Hong Kong Airlines Marketing Plan for India Essay

1. IntroductionThe purpose of this working class is to sire an international mart placeing plan for Hong Kong Airlines to have kittens to the India market.The first part of the project impart cover the current merchandising mix and strategies of Hong Kong Airlines, as comfortably as the deck up abridgment. The secondpart result analyze the India market and explore the feasibility for Hong Kong Airlines to enter this market as a affordable parvenusboy, or comm still known as a cipher respiratory tract. It exit be fol brokened by whatsoever foreseeable challenges, with the relevant remedial measures.2. menstruation Marketing MixThis section get out illustrate the current merchandise mix of Hong Kong Airlines. result/ServiceHong Kong Airlines is a rise service attack aircraft holder which provides twain scheduled personaal flights and cargo services within the Asia-pacific Region. setThe airfargon for Hong Kong Airlines is relatively imprinter than that of its c ompetitors such(prenominal) as Cathay Pacific and Dragonair. bulge outHong Kong Airlines is a Hong Kong-based air lane with its main hub and corporate head office at the Hong Kong International Airport. It uses the bauhinia flower, the emblem of Hong Kong, as its logo.PeopleHong Kong Airlines emphasizes that their staff atomic number 18 young and energetic. It is expected that the size of employees entrust reach 2,600 in the nigh future.Physical EvidenceAs of February 2013, Hong Kong Airlines go across consists of 25 aircrafts with an aver come on age of 3.9 years. This is relatively new when comparing with separate airlines.ProcessesHong Kong Airlines sees both direct and confirmative process direct online sales via its corporate website and indirect sales via endure agencies. packagingCurrently Hong Kong Airlines promotes mainly via advertising, incentives, customer relationship management and e rattlingday relations.AdvertisingHong Kong Airlines does both hard and soft selling through with(predicate) digital platforms, including its corporate website, Facebook, Weibo and Mobile Apps. Positioning as a young and ardent airline, Hong Kong Airlines has invested a considerable amount on online conduct in effect to reach its potential customers. Besides, Hong Kong Airlines has utilized television commercials, printed advertisements and advertorials in magazines.IncentivesHong Kong Airlines collaborates with local get going agencies, such as China Travel Service (Hong Kong) Limited. The proceed agencies slew air tickets with hotel accommodation and offer seasonal packages with appealing discounts.Customer human relationship ManagementHong Kong Airlines has a customer verity programme the Fortune backstage Club. The social rank benefits admit air award redemption, priority check-in and unnecessary baggage allowance to its shop flyers.Public RelationsHong Kong Airlines mellowly involves in charity projects and sponsorship events. For examp le, it has launched the fund raising programme, strike down & C ar, which aims to subsidy athletes for preparing the 2016 Brazil Paralympic Games. It has withal received various service awards such as the Capital periodic Service Awards in 2012.3. Current Marketing outlineThe majority of Hong Kong Airlines passengers ar middle-aged males, with annual income below RMB150,000. They ar generally value-conscious customers who ar expression for reasonable service level with a relatively low airfare. turn 3.1 summarizes some features of Hong Kong Airlines passengers.Geographic part 84% from Asia-pacific region, with Hong Kong constituting 36%. Demographic Segment Gender * Male 70% * Female 30%Age * beneath 30 28% * 31 50 60%Annual Income train (in RMB) * Below 60k 12% * 60k-100K 23.3% * 100k 150k 31.5% * 150k 200k 9.4% * 200k 400k 8.9% * 400k 14.9% Travel Purpose * Business travel 71% * Vacation/others 29% see 3.1Segmentation of Hong Kong Airlines PassengerCompetitors of Hong Kong AirlinesHigh price low-pitched priceLow service graphic symbolHigh service qualitynumber 3.2 Perceptual Map of CompetitorsThe vertical and horizontal axes of Figure 3.2 meet price and service level respectively. Hong Kong Airlines is located at the bottom redress corner because it provides reasonable service level with competitive price.Dragonair and Tiger Airways both operate on similar routings as Hong Kong Airlines. With Dragonair positioning as a premium brand while Tiger Airways macrocosm a low-priced carrier, they are selected for a more detailed competitor analysis.DragonairDragonair is an international airline based in Hong Kong, which is a wholly owned subsidiary of the flagship carrier of Hong Kong Cathay Pacific. It aims to offer customers enjoyable and comfortable flying experience via its full mountain hightail it of services and quality cabin harvest-feasts.Its customers demographic profile is very close to that of Hong Kong Airlines 85% of the p assengers live in Asia-pacific and 30% of them live in Hong Kong 66% are males and their average age is 41-year-old and the average personal periodical income is around USD5,000. They are service-sensitive and less price-conscious. More than half of the passengers are frequent travelers who fly for more than 6 propagation annually.Tiger AirwaysTiger Airways is a inexpensive carrier based in Singapore. Low- woo carrier refers to airline that provides limited range of a function of service with low airfares. The airfare is meant for the transport service only and customers have to pay extra for baggage allowance, food and beverages etc, if required. For example, Tiger Airways offers a buy-on-board program, Tiger Bites, for customers to purchase food and beverage.Tiger Airways operates between Singapore and some regional destinations in Southeast Asia, Australia, China and India. Their passengers are price-conscious and less service-sensitive.4. SWOT AnalysisStrengthsHong Kong Airl ines can enjoy strong financial support from their heighten order, Hainan Airline, which is the