analyse marketing mix 7ps strategy of vietnam airlines in vietnam market

1.5 Hightlight Achievement« 2016: Ranked as one of the World''''s Most Improved Airlines by Skytrax« 2016: Asia''''s Leading Cultural Airline and Asia''''s Leading Airline - EconomyClass by World

MINISTER OF FINANCE

UNIVERSITY OF FINANCE – MARKETING

- �

-GROUP ASSIGNMENTFIRST SEMESTER, 2022

MINISTER OF FINANCE

UNIVERSITY OF FINANCE – MARKETING

-�

-GROUP ASSIGNMENTFIRST SEMESTER, 2022

Ho Chi Minh City – 2022

CHỮ VIẾT TẮT

USD United States DollarCOVID – 19 Coronavirus disease 2019

JSC Joint Stock Company

CHAPTER 1 INTRODUCTION

1.1About Business

Name in Vietnamese: Tổng Công ty Hàng không Việt Nam - CTCP Name in English: Vietnam Airliness JSC

Name in short: Vietnam Airliness

Date of establishment: May 27th, 1995

Address: No 200 Nguyen Son, Bo De Ward, Long Bien District, Hanoi Telephone number: (+84.24) 3827 2289 | Fax: (+84.24) 3872 2375 Website: www.vietnamairlines.com

Email: nhadautu@vietnamairlines.comField of activities: Aviation & Finance

Image 1.1 Logo of Vietnam Airliness

1.2Business Sectors

- Air passenger transportation (air transport services for passengers), aircargo transportation (transportation of luggage, cargo, parcels, postal items,mails).

- Management consulting (investment, capital management of directinvestment in production and business; foreign investment; business

purchase and sale; capital contribution to purchase shares or capitaltransfer).

- Direct support services for air transportation.

- Manufacturing of measuring, testing, navigating, and controlling equipment,such as spare parts, supplies, technical equipment and other aviationindustry components, provision of technical services and spare parts todomestic and international airlines.

1.3Establishment & Development History

The history of Vietnam Airliness began in January 1956, when the Civil AviationAdministration was established by the Government that marked the birth of thecivil aviation industry in Vietnam At that time, the fleet was very small, with 5propeller aircraft: IL 14, AN 2, Aero 45, etc The first domestic flight was openedin September 1956

April 1993, Vietnam Airlines was officially established as a large-scale businessunit of the state (then called Vietnam Airliness) On May 27th, 1995, VietnamAirliness Corporation was incorporated - following Decision No 328/TTg by thePrime Minister and merging 20 enterprises in the aviation industry with VietnamAirlines as the core entity Throughout 20 years of development, VietnamAirliness Corporation has made an important contribution to the development ofVietnam's civil aviation industry as well as made a great contribution to economicdevelopment, society, industrialization, and modernization of the country.(Appendix 1 contains Vietnam Airliness’ development history of each milestone)

1.4Vision & Mission

- Uphold the No 1 position as Vietnam’s aviation group leader.

- Vietnam Airlines to become a leading Asian airline of customer’s choice and

- Provide diverse and high-quality air transport up to customers’expectations

- Create a civilized and professional working environment with variousopportunities for career development for employees

- Run effective business operation, ensure sustainable benefits forshareholders.

« Toward the future: A modern carrier with an internationally recognizable

brand characterized by Vietnamese traditional culture Throughout 20 yearsof development at a double-digit annual growth rate, Vietnam Airliness hasspearheaded Vietnam's aviation market - one of the fastest-growingdomestic markets in the world As a modern airline with a brand widelyknown for its distinct cultural identity, Vietnam Airlines aims to achieve 5-starstatus and become a major airline in Asia

1.5 Hightlight Achievement

« 2016: Ranked as one of the World's Most Improved Airlines by Skytrax« 2016: Asia's Leading Cultural Airline and Asia's Leading Airline - Economy

Class by World Travel Awards 2016

« Top 4 largest carriers South East Asia in terms of passengers transported« 20 years of safety record - no fatal accidents since 1997

