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MET STUDENTSGROUP 7
Sanjana Iyer 19 Rahul Nair 32Rajesh Shetty 47Savio Fernandes 12Ismile Shaikh 43Austin Trindade 55
TOPICS TO BE COVERED
• INDIGO AIRLINES FACTS
• VISION & MISSION
• SWOT ANALYSIS
• PESTEL ANALYSIS
• STP
• PORTER’S 5 FORCES
• LOGICAL FLOWCHART FORENTRY DECISION
• MARKETING PLAN - INDIGO AIRLINES
• COMMUNICATION – CAMPAIGNS & ADS
• THE FLY AHEAD
Fleet size of
93 aircraft ,
considered asone of thelargest in India
NET INCOME of
US$
2.2bn in
struggling Indian market Within short period
of time indigo covered market
share of 27 %
Lowest no of
complaints per passenger
Phase out aircraftolder than
6year to keep
an average agelow
RAHUL BHATIA IS the
Founder of Indigo airlinesunder parent companyInterglobe
Provides service to
38 destination
in India & abroad
Company operates
633
flights daily
Indigo has given the biggest order to airbus of
US$ 25.7
Billion
Indigo operates
the A320
family of aircraft inits fleet
On time performance of
93.4 % as on
November 2014
Only profitable
airline company in India
Single largest
order of 250
brand new
A320neo
aircraft
Fastest aircraft
turnaround times in the industry, while its manpower-aircraft ratio is among the lowest.
Indigo is the
No. 1
airline in Indian Market
• Indigo's stuck to its low-cost, single class model unlike rivals Jet Airways.
• Selling and leasing back planes helps its balance sheet
• Quality and detail key to good service
• It’s all about customer focus Using technology smartly
A d i t y a G h o s h , P r e s i d e n t
R a h u l B h a t i a , M D
INDIGO AIRLINES
MISSION & VISION
S – W – O – T Analysis
1. Low fares2. High Service Quality3. Operational
Efficiency4. Customer Service5. Short haul flights6. Fuel Efficient
Aircrafts
1. Less differentiation2. Short lived
innovations3. Untapped domestic
cargo segment4. No established
alliances5. Lack of product
depth and breadth
1. Increasing middle class population
2. Increase in domestic tourism
3. Booming air cargo business
4. Chartered Services5. Tap International
Destinations
1. Fluctuating ATF prices
2. Economic slowdown3. Government policies4. Technological
advancement in communication
Open Sky Policy/ Deregulation (+)Low Entry Barriers (+)49 % for airlines100% for airportsExtensive airports development planned
Growing Middle Class Income (+)Consistent GDP Growth (+)Hike in average income (+)Growth in Tourism (+)Rising ATF Price (-)
Modernized Airports (+)Better handling of Aircrafts, passengers and Cargo (+)Video-conferencing/VoIP (-)
Growing Middle Class (+)Domestic Leisure Travel (+)Foreign Tourist (+)Status Symbol (+)Security Issues & Terrorism (-)
Legislative Compliance Requirements (+)Allegations of misleading Advertising (-)Anti Competitive Behavior (+)
This analysis is a framework or tool used by marketers to analyze and monitor the macro environmental (external marketing environment) factors that have an impact on an organization
PESTEL ANALYSIS FOR AIRLINE INDUSTRY IN INDIA
Green House & Carbon Emissions (-)Noise Control Levels (-)Infrastructure Capacity (-)
Segmenting Targeting & Positioning
Cost Conscious Passengers
Lower Middle Class/ Middle
Class
Low Cost travelers First time travelers
We first (1) determine which kinds of customers exist, then (2) select which oneswe are best off trying to serve and, finally, (3) implement our segmentation byoptimizing our products/services for that segment and communicating that wehave made the choice to distinguish ourselves that way.
