INTRODUCTION

Pakistan has a new airline service – Airblue – Friday, June 18, which now waits in the wings to take off to
the horizons, spheres and skies. Initially within the country – yet an illustrious plan to extend its’ voyage.

The airline with three new-generation aircrafts has planned to fly between Karachi and other major cities
of the country – including Lahore and Islamabad.

AirBlue, the airline to get the RPT license under the new aviation policy, is in the final phases of starting
domestic operations

Perspective

AirBlue shall offers business and economy classes and will be the first airline in private sector to have
Pakistani pilots and engineering staff trained according to international standards.
The airline in this regard had already entered into agreements with Airbus, a dazzling carrier, being
manufactured by France.

Technical information

AirBlue has acquired 3 new generation Airbus A-320 aircraft on dry lease each of it has 20 Business Class
seats and 126 Economy class seats. AirBlue would help generate over 2,400 jobs — 400 direct and 2,000
indirect — for an all Pakistan crew. AirBlue which has already hired 25 cockpit crew which are getting
hands-on training in Europe while it has also hired 50 cabin crew which is also undergoing training
overseas.

Paperless Operation

Operation of the AirBlue will be paperless, any person who has access to Internet can get reservation
from our web-site with PNR numbers and get out the print, which is acceptable even in the airport
restricted area.
The AirBlue management had held eight workshops, four in Karachi, two in Lahore and two in twin cities
of Rawalpindi and Islamabad. The objective of these workshops is to build understanding among all
stakeholders of the airline.

Innovative e-ticketing Technology

Pakistan's most modern domestic airline AirBlue has introduced its latest and innovative web based e-
technology to members of the Travel Agents Association of Pakistan [TAAP] in Islamabad of late.
A large number of travel agents eager to get acquainted with the airline's online superior reservations
services attended the full-day workshop, which was facilitated by Syed Nasir Ali, Director Commercial,
Zahid Saleem Khan, Regional Head TAAP [Rawalpindi Chapter] Armaan Yahya, District Manager
Islamabad/Rawalpindi and Ms. Sadaf Ali, Manager Systems Support and Ticketing of the AirBlue.

Website: www.airblue.com

AirBlue has unveiled its website, emphasizing high-quality service and posting career opportunities for
professional crew and aviation personnel.
Infrastructure plans include some of the most technologically advanced aircraft in the world, featuring
next-generation reservations, cheek-in, security and service.
The AirBlue website http://www.airblue.com/ offers considerable insight into the company's philosophy
and vision. It emphasizes high-quality service and a commitment to employ best-of-breed candidates.
In addition to other features, AirBlue has integrated unique innovations to ensure security and
affordability. Among these are complete online reservation systems, online reservation hold/in person
payment at various locations, and mobile airport check in procedures.

Focus of AirBlue

AirBlue aims to focus passenger comfort at prices that offer value for money and that explains its
decision to have leather-upholstered seats in the Business class and offering in-flight entertainment not
offered by any other airline, including the PIA, on the domestic sector. The airline has also made
arrangements with quality caterer outside to serve what it calls "exquisite cuisine" to the travelers.
Initially, it will operate 3 flights on the Karachi-Lahore sector and similar number of flights on the Karachi-
Islamabad sector daily.
AirBlue has introduced the concept of total e-ticketing for the convenience of passenger which would
also help it to eradicate the back-dating system associated with manual ticketing that costs airlines,
including its competitors, millions in losses every year. The absence of manual ticketing and the
introduction of computerized check-ins by hand-held computers would help AirBlue offer quality-
conscious travelers value for their money by offering quality product and consistent scheduling.
In addition to 3 daily flights each on the Karachi-Lahore and Karachi-Islamabad sectors AirBlue also has
plans to operate one circular Karachi-Sukkur-Multan-Karachi flight daily.
The total frequency of which adds up to 15 flights a day. The AirBlue is aiming to provide world-class
service on new generation aircraft which are comparatively newer than those used by the other private
airlines, AirBlue's aircraft are just about 5-year-old, without compromising on quality, service or fare.

AirBlue’s Special Incentives to Customers

With all this the newest airline of Pakistan — AirBlue — has offered a wonderful package to its clients and
travelers. Besides a lot of other facilities, the incentives, not extended by any other airline in Pakistan —
so far includes:

Plan Ahead and Save

Earn discounts for booking your travel plans early!

AirBlue online flight reservations system automatically rewards you for planning ahead. 14 day advance
and 7-day advance fares will be reflected in the fares presented when you book online.
Save up to Rs.300 every time you purchase your AirBlue ticket through Airblue’s website.
There is no limit to the number of times you may take advantage of this discount.
Restrictions apply. Please review the rules below for details.

Rules
Frequent Flyer Membership not required.
Discount is applied after full fare (including taxes and applicable fees) is calculated, and will total 2% (up
to Rs.300).
Discount also applies to reservations held and paid-for at a ticketing office within 24 hours.
There is no limit to the number of times you may take advantage of this discount while this special is
offered.
AirBlue Ltd. reserves the right to make changes to this program at any time. Any changes to this special
will be posted on the AirBlue website: www.airblue.com.pk and www.airblue.com

Customer Service

At AirBlue, the airline strives to provide you with the best tools to help you with your online travel
reservations. This includes online help resources, such as answers to "Frequently Asked Questions" and
email assistance.
It also staff a 24-hour call center to book travel and answer questions.

CORPORATE VISION

Mission Statement

Airblue will be a cost effective airline aiming to provide affordable and convenient air travel with luxury
and elegance.

“Enjoy The Difference – Freedom, Flexibility And Savings.”

CORPORATE STRUCTURE

Public Limited Company

Initial Capitalization Of Over Rs. 500 Million

Will Be Listed On KSE By The End Of 2004

SCHEDULE

Initially Introducing

3 Daily Round Trip Flights Between KARACHI And ISLAMABAD

3 Daily Round Trip Flights Between KARACHI And LAHORE

FUTURE EXPANSION
Daily Flights To

Sukkur

Faislabad

Quetta

Gwadar

Multan

Peshawar

MANAGEMENT TEAM

Name/Title Previous Experience Years In

Airline Industry

Shahid Khaqan Abbasi Chairman & Chief Executive

COO Officer At PIA from ‘97-’99 3

Captain Morgan S. Felix Director Flight Operations, Senior

Director Operations Line Captain And Flight Instructor

at PIA and CAA inspector. 40+

Syed Nasir Ali General Manager Marketing With

Director Commercial Extensive International And

Domestic Experience At PIA. 31

Athar H. Ansari Director Engineering & Maintenance

Director Engineering And Chief Engineer At PIA & CAA 40

Inspector.

PRODUCT LIFE CYCLE STRATEGIES

The Product Life Cycle is a course of a product’s sales and profits over its lifetime.
INTRODUCTION
After launching the new product, management wants the product to enjoy a long and happy life.
Management is aware that each product will have a life-cycle, although the exact length and shape is not
known in advance.

PRODUCT LIFE CYCLE

It involves five distinct stages:

1. Product development
2. Introduction
3. Growth
4. Maturity
5. Decline

PRODUCT DEVELOPMENT:

It begins when the company finds and develops a new product idea. During product development, sales
are zero and the company’s investment costs months.

INTRODUCTION:

This is a period of slow sales growth as the product is introduces in the market. Profits are non-existent
in this stage because of the heavy expenses of product introduction.

