETING MIX (PLACE) 11-12

MARKETING MIX (PROMOTION) 11-12
CONCLUSION 12
REFERENCES 12-13

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EXECUTIVE SUMMARY

AirAsia Berhad is a Malaysian airline that offers domestic and international flight services.
AirAsia has targeted a customer market in Malaysia, including young adults, working adults,
and middle-income groups. AirAsia operates in a healthy external environment, emphasized
by the low-cost tickets available to people from all walks of life. AirAsia's marketing strategy
examines the brand using the marketing mix framework, including the four Ps (Product, Price,
Place, Promotion). Product innovation, pricing strategy, promotion planning, and so on are all
marketing strategies. These AirAsia marketing mix-based business techniques aid the brand's
success. The AirAsia marketing strategy aids the brand/company in establishing a competitive
market position and achieve its business goals and objectives. Let's start with the AirAsia
Marketing Strategy & Mix to comprehend AirAsia's product, pricing, advertising, and
distribution methods. This report describes the introduction of AirAsia and also the marketing
mix used by AirAsia. The first element in the marketing mix is a product. There are three types
of products used by AirAsia: core customer value, actual product, and augmented product.
Next, the pricing strategy that AirAsia has used is cost-based pricing and competition-based
pricing. This report also explained the place or distribution channel that AirAsia has used.
Lastly, this report describes what AirAsia uses to boost their products to consumers. There is
a conclusion at the end of this report to close this report.

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INTRODUCTION

AirAsia was founded in 1993 and began operations on November 18, 1996. DRB-Hicom, a
government-owned conglomerate, primarily founded it. On December 2, 2001, former Time
Warner chief Tony Fernandes' business melody air Sdn Bhd purchased the heavily indebted
airline for a symbolic price of one Ringgit, with debts totaling 40 million Malaysian Ringgit.
Fernandes's turned the firm around in 2002, gaining money and setting out on a new road
from its hub in Kuala Lumpur, slashing Malaysian Airlines' rates to as low as 1 RM. AirAsia is
one of Asia's most award-winning and largest budget airlines, with a fleet of 72 Airbus A320-
200 aircraft. It was founded in 2001 and has grown fast since then. AirAsia is known for its
inexpensive fares, high-quality services, and slogan "Now Everyone Can Fly." AirAsia
operates 400 flights daily from its hubs in Malaysia, Thailand, and Indonesia, serving 51
national and international destinations via 108 routes. AirAsia has flown 51 million passengers
to date, owing to their belief in the no-frills, no-hassle low-fare business model and cutting
costs is important.

The vision and mission for AirAsia is:

Vision - To be Asia's largest low-cost carrier, serving a population of 3 billion people who are
currently underserved due to poor connectivity and exorbitant fares.

Mission - Create a worldwide recognized ASEAN emblem to be the finest company for which
employees are treated as members of a huge family.

MISSION STATEMENT

The mission statement is intended to define current business activity and to emphasize current
business limits.

Following an analysis of AirAsia's initial vision statement, the revised mission statement is as
follows: "To provide full premier services to consumers while maintaining the lowest flight
cost." As a result, it accurately embodied the statement "now everyone can fly." "To have a
productive and engaged staff, as well as to develop tight relationships between employees
and senior management," comes next. Finally, "AirAsia is constantly updating and adopting
technology to satisfy the company's goals of reducing costs to the lowest possible level."

The new AirAsia mission statement is brief and memorable, making it understandable to the
majority of the target demographic. Furthermore, it explicitly states the aim of the specific task
that must be completed in a limited amount of time. For instance, AirAsia's new mission
statement, which states, "To bring full premier services to consumers while offering the lowest

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flight cost," has influenced the airline to boost customer value and provide full premier
services, as do its competitors. Increasing customer value is difficult because it necessitates
strategic management actions and planning.

AirAsia's new mission statement emphasizes the importance of having a productive and
motivated team. This simply means that AirAsia must continue providing training and
empowering its staff to ensure that the workflow is effective and productive. While arranging
team building and applying appropriate working policies to the AirAsia workforce can help to
establish positive relationships between employees and top management. This mission
statement aids AirAsia in building a well-structured and flat organization structure.

