THE 7Ps MARKETING MIX OF VIETJET AIR (PHÂN TÍCH CHIẾN LƯỢC 7Ps MARKETING MIX CHO CÔNG TY CỔ PHẦN HÀNG KHÔNG VIETJET AIR)

Có thể nói, thành công của thị trường hàng không Việt Nam không thể không kể đến những cái tên Vietjet Air, Vietnam Airlines, Bamboo,… Trong số đó, Vietjet là cái tên đang làm dậy sóng khi mới ra đời. nhưng cả tăng trưởng và doanh thu đều vượt trội. Theo công bố báo cáo tài chính năm 2020, Vietjet công bố lãi 70 tỷ đồng, còn Vietnam Airlines lỗ hơn 11.000 tỷ đồng. Nhận ra thành công vang dội của VJA và tầm quan trọng mà chiến lược Marketing Mix góp phần vào thành công đó. Chúng tôi quyết định chọn đề tài: “Chiến lược Marketing Mix của Công ty Cổ phần Hàng không Vietjet” làm đề tài nghiên cứu của mình

THE FINANCIAL UNIVERSITY OF FINANCE – MARKETING

-oOo -

THE 7Ps MARKETING MIX OF VIETJET AIR

Branch of learning: Marketing Class: CLC_19DMA12

Course code: 2021702052712

Student’s name:

Nguyễn Duy Tân – 1921002948 Trương Minh Mẫn – 1921000917 Phan Gia Cát Tường – 1921003892 Nguyễn Nhựt Hải Long – 1921004477 Nguyễn Thành Được - 1921005399

Hồ Chí Minh City, 15 July, 2021

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TABLE OF CONTENT

LIST OF TABLES 5

LIST OF PICTURES 6

CHAPTER 1: INTRODUCTION 1

1.1 OVERVIEW 1

1.1.1 Reasons for choosing the topic 1

1.1.2 Objectives of the study 1

1.1.3 Research subjects 2

1.1.4 Research scope 2

1.1.5 Research Methods 2

1.1.6 Structure of topic 2

1.2 OVERVIEW OF VIETJET AIRLINES JOINT STOCK COMPANY 2

1.2.1 About VJA 2

1.2.2 Vision and mission 3

1.2.3 Goals and Core values 3

1.2.4 Operational scale 4

CHAPTER 2: MARKET ANALYSIS OF AVIATION INDUSTRY AND COMPETITORS: 5

Overview of the world Aviation Industry and the Domestic Aviation market: 5

2.1 MACRO ENVIRONMENT : 5

2.1.1 Economic environment 5

2.2.2 Technology environment 6

2.2.3 Political - legal environment 7

2.2.4 Socio-cultural environment 7

2.2.5 Natural environment 8

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2.2 MICRO ENVIRONMENT: 8

2.2.1 Finance 8

2.2.3 Customers 10

2.2.4 Media 11

2.2.5 Employees 11

2.2.6 Shareholders 12

2.3 COMPETITOR 13

2.3.1 Direct Competitors: 13

2.3.2 Potential Competitors 13

CHAPTER 3: TARGET CUSTOMERS AND POSITIONING STRATEGIES 15

3.1 TARGET CUSTOMERS AND POSITIONING STRATEGIES 15

3.1.1 Target customers 15

3.1.2.1 Customers' perception of using Vietjet Air's services: 15

3.1.2.2 Customers searching for information about Vietjet Air's services: 16

3.1.2.3 Customer reviews of other options or alternatives: 16

3.1.2.4 Customers' experiences when using Vietjet Air's services: 16

3.1.2.5 Feedback from customers after using Vietjet Air's services: 17

3.2 POSITIONING STRATEGY OF VIETJET AIR: 17

3.2.1 Positioning distinguishes a brand from its competitors: 17

3.2.2 Developing an effective positioning strategy: 18

3.2.2.1 Market analysis: 18

3.2.2.2 Internal corporate analysis: 18

3.2.2.3 Competitor analysis: 20

3.2.3 Using positioning maps to plot competitive strategy: 21

3.2.3.1 Marketing Strategy Evaluation: 21

3.2.3.2 Customers' perceptions: 22

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CHAPTER 4: MARKETING MIX STRATEGIES 23

4.1 PRODUCT STRATEGY 23

4.1.1 What is product strategy? 23

4.1.2 Product portfolio 23

4.1.3 Product strategy analysis 24

4.1.3.1 Core product 24

4.1.3.2 Supplementary services 24

4.1.4 Evaluate VJA's product strategy 25

4.1.5 Solution to complete the company's product strategy 26

4.2 PRICING STRATEGY 27

4.2.1 Definiton of price 27

4.2.2 VJA’s Pricing Strategies 27

4.2.2.1 Cost-Based Pricing 27

4.2.2.2 Value-Based Pricing 32

4.2.2.3 Competition-Based Pricing 33

4.2.4 The solution to complete the company's pricing strategy 33

4.3.1 Definition 34

4.3.2 VJA’s Distribution of Supplementary and Core Services 34

4.3.3 VJA’s Distribution Strategies 36

4.3.2.1 Indirect Distribution 36

4.3.2.2 Direct Distribution 36

4.3.3 VJA’s Place Decisions of Service Delivery 37

4.3.3 VJA’s Delivering Services in Cyberspace 37

4.3.3 Đánh giá Distribution strategy của VJA (Ưu, nhược điểm) 37

4.3.4 Giải pháp hoàn thiện Distribution strategy của công ty 38

4.4.1 What is a Promotion Strategy? 38

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4.4.2 Actual situation of promotion strategy activities of VJA 39