GROWTH:

This is a period of rapid market acceptance and increasing profits.

MATURITY:

Is a period of slowdown in sales growth because the product has achieved acceptance by most potential
buyers. Profits level off or decline because of increased marketing outlays to defend the product against
competition.

DECLINE:

It is the period when sales fall off and profits drop.

Not all products follow this product life cycle. Some products are introduced and die quickly; others stay
in the mature stage for a long, long time. Some enter the decline stage and are then cycled back into the
growth stage through strong promotion or repositioning.

PRODUCT DEVELOPMENT

Behind the launch of AirBlue lie months and months of market research and knowledge. All the senior
executives of AirBlue are well experienced in their field connecting them to the aviation industry. The
launch of AirBlue partly is due to the major contribution of their knowledge and experience.
Basically a whole set of product and quality development and maintenance was carried out in the
development stage. A complete analysis of market was done and an evaluation was made about the
preferences of their customer. Then the whole airline was developed on those attributes. The product,
though in the introduction stage, is still going through the final stage of its development.

Now, the PRODUCT LIFE CYCLE according to AIRBLUE is discussed below:

INTRODUCTION STAGE:

Definition:

It is the product life-cycle stage in which the new product is first distributed and mage available for
purchase.

Launch:

Airblue was launched on 18th June ‘2004. Airblue carried out a very soft launch strategy aiming at
promoting the company mainly through word-of-mouth

Sales growth:

The sales are growing gradually as faced by any new product. It aims to focus on quality and service
primarily at fares competitive with the national flag carrier PIA therefore those people who have been
traveling in PIA consider it more reliable and prefer traveling in that. It will only be in the due course of
time that people will be shifting to AirBlue and the sales will be growing then.

Profits:

At the moment Air Blue’s profits are going on an average as it has been launched only a month ago
and due to the heavy trade promotions given by them in the form of discounted fares and concessions for
students and senior citizens.

Promotional Spending:

Air blue has given an advertisement on television and FM 107 in the beginning but now they are mostly
into travel agents. They are meeting travel agents and also held 3 sessions of seminars, 2 hours each in
Sheraton hotel. There are no billboards on the streets but they do have some boards outside some travel
agencies and their main promotional strategy is word of mouth.

Competitors:

As every other firm does not reveal the names of their competitors, same is the case with airblue. But
they are mainly targeting to capture they customers of PIA. Though as obvious from survey the other two
main domestic competitors at the moment are Shaheen air and Aeroasia.

GROWTH STAGE:
Definition:

It is the product life-cycle stage in which a product’s sales start climbing quickly.

Sales:

As airblue is in its introduction stage, and everyday people are getting more and more aware of it, the
sales are expected to increase as airblue is a very good airline which is totally e-based and has
everything new.

Profit:

It is obvious that when the sales will increase their profits will also increase to an extent in the beginning
but when they will expand this airline they’ll most probably have large amounts of profits as it has
introduced new technology in Pakistan like e-ticketing and all.

Prices:

Airblue offered their fares at 50% discounts on the first 3 days of their launch. And now they are offering
25% and 15% discounts on the available seats.

Airblue aims to focus passenger comfort at prices that offer value for money and that explains its
decision to have leather-upholstered seats in the Business class and offering in-flight entertainment not
offered by any other airline, including the PIA, on the domestic sector. The airline has also made
arrangements with quality caterer outside to serve what it calls "exquisite cuisine" to the travelers.

Promotional spendings:

Most probably the promotion strategies of airblue will be the same.

Distribution network:

After a month or so, airblue is going to launch itself in sukkar, Faisalabad, Quetta, gawadar, Multan and
Peshawar. And most probably after 1 year they’ll introduce themselves internationally.

Competitors:

The competition will be heating up once again for the domestic market with the start of operations of
three additional airlines — a new one Royal Airlines and one old airline Safe Air. At present there are
three airlines- PIA, Saheen and Aero Asia — are sharing the domestic market among themselves but soon
there would be six carriers operating on the domestic sector.

MATURITY STAGE:

Definition:

It is the stage in the product life cycle in which sales growth slows or levels off.

Sales:
As for the future, airblue is expecting their sales to be at the peak.

Profits:

With the increasing sales, the profits are also expected to increase.

Prices:

It also has plans to offer heavy discounts for the senior citizens and students as well as operating night
coach at discounted fares.

Competitors:

During the time when airblue will reach its maturity stage they will have to face many competitors. Many
airlines will try to reach their level and it is also expected that new airlines will be launched here.

PRODUCT

Levels Of The Product.

The Core Product

It is the most basic level of the product – the benefit that the product offers.

The underlying need is the convenient, fast and high quality mode of traveling.

The Actual Level of Product

The actual product is Airblue airlines.

The actual product has the following characteristics:

Quality level

They are maintaining their quality mainly through all the competitive advantages gaining strategies
namely, their product differentiation, service differentiation channel differentiation, image differentiation
and people differentiation. These are discussed later in detail.

Features

The special features airblue offers are the airline’s attitude of the care they show towards their customers,
their flexible fares, their aircrafts-new Generation Airbus A320 Aircraft, Drop Down Screens After Every 4
Rows, 2% Extra Discount On Self-Reservation, Leather Seats In Business Class and many other such
features.

Design

The company plans to provide world-class service to passengers on domestic flights by making use of
latest information technology and introduce products and services that will be the first of their kind in
Pakistan. They provide catering from Gate Gourmet, Change in Reservation According To Customer
Convenience and Instant Computerized check-ins. All these are a part of the design of the whole product.

Brand name

The brand name is AIRBLUE. This name has been very appropriately selected pertaining to the product
and its purpose.

Packaging

The tickets offered by them are in the form of e-ticket. E-ticketing is an electronic version of a paper ticket
which no longer requires your ticket to be printed on paper. Instead, it is stored in Airblue’s reservation
system as an electronic ticket or e-ticket. Its planes are New Generation Airbus A320 Aircraft. No further
packaging can be discussed as it is mainly a service with a major hint of tangibility

The Augmented Level of Product

They provide high service augmentations to their product.

Product classification

It is a shopping product. Shopping product is a consumer good that the customer, in the process of
selection and purchase, charastically compares on such basis as suitability, quality, price and style.

INDIVIDUAL PRODUCT DESIGN

In individual product design we will focus on decisions about the following:

• Product attributes
• Branding
• Packaging
• Labeling and
• Product support service.

PRODUCT ATTRIBUTES:

Developing a product or service involves defining the benefits that it will offer such as, quality, features,
and style and design.

Product quality:

It is the ability of a product to perform its function: it includes the products overall durability, reliability,
precision, ease of operation and repair, and other valued attributes.

Airblue aims to focus on quality and service primarily at fares competitive with the national flag carrier
PIA. It also has plans to offer heavy discounts for the senior citizens and students as well as operating
night coach at discounted fares. The Airblue, thus, is looking forward to soon become the fourth [yet
most popular] airline serving the domestic sector in a market, the bulk of which is served by the PIA and a
portion is enjoyed by Shaheen Air International and Aero Asia which promotes itself as the country's first
low fare airline.

AirBlue has acquired 3 new generation Airbus A-320 aircraft on dry lease each of it has 20 Business Class
seats and 126 Economy class seats. The company plans to provide world-class service to passengers on
domestic flights by making use of latest information technology and introduce products and services that
will be the first of their kind in Pakistan.

Product features:

it shows that how many versions a product has? A product can be offered with varying features.

