A Research On Vietjet Air’s Marketing Strategy.pdf

Subject: Principle of Marketing

A RESEARCH ONVIETJET AIR’S

MARKETING STRATEGY

Teacher: Đoàn Thị Thanh Hương

IB1606GROUP 2

Bùi Thanh ThùyNguyễn Phương Trang

Vi Đức HuyNguyễn Hà AnhTrần Hoàng AnhVũ Đình Tùng

TABLE OF CONTENTI. Executive Summary

II.Vietjet Air information

1 Company description2 Mission

3 Main business activities4.Organization structure

III.Situation analysis

1 Company SWOT analysis2 Product/ service SWOT analysis3 Competitive analysis

4 Customer analysis

IV.Marketing analysis

1 Marketing and target customer2.Differential/ competitive advantage3.Marketing objectives

4.Overall marketing strategy ( the sale plan )5.Product strategy and description

6.Pricing strategy7.Promotion strategy 8.Place/ distribution strategy

V.RecommendationV.References

I EXECUTIVE SUMMARY

Considering the facts from the market overview and the current supply chain value creation as well as the rise of e-commerce in Viet Nam, our group has identified that VietJet Air is an ambitious trademark in the Vietnam market.

In this century, the need of moving domestic or abroad residents is increasing day by day On the other hand, other methods of moving have many limits like: infrastructure, equipment, time consuming etc in recent days, VietJet Air is rising to grow strong Down here is Group 2’s analysis about VietJet Air’s marketing plan.

II VIETJET AIRLINES INFORMATION 1 Company description

The airline’s headquarters is located at the Vạn Phúc diplomatic mission in Ba Đình, Hanoi It is the first private airline to be established in Vietnam Since its establishment in December 2011, it has become the second private airline to provide domestic services in Vietnam (after Mekong Airlines) and the second in addition to Indochina Five airlines, following Vietnam Airlines, Jetstar Pacific Airlines, Mekong Airlines, and Vietnam Air Services Corporation (VASCO), ceased operations in November 2009 to provide civil domestic flights In the initial plan, the Hanoi-based airline expressed its intention to provide flights to Ho Chi Minh City and Da Nang, gradually expanding its network to other Asian destinations, such as Hong Kong, Bangkok, Singapore and cities in southern China The airline's president and chief executive officer was Nguyen Thi Phuong Thao in December 2011.As of February 2011, it is said that VietJet Air had "completed the final stage"before launching its operating license in June In March, AirAsia reportedly stated that if the airline fails to resolve its brand issues before the June deadline, it may withdraw its funding for VietJet In October 2011, AirAsia announced the cancellation of its plan to establish a joint venture with Vietjet on the grounds that it "failed to obtain approval from the Vietnamese regulatory authorities", including the license to use the AirAsia brand in the airline's commercial operations Despite the closure of the AirAsia joint venture, VietJet Air announced in November that its launch plan would continue.

On 28 February 2017, Vietjet completed its public listing and officially became a fully listed entity on the Ho Chi Minh City Stock Exchange (HOSE), making it the first airline in Vietnam to be listed on the bourse Withits public listing, Vietjet became the first Vietnamese firm to have completed an IPO that meets Securities Act of 1933 standards and practices.

· Baggage cargo transportation · Duty-free shopping · Travel insurance.

· Shuttle bus between airport and central cityDirect supporting services to air transport· Ground operation services

· For cabin crews.

· For technicians and others Aircraft trading· Buy and sell aircraft · Lease and leaseback · Aircraft transfer

VietJet is a low-cost airline; their strategies focus on customers from income class or first-time experience flying They are usually found young and dynamic, and especially expert in utilizing technological equipment such as smartphones, laptops, etc.

middle-And Vietjet also focuses on improving our organizational structure, increasing savings, creating productive work schedule, refreshing the fleet, strengthening every aspect of their business to prepare for the leap after the pandemic, etc

4.Organization structure

The head of the organization is the Board of directors, next is the Board of management with supervisory board After the Board of management, it will be divided into two small parts: Auditing & internal control and safety, security and quality assurance (SSQA) Then divided into 10 small parts: -Training center

-Flight operation division

Manage flight crew- cabin crew(FCD,CCD)Flight operation engineering(FOE)

