Download miễn phí The application of marketing in air service of vietnam airlines



TABLE OF CONTENTS
 
ACKNOWLEDGEMENT III
LIST OF ABBREVIATIONS IV
LIST OF CHARTS AND TABLES V
INTRODUCTION VI
CHAPTER 1: AN OVERVIEW OF AIR SERVICE MARKETING 1
1.1. WHAT IS AIR SERVICE MARKETING? 1
1.1.1. Special features of air service 1
1.1.1.1. Intangibility 1
1.1.1.2. Inseparability 2
1.1.1.3. Heterogeneity 2
1.1.1.4. Perishability 3
1.1.1.5. Lack of ownership 3
1.1.2. Service and Marketing service 3
1.1.3. Marketing in air service 4
1.2. PROCEDURES OF DOING AIR SERVICE MARKETING. 5
1.2.1. SWOT analysis 5
1.2.1.1. Strengths 5
1.2.1.2. Weaknesses 5
1.2.1.3. Opportunities 6
1.2.1.4. Threats 6
1.2.2. Doing market research 7
1.2.2.1. Finding out customers needs and wants 7
1.2.2.2. Segmenting markets 8
1.2.2.2.1. What is market segmentation? 8
1.2.2.2.2. Benefits of Segmentation 8
1.2.2.2.3. The process of Segmentation 9
1.2.2.3. Targeting market 10
1.2.3. Working out marketing mix strategies 11
1.2.3.1. Product Strategy 11
1.2.3.2. Price Strategy 13
1.2.3.3. Place Strategy 13
1.2.3.4. Promotion Strategy 14
1.2.3.5. People Strategy 16
1.2.3.6. Physical Evidence Strategy 18
1.2.3.7. Process Strategy 19
CHAPTER 2: ASSESSMENT OF THE APPLICATION OF MARKETING IN AIR SERVICE OF VIETNAM AIRLINES 20
2.1. AN OVERVIEW OF VIETNAM AIRLINES 20
2.1.1. Vietnam Airlines’ history 20
2.1.2. The status of Vietnam Airlines in the Region 23
2.2. THE APPLICATION OF “MARKETING IN AIR SERVICE” OF VIETNAM AIRLINES 26
2.2.1. Studying Marketing environments 26
2.2.2. SWOT analysis 28
2.2.2.1. Strength 28
2.2.2.2. Weaknesses 29
2.2.2.3. Opportunities 30
2.2.2.4. Threats 32
2.2.3. Doing market research 34
2.2.3.1. How does Vietnam Airlines find out the customers’ needs and wants? 34
2.2.3.2. Market Segmentation 35
2.2.3.2.1. Broad Segmentation 35
2.2.3.2.2. Needs-based segmentations and segment identifications 36
2.2.4. Targeting Markets of Vietnam Airlines 38
2.2.5. Marketing Mix Strategies 39
2.2.5.1. Product Strategy 39
2.2.5.2. Price Strategy 44
2.2.5.3. Place Strategy (Distribution Network) 45
2.2.5.4. Promotion Strategy 47
2.2.5.5. People Strategy 51
2.2.5.6. Process Strategy 52
2.2.5.7. Physical Evidence strategy 53
2.2.6. Evaluation 53
2.2.6.1. Achievements 54
2.2.6.2. Drawbacks 55
CHAPTER 3: MARKETING SOLUTIONS TO IMPROVING VIETNAM AIRLINES’ SERVICE 58
3.1. MARKETING SOLUTIONS 58
3.1.1. Diversification and improvement of the quality of Vietnam airlines 58
3.1.2. Enhancement of air service marketing and promotion activities 59
3.2. RECOMMENDATIONS 60
3.2.1. For the Government 60
3.2.2. For Vietnam Airlines 62
 Company interview (Directly) 63
 Questionnaire 64
CONCLUSION 69
APPENDIX 74
 
 