Product’s style and design:

Another way to add customer value is through distinctive product style and design.

Style simply describes the appearance of a product. Styles can be eye catching or yawn producing.

AirBlue aims to focus passenger comfort at prices that offer value for money and that explains its
decision to have leather-upholstered seats in the Business class and offering in-flight entertainment

Unlike style, design is more than skin deep, it goes to the very heart of a product. Good design
contributes to a product’s usefulness as well as to its looks.

AirBlue has introduced the concept of total e-ticketing for the convenience of passenger which would
also help it to eradicate the back-dating system associated with manual ticketing that costs airlines.

BRANDING:

It is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of
a product or service.

Brand Equity:

The value of a brand, based on the extent to which it has brand loyalty, name awareness, perceived
quality, strong brand associates, and other assetssuch as patents, trademarks, and channel
relationships.

Brand Name Selection:

The name consists of two words, air and blue. Air refers to the medium of their travel and blue refers
to the sky where its planes belong. Besides the name consist of very simple but catchy words. The name
airblue can also be referring to the destinations of the company, the heights of sky where the airline
belongs.

PRODUCT SUPPORT SERVICE:

Customer service is another element of product strategy. These are the services that augment actual
products.
PRODUCT LINE DECISION

PRODUCT LINE:

It is a group of products that are closely related because they function in a similar manner, are sold to the
same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

PRODUCT MIX DECISION

PRODUCT MIX:

These are the sets of all the product lines and items that a particular seller offers for sale.

Airblue, as it is in its introduction stage, has not taken any product mix or product line decisions.

SERVICE MARKETING:

INTERNAL MARKETING:

Marketing by a service fir to train and effectively motivate its customer-contact employees and all the
supporting service people to work as a team to provide customer satisfaction.

INTERACTIVE MARKETING:

Marketing by a service firm that recognizes that perceived service quality depends heavily on the quality
of buyer-seller interaction.

PRICE

Factors To Consider When Setting Prices:

Internal factors affecting pricing decisions

Marketing Objectives

Marketing Mix Strategy

Cost

Organizational consideration

Marketing Objectives:

“Before setting price the company must decide on its strategy for the product. If the company has
selected its target market and positioning carefully the price will be fairly simple. At the same time the
company may seek additional objectives such as survival, profit maximization, market share leader ship
and product quality leadership.”
Air Blue is currently using product quality leadership as its pricing goal they are charging a higher price
than other domestic (Private) airlines because of their excellent service quality which is evident in their
food, cabin crew, seating comfort, and on board entertainment, But on the other hand their price is
equivalent to PIA’s price which gives them an edge over other airlines and PIA itself.

At the same time they are also striving for market share leadership by offering a price equal to PIA, but
quality and services far better than PIA.

Marketing Mix Strategy:

“Price is only one of the marketing mix tools that a company uses to achieve its marketing objectives.
Price decisions must be coordinated with product design, distribution and promotion decisions to form a
consistent and effective marketing program”.

For AirBlue price is a crucial product positioning factor that defines the product’s market, competition
and design. AirBlue has set its price higher than other Domestic (private) airline because of their high
standard quality and services. The main reason for their high price is because of their quality which is
catering by world class on board caterers “Gate Gourmet” which is providing catering services to world
class airlines like Emirates, SwissAir, Lufthansa etc. Overall seats in their aircraft are 146, 20 business
class seats and 126 economy class seats. They have installed leather seats in business class with the
latest in flight entertainment in business and economy class with drop LCD screens after every four rows.
They justify their high price by giving travel agents a healthy amount of commission so that the travel
agents suggest people to choose AirBlue to travel domestically rather than any other airline.

Cost

“Cost set the floor for the price that the company can charge for its product. The company wants to
charge a price that both Covers all its costs for producing distribution and selling the product and
delivers a fair rate of return for its effort and risk. A company’s cost may be an important element in its
pricing strategy.”

The Planes that AirBlue is using are all reconditioned so that helps reduce the cost much but on the other
hand they have been providing high quality catering and efficient cabin crew with high language skills
which tend to increase their costs. Other factor effecting their cost is the E-Ticketing System which is an
online seat reservation service which needs a lot of high tech infrastructure and skilled employees which
increases their cost.

Organizational consideration:

“Management must decide who within the organization should set prices companies handle pricing in a
variety of ways. People who influence pricing includes top management, marketing or sales department
product line managers, sales managers, finance managers, and many other people in the organization”.

In AirBlue, the prices are set by Top Management with the help of the Pricing Department and with the
consent of other Middle Managers. AirBlue has a Pricing Department to set the best prices. This
department reports to the Top Management and to the Marketing Department.

External Factors affecting Pricing Decisions

 • Nature of the Market and Demand
• Competition
• Other External Factors

Nature Of Market and Demand

“Whereas costs set the lower limit of prices, the market and demand set the upper limit. Both consumer
and industrial buyers balance the price of a product with the value they are extracting from it. Before
setting the prices, the marketer must understand the relationship between price and demand for its
product.”

AirBlue has set it’s prices keeping the demand of a high quality Airline which is demanded by people it
has set it’s price according to the quality and services it is providing and according to the needs of the
consumers and also keeping in mind the competitors.

Pricing In different Types of Markets

The sellers pricing freedom varies with different types of markets, there are four types of markets each
presenting a different pricing challenge. The types of markets are:

Pure Competition Markets

Monopolistic Competition Markets

Oligopolistic Competition Markets

Pure Monopoly Markets

AirBlue is operating under Oligopolistic Competition where the market consists of a few sellers (PIA, Aero
Asia, Shaheen Airways) who are highly sensitive to others pricing and marketing strategies. The prices
of AirBlue are more or less the same as that of it’s competitors because if they would have kept their
price higher they would have gained nothing even if they were providing high quality services.

Consumer perception Of Price and Value:

The consumer decides whether a products price is right. Pricing decisions like other marketing mix
decision, must be buyer oriented. When consumers buy a product they exchange something of value (the
price) to get some thing of value (the benefits).

According to our survey the consumers a re satisfied with the price of AirBlue as compared to PIA
because of the services and benefits. If AirBlue’s price was the same as PIA’s and the services too the
consumer would not have preferred to switch to AirBlue because of their to the National Airline and they
would not risk their money to experiment a new airline.

“Another external factor affecting pricing decision is competitors cost and prices and possible
competitor reactions to the company’s own pricing moves. A consumer when purchasing a product
carefully evaluates a company’s product’s price and value against its competitors price and value.”

When a consumer buys a product he carefully evaluates the product price with its comparable products.
Airblue has carefully set its prices seeing it’s competitors and the cost of its own services it is turning out
to be a strong competitor of PIA by charging the same price and providing higher quality and service
standards to its customers.

External Factors are as follows:

General Pricing Approaches

The price the company charges will be somewhere between one that is too low to produce a profit and
one that is too high to produce any demand.

AirBlue has set its prices according to the value it is providing to its customers for e.g. catering, seating
capacity, comfort, entertainment, etc. it has also set its price according to its competitor’s price i.e. PIA. It
has kept its price similar to that of PIA so that it can attract a large market share of PIA. Therefore it is
using a combination of Value Based Pricing Approach and Competition Based Approach.

New-Product Pricing Strategies

Companies bringing out a new product face the challenge of setting prices for the first time. They can
choose between two broad categories: Market Skimming Pricing and Market Penetration Pricing.

