INTRODUCTION
OVERVIEW
1.1.1 Reasons for choosing the topic
The aviation market is experiencing unprecedented interest as modern life elevates people's travel needs Transportation options have evolved from bicycles to motorbikes and cars, making long-distance travel more accessible than ever Air travel stands out as the most convenient mode of transportation, despite its higher costs, due to the significant time savings it offers By choosing to fly, travelers can maximize their time and accomplish more of their plans Additionally, flying provides a more comfortable experience, allowing passengers to relax instead of enduring long hours in cars or trains.
Vietnam's aviation market is experiencing remarkable growth, aligning with the country's economic expansion According to IATA, it boasts the third fastest growth rate globally, averaging 16.6% annually from 2001 to 2014 Projections indicate that by 2035, Vietnam will rank as the fifth fastest growing aviation market worldwide, with passenger numbers expected to reach 150 million Additionally, Vietnam's aviation industry stands out as the fastest growing sector in Southeast Asia.
Vietnam's aviation market has seen remarkable success, prominently featuring airlines like Vietjet Air, Vietnam Airlines, and Bamboo Vietjet, in particular, has gained significant attention for its impressive growth and revenue In its 2020 financial report, Vietjet announced a profit of 70 billion dong, contrasting sharply with Vietnam Airlines, which reported a loss exceeding 11,000 billion dong.
The remarkable success of Vietjet Aviation Joint Stock Company (VJA) can be attributed significantly to its effective Marketing Mix strategy This research focuses on exploring the key elements of VJA's Marketing Mix strategy and how they contribute to the company's overall achievements in the competitive aviation industry.
- Learn about Marketing Mix activities of Vietjet Aviation Joint Stock Company
- Analyzing the current situation of VJA's Marketing Mix
- Analyze the business environment of VJA to see strengths, weaknesses, opportunities and threats And from there, propose measures to improve VJA's Marketing Mix strategy
Marketing Mix Strategy of Vietjet Aviation Joint Stock Company
- Scope of space: in Vietnam
- Collect secondary data and business results of VJA in recent years
- Collect data and information from newspapers, TV, Internet,
- Using analytical methods, comparing data between years to come up with VJA's performance results
CHAPTER 2: MARKET ANALYSIS OF AVIATION INDUSTRY AND COMPETITORS:
CHAPTER 3: TARGET CUSTOMERS AND POSITIONING STRATEGIES CHAPTER 4: MARKETING MIX STRATEGIES
OVERVIEW OF VIETJET AIRLINES JOINT STOCK COMPANY
VietJet's full name is VietJet Aviation Joint Stock Company.
MARKET ANALYSIS OF AVIATION INDUSTRY AND COMPETITORS
MACRO ENVIRONMENT
In recent years, Vietnam's economy has experienced remarkable growth, with annual growth rates ranging from 7% to 8.6% This progress has led to a significant increase in per capita income, transforming the economic landscape The country is undergoing substantial changes, characterized by upgraded infrastructure and rising investment levels, contributing to its rapid development.
6 of the economy, human needs also increase, including the need for travel People with high incomes have an increasing need for air travel
Vietnam's economy has experienced significant growth, with GDP per capita rising over 40% from $1,532 in 2017 to $2,171 in 2020 This positive shift in the socio-economic landscape, coupled with increased macroeconomic stability, lays a strong foundation for the advancement of aviation transport in the country.
The global economy is projected to grow at an average rate of 3.5% from 2015 to 2020, while the world tourism market is expected to increase by 3.6% annually In 2015, the number of foreign tourists reached nearly 1.18 billion, representing a 4.4% increase from the previous year This growth lays a solid foundation for significant advancements in international and regional aviation, including the aviation market.
The aviation industry has experienced significant transformation due to advancements in technology, which enhance flight safety and streamline various aspects of air transport A key component of this evolution is aircraft manufacturing technology, critical for the success of airlines The development of safe, high-quality, and fuel-efficient medium and large aircraft has raised the bar for operational standards, rendering older aircraft models obsolete This shift not only diminishes the competitiveness of less innovative airlines but also pressures them to modernize their fleets.
The Company utilizes Geneva software to enhance the efficiency of its mining operations by optimizing flight schedules, crew management, and streamlining flight handling and time control For procurement, finance, and accounting, the Company employs SunSystems, while AMOS is implemented for effective management of materials and aircraft spare parts.
The Company is focusing its investment in information technology on the Internet by developing an enhanced e-commerce platform to streamline the purchasing of tickets, goods, and services through VietJetair.com Additionally, the Company will persist in investing in ERP solutions to optimize business operations under the "E-Company" model.
The company is currently working with PriceWaterhouseCoopers Company (PWC) to implement a private investment project Question
Vietnam boasts a highly stable and peaceful political environment, creating favorable conditions for airlines to operate This stability results in unoccupied airports and free skies, allowing for unregulated and advantageous business opportunities in the aviation sector.
