Airline Research Report

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1 EXECUTIVE SUMMARY

The 2007 world economic recession has totally changed the overall mindset of majority of

middle and upper middle class people, most of them become cost conscious in all aspects of

life. On top, even some segments of upper class also.

People as well as SME business travellers started to use LLCs to their air travel requirements.

Hence, since 2007, most of the LCCs in Asian region started to gain importance and

experienced a good business development and revenue even under economic recession.

As a part of our course module Strategic Marketing Management, we have given an attempt to

develop a marketing plan is to address the further business development of Tiger Airways.

Tiger Airways is one of the major Low Cost Carrier (LCC) in Asia Region. They have totally

transformed the air traveling in this region by providing an air travel at affordable price. The

good point to note is that while all the other airlines were doing poorly during the 2007 world

economic crisis, Tiger Airways was doing well.

When we look at the business models of LCCs, they are based on offering low fares through

very careful cost management. This means using smaller airports, using free seating, charging

passengers for refreshments and not issuing physical tickets. Furthermore, LCCs do not usually

make their inventory available to intermediaries, making it necessary for consumers to go

directly to their websites to book.

Growing travel…

Apart from leisure and business tourism, medical tourism is also growing rapidly in parts of

Asia, including Thailand, Malaysia and India. Euromonitor International’s data shows that

revenues from ‘Other health and wellness tourism’, which mainly encompasses medical

tourism, were largest in Thailand, at US$1billion in 2009, and these increased dramatically

over the review period, by 106%. The Thai government has worked hard to promote Thailand

as the “Medical Hub of Asia”

So, the importance for cost effective air travel is getting attention, and we have tried to develop

a plan for Tiger Airways to enhance its business.

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We have analysed the macro environments in which tiger airways is currently operating, and

also analysed the possible target segments based on the data collected based on macro

environment factors.

Finally, we have addressed the brand repositions requirements for Tiger Airways so as to keep

with changing business environment and proposed few options.

To conclude, we gave a pilot marketing approach to reposition Tiger Airways business to the

changing macro environment.

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2 SITUATION ANALYSIS

Tiger Airways Limited is one of the well-

known budget airlines in the region of

South East Asia, and can be well

compared to ‘RYANAIR’ of EU which

started the concept of budget air travel,

long ago, during 1985.

Tiger Airways was established in 2003 with Tiger Singapore and it rapidly grew its paw print

with Tiger Airways Australia in 2007, and associate airlines, Mandala Airlines in Indonesia

and SEAir in the Philippines in 2012. At the moment, Tiger Airways flies to over 30

destinations in 15 countries in the Asia Pacific region. The figure below shows the route map

extracted from www.tigerairways.com/sg.

(www.tigerairways.com n.d.)

Operating from Singapore and Australia (Melbourne and Sydney)

http://www.tigerairways.com/sg

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Tiger is committed to offering customers great value fares and friendly service while

maintaining the highest standards of safety, security and reliability.

The airline has won several awards, including the Low Cost Airline of the Year Award at

CAPA's Aviation Awards for Excellence in 2006 and 2010

Details given above are extracted from (www.tigerairways.com 2012)

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2.1 MARKET INSIGHT

In this section we have analysed the Macro and Micro environment in which Tiger Airways is

currently operating. We have analysed the past and future possibilities and used the findings in

making marketing strategy.

2.1.1 MICRO-ENVIRONMENT

On analysing from the perspective of microenvironment, we noticed that Tiger Airway’s

business is influenced by its suppliers, marketing intermediaries, customers and competitors.

2.1.2 MACRO-ENVIRONMENT

On analysing from the perspective of macro-environment we noticed that Tiger Airway’s is

influenced by factors like Demographic, economic, physical, technological, political-legal and

social & cultural.

For the purpose of this marketing plan analysis we have considered the following macro

environment factors.

2.1.2.1 DEMOGRAPHIC

Asia is the most populated region of the entire world. The following graph illustrates the facts

and it can be well noticed that the population of Asia is above all the other regions.

Figure 1-World Population Distribution; source (The Global Education Project n.d.)

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The table below provides the population for the year 2011, 2012 and forecast up to 2016 aged

from 15-64 with-in Asian countries, which are with few hours of journey considering

Singapore as central point.

Table 1-Population forecast aged 15-65, with-in Asian Countries, Source ( Euromonitor International n.d.)

Geographies 2011 2012 2013 2014 2015 2016

China 988.3 990.3 991.8 990.6 988.6 985.2

India 783.6 798.7 813.8 828.7 843.1 856.7

Indonesia 158.6 160.8 163.0 165.1 167.2 169.3

Pakistan 107.3 110.1 113.0 116.0 118.8 121.4

Bangladesh 97.5 99.7 101.9 104.0 106.2 108.3

Japan 81.3 80.2 79.1 77.9 76.9 76.1

Philippines 59.8 61.2 62.6 64.0 65.3 66.5

Vietnam 62.8 63.7 64.5 65.1 65.8 66.3

Thailand 49.2 49.5 49.8 50.1 50.3 50.5

South Korea 36.4 36.5 36.7 36.8 36.9 37.0

Myanmar 33.7 34.1 34.6 35.0 35.3 35.6

Malaysia 19.3 19.7 20.0 20.4 20.8 21.1

Nepal 18.4 18.9 19.4 19.9 20.5 21.0

Taiwan 17.0 17.2 17.3 17.4 17.4 17.4

Australia 15.0 15.2 15.4 15.6 15.8 16.0

Sri Lanka 14.0 14.1 14.1 14.2 14.3 14.3

Cambodia 9.3 9.5 9.6 9.8 10.0 10.1

Hong Kong, China 5.3 5.4 5.4 5.4 5.4 5.4

Singapore 3.8 3.8 3.9 3.9 3.9 3.9

New Zealand 2.9 2.9 3.0 3.0 3.0 3.0

Bhutan 0.5 0.5 0.5 0.5 0.5 0.5

Macau 0.4 0.5 0.5 0.5 0.5 0.5

Brunei 0.3 0.3 0.3 0.3 0.3 0.3

Maldives 0.2 0.2 0.2 0.2 0.2 0.2

From Figure 1 and Table 1 it is very clear that Asia is having higher population growth

particularly in the age group of 15 to 65 years who can be considered as active travellers for

the purpose of business and non-business.