ORGANIZATIONAL CHART

These are the following of AirAsia’s latest organizational chart

 CEO of AirAsia, Dato’ Sri Dr. Tony Fernandes leads AirAsia. He is responsible for
overlooking the entire operations of AirAsia
 Deputy CEO and co-founder of AirAsia, Dato’ Kamarudin Meranun helps by being
involved in the development of the company and its other ventures.
 Group Chief Operating Officer of AirAsia, Javed Malik is responsible for the safe and
efficient operation of AirAsia’s aircraft, overseeing pilot and cabin crew recruitment,
training and operations, AirAsia’s operations control centre, security, airport
infrastructure development and supply chain management.
 Group CEO, AirAsia Aviation Limited, Bo Lingam drove process improvement and set
up new airlines in the region for the Group.

TYPES OF PRODUCTS

AirAsia offered tangible and intangible goods (products) to improve client demand. The AirAsia
credit card purchases physical items such as complimentary meals, pillows, and blankets.
AirAsia Insured (also known as Tune Insurance), AirAsia megastore (online shopping),
ticketless services, convenient payment methods, and customer call center services are all
examples of intangible commodities. In addition, the company launched RedTix.com, which
sells, reviews, and books tickets to international sporting events, plays, concerts, and other
shows.

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CORE BUSINESS ACTIVITIES

Their major business is to provide air transportation services all over the world. The principal
activities of subsidiaries include providing in-flight meals, operating a travel agency, providing
airplane leasing services, and owning newspapers with an announcing business. Their other
operation is to find low-cost hotels for their passengers, who can buy hotel and travel packages
in conjunction with their flight on AirAsia Go. They give sponsorships to various events hosted
in their destination countries, most of which are held in Malaysia. The principal activities of
subsidiaries include providing in-flight meals, operating a trip planning business, providing
airspace lease services, and owning newspapers with an announcing section.

These are also some of AirAsia’s core business :

Flights - AirAsia China, AirAsia Vietnam, AirAsia India, AirAsia Japan, AirAsia X, Indonesia
AirAsia & Indonesia AirAsia X, Philippines AirAsia, Thai AirAsia & Thai AirAsia X.

Air Asia Super App - All-in-one platform with a growing number of Travel, Lifestyle, and
Rewards offerings for everyday needs, as well as access to vast amounts of data to provide
customized offerings for their customers, including Flights (AirAsia and other airlines), Hotels,
SNAP (Flights & Hotel packages), Unlimited, AirAsia farm, AirAsia food, AirAsia fresh, AirAsia
beauty, AirAsia shop, AirAsia health, AirAsia academy (Redbeat Academy), IKHLAS (content
and ads). E-commerce

Logistics – Teleport, Freight, delivery, and e-commerce cross-border logistical operations.

Regional logistics service providers that are tech-enabled and can conduct 24-hour cross-
border door-to-door deliveries using AirAsia's and interline partners' extensive networks.

COMPANY OBJECTIVE

As a firm, AirAsia's primary strategy of being the lowest-cost short-haul airline in every
market has kept them in business. They have controlled the Asian market and are gradually
taking over the rest of the world. Continuously launching new routes is a good strategy that
will add value to their customers. Service distribution is critical in any organization, and when

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new courses are established, they will meet more customers' needs while also increasing
their customer base, resulting in increased productivity. The more customers a company
serves, the more money it will make, and of course, the company will grow.

MARKETING MIX

 PRODUCT
i) AirAsia is the major travel and financial platform firm in the Asia Pacific,
providing air transportation, travel and lifestyle products, and financial services. As a
result, three product layers have emerged: core customer value, actual product, and
augmented product.
CORE CUSTOMER VALUE

The main item isn't a physical item. Because the core product is the feature of the product that
makes it useful to the customer, this is the case. According to Allan Phang, the Allstars
Engagement and Internal Branding Manager, they call their employees Allstar to make them
feel much more special and distinct while working for AirAsia because every one of them plays
a unique function in the organization. They will supply their consumers with fundamental
values to ensure that they are satisfied with their services. The core value is derived from one
of AirAsia's most famous taglines, "Now Everyone Can Fly," illustrating that Allstars are not
bound to their current position but can even transfer roles within the organization.

ACTUAL PRODUCT

The actual product is the tangible, physical thing. The discovered core benefit, or core
customer value, should be turned into a product by AirAsia. Product characteristics, design,
quality level, brand name, and even packaging are all part of this process. The Airbus
A321neo, A320neo, and A320-200 are among the 92 aircraft in the company's fleet. AirAsia,
on the other hand, prioritized professional service, comfortable surroundings, competitively
priced tickets, frequent flights, and reliable point-to-point connectivity for its clients. Since
2018, AirAsia has been on a mission to become more than just an airline, expanding its travel,
lifestyle, and e-commerce platforms to include hotels, vacations, activities, online shopping,
and other services. Customized travel, location highlights, and flight booking are among their
offerings.