« 2017: CAPA Asia Pacific Airline of the Year

« 2017: Skytrax ranked Vietnam Airliness as a 4-star airline for the secondyear in a row

« 2018: one of winners of the 2018 TripAdvisor Travelers’ Choice awards forAirlines for Asia

« 2018: Skytrax ranked Vietnam Airliness as a 4-star airline for the third yearin a row

« 2018: APEX (Airline Passenger Experience Association) awarded VietnamAirliness with Four-Star Official Airline Ratings

« 2018: Vietnam Airliness and Jetstar Pacific are awarded the highest star safety rating from the world’s only safety and product rating agencyAirlineRatings.com

seven-« 2018: World's Leading Cultural Airline and World's Leading Airline Premium Economy Class by World Travel Awards 2018

-CHAPTER 2 MARKET & COMPETITOR ANALYSIS

2.1 Market Analysiss2.1.1 Size

According to statistics from the Civil Aviation Authority of Vietnam, the number ofpassengers through airports in February 2022 reached 6.16 million (up 57.8%compared to February 2021) In which, international visitors have begun toexceed the milestone of more than 100,000 visitors (up 350% compared toFebruary 2021) The number of passengers transported by domestic airlinesreached 3 million passengers (up 56.8%) and 39,400 international arrivals(equivalent to 3,009% over the same period in 2021).

2.1.2 Composition

Since March 15, Vietnam has removed many barriers and restrictions forinternational visitors to enter, creating favorable conditions for internationalvisitors to travel, contributing to increasing the volume of international visitors toVietnam Before the development of the COVID-19 pandemic, the internationaland domestic aviation market was still affected by the epidemic, with the effortsof airlines, the Government, the Ministry of Transport, the Civil Aviation Authorityof Vietnam, and other management agencies, etc Vietnam's aviation market hasbeen gradually recovering, with good changes in 2022 The number of visitorsmainly has come from domestic and international tourists In early 2022, the totalnumber of international visitors to Vietnam reached 7,358, domestic touristsreached 17.6 million.

2.1.3 Location

Vietnam has now reopened flights to 20 countries and territories, includingCambodia, Hong Kong, Japan, Korea, Malaysia, Philippines, Qatar, Singapore,

Taiwan, Thailand, Turkey, United Arab Emirates, Laos, China, France, Germany,UK, Australia, Russia, and America.

Currently, there are 6 airlines, including Vietnam Airliness, Vietjet Air, PacificAirlines, Bamboo Airways, Vietravel Airlines, and VASCO; exploiting 56 domesticroutes with a total frequency of 2,570 flights/week/way, equivalent to 367flights/way/day, reducing respectively 2 routes and 217 flights/week/way,equivalent to 31 flights/way /day compared to the 2019 winter flight schedule.

2.1.4 Trends

Statistics from the Civil Aviation Administration of Vietnam shows that thedemand for passengers traveling on the Ho Chi Minh City - Hanoi route and fromHo Chi Minh City to/from the Tay Nguyen, Central and Northern provinces duringthis period increased sharply with the seat utilization ratio is over 70%.

During the 2022 Lunar New Year period, the frequency of operation on domesticroutes is about 14,000 flights with about 2.7 million seats Besides the aboveroutes, the number of other routes with the number of bookings has notincreased significantly, such as: from Ho Chi Minh City to Da Nang, Tuy Hoa, DaLat; Hanoi to Dong Hoi, Tuy Hoa, Can Tho; etc.

- The slogan "More than just a flight" is highly appreciated when it conveys

the common goal of the business when trying to perfect the experiencewithout simply aiming for the basic purpose: satisfying the mobility needsof customers.

- Punctuality as well as time flexibility for “night flights” and other addedservices such as Bamboo Eco ticket - for customers who do not need tocheck-in baggage and fly less than 2 hours domestically; flexibility inserving specific customer needs, etc.

 Weaknesses:

- The company's current communication strategy has not been very effectivefor the target audience because of its sensational and misleadingcommunication style that easily receives mixed opinions.