Kindly refer to Appendix 3 - A. Continent Population Aged 15-64.xlsx for details of

population, historical & forecast, continent wise.

It would be worth to see the grown population trends for the 1st five major populated countries

as it would be a good factor to decide on the growth forecasting.

Not only by population, the Asian region is also developing on economic basis, the recent

world economic crisis has affected the whole world; however Asian countries are recovering

faster than the rest of regions.

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The Table 2 below shows the Airline Passenger Traffic (kindly refer to Appendix 3 - B. Airline

Passenger Traffic.xlsx for more details) showing the size of the market and the Table 3 shows

the growth index taking year 2006 as basis (kindly refer to Appendix 3 - C. Airline Passenger

Traffic - Index.xlsx for more details) this could be a better indication of the growing airline

passenger trend.

Table 2 - Airline Passenger Traffic in million passenger-kilo meters, Source (Euromonitor International n.d.)

Geographies 2007 2008 2009 2010 2011

China 275,593 285,295 330,243 395,703 469,136

Australia 107,313 108,579 100,515 112,185 119,058

Hong Kong, China 82,976 91,639 88,071 102,019 111,736

India 74,200 78,653 85,768 96,412 107,494

Singapore 93,685 96,711 84,514 92,217 103,123

South Korea 81,387 83,192 82,264 86,717 94,713

Japan 147,584 140,927 127,859 119,316 92,568

Thailand 61,380 56,088 52,452 55,524 56,211

Malaysia 49,942 47,323 32,928 37,836 40,618

Indonesia 33,052 34,952 31,873 36,345 39,560

New Zealand 27,281 28,045 25,924 27,206 27,989

Vietnam 12,468 15,762 16,473 21,204 23,093

Philippines 18,084 18,698 18,254 20,636 20,981

Pakistan 14,196 13,916 13,049 15,073 16,013

Table 3 - Airline Passenger Traffic growth index, Source (Euromonitor International n.d.)

Geographies 2006 2007 2008 2009 2010 2011

China 100 118 122 141 169 200

Vietnam 100 106 135 141 181 197

India 100 122 130 141 159 177

Hong Kong, China 100 107 118 114 132 144

Indonesia 100 111 117 107 122 132

South Korea 100 110 112 111 117 128

Philippines 100 108 111 109 123 125

Singapore 100 104 107 94 102 114

Australia 100 103 104 96 107 114

Pakistan 100 94 92 86 100 106

New Zealand 100 101 104 96 101 104

Thailand 100 111 101 95 100 102

Malaysia 100 105 100 69 80 86

Japan 100 98 94 85 79 62

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The Table 4 below shows the total number passenger arrival through Air Transport from

various Asian countries into Singapore, the countries already served by Tiger Airways are

highlighted.

Table 4 –Visitor Arrival from Asian Countries, Source (https://app.stb.gov.sg n.d.)

Asian Country 2007 2008 2009 2010 2011 2012

Indonesia 761,526 750,575 932,647 1,391,130 1,616,498 864,833

P R China 786,872 792,402 689,992 878,117 1,152,802 690,844

Malaysia 451,215 456,914 581,417 769,234 862,935 445,642

India 536,153 563,568 525,598 612,291 652,060 359,950

Philippines 300,499 314,689 335,692 444,150 567,420 290,632

Japan 464,975 418,663 375,417 419,945 534,169 281,430

Hong Kong SAR 245,859 230,601 248,501 323,939 394,500 190,797

Thailand 259,561 235,731 225,334 321,537 368,186 183,660

South Korea 298,836 256,045 188,049 243,006 284,649 152,721

Vietnam 154,784 188,628 216,805 262,986 276,798 153,113

Taiwan 165,569 142,910 125,616 155,068 194,879 114,610

West Asia 78,980 90,303 93,036 108,462 117,680 56,567

Bangladesh 71,689 90,012 80,911 86,395 90,722 49,749

Myanmar 54,755 68,162 59,969 66,906 81,773 42,938

Sri Lanka 66,253 65,626 58,258 65,595 70,558 32,742

United Arab Emirates 37,040 47,055 46,044 51,539 57,788 27,783

Brunei Darussalam 44,237 48,555 51,505 56,948 56,882 29,762

Other Countries in Southeast Asia 18,113 23,619 26,294 32,152 33,300 16,796

Other Countries in North Asia 10,538 11,126 11,366 19,460 22,669 10,509

Other Countries in West Asia 12,971 14,174 13,429 15,946 18,062 8,452

Pakistan 18,284 18,077 18,014 17,869 17,125 8,714

Saudi Arabia 9,127 8,737 9,465 11,210 14,652 7,406

Israel 10,820 11,178 10,676 12,519 11,969 6,647

Nepal 9,786 12,894 10,800 10,476 9,368 4,610

Iran 4,814 5,166 8,147 9,624 7,702 3,365

Kuwait 4,208 3,993 5,275 7,624 7,507 2,914

Other Countries in South Asia 8,113 8,133 6,898 7,651 7,505 3,673

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The Chart 1 shows the same in chart form and provides the trend in passenger arrival into

Singapore over the past few years, for the first ten major contributing countries

Chart 1 - –Visitor Arrival from Asian Countries, Source (https://app.stb.gov.sg n.d.)