AirBlue has set higher prices to obtain maximum revenues by targeting small segments who are willing to
pay higher prices. So now they have the chance to attract more customers by lowering the prices, as it
will attract many new customers, which are rated in the lower segments.

• Product Mix Pricing Strategies

The strategy for setting a product’s price often has to be changed when the product is a part of a product
mix. In this case, the firm looks for a set of prices that maximizes the profits on the total product mix.

Product Line Pricing

Setting the price steps between various products in a product line based on cost differences between the
products, customer evaluations of different features, and competitors’ prices.

Airblue has also developed a product line, for example, it offers its customers two types of travel classes
i.e. Economy Class and Business Class priced at around 4500 and 6500 respectively. Each successive
class offers more features and more services, for example, Business Class offer leather seats, 38” leg
pitch, personal LCD screen, more choice of food as compared to Economy Class which offers normal
seats, 32” leg pitch and an LCD screen after every 3 rows.

PRICE- ADJUSTMENT STRATEGIES

o Segmented Pricing

Selling a product or service at two or more prices, where the difference in prices is not based on
differences in costs.

 Customer-segment pricing

Different customers pay different prices for the same product or service. AirBlue charges 50% less for
children under 12 years of age and no charges for infants.
  Time pricing

A firm varies its price by the season, the month, the day and even the hour. AirBlue gives seasonal
discounts, low fare rates on special occasions and 15%-25% discount on early bookings.

o Psychological Pricing

 Reference prices

Prices that buyers carry in their minds and refer to when they look at a given product. Airblue has kept
the same pricing charges as that of PIA to imply that it belongs in the same category. PIA is assumed to
be the best and largest airline in Pakistan. So, to match their services with PIA, Airblue is using this
strategy of charging same price and providing better quality than PIA.

o Promotional Pricing

Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run
sales.

 Special-event pricing

AirBlue gave special discounts to its customers on the occasion of 14th August charging 50% of its list
price from customers for 3 days. It also gave 50% discount to customers when they book tickets 15 days
before the flight, when it started its operations.

Place

AirBlue is currently operating in Karachi, Islamabad and Lahore. And in the near future their expansion
programs includes starting daily flights to Sukkur, Faisalabad, Quetta, Gwadar, Multan and Peshawar.
After the completion of the initial requirement of domestic flights, they will start their regular international
flights next year.

“A distribution channel is a set of inter dependent organization involved in the process of making a
product or a service available for consumption by the final consumer.”

Like other organizations AirBlue also uses intermediaries (TRAVEL AGENTS) to bring their products to
the market. Running an Airline is a kind of business which also needs a distribution channel

Number of Channel Levels:

“A layer of intermediaries that performs some work in bringing the product closer to the final buyer.”

AirBlue is using direct Marketing Channels as well as Indirect Marketing Channels

“A marketing channel that has no intermediary levels”

“Channel containing one or more intermediary levels.”

AirBlue uses an indirect marketing channel to reach its customers. It sells its products to its consumer
directly as well as through Travel Agents in all the three major cities that it is operating in.

DIRECT MARKETING CHANNEL

Consumer

Manufacturer

In-Direct Marketing Channel

Retailer

Manufacturer

Consumer

TYPES OF INTERMEDIARIES:

“A firm should identify the types of channel members available to carry out its channel work. The
following channel alternatives might emerge from management discussion”.

1. Company Sales Force

2. Manufacturers Agency
3. Industrial Distributors

Manufacturers Agency

Independent firms whose sales forces handle related products from many companies in different regions
or industries.

AirBlue is a manufacturer’s agency because it is giving the travel agents the rights to sell their airline
tickets as the travel agents are also selling other airline tickets. So the travel agents are independent
firms.

NUMBER OF INTERMEDIARIES

Companies must also determine the number of channel members to use at each level. Three strategies
are available:

Intensive Distribution

Exclusive Distribution

Selective Distribution

AirBlue Uses Exclusive Distribution:

“Giving a limited number of dealers the exclusive rights to distribute the company’s products in their
territories.”
AirBlue is using Exclusive distribution by giving rights to only those travel agents who are certified by the
International Agents Transport Association (IATA). They have also given rights only to IATA agents in
other cities of Pakistan where AirBlue is operating. In this case other agents have to book tickets from
IATA agents or they will have to contact AirBlue directly for their customer’s ticket.

Promotion

THE MARKETING COMMUNICATION MIX (PROMOTION MIX)

It consists of the specific blend of advertising, personal selling, sales promotion, public relations, and
direct marketing tools that the company uses to pursue its advertising and marketing objectives.

Advertising:

Any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified
sponsor.

AirBlue promoted its airline by showing commercials on major television channels like GEO TV, ARY TV
which was for a very short time and extensive advertising in major newspapers like Dawn, The News, and
Daily Jang.

Sales Promotion:

Short-term incentives to encourage the purchase or sale of a product or service.

AirBlue gave special discounts to its customers up to 50% when it started its operations, they also gave
special discounts on the occasion of 14th August up to 50% and they are also giving a regular discount
on certain proportion of seats in every flight ranging from 15-25%.

Direct Marketing:

Direct connections with carefully targeted individual consumers to both obtain an immediate response
and cultivate lasting customer relationships.

They are distributing catalogs to other airline passengers at airports.

Integrated Marketing Communications Diagram

Advertising

Sales Promotion

Direct Marketing

SETTING THE TOTAL PROMOTION BUDGET AND MIX

How does a company decide on its promotion budget? There are four common methods used to set the
total budget for advertising: the affordable method, the percentage-of-sales method, the competitive-
parity method, and the objective-and-task method.
 Competitive-parity method:

Setting the promotion budget to match competitors’ outlays.

AirBlue is using a competitive-parity method. AirBlue’s main competitor in the market is PIA. Keeping in
view the PIA’s low advertising and promotion spending, AirBlue has also set the same type of budget for
its promotion without any heavy spending on advertising.

PROMOTION MIX STRATEGIES

Two types of promotion strategies:

Push Promotion

Pull Promotion.

Push Strategy

A promotion strategy that calls for using the sales force and trade promotion to push the product
through channels.

Pull Strategy

A promotion strategy that calls for spending a lot on advertising and consumer promotion to build up
consumer demand, which pulls the product through the channels.

AirBlue is using some combination of both. AirBlue uses a media advertising to pull its products and
trade promotions to push its products through the channels.

ADVERTISING

Setting Advertising Objectives

Advertising Objective

A specific communication task to be accomplished with a specific target audience during a specific
period of time. There are three types of advertising objectives Informative, Persuasive and Reminder.

Persuasive Advertising:

It is basically used to build brand preference, to encourage switching of brand and to change customer
perceptions of product attributes.

AirBlue is using Persuasive advertising because there are already other airlines established and AirBlue
is convincing its customers to travel in their airline because they are promising best quality and services
that other airlines are not.

SELECTING ADVERTISING MEDIA

AirBlue has Newspapers, Television and Radio as its major advertising media.
Newspapers vehicles include: Dawn, The News and Daily Jang

Television vehicles include: GEO TV and ARY TV

Radio vehicles include: Apna Karachi FM 107

SALES PROMOTION

Major Sales Promotion Tools

Cash Refund Offer (Rebates)

Offer to refund part of the purchase price of a product to consumers who send a “proof of purchase” to
the manufacturer.

AirBlue offers a complete cash refund on cancellation of tickets prior to 24 hours of departure, the refund
will be shown in full as a separate item in passenger sales history report. And within 24 hours of flight
departures, a penalty of Rs. 300 applies.

