Table of Contents
QUESTION ONE 3
AirAsia Airlines 3
Product and Services 3
Support and Subsidiaries 4
Associated companies 4
Value Added Services 5
The Micro and Macro Environment 6
Micro Environment 6
Macro Environment 8
QUESTION TWO 9
Marketing Channel 9
Consideration of Channel Marketing 10
The Effect of Conflict and the Exercise of Power within Marketing Channel 14
Effect of conflict 14
Channel Power 16
The term of “Marketing” arrived based on proposed multiple definitions whereby each trends of marketing is focus on different types of issues. The main key term of marketing is the process of creating customer value in the business environment and it involves the exchange of transaction, products or services between buyers, sellers and other parties such as distributer, manufacturers and etc. Rather than that, marketing is also implemented to create a good relationship among its sellers, buyers or other affected firm parties of its businesses (Perner, 1999). Marketing consists of its own components in terms of marketing environment, strategic planning, social responsibilities, consumer behaviours, segmentation, market research, its products, pricing, distribution, promotion as well as international marketing and so on. Besides that, the strategic of marketing is the most important elements whereby it is an effective way for an organization to evaluate and analyzed their venture of businesses from their competitors by capitalize the potential strength of the business in order to maximise a better customer value in a consistent range.
Besides that, it is also a process of evaluating the needs of businesses in order to compete with its competitors by providing a better value for it's with use of strategic and operational elements (Toman, 2011). Strategic marketing is also a key of understanding for an organization in the process of recognising the customer needs and implementation of a plan to accomplish customer satisfaction as well as gain profit by improve the company performances. Usually, the strategic marketing planning is done with use of written marketing plan by the organization to analyze an appropriate marketing program together with its given time frame to complete and the implementation process of its plans. As an overall concept, strategic marketing is known as a way to bring the business into innovative circumstances instead of being a market penetrate. In the next section, I'm going to evaluate and analysed about “AirAsia Airlines” in deeper by investigating its product or services in terms of its industry and its marketing environment aspects.
AirAsia Airlines is known as a Malaysia based company who are in engaged with air transportation service provision. This organization operates with a fleet of ninety craft and those craft had flies to quite sixty destinations from hubs in Malaysia, Thailand and Indonesia. AirAsia flight is estimated to operate about 3,500 flights per week and it has been declared as world leading low fare airline within the Asia. AirAsia has grown quickly since the year of 2001 and its company performance makes AirAsia to become one of the award winning corporations who perform a major low price carrier throughout Asia. Initially, AirAsia was owned by Malaysia government conglomerate who known as DRB-Hicom in the year of 1993. Later in 2001, Dato Tony Fernandes's who the ex-executive of Time Warner and who owned the “Tune Air Sdn Bhd “company purchased the indebted airline for the sum of RM1 ringgit (Atom, 2012).
In a limited time range, Fernandes makes an excellent spin, by turning the heavily-indebted airlines into turning a profit in the year of 2002 by introducing new routes from its hub in KLIA for the first time. AirAsia prompt a high belief on the hassle-free, no frills and keeping low fare ideas since it will helps to increase the efficiency of its businesses. At the same time, Tony believes that when efficiency in its business produces much saving for its customer, the inexpensive travel by air is able to become as a reality. Besides that, he also had made a great revolution by introduced a tagline which stated “Now Everyone Can Fly” has grabbed many people to choose AirAsia Airlines as their first preference when travelling through air.
Product and Services
When we talk about the product and services of Air Asia, which has been mentioned before; it is known for a low cost based airlines and it's operate through both national and international region. At the same time, Air Asia has been declared as it is a low cost of air travelling services across Asia and introduced the concept of ticketless travelling services. Air Asia Airlines is basically located at KLIA but it is also associated its services at Thailand and Indonesia, respectively. When it's comes to the cost of operation, Air Asia had implemented its operation just for the cost of $0.023 U.S dollar and it is the world most lowest unit cost which taken by them rather than breakeven the load factor of passenger for 52%. Air Asia airlines is the main ad important customer of “Airbus A320” whereby the company has been located with 175 unit of airbus as an order in order to use for servicing its routes and its first unit began with its operational activities on December, 2005 (Atom, 2012).