AUGMENTED PRODUCT

The non-physical component of the product is the augmented product. The product planner
must build an enhanced product that centers around the core benefit and actual product by

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giving additional consumer services and perks. As a "no-frills" airline, AirAsia has a wide range
of upgraded products. In actuality, consumers are purchasing a basic service, a flight ticket,
with the option of adding value. There are, first and foremost, in-flight services. AirAsia offers
"Snack Attack," a food and beverage buy-on-board promotion. Additionally, meals could be
booked simultaneously as the ticket on the internet. AirAsia also offers ancillary services that
are not directly related to the flight.

ii) TYPE OF CONSUMER PRODUCT

Convenience, shopping, specialty, and unsought are the four sorts of consumer products.
AirAsia's products and services will be regarded as convenient, among other things. Because
people buy convenience products the most, this is the case. Convenience products are often
low-cost, undifferentiated from other products, and positioned in areas where customers may
readily buy them.

iii) INDIVIDUAL PRODUCT DECISION

PRODUCT ATTRIBUTES

One of AirAsia's unique characteristics is its intangibility. According to Pride and Ferrell (2011),
Service intangibility is described as a service that is not corporeal and cannot be sensed
through the senses. For example, customers of AirAsia, a flight service provider, are unable
to touch the flight because it is a voyage to particular destinations. Customers may touch the
plane, but they do not own the physical tools or equipment required to offer the service in the
context of services; rather, they are only entitled to the service, which is the flying service.

BRANDING

AirAsia is noted for its successful logo-based branding, which spans from the aircraft's exterior
to the interior seats and clothing. AirAsia's corporate colors are red and white. Both color
choices indicate the proper feelings that the customers associate with. Red denotes dedication
and passion, while white represents perfection and positivity.

PACKAGING

The design and construction of a product's container or wrapping are called packaging. This
package includes city and island transfers, in-flight comforts, and more. It also offers
destination highlights, tailored travel, a low-fare finder, flight booking, self-connect flights, fly-
thru flights, fly-direct flights, city and island transfers, and more. Insurance for vacations Tune-
talk sim cards can only be purchased in Malaysia, while bus tickets can only be purchased at
the Malaysian airport.

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 PRODUCT SUPPORT SERVICES

To earn loyalty "BIG" points, AirAsia created its frequent-flyer program. These can then be
redeemed for free flights on AirAsia. Members can also take advantage of exclusive perks,
including priority booking, exclusive offers, and discounts. In addition, AirAsia offers ancillary
services that are not immediately tied to the journey. For example, customers can book a hotel
room, rent a car, or arrange a tour package in real-time with GO vacation.

 PRICE
a) MAJOR PRICING APPROACHES

Air Asia's strategy is to be a low-cost carrier with a unique selling proposition. It has a vision
of becoming Asia's largest low-cost airline and making the dream of average-income people
to fly a reality. Air Asia uses two major price approaches include Cost-Based Pricing and
competition-based Pricing.

COST-BASED PRICING

Air Asia enterprises utilized cost-based pricing to decide the selling prices of their goods and
services. Companies might establish prices depending on the cost of producing goods or
providing services under this pricing scheme. Air Asia bases each approach on the costs of
creating a product as the foundation for calculating the perfect pricing that leads to high
customer satisfaction and boosts a company's bottom line. This business operates on a low-
cost strategy, aiming to provide the lowest pricing possible. Accepting reduced profits in
exchange for more sales is a win-win situation. Air Asia is regarded as Asia's "pioneer" of low-
cost travel, having defied travel rules for Asian countries over the years. Yet, the airline's status
as a low-cost carrier remains solid and consistent.

COMPETITION-BASED PRICING

Competition-based pricing refers to a pricing approach in which Air Asia bases its charges on
its competitors. Competition-based pricing solely considers publicly available information
about rivals' prices, not a consumer value. On the other hand, Malaysian Airlines and JetStar
Airways are Air Asia's main competitors. Compared to JetStar Airlines, Air Asia offers relatively
low-cost service packages to its customers. JetStar is expanding the number of payment
options and payment channels available to its customers. This suggests that Air Asia is
already seeking to do so by diversifying its product range and expanding its services to include
hotel bookings, travel packages, and other services to gain a competitive advantage.