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2007 2008 2009 2010 2011

Indonesia P R China Malaysia #REF! India

Philippines Japan Hong Kong SAR Thailand South Korea

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2.1.2.2 ECONOMIC

The per-capita incomes of Asian countries are consistently increasing. The Table 5 provides

the Annual Gross Income of people aged from 15 years to 65 years for the year 2012, 2012 and

a forecast up to 2016; the countries already served by Tiger Airways are highlighted (Kindly

refer to Appendix 3 - D. Average Gross Income by Age.xlsx for more details)

Table 5 - Income in million US$ of Major Asian Countries, Source (Euromonitor International n.d.)

Geographies 2011 2012 2013 2014 2015 2016

Australia 67,408.0 70,286.9 71,890.1 73,549.4 75,108.5 76,555.5

Japan 47,603.0 48,452.5 49,122.8 50,396.7 51,904.6 53,422.9

Singapore 34,673.4 36,101.3 36,999.5 38,126.9 39,314.8 40,553.9

Hong Kong, China 33,607.2 36,390.2 38,969.0 41,459.8 44,035.2 46,885.0

New Zealand 28,472.0 30,151.7 31,274.5 32,302.2 33,239.0 34,094.4

Taiwan 18,070.7 18,280.5 19,090.5 20,304.9 21,790.6 23,463.1

Malaysia 9,256.4 9,566.8 10,073.3 10,630.8 11,216.2 11,862.1

Thailand 4,395.9 4,505.7 4,881.7 5,268.5 5,695.9 6,152.3

China 4,099.4 4,650.3 5,097.4 5,587.0 6,115.4 6,702.5

Indonesia 3,589.1 3,665.2 3,948.2 4,239.7 4,579.4 4,961.2

Philippines 2,780.8 2,897.8 3,031.5 3,173.0 3,329.1 3,498.7

India 1,824.7 1,781.0 1,941.5 2,102.2 2,268.1 2,442.9

Pakistan 1,809.9 1,917.6 1,999.5 2,109.4 2,258.8 2,466.5

Vietnam 1,431.3 1,594.2 1,729.1 1,868.2 2,017.1 2,179.1

The Table 6 below provides the current and forecasted Consumer Expenditure in overall for

the major Asian countries; the countries already served by Tiger Airways are highlighted.

(Kindly refer to Appendix 3 - E. Consumer Expenditure.xlsx for more details)

Table 6 Consumer Expenditure in million US$, Major Asian Countries, Source (Euromonitor International n.d.)

Geographies 2011 2012 2013 2014 2015 2016

Japan 3,453,063.8 3,530,462.0 3,540,725.0 3,567,771.7 3,611,801.7 3,649,922.8

China 2,861,376.4 3,188,870.1 3,480,236.5 3,807,024.7 4,185,175.4 4,565,077.5

India 1,065,173.9 1,127,363.0 1,199,791.4 1,287,084.8 1,384,171.1 1,489,728.1

Australia 804,414.5 837,182.8 863,335.0 894,342.8 926,434.0 959,353.6

South Korea 585,933.9 600,535.2 619,269.1 640,124.7 661,785.4 684,534.5

Indonesia 463,521.0 487,539.4 511,784.8 538,397.8 569,714.9 606,445.3

Taiwan 271,481.2 273,384.5 277,244.1 284,061.7 294,097.0 305,258.6

Thailand 201,450.2 207,130.1 213,878.7 222,069.1 231,643.5 242,485.1

Pakistan 178,765.6 190,416.1 204,284.6 214,740.5 223,480.6 232,420.1

Philippines 166,910.3 173,399.7 181,624.1 190,348.8 199,704.0 209,605.3

Hong Kong, China 159,138.3 168,074.7 177,878.2 186,892.2 196,273.1 205,902.7

Malaysia 147,850.3 155,000.4 162,410.9 170,946.0 179,698.4 188,821.3

Singapore 97,810.4 97,759.8 98,490.4 100,584.8 103,441.7 106,808.7

New Zealand 91,611.4 93,617.1 95,928.3 98,548.2 100,995.4 103,301.0

Vietnam 76,612.2 80,371.3 82,965.9 87,167.8 93,188.0 99,844.6

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The Table 7 below provides the current and forecasted Consumer Expenditure on Air Travel

in overall for the major Asian countries; the countries already served by Tiger Airways are

highlighted. (Kindly refer to Appendix 3 - F. Consumer Expenditure on Air Travel.xlsx for

more details)

Table 7 - Consumer Expenditure in million US$ on Air Travel Major Asian Countries, Source (Euromonitor

International n.d.)

Geographies 2011 2012 2013 2014 2015 2016

India 15,015.4 16,541.1 18,227.5 20,247.9 22,468.3 24,922.0

Japan 11,157.4 11,470.2 11,501.2 11,643.3 11,817.1 12,014.0

South Korea 7,763.0 7,839.0 7,991.9 8,133.3 8,324.1 8,532.7

China 6,688.5 7,860.9 9,024.8 10,368.3 11,940.1 13,595.5

Australia 6,649.5 7,001.9 7,416.7 7,821.3 8,222.9 8,648.1

New Zealand 1,749.4 1,758.7 1,801.0 1,851.7 1,896.0 1,936.4

Indonesia 1,168.3 1,245.6 1,319.2 1,402.3 1,499.0 1,612.5

Malaysia 1,052.6 1,135.2 1,220.1 1,313.4 1,409.0 1,508.1

Hong Kong, China 701.0 734.0 772.8 809.0 847.4 887.6

Philippines 566.9 577.2 607.2 633.9 670.8 709.1

Taiwan 477.9 494.4 516.3 537.8 567.1 597.9

Thailand 463.5 479.7 495.6 513.8 534.9 558.8

Vietnam 452.8 483.8 507.7 539.6 581.5 627.0

Pakistan 233.4 252.3 275.0 293.8 311.0 328.8

Singapore 174.3 173.8 173.0 175.2 178.3 182.7

Comparing and co-relating the data provided on Table 1 to Table 7, we can clearly understand

which countries are to be focused on upcoming years, and the related investment areas.

More details of the same has been discussed on under the heading 3-Marketing Strategy on

page 16.

