Research Proposal on "Marketing Communications Management for New Brand of Low Cost Airline in Thailand"

Research Proposal 10 pages (3190 words) Sources: 10

[EXCERPT] . . . .

Marketing Communications Management for New Brand of Low Cost Airline in Thailand

Low Cost Airline Marketing Communications Management

Opening a new company is always a risky decision, especially during the crisis or in an industry like the airlines industry. But the correct assessment of business opportunities and threats and the correct allocation of financial resources can help counteract these risks raised by the business environment. Therefore, it is important to conduct a thorough market study before addressing the airlines industry in Thailand.

The market entry strategy should be based on the characteristics of the industry sector addressed by the business owners, and on the needs of the targeted customer segments. The airlines industry in Thailand presents certain characteristics that allow for new companies to enter the market, by addressing niche business sectors.

The following pages focus on analyzing the Thai airlines industry, the factors affecting this industry and the companies that address this market, and will propose a strategy for a new low-cost airlines company that intends to address this market. The new company is Bowling Asia Airline. The company intends to target customers with low and medium incomes that travel more or less frequently. This is an opportunity that the company can exploit in its attempt to enter the Thai airlines industry and to gain significant market share based on these customer segments.

In order to develop a suitable strategy for the company in case, it is important to take into consideration the competition in the airlines industry in Thailand. The main competitors of Bowling Asia Airline are analyzed in the paper. The strategy proposed for the company also takes into consideration an approach to the competitors of the company.

1. Situation Analysis

The airlines industry is one of the business activities that have been significantly affected by the global financial crisis. As a consequence, the purchase and consumption behavior of customers has modified in accordance with the incomes modifications experienced by most employees. Consumers tend to orient towards cheaper products and services. Airlines services make no exception.

Therefore, the situation favors established airlines companies that have the financial power that allows them to support price reductions and other promotions intended to attract customers, and to low cost airlines that want to enter the market. The economic situation of consumers in Thailand justifies the need for a new low cost airline company.

1.1. External Factors

The activity of the company is influenced by a series of external factors that include: the economic, legal, social, technical, geographical, and organizational environment.

Economic environment

The country's economy benefits from a well-developed infrastructure, free-enterprise characteristics, with pro-investment policies, and intensified exports activity (CIA, 2010). Thailand experiences continuous economic growth, following the Asian financial crisis (the Economist, 2010). The country's economy relies on its exports, which have been significantly affected by the economic and financial crisis (TDS, 2009). In order to counteract the effects of the crisis, the country's government intends to stimulate investments in the private sector (EconomyWatch, 2010).

Legal environment

Thailand's legal system is based on civil law and common law. The executive branch is represented by the chief of state, the head of government, and the cabinet. The legislative branch is represented by the bicameral National Assembly consisting in the Senate and the House of Representatives. The judicial branch is represented by the Constitutional Court, the Supreme Court of Justice, and the Supreme Administrative Court (Infoplease, 2010).

Social environment

The country's population reaches 67,089,500. The urban population is of 33% of the total population (Travel Document Systems, 2010). The characteristics of the country's population allow for economic developments.

1.2. Company Analysis

Bowling Asia Airline is a new low cost airlines company that comes to support the needs of customers that cannot afford to spend important sums of money on regular flights. The company addresses customer segments with lower incomes that need to fly often, usually because of their jobs.

The company is organized in a flexible structure that is able to adapt to the rapid changes determined by the external environment. In the beginning, the company will function with the minimum number of employees in order to reduce investment costs and the financial capital required from the company's owners.

The market entry strategy that the company intends to implement on the Thai market is based on providing low cost prices for the company's products and services that represents Bowling Asia Airline's competitive advantage, and on providing a series of promotions for customers that fly on a regular basis to certain destinations.

1.3. Market Analysis

The most important challenges that currently affect the low cost airlines market are represented by the recession and the fuel price escalation. In order to counteract the effects of these factors, major companies in this industry buy more aircraft, increase services, and reduce prices (the Times, 2008). This is because specialists in the field consider that growth in this industry is not sustainable, and airlines companies must change their business model in order to remain profitable.

However, the airlines market presents different characteristics in different markets. Although the developed countries present fewer options for new companies that intend to address this industry, emerging markets, like the Asian and African ones, provide growth possibilities for low cost airlines companies (Ford, 2005).

2. Air Asia Analysis

2.1. Overview

Air Asia is the company's main competitor and represents the pioneer of low cost airlines in Asia (the New York Times, 2007). Air Asia was established in 1993 and provides domestic and international flights. The company's subsidiaries are: Thai Air Asia, Indonesia Air Asia, VietJet Air Asia, and Air Asia RedTix.

The company's fleet size is of 103 planes. Air Asia flies to 68 destinations. Air Asia's associate companies include: Air Asia X, Tune Hotels, and Tune Money.

2.2. Segmentation

Given the fact that Air Asia is expanding, the company must fill in its increased capacity while consumer spending is reduced and competition in this business increases. The customer segments that Air Asia addresses are: non-business passengers for short and long routes, price-conscious business passengers for short and long routes, and quality-conscious business passengers for short and long routes.

2.3. Targeting

Air Asia intends to attract customers by exploiting its product differentiation, offering lower costs in comparison with competitors, increasing the number of seats in each aircraft, reducing maintenance fees, addressing new routes, providing numerous regional and international flights.

2.4. Positioning

The company positions itself as the leader on the lost cost airline industry in Asia. This is because Air Asia is the first low cost airlines company in this region. As a consequence, the company has the advantage of being able to initiate moves and strategies on the market, which determine its competitors to follow and to develop strategies in order to adapt to the trends imposed by Air Asia.

The fact that the company is an established brand on the market allows Air Asia to establish the rules in this industry sector, to determine the level of prices in this market, and to determine the type of strategies that are the most suitable for this industry.

2.5. Communications Strategy

The company's communications strategy is based on Air Asia's website. The company's website provides important information on its products and services. The company provides call center services, where interested customer can find out necessary information, and sales office contact information where customers and business partners can express their opinions.

Air Asia has also created a magazine for its customers. The company's website also allows customers to purchase online packages.

3. Nok Air Analysis

3.1. Overview

Nok Air is another competitor of Bowling Air Asia. Nok Air is a low cost airlines company established in Thailand in 2003. The company's fleet is consisted of 3 planes. The company provides domestic and international flights to 6 destinations in India, Thailand, and Vietnam. Although Nok Air is a company of a significantly reduced size in comparison with Air Asia, the company represents direct competition for Bowling Air Asia and must be granted attention in accordance with the situation.

3.2. Segmentation

Nok Air focuses on the mid-market in this industry. The company's fares are higher in comparison with those of other low cost companies, which means the company is not interested in addressing price-sensitive customers.

The company is oriented towards non-business passengers with medium incomes for short and long routes, business passengers for short and long routes, and quality-sensitive passengers for short and long routes.

3.3. Targeting

Nok Air intends to increase its number of customers by providing high quality products and services. However, the company's fares are higher than those of competition. By introducing such prices, the company is unable to address customer segments characterized by price sensitivity. This limits the customer base of the company.

3.4. Positioning

Given the fact that Air Asia is the leader in the low cost airlines industry, Nok Air is one of the followers. The reduced pcapacity of Nok Air does not allow the company to improve its position on the market. In order to attempt to… READ MORE

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