Marketing Mix of AirAsia and 7Ps (Updated 2024)

The Marketing mix of AirAsia analyses the 7Ps of AirAsia, which includes the Product, Price, Place, Promotion, People, Physical Evidence, and Process of AirAsia. AirAsia Berhad is commonly known as AirAsia and is of Malaysian origin. It is associated with the airline industry and deals in air travel carriers. The company was founded in 1993 but was able to start its operations in 1996 on 16th November. AirAsia is a subsidiary of its parent company, Tune Group, and has positioned itself as a force to reckon with in the Asian region. It faces competition from

• Tiger Airways
• SilkAir
• Jetstar Airways.

About AirAsia

• Type: Low-cost airline
• Industry: Aviation
• Founded: 1993
• Founders: Tony Fernandes and Kamarudin Meranun
• Headquarters: Kuala Lumpur, Malaysia
• Area served: Asia, Australia, and Europe
• Current CEO: Tony Fernandes
• Number of employees: 21,000+
• Major products: Air travel

AirAsia Product Strategy

AirAsia is the largest airline in terms of destinations and fleet size in its home country, Malaysia. It operates both international and domestic flights with the help of its affiliated airlines, AirAsia India, Philippines AirAsia, Indonesia AirAsia, Thai AirAsia, and AirAsia X, to deal with the long haul routes over-hauling routes.

The company has a fleet of ninety-two aircraft, including Airbus A321neo, Airbus A320neo, and Airbus A320-200. AirAsia is focused on offering competent services, comfortable settings, reasonably priced tickets, frequent flights, and point-to-point reliable connectivity to its passengers. Over the years, it has enhanced its services and products to maintain customer satisfaction and loyalty.

The product mix of AirAsia in 2024 is as follows (Source).

1. Air Travel Services: This low-cost air service is the core product of AirAsia. The airline offers low-cost flights across various domestic and international routes. They are known for their affordable travel options, frequently offering promotions and discounts.
2. Premium Services: For passengers looking for more comfort, AirAsia offers premium services like the ‘Premium Flatbed’ on long-haul flights, similar to business class in trade services on airlines.
3. AirAsia X: A part of AirAsia Group, AirAsia X operates long-haul flights. This subsidiary is designed to serve the low-cost market for long-distance flights.
4. Cargo Services: AirAsia also provides cargo services, leveraging the cargo hold space in their passenger aircraft fleet.
5. In-Flight Services: These include selling food and beverages, in-flight entertainment, and merchandise. AirAsia’s in-flight menu is quite popular and an additional revenue source.
6. Insurance: AirAsia offers passengers travel insurance, covering various travel-related contingencies.
7. Loyalty Program: The ‘BIG Loyalty’ program allows frequent flyers to earn points that can be redeemed for flights and other benefits.
8. Ancillary Services: These include seat selection, priority boarding, increased baggage allowance, and other convenience-based services.
9. AirAsia.com: Acting as a digital travel platform, this website extends beyond flight bookings to include hotel bookings, activities, and package deals.
10. Telecommunication Services: AirAsia has ventured into providing mobile services, offering SIM cards and data plans.
11. Financial Services: The company offers financial products like a co-branded credit card and an e-wallet service.
12. Ride-hailing Services: AirAsia has also entered the ride-hailing market in some regions, further diversifying its portfolio.
13. Health and Wellness: Recognizing the growing focus on health, international air travel carrier AirAsia has started offering health and wellness products and services.

Please note that the specific offerings and the extent of these services can vary based on the current business strategy and market conditions.

AirAsia Pricing Strategy

Air Asia is a low-cost carrier that operates at one of the minimum unit costs of 0,023 US$/available seat km and has an average aircraft utilization rate of 13 hours/day. The company posted its revenues and net income for the first three quarters of the fiscal year 2016 at RM 5.01 billion and RM 1.574 billion, respectively.