A special article on the Indian Budget Airline Industry is available at Appendix 1.

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2.1.2.3 TECHNOLOGICAL ENVIRONMENT

High speed broadband and internet penetration in South East Asia has enabled companies to

market and sell products to millions of customer without wide spread of marketing and sales

channels. Shift in people’s preference in making transactions online has made companies to

invest in technologies. Online travel offices and airline website has become a major channel

for selling flight tickets, choosing customer’s travel preferences.

Online Sales: - Internet transaction value includes the sales and payment of products and

services over the internet from both direct suppliers’ web platforms and online intermediaries.

Secure bookings made over the web are included. If the internet is used for research purposes

only with the booking not being completed through the direct supplier or intermediary online

reservation system this is not considered to be an online transaction. Tourist attractions direct

suppliers are attractions that offer a web platform for the purchase of tickets. Tourist attractions

intermediaries are third parties such as travel retailers that offer a web platform for the purchase

of tickets.

Smart Phone Apps: - Smart phone applications such as Android apps and iPhone apps have

becoming a major marketing channel and a point of sale. With Smart phone applications,

companies can send notifications, product offers which would attract customers’ immediate

attentions. Smart phone applications such as Android apps and iPhone apps have becoming

a major marketing channel and a point of sale. With Smart phone applications, companies can

send notifications, product offers which would attract customers’ immediate attentions.

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2.1.2.4 POLITICAL – LEGAL ENVIRONMENT

LCCs are widely accepted for their Cost control measures. LCCs are very sensitive to any

changes that affect their cost of operation, or new legislations which requires LCCs to include

new mandatory services, like making the airline more baby friendly or elderly friendly.

Increase in taxes, fuel surcharges and Airport fees the local government will have impact to the

operational margin of airline. Since airlines are generally operated over many legal

jurisdictions with different political environment, they are exposed to high risk.

Except few countries in South East Asia, which has open sky policies, other countries have

restrictions to fly to all destinations. Malaysian government has laid restrictions on Tiger

Airways to fly in to destinations other mainland destinations other than KL.

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2.2 STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREAT ANALYSIS

The below is the table of SWOT analysis that we have performed for Tiger Airways. The

strength and Weakness are the internal factors that Tiger Airways can easily address and make

all its best effort to enhance / correct.

Strength:

Operating from Singapore as Hub, the

5th busiest Airport in the world.

Connectivity for passengers to /from

most of the major countries in the world

Strong Brand association with no-frill

low cost travel in SE Asia.

Existing operation in 15 Asian countries

and Australia, connecting Major Asian

cities through to Singapore.

Licence to operate to South China cities,

can cater the needs of tourist and Non-

residents.

Weakness:

Brand association with LCC option.

Overall Journey experience.

Recent technical issue, related to the

Tiger Airways fleets in Australia and

Singapore, may create concern with

safety.

Opportunities:

Growing tourism opportunities in South

China.

Connectivity to Australian cities/tourist

destination through its Australian

domestic carrier.

New FDI limit increase by Indian

government on airline industry, can

partner with domestic carrier, to extend

it service to major cities and tier-2

location cities in India.

New opportunities in Myanmar due to

political changes.

Threats:

Impositions of new restrictions on LCC

operation by Asian countries to safe

guard their national airlines.

Geographic / Climatic condition of

natural disasters in SE Asian countries

like Typhoon, floods may impact

operation on certain routes for a time

period.

Economic downturn may reduce travel

among non-residents population and

tourism.

On the other hand the Opportunities and threats are the external factors that need to be carefully

handles by Tiger Airways to achieve sustainable business growth.

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2.3 COMPETITION

Air Asia and Jet Star Asia are to 2 major competitors for Tiger Airways in Asia. New Entrant,

Scoot is currently having alliance with Tiger Airways to complement it with short haul services.

Jet Star Asia offers Business class on their short haul low cost services. Jet Star Asia is backed

by Qantas Airways. Air Asia has been a recipient of awards for their best customer services

among the low cost airlines.

Tiger Airways Air Asia Jet Star

Destination 30 88 34

Fleet Size 38 54 68

Brand

Slogan

Get The Real

Deal

Now Everyone Can

Fly

Low Fares, Good Times

Aircraft

Type

Airbus A320 /

A319 Airbus A320 Airbus A330-200,Airbus A320-

200

Travel class Economy Economy Business and Economy

2.4 PRODUCT OFFERINGS

Short/medium hauls Low cost Air Transportation: - Tiger airways fly to 30 destinations in 15

countries with Singapore as hub. Tiger Airways covers destinations with 5 hour journey period.

Add-on for Air Travel: - Tiger Airways provide additional services/products associated with

Air travel as add-on.

Hotel, Car and Insurance: - Tiger airways booking portal provides hotel and Car booking

Services along with travel insurance.

(www.tigerairways.com n.d.)

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3 MARKETING STRATEGY

In the previous heading we have seen the macro environment details and some statistics to

illustrate the width and depth of the market.

3.1 OBJECTIVES

As stated already in executive summary, the objective of this marketing plan is to address the

growth opportunities for Tiger Airways and making a marketing plan for the same.

With the given market insight and the Tiger Airway’s service offering and considering

Strategic-Planning Gap Model, the best possible options available for Tiger Airways are the

intensive growth and integrative growth, as well as introduction of additional value added

services.

The intensive growth opportunities available for Tiger Airways can be mapped on the Ansoff’s

Product-Market Expansion Grid, as shown below:

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Tiger Airways, first can consider whether it could gain more market share with its existing

international air routes by way of increasing more destinations with-in the countries it already

flying to /from (as already having international air route licensing) using a market-penetration

strategy. Next it can also consider finding or developing new air routes / destinations to

countries not in its existing destination list, using a market-development strategy.

Tiger Airways should also consider the market-development strategy to develop domestic

flight services in major countries with high level of air traffic as given in Table 3, on page 7.