MICHAEL PORTER’S 5 Forces
• LowProductdifferentiationinbasicservices• Low Switch cost for Customers but high for
airlines• Openskypolicyforforeignentrants• Veryhighset-upcosts• Increasing fuelprices• Shortfall+Highcostofskilledresources-Pilots
• Duopoly in AircraftMarket- Low bargainingpowerwithairlines
• Switch cost to othersuppliers is high
• Shortage of CommercialPilotsinIndia
• LimitedSuppliersofATFinIndia
• High number of buyersfragmented-lowerstheirpower
• With high number of buyers,growthopportunitiesarealsohigh
• Switchcostsareminimalforbuyers
• VerylittleproductdifferentiationinServices
• Mature Industry- Only scope forgrowth by gaining other people’smarketshare
• High bargaining power ofsuppliers
• No sense of brand royaltyamongst customers and caneasilyswitchtootherairlines
• Indirect Substitutes are railways- but notpowerfulasairlines,scorehighlyintraveltime
• However direct substitutes are other LowCostCarriers–sinceswitchcostislow,threatofsubstitutesishigh
• Communication Advancements withTechnology
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate PT country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014
Other Airlines
Indigo
0%
5%
10%
15%
20%
25%
30%
35%
2006 2007 2008 2009 2010 2011 2012 2013 2014
Market Share
Market Share
MARKET SHARE IN DOMESTIC MARKET
Current Fleet Size of Indian Airline Companies
Expected Fleet Size
CURRENT & EXPECTED FLEET SIZE
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate PT country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
BIG FISH, SMALL POND
SMALL FISH , BIG POND
DOMESTIC MARKET INTERNATIONAL MARKET
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate ’PT’ country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
POTENTIAL TARGET MARKETS
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate ’PT’ country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
POTENTIAL TARGET MARKET DATA
POTENTIAL TARGET MARKET DATA
4.90%
5.27% 5.30%
2.97%
2.50%
2.81%2.91%
3.00%
4.10%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
0
500000
1000000
1500000
2000000
2500000
2011-2012 2012-2013 2013-2014
Qatar Hongkong Malaysia Qatar Hongkong Malaysia
INTERNATIONAL PASSENGER TRAFFIC TO & FROM INDIA TO THE FOLLOWING CITIES BY ALL AIRLINES FOR LAST THREE YEARS
LCC MARKET SHARE
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate ’PT’ country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
PRIMARY DATA
COMPANYS OVERALL PERFORMANCE
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate ’PT’ country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
CHOOSING THE MODE OF ENTRY
Decision Criteria for Mode of Entry
– Market Size and Growth
– Risk
– Government Regulations
– Competitive Environment/Cultural Distance
– Local Infrastructure
Creating Strategic Alliances
• Types of Strategic Alliances
– Simple licensing agreements between two partners
– Market-based alliances
– Operations and logistics alliances
– Operations-based alliances
27
• The Logic Behind Strategic Alliances
– Defend
– Catch-Up
– Remain
– Restructure
CREATING STRATEGIC ALLIANCES
REASONS FOR ALLIANCES• Commitment and support of
the top of the partners’organizations
• Strong alliance managers arethe key
• Alliances between partnersthat are related in terms ofproducts, technologies, andmarkets
• Have similar, assets sizes andventuring experience
• Tend to start on a narrowbasis and broaden over time
• A shared vision on goals andmutual benefits
Star Alliance27 members
Founded 1997
SkyTeam20 members
Founded 2000
Oneworld15 members
Founded 1999
Rest of Industry(Largest Airlines)
Passengers per year 653.81 million 588 million 512.3 million 1.223 billion
Countries 193 177 155204 (total countries)
Destinations 1,321 1,052 1,0104,000 (total destinations)
Fleet size 4,561 4,634 3,428 11,082