4.4.2.1 Advertisement 39

4.4.2.2 Promotions 40

4.4.2.3 Public relations 41

4.4.2.4 Personal selling 42

4.4.2.5 Direct Marketing 43

4.4.3 Evaluate VJA's promotion activities 43

4.4.4 Complete solution for promotion activities 44

4.5.1 Definition: 44

4.5.1.1 Processes: 44

4.5.1.2 Flowcharting customer processes: 45

4.5.2 Processes in Vietjet: 45

4.5.2.1 Vietjet’s booking and payment process: 45

4.5.2.2 Vietjet’s air ticket refund process: 46

4.5.2.3 Vietjet's complaint and compensation process: 46

4.5.2.4 Vietjet’s maintenance process: 47

4.5.3.2 Propose solutions for Vietjet: 48

4.6 PHYSICAL EVIDENCE MANAGEMENT 49

4.6.1 Definition of evidence 49

4.6.3 Physical evidence assessment of Vietjet Air 52

4.6.4 Solutions and proposals for Vietjet Air company 53

4.7 PEOPLE 55

4.7.1 Service employees 55

4.7.1.1 Service employees are crucially important 55

4.7.1.2 Service employees as a source of Customer Loyalty and Competitive Advantage 55

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4.7.2 Human Resource 56

4.7.3 Customer services 57

4.7.4 Problems and suggestions for future 58

4.7.5 Pros and Cons of People’s Strategy 59

4.7.6 Solutions and proposals for Vietjet Air company 60

CHAPTER 5: SUMMARY 61

DOCUMENTATION 63

LIST OF TABLES Table 1: Structure of the company's shareholders as of January 4th, 2021 9

Table 2: List of Board of Directors 12

Table 3: The service of each levels of price 28

Table 4: table of ticket prices of VietJet Air compared to Vietnam Airlines, Pacific Airlines from Ho Chi Minh city to some provinces 30

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LIST OF PICTURES

Picture 1: Life of cycle cost analysis 19

Picture 2: Scale and the level flight route coverage 20

Picture 3: Staff and aircraft of VJA 21

Picture 4: Positioning map 1 21

Picture 5: Positioning map 2 22

Picture 6: “Hunting 0-VND tickets to fly around VietNam Campaign” 31

Picture 7: 77% discount program forr passengers 32

Picture 8: Minh Tu and Celine Farach in VJA’s calenndar in 2018 41

Picture 9: VJA’s promotion on VietNam Teacher’s day 42

Picture 10: VJA for bikini model to welcome U23 VietNam caused a lot of controversy 43

CHAPTER 1: INTRODUCTION 1.1 OVERVIEW

1.1.1 Reasons for choosing the topic

The aviation market is now more interested than ever Because life is more and more modern, people's needs are increasing From old bicycles, to motorbikes, to cars People's means of transportation are getting more modern over the years Moving between faraway places is no longer something that makes us think twice No need to say much or discuss deeply, there is one thing that everyone must admit that traveling by air will be much more convenient than other types of means Although the cost is much higher, flying gives us commensurate benefits First of all, the issue of time, traveling by "birds of flight" helps us save a lot of time And thanks to that, our time will be longer, longer, and we can do more of our plans Besides, health issues are also very important, instead of having to sit for hours on end tired in cars and trains, we can sit comfortably on airplanes in a much shorter time

Along with the growth rate of the economy, the aviation market also develops in a proportional manner According to IATA data, Vietnam's aviation market has the third fastest growth rate in the world with an average rate of 16.6% per year in the period 2001-2014 IATA also forecasts that Vietnam will be the fifth fastest growing aviation market in the world, reaching 150 million passengers by 2035 Vietnam's aviation industry is also the fastest growing industry in Southeast Asia

It can be said that the success of the aviation market that Vietnam has cannot fail to mention the names Vietjet Air, Vietnam Airlines, Bamboo, etc Among them, Vietjet is the name that is making waves when it was born but both growth and revenue are outstanding According to the announcement of the 2020 financial report, Vietjet announced a profit of 70 billion dong, while Vietnam Airlines lost more than 11,000 billion dong

Realize the resounding success of VJA and the importance that the Marketing Mix strategy contributes to that success We decided to choose the topic: "Marketing Mix Strategy

of Vietjet Aviation Joint Stock Company" as our research topic

1.1.2 Objectives of the study

- Learn about Marketing Mix activities of Vietjet Aviation Joint Stock Company

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- Analyzing the current situation of VJA's Marketing Mix

- Analyze the business environment of VJA to see strengths, weaknesses, opportunities and threats And from there, propose measures to improve VJA's Marketing Mix strategy

- Collect secondary data and business results of VJA in recent years

- Collect data and information from newspapers, TV, Internet,

- Using analytical methods, comparing data between years to come up with VJA's performance results

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This is Vietnam's first private airline Not only air transportation, Vietjet also provides consumer demand for goods and services through e-commerce technology applications Currently, Vietjet Air is an official member of the International Air Transport Association (IATA) with the Operational Safety Certificate (IOSA)