Business Class targeting

SME Business Travellers

New Countries not served and

domestic market on already

served counties

Domestic market on already

served counties

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3.2 TARGET MARKETS

We have applied ‘Geoclustering approach called PRIZM (Potential Rating Index by Zip

Markets)’ to find the potential segments to serve in order to increase the business wealth.

PRIZM model suggests that when an approach combines geographic data with demographic

data it will yield richer descriptions of consumers and countries.

The best question to answer, to make the best segmentation, is which geographic areas (Asian

Countries) contain our most valuable customers? How deeply have we already penetrated these

segments?

Tiger Airways is already serving fifteen countries1 in international air travel as well as

Australian Domestic market. As Tiger Airway’s hub is based in Singapore, it can plan all the

possible air routes that falls under short and medium haul flight (max 6 hours of continues

flight). If extended fly is required then the same can be achieved through alliances with other

regional airlines.

Most of the carrier’s owned by Tiger Airways are of series A320 aimed at standardisation and

better service and maintenance. The Figure 2 on page 19 illustrates the nominal range that

could be safely covered by an Airbus A320 carrier, considering Singapore as starting point.

1 Singapore, Australia, Bangladesh, Cambodia, China, Hong Kong, India Indonesia Macau, Malaysia, Philippines, Srilanka, Taiwan, Thailand,

Vietnam

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Figure 2 – A320 Flying range, considering Singapore as Hub, Source (http://www.airbus.com n.d.)

The Table 1, on page 6 provides the list of countries and corresponding population aged 15 to

65, those can be considered as potential business and / or non-business travellers. The countries

currently served by Tiger Airways are highlighted.

The Table 7 on page 11 provides the list of major Asian countries with their corresponding

spending on air travel for the year 2011 and forecasting up to 2016. Out of the 15 countries

listed, Tiger Airways is already flying for eleven countries and the same are highlighted. The

unserved markets like Japan, South Korea, Myanmar and Nepal could be good places for

market development strategy considering new destinations from Singapore.

Countries like India and China are the best markets for market penetration strategy by way of

starting domestic flight services; however constraints by country regulations should be

considered.

The table 31 on page 59 on the Appendix 1 - B. Tourism Flow Outbound, India provides the

forecasted number of arrivals with country of origin, and the table 32 provides the mode of

arrivals. On combined observation, it can be noticed that the Asian countries like Australia,

Japan, Malaysia, Singapore, South Korea and Srilanka are domination the list, this could be a

good indication of future business potential.

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In the same way, the table 44 on page 66 on the Appendix 1 - B. Tourism Flow Outbound, India

provides the forecasted number of departures with country of destination, and the table 45

provides the mode of departure. On combined observation, it can be noticed that the Asian

countries like Australia, Japan, Malaysia, Singapore, South Korea and Srilanka are domination

the list, this could be a good indication of future business potential. It is also worth to note that

Singapore, Malaysia and Thailand are the most dominating destinations.

Indian Government has recently announced FDI up to 49% in domestic air transportation

market, kindly refer to http://www.investindia.gov.in/?q=civil-aviation-sector for more details,

this could be a better opportunity for Tiger Airways to extend its domestic airline business

share in India.

The same analysis, given in the above paragraphs, for other markets like China, Japan and

South Korea are available in the appendix, kindly refer to:

Appendix 1 - C. Tourism Flow, China

Appendix 1 - D. Tourism Flow, Japan

Appendix 1 - E. Tourism Flow, Singapore

Hence, based on the detailed Geoclustering analysis presented in the previous heading, TAs

geographical segments are:

Current Services New Services

Current markets India, China SME Business Class

New Markets Japan, South Korea, New

Zeeland

As already seen, The Table 2 presented earlier gives the Airline Passenger Traffic in absolute

numbers showing the size of the airline passenger market and the Table 3 shows the growth

index taking year 2006 as basis; this could be a better indication of the growing airline

passenger trend in Asian region.

The Table 4 on page 8 provides the visitor arrival into Singapore from all the major Asian

countries. This would be the clear cut indication for the Tiger Airways to understand the

http://www.investindia.gov.in/?q=civil-aviation-sector

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passenger traffic that needs to be addressed and Tiger Airways should make all the possible

infrastructure expansion activities to handle expected additional passenger traffic.

The Table 5, Table 6 and Table 7 provide the economic factors that would be a deciding

criterion for the market penetration and expansion. It can be clearly notices from the tables that

the countries like India and China are spending a lot in air travel which can be seen as a good

market for Tiger Airways to penetrate, and the countries like Japan, South Korea, New Zeeland

also spends a lot for overseas travel, that needs to be tapped by Tiger Airways.

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3.3 POSITIONING & STRATEGY

When it comes to positioning in the selected Geoclustering segments, there should be specific

strategy to address the need of each segment, and to have a holistic positioning approach by

way of addressing all possible needs and demands.

In overall, we can consider to follow the Michel Porters Three Generic Strategies to position

well with-in the given market segments. We have considered Overall Cost Leadership and

Focus aspects.

3.3.1 OVERALL COST LEADERSHIP

Tiger Airways has already identified as one of the best low priced airlines in the LCC segment.

However, when it comes to overall pricing, modifications such as change in schedule and other

details, TAs price is higher than its competitors like Air Asia and Jet Star Asia; hence Tiger

Airways has to do more to keep its price lower to attract more customers.

For example, the Table 8 on page 23 provides the price for Singapore to Perth air travel with

change in schedule option enabled. It can be clearly seen that Tiger Airway’s price is higher

than Air Asia’s price.

Hence, in order to create the overall cost leadership, Tiger Airways has to make sure that there

is no hidden cost involved and the costing structure is transparent to the customers.