As Vietnam integrates internationally, the government is implementing policies to enhance the investment climate, attract foreign investments, and focus on multinational corporations The country is also shifting its approach to tourism, aiming to develop a robust tourism industry and position it as a key economic sector Foreign Direct Investment (FDI) is projected to grow at an annual rate of 5-7%, while international tourist arrivals are expected to increase by 10-12% per year, alongside a domestic tourism growth rate of 10-11%.
The Vietnamese government's decision to eliminate the 15% tax on imported fuel, coupled with its investment in infrastructure, marks a significant advancement in meeting future demand Additionally, Vietnam has effectively transitioned from paper tickets to electronic tickets, and it is now essential to enhance freight transport through electronic transactions to support export activities.
Vietnam is currently experiencing a "Golden population structure," marked by a rapidly changing age demographic that offers significant opportunities due to a large working-age population However, this demographic shift also presents challenges in enhancing the quality of human resources and generating high-productivity, quality jobs with better income Notably, the country is witnessing the highest proportion of young people in its history, with those aged 10-24 comprising nearly 40% of the total population.
Vietjet Air, a low-cost airline, targets the young, tech-savvy customer segment, including active first-time flyers and middle-income individuals Their clientele is proficient in using smartphones, social networks, and online payment methods like Visa and MasterCard, and they share a passion for exploration and travel at affordable prices Most of Vietjet's customers value innovation, creativity, and connectivity.
Since its inception, Vietjet has prioritized exploring untapped opportunities in the aviation market rather than fixating on its current market share The Deputy General Director emphasized that focusing on past investments could blind the company to new prospects With a population of 100 million, where only 1% currently utilizes air travel, Vietjet recognizes a vast potential customer base The airline strategically targets individuals who have never flown before, aiming to normalize air travel and position it as an accessible option, akin to taking a bus rather than a luxury experience.
Vietnam's strategic geographical position enhances its aviation industry, situated at the crossroads of Southeast Asia and key international air routes This location facilitates efficient connections between the US and Australia, as well as short domestic flights within Vietnam and the surrounding Southeast Asian region Vietjet Air's route network is specifically designed to capitalize on these advantages, promoting seamless travel across these vital corridors.
Vietjet Air is enhancing its competitive edge in the aviation sector by leveraging the "shaft-spoke" model, which supports high operating frequencies and efficient transshipment services in Hanoi and Ho Chi Minh City This strategy positions Vietnam as a growing regional air hub, competing with major transit centers like Hong Kong, Bangkok, and Singapore for international cargo flows to and from Indochina and Southeast Asia The airline aims to collaborate with international carriers, expand its route network, and strategically select partners for global alliances, aligning with worldwide trends and its own capabilities By effectively utilizing Vietnam's geographical advantages, Vietjet Air can significantly boost its market presence, although it has yet to fully capitalize on these opportunities.
MICRO ENVIRONMENT
Total assets by book value in 2020 compared to 2019 decreased by VND3,662 billion, down 7% mainly because the Company transferred an investment project to support air transport
In 2020, the airline industry faced significant challenges due to the Covid-19 pandemic, leading to a staggering 64% decline in net revenue compared to 2019 To cope with low demand, airlines drastically reduced seat availability, flight numbers, and frequency to optimize seat utilization and revenue Intense competition for market share resulted in plummeting business aircraft rental prices and a surge in promotions and stimulus programs aimed at attracting customers On the international front, Vietjet focused on conducting humanitarian flights to rescue and repatriate Vietnamese citizens in coordination with authorities.
In 2020, Vietjet successfully executed investment project transfer transactions, generating a profit of 1,773 billion VND to offset losses in its aviation operations Consequently, the airline achieved a consolidated profit after tax of 69 billion VND, positioning Vietjet as one of the few airlines to report a profit during that challenging year.
Table 1: Structure of the company's shareholders as of January 4th, 2021
No Shareholder Number of shareholder
(Source: List of shareholders, provided by VSD on January 4, 2021)
Aircraft leasing company: Alafco Aviation
Vietnam Airlines' partnership with Dung Quat Oil Refinery, which operates approximately 300 flights daily, is set to significantly reduce transportation and warehousing costs while alleviating foreign currency pressures amid the current economic climate This collaboration will also aid in decreasing the nation's trade deficit Since August 2010, Binh Son Refining and Petrochemical Company has supplied over 28,600 tons of Jet A1 jet fuel to both domestic and international partners The Dung Quat Refinery is projected to produce around 400,000 tons of Jet A1 gasoline annually, fulfilling approximately 35% to 40% of Vietnam Airlines' current fuel requirements.
Marketing service establishments: market research companies, advertising consultants
Product distribution: resellers, ticketing websites
Financial intermediaries: 3 major shareholders and ACE Insurance Co …
Vietjet Air collaborates with several well-known partners in its SLB deals, including GE Capital Aviation Services Limited, Awas Aviation Trading Limited, Awas 7170 Ireland Limited, Avation PLC, Goshawk Aviation Limited, Goshawk Management (Ireland) Limited, and Jackson Square Aviation, LLC.
