analysis and evaluation of current 7ps marketing strategy baamboo

In March 2018, the agreement between FLC Group and France’s Airbus Group tobuy 24 aircrafts A321NEO was signed with a total contract worth of up to 3.1 billion USdollars witnessed by Gen

Table of Contents

1 Executive summary

2 Service organization’s Introduction

3 Service Organization’s Situation Analysis

4.3 Challenges and problems that the service provider is facing

5 Analysis and Evaluation of Current 7Ps Marketing Strategy

Aviation services are one of the core components of each country's civil aviation industry Itnot only facilitates the allocation of resources and products, but also acts as a bridge for globalintegration and development.

This is a report to introduce and analyze the current situation of Bamboo Airways and makesome recommendations to remedy this situation Businesses are using competitive pricingstrategies to compete with industry rivals and competitors strategy to attract users, helpincrease market share Bamboo Airways has used a lot of advertising platforms such aswebsites, social networks, to advertise their products to customers During the epidemicsituation, Bamboo Airways has just encountered some problems, but besides that, there arestill huge opportunities in today's market And there will be some recommendations given inthis report

2 Service organization’s Introduction

Originated from national pride and inspiration on the trip of exploration, Bamboo Airways – amember of FLC Group – was officially established in 2017

“With the mission of connecting the tourist regions in the S-shaped country, raising Vietnam’simage and people on the international map, Bamboo Airways starts its journey to fly high withits spreaded wings based on the cooperation with the world’s leading brands in the aviationindustry” Bamboo Airways showed

In 2017, the establishment of Bamboo Airways has drawn a great attention in the internationalcommunity In March 2018, the agreement between FLC Group and France’s Airbus Group tobuy 24 aircrafts A321NEO was signed with a total contract worth of up to 3.1 billion USdollars witnessed by General Secretary Nguyen Phu Trong and French Parliamentary PresidentFrancois De Rugy

By the end of 2020, Bamboo Airways has carried over 6 million passengers, 100% safe.Shipping volume increased by over 10% compared to 2019, despite difficulties caused by themarket crisis

At the age of 3, this airline aims to have a 30% domestic market share, which is a factor that

changes the face of aviation services with a diversified and flexible product structure, goodservice quality, on time, safe.

3 Service Organization’s Situation Analysis

3.1 Business/company Context

“The worst year in the history of civil aviation” is a phrase used by the Director General of theInternational Air Transport Association (IATA) to describe 2020 There is a lot of data showingthat this is a valid statement (Bamboo Airways, 2021)

Since the beginning of the year, the number of global flights has decreased by 49% compared

to 2019, worse, the number of passengers transported has decreased by 67%, according tostatistics of aviation research organization Citrium Covid-19 has "blown away" $ 510 billion

in industry sales, claiming tens of thousands of jobs The number of aircraft "covering mats" inthe hangars is so crowded that it has never been seen "in more than 40 years of work" by theleader of the aircraft maintenance company Tarmac Aerosave (Bamboo Airways, 2021)

"The number of airlines that have survived to see the sun is dwindling," IATA wrote in its lateNovember report But in a tumultuous year that has exhausted most of the world's airlines,there are still a few players who have made a spectacular comeback thanks to their adaptabilityand sensitivity to opportunity Fortunately among them, there is a face from Vietnam: BambooAirways

In 2020, Bamboo Airways has exceeded 10% of the total number of flights and number ofpassengers compared to the previous period in 2020, continuously leading the list of airlinesrecovering and exceeding their operating capacity after the epidemic 100% of flights areperformed in absolute safety, without any incidents threatening security Currently, thecompany holds nearly 20% market share (Bamboo Airways, 2021)

Responding to the new desire for more economical journeys and more flexible schedules, theBamboo Pass line of multi-purpose flight cards was born Bamboo Pass's 4 flight cardpackages with diverse functions, "filled" directly to the specific needs of each customer group.Instead of 3 traditional ticket classes, a set of new customer benefits (branded fares) including

8 groups of benefits are deployed by Bamboo Airways The ticket structure is morefragmented, providing more diverse, flexible and economic options for passengers in afinancially sensitive period.