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Table 8 – Pricing comparison of Tiger Airways and its rival Air Asia

The right side

price has been

taken from TAs

website on 30th

Oct 2012 7:45 am,

considering

Singapore as

Departure and

Perth as Arrival

The left side price

has been taken

from AAs website

on 30th Oct 2012

7:45 am,

considering

Singapore as

Departure and

Perth as Arrival

In this requirement, Tiger Airways can follow the Business Operations Streamlining Model

implemented by Southwest Airlines (PHILIP KOTLER 2012).

An extract of the same has been provided on attachment Appendix 2 - C. Southwest Airlines,

kindly refer to the same for more details.

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3.3.2 FOCUS

Tiger Airways should focus on following market segments, gets to know them intimately, and

pursues cost leadership within the target segment

As stated earlier under differentiation, TAs focus markets and positions would be as below:

Geographical Segments:

Market Penetration: - India, China

Market Expansion: - Japan, South Korea, New Zeeland

Demographic / Economic:

SME Business Travellers

Non-Business Travellers

3.3.2.1 SME BUSINESS TRAVELLERS

Tiger Airways has to focus to be one of the high class airlines in LCC segments, by way of

offering business class with low fare (at the price of scheduled airlines economy class, refer to

heading 3.5.3 on page 29) targeting SME business travellers with-in Asian countries. The

facilities like on-board internet and other business requirements can be provided as add-on or

as basic inclusive.

TAs one of the major strength is its on time performance. Referring their website, it can be

found that on an average Tiger Airways is 91 to 95% on time on departure as well as arrival

(www.tigerairways.com n.d.). This can be further used to differentiate themself as one best

schedule followers that could help

SME business travellers to reduce

their overall scheduling time.

Most of the business travels with-

in Asian region as short time

notice and time is essence for

them, hence this could be a major

advantage for tiger as their

booking system allows booking up to an hour before flight departure.

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Tiger Airways can adjust its pricing strategy in such a way that it gains the same income in

place of a 4 seat which would be the same as earned by 6 seat row configuration. A proposed

business class seating would be as shown aside (http://www.airbus.com/ n.d.). Tiger Airways

may consider naming this as Tiger-Biz class.

3.3.2.2 NON-BUSINESS TRAVELLERS

Non-Business Travellers primarily includes leisure, visiting friends and relatives and other

purposes such as sports, education, medical, shopping, religion. Non-business travel can be

broken out into couples, families, groups (including friends, school trips and organised sport

trips, organised tour groups), singles (including backpackers travelling alone), couples and

others.

So, when it comes to non-business travellers, the core need is to fly from one place to another

place in a safe condition & with the facilities to which they have paid.

Hence, Tiger Airways has to position themselves as a safe airline with price benefits and

complete satisfaction.

At the moment, TAs seat allocation is not based on assignment basis. Tiger Airways has to

focus to group the family members with-in a row, this could make them convenient in terms of

experience with family group. Tiger Airways can also refer to the seat allocation process of

southwest airlines, in that Instead of assigned seating, passengers are assigned to one of three

groups (A, B, C) and a number when they check in. The number refers to where they stand in

line at the gate. Group 'A' boards first, and once on board, passengers may sit anywhere they

like.

Another needed approach is to treat kids with special physical mementos. This could improve

the TAs friendly image with passengers, as a basic psychological of kids-parents relationship.

Tiger Airways may consider naming this as Tiger-Eco class

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3.4 MARKETING MIX

Tiger Airways is in the service sector of Major Service with Accompanying Minor Goods and

Services.

In order to focus more on the LCC industry segment with-in the given geographical and

demographical segment, Tiger Airways should include new service offering mix both in width

and length.

Flights Car Hotel Travel - Insurance

SME Business

Travellers

Hertz Tie-up with all

major hotels in

destinations with

discounted fare

Different length of

travel insurance

based on Business /

non-business needs Non-Business

Travellers

Connecting Flight

Add-on / Baggage

Transfer

Asian Meal Add-on

Additional Baggage

On-Board Internet

on business class

On-Board

Emergency Calls

Reliable Internet

Portal

Efficient Call Centre

On properly addressing each service, the overall customer experience through the service

provided can be enhanced. For example, referencing the Appendix 1 on Tourism Flow of India,

China, Japan, South Korea, and Singapore we can very well understand the pattern and mix of

passenger flow in and out and accordingly address the needs and make Promotional Packages.

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3.4.1 FEATURES

99% of Tiger Airway’s services booking are done through its internet portal. Tiger Airways

should make its best effort to make it user friendly and reliable. For example, Tiger Airways

needs to consider a date picker in its portal instead of a list box. On a friendly survey done

within our contacts, we found that they prefer date picker. Also they compare the same feature

offered by other Airline portals such as Air Asia, Scoot, and Jetstar Asia etc.

TAs non-user friendly date picker.

Most of the Gen X and Y prefer to

have enhanced features in the

interface to easy their experience.

AAs easy date picker, as well as selection of service

on the dashboard itself.

Even the recently launched airline named Scoot is

also having a good and easy to use user interface.

Kindly have a look below.

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3.5 BRAND POSITIONING

3.5.1 CURRENT MARKET CONDITION & PERFORMANCE

During the global financial downturn between 2007 to 2011the number passenger’s carried by

scheduled airlines were on falling trend, whereas the number of passengers carried by LLCs

were on increasing trend, Which clearly indicates that travellers are now more price conscious

on the air travel expenses that are normally done for business and non-business travels.

The Table 58-Air by Category: Passengers Carried: 2006-2011, on page 73 of ‘Appendix 1 -

E. Tourism Flow, Singapore’ clearly indicates this change in the trend. A snap shot of the table

has been presented below for immediate view.

Also,

Referring table 61, Airline Brands by Key Performance Indicators 2011 on page 74 of

‘Appendix 1 - E. Tourism Flow, Singapore’ it can be clearly understand that, as of 2011, Tiger

Airways is having a major share of the Singapore LCC business. A snap shot of the same has

been given below.

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3.5.2 CURRENT BRAND POSITION

TAs current brand positioning is as follow: (www.tigerairways.com n.d.)

