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Indigo airlines marketing mix

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Service And Retail Marketing
IGTC 2014-
2016
IndiGo Airlines
Alan.P.Lal
C1402
[INDIGO AIRLINES] IGTC 2
Service and retail marketing Page 2
Abstract
IndiGo is an Indian budget airline company headquartered at Gurgaon, India. It is the fastest
growing and also the largest airline in India with a market share of 36.1% as of December
2014. This report is regarding the services and products offered by Indigo airlines. The
concepts of service and retail marketing are discussed below like 8ps of service marketing,
market segmentation.etc.
Mission Statement
Indigo airlines aims to become the number one leader in the low cost airline industry
of India, offering the best service and ensuring highest standards of quality at low cost
to the customer.
Vision Statement
To be India's largest and fastest growing airline through three things: affordable fares,
on-time performance and hassle-free travel experience
Introduction
India is one of the fastest growing aviation industries in the world. Because of the
introduction of liberalization policy in the Indian aviation sector, the industry has witnessed
difference with the entry of the privately owned full service airlines and low cost carriers. In
2006, the private carriers accounted for around 75% share of the domestic aviation market.
Besides, there was significant increase in the number of domestic air travel passengers. Some
of the factors that have resulted in higher demand for air transport in Indian clued the
growing purchasing power of middle class, low airfares offered by low cost carriers and the
growth of the tourism industry in India. In addition to the liberalization policy, the
deregulation policy has also played a major role to encourage private players in the aviation
industry. Below graph shows the gradual growth in the domestic air traffic: The growth in the
aviation industry looked promising and hence attracted many low cost carriers like Spice Jet,
Go Air and IndiGo after the success of Air Deccan in 2003.
On one hand, the booming opportunities incited players to expand capacity but on the other
hand, rising fuel costs and taxation rates, increased the operational costs. Thus the low-cost
players found it difficult to maintain their commitment. In their urge to survive, they were
compelled to increase prices, add free refreshments and beverages on-board, etc. Some
[INDIGO AIRLINES] IGTC 2
Service and retail marketing Page 3
players sought refuge in mergers, whereas some survived by modifying their business model.
However, amidst this aviation turmoil, IndiGo continued to fly high. In its endeavour to
consistently maintain low costs, IndiGo resorted to measures like outsourcing and having
homogeneous fleet. These efforts helped IndiGo to offer its passengers low air fares. Indigo is
the latest entrant as a low cost carrier in the aviation industry of India. It started its operations
on August 4, 2006. InterGlobe Enterprises, a renowned travel corporation, is the owner of
IndiGo. The IndiGo team uses all of these resources to design processes and rules that are
safe and simple, that make sense, and that cut waste and hassles, which in turn ensures a
uniquely smooth, seamless, precise, gimmick-free customer experience at fares that are
always affordable. It was awarded the title of ‘BestDomesticLowCostCarrier’
MarketSegmentation
Indigo airlines havesegmentedintoaCost Conscious Passengers service. they have targeted .the
middle class and lower middle class customers and it positioned itself as a Low Cost No
Frills airlines In Indian Sub-continenet
8 P's Of Indigo Airlines
1. products
Indigo Airlines provides 2 types of product services they are
1. on ground services
2. In flight services
Core Product
The core product of indigo airlines is that they provide low cost passenger air
transportation for middle class and lower middle class customers so that they can also
experience flight journey.
Supplementary Product
Along with the core product they also offers supplementary product. They are like Check
in , Food on board ,Connecting flight while traveling where the service is not available,
Complementary gifts along with the travel, In-flight entertainment such as music, movies
games and Frequent flier programs
[INDIGO AIRLINES] IGTC 2
Service and retail marketing Page 4
Augmented Product
A commodity that has both the primary physical attributes and the non-physical
attributes that are added to increase the product's value. They Augmented product are-
• Online booking
• Variety of meal options
• Pick up and drop service
• Mobile ticketing
2. Price
Price is one of the major marketing mix for any industry. To be simple Indigo airlines
succeeded because of the cheap fares which opened the gates for the middle income group.
In fact, that happens to be its competitive advantage when travellers are comparing prices.
This makes it one of the most sought airline services in India because of its quality services
as well. The control department plays a major role in maintaining the cost by the company,
Indigo uses computer generated mechanisms to determine how much petrol it will need from
Point A to point B. Thus, its savings on petrol is high and airline petrol is very very costly.
Furthermore, the servings on flight are minimum. Indigo wants to control cost but does not
build relationships with its customers.