Not only drastically expanding the fleet in terms of quantity in 2020, Bamboo Airways alsoupgraded in quality From 19 aircraft at the end of 2019, the airline is operating nearly 30aircraft at the moment, including the world's most advanced aircraft, such as Boeing 787-9Dreamliner wide-body aircraft, jet aircraft Embraer force E195 These two remarkable newaircraft lines also established the first operating position of a private airline in Vietnam.(Bamboo Airways, 2021)

In addition, Bamboo Airways also promoted the opening of 6 new domestic routes, expandedthe network scale to 85 routes (60 domestic + 25 international) to increase market share withthe goal of capturing 30% of the domestic market share in the coming year 2020 (BambooAirways, 2021)

● Vietnam is emerging as a popular tourist destination, the number of visitors surpassed

10 million in 2016, an increase of 26% over the previous year In the first 9 months of

2017, the number continued to increase by 30% compared to the same period last year.This trend is expected to continue This is an opportunity for Bamboo Airways(Bamboo Airways, 2021)

● In May, Bamboo Airways announced a cooperation with international consulting firmYates & Partners, aiming to achieve 5-star certification as soon as 2023 (VnExpress,2021)

Threats

● The policy of "ASEAN open sky" creates favorable conditions for international airlines

to penetrate into the freight transport market of our country (Báo Chính Phủ, 2019)

● Currently, the Vietnamese aviation market has the participation of 68 foreign airlinesfrom 25 countries/regions, creating great competitive pressure for Bamboo Airways.(Dương Ngọc, 2019)

● Not only international airlines but also domestic airlines have many challenges On thetrend towards flight quality as well as price, Vietnam Airlines and Vietjet Air are a bigcompetitor for Bamboo Airways

● Many flight routes have not been exploited yet (elines, 2021)

3.3 Competitor Analysis

Currently, Bamboo Airways is facing direct competition with Vietjet Air and Vietnam Airlines

in the domestic market

Vietnam Airlines: Positioning itself as a national brand, along with it comes premium quality,

being selected, trusted and used most often, highly appreciated for its image and quality ofcustomer service With 67% of users saying that this is the first brand to mention when itcomes to the aviation industry, 73% think that this is a high-class brand with good servicequality

Strength

● Good service quality, always serving attentive food during the flight

● Pay special attention to the safety of passengers Flights usually leave and land ontime

● Building an image suitable for brand positioning, worthy of a high-class airline:courteous uniforms, creating sympathy for customers, including Ao Dai for women andgile for men with yellow - blue tones

● Communication and PR build a "clean" image

● Build very good communication about your brand:

▪ Press advertising targeting the business customer segment, often using largenewspapers with a nationwide distribution such as Labor, Youth

▪ Overseas VNA uses major newspapers in key markets: Asahi, Goodweeken, TravelTrade

▪ The frequency of broadcasting news about the company's commercial activities ondomestic and international news bulletins is high

Vietjet Air: is oriented to be a low-cost airline, impressing customers with the dynamism and

youthfulness of its staff, attracting customers with attractive promotions Therefore, 59% ofcustomers choose because this is the first low-cost airline in Vietnam

Strength

● The "cheap" communication strategy, which mainly focuses on consumer priceawareness, is suitable for a wide range of customers The “flying dream for allVietnamese people” that Vietjet evokes is a beautiful dream in a rapidly growingmiddle-class market like Vietnam.16

● According to CAPA calculations, VietJet's brand recognition in Vietnam is 98%.Because Vietjet has succeeded in building the image of "the sexiest airline in Vietnam".Bearing bricks and stones, but at the same time, VietJet was as famous as alcohol

Weakness

● Although widely known in Vietnam, outside Vietnam the situation is completelyopposite, Vietjet is just a relatively new brand, not many people know

● Using the "offensive" communication method, associated with the name "bikiniairline", the advertising method is somewhat bold, this is not in line with the customsand traditions, receiving a lot of mixed opinions.