Employees 410,274 481,691 389,788
Revenue Billion US$ 177.42 186.331 143.2311,651.325 (1,550)
Daily departures: 18,521 16,323 14,296
ALLIANCES
MembersAdria AirwaysAegean Airlines - 2010Air Canada - FounderAir China - 2007Air India - 2014Air New Zealand - 1999All Nippon Airways - 1999Asiana Airlines - 2003Austrian Airlines - 2000Avianca - 2012Brussels Airlines - 2009Copa Airlines - 2012Croatia Airlines - 2004EgyptAir - 2008Ethiopian Airlines - 2011EVA Air - 2013LOT Polish Airlines - 2003Lufthansa - FounderScandinavian Airlines-FounderShenzhen Airlines - 2012Singapore Airlines - 2000South African Airways 2006Swiss International Air Lines – 2006
TAP Portugal - 2005Thai AirwaysInternational - Founder
Turkish Airlines - 2008United Airlines – Founder
MembersAeroflot - 2006Aerolíneas Argentinas - 2012Aeroméxico - FounderAir Europa - 2007Air France - FounderAlitalia - 2001–2009 Aeree Italiane - 2009China Airlines - 2011China Eastern Airlines - 2011China Southern Airlines - 2007Czech Airlines - 2001Delta Air Lines - FounderGaruda Indonesia - 2014Kenya Airways - 2007KLM - 2004Korean Air - FounderMiddle East Airlines - 2014Saudia - 2012TAROM - 2010Vietnam Airlines - 2011Xiamen Airlines – 2012
MembersAir Berlin -2012American Airlines - FounderBritish Airways - FounderCathay Pacific - FounderFinnair- 1999Iberia Airlines - 1999Japan Airlines - 2007LAN Airlines - 2000Malaysia Airlines - 2013Qantas - FounderQatar Airways -2013Royal Jordanian - 2007Sriklankan Airlines -2014S7 Airlines - 2010TAM Airlines -2014
Africa(AH) Air Algérie(MD) Air Madagascar(UU) Air Austral(HM) Air Seychelles(MK) Air Mauritius(W3) Airk Air(AT) Royal Air Maroc
Asia(AK) Air Asia(NX) Air Macau(PG) Bangkok Airways(DZ) Donghai Airlines(LY) El Al(EK) Emirates(EY) Etihad Airways(G8) Go Air(GF) Gulf Air(HU) Hainan Airlines(6E) Indigo(9W) Jet Airways(7C) Jeju Air(JT) Lion Air(W5) Mahan Air(WY) Oman Air(PK) Pakistan Airlines(PR) Philippine Airlines(BI) Royal Brunei Airlines(SC) Shandong Airlines(3U) Sichuan Airlines(SG) Spice Jet(9C) Spring Airlines(UK) Vistara(TR) Tiger air(IY) Yemenia
North America(AS) Alaska Airlines(F9) Frontier Airlines(HA) Hawaiian Airlines(B6) JetBlue(WN) Southwest Airlines(NK) Spirit Airlines(VX) Virgin America(WS) WestJet
Australia(SB) Air calin(PX) Air Niugini(TH) Air Tahiti Nui(FJ) Fiji Airways(VA) Virgin Australia
South America(AD) Azul(G3) Gol Transportes Aéreos
Europe(EI) Aer Lingus(BT) Air Baltic(JU) Air Serbia(U2) Easy Jet(BE) Fly be(IG) Meridiana(ZB) Monarch Airlines(DY) Norwegian Air Shuttle(PC) Pegasus Airlines(FR) Ryan air(UN) Transaero(PS) Ukraine Intl Airlines(U6) Ural Airlines(UT) UTair Aviation(VS) Virgin Atlantic
Star Alliance27 members
SkyTeam20 members
Oneworld15 members
Rest of Industry(Largest Airlines)
STRATEGIC ALLIANCES - ONE WORLD
POTENTIAL TARGET MARKETS
HUB
Australia
Japan
South Korea
Malaysia
EUROPE
AFRICA
SOUTH AMERCIA
UNITED STATES OF AMERICA
ASIAMIDDLE
EAST
$783bn World Revenue $140bn One World Revenue $2.2bn Indigo Revenue
Vision of One world
To be the first choice airline alliance for frequent international travellers
• Making global travel smoother, easier, better value and more rewarding.
• Offering travel solutions beyond the reach of any airline's individual network.
• Providing a common commitment to high standards of quality, service and safety.
• Delivering its airlines with savings and benefits greater than any can achieve by itself.
Stat’s of One world
One world current member airlines and members elect:
• Serve more than a 1000 destinations in 155countries.
• Carry more than 510 million passengers a year
• Operate combined fleets totalling some 3,500aircraft.
• Offer more than 14,250 flights a day - an average ofone world airline departure or arrival somewherearound the world every three seconds around theclock.