With decrease in prices and increase in the number of passengers every day, Indigo faces a
tough competition from SpiceJet and Air India. With a market share of 31.7% at present, it
would be safe to say that Indigo provides what no other airlines can offer when it comes to
cheap prices. There are also constant discounts that keep customers coming back.
3.Place and Time
Indigo airlines have round the clock online booking so that they can avoid the difficulty for
customers in going to a booking counter and wait. They also have tie up with various travels
and tours operators. Another interesting is that they have affiliation with many companies
regarding their entire travel plans. As a matter of fact, there are about 29 current Indigo
destinations but expansion is ongoing. While that is the case, the airline has ensured that its
core strategies are maintained. The core strategies include keeping the airline the most
affordable airline in India and keeping flying a pleasant experience.
With its fleet of 78 aircrafts and as many as 508 flights daily, it operates 29 domestic and
international destinations whiles its competitor SpiceJet as 56 of its aircraft operating 45
[INDIGO AIRLINES] IGTC 2
Service and retail marketing Page 5
destinations. Thus, the strategy is to provide more capacity on fewer routes than thinly spread
itself over many destinations. This is advantageous in that: it helps contain costs because new
destinations will require infrastructure costs and help in creating more customers because
they will be viewed as reliable in the few destinations they operate.
4. Promotion
No airline has worked harder at capturing the local market better than IndiGo Airlines. The
airline relies on its cost and availability to promote its brand across the market. This
investments in advertisements are low because it affects the cost. However, Indigo did come
out with a few TVC’s of its own as well as does good advertising online. The airline has
adopted a strategy of connecting flights to other destinations from one destination such that
customers will not have to book another airline to arrive to their destination. For instance, it
has connected four flights from Ranchi to Delhi, Mumbai, Patna and Bangalore and plans are
underway for it to add Kolkata and Raipur.
Although not a direct marketing strategy, this strategy has seen it gain more customer base
because customers would want to cut costs by using just one aircraft to reach their
destination. Other promotion methods used by Indigo aircraft include media vehicles like
billboards, print media advertising and advertising on travel portals.
5.Process
The process is related to service delivery for the customers the best policy .The management
policy should be transparent ass possible to attain the loyalty of the customers.
The process mix of indigo airlines involve the reservation system, how effectively the flight
information is provided to the customers, the facilities provided in the airport, Baggage
handling facility , in flight service and check in process.
6.People
The people involved in the business directly and indirectly are very important for indigo
airlines as they will be providing a lot of information. Travel agents will be providing direct
business to the airlines so a proper channel should be made to identify the strength of travel
[INDIGO AIRLINES] IGTC 2
Service and retail marketing Page 6
agents in a particular area. Employees of a firm are its best resource as the human capital
increases production and optimum utilization people with high customer services skills
should be hired to impress the clientele as indigo is providing customer service. The customer
should be given first hand information as to what is the schedule for their flights in case of
any delays or complexities.
7. physical environment
Physical environment in airline can be divided into two-
1. Ground
The ground environment can be considered like the booking office, the baggage facility
system, on ground handling system can be considered as the physical environment of the
indigo airlines.
2. In-Flight
In-flight service is the most important functionality which may have the direct impact on the
customers. The in flight physical environment can be like the amenities provided in the flight,
the cleanliness of the flight, ambience in the flight.
8. productivity and quality
IndiGo's executives, including staff at the check-in counters, air crew and sales and marketing
staff are hired only after Bhatia meets each of them individually. Besides, the airline also
employs far fewer people, with one of the industry's leanest work forces.
The airline also broke industry standards with simple things like turnaround time. This is the
time taken for a plane to be ready for the next flight between landing and take off. IndiGo
boasts of a turnaround time of less than 30 minutes.
Obviously less time on the ground means more time in the air which also reduces fuel
burning. A report in the Business Standard had said earlier that IndiGo's aircraft spend more
than 11 hours a day in the sky, compared to the industry average of eight or 10 hours.