Emirates : is one of the two national airlines of the United Arab Emirates with Etihad Airways

and is headquartered in Dubai The airline will serve scheduled customers with nearly 550flights per week, serving 87 cities and 59 countries

Strength

● Strong Backing – Emirates has the strong backing of the Government of Dubai This is

a great strength for airlines because of their business success

● Good customer service – Emirates offers good customer service and as a result, theairline has a huge response from customers

● Huge workforce – Emirates has a strong workforce of around 50,000 employees Thiswill help airlines operate better

● Good reach – Emirates airlines have an excellent coverage covering around 70countries on about six continents

● Excellent advertising – Emirates has great advertising and branding for the airline It isdone through print, online advertising, TV, etc

● Service Excellence – Emirates airlines shine in customer service, in-flightentertainment, exclusive lounges and more

● Size – Emirates airline has the big advantage of having large aircraft This is a hugepower as it can accommodate a maximum of passengers

involved in accidents that cause great damage and affect the airline's image.

That has created a great opportunity for airlines to access not only domestic but alsointernational markets and Bamboo Airways is no exception Beside the domestic market,Bamboo is currently operating many international flights and continues to expand its network

of routes to countries in Asia, Europe and America

Gross domestic product (GDP) growth rate in Vietnam 2026 (Statista,2021)Vietnam’s real gross domestic product has been experiencing positive growth for the past fiveyears since 2016, and is projected to continue to do so through 2026 (Statista,2021) Grossdomestic product (GDP) in 2020 is estimated to increase by 2.91% over the previous year,although this is the lowest increase of the years in the period 2011-2020, in the context ofcomplicated developments of the Covid-19 epidemic, this is a great success for Vietnam withthe growth rate in 2020 among the highest in the world (General statistics office, 2020)

Tourism has become one of the major sectors within the economy of Vietnam in recent years,with a direct GDP contribution of over nine percent in 2019 (statista,2021) As Vietnamshifted its heavy reliance on agriculture towards a service economy, tourism has been anessential part of economic growth in recent years Vietnam had one of the highest numbers ofinternational tourist arrivals in the Asia Pacific region in 2019, with yearly increases in tourismreceipts before 2020 (Statista,2021)

Strong economic growth and the structural shift of the economy from agriculture to servicescontribute to Vietnam becoming the world’s seventh fastest-growing aviation market For theperiod 2016-2021, Vietnam is expected to have the highest average growth rate in Southeast

Asia at 17.4 percent, compared to the 6.1 percent in ASEAN (International tradeAdministration,2020) However, due to the negative impact of the COVID-19 pandemic, theCivil Aviation Administration of Vietnam (CAAV) in 2020 that regulated the aviationindustry, forecasts that the number of air passengers in Vietnam will likely drop by 46% to 43million and Vietnamese carriers could lose more than $1.3 billion or worsen in revenues While the aviation industry is struggling, the huge investment in aviation infrastructure and thepotential growth of MRO services are the bright spots for Vietnam’s aviation future(International trade Administration,2020) Vietnam has 22 airports, of which 11 areinternational and 11 are domestic The Government has set key priority for airportinfrastructure investment from now till 2030 by investing in the construction of 6 new airportsand upgrading most tourism hub airports with a total investment of approximately $16 billion

to increase to a total of 28 airports (14 international and 14 domestic airports)

All of the above economic factors bring a lot of opportunities and challenges for BambooAirways on the way to conquering the Vietnamese aviation market

Sociological

When gross domestic product (GDP) and the tourism needs increase day by day, the needs fortraveling by airlines also rise According to a World Bank report, the growth of touriststraveling by air in Vietnam ranks first in Southeast Asia In the period 2016-2021, Vietnamgrew 17% compared to Southeast Asia's average of 6%

Mr Dinh Ngoc Duc, Director of the Tourism Market Department, Vietnam NationalAdministration of Tourism, affirmed: "Currently, more than 80% of foreign tourists come toVietnam from airlines, the number of domestic tourists traveling by this means is alsoincreasing day by day Aviation and tourism are like two wings of an airplane that have a closerelationship."