Consumers: individuals and households who have a need to fly
Producer: charities, entertainment companies, media events
International customers: tourists, foreign businessmen, overseas Vietnamese, public officials coming to Vietnam to work
Vietjet Air, officially certified on December 20, 2007, commenced operations in 2011 after several delays The airline quickly gained popularity among domestic customers due to its low ticket prices.
Vietjet Air, a fully Vietnamese-owned airline with a registered capital of 600 billion VND, operates its main office at Tan Son Nhat International Airport in Ho Chi Minh City and has a branch at Noi Bai International Airport in Hanoi The airline's primary shareholders include T&C Group, Sovico Holdings, and Ho Chi Minh City Joint Stock Commercial Bank and Housing Development.
Owning 100 aircraft of all kinds: 62 ordered, 30 more purchased and 8 leased with the time until 2022 with a total transaction value of about $9.1 billion from the manufacturer
Vietjet is the first airline in Vietnam and a few in the region to own the latest and most modern Sharklet A320 aircraft from Airbus
Vietjet Air is a dynamic and trusted airline in Vietnam, known for its international professional crew and experienced flight attendants who provide exceptional aviation services Recognized as a leading domestic and regional carrier, Vietjet Air has garnered a loyal customer base, embodying the brand promise of "Fly is like right away."
Vietjet has established an extensive domestic flight network and aims to expand its routes across the Asia-Pacific region, catering to the growing travel demands of both domestic and international travelers With a commitment to high on-time performance and exceptional service quality, Vietjet stands out in the industry The airline not only provides a variety of flight options but also prioritizes creativity, offering passengers engaging experiences and enjoyable surprises during their journeys.
In 2020, as airlines globally reduced their workforce to cope with the Covid-19 pandemic, Vietjet capitalized on the situation by actively recruiting skilled personnel from both domestic and international markets The airline successfully onboarded 792 new employees that year, which included 13 pilots, 125 flight attendants, and 654 other staff members.
The Company's Board of Directors consists of a General Director, a Chief Executive Officer (CEO), eight Vice Directors, and a Chief Accountant The General Director serves as the legal representative and oversees daily operations, reporting to the Board on the execution of assigned responsibilities Meanwhile, the CEO, Vice Directors, and Chief Accountant manage production and business activities, providing strategic advice to the General Director for informed decision-making.
Table 2: List of Board of Directors
1 Nguyen Thi Phuong Thao General Director
3 Ho Ngoc Yen Phuong Vice Director & CFO
4 To Viet Thang Vice Director of Exploitation
5 Nguyen Thi Thuy Binh Vice Director
6 Nguyen Thanh Son Vice Director
7 Nguyen Duc Thinh Vice Director
8 Do Xuan Quang Vice Director
9 Luong The Phuc Vice Director
10 Tran Hoai Nam Vice Director
11 Hoang Manh Ha Chief Accountant
TARGET CUSTOMERS AND POSITIONING STRATEGIES
TARGET CUSTOMERS AND POSITIONING STRATEGIES
VJA's customers are those who need to travel by air
VietJet Air, a low-cost airline, successfully attracts a young and middle-income demographic by focusing on dynamic, tech-savvy customers who enjoy travel and exploration at affordable prices The brand's personality is defined by three key traits: "Playful," "Creative," and "Inspiring," appealing to individuals who value innovation and connectivity By catering to customers proficient in using technology and online payment methods, VietJet Air enhances the travel experience for those seeking both adventure and cost-effectiveness.
For high-income customers, VJA has high-class services suitable for these customers Customers can enjoy personalized services when using Vietjet's premium services (lounge, food, private shuttle )
3.1.2 Behaviors related to target customers:
3.1.2.1 Customers' perception of using Vietjet Air's services:
In response to the growing demand for air travel, VJA has strategically aligned its services with customer needs To effectively stimulate customer interest, VJA has identified three key triggers that influence travel decisions.
Unconscious mind: the customer's personal need for air travel
Physical conditions: Because the need to use aviation services is suitable to the customer's conditions, the customer has decided to choose VJA
External sources: the customer's decision to buy services is affected by marketing activities that VJA has launched such as advertising, service quality, brand,
3.1.2.2 Customers searching for information about Vietjet Air's services:
The increasing demand for air travel has led customers to seek comprehensive information about air services, resulting in a plethora of options and brands Before making a decision, customers weigh their past experiences and external factors, exploring alternatives before arriving at a final choice In response to this trend, VJA has implemented extensive marketing strategies to stimulate demand and enhance customer access to its services.
3.1.2.3 Customer reviews of other options or alternatives:
Besides Vietjet Air, customers also have other options such as Vietnam Airlines, Bamboo Airlines Jetstar, And customers will base on the following attributes to make the final decision:
The search attribute plays a crucial role in helping customers assess a service prior to making a decision By gathering information, customers can effectively compare and evaluate various aspects of airline services, including ticket prices, food quality, and brand reputation.