AirAsia’s pricing strategy is intricately designed to maintain its position as a leading low-cost carrier service costs while maximizing profitability and market penetration. Here’s how AirAsia structures its pricing:

1. Dynamic Pricing Model: AirAsia utilizes a dynamic pricing strategy, where ticket prices fluctuate based on demand, seasonality, and booking lead time. This approach allows AirAsia to maximize revenue on popular routes and during peak travel periods while offering attractively low fares during off-peak times.
2. Low Base Fares with Ancillary Revenue Generation: The core of AirAsia’s pricing strategy is to offer low base fares, which are appealing to price-sensitive customers. The low fares cover the basics of air travel, with additional services (like baggage, meals, and seat selection) available for an extra fee. This a la carte approach allows passengers to customize their experience with low-cost services, providing AirAsia with diverse revenue streams.
3. Promotional and Flash Sales: Regular promotions and flash sales are a hallmark of AirAsia’s pricing strategy. These limited-time offers create urgency and stimulate demand, which is particularly beneficial in filling seats during less busy periods and attracting price-conscious travelers.
4. Segmented Pricing for Different Customer Groups: AirAsia employs segmented pricing, offering different fare types that cater to various customer needs. For instance, fare options exist for those who prefer more flexibility (like refundable tickets) versus those who prioritize cost savings.
5. Competitive Benchmarking: AirAsia continuously monitors competitor pricing in all markets to maintain its competitive edge in low-cost airlines. This often involves undercutting competitors on similar routes or offering better value for money, reinforcing their position as a budget-friendly airline.

By implementing these strategies, AirAsia effectively balances customer affordability with profitability for the airline, maintaining its reputation as a leading low-cost carrier in the region.

AirAsia Place Strategy

AirAsia has an international presence, including flights to more than twenty-five countries via nearly one hundred and sixty-five destinations. It started its operations in Malaysia and spread its presence to several Asian countries like India, Thailand, and Singapore.

AirAsia has its headquarters in Kuala Lumpur, Malaysia, and its registered office in Petaling Jaya in Selangor. The central hub of AirAsia is Kila2 at Kuala Lumpur International Airport, situated in Sepang, Malaysia, with secondary hubs at Langkawi International Airport, Senai International Airport, Kuching International Airport, Penang International Airport, and Kota Kinabalu International Airport.

AirAsia has a massive operational route as it offers flights at national and international levels. It has set up a strong distribution channel that helps offer its products and services quickly to its passengers. The network includes multiple sources of ticket reservation, funding, and related services.

AirAsia operates through its official website, which offers several privileges and services to help its passengers. It uploads essential information on its website and sends related information via SMS to its passengers on mobile devices, informing them about the status of their tickets. AirAsia offers facilities to its passengers, such as web check-in, mobile check-in, and kiosk check-in.

The company offers several payment options to suit individual needs, such as debit card, credit card, online payment, cash payment, or payment through the mobile app. The airline tickets can easily be purchased via its sales office, owned and managed by the company, and it is a sales center that authorized agents handle. It also has tie-ups with other ticket agents and e-platforms from where it is easy to buy a ticket.

AirAsia’s place strategy is as follows:

1. Extensive Network Across Asia-Pacific Region: AirAsia operates a vast network, primarily focusing on the region and connecting major cities and tourist destinations to cater to business and leisure travelers.
2. Secondary Airports Usage: To keep costs low and reduce congestion, AirAsia often uses secondary airports that are less busy and closer to suburban areas, offering convenience and efficiency to passengers.
3. Strategic Hub Locations: The airline strategically selects hub airports in critical cities (like Kuala Lumpur, Bangkok, and Jakarta) to facilitate easy connections and efficient operations across its network.
4. Online and Mobile Presence: AirAsia emphasizes a solid online presence for bookings and customer service, utilizing its website and mobile app to make travel arrangements accessible and convenient.
5. Partnerships with Local Carriers: AirAsia forms partnerships with local carriers in various countries to expand its reach, allowing it to serve a broader range of destinations and tap into different market segments.

AirAsia Promotion Strategy

AirAsia has established itself as a brand with credible performance. It is an essential player in the airline sector and has adopted several marketing strategies and policies to uphold its passenger’s interests. The company advertises via print media through print ads on billboards.

To build customer value, the airline company has taken a successful step via The Big Loyalty Programme. This highly acclaimed campaign allows privileged passengers to earn points for every transaction. The points can be redeemed against free air tickets during the next travel. The company also informs its passengers of new offerings, travel arrangements, related information, incentives, and changes via emails and SMS.