Currently, Vietjet is operating 80 A320 and A321 aircraft, carrying out more than 385 flights per day, transporting more than 65 million passengers

This airline currently has 105 routes covering destinations in Vietnam and a number of international routes such as Japan, Hong Kong, Singapore, Korea, Taiwan, etc In the future, Vietjet Air will open more routes flies throughout the Asia-Pacific region

Vietjet's headquarters in Hanoi, address: Van Phuc Diplomatic Corps, Ngoc Khanh ward,

Mission:

- Exploiting and strongly developing domestic, regional and international routes

- Bringing a breakthrough in aviation services

- Make air service a popular means of transportation in Vietnam and internationally

- Bringing joy and satisfaction to customers with outstanding, luxurious service and friendly smiles

1.2.3 Goals and Core values

Goals:

Creating a new historical milestone for the aviation industry, making Vietjet a "made in Vietnam" global airline

to develop a wide flight network throughout the Asia-Pacific region, is studying to continue expanding routes in the region and has signed contracts to purchase new and modern aircraft with major aircraft manufacturers in the world

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CHAPTER 2: MARKET ANALYSIS OF AVIATION

INDUSTRY AND COMPETITORS:

Overview of the world Aviation Industry and the Domestic Aviation

market:

Currently, airlines are still struggling to maintain operations, partly thanks to the resources of businesses, partly thanks to financial support from the government However, according to the assessment of organizations, with strong vaccine programs in countries and gradually loosening policies to open up internationally, it is expected that aviation activities will gradually become bustling and recover from the beginning of 2022 The number of passengers transported dropped sharply due to flight restrictions and social distancing, causing international and domestic routes to be suspended The airline market also faces difficulties when tourism demand is low, leading to a decline in passenger arrivals After recording a sharp decline of 86.5% and 87.7% in April and May respectively due to the outbreak of the disease, the market recorded a gradual recovery in the following months thanks to the stimulus policies during the tourist season, which mainly serves domestic tourists For the whole year 2020, the number of passengers transported reached 34.8 million passengers, down 61%; in which international visitors reached more than 3 million visitors, down 79% and domestic tourists reached 31.7 million visitors, down 25%, a decrease much less than the world average

In Vietnam, with the best anti-epidemic record in the region and a country with the advantage of 22 airports, it is expected that Vietnamese airlines will gradually recover, and are expected to open international routes in the fourth quarter of 2021 and start to recover gradually

in 2022

2.1.1 Economic environment

Vietnam's economy in recent years has made great progress, with an annual growth rate

of 7% to 8.6%, per capita income has increased significantly Vietnam's economy is changing its face, infrastructure is being upgraded, investment is increasing With the rapid development

In the coming years, it is forecast that the world economy will continue to grow at an average rate of 3.5% in the period 2015-2020; The world tourism market will increase by an average of 3.6%/year In 2015, there are nearly 1.18 billion foreign tourists, up 4.4% over the previous year This is a very important premise for international and regional aviation to have strong growth and development conditions, including the aviation market

2.2.2 Technology environment

The change in technology has had the most direct and strongest impact on the business of the aviation industry It not only ensures safe flights, but also involves many other activities in the air transport business The first is aircraft manufacturing technology This is the most important factor in the success of airlines The production of safe, good quality, fuel efficient, business efficient aircraft of medium and large sizes ensures flights requiring high technology These aircraft were born, making the previous aircraft lines obsolete, reducing the competitiveness of less innovative airlines and modernizing the fleet - creating a pressure on airlines

For the management of mining operations, the Company uses Geneva software This software helps the company to optimize its resources in terms of flight schedules, crew schedules, simplify flight handling and flight time control The company uses SunSystems to manage procurement, finance and accounting processes In addition, the company also applies AMOS to manage materials and aircraft spare parts

Orienting investment in information technology on the Internet, the Company will build

an expanded e-commerce technology platform to facilitate customers in buying tickets and goods and services from the website VietJetair.com Besides, the Company will continue to invest in ERP solutions for business operation management under the model "E-Company -

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The company is currently working with PriceWaterhouseCoopers Company (PWC) to implement a private investment project Question

2.2.3 Political - legal environment

Vietnam is considered to have the most stable and peaceful political environment With a stable political background leading to unoccupied airports, free skies, unregulated, favorable conditions for airlines to do business

In parallel with the process of international integration, the State continues to adopt policies to improve the investment environment, increase the attractiveness of foreign investment, and focus on investment of multinational companies; Encourage and promote tourism development, shift from exploring tourism business to building a real tourism industry, considering tourism as a spearhead economic sector; Foreign investment (FDI) achieved a growth rate of about 5-7%/year; the source of tourists from abroad to Vietnam will grow at 10 12%/year, domestic tourists 10-11%/year

The Vietnamese government's removal of the 15% tax on imported fuel and investment in infrastructure to meet future demand is considered an important step Vietnam has well implemented the conversion of paper tickets to electronic tickets, next needs to promote freight transport through electronic transactions to serve exports

2.2.4 Socio-cultural environment

Currently, Vietnam is in the period of "Golden population structure" because the population structure by age changes rapidly This is a period that brings many opportunities thanks to an abundant working-age population However, it is also a challenge in the process

of improving the quality of human resources, creating jobs and jobs with high productivity, quality and income Vietnam is recording the highest proportion of young population in history The population aged 10-24 in our country currently accounts for nearly 40% of the population