Experience attributes: After experiencing the aviation services of different airlines, they can assess attributes such as reliability, ease of use, and customer support
VJA Airlines emphasizes reliability by delivering on its promises of value and quality, exemplified by its slogan "Bay là thích ngay," which highlights affordable fares alongside exceptional customer experiences The airline enhances customer trust through engaging initiatives, such as distributing small souvenirs during special holidays These efforts not only strengthen the confidence of potential customers who have yet to experience VJA's services but are also effectively showcased through media advertising, including TV commercials and event photography featured on the company's website and publications.
3.1.2.4 Customers' experiences when using Vietjet Air's services:
Vietjet Air consistently demonstrates exceptional service quality throughout the customer journey, from check-in to takeoff The airline offers a variety of flight options tailored to meet individual preferences, whether customers opt for domestic travel or international flights With a focus on accommodating both short and long-haul services, Vietjet Air ensures a seamless experience for all passengers.
Vietjet Air operates as a high-contact service, emphasizing the essential collaboration between customers and service providers throughout the service delivery process The airline prioritizes the "processing" of people over inanimate objects, viewing the airplane as a dynamic transportation "factory." Consequently, the marketing challenge lies in creating an engaging experience for customers, focusing on both the physical environment and their interactions with service employees.
3.1.2.5 Feedback from customers after using Vietjet Air's services:
Customers assess service performance against their initial expectations after the service encounter, evaluating the qualities and risks associated with their chosen service During this decision-making process, they form expectations regarding the service's performance If these expectations are tied to critical attributes, the zone of tolerance may be narrow and firm Most customers believe that Vietjet Air meets their service expectations, leading to high levels of satisfaction Positive customer feedback has become a significant driving force behind Vietjet Air's continued growth and success.
MARKETING MIX STRATEGIES
PRODUCT STRATEGY
A product strategy is a comprehensive plan that outlines a business's objectives for its product and the methods to achieve them It should address critical aspects, including the target audience (personas), the benefits the product offers to these personas, and the company's overarching goals for the product's lifecycle.
Skyboss class is the premium ticket option offered by the airline, featuring exclusive benefits such as flexible flight date and time changes, name alterations, and priority check-in Passengers enjoy superior seat arrangements, complimentary access to VIP lounges, and a dedicated shuttle bus service to and from the aircraft Additionally, during long flights, Skyboss class travelers can indulge in free meals and beverages, making their journey exceptionally comfortable and convenient.
The Deluxe ticket class offers a range of flexible and convenient options for travelers, allowing them to easily change their flight date, time, or sector at no extra charge Passengers can also enjoy complimentary upgrades, although any fare differences will apply Additionally, changing the name of a passenger incurs a fee plus the price difference.
The Eco class is Vietjet Air's most popular ticket option, offering passengers the flexibility to change flight times, dates, and names for a fee This affordable ticket class is designed to meet the economic needs of most Vietnamese travelers while providing high-quality and attentive service.
Vietjet's Promo class offers the most affordable promotion ticket option, but it comes with significant restrictions Passengers booking these low-cost tickets cannot change their names or receive refunds, and any modifications to flights, including changes to flight times, dates, or itineraries, incur additional fees.
• Ancillary activities: selling food, teddy bears, souvenirs on the plane
Each Vietjet ticket class has different prices and service quality, customers can easily choose according to their own needs
Services are typically categorized by their specific industry, focusing on the essential benefits and solutions provided to customers At the heart of this offering is the core product, which delivers the primary, problem-solving advantages that customers desire.
VJA's transport services effectively address the need for moving individuals or goods between locations, while management consulting provides clients with expert guidance on strategic actions to take.
VJA's flagship product: Econmy class
- The Eco Vietjet Air ticket class is not much different from the Economy class of other airlines
Eco, or Economy, is the standard ticket class offered by Vietjet Air when promotions are not available As a result, during non-promotional periods, Eco becomes the most sought-after airline ticket class among travelers flying with Vietjet Air.
- For this class of seats, Vietjet Air does not offer free meals for passengers You can choose from a wide variety of meals and drinks on the menu
- This ticket class saves costs for customers because it does not include other services Therefore, customers are free to choose other services according to their needs
Delivery of the core product is usually accompanied by a variety of other service-related activities referred to collectively as supplementary services
Supplementary services enhance the core product, improving user experience and overall value As industries mature and competition intensifies, core products often become commodified, making it essential to focus on supplementary services for competitive advantage By adding or improving these services, providers can elevate the perceived value of their core offerings, justifying higher pricing.
Vietjet Air offers a diverse and thoughtfully prepared food and beverage menu, ensuring passengers enjoy a high-quality dining experience during their flights.
Vietjet Air offers a diverse menu featuring 9 hot dishes and 20 instant meals crafted by 5-star chefs Passengers can also enjoy a selection of desserts, bottled water, and a variety of beverages, including milk, fruit juices like orange and lemonade, and refreshing coconut water Additionally, instant coffee and expertly prepared coffee by a professional bartender are available to enhance the dining experience.