Operation management center(OMC)and rostering-Technical division

EngineeringMaintenanceSupply & store-Ground operation division

Manage ground servicesStandards & training & SSCustomer service

-Engineering-Commercial division

Domestic & international sales and distributionMarketing & advertising

Planning & system-Customer service

-Finance-accounting division -Back official

CEO office

Project & business development

Contracts & insuranceFleet planningICT

-Vietjet aviation academy

Vietjet's second strength is having the lowest cost per product unit in Asia aswell as in the world Revenue from in-flight services is an important factor inthe success of most low-cost airlines This is also a factor that has helped thecompany quickly become profitable Currently, this source contributes morethan 23% of the company's revenue.

Vietjet's brand is famous for its strong marketing activities, hitting the rightpsychology of target customers The nationwide distribution system is alsoone of the strengths not to be missed by this low-cost airline.

Weaknesses

The company's weakness is that it does not have a joint venture partner Nextis to compete in markets that already have famous airlines, especially in theThai market.

The next weakness to mention is that most of VietJet's profit comes from saleand leaseback activities, but in the long term, the airline will have to payhigher costs than the average rental price when the life of the aircraftincreases.

Opportunities

Vietnam is emerging as a popular tourist destination, the number of visitorssurpassed 10 million in 2016, an increase of 26% compared to the previousyear 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 VietJet.

Currently, the airline has regular flights to Korea, Taiwan, Malaysia, Thailandand Cambodia China is the largest source of tourists and the fastest growing.Moreover, Vietnam's geographical location is very convenient fortransporting passengers from Southeast Asia to Northeast Asia.

Vietnam is a developing country, so low-cost airlines are chosen by manypeople and are more willing to pay This is also the reason why the market

share of Vietjet Air, a latecomer, has surpassed Vietnam Airlines in the past 2years.

Threats

The competitive environment of the aviation industry is increasingly fierce.Leading Southeast Asian airlines such as AirAsia and Lion are both planningto set up joint ventures in Vietnam Many low-cost airlines also see thepotential of our country's market and are eager to jump in.

After growing 20% - 30% in the period 2012-2016, Vietnam's aviationmarket will decelerate Slowing growth in the domestic market will putpressure on VietJet to rely more on the international market, which is noteasy Besides, the growth of domestic tourism demand is currently 4-5 timeshigher than GDP growth, which is an unsustainable rate.

Airport overload makes it difficult to open more routes as well as flightfrequency.

II.Competitive analysis1 VietJet Air

is a low-cost airline that caters to all subjects in society and brings people closer together when sitting together, in the same class on the flights Along with promotions on ticket discounts, reverse auctions, special promotions… have contributed to bringing air travel closer to the people of Vietnam.

2 Reduce the risk of new services

• 100% refund of fare if canceled, 50% of fare if delayed for more than 30 minutes

• Commitment to 100% refund if the service (including price, distribution, promotion, etc.) does not meet the commitment

• Committed to handling ticket-related issues within 12 hours Problems related to Check-in in 30 minutes

• Insurance for each passenger up to 50,000 USD/person/case • Guaranteed by Insurance Company ACE Life

III.Customer analysis

VietJet Air caters to everyone, but the communication strategy focuses on a segment of customers that we call:

Young - minded

Young - minded consumers are aged from 18 to 30 They are educated, experienced and often use technology devices They believe that technology can enrich their lives by making them feel deeply connected to others and theworld around them And they look for brands that open them up to new possibilities,

- Priority group 2: Young-minded group Have used VietJet Air service from 1 to 6 times

- Priority group 3: Belonging to the Young-minded group but have never usedVietJet Air's services - The remaining customers are not in the media category this time.

IV.MARKETING ANALYSIS1 Market and target customer

Market: According to data of the Civil Aviation Authority of Vietnam, the market is being operated by four Vietnamese airlines, including Vietnam Airlines, Jetstar Pacific, Vietjet Air and Bamboo Airways In addition, there are more than 70 foreign airlines from 28 countries/territories in the world.VietJet Air debuted just as Vietnam was about to enter a period of

unprecedented economic expansion Since VietJet's introduction, Vietnam's GDP has increased by at least 5% per year, with 6%-plus growth in 2015 and 2016.