Support and Subsidiaries
As the masterpiece for low cost airlines throughout Asia, the Air Asia airlines consists of its subsidiaries and support from its associate company for the purpose of the operation. For an example, the Air Asia of Thailand has been grown up on behalf of the Air Asia subsidiaries on December 2003 as a cooperative venture with the Shin Corporation. As the result, its flight operation started to provide the air transportation services on January, 2004 from the “Don Mueng International Airport” but later, the airlines shifted its operation to “Suvarnabhumi Airport” in the year of 2006. Apart Thailand, Air Asia of Indonesia are also taken part for another subsidiaries for Air Asia Sdn Bhd and its services started to operate from the “International Airport of Soekarno Hatta”. But in the year of 2004, Air Asia has purchased non-operational airlines with a 49 percentage of stake and it is known as an “Awair Airline”. Awair airlines started its operation in December, 2004 and later it was completed rebranding as an Air Asia of Indonesia from December 2005 onwards (William, 2016).
Apart flight services, Tony Fernandes who is the founder of Air Asia Sdn Bhd do also collaborated with many other companies such as Fly AsiaXpres, Tune Hotels and money as well as Air Asia X. Basically, the Air Asia X is operates for long-haul travelling services by using Airbus A330 which started from Kuala Lumpur to Australia and then to China region. While, the Tune Hotels and Tune Money is known as a Asia's first no-frills based hotel and online financing services and located in many region of Malaysia such as Kuala Lumpur, Penang, Kota Kinabalu, Johor, Miri, Sandakan and etc. The concept of Tune Money is to comprise its services for home, life or motor vehicle's insurances (Phong, 2014).
Air Asia airlines has expand its flight services for almost 200 flights a day by covering 75 types of different regions routes such as Malaysia, Australia, Thailand, Philippines, Indonesia, Singapore, Laos, China and much more. At the same time, a 19 types of new region routes has been established with use of “Air Asia wide network” in the year of 2007 and its include a new route which started from Kuala Lumpur to Gold Goast, Bandar Aceh and southern China. Moreover, in the year of 2008, Air Asia has finds a new routes which includes its destination hub in India (Chennai, Madurai and Kochi) as well as in China (Shah, 2012).
Value Added Services
Furthermore, Air Asia Sdn Bhd do also comes out with value added services to ease the travelling experience of their customers. So, they introduced a new service which entitle as “Xpress Boarding” in the year of 2007 for the usage of providing priority boarding pass with fee for their customers and this services are available in all hubs. Besides that, customers are able to purchase extra luggage weight services, the comfort kits as well as the seat selection with use of Air Asia X airlines under affordable price range (Shah, 2012).
The Micro and Macro Environment
The key elements of macro and micro environment of Air Asia airlines has brings a successful component to constantly operate with lower costs. Yet, Air Asia does face up with many challenges throughout their operation and it can be derived in terms micro and macro resources as listed below:
• Threats of new entrance
New entrants to business bring new capability and it is used to achieve market share that puts pressure on costs, prices as well as on the rate of investment necessary. The threat to Air Asia airlines is comparatively less because the capital needed to enter the business is kind of high. However, potential new entrants from full-service carriers with a surplus capital may be threats within the future and semi permanent.
• The power buyers
Powerful customer-the flip position of powerful suppliers will capture additional price by forcing down costs, hard-to-please higher quality or additional service, and usually taking part in business participants off against each other at the expense of business profitableness. The negotiation power of the patrons is incredibly high as currently a day's tickets are often engaged on-line and if they'll select price for most affordable fares and there's not abundant cost concerned in it.