Advertising specialties

Useful article imprinted with an advertiser’s name, given as a gift to consumers.

Airblue gives key chains and toys as souvenirs to their passengers during the flight.

Patronage rewards

Cash or other award for the regular use of a certain company’s products or services.

Airblue offers its Blue Miles Frequent Flier programs, awarding points for miles traveled that can be
turned in for free airline trips. For example, On every 10,000 miles traveled, a customer is eligible for a
free domestic ticket to any city.

SWOT ANALYSIS

A Situational Analysis Tool That Helps Managers Identify Internal Strengths And Weaknesses, External
Opportunities And Threats And The Potential Impact Of These Factors On Organizational Performance.

STRENGTHS

Strength is an internal characteristic that has the potential of improving the organization’s competitive
position.

Latest And Technologically Equipped Aircrafts

The AirBlue is aiming to provide world-class service on new generation aircrafts, which are comparatively
newer than those used by the other private airlines. AirBlue's aircraft are just about 5-year-old, without
compromising on quality, service or fare. Its most significant features, beside other minor ones, are as
follows:

• New Generation Airbus A320 Aircraft

• Aircraft Seat Configuration Of 20 Business Class + 126 Economy Class
• Leather Seats In Business Class
• Seat Pitch Of 38” In Business Class, And 32” In Economy Class.
• Drop Down Screens After Every 4 Rows

Blue Miles Frequent Flyer Program

As an airblue Frequent Flyer, you earn BlueMiles™ with every flight you make. Fly often, and you may
earn enough to take

your whole family on holiday.

The possibilities are endless with airblue. Unlike other airlines that require upwards of 50,000 miles for
redemption, you may redeem your BlueMiles™ in as little as five round trip flights.

It works in the following way when you attain blue miles:

• The trip mileage from each of your traveled fares to your BlueMiles account.
• Redemption requires a minimum accrual of 7,500 Miles.
• Use your BlueMiles to purchase economy or business class tickets.

Latest In-Flight Entertainment

Airblue offers in-flight entertainment not offered by any other airline, including the PIA, on the domestic
sector. Airblue provide the facility of dropdown screen after every four rows in business and economy
classes. They also play a variety show produced by ARY on their flights. This is the first of its kind
service not provided by any other airline in Pakistan.

Pioneers Of E-Ticketing In Pakistan

AirBlue has introduced the concept of total e-ticketing for the convenience of passenger which would
also help it to eradicate the back-dating system associated with manual ticketing that costs airlines,
including its competitors, millions in losses every year. The absence of manual ticketing and the
introduction of computerized check-ins by hand-held computers would help AirBlue offer quality-
conscious travelers value for their money by offering quality product. E-ticketing is an electronic version
of a paper ticket which no longer requires your ticket to be printed on paper. Instead, it is stored in
Airblue’s reservation system as an electronic ticket or e-ticket.

When customers make reservations online, a confirmation number is displayed on the itinerary and
confirmation screen. You have to note 5that. A printer-friendly version of the ticket receipt is provided.
You must print this with the bar code to get your boarding pass at the airport.

Introducers Of E-Commerce In Pakistani Aviation Industry

The new entity, Airblue, has given special emphasis on a highly sophisticated IT network to compete
effectively with the existing airlines in the market. The AirBlue website “www.airblue.com” offers
considerable insight into the company's philosophy and vision. There are a number of online services
offered by Airblue, which are a giant leap for the aviation industry towards E-commerce. Among these are
complete online reservation systems, online reservation hold/in person payment at various locations, and
mobile airport check in procedures. AirBlue has unveiled its website, emphasizing high-quality service
and posting career opportunities for professional crew and aviation personnel.

Highly Trained Staff From Renowned Agencies

Airblue is the first airline in private sector to have Pakistani pilots and engineering staff trained according
to international standards. The airline has experienced staff, which has further been trained with the
British Airways.

• Flight Crew Training At Airbus

• Maintenance Crew Training At Airbus
• Cabin Crew Training At Airbus And PIA
• Ground Crew Training At Sabre, USA
• Reservations Crew Training At Sabre, USA

High Quality Services Augmentation

They are focused on services, which matters the most in airline business. To differentiate from other
competing airlines, Airblue besides offering high standard in ticketing procedures is focusing on special
care in providing quality services on board as well as on the ground to the travellers. AirBlue aims to
focus passenger comfort at prices that offer value for money and that explains its decision to have
leather-upholstered seats in the Business class and offering in-flight entertainment not offered by any
other airline, including the PIA, on the domestic sector.

• Catering From Gate Gourmet

The airline has also made arrangements with quality caterer outside to serve what it calls "exquisite
cuisine" to the travelers. Gate Gourmet also provides catering to international airlines such as Emirates
and Lufthana. Therefore Airblue is benchmarking itself to the standards of leading international airlines.

• Change in Reservation According To Customer Convenience

You may not make changes to your reservation online at this time after purchasing travel on the Airblue
web site. For example, you can change your seat to a desired one in the flight map supplied online.

• 2% Extra Discount On Self-Reservation

Those eager for a still lower fare even after the discount or couldn’t avail the discount can get an extra 2%
discount they register for their flight themselves on the airline self-reservation computer systems.

• Airblue Internet Specials

They are always announced on the Airblue web site. When Airblue is running a special that is only
available on the Internet, people can view this information on the special offers page.

Pioneers Of Instant Computerized check-ins

They have started the practice of instant computerized check-ins. Those customers with nil baggage may
simply approach the AirBlue’s representative at the airport and obtain their boarding passes instantly
providing them the needed information. This convenience saves them from the hassle of standing in long
ques and waiting for a lengthy periods of time. It saves their time and energy.

Auto Cancellation Of Tickets

According to this, if customer reserves a seat through the Airblue website, your reservation will be held
for up to 24 hours. You will need to visit any Airblue sales office or participating payment center to make
your payment in person. Just in case the customer changes his mind then they don’t have to go to the
office for cancellation. The ticket will be auto cancelled after 24 hours. This saves the time and efforts of
the customer.

High Schedule Reliability

Unlike other domestically flying airlines, Airblue is very particular about its flight schedules. Airblue
operates 3 daily flights each on the Karachi-Lahore and Karachi-Islamabad sectors. AirBlue also has
plans to operate one circular Karachi-Sukkur-Multan-Karachi flight daily. The total frequency of which
adds up to 15 flights a day. The flights never miss their schedule and stay tightly stuck to their schedule
to prevent customer inconvenience, which they face due to rescheduling of flights and flights delays.

Web Based Reservation System

Airblue provides the ability to search for available flights, view fares, make reservations and purchase e-
tickets through this system.

Operation of the AirBlue is paperless, any person who has access to Internet can get reservation from
their web-site with PNR numbers and get out the print, which is acceptable even in the airport restricted
area. The customers can save up to Rs.300 every time you purchase your AirBlue ticket through Airblue’s
website.

Convenience Of Payment

You may pay for Airblue travel by credit card online. Payments can also be made at the participating
payment center, which currently are the participating branches of Abn-Amro or they may also be made at
the city sales office. They are also making arrangements with FedEx to be included in their payments
centers in future.