- Heavily dependent on large financial funds to finance their operations

- Few international airports in Vietnam (especially in Qui Nhon) to portBamboo Airways large aircraft.

The message “Dream of flying for all Vietnamese people - Giấc mơ

bay cho mọi người dân Việt Nam” that Vietjet evokes is a beautiful

dream in a market with a rapidly growing middle class like Vietnam.- VietJet's brand awareness in Vietnam is relatively high.

- Young, professional, and enthusiastic staff.

 Weaknesses:

- Using the "offensive" communication method, associated with the name"Bikini Airline" This is not in line with the national media culture, receivinga lot of mixed opinions.

- There are often problems in the service that make passengers unsatisfied:overcrowded and often delayed flights.

-CHAPTER 3 STP ANALYSIS

3.1 Segmentation3.1.1 Income

Image 3.2 Income of

The low-income and middle-income earners have high price sensitivity They areless likely to choose air services They conceive that airline service is still a typeof luxury and expensive service, not suitable for their income.

The high-income earners have lower price sensitivity They prioritize using airlineservices because of the benefits they seek related to convenience, reputation,

quality of goods/services, airline services as a tool to help them assert theirstatus However, they have high standards and expectations about thegoods/services they experience.

3.1.2 Social Class

Social class in Vietnam, in addition to income, is also divided by occupation,position, and position in work It is formed as a pyramid with the top partoccupying the highest position, arranged in order from top to bottom, includingleaders, managers, entrepreneurs, and highly qualified experts On the next flooris staff, workers, small traders, handicrafts And finally, there are the unskilledworkers, the simple workers, and the farmers According to the top-down order ofthe pyramid, the demand and requirements for using air services are decreasingand inversely proportional to the price sensitivity.

3.1.3 Psychographic

Image 3.3

Acrophobia - is an extreme fear or phobia of heights, especially in people ofnormal height It causes a lot of psychological obstacles when consumers makepurchasing decisions and reduces their confidence.

Accompanying the above syndrome is the fear of taking risks when taking aflight Consumers are always very aware of participating in service experiences -

which means they put their lives on the line for the pilots, so that fear isinevitable, especially for first-time customers.

The view of airline service is a luxury service When airline service first appearedin the world, it was positioned as a service for aristocrats or rich people - theupper class This leads to an increase in the value of the service that stimulatesthe demand to experience it at least once, especially for those with low-middleincome.

The view of superior transportation service The luxury, as well as convenience ofairline service, compared to other services, so some people have come tobelieve that this is the best transportation service with high-quality experienceand outstanding speed.

3.1.4 Lifestyle

Image 3.4

Conservative lifestyle: People are often not willing to try new products/services.

They spend a lot of time researching before making a consumption decision.However, they are very opinionated and not affected by exogenous factors Inaddition, their brand loyalty is also very high.

Modern lifestyle: The complete opposite of the conservative lifestyle, they value

experience and are always ready to discover new things They tend to followtrends and the crowd However, building brand loyalty in them is also relativelyhard.

3.1.5 Need

Image 3.5

Work-related needs: In some professions and fields, fast traveling over long

distances is in high demand Especially for business people, the use of airservices is almost inevitable and regular.

Personal needs: other purposes such as travel, study abroad, repatriation, etc.

will use air services when traveling relatively long distances, they still undergoscreening, comparative evaluation before making a consumption decision.

3.2 Targeting

As the face of Vietnam's air services, Vietnam Airlines has used the concentratedsegmentation strategy - to concentrate all of its resources on building andconsolidating a premium airline brand in Vietnam Specifically, Vietnam Airlinesfocuses on customers, who have a middle and high income, are usually

merchants and entrepreneurs with a certain status in the social class, and oftenhave to use airline services for many different purposes.

