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Services Marketing Presentation

- Low Cost Airlines v/s Full Service Airlines



MPE -2009-11 - DIV B


Group A

 Asif Khan Roll No: 64


 Amit Kothari Roll No: 67
 Tushar Mistry Roll No: 84
 Sumit Mukherjee Roll No: 87
 Ramesh Nair Roll No: 93 The color orange is a mix of
 Jignesh Parmar Roll No: 107 yellow and red which denotes,
learning through sharing and
 the green arrow shows growth
through prosperity, environment
 concerns etc.

SQUARE
1

Airline Industry

Started in1912

In 1932, JRD Tata founded Tata Airline, the first Indian airline

At the time of independence, nine air transport companies were
carrying both air cargo and passengers

Fastest growing aviation industries in the world – 9th largest
aviation market in the world

Private airlines account for around 75% share of the domestic
aviation market

CAGR at 18 per cent, 454 airports and airstrips in place in India,
of which 16 are designated as international airports

2
Passenger growth

Registered growth of 18.3% as compared to last year


419.34 Lakh passengers carried by domestic airlines from Jan-Oct 2010
354.55 Lakh passengers carried in the corresponding period in 2009

3
Changing dynamics over the years

4
Indian domestic air traffic still growing at
more than 10%

6
Industry Challenges

7
Target Markets

8
Service Positioning of various airlines

Competitive Pressure

Low cost carriers are


changing the game

9 Price
7Ps of Services Mix

10
Flower of Services

11
Product Analysis

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Product as a Service

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Price Mix

Airline Costs

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PLACE MIX

20% increase in ticket purchases online


20% - reduction in travel operator involvement
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Promotion MIX

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PEOPLE MIX

 Competence

 Reliability

 Caring Attitude

 Responsiveness

 Initiative

 Problem Solving
Ability

 Goodwill

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PROCESS MIX

 Reservation

 Flight Information

 Facilities at The Airport

 Baggage Handling

 Meal Service

 Flight Entertainment

 Deliver Quality Service

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PHYSICAL EVIDENCE

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Service Quality

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Source : http://www.foolonahill.com/mbaaviation.html
Some common passenger experiences

Key Parameters For Customer’s Satisfaction

Timely check in
Timely departure
Timely arrival
Value for money
Safety
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Service Quality

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Service – Quality Model
Personal needs

Word-of-mouth
Past experience
communications

Expected service

GAP
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Perceived service

CONSUMER
MARKETER
GAP
Service delivery External
4
(including pre-and communications
post-contacts ) to consumers
GAP GAP
1 3
Translation of
perceptions into
service-quality
specifications
GAP
2
Management
perceptions of
consumer
expectations
Customer Service Delivery

Passenger
(pax)

Line of
Interaction

Front Line

Internet based Reservation & Ticketing

Line of
Internal
Interaction

Support

25
Research Findings
( Dr. M.N. Khan & V.R. Dutt of FMS And Dr. S .C. Bansal of IIM-L)

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Research Findings
( Dr. M.N. Khan & V.R. Dutt of FMS And Dr. S .C. Bansal of IIM-L)

ØThere is no difference in the gap between customers’ perceived and expected


service quality vis-à-vis ‘Tangibility - Legacy Support Services’ among different
categories of airlines.
Ø
ØThere is no difference in the gap between customers’ perceived and expected
service quality vis-à-vis ‘Tangibility – Additional LCC Support Services’ among
different categories of airlines.

ØThere is no difference in the gap between customers’ perceived and expected


service quality vis-à-vis ‘Tangibility – Flight’ among different categories of
airlines.

ØThere is no difference in the gap between customers’ perceived and expected


service quality vis-à-vis Reliability among different categories of airlines.

ØThere is no difference in the gap between customers’ perceived and expected


service quality vis-à-vis Empathy among different categories of airlines

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Competitive Dynamics

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Strategies for Future Sustenance

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In conclusion …

ØThe Airlines industry is cyclical in nature due to uncertainties which are beyond
its control
Ø
ØBrands have to be built in such a manner that they survive the lean periods on
their strength of being able to differentiate themselves with others
Ø
ØPricing is the most sensitive issue in airline industry and is done depending on
the demand of the market
ØSwitching is more frequent in case of low fare airlines whereas business
segments are more brands loyal

ØLCCs have positioned themselves in competition to railways by making travel


affordable.
ØIt is not possible for them to compete with railways on price front
ØShould aim to highlight features such as lesser travel time and better
in-flight facilities

ØLCC - Fares acts as the deciding factor


ØFSC - Determining factors are flight schedule, reliability, quality and
connections with less emphasis on fare
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Don’t mess with customers

United breaks guitar

31 Source: http://www.markpack.org.uk/united-airlines-dave-carroll-youtube/