7 P's, Marketing Mix, Kingfisher Airlines, Kingfisher

1. MARKETING PROJECT
SUBMITTED TO PROF. ADAPA SRINIVASA
RAO
IBS HYDERABAD
Divya Gaury
Saluja -27 Indurkar-
17
Anuj Shilpi
Gupta-35 Sarkar-72
Jignesh
Patel - 70
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2. Contents
AVIATION INDUSTRY ...........................................................................................3
1.1 Introduction ......................................................................................................3
1.2 Porter‟s Five Forces.......................................................................................4
1.3 Pestel Analysis ..............................................................................................5
1.4 Market Share .................................................................................................7
KINGFISHER AIRLINES.........................................................................................8
2.1 Strategic Alliance with Deccan .....................................................................8
2.2 SWOT Analysis .............................................................................................9
MARKETING MIX .................................................................................................10
RECOMMENDATION FOR FUTURE STRATEGIES.........................................19
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3. AVIATION INDUSTRY
1.1 Introduction
The Aviation industry in India is one of the fastest growing sectors globally. The sector has
undergone rapid transformation since the liberalization drive that began in the earlier half of the
decade. The origin of Indian civil aviation industry can be traced back to 1912, when the first air
flight between Karachi and Delhi was started by the Indian State Air Services in collaboration
with the UK based Imperial Airways. It was an extension of London-Karachi flight of the
Imperial Airways. 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.
In early 1948, Government of India established a joint sector company, Air India International
Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet
of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took
off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline
companies vide the Air Corporations Act, 1953.. By 1995, several private airlines had ventured
into the aviation business and accounted for more than 10 percent of the domestic air traffic.
Today, Indian aviation industry is dominated by private airlines and these include low cost
carriers, who have made air travel affordable.
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4. 1.2 Porter’s Five Forces
BUYER POWER – Low SUPPLIER POWER – High
Economic and Demographic ATF Fuel Prices.
Changes. Food Inflation Might Affect The
Higher Disposable Incomes. Industry As Food Provided By
Kingfisher Is Packed Through
Increasing no. of Working Women. Premium Hotels.
Increasing Awareness.
Exposure to Global Brands.
INDUSTRY RIVALRY
(Moderate to High)
Competitive Pricing is there
Many upcoming players
High exit costs involved
THREAT OF SUBSTITUTES ENTRY BARRIERS - High
Moderate to High Very Huge Capital Investment
Indian Railway has improved Till 1991 No Private Player Was
service level and quality. Can Allowed Due To License Raj
give good competition in future.
Subject To Strict Regulations
Other Modes of Transportation.
Still Govt. Interference In Pricing
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5. 1.3 Pestel Analysis
POLITICAL FACTORS
 Open Sky Policy
 India‟s Political environment-Tension with Pakistan, Government‟s inability to
control issues(Riots etc.)
 September 11-huge drop in air traffic due to safety and security concerns
 Trade relations with other countries have to be good
ECONOMIC FACTORS
 High operations cost due to huge demand which resulted in laying off employees at
the time of recession.
 There has been huge contribution to the Indian Economy
 Rising cost of fuel
 There has been huge investment in the aviation sector
SOCIAL FACTORS
 People from varied groups have to be catered
 Destination, kinds of foods served have to be chosen carefully
 Development of cities leads to better services and airports
 Employment opportunities
 Safety regulations
 The status symbol attached to a plane travel
TECHNOLOGICAL FACTORS
 Use of internet-online ticket booking,updated flight information and handling of
customers
 Restrucutring the existing airports to world class appeal.
 The growth of e-commerce and e-ticketing
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6.  Satellite base navigation system
 Modernisation and privatization of the airports
 Developing green field airports with private sector. For example-In Bangalore,
“Airport Corporation Limited”.
ENVIRONMENT FACTORS
 The increase in global warming
 The sudden and unexpected behavior of the atmosphere and the dependency on
weather
 Shortage of the infrastructural capacity
 Tourism Saturation
LEGAL FACTORS
 FDI limits
 Airlines Acquisitions and the leasing cost.
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7. 1.4 Market Share
Source: http://dgca.nic.in/reports/mar-ind.htm
(Directorate General of Civil Aviation)
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8. KINGFISHER AIRLINES
KINGFISHER AIRLINES was introduced by Mr.Vijay Malliya on 7th may 2005 , it was a
subsidiary of united breweries holding limited. It was introduced in year 2005. That year itself
kingfisher created hype in the market .it was a late entrant in aviation sector but it managed to
establish a pinnacle position in its near future. Scanning through the performance of kingfisher, it
attained a significant position in Indian market. Mr.Vijay Malliya, the strategist, left no stones
unturned to make KINGFISHER AIRLINES a huge success.