Empowering travellers by enabling them to fly frequently to more places

Providing options and choices to customers who want a safe and reliable way to travel

As of now, the above brand positioning considered by Tiger Airways is not well communicated

to the current and prospective customers. The real situation is that LCCs has contributed a lot

to sustain lots of business and non-business travellers to continue their traveling needs during

the world economic crisis that started 2007 onwards.

3.5.3 PROPOSED POSITIONING

Tiger Airways can tap the fact stated in previous heading and reposition them as a brand that

plays its part in economic sustainability even under world economic recession. It can also

promote themselves as partners of SMEs, and assisting them to continue their business travel

even during recession and sustain their business.

Figure 3 - Full Economy Design, (http://www.airbus.com n.d.)

Figure 4 – Balance of Economy and Business Class Design, (http://www.airbus.com n.d.)

The Figure 3 shows the full economy seating design and Figure 4 shows the balance of business

class and economy class design. The change in seating will make Tiger Airways as SME

friendly airlines by way of providing business class features at the price of economy class of

schedules airlines.

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For example, we have a price from Singapore to Chennai on same day from Singapore Air and

Tiger.

Tiger Airways

At the moment tiger is having 6 seats in a row, if suppose they have

switching to 4 seats in a row to have the SME business class, the

price is still below the Scheduled Airlines Economy class.

$424 x 6 = $2,538 / row

New price for SME business class would be $2,538 / 4 = $634

The price $643 is well below the price of $1,062 for a Scheduled

Airlines Economy class. Hence the proposal of SME business class

is well workable.

Scheduled Airline

The potential growth is higher on SME business class passenger who travel from the major

countries like India to Australia and vice versa, as well as china to Australia / India (Southern

region) and vice versa. The scheme is illustrated in the flow chart below:

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The blue dotted lines show the logical flow and the black lines shows the actual flow of the

traffic. So, connecting the SME business travellers between these biggest countries would be a

great business opportunities for TA and it should be capitalised.

For example, the table 33 on page 54 of Appendix 1 - B. Tourism Flow, India, we can clearly

understand that the Business Travellers make more than 35% on overall arrivals. Please have

a look on the snap shot of the table 33 below:

The same data is available for China, kindly refer to table 33 on page 57 of Appendix 1 - C.

Tourism Flow, China, please have a look on the snap shot below:

Singapore China

Australia

India

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Apart from addressing the SME business travellers, Tiger Airways must also use the fact stated

in the previous heading to address the non-business travellers. Tiger Airways can state that it

make possible to travellers to explore and take holiday connect with families even under world

economic recession, thereby enhancing and sustaining family happiness and bonding.

Proposed Brand Slogan “People Oriented and Socially Responsible LCC Airline”

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3.5.4 APPROACH

We recommend Holistic Marketing Approach with all the activities concentrated through the

7P of Marketing Activities.

In order to position Tiger Airways as People Oriented and Socially Responsible LCC Airline

Brand, Tiger Airways has to focus on the following areas of value delivery:

Place: - Tiger Airways is fully delivering its tickets through internet. As discussed already

under heading 3.4.1 on page 23 Tiger Airways must enhance its internet portal user friendly

and easy to use. The current old trended appeal is not appreciable to most of the Gen X and Y

customers as they continue to compare with other options. The revolutionised internet space

has increased expectations of customers in terms of easiness and effectiveness.

Price: being LCC, ta should take cost leadership as strategy and make its price cheaper

compared to its rivals as already mentioned under Table 8 at page 23, ta should focus on cost

reduction and pass the savings to its passenger to achieve success in the cost leadership strategy.

Promotion: Good Promotion on Destinations & Senior Citizens, and Expanding Partnerships

with other regional / International LCC airlines to expand its current network and meet the

growing demand.

People: - Better Training to employees, start from Check-in counter to cabin crews, on the

subjects of passenger handling and conflict resolution, hospitality and empathy will

considerable improve the overall delivery of the service.

Process: robust booking website & call centre for emergency situation handling. TAs website

is one of the very poorly designed and presented user interfaces. The details provided under

3.4.1 on page 27 explain this issue in detail. Hence it should be TA utmost interest to restructure

its website to provide a good and comfortable web booking interface.

Physical Environment: Better Seating for Economy and SME Business Class, on board

Entrainment on pay per use basis.

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Product / Service: SME Business Class, Economy, Car, Hotel, Insurance etc are to be

introduced and well communicated to its customers so that the same would be purchased while

booking the flight ticket.

On top of value delivery, some of the POP and POD are to be structured and presented to

customers in such a way that it touches the hearts, which will eventually lead to emotional

branding strategy:

Few points which can be highlight are:

Tiger Airways has helped to remain families connected even under economic downturn,

by way of providing low priced travel options

Even middle and even low income families can travel on air and make a good holiday

experience.

SMEs sustained their business by keeping their business travel possible even under

recession.

Above all, the authenticity of Tiger Airways needs to be communicated well to its

customers.

Brand consultant Marc Gobé believes emotional brands share three specific traits: (Gobé

2001)

Strong people-focused corporate culture,

a distinctive communication style and philosophy, and

A compelling emotional hook.

All the above presents the positioning strategies that can be well communicated to the current

and prospective customers by way of television advertisement as well as printed media,

Advertisements play a very important role in branding and brand positioning.

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4 FINANCIALS2

In the previous chapters we have seen the market insight and the potential market segments for

penetration and expansion as well as strategies for achieving the same. However all there are

not possible with considerable financial investment.

Tiger Airways need to invest for new A320

carriers for all the market penetration activities

in India and China as well as expansion

activities for japan, South Korea and New

Zeeland. On the other hand, Tiger Airways

should also consider other alternatives in

market penetration, like investing / buying

shares of already existing LLC companies in

India and China, which would make Tiger Airways position safe and convenient.

As we have proposed the introduction of SME Business class in existing carriers, Tiger

Airways need to invest additional for changing the seats and additional infrastructure like on-

board internet.