Efficient Feedback Program Adopted

The have a separate section on their web site reserved for feedbacks. Through this they remain
connected to their customers all the time. The biggest advantage this provides the company is that they
get first hand knowledge of the problems faced by their customers and strive to rectify them. Secondly,
the attitude of the company makes the customers feel special and that the company care about them.
This is a very efficient mode of establishing relationship with their customers and carry out relationship
marketing. The approach of having direct interaction with the customers, increase brand loyalty of the
company.

Flexible Fare Structure

Though the fares are not cheap, Airblue has a flexible fare structure. It aims to focus on quality and
service primarily at fares competitive with the national flag carrier PIA. It also has plans to offer heavy
discounts for the senior citizens and students as well as operating night coach at discounted fares.
Those eager for a still lower fare even after the discount or couldn’t avail the discount can get an extra 2%
discount they register for their flight themselves on the airline self-reservation computer systems. AirBlue
online flight reservations system automatically rewards you for planning ahead. 14-day advance and 7-
day advance fares will be reflected in the fares presented when you book online. You can save up to
Rs.300 every time you purchase your AirBlue ticket through our website.

WEAKNESSES

Weakness is an internal characteristic that leaves the organization potentially vulnerable to strategic
moves by competitors.

Early Cancellations Required

The customers are required to place their cancellation requests within 24 hours of flight departure due to
procedural limitations of the computer based reservation system. The other airlines that follow the
traditional, manual system of reservation do not have any such limitations as faced by AirBlue following a
web-based reservations system. If the requests are not placed within 24 hours of flight departure then the
ticket fare will not be refunded on account of missing the flight.

Early Check-In Required Compared To Other Airlines

Due to the strict schedule followed by AirBlue, a check in prior to at least half an hour of flight departure
is required due to the reason that the need to feed it into their computers before flight departure unlike
other domestic airlines who take-in passengers till the last minute.

Un-guaranteed Fares

The fares on which you make reservations are un-guaranteed. In case you cancel your reservation and
need to make it again, you have to start the procedure all over again and will be offered a completely new
set of fares in accordance with the flexible fare system. A person getting a 25% discounted seat may get a
15% discounted seat if he tries to make a re-reservation past 5 min of the earlier reservation.

High Traffic – Slow Service On Website

Due to the bandwidth limitations offered by ISPs in Pakistan, the Airblue’s web site open at a very slow
speed and the reservation processing time become slower then usual. There is high traffic on website
and with the rate at which the sales are expected to grow, there will be extremely heavy traffic load on the
website. This inconvenience sometimes tests the patience of the customers bringing down the customer
satisfaction level.

Minimum Amount Of Advertising

Airblue carried out a very soft launch strategy aiming at promoting the company mainly through word-of-
mouth. But word-of-mouth is a very gradual mode of promotion and takes a lot of time to spread around.
Airblue carried out a minimal amount of advertising with its ad placement on different television channels
only a week prior to its official launch, on major newspaper for a very short time and placing its logos
outside participating agents’ offices. Due to this, there is a very low volume of awareness created and
there are so many potential customers who do not stay up-to-date with the current affairs are not aware of
Airblue’s presence.

OPPERTUNITIES

Opportunity is an environmental condition that offers significant prospects for improving an

organization’s situation relative to competitor.

Low Schedule Reliability Of Competitors

The other airlines competing in Pakistan aviation industry have very unreliable schedules with flight
timing changing recurrently accompanied by frequent flight delays. This tempts and makes time and
schedule conscious people to switch to AirBlue due to its flight reliability and high frequency of flights
available on daily basis.

Increasing Technological Awareness In Pakistan

The technological advancements are gaining roots in especially in the major cities of Pakistan moving on
to the smaller ones gradually. With the technological awareness increasing, people will find it easier and
safer to adapt to the system put forward by Airblue. Among the features offered by the Airblue system are
complete online reservation systems, online reservation hold/in person payment at various locations, and
mobile airport check in procedures. People do not any more feel alienated when they come across certain
practices in any industry, which are different from the traditional methods.

Very Few Competitors

There are a very few number is existing airlines in Pakistan aviation industry. Though they maintain a
monopoly in Pakistan’s domestic aviation industry but due to the presence of very few airlines in aviation
industry there exists a niche in the market for a new airline and Airblue is trying to tap that potential. The
state-owned carrier PIA possesses over 75 percent of market share, the rest is held by two private
airlines, Aero Asia and Shaheen Air.

Competitors Offering High Penalty For Flight Cancellation

The other competitors in the field are offering a penalty of, generally, 15% of the total fare for cancellation
of seats outside given time limit. But AirBlue charges a penalty of a standard Rs. 300 for seats
cancellation within 24 hours of flight departure on any kind of ticket to any destination. So those people
who are not so sure about their flight conformance may find it as an advantage and will be attracted
towards the airline.

Travel Agent’s Inclination

The AirBlue management had planned eight workshops, four in Karachi, two in Lahore and two in twin
cities of Rawalpindi and Islamabad. The objective of these workshops is to build understanding among all
stakeholders of the airline. The care and concern AirBlue shows towards its agents also is playing a
positive role in increasing agents’ inclination towards AirBlue. Due to these efforts carried on by Airblue
in addition to high commissions and enormous incentives the inclination of travel agents towards AirBlue
is increasing at a tremendous rate. Beside the increase in customers’ loyalty towards AirBlue has also
tempted the travel agents towards AirBlue.
People Recommendation – Word-Of-Mouth

With the growing brand equity and loyalty of the company, the company is being publicized through the
word-of-mouth, without the company putting in much effort in advertising. This is what the company
aimed at when they diverted the expenses required for advertising in sales promotion and providing
incentives for its customers along with superior services compared to the domestic airlines operating in
this region.

Improvement In Economy

Pakistan’s air traffic market is tiny but it can grow following in an improvement in the economy, which is
expected to grow more than 5% in the year to June. Airblue can tap into rising passenger traffic as the
country’s economy expands. The country is heading towards growth path that would definitely create
room for more business activity in Pakistan increasing the trend towards air traveling.

Development Of Airports In Pakistan

The government decided to upgrade the Gwadar International Airport at a cost of 480 million rupees last
year. Once upgraded, the airport will be able to handle wide-body aircraft such as Airbus and Boeing 747
aircraft. Similarly, the construction for the new runway of Sialkot International Airport was in full swing in
May last year. The new Lahore Airport, the Allama Iqbal International, & its terminal building were opened
for domestic and international traffic.

High Existing Air Fares

The cost of travel especially on the domestic route is not affordable even by the middle-income group,
which means a huge market still remains untapped only because of high tariffs of the airline. Actually,
while fixing the tariff we usually compare it with international standards but unfortunately ignore that low
GNP level in the country. The flexible fare structure of Airblue enables them to tap this potential market in
which people are willing to travel by air but are not able to do so due to their low-income level and high
fares offered by airlines. Due to their flexible fares structure and discounts offered by them, Airblue has
an opportunity to expand in this market thereby increasing their market share. Their fare structure gives
them a competitive edge over other competitors.

THREATS

Threat is an environmental condition that offers significant prospects for undermining an organization’s
competitive situation.

Basic Knowledge Of Computer And Internet Required

A basic knowledge of computer is required for the use or understanding of their services. Those people
who feel alienated with the new technological developments, as is the case with many people in Pakistan,
do not feel comfortable of safe with the services. They fall under the laggards and only follow the things
when rhey become a part of their culture and such technological advancements are nor yet a part of our
culture.