That year itself KINGFISHER was awarded as “BEST NEW AIRLINE OF THE YEAR 2005”
by center for Asia Pacific Aviation. In 2006 it was awarded as “SERVICE EXCELLENCE FOR
NEW AIRLINES” by Skytrax. created brand equity for the organization over a period of 5 years
i.e. it enhanced perceived benefits to the organization due to the brand name and goodwill it
commanded in the market.
.Substitute services existed for airlines industry in the form of various other transport systems
like transportation through roadways, railways and sea transport but it did not create any
significant threat for aviation sector because of its unique characteristics like speed flexibility
and time efficiency.
2.1 Strategic Alliance with Deccan
 The opportunity of having an equal right to fly overseas and
expand its presence in the subcontinent with a combined
fleet of 80 aircraft.
 Kingfisher Airlines - Air Deccan have its commonality of
fleet. With the same family of planes on both sides, there
they enjoyed a significant reduction of cost.
 They mutually took the advantages of their respective
operational Merging with Deccan and becoming single
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9. corporate entity, Kingfisher got efficiencies
 They captured a greater business market in both top and end and cut price market in a
fiercely competitive market in aviation industry.
2.2 SWOT Analysis
STRENGTHS WEAKNESSES
 KFA has a strong brand  Still not in profit due to
value and reputation in Long Gestation Period of
the mind of customers. the Industry.
 Quality of service  High ticket pricing
 Route rationalization  Facing a tough
competition from
 First airline to have a competitors
new fleet of airbuses.
 Quality and continuous
innovation.
 Best R & D
OPPORTUNITIES THREATS
 The expanding tourism  Threat from competitors
industry
 Infrastructural issues
 The non penetrated
domestic market  Hike in fuel prices
 Tapping the international  Tourism saturation
market  Economic slowdown
 Catering the untapped air  Promotion and
cargo market sponsorship is declining
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10. MARKETING MIX
P‟s
This P explain what range of products or services is been offered by the firm. As the firm grows
ancillary services and products also start growing sometimes related diversification is also
observed thus larger organizations go for vertical integration in order to manage the value chain.
Kingfisher has created its service differentiation by providing quality service and delivering
value to the passengers by creating a lavish and luxurious experience.
Also it provided secondary services like
King Mobile:
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11. Kingfisher Airlines became the first Indian Airline to launch a range of services on the mobile
platform. Now one can check for flight updates, buy tickets through SMS or access a world of
services through a simple mobile application - anytime anywhere
Little Wings:
Kingfisher Airlines, provides onboard experience which promises to be full of delightful &
unforgettable moments. The airlines call its passengers as ‟guests‟ and as soon as the flight takes
off, they‟ll soon be absorbed in the thrill of stretching their own little wings.
Kingfisher Holidays:
This scheme provides its passengers with King Miles which one can redeem for stay in hotels,
car rentals etc.
Kingfisher Elite:
In today‟s competitive business environment, the pressure on productivity, cost and efficiency
are greater than ever before. Kingfisher Elite offers exclusive travel solutions. One can Fly at
one‟s own convenience anywhere, anytime and choose who flies along with them in the utmost
comfort, safety and privacy. Be it business or leisure, one can select from the range of business
jets and provide the most exquisite service complimented with the highest safety standards,
allowing one to arrive to their destination relaxed and refreshed.
Kingfisher is now to launch 14 more planes for improving the domestic service in the major
cities.
A firm must set a price for the first time when it develops a new product. The firm searches for a
set of prices that maximizes profit on the total mix. Market share to determine prices to
customers and channel patterns. Prices across models and geographic regions have to be
determined. Quality
Prices
Variety Serives 11

12.  The price segments that Kingfisher targets is the higher income group as well as the
upper middle class background.
 There are a few segments that are majority of the youth and high lifestyle segments.
 The pricing is also done keeping in mind those people who are ready to pay for
luxury.
 Initially Kingfisher airlines did not differentiate between business class and economy
class. But eventually they decreased the prices of business class and called those seats
as premium seats.
 Fares were very average.
 They targeted middle class as well as premium class people. A „Low-Cost‟ option has
been given by the introduction of Kingfisher Red services to compete with other „No-
frills‟ airlines.
 The Kingfisher Red serves complementary meals on board, thereby increasing the
perception of „More Value for Money‟ for the passengers
PRICING
STRATEGY
Class of Day of
travel travel
Load
factors Date of
travel
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13.  It is the largest Domestic Airline with a fleet of 60+ aircraft.
 Connecting 61 Cities in India including 8 International Destination.
 Flight Bookings:
o Book in Person
o Travel Agents
o Online
o India‟s first „flybuysms‟ Service
 The process of kingfisher airlines services lays emphasis on the involvement of
channels, front line staff, travel agency offices, offices of tour operators, or so from
where the services flow and reach to the ultimate users.