- With the current population situation in our country, Vietjet Air - a low-cost airline, focuses

on the young customer segment, active and first-time flyers, middle-income people Customers who are proficient in using technology and the Internet such as smartphones, email, social networks, online payment methods: visa, master card, and have a hobby of exploring, traveling often at the right cost Most of Vietjet's customers are those who like innovation, creativity and love to connect,

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Since its establishment, Vietjet has not looked at how much the aviation market share has been "captured", but only focused on how much more can be exploited VietJet Deputy General Director vindicated: If we keep looking at the water that has been poured into the capital, VietJet will not see the opportunity of the city to be poured more Thanks to that "strange" thinking, VietJet saw a great opportunity: "With 100 million people, only 1% of Vietnamese people use air transport, 99% of the chances are Vietjet" VietJet also does not target customers who have already flown With the same mindset as a glass of water with half, Vietjet has made

a decision to target customers who have never been on a plane The breakthrough in thinking

is to consider traveling by plane as simple as taking a bus, not as luxurious as riding a limousine

2.2.5 Natural environment

The geographical position of Vietnam is quite favorable for the development of the aviation industry with a location on the edge of Southeast Asia, in the middle of the international air route connecting from east to west, from north to south is suitable for building the flight network between the US and Australia with short flights within Southeast Asia and inlandVietnam With the characteristics of Vietjet Air's route network built according to the

"shaft-spoke" model with high operating frequency, good transshipment service in Hanoi Inner city and Ho Chi Minh City, creating competitive advantages with transportation flows international cargo to/from Indochina, Southeast Asia; Vietnam step by step become a regional air hub, competing directly with airlines major transit centers such as Hong Kong, Bangkok, Singapore Vietjet Air will actively cooperate in bilateral trade with international airlines, expand routes, overcome subjective limitations, and gradually select partners to join the global alliance in line with current trends the general development position of the world and the actual capacity of the company, if it makes good use of the position of Vietnam's natural factors, it will significantly increase the production of its goods in these markets However, Vietjet Air

has not yet fully exploited this advantage

2.2.1 Finance

Total assets by book value in 2020 compared to 2019 decreased by VND3,662 billion, down 7% mainly because the Company transferred an investment project to support air transport

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In 2020, the market recorded great fluctuations when the Covid epidemic broke out and complicated movements throughout the year resulted in a 64% decrease in net revenue in 2020 compared to 2019 net revenue When the load is low, the airlines are forced to reduce the number of seats available, the number of flights and the frequency on a large scale in order to increase the efficiency of seat utilization and revenue The competition for market share and for each flight takes place fiercely on every day, every flight, Business aircraft rental prices down to very low levels; a series of promotions and stimulus programs are launched to attract customers and sales channels In the international market, Vietjet mainly conducts a number of humanitarian flights to rescue and repatriate Vietnamese people under the coordination of authorities

During the year, Vietjet made transfer transactions of investment projects and made a profit of 1,773 billion VND to compensate for losses in aviation activities As a result, consolidated profit after tax reached VND 69 billion, making Vietjet one of the rare airlines with a profit in 2020

Table 1: Structure of the company's shareholders as of January 4th, 2021

No Shareholder Number of

shareholder

Number of Stocks

Value (VND)

Proportion (%)

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Total 7.454 541.611.334 5.416.113.340.000 100%

(Source: List of shareholders, provided by VSD on January 4, 2021)

2.2.2 Suppliers

 Aircraft leasing company: Alafco Aviation

 With about 300 flights per day, the purchase of products by Vietnam Airlines Dung Quat Oil Refinery will help businesses save on transportation costs moving, warehousing and not be under pressure of foreign currency in the context of the economy as the current At the same time, contributing to reducing the trade deficit for the country From August 2010 to now, Binh Son Refining and Petrochemical Company has sold to domestic and foreign partners more than 28,600 tons of Jet A1 jet fuel It is estimated that each year Dung Quat Refinery will produce about 400,000 tons of Jet A1 gasoline, meeting about 35% - 40% of the current fuel demand for Vietnam Airlines

 Marketing service establishments: market research companies, advertising consultants

 Product distribution: resellers, ticketing websites

 Financial intermediaries: 3 major shareholders and ACE Insurance Co…

 In addition, some familiar partners of Vietjet Air in SLB deals are GE Capital Aviation Services Limited, Awas Aviation Trading Limited; Awas 7170 Ireland Limited; Avation PLC; Goshawk Aviation Limited; Goshawk Management (Ireland) Limited; Jackson Square Aviation, LLC…

2.2.3 Customers

 Consumers: individuals and households who have a need to fly

 Producer: charities, entertainment companies, media events

 Distribution intermediaries: ticket agents

 International customers: tourists, foreign businessmen, overseas Vietnamese, public officials coming to Vietnam to work

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2.2.4 Media

 Vietjet Company operating under the name Vietjet Air, certified on December 20, 2007 However, after many delays, it was officially put into operation in 2011 and quickly received the support of domestic customers because the ticket price is very cheap

 The main office is at Tan Son Nhat International Airport in Ho Chi Minh City and a branch at Noi Bai International Airport in Hanoi with a registered capital of 600 billion VND, Vietjet Air is a 100% Vietnamese owned company with 3 main shareholders: T&C Group, Sovico Holdings and Ho Chi Minh City Joint Stock Commercial Bank and Housing Development