3.3 Positioning

3.3.1 Positioning A Premium Airline

Since its establishment, Vietnam Airlines has always held the number oneposition in the Vietnamese market Compared to other competitors in the market,Vietnam Airlines has a distinct advantage when being called with the name"Vietnam's national airline" With this name, it easily positioned the brand,attracting a number of customers who believed in the national branded serviceeven though the fares are much higher than other airlines

In Vietnam, the trust in "national" businesses is very large As the national airlineof Vietnam, it is compulsory that Vietnam Airlines strictly comply with regulationsand its initial promise is to provide services of high quality.

According to the positioning diagram, Vietnam Airlines has clarified that theircustomers, who have a good financial status, want to receive perfect serviceswhen using its services.

Nowadays, Vietnam Airlines is the only traditional airline in Vietnam withdifferentiated domestic products (Business class, frequent flyer program - GLP).The airline's number one position in Vietnam is also shown in its extensivedomestic network through all regions of the country, heavy operating frequency,convenient connecting schedules, the airline's punctuality index, andaccompanying service - these are all superior to their opponents.

3.3.2 Service Positioning Strategy

Vietnam Airlines also designs products that create Vietnamese cultural identity inservices, distinctly different from domestic competitors Specifically, VietnamAirlines’s products meet quality, the international 4-star international standard,and aim to achieve 5-star standards (80% of Vietnam Airlines’s criteria are rated5 stars by Skytrax, Vietnam Airlines has been awarded the 4-star airlinecertificate by Skytrax).

3.3.3 Communication Positioning Strategy

Building a brand image with national identity: modern, creative, friendly, dynamic,efficient, and socially responsible The slogan "Reach Further" emphasizes thenational spirit, the determination to rise strongly of a country Besides that, it alsoconveys a desire to reach the success of passengers and Vietnam Airlines oneach flight It is an affirmation: the development path of Vietnam Airlines alwaysfocuses on customer experience Bringing passengers not only a flight but alsothe feeling of a journey of experiencing 5-star-oriented services according tointernational standards, luxury, and class Six-petal golden lotus, which is aspecial symbol of Vietnam Airlines, contains the soul of the Vietnamese nation Ithas become very familiar to many Vietnamese people and is used for many

products such as Bowls/Plates/Spoons/Knives/Forks and is considered a symbolof high-quality products.

3.3.4 Compare With Competitors

Compared to domestic competitors, Vietnam Airlines has the advantage of awide network, its high-quality products but not too high prices Vietnam Airlines'spositioning strategies are also different from competitors like Vietjet and Bamboo.While Vietjet tends to young/dynamic communication (advertising images in themedia by hot models, who play the role of flight attendants), Vietnam Airlinestends to cautiously and discreetly way through emphasize Vietnamese culturesuch as flight attendant’s Ao Dai) Bamboo Airways has a sensational andmisleading communication style - The first airline to fly directly to the US In fact,Vietnam Airlines has had many direct flights to the US many times before, andthe first airline of Vietnam owns a B787 Vietnam Airlines tends to cautiouslycommunication.

Vietnam Airlines's meticulousness in every little detail is proof of their Marketingstrategic vision They do not "snatch" customers immediately, but build an imageover time, attracting customers with quality and prestige This is considered anadvantage of the company in attracting customers to its services VietnamAirlines affirms the position of the national branded airline, along with the qualityof flight safety and service, helping customers feel secure and satisfied whenparticipating in Vietnam Airlines flights.

CHAPTER 4 MARKETING MIX (7Ps)

4.1 Product

4.1.1 Core Product: Services of transporting goods and people by air domestically and internationally Vietnam Airlines has up to 33 direct shipping locations across 3 continents of Asia, Europe, and Australia

- Domestic Market: By 2020, operating up to 64 domestic routes and 22

airports in regions

- International Market: Currently, Vietnam Airlines has operated 64 routes

to 18 countries, including 33 destinations By the end of March 3/2021 due to the impact of COVID - 19 disease, most flight routes were suspended.