The Ministry of Industry and Trade of the Socialist Republic of Vietnam quoted a survey byNielsen ( 2020) that compared to the global average, Vietnamese consumers have a strongerpriority for local products, with 17% of people surveyed said that they only buy domesticgoods, and 59% said they mostly buy domestic goods (compared to the global average of 11%and 54%, respectively) Ms Louise Hawley, General Director of Nielsen Vietnam, (2020) saidthat locally sourced products are very important in Vietnam and have an advantage over less

familiar products This trend has become an advantage for young domestic airlines likeBamboo Airways.

The strong development of the aviation industry leads to an increase in the demand foraviation human resources According to statistics, the overall human resource of the aviationindustry is currently about 44,000 people, it is expected that from 2021-2025, the industryneeds more than 60,000 employees (Vnexpress, 2020)

Since the aviation market has stronger competition with the participation of many airlines, ithas led to the phenomenon of attracting aviation human resources with a high salary and bonusregime, especially for the potential pilot force competition among domestic airlines( Transportation magazine,2020)

Currently, there is only Viet Flight Training in the country that can only train 80-100 pilotseach year, so it is not enough to meet the demand Meanwhile, Vietnam Airlines alonecurrently has nearly 1,200 pilots, but its demand is calculated on the basis of flight output, thenumber of aircraft exploited by 2020 is 1,340 people…

FLC Group has just started the construction of Bamboo Airways Aviation Training Academy

in Quy Nhon with a total investment capital of nearly 700 billion VND in the formation anddevelopment phase It is expected that after completion and operation in 2020 By 2022, theAcademy will train nearly 3,500 students per year, focusing on professional specialties suchas: pilots, flight attendants, engineers technician, ground operator, flight operator andmechanic training…

Technological

Certainly, without technology, the aviation industry cannot function for a second! Technologyhas been the backbone of the aviation industry since its inception The explosion of scienceand technology, especially the emergence of artificial intelligence, has contributed to changingthe face of the aviation industry around the world, including Vietnam Major airlines haveapplied new trends such as Biometrics, Blockchain, Robotics and Autonomous vehicles,Virtual Reality, Augmented Reality in order to maximize the process and service quality.That requires bamboo Airways to make more efforts in applying technology to its services, inorder to compete with domestic and foreign competitors

The limited technology for manufacturing aircraft components in Vietnam is also a bigchallenge for domestic airlines like bamboo Airways when the technology is still heavily

Payment method that non-Bamboo’s customers would like to use

The most preferred form of promotion for customers is a discount when booking tickets via wallets It is also quite understandable when their main form of payment is online or via e-wallet

e-Promotion program that Bamboo’s customer like

Promotion program that non-Bamboo’s customer like

4.3 Challenges and problems that the service provider is facing

In our survey, up to 76.5% of 204 people surveyed know Bamboo However, 149 customershaven’t really tried out Bamboo Airways services One of the most important reasons is thatbesides Bamboo, customers also have a lot of alternatives options

Bamboo's main competitors include Vietnam Airline and Vietjet Air Bamboo also faces manydifficulties in competing for brand positioning with Vietjet and Vietnam Airlines Becausethese two big brands have made a lot of special impressions with customers with variousawards and articles Like Vietjet is always at the forefront of price, Vietnam Airline is alwaysproud of its diverse and best service quality with clients

Bamboo also has a bit of a communication challenge The company's current communicationstrategy has not been effective for customers' target public Specifically, about advertising: thecompany has had advertisements on television with specific messages However, their Internetadvertising, especially on Facebook (channel interactive media and bring the most exposure) isless prominent than remaining firms Mass media advertisements are also directedtraditionally, or follow other brands but nothing stands out to make a name of the firm