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 b) PRODUCT MIX PRICING STRATEGIES

Low rates and a no-frills approach are hallmarks of Air Asia. As part of its marketing mix, it
employs an anchor pricing strategy that acts as the basis for pricing all Air Asia activities. Air
Asia uses anchor pricing to offer extremely low prices for its services and tickets, enticing
consumers to fly with the airline. In the airline industry, expenses are also determined by the
class of travel, airline load factors, travel dates and days, and competitor pricing.

Air Asia has chosen to use an anchor pricing method, which sets a single price for its flights.
It has maintained ticket rates as low as possible while improving service. This encourages
people to think about Air Asia before buying a ticket because it is less expensive than other
carriers. Some parameters, including load factors, travel class, travel date, and competitor
prices, are used to determine the price of a ticket when using this method. Air Asia provides
incentives, discounts, and other services to attract customers and increase profitability.

Finally, one of Air Asia's product mix pricing techniques is optional product pricing. Customers
can often purchase extra or supplemental products in addition to the main product. The same
is true for Air Asia, where passengers can order an advanced entertainment system when
booking their tickets. They have, however, carefully considered which items to include in the
standard pricing and which to make available as extras.

c) PRICE ADJUSTMENT STRATEGIES

Air Asia is one of Malaysia's largest airline companies. Anchor pricing allows Air Asia to
provide exceptionally low prices on its services and tickets, attracting customers to fly with the
airline. In order to entice customers, Air Asia has employed a few price-adjustment strategies.
Air Asia has four different prices-adjustment strategies in place.

First and foremost, Air Asia adopted a discount and allowance-based pricing strategy.
Customers who book and pay for their tickets early receive a discount from Air Asia as part of
this arrangement. Discount and allowance pricing appears advantageous because Air Asia
supplies clients with reduced prices. During this event, customers will benefit from discounted
aircraft tickets and complimentary seats and from incredible Air Asia deals on a variety of other
products and services.

In addition, to entice customers, Air Asia uses segmented pricing as a price modification
approach. Hotel packages are also available through Air Asia. Although the product or service
is the same, the hotel room package cost differs. Differential pricing is used by Air Asia, in
which the same airline ticket is sold to different buyers at various prices. The most common

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type of differential pricing is second-market discounting, in which prices are adjusted for
different segments of buyers. Furthermore, Air Asia uses psychological pricing based on the
airline's desired image for the fare. Odd-even pricing is used by Air Asia, with odd numbers
indicating a low price or a "good deal" and even numbers indicating greater quality.

 PLACE

AirAsia's headquarters are in Kuala Lumpur, Malaysia, while its registered office is in Petaling
Jaya, Selangor. AirAsia's principal hub is KLIA2 in Sepang, Malaysia, with additional hubs in
Langkawi International Airport, Senai International Airport, Kuching International Airport,
Penang International Airport, and Kota Kinabalu International Airport. In terms of fleet size and
number of destinations, the airline serves more than 165 domestic and international
destinations in 25 countries, making it Malaysia's largest airline. Thai AirAsia, Indonesia
AirAsia, Philippines AirAsia, and AirAsia India are its associate airlines specializing in long-
haul flights. Five in Malaysia, six in Thailand, five in Indonesia, four in India, three in the
Philippines, and one in Japan are among the airline's 24 hubs.

a) CHANNEL LEVEL – DIRECT CHANNEL

Producer – Customer

The company's website is the primary avenue for selling tickets for air Asia. AirAsia employs
direct marketing to boost brand awareness among customers by encouraging connections
between organizations and allowing users to understand the brand better. Yahoo Mobile is
one of the direct marketing strategies that Airasia employs. AirAsia has a partnership with
Yahoo Mobile, which allows the Airasia mobile website to place banner ads on the Yahoo
mobile homepage, yahoo mail, and yahoo search. Users on mobile devices only need to go
to Yahoo Mobile and click on the Airasia banner; the link will take them to the AirAsia website.
Customers can use this to book airplane tickets, monitor the status of their bookings, and gain
access to promotional campaigns. These services and information evaluations via mobile
technology have increased organization awareness and campaign promotion.

b) SUPPLY CHAIN
AC2 GROUP

The AC2 Group is a prominent solution provider for Asia's warehouse and supply chain
consulting and solutions. The organization has successfully deployed several supply chain
systems throughout Asia-Pacific, with over 25 years of knowledge and experience in executing
supply chain solutions. The AC2 Group, headquartered in Singapore, has expanded its market
reach to include offices in Malaysia, Thailand, Taiwan, Hong Kong, and Shanghai. AirAsia