As part of promotional activities, cheap flight tickets out of several destinations are offered to create a buzz around its airlines. For instance, AirAsia recently offered direct flights between Surat and Bengaluru starting at RS 3,999 as part of its summer sale campaign. Other domestic flights at Rs 1,399 only under this scheme run from Bhubaneswar to Kolkata, Kochi to Bengaluru, Ranchi to Kolkata, Chennai to Bengaluru, Hyderabad to Bengaluru, and Kolkata to Ranchi. It also offers international flight tickets under its summer sale program but with certain conditions.

The international airline provides several privileges to its passengers, Like the Red Carpet treatment, which includes buggy service, priority baggage tags, priority boarding, priority check-in, lounge access, and security clearance.

It has entered various sponsorship deals and sponsors Queens Park Rangers, the Singapore National Football Team, and the Malaysia National Football Team. AirAsia has received recognition and awards for nine consecutive years, including Best Low-Cost Carrier in International Travel. The company tagline is Now Everyone Can Fly.

AirAsia’s promotion strategy is as follows:

1. Digital Marketing Focus: AirAsia heavily invests in digital marketing, utilizing social media, email marketing, and online advertising to reach a broad audience and target market and engage with customers directly.
2. Partnership and Sponsorship: They form strategic alliances and sponsor events, particularly in sports and tourism, to enhance brand visibility and appeal to diverse customers.
3. Sales and Discount Campaigns: AirAsia frequently runs sales and discount campaigns, often tied to cultural and festive periods, to stimulate demand and attract cost-conscious travelers.

Some Recent Video ads and Print ads of AirAsia are:

https://youtu.be/dVmWn6uSNXM

AirAsia People Strategy

The “People” aspect of the service marketing mix for AirAsia, as with any service-oriented company, is crucial for delivering value and creating a positive customer experience. Here are key points regarding the “People” component of AirAsia’s service marketing mix:

1. Customer-Centric Staff: AirAsia focuses on hiring and training its staff to be customer-centric. This includes flight attendants, customer service representatives, and ground staff, all trained to assist passengers efficiently and courteously.
2. Skilled and Professional Teams: Pilots, engineers, and maintenance teams are highly skilled and trained to ensure the safety, reliability, and efficiency of flights. Their professionalism contributes significantly to the brand’s reputation.
3. Diverse Workforce: AirAsia employs a diverse workforce representing many nationalities and cultures. This diversity enriches the company culture and enhances its ability to cater to many passengers.
4. Employee Empowerment: AirAsia empowers its employees by encouraging innovation and feedback. This empowerment allows for improvements in service delivery and operational efficiency.
5. Training and Development: Continuous training and development programs are in place for all levels of staff. These programs ensure that employees are up-to-date with industry practices and service standards.
6. Performance and Incentive Schemes: The company implements performance and incentive schemes to motivate employees and recognize their contributions. This boosts morale and encourages high-quality service delivery.
7. Leadership and Management: AirAsia’s leadership, including its CEO Tony Fernandes, is known for its open and communicative management style. This approach fosters a sense of belonging and dedication among employees.
8. Digital and Technological Support for Staff: AirAsia equips its staff with digital tools and technologies to improve efficiency and service delivery. This includes using mobile devices and apps for better communication and management of tasks.
9. Customer Feedback Integration: Employees are trained to collect and integrate customer feedback into service improvements. This feedback loop is essential for continuous improvement and customer satisfaction.
10. Community Engagement and CSR: AirAsia’s staff participate in community engagement and corporate social responsibility (CSR) initiatives. This contributes to societal welfare and enhances the brand’s image and employee satisfaction.