 Owning 100 aircraft of all kinds: 62 ordered, 30 more purchased and 8 leased with the time until 2022 with a total transaction value of about $9.1 billion from the manufacturer

 Vietjet is the first airline in Vietnam and a few in the region to own the latest and most modern Sharklet A320 aircraft from Airbus

 The modern fleet is an international, professional crew With experienced and friendly flight attendants, providing quality aviation services, serving customers, Vietjet Air is a young and dynamic airline trusted by many passengers and has become a leading airline in Vietnam domestic and regional favorite airline The area is known for the brand "Fly is like right away"

 Vietjet has developed a wide domestic flight network and plans to develop a network

of routes in the Asia-Pacific region Meeting the increasing travel needs of domestic as well as international people with the rate of on-time flights and service quality that is always at the forefront of the industry The highlight of the airline is that it always offers many choices of flights, not just a means of transport, Viejet is always creative, bringing customers many interesting tricks and fun on flights

2.2.5 Employees

In 2020, while many airlines around the world simultaneously cut staff in order to maintain business operations during the ongoing Covid-19 pandemic, Vietjet took advantage of the opportunity to recruit qualified personnel from the domestic and international labor market During the year, Vietjet recruited 792 new employees including 13 pilots, 125 flight attendants and 654 other employees

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2.2.6 Shareholders

The Board of Directors of the Company includes 01 General Director, 01 Chief Executive Director (CEO), 08 Vice Directors and Chief Accountant The General Director is the legal representative of the Company, manages all day-to-day activities of the Company and is responsible to the Board of Directors for the implementation of the assigned rights and duties The CEO, Vice Directors and Chief Accountant directly manage production and business activities, and advise the General Director to make strategic decisions for the Company

Table 2: List of Board of Directors

1 Nguyen Thi Phuong Thao General Director

3 Ho Ngoc Yen Phuong Vice Director & CFO

4 To Viet Thang Vice Director of Exploitation

And Safety, Quality, Security

5 Nguyen Thi Thuy Binh Vice Director

state-Along with competition in the domestic market, Vietjet Air also has to compete with airlines from countries inside and outside the region In 2017, fares for flights from Europe to Vietnam decreased significantly If in the past, these routes VNA competed mainly with French and German airlines, now, when German airlines have to give way to airlines from the Middle East, VNA is forced to compete with very strong opponents, difficult to balance While VNA has only 4 routes to Western Europe (Paris, Frankfurt, London, Moscow), Middle Eastern airlines have routes to all cities in Europe

- Small and medium scale, compact management systems lead to low cost

- Advanced technical technology helps reduce costs (take advantage of the Internet for ticketing, use new generation aircraft more flexible) For example, Air Mekong uses Bombardier CRJ 900 series of jets, thereby doing unprecedented things such as direct flights from Hanoi to Phu Quoc, Pleiku, Con Dao Choose short routes, actively build new routes not yet exploited by Vietjet Air

- Dividing a long flight into reasonably short segments (For example, with the route HCM-Bangkok, a Cambodian airline can open a route HCM-Siem Reap-Bangkok to take advantage of a group of customers who like to travel with the wish one trip can

go to 2 places)

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- There are many ways such as: homogenizing seats, using only one type of plane, eliminating food services, free newspapers, if you want to be served, you have to pay extra) For example, an airline has been established: Air Mekong

 Major airlines in the world: Because the Vietnamese aviation market is quite small, this group of large airlines often does not build direct routes as well as domestic flights in Vietnam However, these airlines can compete with Vietjet Air in the following ways:

- Building a route to Vietnam that connects to another country with a more stable market (e.g Thailand or Singapore) So with the reverse flight from Vietnam, they will be able to lower the price a lot to promote the brand, destroy the opponent, but the profit will not affect too much

- Use strong financial resources to conduct strong discounts to build a name, build trust

in customers, causing small competitors a lot of difficulties, even bankruptcy

- Link with a domestic airline through the form of capital contribution Currently, the government's new policy is very open, not only encouraging the establishment of private airlines, Vietnam will also be calling for foreign investors to join the association with the condition that the legal representative is a Vietnamese citizen and the charter capital of the foreign airline does not exceed 49%.) For example: Qantas Airways used to be bought 30% of shares and became a strategic shareholder of Jetstar, thanks to its very strong potential, Qantas Airways helped Jetstar offer almost unbelievable prices

VJA's customers are those who need to travel by air

VietJet Air is a low-cost airline, because of this, it has attracted many young people and middle-income people VJA focuses on segmenting target customers who are young and dynamic people VietJet Air had the idea to attract this group of customers, so the brand personality was built on three personality traits "Playful", "Creative" and "Inspiring" In addition, VJA also targets customers who are proficient in using technology and the Internet such as smartphones, email, social networks, online payment methods: visa, master card, etc and have a hobby of exploring, traveling often at a reasonable cost Most of Vietjet's customers are those who like innovation, creativity, connection, etc

For high-income customers, VJA has high-class services suitable for these customers Customers can enjoy personalized services when using Vietjet's premium services (lounge, food, private shuttle )

3.1.2 Behaviors related to target customers:

3.1.2.1 Customers' perception of using Vietjet Air's services:

Nowadays, people's travel needs are increasing, especially by air Recognizing the needs

of customers, VJA has struck into the minds and perceptions of customers about its services Therefore, to stimulate customer demand, VJA has divided into 3 triggers of need:

 Unconscious mind: the customer's personal need for air travel

 Physical conditions: Because the need to use aviation services is suitable to the customer's conditions, the customer has decided to choose VJA

 External sources: the customer's decision to buy services is affected by marketing activities that VJA has launched such as advertising, service quality, brand,

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3.1.2.2 Customers searching for information about Vietjet Air's services:

Because the demand for air travel has sparked an effort to find information related to air services Through searching, customers have received many sources of information about this service This information has suggested to customers many different services and brands Before the customer makes a decision, the client considers factors gained from past experience

or external factors From there, offer alternative solutions and consider, evaluate and make a final choice Realizing that, VJA has launched extensive marketing strategies to create stimulation and access to demand so that customers can choose to use VJA's services

3.1.2.3 Customer reviews of other options or alternatives:

Besides Vietjet Air, customers also have other options such as Vietnam Airlines, Bamboo Airlines Jetstar, And customers will base on the following attributes to make the final decision:

 The search attribute helps customers evaluate a service before choosing to use that service: after searching for information, customers begin to compare and evaluate the service quality of airlines such as ticket prices, food, brand value,

 Experience attributes: After experiencing the aviation services of different airlines, they can assess attributes such as reliability, ease of use, and customer support

 Reliability attribute: show customers that the value and quality that VJA brings

is exactly what the company has committed to An example of the airline's slogan "Bay là thích ngay" not only offers cheap fares but also gives customers a great experience Besides, the airline also has attractive events such as giving small souvenirs to customers on special holidays These things have affected the trust of customers who have never experienced VJA's services through the media, creating advertising TVCs, taking photos of events and posting them on the company's newspapers and websites

3.1.2.4 Customers' experiences when using Vietjet Air's services:

During the experience of Vietjet Air's services, the airline has shown customers the true quality of service This thing is doing from the customer check-in before the fly to when the machine fly to the world Flight options match the criteria selected by the customer, some customers will choose domestic flights, others will choose flights outside the country, should work with long or short service contact belongs to the row of the options

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High-contact service: Vietjet Air is a high-contact service Because throughout the service delivery process, there must be cooperation between the customer and the service provider VJA focuses on “processing” people rather than inanimate items because an airplane is a flying transportation “factory.” The marketing challenge is to make the experience engaging for customers in terms of both the physical environment and their interactions with service employees

3.1.2.5 Feedback from customers after using Vietjet Air's services:

Customers analyze the service performance they have encountered and compare it to their prior expectations in the post-encounter stage of service consumption Customers evaluate the qualities and hazards associated with a service offering during the decision-making process They establish expectations about how the service they select will perform during this process The zone of tolerance can be narrow and firm if they are related to attributes that were important

in the choice process The majority of customers feel that Vietjet meets their expectations in terms of service and customers feel very satisfied Vietjet Air has received very good feedback from customers, which has become the driving force for Vietjet Air to grow stronger and stronger

3.2.1 Positioning distinguishes a brand from its competitors:

Once we have segmented the market, and understood determinant attributes and related service levels, we need to see how we can best position our service in a competitive mar ket Competitive positioning strategy is based on establishing and maintaining a distinc tive place

in the market for an organization and/or its individual product offerings Jack Trout distilled the essence of positioning into the following four principles:

1 A company must establish a position in the minds of its targeted customers

2 The position should be singular, providing one simple and consistent message

3 The position must set a company apart from its competitors

4 A company cannot be all things to all people-it must focus its efforts

These principles apply to any type of organization that competes for customers Understanding the principles of positioning is key to developing an effective competitive posture The concept

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of positioning is certainly not limited to services-indeed, it had its origins in packaged-goods marketing-but it offers valuable insights by forcing service managers to analyze their firm's existing offerings and to provide specific answers to the following six questions:

1 What does our firm currently stand for in the minds of current and prospective customers?

2 What customers do we serve now, and which ones would we like to target in the future?

3 What is the value proposition for each of our current service offerings and whatmarket segments is each one targeted at?

4 How does each of our service products differ from those of our competitors?

5 How well do customers in the chosen target segments perceive our service offer ings as meeting their needs?

6 What changes do we need to make to our service offerings in order to strengthen our competitive position within our target segment(s)

3.2.2 Developing an effective positioning strategy:

Positioning links market analysis and competitor analysis to internal corporate analy-sis From these three, a position statement can be developed that allows the service organization to answer sis questions for developing an effective positioning strategy

3.2.2.1 Market analysis:

Market analysis addresses such factors as the overall level and trend of demand and the geographic location of this demand So following to this theory, Vietjet Air focuses much on young, dynamic customer segments and first-time flyers, middle-income people, they have a hobby of exploring, traveling often at a reasonable cost Most of vietjet air's customers are those who like to innovate, create, like to connect to others,…

3.2.2.2 Internal corporate analysis:

 Capabilities:

Vietjet Air has abundant and large human resources, which include a total of about

5092 qualified, outstanding, experienced young, active, and enthusiastic employees Vietjet has also been continuously honoured with many prestigious internationalawards such as "Asia's Best Employer Brand", top 500 "Asia's Leading Brand", and the world’s 50 best airlines for

