MARKETING ANALYSIS:INDIGO AIRLINES

Rohan Satija 11BSPHH010682 Section -H Seat 14

Introduction
Indigo airlines is a low cost airlines operator in India, and is a subsidiary of InterGlobe Enterprises. It was incepted in August 2006. It started operations with an Airbus A320 aircraft which flew from New Delhi to Imphal via Guwahati. B y the end of 2006 it had six aircrafts of the same type. Indigo boasts of being one of the best performing Low cost airline operators in terms of profits. As of now, it has a fleet of 43 aircrafts in service and has committed to a total of 180 A-320s and A-320 neos by 2016. It operates flies to 29 destinations across the country with over 259 flights each day.

Mission statement
To be the best Airline in India by providing the following values to the customer:
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Affordable Fairs Ontime performance Hasslefree Service

Envi nm ntal Analysis

Mi : i tt i t f ilit t i t l l f ll t f t l ti l i f t t it i t .

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Competition

Jet Kingfisher Spicejet Indian Airlines Go Air

Customers

Suppliers

Publics

Media: Print media, radio, social media et al Government: DGCA, AAI Internal: mployees, Board of Directors, Managers

Budget customers Middle class

Aircraft supplier (Airbus) Airline urbine Fuel suppliers (IOC, HP, BP and O GC)

Macroenvironment: The macroenviroment consists of broade r forces that affect the actors in the environment.

Open Sky Poli y Low entry barriers in Industry Deregulation in different spheres FDI: 49% in airports, 100% for airports

Economic
Rising income of middle class Average salary increase highest 14%) Growth of tourism around 8.5%

Technological
Increasing reach of internet for online bookings Development of technologically superior aircrafts Modernization of airports and cargo facilities

Social & Cultural

Rising middle class with disposable income Business and leisure travel increasing Promotion of tourism Incredible India)

Demographic
Changed travel patterns of consumers Younger working professionals with disposable income Improving educational facilities High input cost ATF costs)

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SWOT Analysis
Strengths HIgh brand awaresness, Brand quity Succesful implementation of low cost strategy Efficient management Continuous innovation to improve non price factors Tie ups with hotels Ease of ticket booking

Weakness Less scope of differentiation Customer serive model highly immitatable No presence in cargo market

Opportunities Increasing domstic air traffic Expansion to international markets Promotion of regional air connectivity Improvement of airport infrastructure

Threats Rising Labour Costs Rising ATF prices Increasing competition Scarcity of trained manpower Government interference

Segmentation Cost conscious passengers

STP
Targeting Lower middle class/middle class

Positioning Low cost low frills

Product Mix
Getting the product right is the single most important activity of marketing. If the product isn't what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to buy it. The airline product is quite a complex one since it comprises of a service of incorporating the temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty free spirit to encourage booking.

The product includes two types of services: 1. on the ground services, 2. In-flight services. The on-the-ground services include a convenient airport with car parking facilities, duty free' shopping quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport, etc. The service provided inside is intangible and is highly variable. Th airhostesses are trained to e provide polite, warm and courteous service. The courteous service that the representatives at the baggage counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of the airlines also need to be efficient and polite.

Price Mix
Price plays as much a tool of marketing as promotion plays a critical role in the marketing mix. The concept of 'fair price' is paramount. Buyers judge whether a product is fairly priced by seeing whether it represents value for money. Pricing can be classified in three ways.

DIVISION OF F RES: The final fares charged to the passengers include the following components:     Basic fares Insurance Inland Aviation Travel Tax (IATT). Passenger Service Fee (PSF)

The basic fares include the operating cost incurred by the airlines and the profit margin. The major constituents of the operating cost in respect of domestic airlines in India are the Aviation Turbine Fuel (ATF) the basic raw material for this service industry, varies 30-40 % depending on

aircraft utilization; Navigation, Landing & Parking costs 7-10%; Repair and Maintenance 13%, Manpower 12%; Acquisition/ Depreciation & Insurance 13% and balance other expenses.

How are fares arrived at? When Airlines put in capacity (seats) and frequency (flights) between any two points, they market research the route in order to arrive at the total potential for that segment. In other words, the capacity and frequency is tailored to the size of the market. Accordingly, the pricing structure is also arrived at. Pricing or fare levels are arrived at after taking into consideration various factors; type of aircraft, configuration of aircraft (number of seats), density of route, competitor activity, and minimum breakeven cost. In order to achieve the breakeven seat factor and thereafter maximize loads, the airline embarks upon a series of marketing activities. These will vary from a publicity campaign highlighting various facets of the Product, to sales, service, punctuality, ideal departure and arrival timings, connections and so on. In short, the entire focus is to increase the yield and load factor (seat factor). The yield or the bottom line is the income generated from ticket sales less costs incurred on the route.

Bug identification/Solution (Product | Food)

Food, for any airline company, is one of the prime product offerings. Early in 2010, Indigo roped in Wieden + Kennedy (W+K) to create a brand identity which took the advertising world by storm. As a part of the campaign, Indigo aimed towards packaging food inslick containers and packets which would appeal to its customers. IndiGo offers a selection of food and beverages for sale onboard which includes vegetarian & non-vegetarian wraps, malabarparathas, sandwiches, flavored cashew nuts, cakes, potato sticks and samosas (veg. only).

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In beverages, IndiGo offers a choice of healthy juices, thirst -quenching lemonade and aerated beverages. For passengers with special needs, IndiGo offers a choice of sugar-free health bars and drinks. Passengers can now purchase individual bottle of natural spring water. Now being an LCC, the Indigo aircrafts do not have any heating equipment such as microwave ovens onboard. The company states that the food is stored in a suitably warm environment before being served to the customers. Most of the times the food items are not made as per required standards (e.g. malabariparathas tend to become soggy and leave an undesirable mouth feel after consumpti on, chicken sandwiches which are warmed instead of being grilled.) Also, the items are sold at premium prices (e.g. 20 gm of cashewnuts for Rs.50). The company needs to work on its menu to provide food items which have been cooked to the best of standards and only then served to customer. The customer would always seek value for the money that he spends onboard the aircrafts. They need to ensure that they serve items onboard which are compatible with their current mode of operation, i.e. serving pre -heated or cooked food which has been cooked as per industry standards.

References y y y y y y
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Indigo Airlines : www.goindigo.com DGCA: www.dgca.ac.in Wikipedia: www.wikipedia.com Indian Brand Equity Foundation: http://www.ibef.org/industry/aviation.aspx CNN : Brand Story Indigo http://www.cnngo.com/mumbai/life/brand -story-behindindigo-044435 Wieden-Kennedy India: http://www.wk.com/campaign/new_menu/from/indigo_air http://www.azresearch.in/articles/Aircargo_industry_overview.pdf Indigo Archieves: http://book.goindigo.in/skylights/cgi bin/skylights.cgi?module=c3&page=PRESS Economic Times: http://articles.economictimes.indiatimes.com/2007 -0111/news/28462024_1_air -deccan-catering-low-cost-model