ANALYSE MARKETING MIX 7p’s STRATEGY OF VIETNAM AIRLINES IN VIETNAM MARKET

MINISTER OF FINANCE UNIVERSITY OF FINANCE – MARKETING--- � ---GROUP ASSIGNMENT FIRST SEMESTER, 2022 SERVICES MARKETING Class code: 2121702052701 ANALYSE MARKETING MIX 7P’S STRATEGY OF

MINISTER OF FINANCE UNIVERSITY OF FINANCE – MARKETING

- �

-GROUP ASSIGNMENT FIRST SEMESTER, 2022

Ho Chi Minh City – 2022

MINISTER OF FINANCE UNIVERSITY OF FINANCE – MARKETING

- �

-GROUP ASSIGNMENT FIRST SEMESTER, 2022

SERVICES MARKETING

Class code: 2121702052701

ANALYSE MARKETING MIX 7P’S STRATEGY

OF VIETNAM AIRLINES IN VIETNAM

MARKET

Instructor: Mr Dang Huynh Phuong

Student name: Le Dinh Phuong Khanh

Luong Ai Lien

Vo Dao Phuong Mai Nguyen Nhu Ngoc Lam Gia Phu

Ho Chi Minh City – 2022

MỤC LỤC

DANH MỤC HÌNH

CHỮ VIẾT TẮT

COVID – 19 Coronavirus disease 2019

CHAPTER 1 INTRODUCTION

Name in Vietnamese: Tổng Công ty Hàng không Việt Nam - CTCP

Name in English: Vietnam Airliness JSC

Name in short: Vietnam Airliness

Date of establishment: May 27th, 1995

Address: No 200 Nguyen Son, Bo De Ward, Long Bien District, Hanoi

Telephone number: (+84.24) 3827 2289 | Fax: (+84.24) 3872 2375

Website: www.vietnamairlines.com

Email: nhadautu@vietnamairlines.com

Field of activities: Aviation & Finance

Image 1.1 Logo of Vietnam Airliness

1.2 Business Sectors

- Air passenger transportation (air transport services for passengers), air cargo transportation (transportation of luggage, cargo, parcels, postal items, mails).

- Management consulting (investment, capital management of direct investment in production and business; foreign investment; business

purchase and sale; capital contribution to purchase shares or capital transfer).

- Direct support services for air transportation.

- Manufacturing of measuring, testing, navigating, and controlling equipment, such as spare parts, supplies, technical equipment and other aviation industry components, provision of technical services and spare parts to domestic and international airlines.

1.3 Establishment & Development History

The history of Vietnam Airliness began in January 1956, when the Civil Aviation Administration was established by the Government that marked the birth of the civil aviation industry in Vietnam At that time, the fleet was very small, with 5 propeller aircraft: IL 14, AN 2, Aero 45, etc The first domestic flight was opened

in September 1956

April 1993, Vietnam Airlines was officially established as a large-scale business unit of the state (then called Vietnam Airliness) On May 27th, 1995, Vietnam Airliness Corporation was incorporated - following Decision No 328/TTg by the Prime Minister and merging 20 enterprises in the aviation industry with Vietnam Airlines as the core entity Throughout 20 years of development, Vietnam Airliness Corporation has made an important contribution to the development of Vietnam's civil aviation industry as well as made a great contribution to economic development, society, industrialization, and modernization of the country (Appendix 1 contains Vietnam Airliness’ development history of each milestone)

1.4 Vision & Mission

- Uphold the No 1 position as Vietnam’s aviation group leader.

- Vietnam Airlines to become a leading Asian airline of customer’s choice and

be the main force transportation of Vietnam as a flag carrier

- Provide diverse and high-quality air transport up to customers’ expectations

- Create a civilized and professional working environment with various opportunities for career development for employees

- Run effective business operation, ensure sustainable benefits for shareholders.

« Toward the future: A modern carrier with an internationally recognizable

brand characterized by Vietnamese traditional culture Throughout 20 years

of development at a double-digit annual growth rate, Vietnam Airliness has spearheaded Vietnam's aviation market - one of the fastest-growing domestic markets in the world As a modern airline with a brand widely known for its distinct cultural identity, Vietnam Airlines aims to achieve 5-star status and become a major airline in Asia

1.5 Hightlight Achievement

« 2016: Ranked as one of the World's Most Improved Airlines by Skytrax

« 2016: Asia's Leading Cultural Airline and Asia's Leading Airline - Economy Class by World Travel Awards 2016

« Top 4 largest carriers South East Asia in terms of passengers transported

« 20 years of safety record - no fatal accidents since 1997

« 2017: CAPA Asia Pacific Airline of the Year

« 2017: Skytrax ranked Vietnam Airliness as a 4-star airline for the second year in a row

« 2018: one of winners of the 2018 TripAdvisor Travelers’ Choice awards for Airlines for Asia