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healthy financing VietJet is able to obtain marketknowledge as well as provide computerized information for suppliers, customers,… Vietjet Air has always done a good job in motivating Vietjet has been rewarded for unrelenting commitments and efforts ininvesting in human resources, improving well-being and engagement of employees

Vietjet Air will expand flight routes and distribution channels globally as well asconnecting with more than 446 different airlines within Amadeus network In Vietnam,VietJet also has a strong local distribution through a network of 1,300 local agents

 Finacial resources:

About finance, financial resources, during the period of influence by Covid-19,Vietjet's strategies and solutions to optimize cash flow are always the top priority.Vietjet Air has optimized working capital and cash flow through the deployment ofcomprehensive and advanced cash flow management and payment integration solutions based on modern technology platforms of leading banks

Vietjet Air has the lowest cost per unitof products in both Asia and the world The revenue from in-flight services alsocontributes more than 23% of Vietjet’s revenue, this factor has led

to the success ofVietjet Air According to Vietjet Air’s financial report, in the first 6 months in

2019, thepre-tax profit of Vietjet Air reached 2398 billion VND, while that of the brand’sbiggest domestic rival – Vietnam Airlines, was only 1650 billion VND when following LCC model

Picture 1: Life cycle cost analysis

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3.2.2.3 Competitor analysis:

 Scale and the level flight route coverage:

In Vietnam, Vietjet only has to contend with two domestic rivals: the state-run Vietnam Airlines and its low-cost arm, Jetstar Pacific Airlines Vietjet currently operates 60 Airbus jets with more than 385 flights daily within Vietnam and to countries and territories such as mainland China, Hong Kong, Japan, Malaysia, Myanmar, South Korea, Singapore, Taiwan and Thailand

Picture 2: Scale and the level flight route coverage

 Compare airline tickets

Airfares of VietJet Air are extremely cheap, especially these two airlines often have surprisingly cheap ticket discounts for customers Therefore, if you want to travel economically, you should pay attention to hunt for cheap flight tickets from Jetstar Pacific and VietJet Air

Airfares of Vietnam Airlines are quite stable, there are no deep ticket discounts and as many

as the two airlines above Although the ticket price of Vietnam Airlines is much higher than that of Jetstar Pacific and VietJet Air, it still retains its position and reputation in the hearts of customers Many people choose to go to Vietnam Airlines because of the perfect service quality

 Staff and aircraft system:

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Vietnam Airlines impresses customers with professionalism, traditional costumes, and flight attendants with gentle and discreet uniforms Vietjet Air again affirms its brand with the dynamism and youthfulness of its staff The airline owns a fleet of more than 45 aircraft

Picture 3: Staff and aircraft of VJA

Besides, while most of the full-service carriers depend on travel agents or the sales office to sell the ticket, Vietjet Air focuses on the internet, SMS, and credit card sales Ticket booking and sales can be made by telephone; it is simple and cost-effective Vietjet Air also provides online check-in which allows passengers to check-in their flights with any devices that can connect to the Internet and access to its website

3.2.3 Using positioning maps to plot competitive strategy:

3.2.3.1 Marketing Strategy Evaluation:

Picture 4: Positioning map 1

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There are 2 things that need to be considered: one is its novelty, measured by the originality of the “big idea” and the freshness of the strategy used to approach the customer; and another is its effectiveness, which is the amount of awareness raised by the strategy among its customers, regardless of negative or positive responses

3.2.3.2 Customers' perceptions:

Picture 5: Positioning map 2

The Y-asis shows that “Respect” in this positioning map is the reputation and public image of the brand in the customers’ perception The X-asis indicates “Preference” is used to indicate customers’ tendency of choosing an airline over others:

- Vietnam Airlines is a national airline and dominates the market share from the early days The reputation and the image of Vietnam Airlines have been built so strong for

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CHAPTER 4: MARKETING MIX STRATEGIES

4.1 PRODUCT STRATEGY

4.1.1 What is product strategy?

A product strategy is a high-level plan describing what a business hopes to accomplish with its product and how it plans to do so This strategy should answer key questions such as who the product will serve (personas), how it will benefit those personas and the company's goals for the product throughout its lifecycle

4.1.2 Product portfolio

• Airline ticket classes:

- Skyboss class: This is the ticket class with the highest fee among the airline's ticket classes That's why it has special offers Passengers can change the flight date, flight time, change name, have the best seat arrangement and use the free vip lounge, and have priority check-in procedures Buying a ticket of this class, during the long flight, passengers can enjoy free food and drinks on the plane, and have their own shuttle bus to and from the plane

- Deluxe class: Deluxe ticket class comes with many flexible and convenient utilities With this ticket class, passengers are allowed to change the flight date, time, flight sector or upgrade for free (surcharge for fare difference if any) and charge + price difference if changing the name

of the passenger

- Eco class (main): This is a normal economy ticket class, that's why it is the best-selling ticket class, passengers also have the right to change flight time, flight date and change name but with the condition that there is a fee The difference between the seat classes and ticket classes

of Vietjet Air for this cheap flight ticket is suitable for the economic conditions of most Vietnamese people The service is also very photo quality and attentive

- Promo class: This is the cheapest promotion ticket class of Vietjet Therefore, when booking this cheap flight ticket, the services that come with it also restrict passengers from changing their name and refunding tickets, changing their flights, flight time, flight date and flight itinerary, but with a fee fee

