Airasia Case Study

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- Competitors

A successful marketer must provide much better customer value and satisfaction than their competitors do. Marketers must do more than simply fit to the needs of consumers. They must gain strategic advantage by positioning their offerings strongly against competitor’s offering.

Malaysia Airline System (MAS) is the biggest competitor of AirAsia whose high prices created a pent-up demand for low-cost air travel. Now, the presence of AirAsia offered savings of up to 60 percent compared to MAS’s price. The price competition is a main factor that leads to the success of AirAsia because AirAsia offering much better customer value compare to the competitors.

- Publics

Public is any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. Classification of publics contains media, government, financial, local, citizen-action, general and internal publics. All of these publics have the power to influence the whole market for the companies. For example, government can affect the company’s ability to set the prices.

Media publics did help AirAsia to be launched during a turbulent period by increased the media coverage on LCCs. Through this media public, consumers more understand the no-frills concept and starting to choose AirAsia as their traveling channel.

Macro Environmental Factors

- The Economic Environment

The economic environment is one of the factors that influence consumers’ purchasing power and spending patterns. The economic system operating in the country affects the company to a very great extent.

AirAsia was established to provide airline services during the turbulent period when people were hesitant to travel due to the aftermath of terrorist assails. After the terrorist attacks, the incomes of citizen increase constantly with the good economic growth.

- The Demographic Environment

Demographic factors include size, growth rate, gender, education level, location and other statistics. The demographic environment is the major interest of the marketers because it contains people and people build up markets.

For instance, the changing of age structure of the population from baby boomers to Generation X to Generation Y alters the needs of each age structure from age to age. Baby boomers use ferry ship to travel because airplane traveling is still an unachievable dream for them during that time. When it comes to Generation X and Y, the using of aircraft started to be universalized. AirAsia was one of the companies that compete with others to launch their market for aviation. AirAsia achieves a success in creating their own market in Generation X and Y because AirAsia truly understand the marketplaces and consumers.

- The Technological Environment

The technological environment is the most dramatic forces that encourage for new technologies, new products and market opportunities. New technologies create new products and new processes. Smartphones, tablets, internet and robotic released result of the technology have created convenience for the people. Online banking, credit cards make the transactions easier.

Advancements of technology provide many advantages for AirAisa. Internet creates the opportunity for AirAsia to reach their customers through online booking. Customers can make payment for the booking through online booking.

- The Cultural Environment

The cultural environment consists of institutions and other forces that affect a society’s basic value, perceptions, preferences, and behaviours. People grow up in a particular society that shapes their basic beliefs and values.

The cultural always decide the markets, the basic beliefs and values will also bring some market to the marketer. For example, AirAsia understand the culture in Malaysia so the foods prepared all is “Halal”. Air Asia is accredited by the KL Syariah Index, and as per Shariah law it does not serve alcohol or pork.

- The Natural Environment

The natural environment contains the natural resources that are needed as inputs by marketers’ activities. Economic concerns have grown steadily over the past three decades. In many cities around the world, air and water pollution have reached dangerous level included Kuala Lumpur Malaysia.

AirAsia considers about the natural environment by develop some strategies and practices to support environment sustainability. For example, AirAsia practises recycled and biodegradable packing in packing their foods and this can help to control the pollution. AirAsia also recommends their customers to use online check in and save the boarding pass inside the handphone in order to reduce the usage of paper.

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QUESTION 2

Discuss the micro and the macro factors that would affect AirAsia’s performance in the current competitive environment described in the case?

i.) The Company

AirAsia can affect their own performance in the current competitive environment. The company itself has important role to maintain the balance between low cost and profitability. The departments inside the company such as marketing department, financial departments and so on are very crucial to interrelate with the other departments inside the company to launch the marketing activities that can help AirAsia to makes profit by keeping costs low.

AirAsia very good and success in doing this, they had prepared many campaigns to promote their low price flight. Campaigns such as “Have You Flown AirAsia Lately” and “Free Seats” help to promote AirAsia services to their prospect customers. In the same time they gained profits through raising the fuel prices and landing charges, all this need perfect planning between the departments inside the company. For example, marketing department must communicate with the financial accounting department so that they can archive the balance between low cost and profitability.

ii.) Publics

In the current environment, the public make ​​a tremendous impact on the success and performance of the company. In this case study, the type of public that have big influence is the media publics