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Indigo airlines marketing mix

  • 1. Service And Retail Marketing IGTC 2014- 2016 IndiGo Airlines Alan.P.Lal C1402
  • 2. [INDIGO AIRLINES] IGTC 2 Service and retail marketing Page 2 Abstract IndiGo is an Indian budget airline company headquartered at Gurgaon, India. It is the fastest growing and also the largest airline in India with a market share of 36.1% as of December 2014. This report is regarding the services and products offered by Indigo airlines. The concepts of service and retail marketing are discussed below like 8ps of service marketing, market segmentation.etc. Mission Statement Indigo airlines aims to become the number one leader in the low cost airline industry of India, offering the best service and ensuring highest standards of quality at low cost to the customer. Vision Statement To be India's largest and fastest growing airline through three things: affordable fares, on-time performance and hassle-free travel experience Introduction India is one of the fastest growing aviation industries in the world. Because of the introduction of liberalization policy in the Indian aviation sector, the industry has witnessed difference with the entry of the privately owned full service airlines and low cost carriers. In 2006, the private carriers accounted for around 75% share of the domestic aviation market. Besides, there was significant increase in the number of domestic air travel passengers. Some of the factors that have resulted in higher demand for air transport in Indian clued the growing purchasing power of middle class, low airfares offered by low cost carriers and the growth of the tourism industry in India. In addition to the liberalization policy, the deregulation policy has also played a major role to encourage private players in the aviation industry. Below graph shows the gradual growth in the domestic air traffic: The growth in the aviation industry looked promising and hence attracted many low cost carriers like Spice Jet, Go Air and IndiGo after the success of Air Deccan in 2003. On one hand, the booming opportunities incited players to expand capacity but on the other hand, rising fuel costs and taxation rates, increased the operational costs. Thus the low-cost players found it difficult to maintain their commitment. In their urge to survive, they were compelled to increase prices, add free refreshments and beverages on-board, etc. Some
  • 3. [INDIGO AIRLINES] IGTC 2 Service and retail marketing Page 3 players sought refuge in mergers, whereas some survived by modifying their business model. However, amidst this aviation turmoil, IndiGo continued to fly high. In its endeavour to consistently maintain low costs, IndiGo resorted to measures like outsourcing and having homogeneous fleet. These efforts helped IndiGo to offer its passengers low air fares. Indigo is the latest entrant as a low cost carrier in the aviation industry of India. It started its operations on August 4, 2006. InterGlobe Enterprises, a renowned travel corporation, is the owner of IndiGo. The IndiGo team uses all of these resources to design processes and rules that are safe and simple, that make sense, and that cut waste and hassles, which in turn ensures a uniquely smooth, seamless, precise, gimmick-free customer experience at fares that are always affordable. It was awarded the title of ‘BestDomesticLowCostCarrier’ MarketSegmentation Indigo airlines havesegmentedintoaCost Conscious Passengers service. they have targeted .the middle class and lower middle class customers and it positioned itself as a Low Cost No Frills airlines In Indian Sub-continenet 8 P's Of Indigo Airlines 1. products Indigo Airlines provides 2 types of product services they are 1. on ground services 2. In flight services Core Product The core product of indigo airlines is that they provide low cost passenger air transportation for middle class and lower middle class customers so that they can also experience flight journey. Supplementary Product Along with the core product they also offers supplementary product. They are like Check in , Food on board ,Connecting flight while traveling where the service is not available, Complementary gifts along with the travel, In-flight entertainment such as music, movies games and Frequent flier programs
  • 4. [INDIGO AIRLINES] IGTC 2 Service and retail marketing Page 4 Augmented Product A commodity that has both the primary physical attributes and the non-physical attributes that are added to increase the product's value. They Augmented product are- • Online booking • Variety of meal options • Pick up and drop service • Mobile ticketing 2. Price Price is one of the major marketing mix for any industry. To be simple Indigo airlines succeeded because of the cheap fares which opened the gates for the middle income group. In fact, that happens to be its competitive advantage when travellers are comparing prices. This makes it one of the most sought airline services in India because of its quality services as well. The control department plays a major role in maintaining the cost by the company, Indigo uses computer generated mechanisms to determine how much petrol it will need from Point A to point B. Thus, its savings on petrol is high and airline petrol is very very costly. Furthermore, the servings on flight are minimum. Indigo wants to control cost but does not build relationships with its customers. With decrease in prices and increase in the number of passengers every day, Indigo faces a tough competition from SpiceJet and Air India. With a market share of 31.7% at present, it would be safe to say that Indigo provides what no other airlines can offer when it comes to cheap prices. There are also constant discounts that keep customers coming back. 3.Place and Time Indigo airlines have round the clock online booking so that they can avoid the difficulty for customers in going to a booking counter and wait. They also have tie up with various travels and tours operators. Another interesting is that they have affiliation with many companies regarding their entire travel plans. As a matter of fact, there are about 29 current Indigo destinations but expansion is ongoing. While that is the case, the airline has ensured that its core strategies are maintained. The core strategies include keeping the airline the most affordable airline in India and keeping flying a pleasant experience. With its fleet of 78 aircrafts and as many as 508 flights daily, it operates 29 domestic and international destinations whiles its competitor SpiceJet as 56 of its aircraft operating 45