On top of carrier improvement activities, Tiger Airways should also need to invest on employee

training, which is one of the important aspects of overall experience of passengers while flying

with Tiger Airways.

From the view of Brand repositioning, Tiger Airways has to spend extensively in Brand

Repositioning efforts like advertisement campaigns and particularly Television

Advertisements. As it is noticed that most of the lower and middle class people watch television

2 Due to the limited information available in financial for the airline and other facilities, our team is not able to provide the absolute numbers

for calculations, Hence summarized only the areas that need to be considered on financial terms.

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than reading newspaper / magazines, the TV advertisements will play a major part in Brand

Repositioning activities.

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5 CONTROLS

Controls help management measure results and identify any problems or performance

variations that need corrective action

Market share by Revenue: - Tiger Airways should monitor the market share in term of revenue

monthly and annually.

Customer Satisfaction: - Periodic Customer feedback should be received from Business class

customers on entire travel experience.

Business class Occupancy Rate: - Average occupancy rate of Business class should be

monitored monthly and annually and should be maintained close 100%.

New Products for Business class: - Business class traveller’s frequency of travel should be

observed and new products or Customer loyalty programs should be rolled out.

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5.1 MARKETING ORGANIZATION

The proposed marketing plan will be part of the overall business plan of Tiger Airways for the

next strategic year for business development. The overall responsibility falls under the Chief

Executive Officer of Tiger Airways, and all the marketing related activities will fall under the

Marketing Director.

As we know already, most of the marketing efforts provide success only when it is implements

from all the aspects of business, hence we propose Tiger Airways to follow the holistic

marketing approach and structure the whole marketing organisation.

(PHILIP KOTLER 2012)

The Four key constituents for relationship marketing are customers, employees, marketing

partners (e.g. channels, suppliers, travel agents, tourism bards and SME), and members of the

financial community (shareholders, investors, analysts). The Marketing Director must create

prosperity among all these constituents.

All Tiger Airways communications must also be integrated. Tiger Airways should choose

communication options that reinforce and complement each other. The Marketing Director

might selectively employ television (in major), radio, and print advertising, public relations

and events, and PR and Web site communications so each contributes on its own as well as

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improving the effectiveness of the others. Each must also deliver a consistent brand message

at every contact.

As part of Internal marketing, the marketing director must seek the cooperation of all the

departments, particularly Human Resource, in the task of hiring, training, and motivating

employees who want to serve customers well. It ensures that everyone in the organization

embraces appropriate marketing principles, especially senior management.

The Marketing Director should go beyond sales revenue to examine the marketing scorecard

and interpret what is happening to market share, customer loss rate, customer satisfaction,

service quality, and other measures, and should also consider the legal, ethical, social, and

environmental effects of marketing activities and programs implemented.

~End~

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Works Cited

Euromonitor International. "Population Aged 15-64: January 1st: Euromonitor International

from national statistics." n.d.

Euromonitor International. "Airline Passenger Traffic: Euromonitor International from

International Civil Aviation Organization (ICAO)/UN/World Bank/national

statistics." n.d. (accessed 10 26, 2012).

—. "Average Gross Income by Age: Euromonitor International from national statistics." n.d.

(accessed 10 26, 2012).

—. "Consumer Expenditure on Air Travel: Euromonitor International from national ." n.d.

(accessed 10 26, 2012).

Gobé, Marc. Emotional Branding: The New Paradigm. New York: Allworth Press, 2001.

http://www.airbus.com. n.d.

http://www.airbus.com/aircraftfamilies/passengeraircraft/a320family/a320/performan

ce/ (accessed 10 27, 2012).

http://www.airbus.com/. n.d. http://www.airbus.com/ (accessed 11 02, 2012).

—. n.d. http://www.airbus.com/ (accessed 11 03, 2012).

https://app.stb.gov.sg. n.d. https://app.stb.gov.sg/asp/index.asp (accessed 10 27, 2012).

PHILIP KOTLER, KEVIN LANE KELLER. Marketing Management. 14. Pearson

Education, Inc, 2012.

The Global Education Project. "Life Expectancy, Food and Hunger, Access to Safe Water,

AIDS, Population, and Human Conditions - Earth Web Site."

www.theglobaleducationproject.org. n.d.

http://www.theglobaleducationproject.org/earth/human-conditions.php (accessed 10

26, 2012).

www.tigerairways.com. n.d.

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—. About Us. 10 25, 2012. http://www.tigerairways.com/sg/en/about_us.php (accessed 10 25,

2012).

—. Destination Map of Tiger Airways Limited. n.d.

http://www.tigerairways.com/sg/en/destination_map.php (accessed 10 25, 2012).

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Appendixes

Appendix 1

1) Appendix 1 - A. Passage to India

2) Appendix 1 - B. Tourism Flow, India

3) Appendix 1 - C. Tourism Flow, China

4) Appendix 1 - D. Tourism Flow, Japan

5) Appendix 1 - E. Tourism Flow, Singapore

6) Appendix 1 - F. Budget Travel Briefing.pptx

7) Appendix 1 - G. Business Travel A challenging Recovery.pptx

8) Appendix 1 - H. Asia Travel and Tourism Promise of Long-term Growth.pptx

Appendix 2

1) Appendix 2 - A. A320 Technical Details

2) Appendix 2 - B. A320 AIRCRAFT CHARACTERISTICS

3) Appendix 2 - C. Southwest Airlines

Appendix 3

1) Appendix 3 - A. Continent Population Aged 15-64.xlsx

2) Appendix 3 - B. Airline Passenger Traffic.xlsx

3) Appendix 3 - C. Airline Passenger Traffic - Index.xlsx

4) Appendix 3 - D. Average Gross Income by Age.xlsx

5) Appendix 3 - E. Consumer Expenditure.xlsx

6) Appendix 3 - F. Consumer Expenditure on Air Travel.xlsx

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