• Offered different products
The threat of a substitute is high if it offers valuable performance by trade-off to the industry's product. The threat of a substitute is kind of low as Air Asia encompasses a network that spans quite twenty countries. Air Asia is that the leading affordable carrier, connecting folks and places across 132 routes.
• Government legislation
Government policy will hinder or aid new entry directly, still as amplify the opposite entry barriers. Government directly limits or perhaps forecloses entry into industries through, for instance, licensing needs and restrictions on foreign investment
• Bargaining power of supplier
The power of the suppliers is very important because it can have an effect on the business. Within the airline business, the facility of suppliers is kind of high since there are solely two major suppliers that is Airbus and Boeing, thus there don't seem to be several decisions to the airline business. However, each suppliers give nearly same commonplace craft and thus the switch to Air Asia is low (Myra, 2014).
The mutual agreements obstruct progress of the budget airlines. For instance, Malaysia government refusing Air Asia rights to fly to sure counties to guard the interest of the Malaysia airline. Terrorism threat is additionally a significant issue.
Due to the worldwide monetary crisis there has been a modification within the disbursement patterns. People tend to cut back disbursement on discretionary desires like taking craft transportation. When the economy's growth is weak the foreign currency exchange rates also are affected that in-turn increase the disbursement of the corporate
Air Asia operates in South East Asia in several countries with totally different languages. Each country has numerous cultures and religions. Co-operation in business is given additional importance than individualism. Acceptance of laws and rules will vary. Corruption is rampant and therefore the rules and rules don't seem to be followed by traveller
Air Asia has pushed net booking services and Air Asia currently takes the bulk of bookings direct instead of probing factor. The social media, tools like Facebook and Twitter and blogs became integral to the Group's client relationship initiatives. Air Asia has the youngest fleet of aircrafts with state of the art technology that conjointly provides higher fuel potency (Myra, 2014).
The most effective way by cut back prices, improve potency, expand markets and increase client satisfaction will helps to build business partnerships too productive to pass up. Nowadays, it's become tougher for any kind of businesses to sell products based on one place, necessitating a lot of international cooperation to extend success rates. In business, a “channel” is that the pathway through that merchandise be due producers to customers. It's necessary to think about each purpose on the trail so as to make a full image of however merchandise is literally created and sold-out. The concept of channel marketing do involves the process of finding new partners to assist transfer merchandise from producers to customers. Only a few manufacturers truly sell the products which they produce themselves and sold-out through negotiator.
Contemplate the cereal all over again whereby if there is no cereal store; producers suppose grocery stores to sell their merchandise. Finding new channels and maximising the potential of these channels is that the main goal of channel promoting. It's primarily a business to business (B2B) promoting strategy, involving businesses promoting themselves to different businesses instead of individual customers. For an example, customer's broker at company A can attempt to convert a manager at company B that they'd profit if they started commercialism Company A's merchandise. The marketing channel do also affects several aspects of the method a product is sold-out. A product's value purpose can rely for the most part on the kind of surroundings its sold-out in. coaching and advertising efforts can need to be tailored to fulfil the wants of the vendor. Ultimately, the whole perception of a product are influenced by the method channel partners gift it (Marketing Schools.org, 2012).
Consideration of Channel Marketing
The process of channel identification is very important aspect in choosing a strategic decision in terms of marketing. The selection of channel marketing need the consideration must be based on three types of factors such as customers, distribution and its channel constraints as below:
Identification in terms of target customers is an important element in choosing channel marketing. It's extremely essential to grasp the customers, its demographic, psychographic characteristic and location for them to obtain merchandise. These are the factors highlighted as major determinants within the channel choice. The seller should use marketing research to spot the influence of those factors within the choice of the channel structures. Industrial and institutional customers typically order directly from the producer or use the agent's services. Customers ordinarily obtain from the shops maintained by the manufacturer or the retail merchant. In the client market, selection of searching space and shops considerably varies among the class, social class, and class consumers. The subsequent customer's issues area unit vital in distribution decisions:
• If consumers are the type of people who are based on prestige-oriented, they prefer to shop for from high-toned shops, like specialty stores and department's stores.