Checked baggage service is a highly valued option among travelers, allowing them to transport a variety of items and equipment for their trips VJA categorizes luggage into two types: hand luggage and checked baggage, each with distinct regulations regarding quantity, size, and weight.
- Air travel alone with children from 12 to under 14 years old unaccompanied by adults on domestic flights
- VJA's service to assist people with disabilities in flying: VJA accepts to provide the necessary equipment to transport up to 8 people with disabilities on one flight
- Insurance services of VJA: TravelCare Travel Insurance is provided by ACE Insurance Co., Ltd through linking with Vietjet's system, focusing on meeting the needs of customers
- It helps decide the exact steps to be taken in any event to make the product a success
- It prepares the company for response by competitors or towards changing market conditions
- It helps the company decide the target market and in market penetration
- A product vision is formed thereby setting the product on an independent path with a time to time intervention allowing the company to focus on multiple products in a short time
- The translation quality of ticket classes has not been clearly differentiated This makes customers tend to choose low-priced tickets because the quality is similar to higher-priced tickets
- The quality of the attached services is alarmingly poor Specifically, when customers' luggage was searched, VJA staff refused to accept customers with disabilities
4.1.5 Solution to complete the company's product strategy
The current optimal strategy for VJA is to enhance service quality, aiming to establish itself as a "delicious - nutritious - cheap" airline, where affordable prices do not compromise the quality of service compared to competitors.
VJA has been facing challenges with flight delays, currently holding the highest delay rate among airlines While unexpected incidents and errors can occur during service provision, it is essential for VJA to improve its organizational systems to enhance customer confidence Addressing these delays is crucial for customers who are increasingly concerned about their travel experience when choosing VJA's services.
VJA has faced criticism for its service staff's disrespectful behavior towards customers, particularly in instances of refusing service to disabled individuals and looking down on economy class passengers This negative attitude has harmed VJA's reputation among its clientele To address these issues, VJA must prioritize training to enhance the expertise and service attitudes of its employees Additionally, the company should publicly acknowledge its past mistakes in customer service and commit to ensuring that such incidents do not recur.
PRICING STRATEGY
Pricing refers to the amount customers spend to acquire a product or service of a certain quality, and determining the right price poses a significant challenge for marketers due to its volatility and the influence of various internal and external factors Incorrect pricing decisions can lead to customer skepticism regarding product quality, damage to brand image, and decreased sales Effective pricing goes beyond simply matching competitors; it involves a comprehensive analysis of multiple relevant factors This article will explore the pricing strategy employed by VietJet Air.
“Cheap" is the leading pricing strategy that VietJet Air still maintains up to the present time To do that, VJA applies stand on three foundations strategies:
Understanding pricing objectives is essential before developing an effective pricing strategy This strategy is built on three key components: provider costs, competitor pricing, and customer value Traditionally, many service industries approached pricing primarily from a financial perspective, leading to the prevalent use of cost-plus pricing methods.
VietJet optimizes costs to offer competitive fares by exclusively operating narrow-body A320 and A321 aircraft, which are efficient for short flights of 5-6 hours This strategy reduces operating expenses, including crew meals and rest, while allowing for multiple flight turnarounds The advanced, younger aircraft also contribute to a 15% savings in fuel costs Additionally, VietJet separates luggage and food service fees from the ticket price, catering to passengers' specific needs Their online ticket sales through the website and mobile platforms further minimize marketing, commission, and printing costs.
To enhance customer choice, many businesses offer a product line that includes multiple versions of a customized original product or service, typically organized from lowest to highest value As the value of these offerings increases, businesses also adjust their pricing accordingly to reflect the enhanced features and benefits.
VJA Airlines employs a tiered ticketing strategy, offering three distinct classes: Skyboss, the premium option; Eco class, comparable to economy offerings from other carriers; and the recently introduced Deluxe class, which replaced the Promo class in June 2020 The Deluxe class provides enhanced service incentives, reflecting VJA's commitment to improving the passenger experience.
Table 3: The service of each levels of price
Free 30 Kg and 01 set of golf clubs under 15 kg (if any) Free 20 Kg Must buy more
3 Change flight, flight date, itinerary
• Collect fare difference (if any)
• Collect fare difference (if any)
• Must cancel and rebook a new Ticket, Charge for name change and Fare difference
• Must change the name for the entire itinerary in the
• Only applicable for tickets purchased initially as
Skyboss, not applicable for upgrade tickets
Do not apply • Free change
6 Regulations on implementation time changes
All changes must be made and completed at least 3 hours before the scheduled departure time of the flight to be changed
7 Not coming to check in for the flight
Passengers must cancel the reserved seat 03 hours before the scheduled departure time indicated on the ticket or notify the cancellation to
VietJet via the call center, the ticket office of Vietjet no
• Passenger's ticket will be canceled
• Full Ticket Fees are non-refundable
30 later than 72 hours after the scheduled departure time of the flight to Request a
Fees according to the published Policy
• Reservation of Tickets for up to 02 years from the date of flight cancellation for reservation
• Collecting ticket reservation fee according to published policy
• Passengers must notify at least 24 hours before the departure time of the first flight sector bay
• Reservation of Fare for up to 180 days from the date of flight cancellation for reservation
The intrusive pricing strategy involves setting the lowest possible price when introducing a product or service to the market, aiming to quickly capture significant market share.