• Ancillary activities: selling food, teddy bears, souvenirs on the plane

Transport services of VJA solve the need to move a person or a physical object from one location to another, management consulting should yield expert advice on what actions a client should take

VJA's flagship product: Econmy class

- The Eco Vietjet Air ticket class is not much different from the Economy class of other airlines

- Eco or Economy is a normal economy ticket class when there is no Vietjet promotion Therefore, during the period when there is no promotion, Eco is the most popular airline ticket class of Vietjet Air

- For this class of seats, Vietjet Air does not offer free meals for passengers You can choose from a wide variety of meals and drinks on the menu

- This ticket class saves costs for customers because it does not include other services Therefore, customers are free to choose other services according to their needs

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VJA's supplementary services:

- Food and beverage service: The food and drink menu on Vietjet Air flights is quite diverse Not only that, the dishes are also very elaborately cooked Vietjet Air provides passengers with

9 hot dishes And 20 instant dishes created by 5-star chefs on the menu Besides, Vietjet Air also serves desserts, bottled water, various kinds of drinks milk, fruit juices such as orange juice, lemonade, watermelon or not to mention coconut water There is also instant coffee or coffee prepared by a professional bartender

- Checked baggage service, which is one of the most popular and highly appreciated services from passengers This is a useful service that helps customers carry many items, equipment for their trip, travel, and resort Regarding luggage, VJA divides it into 2 types of hand luggage and checked baggage, with each type having completely different regulations on quantity, size and weight

- Air travel alone with children from 12 to under 14 years old unaccompanied by adults on domestic flights

- VJA's service to assist people with disabilities in flying: VJA accepts to provide the necessary equipment to transport up to 8 people with disabilities on one flight

- Insurance services of VJA: TravelCare Travel Insurance is provided by ACE Insurance Co., Ltd through linking with Vietjet's system, focusing on meeting the needs of customers

4.1.4 Evaluate VJA's product strategy

• Pros:

- It helps decide the exact steps to be taken in any event to make the product a success

- It prepares the company for response by competitors or towards changing market conditions

- It helps the company decide the target market and in market penetration

- A product vision is formed thereby setting the product on an independent path with a time to time intervention allowing the company to focus on multiple products in a short time

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• Cons:

- The translation quality of ticket classes has not been clearly differentiated This makes customers tend to choose low-priced tickets because the quality is similar to higher-priced tickets

- The quality of the attached services is alarmingly poor Specifically, when customers' luggage was searched, VJA staff refused to accept customers with disabilities

4.1.5 Solution to complete the company's product strategy

The most available solution for VJA at the moment is to improve and improve service quality to become a "delicious - nutritious - cheap" airline, which means that although the price

is cheap, the service is not inferior to other airlines other airlines

- About the organization system: Improve the regular delay of VJA Even though we know that

in the process of providing services, there will be unexpected incidents and errors But currently, VJA is the airline with the highest flight delay rate This is for customers who are quite concerned when choosing VJA's services

- About the service staff: There have been many times when VJA is a newspaper that wastes ink when employees do not respect customers Specifically, refusing to serve disabled people, looking down on economy class customers And this has a very bad effect on the image of VJA

in the eyes of customers VJA should train and improve the expertise and service attitude of its staff Then, VJA should admit that there was a mistake in the service attitude of employees to the media Next is a commitment to the customer that the same situation will not happen

clarify

4.2.2 VJA’s Pricing Strategies

“Cheap" is the leading pricing strategy that VietJet Air still maintains up to the present time To do that, VJA applies stand on three foundations strategies:

4.2.2.1 Cost-Based Pricing

“Once the pricing objectives are understood, we can focus on the pricing strategy The foundations underlying pricing strategy can be described as a tripod, with costs to the provider, competitors pricing, and value to the customer as the three legs (Pic ) In many service industries, pricing used to be viewed from a financial and accounting standpoint, therefore, cost-plus pricing often was used.”

To get such a "breathable" price for passengers, VietJet must also find ways to optimize costs Currently, they only operate narrow-body aircraft A320 and A321 This is a line that specializes in serving short routes (5-6 hours of flight), helping VietJet save a large amount of operating costs as well as meals and rest for the flight crew because it can turn around many flights, save money save fuel costs (15%) because it is an advanced aircraft with a young age Instead of calculating the cost of luggage and food service together with the fare, VietJet separates to serve passengers who really need it Moreover, Vietjet applies online ticket sales via website or phone Reduce marketing costs, commission costs for agents, ticket printing costs,…

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Product line Pricing

To give customers more choice, some businesses have customized an original product/service into multiple versions, usually ranked from the lowest value to the highest value version In this case, all versions are collectively referred to as the product line Based

on the increasing value of products/services, businesses will also set corresponding increasing prices

VJA, like other airlines, applies this strategy, dividing air tickets into different classes At the time of its establishment, VJA operated 3 ticket classes on flights including: Skyboss (the most premium class), Eco class (equivalent to the economy class of other airlines) and Promo class (cheap tickets, promotions) forever) But since June 2020, Promo class has been replaced

by Deluxe class, with service incentives as shown in the table below:

Table 3: The service of each levels of price

1 Luggage

2 Signed luggage

Free 30 Kg and 01 set of golf

clubs under 15 kg (if any) Free 20 Kg Must buy more

3 Change flight, flight date, itinerary