• If consumers are the type of people who acutely aware, they'll like shopping for at supermarkets and discounts stores.
• If consumers use longer and energy in shopping for, the merchandise could also be distributed through fewer shops.
• If consumers look for convenience in shopping for, marketers ought to be able to distribute extensively so as to sell the merchandise near consumer's searching locations.
The objectives of distribution elements comprise in terms of control channel, larger market coverage and minimize the cost. The seller cannot absolutely adopt all 3 objective, joined objective moves contrary to the opposite. However the seller formulates the distribution objective determines the choice of the channel structure (Chimoriya, 2016).
If the firm desires to control the channel, it ought to follow the short promoting channel. The manufacturer of World Health Organization distributes on to customers will exercise the best degree of channel management. The vendor loses management with every sequential addition of channel levels.
The market coverage is directly associated with the intensity of distribution. The intensity of distribution desired by the firm affects the channel choice. In terms of intensive distribution, the sellers consist of target in achieving the market coverage and he/she will use the attainable promoting channel. While, in terms of selective distribution element, the seller will set the limitation of customers and distribute with the involvement of fewer levels of selling intermediaries. In exclusive distribution, the seller's usually will targets at appropriate market coverage and serves designated customers. In such a case it's going to distribute directly or through one level of selling intercessor (Chimoriya, 2016).
Distribution prices vary across totally different channel structure. The distribution prices embrace the channel prices in terms of commissions, discounts and incentives paid to channel members while, physical distribution prices consists the price of transportation, storage, order process, internal control and products handling.
• In shorter channels, the vendor is also able to scale back product delivery and channel prices, however might suffer significant inventory holding prices.
• Longer channels involve higher product delivery and channel prices, however might involve lower inventory holding prices.
Consideration of prices conjointly affects the choice of the channel members. Channel prices vary across channel participants, as some channel participants demand higher commission and discount rates than others however might provide totally different value saving facilities to the vendor. A seller must evaluate the involvement of the various kinds of prices within the channel alternatives. The price analysis is important so as to pick the price effective promoting channel in reference to the required level of channel management and market coverage. In fact, channel choice may be a trade off call on channel management, market coverage and prices (Chimoriya, 2016).
• Channel Constraint
Channel choice is influenced by many constraints related to product, intermediaries, competitors, and organization. The vender has to identity the foremost factors related to these constraints and value the results of those factors within the choice of the channel structure.
• Nature of the merchandise may be a major determinant in channel choice. Decay able product can't be hold on for long period and want to be delivered quickly to the market. Marketers typically follow short channels for decay able product, whereas sturdy product is distributed through the longer channels. shopper product an unremarkably distributed through the longer channels, whereas industrial product square measure distributed through the longer and shorter channels. Services are distributed through the short channels.
• If the unit value of the merchandise is high, like within the case of knickknack or installations, marketers unremarkably adopt marketing. Low priced shopper things and operational provides square measure extensively distributed through the long selling channels.
• If the merchandise is technically complicated and needs union underneath the makers management, it's distributed directly. General expendable product square measure distributed through the long channels.
Competitive factors touching alternative of channels which competitor's channel policies and styles, and edges provided by competitors to intermediaries. During a competitive market, the vender must choose a channel style that's not solely price effective however additionally additional economical than that of the competitors. Once a vender must share associate intermediary's service with competitors at the wholesale level, the channel alternative is influenced by the competitor's commission, discounts and incentive policies. In such a scenario, the vender might get to offer similar or higher edges and services than the competitors (Chimoriya, 2016).
The organization's overall objectives, its resources and knowledge in channel management square measure major factors touching channel selections.
• The channel structure of a corporation ought to change to the organization's overall objectives, selling goals, policies and methods.
• It ought to even be in conformity with the opposite components of the selling combine.