Table 4: table of ticket prices of VietJet Air compared to Vietnam Airlines, Pacific
Airlines from Ho Chi Minh city to some provinces
Ticket Class Hà L i ộ Da Lat Đa Nang
VietJet focuses on cost reduction to deliver exceptional value to customers at the most competitive prices in the market Since its inception, the airline has significantly contributed to lowering the overall costs within Vietnam's aviation industry, making air travel more accessible.
VietJet Air successfully utilizes innovative marketing strategies, offering continuous vouchers and discount codes, alongside its popular "Hunting 0-VND tickets to fly around Vietnam" promotion available from 12 PM to 2 PM Even after accounting for taxes and fees, the ticket prices remain significantly lower, often at half or one-third the cost of standard bookings.
Picture 6: "Hunting 0-VND tickets to fly around Vietnam"Campaign
VietJet also designs promotional programs suitable for each event, at different times, to attract consumers The most recent is a 77% discount program for passengers traveling from Hanoi on 7 /7
Picture 7: 77% discount program for passengers traveling from Hanoi on 7/7
VJA primarily targets young, dynamic customers aged 18 to 30 who are tech-savvy and eager to try new products and services This demographic is particularly drawn to low-cost strategies, making them an appealing market segment Additionally, some customers evaluate the net value of a service before making a decision, highlighting the importance of demonstrating value in VJA's offerings.
When customers assess competing services, they primarily compare their relative net value Marketers can enhance this value by incorporating additional benefits into the core product and offering supplementary services.
Prior to the emergence of VJA, Vietnam's aviation market was dominated by foreign carriers and the state-owned Vietnam Airlines, which targets the premium segment and is often perceived as expensive VJA differentiates itself by emphasizing core values such as a 7-star safety certification and a professional, youthful team, effectively appealing to customers seeking quality and affordability This strategic communication not only strengthens customer perception but also positions VJA as a compelling alternative that aligns with their core values at a more competitive price point.
The emergence of low-cost airlines like Bamboo Airways and Jetstar Pacific has compelled VJA to respond to increasing competition The current market landscape has turned cost reduction into a competitive race, where pricing strategies heavily influenced by competitors could jeopardize profitability across the industry, potentially leading to significant financial losses.
4.2.3 Evaluation of VJA's pricing strategy (Pros and cons)
- The strategy is reasonable and suitable to the economic and social situation of Vietnam: people's income is not high and there is an increasing demand for air travel
Vietjet Air's unique pricing strategy has played a crucial role in establishing a strong brand identity, achieving an impressive 98% brand recognition level in Vietnam, according to CAPA calculations This innovative approach to pricing has significantly fueled the company's growth and solidified its presence in the minds of consumers.
The strategy covers various price segments, resulting in conflicts among them Consequently, customers face confusion with numerous pricing options, making it difficult for them to make a choice.
- It is the low-cost strategy that has created doubts in customers, adversely affecting the customer's decision to use the service
Low prices can often lead customers to voice complaints when issues arise, such as flight delays caused by weather conditions This tendency to complain is exacerbated by perceptions of poor service and the frequency of delays, making customers more critical when they feel they are not receiving value for their money.
PHYSICAL EVIDENCE MANAGEMENT
Physical evidence refers to the environment and location where customers purchase and consume products, serving as the backdrop for the interaction between the company and the customer While it was once primarily associated with service products, the distinction between service and physical products has become increasingly unclear Businesses that offer both types of products strive to manage the physical evidence associated with their offerings, as it significantly enhances the overall customer experience.
It is a way to control and add value through the presentation of intangible elements of the product
4.6.2 Physical evidences in Vietjet Air
The location and surrounding factors at the time of product consumption play a crucial role in the Physical Evidence aspect of marketing These elements significantly influence customer thoughts and moods, ultimately enhancing the perceived value of the product.
Vietjet Air operates dedicated ticket counters and check-in areas at major airports across Vietnam, including Tan Son Nhat, Noi Bai, and Phu Quoc At these locations, passengers will find a separate ticketing area for Vietjet Air, staffed by enthusiastic personnel ready to assist and guide travelers through the check-in process.
Vietjet offers modern and luxurious airport lounges exclusively for Skyboss passengers, providing a serene environment for relaxation and work These lounges feature private screens with flight information, a diverse buffet, a bar, and a selection of newspapers and magazines Additionally, complimentary Wi-Fi and various amenities cater to both business and leisure needs, ensuring a comfortable experience for all travelers.
Vietjet offers an exceptional in-flight service featuring comfortable, adjustable seats for both sitting and reclining Passengers can enjoy a diverse menu that includes nine hot dishes, instant meals, a variety of snacks, and over 20 types of hot and cold drinks, all crafted by chefs from five-star restaurants Additionally, Vietjet caters to individual dietary preferences by providing vegetarian and diet options to meet customer needs.