• Generate more than US$140 billion in annualrevenues.
Why an Alliance with One world?
• One world enables its member airlines to offer services beyond what any individual carrier can provide by itself or bilaterally with another partner.
– Global coverage
– Better value
– More rewards and recognition
– More miles and points
– More lounges
– Smoother transfers
– Superior quality
– Greater support
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate ’PT’ country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
THREE STAGES APPROACH
MARKETING PLAN - INDIGO AIRLINES
STAGE 1TANGIBILITY & INTANGIBILITY
STAGE 2MARKETING MIX - 7 PS
STAGE 3RECOMMENDATIONS
Build on strength Meet the Global challenge
and increase its footprint Increase depth by venturing
into cargo and charteredairlines
Continue being close to thecustomer by being consistentin their services and comfortto customers
Come up with innovativeofferings
Increase tie-ups with hotelsand banks
Continue to improveorganizational development,which is a critical to airlines
Price: Value for Money Pricing/ Load factor/ Seasonality/ Competitive
pricing /Profit margins
Place: Tour operators/ Online/ Travel Agent/ Affiliated with companies &
Overseas Market, Website
Promotion: ADVT In Partner alliance countries, press Launch & loyalty
Programme
People: Team of skilled & competent flight and ground crew members & Employees
Process: International standard practiced globally by oneworld
Physical Evidence – The service itself
Product/Service: The air transport serviceINDIGO AIRLINES
INTANGIBLE RESOURCES
Brand Equity/Reputation
Social Capital
Brand AwarenessEmployee Relationship
MAJOR COMPETITORSGo Air, Jet Airways,
Spice jet, Air India
Vistara Airlines, Air Asia
TANGIBLE RESOURCES
AircraftsHuman Resources
Fuel
Communication – Campaigns & Ad’s
Sponsoring fashion shows, talenthunts, new year parties, etc. Collaboration with consumer banks,credit card companies, hotels, ticketingwebsites to promote special offers,discount, cash back etc.
Hoarding at airports with focus on Best on Time performance Advertisement through social networking medium like Facebook, Twitter, etc. Collaboration with multiplexes in major cities to promote the airline and itsoffers Hoardings in multistoried buildings and offices Ads in magazines targeting urban population
Sending special offers to frequent fliers through sms, email, etc.
Promoting in regional languages in respective sectors thus giving a local flavor
Communication – Campaigns & Ad’s
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate ’PT’ country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
SPORTS
TOURISM
HOSPITALITY
WIDE CULTURE
INVESTMENT OPPORTUNITIES
MANUFACTURINGHUB
RISE OF START UPS
GROWING SCIENTIFIC RESEARCH
MOVIES & MUSIC
INDIAN INTERNATIONAL
CELEBRITIES
INSPIRATION
EASY LIVING
GLOBAL PRESENCEGROWING POPULATIONFOR CONSUMPTION
SPACE ROCKET GROWTH
INDIA A LUCRATIVE DESTINATION
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate ’PT’ country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate ’PT’ country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
Do we have products & service that can be marketed abroad?
Should we investigate foreign markets?
Does preliminary screening indicate PT country markets?
Does secondary data analysis indicate a country with high
sales potential?
Do primary (field) data support secondary data?
Is our entry mode the most appropriate mode, given external factors & our objectives?
Is our marketing plan the most appropriate one, given our resources & objectives?
Should we enter the foreign market now?
Operations
Is our performance satisfactory?
Redesign entry mode
Redesign Marketing plan
Delay Entry
Redesign Strategy
Continue to exploit home market only
Withdraw
LOGICAL FLOWCHART OF ENTRY DECISION PROCESS
DOMESTIC PERFORMANCE
EXPECTED FUTURE PERFORMANCE EVALUATION
THE FLY AHEAD
• Indigo will have over 45% of thecapacity of all low-cost carriers in 2017-18& become a large market player in LCC
• It will get delivery of fuel-efficient A-320Neo from end 2015
• Long haul flights capacity will betested and practices would be putin place for his operations in nearfuture.
• It plans to be the majorcontributor for ONE WORLDAlliance in gaining the marketshare in Asia's & Middle East
THANK YOU