Air travel is now accessible to a much larger proportion of Vietnam's 96 million residents, thanks to rising income levels and the growth of the middleclass Demand has been boosted further by the reduction of air fares, which were already low, to levels that are now comparable to bus or train fares on most domestic trunk routes.

Long bus and rail travels have naturally been replaced by domestic flights by the Vietnamese population, which is youthful and urbanizing Because Vietnam is such a long and narrow nation with limited roadway and rail infrastructure, travel between most cities is long and laborious.

Since VietJet's start, Vietnam has become one of Asia's – and the world's – fastest-growing markets The domestic market has increased from 12 million passengers in 2012 to 28 million passengers in 2016, a stunning annual growth rate of more than 30%.

From 25 million passengers in 2012 to 52 million passengers in 2016, the overall Vietnamese aviation market (including foreign traffic) has more than doubled in size Vietnam's Civil Aviation Authority reported a 20 percent increase in passenger traffic to 30.3 million in the first half of 2017.VietJet flew as many domestic passengers as Vietnam Airlines in just five years In the same time frame it took Cebu Pacific more than a decade to overtake Philippine Airlines VietJet is starting to focus more on international expansion and could eventually overtake Vietnam Airlines.

From 2020 until now, the outbreak of the Covid-19 epidemic worldwide has pushed airlines into countless difficulties It is estimated that the number of passengers of the airline in general decreased by 70%, however, not giving up, Vietjet has a flexible strategy, shifting to increasing the transportation of goods, medical equipment, and medicines men to frontline areas to fight the epidemic, supporting medical staff and doctors on duty Cargo transportation is quickly becoming a major activity during the Covid-19 pandemic, creating a significant source of revenue for the airline.

Target customers:

Because Vietjet air is a low- cost airline; their strategy focuses on customers from middle income class or first-time experience flying They are usually found young, knowledgeable, dynamic and especially expert in utilizing technological equipment such as smartphones, laptops Have a hobby of traveling, exploring or often have to travel by air services at a reasonable cost This group of customers loves innovation, creativity and dynamism Enjoy community activities and connections Vietjet’s report presentation on September 2018 shown that customers from 20 to 35 accounted for 25,9%, the main consumers of VietJet Air

2 Competitive advantage

2.1 Using digital technologies to provide better customer service

While other full-service airlines rely on travel agents or sales offices to sell tickets, Vietjet Air concentrates on sales via the internet, SMS, and credit card It is straightforward and cost-effective to book and sell tickets over the phone Vietjet Air also offers online check-in, allowing travelers to book theirflights with any devices that can connect to the Internet and access to its website.

Important: These are the primary channels with the fastest growth rates and the highest revenue share among Vietjet's sales channels.

Rare: a large number of airlines use the same tool.

Hard to duplicate: Creating an online system will require a significant investment and a long period of time.

Non-substitutable: In addition to online channels, Vietjet Air offers clients information counters or direct check-in

2.2 Using cutting-edge navigation technology

Most LCCs must meet maintenance, repair, refueling, and other requirements in between flights so that the aircraft can rapidly serve the following flight (cutting wait times and increasing aircraft operating time) Cabin and ground crews will be trained to work on a single aircraft type This will save money on flight crew recruiting and training, as well as plane maintenance Since 2017, Vietjet has worked with SafranGroup (France) to develop and implement the SFC02 program, which provides specialized solutions and instructions in flight control, maximizing aircraft engine capacity, and lowering fuel consumption.

Valuable: The firm’s innovation is valuable to increase operationalefficiency and improve customer flying experience.

· ·Rare: While most other low-cost airlines from Asia wait and copy technology from leading Western airlines, Vietjet Air works in introducing new products and technology.

· ·Costly to imitate: While the technology is not costly to imitate, the firm cancapture new technology and being the first mover is not easily imitable.

2.3 Making use of tiny planes

VietJet has a single fleet of narrow-body Airbus A320 and A321 aircraft, which are ideal for domestic and international flights with larger seat capacitythan other large aircraft It has synchronized engines and components, as wellas training, operation, and repair.

· Important: Vietjet saves roughly 15% on fuel and operating costs by using sophisticated aircraft.

· Rare: Using small planes is appropriate for the LCC model that Vietjet adopts because it helps to reduce expenses.