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Group, the world's best low-cost carrier for 11 years in a row, has announced a partnership
with AC2 Group to implement Blue Yonder's warehouse management solution (WMS) to
digitally transform its supply chain capabilities and operational agility as the airline continues
to expand domestic capacity in response to solid demand.

c) FUNCTION/RESPONSIBILITY
Be aware of and follow all applicable laws and regulations in the countries
where they operate and the countries where they offer AirAsia with products and
services.
Suppliers shall take all necessary efforts to protect AirAsia, its affiliates, and
partners' confidential information.
Suppliers must promote a work environment free of discrimination and abuse
in which employees and business partners are recognized and valued for their
contributions.
Suppliers must proactively manage health and safety risks through systems
and controls to ensure an incident-free environment free of occupational injuries and
diseases.

 PROMOTION

AirAsia employed the promotional mix strategy to attract more consumers by showcasing
fascinating aspects of the airline. Advertising is one of AirAsia's most effective techniques for
informing and educating customers about the company's offerings. Advertising is done in
various ways, including broadcast, print, web, mobile, and outdoor. AirAsia's messages may
be sent rapidly to the public, both domestically and internationally, utilizing this manner. On
the other hand, AirAsia ensures that the advertising is effective in persuading the public to
choose AirAsia services. Broadcast is critical for ensuring that customers are more
comfortable with brands that advertise on television. AirAsia can urge the general people to
choose AirAsia services as their first choice for travel by employing radio and television.
Newspaper, magazine, and poster printing are examples of printing methods. Furthermore,
AirAsia has adopted the web way because it is the most successful method of enticing the
public.

AirAsia's sale advertising techniques include discounts, vouchers, displays, and

demonstrations. AirAsia has announced an offer for the first 10,000 customers who book a
flight to receive a 20% discount on their ticket, as well as a deadline for the promotion so that
customers can take advantage of it. According to AirAsia, 24,000 domestic tourists will receive
RM50 e-vouchers, which will assist boost domestic tourism and generate revenue for tourism-

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related businesses, including hotels, restaurants, tour operators, and more. The
demonstration is also required to ensure that passengers feel secure and aware of what to do
in an emergency. As a result, passengers must listen closely and respond appropriately.
However, it can improve AirAsia's service quality and attract more customers. Apart from that,
AirAsia's promotional mix includes public relations. AirAsia has been a big sponsor in sports
and e-sport to further expand the company's name. AirAsia Bhd has signed a term sheet to
become the official sponsor of Queens Park Rangers Football Club's (QPR) away shirt in the
Barclays Premier League, according to TheEdgeMarket.

Furthermore, the AirAsia name must be prominently shown on the Queens Park Rangers
Football Club's jersey, as AirAsia is the club's major sponsor. In addition, AirAsia also
sponsored the e-sports team Saiyan in 2018. The name of the Saiyan teams has been
changed to AirAsia Saiyan to reflect their sponsor. Because of their success in the MLBB
championship, this squad has elevated the profile of AirAsia, and they are also among the
best in Southeast Asia. In such a situation, AirAsia will reap a slew of benefits that will help
them expand their business even more.

CONCLUSION

In conclusion, the business model of AirAsia has been studied in connection with the
marketing mix used to define its target market. With the phrase "Now everyone can fly,"
AirAsia's low-fare ideology aims to make flying cheap for everyone. AirAsia also strives to
make travel simple, convenient, and enjoyable for its passengers. AirAsia's marketing mix is
shaped by its philosophy. Their services and price work together to identify their target market.
Still, their promotional activities and distribution channels are aggressively designed, planned,
and implemented to appeal to foreigners and locals. Furthermore, more advertising models
should be developed. AirAsia should locate more appropriate regions for distribution, as more
and more loss potential targets might be captured, resulting in significant revenue for AirAsia.

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NewStraitTime (October 9, 2020 )AirAsia confirms layoffs

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Malaysia RM50 e-voucher to drive domestic tourism

https://newsroom.airasia.com/news/2020/11/24/airasia-statement-airasia-collaborates-with-
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TheEdgeMarket (September 12, 2011) AirAsia to sponsor QPR away kit

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December 15, 2018, By Hitesh Bhasin

https://www.marketing91.com/marketing-mix-of-airasia/

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