« 2018: Skytrax ranked Vietnam Airliness as a 4-star airline for the third year

in a row

« 2018: APEX (Airline Passenger Experience Association) awarded Vietnam Airliness with Four-Star Official Airline Ratings

« 2018: Vietnam Airliness and Jetstar Pacific are awarded the highest star safety rating from the world’s only safety and product rating agency AirlineRatings.com

seven« 2018: World's Leading Cultural Airline and World's Leading Airline Premium Economy Class by World Travel Awards 2018

CHAPTER 2 MARKET & COMPETITOR ANALYSIS

2.1 Market Analysiss

2.1.1 Size

According to statistics from the Civil Aviation Authority of Vietnam, the number of passengers through airports in February 2022 reached 6.16 million (up 57.8% compared to February 2021) In which, international visitors have begun to exceed the milestone of more than 100,000 visitors (up 350% compared to February 2021) The number of passengers transported by domestic airlines reached 3 million passengers (up 56.8%) and 39,400 international arrivals (equivalent to 3,009% over the same period in 2021).

2.1.2 Composition

Since March 15, Vietnam has removed many barriers and restrictions for international visitors to enter, creating favorable conditions for international visitors to travel, contributing to increasing the volume of international visitors to Vietnam Before the development of the COVID-19 pandemic, the international and domestic aviation market was still affected by the epidemic, with the efforts

of airlines, the Government, the Ministry of Transport, the Civil Aviation Authority

of Vietnam, and other management agencies, etc Vietnam's aviation market has been gradually recovering, with good changes in 2022 The number of visitors mainly has come from domestic and international tourists In early 2022, the total number of international visitors to Vietnam reached 7,358, domestic tourists reached 17.6 million.

2.1.3 Location

Vietnam has now reopened flights to 20 countries and territories, including Cambodia, Hong Kong, Japan, Korea, Malaysia, Philippines, Qatar, Singapore,

Taiwan, Thailand, Turkey, United Arab Emirates, Laos, China, France, Germany,

UK, Australia, Russia, and America.

Currently, there are 6 airlines, including Vietnam Airliness, Vietjet Air, Pacific Airlines, Bamboo Airways, Vietravel Airlines, and VASCO; exploiting 56 domestic routes with a total frequency of 2,570 flights/week/way, equivalent to 367 flights/way/day, reducing respectively 2 routes and 217 flights/week/way, equivalent to 31 flights/way /day compared to the 2019 winter flight schedule.

 Strengths

- The slogan "More than just a flight" is highly appreciated when it conveys the common goal of the business when trying to perfect the experience without simply aiming for the basic purpose: satisfying the mobility needs

of customers.

- Punctuality as well as time flexibility for “night flights” and other added services such as Bamboo Eco ticket - for customers who do not need to check-in baggage and fly less than 2 hours domestically; flexibility in serving specific customer needs, etc.

 Weaknesses:

- The company's current communication strategy has not been very effective for the target audience because of its sensational and misleading communication style that easily receives mixed opinions.

- Heavily dependent on large financial funds to finance their operations

- Few international airports in Vietnam (especially in Qui Nhon) to port Bamboo Airways large aircraft.

The message “Dream of flying for all Vietnamese people - Giấc mơ

bay cho mọi người dân Việt Nam” that Vietjet evokes is a beautiful

dream in a market with a rapidly growing middle class like Vietnam.

- VietJet's brand awareness in Vietnam is relatively high.

- Young, professional, and enthusiastic staff.

 Weaknesses:

- Using the "offensive" communication method, associated with the name

"Bikini Airline" This is not in line with the national media culture, receiving

a lot of mixed opinions.

- There are often problems in the service that make passengers unsatisfied: overcrowded and often delayed flights.

of luxury and expensive service, not suitable for their income.

The high-income earners have lower price sensitivity They prioritize using airline services because of the benefits they seek related to convenience, reputation,

quality of goods/services, airline services as a tool to help them assert their status However, they have high standards and expectations about the goods/services they experience.

3.1.2 Social Class

Social class in Vietnam, in addition to income, is also divided by occupation, position, and position in work It is formed as a pyramid with the top part occupying the highest position, arranged in order from top to bottom, including leaders, managers, entrepreneurs, and highly qualified experts On the next floor

is staff, workers, small traders, handicrafts And finally, there are the unskilled workers, the simple workers, and the farmers According to the top-down order of the pyramid, the demand and requirements for using air services are decreasing and inversely proportional to the price sensitivity.

3.1.3 Psychographic

Image 3.3

Acrophobia - is an extreme fear or phobia of heights, especially in people of normal height It causes a lot of psychological obstacles when consumers make purchasing decisions and reduces their confidence.

Accompanying the above syndrome is the fear of taking risks when taking a flight Consumers are always very aware of participating in service experiences -

which means they put their lives on the line for the pilots, so that fear is inevitable, especially for first-time customers.

The view of airline service is a luxury service When airline service first appeared

in the world, it was positioned as a service for aristocrats or rich people - the upper class This leads to an increase in the value of the service that stimulates the demand to experience it at least once, especially for those with low-middle income.