• Many makers acknowledge the actual fact that channel management is troublesome and wishes special experience and so, turn in the distribution functions to selling intermediaries.
• Funds and personnel availableness for distribution additionally become a serious constraint for several makers World Health Organization wish to distribute directly.
The Effect of Conflict and the Exercise of Power within Marketing Channel
Channel conflict could be a scenario during which channel partners ought to contend against each other or the vendor's internal business department. Channel conflict will price a corporation and its partner's cash as partners try and undercut each other. It also can lower morale among the channel and cause some partners to contemplate alternative vendors. To forestall channel conflict, partners generally enact agreements like deal registration (Rouse, 2015).
Effect of conflict
• Horizontal Conflict
A horizontal conflict refers to a disagreement among two or more channel members at constant level. For instance, suppose a toy manufacturer has deals with two wholesalers, every shrunk to sell merchandise to retailers in numerous regions. If one distributer decides to branch its operations into the opposite wholesaler's region, a conflict can result. If the toy manufacturer does not facilitate solve the matter, its business dealings with each the wholesalers and therefore the downstream retailers (Mack, 2014).
• Vertical Conflict
Vertical conflicts involve a disagreement between two different channel members on consecutive levels. For instance, if the toy manufacturer discovers its merchandise area unit inward at retail stores later than scheduled, a conflict may develop between the manufacturer and therefore the distributer liable for shipping to retailers. At constant time, the retail stores may well is in conflict with the distributer owing to its inability to ship merchandise on time.
• Multichannel Conflict
Multichannel conflicts ask disagreements among members in separate promoting channels. Whereas neither strictly horizontal nor vertical, these conflicts will have an effect on all members of each channel. For example, suppose the toy manufacturer participates in 2 promoting channels. Within the 1st channel, the manufacturer sells its merchandise on to shoppers via its official web site. Within the second channel, the manufacturer sells its merchandise to wholesalers for marketing to retailers. If the toy manufacturer's web site sells the merchandise for abundant lower costs than retail stores, sales within the second channel can plummet. The ensuing conflict would force some answer that works for each channel (Mack, 2014).
The Channel Power refers to the power of anybody channel member to change or modify the behaviour of alternative members within the channel, attributable to its comparatively sturdy position within the market. Generally, the maker's are seen, dominating the behaviour of alternative channel partners and influencing their actions in keeping with its needs. Some channel members want others over others want them. As an example, Wal-Mart features a ton a lot of power, given its massive volume purchases, than several of its suppliers. There are many sources of power. Reward power involves a channel member having the ability to completely reinforce another's performance. And even, Coco-Cola Corporation is able to provide a value break or pay a fee for added shelf house. A merchandiser that meets an explicit goal the sale of 5000 cases per month may receive a bonus. In distinction, powerful power involves the threat of a social control (Perner, 1999).
An oversized merchandiser, as an example, could tell little manufacturer that no any orders are going to be forthcoming unless a value discount is obtainable. Professional power includes information. Wal-Mart, as an example, as a result of its significant investment in info technology, will persuasively argue regarding probably sales volumes at totally different value levels. "Legitimate" power involves government or different regulations likely the machine dealers have a good deal of power over machine manufacturers as a result of solely they're allowed to sell to finish customers within the continental U.S. beneath most circumstances. Finally, referent power involves the need of the opposite facet to be associated most makers of upmarket merchandise are extremely impelled to make sure their convenience at Nordstrom's (Perner, 1999).
Marketing strategy are a few things that perpetually evolves by adapting to dynamical market conditions. At intervals Enterprise, the outcomes from its many various varieties of business square measure perpetually reviewed and evaluated. Judgements square measure then fed into the decision-making method. This enabled new methods to be developed to enhance operations.
However, the methods modification, one facet of the business has remained in the situation. This is often a continued specialize in high levels of client service and worker relations. This strategy has enabled Enterprise to get pleasure from continued growth for quite fifty five years and therefore the prospect of more growth within the future.
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