Uneducated Customers
It is taking a deal of time and effort by airblue to make people aware of their working and reservation
system. The customer cannot just adopt their services and they first have to be educated. This is
standing as a curse along with being a blessing to them.

Because though if makes the working faster and convenient bur it is taking great effort to educate their
customers too.

Low Amount Awareness Among Travel Agents In Pakistan

The travel agents, like the end-users are not familiar with the technologies used by Airblue and thus feel
alien while using their system. This reason may cause them to hesitate while using air blue’s facilities. To
over come this difficulty the AirBlue management had planned eight workshops, four in Karachi, two in
Lahore and two in twin cities of Rawalpindi and Islamabad. The objective of these workshops is to build
understanding among all stakeholders of the airline.

Flights To Limited Areas Only

At the moment Airblue is operating only domestically on the routes of Karachi, Lahore and Islamabad.
Though they plan to extend their flights to Sukkar, Faislabad, Quetta, Gwadar, Multan and Peshawar but
they are not in operation yet and it will take sometime to work out the program. Meanwhile, the other
competing airlines will hold their market domination in those areas.

No International Routes

Airblue has not been issued an international license as yet and it is required to operate domestically for at
least one year before the acquisition of international license to prove its eligibility according to the rules.
Therefore, airblue will be missing an opportunity to tap into its potential market internationally for one
year and will be missing its potential revenues from that source. Though, AirBlue leased ex-Thomas Cook
Belgium A320 (394) with V2500s from Jetscape for startup [three-time daily Karachi-Lahore/-Islamabad] in
late April. It expects later to add service to the Middle East and Asia Pacific.

Loss Making Sectors Limitations

One of the major failures for a private airline has been its inability to operate flights of the less lucrative
sectors due mainly to reason of economy thereby leaving only PIA to serve what are called the “ loss
making sectors” as public service. So due to low traffic in this area Airblue may be limited to expanding
their services to these areas leaving the larger share of the market to PIA.

Domination Of Three Major Airlines

At present, the commercial air traffic in Pakistan is shared by three airlines — the state-owned PIA and
private Shaheen Air International and Aero Asia. The bulk of the domestic commercial traffic is dominated
by the PIA a portion of which is also shared by the two other private airlines, both of which are also
operating international flights on a number of routes in the Gulf. Hence, Airblue will be facing the
difficulty of dealing with two direct and close competitors - Shaheen Air International and Aero Asia and
one direct competitor which is also a market leader a present – PIA.

COMPETATIVE MARKETING STRATEGIES

 Strategies That Strongly Position The
Company Against Competitors And That
Give The Company The Strongest Possible
Strategic Advantage.
INTRODUCTION
As the competition exists in the very market, the first task of a company is to analyze who the actual
competitor is and who would be challenging it in the market. AirBlue, it seems, has carefully analyzed its
market and its competitors. AirBlue has ventured into a market which is heavily dominated by PIA
(Pakistan International), and a couple of other minor competitors. PIA has a very strong base in the airline
industry because of its vast experience and occupies a huge market share. Facing such a huge threat
from PIA.

BENCHMARKING

There is a term in marketing called Benchmarking which means ‘the process of comparing the company’s
products and processes to those of competitors or leading firms in other industries to find way to
improve quality and performance. We would like to put forward that Air Blue has set its own standard of
quality rather benchmarking it on the leading airline PIA.

COMPETITIVE MARKETING STRATEGIES

AirBlue has efficiently implemented the two out of the three winning competitive strategies, which are:

Overall Cost Leadership:

Under this strategy the companies work hard to achieve the lowest costs of production and distribution
so that it can price lower than its competitors and win a large market share. Even though, AirBlue at its
launch gave the passengers up to fifty percent discount, the regular fare is exactly similar to what PIA
charges. Nonetheless, AirBlue has a certain number of seats offering 25 percent and 15 percent
discounts on all flights as already mentioned. This gives AirBlue an edge over its competitor PIA

Differentiation:

Here the company concentrates on creating a highly differentiated product line and marketing programs
so that it comes across as the class leader in the industry. This is an area where AirBlue has taken a very
calculated step and we believe, AirBlue has completely differentiated its airline from PIA and other
competitors. AirBlue has a fleet of airbuses which all have a greater seat space and a far better catering
service. Apart from differentiating its product, its services are also distinguished from the other airlines in
the market. It employs well-trained staffs who communicate very effectively and in a very polite manner to
give the customer a sense of superiority unlike other airlines’ staff that is not properly trained to interact
with customers and passengers.
All of these services have differentiated this new airline from the rest of the airlines in the industry.

Focus:

Here the company focuses on its effort on serving a few market segments well rather going after the
whole market. AirBlue, even though caters to every segments’ needs and tries to supply the best product
and services to them, has focused its effort on passengers who travel a lot and carry light luggage. It has
started a free-flyer scheme under which the travelers gain points the more they travel and these points
yield them free tickets.

Air Blue also has focused on passengers who carry light luggage. They realized that passengers, carrying
little or no luggage, had to stand in long queues to get their boarding done. To overcome this problem Air
Blue came up with the idea of mobile boarding (explained earlier) through which these passengers get
their boarding pass instantly from the Air Blue staff roaming in the boarding lounge.

All these strategies have put Air Blue ahead of its competitors; even the system of e-ticket is first of its
kind in Pakistan.

COMPETITIVE POSITION OF AIRBLUE IN THE MARKET

Firms competing in a market, at any point in time, differ in their objectives and resources. Some firms are
large, others are small. Some have many resources, others are strapped for funds. Some are old and
established and others are new and fresh. Basically, the firms occupy different competitive positions in
the target market. Air Blue occupies the competitive position of market challenger.

Market challenger

Market challenger is a runner-up firm in an industry that is fighting hard to increase its market share. A
market challenger can adopt one of the two competitive strategies: either it can challenge its competitor
aggressively for more market share or it can play along with the competitor.

Air Blue has launched a full frontal attack, by offering the better product than its competitor and by
matching the price. PIA had better carriers than Aero Asia and Shaheen (the other two airlines in the
industry) before the advent of Air Blue, but Air Blue explicitly attacked this strength of PIA by bringing
carriers equivalent to that of PIA but with more spacious seats than PIA. Air Blue also provides better
service on-board and off-board than does PIA

On the whole Air Blue has implemented their strategies very tactically and it seems that these strategies
have started paying-off very early as was evident from the positive response that we received from the
regional manager of Air Blue when asked how Air Blue has performed since its launch. It has neither
become competitor-centered nor customer-centered company but it is market-centered company- a
company which pays balance attention to both its customers and competitors in designing its marketing
strategies and not focusing profusely either on customers or competitors.

Suggestions and Recommendations

Airblue should consider the following suggestions:

 They should start their flights to more routes domestically.

They should increase their daily flights.

They should include more aircrafts in their fleet like Boeing 111 and Boeing 747.

They should spend more on advertising and promotion because mostly business class people know
about this airline.

They should maintain their current standards of service and catering.

They should build awareness and educate the people about e-ticketing system.

They should make plans to cover international countries after their first year.

HIGH

LOW

MARKET GROWTH RATE

HIGH

LOW

BCG Matrix

RELATIVE MARKET SHARE

 GENDER CLASSIFICATION

NUMERICAL DATA
Male Female Total
33 17 50

Analysis: AirBlue survey was conducted among 50 people who were given separate questionnaires to
write their views about AirBlue. Out of 50 individuals, there were 33 (66%) male respondents and 17 (34%)
female respondents.