Image 4.6

4.1.2 Supplementary Services:

 Information: Vietnam Airlines provides flight itineraries, prices, vouchers,

and how to apply vouchers Even information about hotels in customerdestinations can also refer to the Website and App (Cooperate toBooking.com) Not only that, but Vietnam Airlines also brings informationlike how to complete the procedures, ticket information has been put andthe status of active flights to help our customers' relatives track throughout

 Order - Taking:

oApplications:

- Vietnam Airlines also designed the application so that users caneasily access to book tickets online, pay online, hunt for cheapairfare deals, and redeem vouchers to receive gifts more easily.- Vietnam Airlines after-sales service for customers is quite good

through providing regular customer service, providing a number ofservice incentives on Vietnam Airlines flights, or even othermembers of the same members in Sky Teams.

- Besides, customers are members, when flying will be accumulatedequivalent to flight miles and converted into bonus points, thenused to change valuable rewards such as upgrade fare, upgradechecked baggage, use the business class lounge, etc Besides,there are countless attractive after-sales services for customergratitude

oOrder Entry:

- Online flight booking service.

- The online check-in service to somewhat limit the gathering at thecheck-in counter during the COVID-19 epidemic has not shown anysigns of stopping

oReservations and Check-in:

- Services connected with means of transport: assigning member unitsto pick up and drop off passengers from the gathering location tothe airport or vice versa Besides, customers can also hire 4 - 7-seater cars to conveniently for moving after service.

- Links with hotel booking apps, to serve customers who travel or workfar away to find accommodation Typically collaborating withBooking.com

 Billing: Customers can get information about fares of different classes

easily through the App or website of Vietnam Airlines On the mediachannels, fares that are often publicized, run attractive discount deals.Besides, Vietnam Airlines still has direct fare counters at the airport, whereticket prices are also provided before purchasing Fares are also sold viathe call center and here customers can also get specific ticket prices andrelated information.

 Payment: Many customers want fast payment, and understanding this,

Vietnam Airlines has actively linked with different payment methods tocreate convenience for customers, support payment by credit card, E-Banking, or other applications/wallets to pay for transactions at thewebsite, App, and even at counters.

 Consultation: Vietnam Airlines officially develops ticket booking service

through the customer care call center and card payment In addition,Vietnam Airlines has a customer consulting service that always acceptsinquiries and is ready to advise any customer who has questions aboutVietnam Airlines's services, via:

- Contacts Center for calls within Vietnam (24/7): 1900 1100 - For Lotusmiles members: 1900 1800

- For calls from outside Vietnam (24/7): +84 24 3820320- Email: Telesales@vietnamairlines.com

 Hospitality: The quality of Vietnam Airlines service is usually highly

appreciated Facilities are usually guaranteed as well as the attitude of the

attendants is extremely standard The delay time of Vietnam Airlines isoften assessed to be less than that of competitors The waiting room isalso extremely luxurious with comfortable and clean seats and chairs Ifthe customer buys the business ticket, the more exciting privileges areworth mentioning such as serving food, drinking water, the lounge is muchmore luxurious Moreover, passengers will be served a welcome drink ineither premium economy or business class Depending on the class ofseats that customers own, Vietnam Airlines also provides differentservices.

 Safekeeping: Vietnam Airlines customers can rest assured to enjoy their

flight service because Vietnam Airlines will ensure the safest flight with ateam of highly qualified pilots who have practiced and practiced throughmany hours of flight The experienced flight attendants constantly remindcustomers to ensure safety during the flight Besides, Vietnam Airlines alsoprovides a comprehensive travel insurance service for customers ondomestic and international flights - TripCARE.

4.2 Place

4.2.1 Information and Promotion Flow

Through partners such as Traveloka, Booking, Agoda, etc., social networking platforms such as Tik Tok, Instagram, Facebook and on its own website, fanpage, Vietnam Airlines builds its information and promotion flow to help customers reach it in the most effective way In addition, the promotion flow of Vietnam Airliness also includes out-of-home advertising to serve outside promotion strategies.

4.2.2 Negotiation Flow

In order to ensure the quality of their services, Vietnam Airlines’s distributionfacilities and members of the distribution channel are subject to strict control on