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members, after Malaysia, Thailand, Singapore and Indonesia. Five other members of the grouping are Brunei, Cambodia, Laos, Myanmar and the Philippines. Vietnam Airlines has set a target of having upper seat in the region in the next 5 years. To achieve this target, the country hopes to serve 10 million by 2010 throughout a strategically developed network of long haul flights and local and regional connections. With so many changes under its wings, Vietnam Airlines now looks forward to further integrating in the world of global aviation and to establish itself as a truly regional air carrier of choice.
2.2. THE APPLICATION OF “MARKETING IN AIR SERVICE” OF VIETNAM AIRLINES
2.2.1. Studying Marketing environments
Political/ Legal
Political stability plays an important role in Vietnam’s constant economic growth in recent years. Vietnam has been committed to strengthening bilateral and multilateral relationships with other countries and international organizations. The country has participated into regional and international trading blocs such as: AFTA, APEC, and ASEM and prepared to enter WTO in the future. The Vietnamese Government is also pushing towards a more and transparent economic system based on the rule of law. These events Giúp Vietnam Airlines attract foreign sightseeing and investment into the country. Moreover, Vietnam also engaged in bilateral and multilateral aviation and agreements with many countries such as the US The war on terrorism assisted in making Vietnam stand out as a safe destination. The passengers can put all their faith in Vietnam Airlines, because its air security is currently standing at the top ten nations. Finally, the country’s new rule on visa exemption for travelers from ASEAN, Japan, France etc results in increasing number of incoming visitors.
Economic
GDP per capita in Vietnam remained less than USD 500 a year. Thus, air travel is too expensive for most Vietnamese. However with the economy constantly growing in the past decade, and is expected to continue in the coming years, Vietnamese income has increased remarkably by 34% over the period 1999-2003. According to the Vietnam Airlines’ statistics, the amount of travelers who are inbound or outbound Vietnam has been remarkably increasing. The Vietnamese Government’s efforts to promote foreign investment and tourism have increasingly attracted international visitors which counted about 2.5 million in 2003. The weakened Vietnamese currency also made Vietnam more economical destination for many countries such as US, Japan, Australia (VANT website). However, rising fuel costs appear to be a threat to the profitability of the airlines.
Socio-cultural
In term of Socio-cultural, Vietnam Airlines considers many factors, especially if it wants to enter into other nations, to expand its agents in many countries or to connect airlines with farther nations in all over the world. These factors are: demographics (age, gender, race, family size, etc.), lifestyle changes, population shifts, education, trends, fads, diversity, immigration/emigration, health, living standards, housing trends, fashion, attitudes to work, leisure activities, occupations, and earning capacity. By this way, Vietnam Airlines can select which country it should inter into and how it can compete with foreign competitors. Vietnam is internationally renowned for its beautiful scenery, culture and history. There is also an increasing number of Vietnamese traveling overseas, mainly to Thailand and China. The community of two million overseas Vietnamese living mainly in the US, Europe and Australia is a key factor in favor the air travel inbound or outbound Vietnam (Vietnam Airlines). Moreover, the Government has given great support in developing and pushing socialization of education, science, culture, public health, sport events, etc. More and more training programs coordinated with foreign organizations especially Australia has brought potential passengers into Vietnam via the route Vietnam-Sydney, Vietnam-Melbourne. Besides, Vietnam participation in regional and international cultural activities like ASIAD, Tiger cup, etc has created opportunities for Vietnam Airlines to get more passengers.
2.2.2. SWOT analysis
2.2.2.1. Strength
Vietnam Airlines is a national flag carrier run by a management board reporting to the Vietnamese Prime Minister, thus it is well protected by the Vietnamese Government for the sake of national pride and interest.
Vietnam Airlines services reflect the Vietnam cultural identity such as foods, Vietnamese language, the friendliness of cabin crew etc that Vietnamese travelers are proud of and foreign travelers may wish to experience.
For the last 5 years, Vietnam Airlines enjoyed a fast growth at about 12-16% a year. International operation is the main driving force behind this growth, with an annual growth rate of 18%, compared to that of domestic market 7%.
Vietnam Airlines was in good financial situation for the last five years, despite the negative growth in profit in 2003 due the SARS outbreak, rising fuel costs and weakened Vietnamese Dong.
Vietnam Airline dominates the domestic air travel with 85.6% market share in 2004. It also holds 40% share of international passenger’s traffic from/to Vietnam. This is a really strength as is takes strong share in international routes from or to North Asia, South East Asia and Australia where the market is hotly competitively filled with strong airlines such as Japan Airlines, Singapore Airlines, and Cathay Pacific.
Vietnam Airlines has become an international airline with 19 branch offices and thousands of agents worldwide. The share of international market in its business has gradually increased from about 38.6% to 48.3% of its business. The company also have nationwide network of sales office and sales agents.
Vietnam Airlines has joined ICAO (International Civil Aviation Organization) and IATA (International Aviation Transport Association) so that it can cooperate with other airlines to operate code-sharing flights.
Vietnam Airlines has signed co-operative agreements with international leading airlines such as JAL, Cathay Pacific, Qantas for joint services, revenue pooling and interline traffic.
Table 2 . 2: Market Share of Vietnam Airlines
No. of Passengers
Passengers carried by Vietnam Airlines
Total passengers traffic
Market share
Domestic
2,169,327
2,534,000
85.60%
International
2,026,822
5,016,886
40.40%
North America
65,209
486,638
13.40%
South East Asia
560,953
918,090
61.10%
North Asia
1,098,628
2,463,291
44.60%
Australia
67,698
195,659
34.60%
Europe
178,441
571,925
31.20%
Others
55,893
381,283
14.70%
Source: Vietnam Airlines website
2.2.2.2. Weaknesses
Although VNA is currently developed step by step, it still has some weaknesses which need to be overcome. Mrs. Pham Chi Lan _ a member of the Prime Minister’s Research Board said: “The scandals at state-owned corporations like Vietnam Airlines show the looseness of administrative control over state-owned companies. It is easy for staff to abuse power to misappropriate funds at state corporations”.
Firstly, the reason that is very easy to see is the weakness of the supervisory system. In our decrees and laws, supervision at state-owned enterprises is often described by just seven lines compared to hundreds of pages within entire legal documents. The laws generally state that state employees and state-owned companies that violate the law are to be punished under the law.
Meanwhile, state-owned corporations operate in an unstable manner. Responsibility and powers are not clear between the management board and the general director. Sometimes both sides fight each other. Executive directors said that they have to report everything to management boards, while management boards say they have no real power. Secondly, the domestic tourism market has been developing fast in the past years however its pace is still unstable whilst the promotion activities to attract foreign tourists has been taken slowly and they are not effective, thus the amount of passengers flying with Vietnam Airlines is considerably decreased. In addition, Fuel provided by the aviation fuel company is three times as expensive as that of the world price due to high tariff. Vietnam Airlines’ network is still so small and less well-known. It’s partly due to the high advertising cost. Thirdly, in terms of platform and port, Vietnam Airlines hasn’t had a reasonable design for the passengers. Besides, the airlift is not suitable to absolutely exploit all planes. “Delay” situation is one of the main issues need to be overcome.
Finally, Vietnam Airlines’ aircrafts are leased and the fleet is small in term of quantity therefore the flight schedule is not secured and VNA could not foresee and prepare for unexpected changes. Despite of quite good service in flight, it has not come up with the international standard quality. While Vietn...

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