 The process begins at the time of reservation and goes on up to the confirmation of
seats.
 By giving details of where to book and how to book kingfisher airlines help in
providing quality services to its customers..
 They also offer concession by not charging any cancellation charges and also giving
them options to make a change in the reservation status if they required.
 Facilities at the airport, the baggage handling, flight information, also helped in
delivering quality service and making travel a pleasure.
 Kingfisher Airline is making every effort to constantly redefine service procedures to
enhance service satisfaction levels.
 In aircraft the meal service, in flight entertainment, reading materials, etc enables the
customers to have an enjoyable and convenience.
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14. COMFORT
PHSYCAL
EVIDENCE
INTERIOR
DESIGINING Billing system
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15.  At Kingfisher Airlines, the aircraft by itself, the seating configuration which is meant
to be comfortable and spacious and the in flight food food provided, constitute the
physical evidence in this service.
 The seating is such that it is comfortable and there is enough leg space.
 Kingfisher has introduced new sleeper seats which electric controls for reclining
lumber support, leg rest extension, expanded seat back and thus providing highly
comfortable seating.
 Booking offices and ticket counters are extremely spacious and well designed with
good looks.
 Domestic lounges are enhanced with good interiors and basic amenities which make
it an ideal place to conduct business, entertain and relax.
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16. At Kingfisher Airlines, people are the most important. People provide most services that is
selection, training and motivation of the employees.
The airhostess at kingfisher come in contact with the customers in the process of providing the
service, while the cock-pit crew are the employees who contribute to the service product but
there is no direct contact with the customers.
The frontline staff plays an important role in order to make sure that the service has been
delivered to the customers in an apt and an efficient manner. Kingfisher Airline‟s cabin and
ground crew is the hallmark of their services. The quality of staff service is impeccable and the
airline is able to sustain these high quality levels as they experience continued and rapid
expansion people that is the staff deliver high standards of service efficiency, and in a sincere
and charming manner that makes it stand out from the rest of the airlines. The airline also
provides the crew to undergo rigorous training programs.
The airlines has also instituted the Kingfisher Training Academy to cater to the growing demand
for trained service oriented professionals.
As a part of its promotional strategy kingfisher‟s marketing team showcases themselves as the
“the new flying experience” in the aviation industry. Advertisement hoardings at airport
depicted the stylish interiors of the fun liners‟ which led them to the following advantages:-
 It has built up a long term image for the product.
 This hoardings put by them to repeat the messages many them.
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17.  The artful uses of the color and print led to convey a youthful, fun-filled and world
class image.
Besides this INOX multiplexes in Mumbai publicized KFA‟S special offer for a month.
They promoted greater consumer awareness for prices. This gave Kingfisher a great deal of
competitive advantage with respect to other low cost airlines.KFA was the official travel airline
for the cast and crew of „Mangal Pandey‟ and gave a warm welcome to all the guests who
attended the premiere of the film.
In addition to that KFA as a low cost airline also followed some other promotional strategies
which are listed below:-
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18.  Organized the guest speakers at the seminars and present their ideas on the areas of
their expertise.
 Sponsored many cultural events and have celebrity endorsements.
 Sponsored sports team and charity events.
 Designed image logo for the company.
The organizing of events have given them a lot of advantages to establish their brand name. To
enlist a few:-
 It increased awareness of the company and helps to enhance their brand name.
 It upraised their corporate image.
 These promotional tools helped KFA to express commitment to the community and
social issues.
 KFA made use of various fashion shows, celebrity golf matches, New Year parties all
to build its “Kingfisher” brand.
 In October, KFA launched “Chill Times Offer” in the month of Augur.
 KFA launched many attractive offers to promote its sales like the “King Card” in
association with ICICI Bank, in August 2005. This was meant to create loyal
customers for KFA by providing benefits like privileged access to lounges,
restaurants, free refreshments at airports, access to 180 golf clubs across India, special
invites for lifest.
Thus by implementing all this measures kingfisher succeeded to have a loyal customer base.
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19. RECOMMENDATION FOR FUTURE STRATEGIES
Market  Can tie up with Corporate and Government Companies by
Penetration Providing Unique Travel Solutions for Professional and
Personal Use. Can implement programs implemented by South
West Airlines to penetrate market.
 Seek additional distribution channels such as more tie ups and
Product collaboration.
Development
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20.  Collaboration with international carriers, bilateral discussions
over seats and code sharing between the carriers.
Market
 Special offerings for first time fliers.
Development
 Try to find out new customer group such as old-retired
persons.
 Can enter into other Transport Services like Bus Services
between Major Cities and Other Services.
Diversification
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