The view of superior transportation service The luxury, as well as convenience of airline service, compared to other services, so some people have come to believe that this is the best transportation service with high-quality experience and outstanding speed.

3.1.4 Lifestyle

Image 3.4

Conservative lifestyle: People are often not willing to try new products/services.

They spend a lot of time researching before making a consumption decision However, they are very opinionated and not affected by exogenous factors In addition, their brand loyalty is also very high.

Modern lifestyle: The complete opposite of the conservative lifestyle, they value

experience and are always ready to discover new things They tend to follow trends and the crowd However, building brand loyalty in them is also relatively hard.

3.1.5 Need

Image 3.5

Work-related needs: In some professions and fields, fast traveling over long

distances is in high demand Especially for business people, the use of air services is almost inevitable and regular.

Personal needs: other purposes such as travel, study abroad, repatriation, etc.

will use air services when traveling relatively long distances, they still undergo screening, comparative evaluation before making a consumption decision.

3.2 Targeting

As the face of Vietnam's air services, Vietnam Airlines has used the concentrated segmentation strategy - to concentrate all of its resources on building and consolidating a premium airline brand in Vietnam Specifically, Vietnam Airlines focuses on customers, who have a middle and high income, are usually

merchants and entrepreneurs with a certain status in the social class, and often have to use airline services for many different purposes.

3.3 Positioning

3.3.1 Positioning A Premium Airline

Since its establishment, Vietnam Airlines has always held the number one position in the Vietnamese market Compared to other competitors in the market, Vietnam Airlines has a distinct advantage when being called with the name

"Vietnam's national airline" With this name, it easily positioned the brand, attracting a number of customers who believed in the national branded service even though the fares are much higher than other airlines

In Vietnam, the trust in "national" businesses is very large As the national airline

of Vietnam, it is compulsory that Vietnam Airlines strictly comply with regulations and its initial promise is to provide services of high quality.

According to the positioning diagram, Vietnam Airlines has clarified that their customers, who have a good financial status, want to receive perfect services when using its services.

Nowadays, Vietnam Airlines is the only traditional airline in Vietnam with differentiated domestic products (Business class, frequent flyer program - GLP) The airline's number one position in Vietnam is also shown in its extensive domestic network through all regions of the country, heavy operating frequency, convenient connecting schedules, the airline's punctuality index, and accompanying service - these are all superior to their opponents.

3.3.2 Service Positioning Strategy

Vietnam Airlines also designs products that create Vietnamese cultural identity in services, distinctly different from domestic competitors Specifically, Vietnam Airlines’s products meet quality, the international 4-star international standard, and aim to achieve 5-star standards (80% of Vietnam Airlines’s criteria are rated

5 stars by Skytrax, Vietnam Airlines has been awarded the 4-star airline certificate by Skytrax).

3.3.3 Communication Positioning Strategy

Building a brand image with national identity: modern, creative, friendly, dynamic, efficient, and socially responsible The slogan "Reach Further" emphasizes the national spirit, the determination to rise strongly of a country Besides that, it also conveys a desire to reach the success of passengers and Vietnam Airlines on each flight It is an affirmation: the development path of Vietnam Airlines always focuses on customer experience Bringing passengers not only a flight but also the feeling of a journey of experiencing 5-star-oriented services according to international standards, luxury, and class Six-petal golden lotus, which is a special symbol of Vietnam Airlines, contains the soul of the Vietnamese nation It has become very familiar to many Vietnamese people and is used for many

- The slogan "More than just a flight" is highly appreciated when it conveysthe common goal of the business when trying to perfect the experiencewithout simply aiming for the basic purpose: satisfying the mobility needs

of customers

- Punctuality as well as time flexibility for “night flights” and other addedservices such as Bamboo Eco ticket - for customers who do not need tocheck-in baggage and fly less than 2 hours domestically; flexibility inserving specific customer needs, etc

 Weaknesses:

- The company's current communication strategy has not been very effectivefor the target audience because of its sensational and misleadingcommunication style that easily receives mixed opinions

- Heavily dependent on large financial funds to finance their operations

- Few international airports in Vietnam (especially in Qui Nhon) to port

Bamboo Airways large aircraft.

The message “Dream of flying for all Vietnamese people - Giấc mơ

bay cho mọi người dân Việt Nam” that Vietjet evokes is a beautiful

dream in a market with a rapidly growing middle class like Vietnam

- VietJet's brand awareness in Vietnam is relatively high

- Young, professional, and enthusiastic staff.

 Weaknesses:

- Using the "offensive" communication method, associated with the name

"Bikini Airline" This is not in line with the national media culture, receiving

a lot of mixed opinions

- There are often problems in the service that make passengers unsatisfied:overcrowded and often delayed flights

of luxury and expensive service, not suitable for their income.

The high-income earners have lower price sensitivity They prioritize using airlineservices because of the benefits they seek related to convenience, reputation,