PROFESSION

NUMERICAL DATA
Govt Businessman Professional Student Retired Other Total
Official
3 20 5 16 3 3 50

Among male and female respondents, there were 3 (6%) Government Official, 20 (40%) Businessmen, 5
(10%) Professional, 16 (32%) Students, 3 (6%) Retired and 3 (6%) Others.
AGE GROUP

NUMERICAL DATA
below 18 18-25 26-35 36-45 46-55 56+ Total
2 16 17 8 4 3 50

The survey results showed the age group as: Below18: 2 (4%), 18-25: 16 (32%), 26-35: 17 (34%), 36-45: 8
(16%), 46-55: 4 (8%) and 56+: 3 (6%). Major respondents of the survey were young businessmen and
students, which accounted for more than 60% of the total respondents.

TRAVELLING RATIO

NUMERICAL DATA
Once in a Week Once In A Once In A Other Total
Month Year
5 10 23 12 50

According to the survey, number of people who travel once in a week are 5 which is 10% of the total,
number of people who travel once in a month are 10 (20%), number of people who travel once in a year
are 23 (46%) and Others who travel, for instance, twice or thrice a year, or 3, 4 times a month etc.
accounts for 24% (12) of the total.

AIRLINE PREFERENCE

NUMERICAL DATA
PIA AeroAsia Shaheen AirBlue Total
23 7 3 17 50

23 respondents (46%) preferred PIA over others, 7 respondents (14%) preferred AeroAsia, 3 (6%)
preferred Shaheen and 17 (34%) people preferred the new AirBlue over others. As it is evident from the
above pie diagram that AirBlue despite being a new airline, has captured a 34% market share and now
ranks 2nd after PIA according to our survey.

CABIN PREFERENCE

NUMERICAL DATA
First Class Business Economy Total
Class Class
5 11 34 50

Survey analysis shows that 68% (34) people prefer to travel in Economy Class, 22% (11) people in
Business Class and 10% (5) people prefer to travel in First Class. Corporate Executives and Government
Officials travel mostly in Business Class but the majority of population travel in Economy Class specially
those who travel frequently on domestic routes because of low fares. People who traveled with AirBlue in
Economy Class were more satisfied with the service than other domestic Airlines.

SOURCE OF AWARNESS

NUMERICAL DATA
Newspaper/Ad Friend Internet Other Total
25 13 4 8 50

AirBlue did not involve in huge advertising and promotion efforts, rather it conducted a very small
advertising in Newspapers and Television. And according to the survey, 50% (25) respondents heard
about AirBlue in Television and Newspapers, 26% (13) people were told by their friends about the airline,
8% (4) people learned about Airblue on Internet and 16% (8) people heard from other sources.
 PURPOSE OF TRAVELLING

NUMERICAL DATA
Business/Professional Personal/Pleasure Other Total
23 20 7 50

This diagram shows that out of 50 people, 23 (46%) traveled mainly for Business purpose and 20 (40%)
people traveled mainly for Personal and Pleasure Purpose where as only 7 (14%) people traveled for
some other purposes.

TRAVELLING DECISION

NUMERICAL DATA
Own Travel Friend's Tour Total
Agent's Package
22 12 9 7 50

In the survey 44% (22) people made their own decision for traveling in AirBlue
after hearing about AirBlue’s amazing recent hype, 24% (12) people
complied with Travel Agents’ decision, 18% (9) people were suggested
by their Friends, and 14% (7) people traveled in AirBlue because it was
included in their Tour Package.
MODE OF RESERVATION

NUMERICAL DATA
Calling Travel Internet Total
Direct Agency
9 26 15 50

As it is shown in the above diagram, 52% (26) people made reservations for AirBlue through Travel
Agency, 30% (15) people used Internet for reservation of tickets and 18% (9) people made reservations by
calling directly to AirBlue.

VALUE FOR MONEY

NUMERICAL DATA
Excellent Good Satisfactory Poor Total
14 22 12 2 50

The analysis of the survey shows that 28% (14) people rated the value for the money of the transportation
and service “Excellent”, 44% (22) people rated it as “Good”, 24% (12) people chose “Satisfactory” and
only 4% (2) people rated the value for money “Poor.”

OVERALL EXPERIENCE

NUMERICAL DATA
Excellent Good Satisfactory Poor Total
14 27 8 1 50

The Overall Experience was rated “Excellent” by 28% (14) people, “Good” by 54% (27) people,
“Satisfactory” by 16% (8) people and “Poor” by only 2% people.

RECOMMENDATION TO A FRIEND

NUMERICAL DATA
YES NO Total
38 12 50

According to the survey, 76% (38) respondents would recommend this service to their friends and 24%
(12) respondents would not recommend it to a friend.

Products And Services Excellent Fair Poor Total

Online Booking Service 24 25 1 50
Airline Lounges-Staff Service 21 29 0 50
Flight Boarding procedures 34 16 0 50
Cabin Cleanliness on aircraft 21 25 4 50
Cabin Seating Comfort 16 29 5 50
Standard of onboard reading materials 11 37 2 50
Standard of Onboard Catering 36 14 0 50
Language Skills of Cabin Staff 10 33 2 45
In-flight Entertainment 12 34 4 50
Efficiency of Cabin Staff Service 18 30 2 50
Friendliness/Attitude of Cabin Staff 16 27 7 50
Overall Flight Rating 15 35 0 50

SERVICES ANALYSIS

NUMERICAL DATA
According to the survey we conducted Air Blue services have been appreciated by passengers a lot
specially the onboard catering service was rated excellent by 80% passengers and 20% rated it fair and
none rated the service as poor because the service was being provided by world class airline caterers
GATE GOURMET. The online booking service was also rated as excellent by majority of passengers as it
has proved to be a very convenient and efficient way of booking airline tickets of AirBlue without any
hassle of going to the travel agents. The overall flight boarding procedures have also turned out to be
very efficient and convenient for elder people and children because they don’t have to stand in long
queues to obtain their boarding pass. 32% people rated cabin-seating comfort excellent, fair by 58% and
poor by 10%. The friendliness attitude and the language skills of the onboard crew were highly
appreciated by the passengers because it was way better than other private airlines that don’t care about
these little things that matter a lot. In flight entertainment and reading material was rated fair by most of
the passengers and suggested that they can increase the number of LCD screens in the aircraft and can
improve the variety of magazines for all age groups. The overall response was good from the passengers
and rated it as a far better airline than other private carriers ever launched in Pakistan.

After extensive research and analysis we came to a conclusion that the airline has a bright future and
attracts a large number of Business Professionals who want a quick and hassle free service with all their
needs fulfilled, AirBlue has introduced the concept of total e-ticketing for the convenience of passengers
which would also help it to eradicate the back-dating system associated with manual ticketing that costs
airlines, including its competitors, millions in losses every year. The absence of manual ticketing and the
introduction of computerized check-ins by hand-held computers would help AirBlue offer quality-
conscious travelers value for their money by offering quality product and consistent scheduling.

It aims to focus on quality and service primarily at fares competitive with the national flag carrier PIA. It
also has plans to offer heavy discounts for the senior citizens and students as well as operating night
coach at discounted fares. The AirBlue, thus, is looking forward to soon become the fourth [yet most
popular] airline serving the domestic sector in a market, the bulk of which is served by the PIA and a
portion is enjoyed by Shaheen Air International and Aero Asia which promotes itself as the country's first
low-fare airline