largest privately owned air transport troupe in China. run in a relatively small scale, Hong Kong Airlines can be waxy and responsive to the market changes.Its young fleet includes both short / strength haul aircrafts (A320) and long haul aircrafts (A330-200 & A330-300), which can support routings between Hong Kong and Asia-pacific ports.Figure 4.1A330-200s Coverage (from Hong Kong)Figure 4.2A330-300s Coverage (from Hong Kong)WeaknessesHong Kong Airlines has a creaky financial management. The Hong Kong Aircraft Engineering Company Limited has stopped providing services to Hong Kong Airlines out-of-pocket to its inability to settling the bills. This nips Hong Kong Airlines to turn to a nonher aircraft maintenance service supplier China Aircraft Services Ltd.Hong Kong Airlines is likewise sluttish in operational management. The Hong Kong well-mannered Aviation Department has fro zen the fleet expansion plans of Hong Kong Airlines since August 2012 referable to safety concerns, and advised it to consolidate the existing operations with current fleet size.With a relatively small scale of operations, Hong Kong Airlines has a rather weak bargaining power with its suppliers of aircrafts, fuel, and aircraft maintenance services.OpportunitiesThe tourism industry in Asia-pacific region is expected to cover due to the exuberant economic growth, and the implementation of the intra-regional policies in tourism development. Currently the intra-regional traffic constitutes around 78% of Asian tourism, with budget airlines account for 24.9% of Asias total passenger traffic.The Hong Kong touristry Board will invest around HKD30 trillion in opening up new visitor sources in five new markets India, the Middle East, Russia, Vietnam and the Netherlands.These developments in tourism will definitely profit the demand for air travel.ThreatsThere are keen competitions in t he airwave industry, involving both the market leaders and cheap carriers.One of the major operation costs for an airline is the fuel cost, which has a great impact on an airlines profitability. If the crude crude oil prices return to the peak of USD70-odd or higher, some small-scale airlines, like Hong Kong Airlines, may be unable to survive.5. Expansion to IndiaThis section comprises an analysis of the India market, a merchandise plan for Hong Kong Airlines to expand to India and some foreseeable challenges. Market AnalysisTo expand the condescension of Hong Kong Airlines, entering the India market as a low-priced carrier would be a considerable option based on the factors belowIncrease in Indian outbound travelThe number of Indian outbound travel has been incr sticking(p) from 5.4 million in 2003 to 12.5 million in 2010. The World touristry Organization predicts that India will account for 50 million outbound tourists by 2020.Figure 5.1 outgoing Traveler Numbers of IndiaD epreciation of Indian rupeeThe Indian rupee has been depreciating and cheap air tickets are becoming more preferable for the value-conscious Indian tourists.Increase in the commonity of low-cost carriersThe demand for cheap air tickets has made low-cost carriers more popular in India. In 2012, 37% of the Indian leisure travelers travel overseas via budget airlines.No low-cost carriers available between Hong Kong and IndiaDespite the all-encompassing coverage amongst the Asia-pacific areas by existing low-cost carriers, currently there are no direct flights between Hong Kong and India operated by any low-cost carriers. transpose in Indian aviation polityIn September 2012, the Indian government has eased the restriction by allowing foreign direct investment funds up to 49% in private Indian airlines.2013-2014 Work forge of Hong Kong Tourism Board (HKTB)To open up new visitor sources for Hong Kong, the HKTB has been actively developing new markets, including India. The proposed s elling budget for India in 2013-2014 will be HKD13.4 million.The above factors have illustrated a growing market for low-cost carriers in India, which is not yet fully accommodated by existing airlines. Together with the open-up policy of Indian government and the merchandise plan of HKTB, it is a favorable fortune for Hong Kong Airlines to expand its operation into India as a low-cost carrier.Remarks There are rumors that Hong Kong Airlines sister airline, Hong Kong Express, will relaunch itself as a low-cost carrier in the near future. However, no relevant ex officio announcement has been made by either the Hainan aggroup or Hong Kong Express. Regardless, this project aims to propose Hong Kong Airlines to enter India as low-cost carrier any future development plans of other subsidiaries of the Hainan Group should be investigated separately.International Market externaliseObjectivesThis plan serves to relaunch Hong Kong Airlines as a low-cost carrier in India. It aims to raise public awareness of the participations new positioning in the India market, with the ultimate goal to increase revenue.Target AudienceThis plan will target the potential customers in Mumbai and Delhi, which are the two cities containing the most outbound travel population in India 33% and 26% respectively.Entry StrategyThe ideal entry dodge will be cooperating with a local airline or community in the form of joint venture. It will reduce the risk of investment, and also serve to comply with the local governments policy on foreign direct investment. However, Hong Kong Airlines of necessity to be very careful in choosing the right local partner as most of the local airlines are suffering from severe financial problems. Therefore, it would be preferable to resemble the heavy(p) partnership between Air Asia and the Tata Group in India.Market StrategyIn view of the strong cultural differences between India and Hong Kong, Hong Kong Airlines will adopt a localized market dodge and co mpete as a market nicher amongst the existing competitors.Marketing MixThe table below summarizes the marketing mix which Hong Kong Airlines will adopt to enter the India market.Price * LowProduct /Service * Limited Place * Local back office * Online conveyPeople * Local employeesPromotion Direct Advertising * Digital marketing website, Facebook * Interactive marketing * Outdoor promotions * Membership programme confirmatory Advertising * Cooperation with other organizations / companies Hong Kong Tourism Board, Indias Ministry of Tourism & travel agents * Product placement in spuds Figure 5.2Summary of Marketing Mix for Hong Kong Airlines expansion to the India MarketPriceAs a low-cost carrier, the airfare will be much lower than its rivals.ProductThe scope of service will be limited the airfare will only include thetransport service. Customers will be required to pay extra for the others, such as baggage handling, in-flight catering and entertainment.PlaceHong Kong Airlines will set up local office in India, mainly for back-end operation but not customer-facing. Instead, it will utilize the online channels to approach the customers because there is a day-and-night increase in the number of internet users in India from 5.5 million in 2000 to 100 million in 2010. PeopleIn terms of people, the company will recruit local employees to address the cultural differences between Hong Kong and India.PromotionThe promotions can be classified as Direct Advertising and Indirect Advertising the former refers to advertisements that reach the public directly, while the latter includes cooperation with other organizations and companies.For direct advertising, Hong Kong Airlines will utilize the digital marketing channels by setting up website and Facebook page specifically for India besides having a fast growing amount of internet users, India also has the introductions troika largest Facebook community. Interactive marketing activities, such as games and contests, can be introduced through these channels.The company will conduct outdoor promotions, like billboards, to respond to the cultural characteristics of Indians collectivism and the preference of public space.Hong Kong Airlines will expand its membership programme, genus Bauhinia Miles, to India to retain customers and build a customer database for future promotions. Customers will be offered purchase discount upon accumulating certain amount of credits, through participating in the promotion events, such as referral. It is different from other customer loyalty programmes, which customers can redeem complimentary flights or lifestyle awards withflying miles. Since Hong Kong Airlines will operate as a low-cost carrier offering low airfare, it would be difficult for the company to offer excessive complimentary awards to customers.As for indirect advertising, Hong Kong Airlines can cooperate with the Hong Kong Tourism Board and the Indias Ministry of Tourism to promote Hong Kong Tourism to t he Indians, and vice versa. This tie in with the current strategy of HKTB to explore new visitor sources in new markets, including India.The company will also cooperate with local travel agents to provide low-cost travel packages because 60% of Indians used to purchase air tickets through travel agents. Also, the disparagement of rupee induces demand for cheap travel packages.Since Bollywood, the Hindi-language film industry, is one of the largest film product centres worldwide, Hong Kong Airlines will cooperate with the local film production companies for product placement.Potential ChallengesThe cultural differences between India and Hong Kong may obstruct the understanding and impelling communication with the potential customers. Recruitment of local employees and learning from the local partner(s) will help ease the cultural impact.Another challenge will be the high burden on operating cost due to the high taxation on luxury in India. Travel is still being regarded as a luxury in India and the tax on reverse lightning fuel is 70% more than that in other countries. So Hong Kong Airlines needs to ensure a high passenger load factor on each flight and to strictly control other costs in order to leverage the overall operating costs.6. ConclusionHong Kong Airlines is currently a full service carrier in Hong Kong targetingvalue-conscious customers.In order to expand its business, entering the India market would be a favorable option for the company because of the various opportunities of the India market the increase in India outbound travel, depreciation of Indian rupee, no existing direct competitors, change in Indian aviation policy, and upcoming work plan of Hong Kong Tourism Board.In view of the market situation, the marketing plan of Hong Kong Airlines will relaunch the company as a low-cost carrier in India, targeting the two cities with most outbound travel population, in the form of joint venture. It aims to raise public awareness of the companys new positioning in the India market, with the ultimate goal to increase revenue.The marketing mix will be offering low airfare providing limited scope of services setting up local back office and utilizing online channels as well as recruiting local employees. A wide range of direct and indirect advertising will be adopted, which includes online marketing, outdoor promotion, membership programmes, cooperation with other organizations and companies, and product placement in films.As if other business expansion plans, Hong Kong Airlines will face some challenges when entering the India market. The most all important(p) one is the cultural difference between Hong Kong and India, which can be eased by recruiting local employees and learning from the local partner. Another one would be the high tax burden induced by the Indian government, which would be remedied by leveraging the overall operating cost.7. References1. Hong Kong Airlines official websitehttp//www.hongkongairlines.com2. Fort une fly Club official websitehttp//ffp.hnair.com/FFPCluben/3. Hong Kong Airlines Fly & Care programme http//www.youtube.com/watch?v=nx99gmWh8hI4. Hong Kong Airlines advertising media introduction, NINGBO airline media & Co. 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