Contingencies to Airasia’s Marketing Strategy Essay

Suggest three contingencies AirAsia should consider and rationalize your choice. What are the main modifications to the current marketing strategy should AirAsia undertake to respond to these contingencies. There are number of threats that AirAsia faces thus it should have well-prepared contingency plans in case certain situations occur. The following part focuses on analyzing three main contingencies that AirAsia should take into consideration as well as the modifications to the current marketing strategy that it would have to make to respond in case certain events occur. What if price war happens†¦Ã‚  To compete with the rivals, each airline introduced its own strategy. Famous full service carriers like Singapore Airlines and Thai Airways have set up low cost subsidiaries. Malaysia Airlines launched competitive promotion scheme while independent low-cost airlines like Valuair focused on improving customer services through offering additional benefits to customers. Obviously, the harsh competitiveness in the region strengthens the probability that price war might happen. Price war happens when almost all airline companies simultaneously start to reduce their prices and the region’s aviation industry as a whole fails to deliver profit. Price war might have a serious impact on AirAsia if it, together with other airlines in the region, starts to reduce its prices to compete. Customers now will have various choices and would be able to switch to the airlines that offer them the best price as well as best service. If price war does happen, AirAsia should make the following modification to its current strategy: Increase customer satisfaction by improving on-flight service quality as discussed in depth in the third paragraph of question one. What if customers decide to switch to other airlines†¦ Air Asia now has to face up with increasing competition not only from low cost subsidiaries of full service carries but also from the emergence of independent low cost airlines. With the increasing emergence of new airlines which provide customers with not only low fares but also â€Å"a level of service far beyond that expected†, the probability that customers switch to other airlines is very high. Recently, AirAsia has been receiving many complaints from passengers who are unsatisfied with the service quality. Focusing intensively on keeping costs low, AirAsia neglected the satisfaction and convenience of its customers. Thus, the company should consider the possibility that customers might switch to other airlines. In this case the following modifications to the strategy should be made: AirAsia should offer incentives for the customers to stay with the company by introducing frequent flyer bonus miles. To motivate customers’, AirAsia can also offer membership cards which would provide them not only with additional miles but also with regular customers’ discount on specific flights to specific destinations or at special period of time. What if AirAsia is unsuccessful in entering new markets such as China and India†¦ AirAsia is now looking for expanding routes to other countries in the region and China and India are a huge potential. However, these markets have completely different economies and therefore there is a probability that the market will not support a new airline. Also, for example, when going to China – a huge market, AirAsia needs to be ready to face tough competition. Besides good reputation in the market, well-established airlines in China such as China Airline, Cathay Pacific, etc. are offering very high quality service to customer. In addition to that in the meantime, AirAsia has to compete with many tough competitors in its local market. Thus, there is possibility that AirAsia might not take the lead when entering new markets and might not be able to reach its targets in new markets. Therefore, AirAsia should take into account the possibility of low demand and be ready to make modifications to its strategy in order to respond: The Olympic Games 2008 would be a great opportunity for AirAsia to strengthen its image in customers’ mind. To take this advantage, AirAsia should organize some activities to promote the company. Other big companies will certainly promote itself through taking part in such activities as Olympic Sponsorship, On-Air advertisement, etc. AirAsia should choose a different tactic. Instead, it can create association between AirAsia and the Olympic through programs spread via mass media such as: design logo for AirAsia used during the Olympic time or organize a lottery program the prizes of which would be Olympic tickets or flying tickets inside China. AirAsia can also use other promotion programs like offering round trip tickets flying to cities where the Games would take place at the price of 1 reminbi (Chinese currency) for the first 10 customers buying tickets at a random period of time during 6 months before the Olympics. This should help build up the demand for AirAisa’ services among the customers and enhance its position in customers’ mind. To conclude, it is important for AirAsia to be aware of all contingencies that may happen during its operations and to be ready to apply modifications to the strategy to protect itself from any possible issues that might occur. These contingencies may not come to reality but it is essential to have contingency plans and to be able to make necessary modifications to the strategy in case of the price war, or lost of the customers, or difficulties entering the new markets in order to adapt to these changes and continue to operate successfully.