Vietjet enhances in-flight entertainment by not only providing screens, books, and magazines but also hosting engaging activities like Carnival and Gangnam Style dances, as well as unique events such as weddings on the plane featuring renowned artists During major holidays like Tet, the airline organizes special events that include distributing lucky money, fortune gifts for the New Year, and Christmas presents for women and children, ensuring a memorable experience for all passengers.
This is a component, acting in conjunction with the physical environment This is how the environment is set up
Vietjet Air's ticket counter features a unique design with a bright red background, strategically placed to capture the attention of customers immediately upon entering the airport terminal.
The aircraft has a seating capacity of up to 100 passengers, featuring a layout of six rows organized in two sections Each side consists of three rows, labeled from left to right with capital letters A, B, and C, starting from the entrance of the plane.
The aircraft features three distinct seating areas to cater to various customer needs The front seating area is designated for VIP guests, offering the highest quality with spacious and comfortable seats In contrast, the regular row area provides less legroom and tends to be noisier, as it is located closer to the plane's engines Passengers in this section may experience more vibrations and noise during take-off and landing, which could lead to discomfort or potential motion sickness.
Physical evidence plays a crucial role in shaping customer perceptions of a business While branding may sometimes be overlooked in the marketing mix, it significantly influences the intangible aspects of the customer experience For instance, Vietjet Air, Vietnam's first private low-cost airline, is well-known for its vibrant and professional staff, along with enticing promotions such as 0 dong airfares during peak hours from 12 to 14 o'clock This focus on affordability is a key element in establishing the airline's brand identity and attracting customers.
Vietjet Air stands out as a leading choice for affordable airfares, making it the preferred option for budget-conscious travelers The airline's flexible policies allow for easy ticket exchanges, name changes, and itinerary modifications, albeit with a fee Recognized as the second-best low-cost airline in Southeast Asia, Vietjet Air prioritizes customer comfort by offering a range of impressive services With its commitment to excellence, Vietjet Air has earned the trust of numerous passengers seeking reliable and economical travel options.
Consistency is a crucial element of physical evidence that informs customers about what to expect from your product By delivering consistent experiences, you not only meet but exceed customer expectations, significantly reducing the perceived risk associated with trying a new product This reliability increases the likelihood of initial and repeat purchases Vietjet Air exemplifies this consistency across all aspects of its service, ensuring a seamless experience from start to finish.
Vietjet's brand identity is prominently defined by its main colors: red and yellow These vibrant hues are consistently featured across various elements, including the airline's logo, aircraft paint, official website, staff uniforms, airplane interiors, and printed materials like tickets, posters, and banners This cohesive color scheme leaves a lasting impression on customers, reinforcing the airline's recognition and brand image.
The airline's main slogan, "Flying is like right away!" captures attention with its thoughtful and concise messaging, making it a popular choice across various platforms, from tangible printed materials to digital advertising and marketing campaigns.
The perception of affordability plays a crucial role in customer decisions when selecting airline services Vietjet Air has successfully established itself as the go-to "low-cost airline" in the minds of many consumers, demonstrating the airline's effectiveness in creating a consistent brand identity centered around budget-friendly travel options.
This is important in setting the customer's mood It can include a number of factors such as: lighting, music, clothing, employee attitudes, and many other components of external evidence
SUMMARY
1.2 OVERVIEW OF VIETJET AIRLINES JOINT STOCK COMPANY 1.2.1 About VJA
VietJet's full name is VietJet Aviation Joint Stock Company
This is Vietnam's first private airline Not only air transportation, Vietjet also provides consumer demand for goods and services through e-commerce technology applications
Currently, Vietjet Air is an official member of the International Air Transport Association (IATA) with the Operational Safety Certificate (IOSA)
Currently, Vietjet is operating 80 A320 and A321 aircraft, carrying out more than 385 flights per day, transporting more than 65 million passengers
Vietjet Air operates 105 routes that connect various destinations within Vietnam and several international locations, including Japan, Hong Kong, Singapore, Korea, and Taiwan Looking ahead, the airline plans to expand its network by introducing additional routes across the Asia-Pacific region.
Vietjet's headquarters in Hanoi, address: Van Phuc Diplomatic Corps, Ngoc Khanh ward,
In Ho Chi Minh City, the head office is at 260 Ung Van Khiem, Binh Thanh District In addition, the company's hotline number is 1900.1796 (support 24/7)
To establish a multinational airline corporation with an extensive global flight network, it is essential to not only enhance aviation services but also to offer consumer goods through an e-commerce platform, fostering a brand that resonates with and earns the trust of customers.