AirAsia Process Strategy

The “Process” element of the service marketing mix refers to the systems and procedures companies use to deliver their services efficiently and satisfactorily. For AirAsia, an efficient and customer-friendly process is vital to its success, given the competitive nature of the airline industry. Here are key points regarding AirAsia’s process component:

1. Online Booking System: AirAsia has streamlined its booking process with an easy-to-use online platform that allows customers to book flights, select seats, add luggage, and purchase meals seamlessly. This system is accessible via AirAsia’s website and mobile app, providing convenience and flexibility.
2. Self-Check-In Services: To reduce wait times at airports, AirAsia offers self-check-in options through its website, mobile app, and airport kiosks. This allows passengers to check in, select seats, and print boarding passes without queueing at check-in counters.
3. Automated Baggage Drop: AirAsia has introduced automated baggage drop counters at major airports, enabling passengers to check in their luggage quickly and efficiently, reducing wait times, and improving the airport experience.
4. Flight Operations Efficiency: AirAsia employs sophisticated logistics and operations management systems to ensure timely departures and arrivals. This includes advanced scheduling, route optimization, and turnaround management to maintain high operational efficiency.
5. Customer Service Channels: The airline has developed multiple customer service channels, including social media, a comprehensive FAQ section on its website, live chat, and a customer call center. These channels provide passengers with various options to seek assistance, make inquiries, or provide feedback.
6. Boarding Process: AirAsia has optimized its boarding process by implementing a zone-based boarding system. This approach minimizes congestion and ensures a smoother boarding experience for passengers.
7. Safety and Security Procedures: AirAsia adheres to strict safety and security procedures to ensure the well-being of passengers and crew. This includes regular safety drills, stringent security checks, and international aviation safety standards compliance.
8. Feedback and Continuous Improvement: The airline collects customer feedback through post-flight surveys, monitoring social media, and direct customer communication. This feedback is used to improve service processes and address any areas of concern continuously.
9. Partnerships and Integration: AirAsia collaborates with various partners, including hotels, car rental services, and entertainment providers, to offer a seamless travel experience. This includes integrated booking processes allowing customers to plan their trip through AirAsia’s platforms.
10. Sustainability Initiatives: AirAsia is implementing processes that reduce environmental impact, such as fuel-efficient flying, reducing waste, and promoting sustainable practices among its passengers and employees.

AirAsia Physical Evidence Strategy

The “Physical Evidence” in the service marketing mix refers to the environment in which the service is delivered, along with any tangible elements that facilitate the service or help customers evaluate the service beforehand. For AirAsia, as a budget airline, physical evidence plays a crucial role in shaping perceptions and experiences of the brand. Here are key points regarding AirAsia’s physical evidence:

1. Branding and Color Scheme: AirAsia’s bright red color scheme and logo are prominently displayed across all customer touchpoints, including aircraft livery, uniforms, and marketing materials. This solid visual branding helps to create a distinctive and memorable image.
2. Aircraft Interior and Cleanliness: The interior design of AirAsia’s aircraft, including seating layout and cleanliness, contributes to the overall passenger experience. The airline ensures that interiors are well-maintained and clean, reflecting the brand’s commitment to quality and comfort.
3. Check-in Counters and Self-Service Kiosks: AirAsia’s check-in counters and self-service kiosks at airports are branded and designed to be user-friendly, ensuring a smooth and efficient check-in process for passengers.
4. Website and Mobile App Interface: The design and functionality of AirAsia’s website and mobile app serve as critical physical evidence. These platforms are designed for ease of use, allowing customers to book flights, check-in, and manage their travel plans conveniently.
5. In-flight Entertainment and Comfort Items: Although a low-cost carrier, AirAsia offers optional in-flight entertainment and comfort items such as blankets and pillows for purchase. These items enhance the travel experience and provide tangible evidence of the airline’s attention to passenger comfort.
6. Boarding Passes and Travel Documents: The design and clarity of boarding passes and travel documents issued by AirAsia are part of its physical evidence. They are designed to be straightforward and informative, aiding the travel process.
7. Airline Lounges (for Premium Customers): AirAsia’s premium customers have access to exclusive lounges at specific airports, providing a tangible space where passengers can relax and enjoy amenities before their flights.
8. Merchandise and Ancillary Products: AirAsia sells branded merchandise and ancillary products, such as travel insurance and AirAsia BIG Points for its loyalty program. These products provide additional physical evidence of the brand and enhance customer engagement.
9. Safety and Information Cards: The safety and information cards provided on flights are designed to be clear and easily understandable. They are essential to the airline’s commitment to safety and provide passengers with the necessary information in a tangible format.
10. Uniforms of Staff and Crew: AirAsia’s flight attendants and ground staff uniforms are practical and professional and carry the airline’s branding and color scheme. This helps in creating a consistent image and reinforces the brand identity.

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