  • 5. [INDIGO AIRLINES] IGTC 2 Service and retail marketing Page 5 destinations. Thus, the strategy is to provide more capacity on fewer routes than thinly spread itself over many destinations. This is advantageous in that: it helps contain costs because new destinations will require infrastructure costs and help in creating more customers because they will be viewed as reliable in the few destinations they operate. 4. Promotion No airline has worked harder at capturing the local market better than IndiGo Airlines. The airline relies on its cost and availability to promote its brand across the market. This investments in advertisements are low because it affects the cost. However, Indigo did come out with a few TVC’s of its own as well as does good advertising online. The airline has adopted a strategy of connecting flights to other destinations from one destination such that customers will not have to book another airline to arrive to their destination. For instance, it has connected four flights from Ranchi to Delhi, Mumbai, Patna and Bangalore and plans are underway for it to add Kolkata and Raipur. Although not a direct marketing strategy, this strategy has seen it gain more customer base because customers would want to cut costs by using just one aircraft to reach their destination. Other promotion methods used by Indigo aircraft include media vehicles like billboards, print media advertising and advertising on travel portals. 5.Process The process is related to service delivery for the customers the best policy .The management policy should be transparent ass possible to attain the loyalty of the customers. The process mix of indigo airlines involve the reservation system, how effectively the flight information is provided to the customers, the facilities provided in the airport, Baggage handling facility , in flight service and check in process. 6.People The people involved in the business directly and indirectly are very important for indigo airlines as they will be providing a lot of information. Travel agents will be providing direct business to the airlines so a proper channel should be made to identify the strength of travel
  • 6. [INDIGO AIRLINES] IGTC 2 Service and retail marketing Page 6 agents in a particular area. Employees of a firm are its best resource as the human capital increases production and optimum utilization people with high customer services skills should be hired to impress the clientele as indigo is providing customer service. The customer should be given first hand information as to what is the schedule for their flights in case of any delays or complexities. 7. physical environment Physical environment in airline can be divided into two- 1. Ground The ground environment can be considered like the booking office, the baggage facility system, on ground handling system can be considered as the physical environment of the indigo airlines. 2. In-Flight In-flight service is the most important functionality which may have the direct impact on the customers. The in flight physical environment can be like the amenities provided in the flight, the cleanliness of the flight, ambience in the flight. 8. productivity and quality IndiGo's executives, including staff at the check-in counters, air crew and sales and marketing staff are hired only after Bhatia meets each of them individually. Besides, the airline also employs far fewer people, with one of the industry's leanest work forces. The airline also broke industry standards with simple things like turnaround time. This is the time taken for a plane to be ready for the next flight between landing and take off. IndiGo boasts of a turnaround time of less than 30 minutes. Obviously less time on the ground means more time in the air which also reduces fuel burning. A report in the Business Standard had said earlier that IndiGo's aircraft spend more than 11 hours a day in the sky, compared to the industry average of eight or 10 hours.
  • 7. [INDIGO AIRLINES] IGTC 2 Service and retail marketing Page 7 Petals Of Indigo Information The Information is provided to the customers by IndiGo through the official site of indigo,the check in counters,inflight air-hostess. Order taking Order taking that is the ticket booking is done through the booking counters and also online booking, various travels and tours agents will involve in the procedure Billing Billing is generated through the type of ticket purchased by the customer. it may vary upon the type of purchase done. Hospitality IndiGo provides with utmost hospitality service through the air hostess, the baggage handling facility Payment According to the billing method the payment is made. If it is online the credit card, debit card, Internet Banking. Ready cash is also accepted in the booking centres. Exception Indigo provides with exception service for medical emergencies, for the VIPs', for children who is travelling alone. Competition The Major competition for the indigo airlines are the spice jet, Jet airways, Air - India in the Indian market. The price war is on edge as the race for the market share is on. Because of non-stability of other carriers IndiGo Have a clear cut advantage of other Players.Competitor include home grown carrier like SpiceJet, Kingfisher and international LCC like AirAsia, Air Arabia , Fly Dubai. Although the completion is high indiGo have a 29 % market share in the Indian Market.
  • 8. [INDIGO AIRLINES] IGTC 2 Service and retail marketing Page 8 Conclusion From the report we can conclude that IndiGo airlines have a competitive advantage over other services in terms of customer loyalty, services offered and the important of all the pricing strategy adopted by Indigo. Because of its Pricing strategy it have adopted the name as low cost carriers. Indigo also have to look upon their future plans in order to stay alive in this non - stabilized market. The Pricing also should be varied in accordance with the operating cost in order to reduce the losses.
  • 9. [INDIGO AIRLINES] IGTC 2 Service and retail marketing Page 9