- Exploiting and strongly developing domestic, regional and international routes
- Bringing a breakthrough in aviation services
- Make air service a popular means of transportation in Vietnam and internationally
- Bringing joy and satisfaction to customers with outstanding, luxurious service and friendly smiles
Creating a new historical milestone for the aviation industry, making Vietjet a "made in Vietnam" global airline
Core Values: Safe Fun Cheap On t– – – ime
VJA operates over 385 daily flights and has transported more than 65 million passengers across 105 routes, including domestic destinations in Vietnam and international locations such as Japan, Hong Kong, Singapore, Korea, Taiwan, China, Thailand, Myanmar, Malaysia, and Cambodia Vietjet aims to expand its flight network throughout the Asia-Pacific region and is actively exploring new routes while securing contracts for modern aircraft with leading global manufacturers.
CHAPTER 2: MARKET ANALYSIS OF AVIATION
Overview of the world Aviation Industry and the Domestic Aviation market:
Airlines are currently navigating operational challenges, bolstered by business resources and government financial support However, with robust vaccination programs and easing international policies, the aviation sector is expected to revive starting in early 2022 The pandemic led to a significant decline in passenger numbers due to flight restrictions and social distancing measures, resulting in the suspension of many routes The airline market has struggled with low tourism demand, which has further impacted passenger arrivals Following a drastic drop of 86.5% and 87.7% in passenger numbers in April and May, the market began to recover in subsequent months, aided by stimulus policies aimed at domestic tourism In 2020, airlines transported 34.8 million passengers, a 61% decrease, with international visitors plummeting by 79% to over 3 million, while domestic tourists fell by 25% to 31.7 million, reflecting a decline that was significantly less severe than the global average.
Vietnam, renowned for its exceptional anti-epidemic measures and equipped with 22 airports, is poised for a gradual recovery in its airline industry Vietnamese airlines are anticipated to resume international routes by the fourth quarter of 2021, setting the stage for a more significant recovery throughout 2022.
Vietnam's economy has experienced remarkable growth in recent years, boasting an annual growth rate between 7% and 8.6% This economic expansion has led to a significant rise in per capita income and a transformation of the country's infrastructure As investments continue to surge, Vietnam is undergoing a dynamic economic evolution.
6 of the economy, human needs also increase, including the need for travel People with high incomes have an increasing need for air travel
Vietnam's economy has experienced significant growth, with GDP per capita rising over 40%, from $1,532 in 2017 to $2,171 in 2020 Positive changes in the socio-economic landscape have contributed to increased stability in the macro-economy, fostering favorable conditions for the development of aviation transport.
The global economy is projected to grow at an average rate of 3.5% from 2015 to 2020, while the world tourism market is expected to expand by 3.6% annually In 2015, the number of foreign tourists reached nearly 1.18 billion, marking a 4.4% increase from the previous year This growth presents significant opportunities for the international and regional aviation sectors, fostering strong development within the aviation market.
Technological advancements have profoundly transformed the aviation industry, enhancing flight safety and streamlining various air transport operations A key element of this evolution is aircraft manufacturing technology, which plays a crucial role in the success of airlines The development of safe, high-quality, and fuel-efficient aircraft has rendered older models obsolete, diminishing the competitiveness of less innovative airlines and prompting a modernization of fleets This shift creates significant pressure on airlines to adopt advanced technologies to remain relevant in the market.
The Company utilizes Geneva software to enhance the management of its mining operations by optimizing flight and crew schedules, streamlining flight handling, and improving flight time control For procurement, finance, and accounting processes, the Company employs SunSystems, while AMOS is used to effectively manage materials and aircraft spare parts.
The Company is focusing on enhancing its investment in information technology by developing an advanced e-commerce platform at VietJetair.com, enabling customers to easily purchase tickets, goods, and services online Additionally, the Company plans to invest in ERP solutions to optimize business operations under the "E-Company" model.
The company is currently working with PriceWaterhouseCoopers Company (PWC) to implement a private investment project Question
Vietnam boasts a stable and peaceful political environment, which fosters a conducive atmosphere for the aviation industry This stability results in unoccupied airports and free skies, creating favorable and unregulated conditions for airlines to thrive in the region.
As Vietnam integrates internationally, the government is enhancing the investment climate to attract foreign investments, particularly from multinational corporations The focus is on transforming tourism from a mere business venture into a robust industry, positioning it as a key economic driver Foreign Direct Investment (FDI) is projected to grow at an annual rate of 5-7%, while international tourist arrivals to Vietnam are expected to increase by 10-12% annually, alongside a domestic tourism growth rate of 10-11%.
The Vietnamese government's decision to eliminate the 15% tax on imported fuel, along with its investment in infrastructure, marks a significant advancement in meeting future demand Additionally, Vietnam has effectively transitioned from paper tickets to electronic tickets and must now focus on enhancing freight transport through electronic transactions to support its export activities.
Vietnam is currently experiencing a "Golden population structure," characterized by a rapidly changing age demographic that presents significant opportunities due to a large working-age population This period, while advantageous, also poses challenges in enhancing human resource quality and generating high-productivity, high-income jobs Notably, Vietnam has the highest proportion of young people in its history, with those aged 10-24 making up nearly 40% of the total population.