lOMoARcPSD|39514913 MINISTER OF FINANCE UNIVERSITY OF FINANCE – MARKETING -------- � -------- GROUP ASSIGNMENT SECOND SEMESTER, 2022 SERVICES MARKETING Class code: 2121702052701 ANALYSE MARKETING MIX 7P’S STRATEGY OF VIETNAM AIRLINES IN VIETNAM MARKET Instructor: Mr. Dang Huynh Phuong Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 Ho Chi Minh City – 4, 2022 Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 MINISTER OF FINANCE UNIVERSITY OF FINANCE – MARKETING --------- � --------- GROUP ASSIGNMENT SECOND SEMESTER, 2022 SERVICES MARKETING Class code: 2121702052701 ANALYSE MARKETING MIX 7P’S STRATEGY OF VIETNAM AIRLINES IN VIETNAM MARKET Instructor: Mr. Dang Huynh Phuong Student name: Le Dinh Phuong Khanh Luong Ai Lien Vo Dao Phuong Mai Nguyen Nhu Ngoc Lam Gia Phu Ho Chi Minh City – 4, 2022 Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 TABLE OF CONTENT Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 IMAGE LIST Image 1.1 – Logo of Vietnam Airliness.2 – Vietnam Airlines’ aircraft.1 – Pyramid of Vietnam’s social class.1 – Vietnam Airlines’s route network in Vietnam.3 – Vietnam Airline’s route network.4 – Vietnam Domestic Fare Rules of Economy.5 – Vietnam Domestic Fare Rules of Premium Economy.6 – Vietnam Domestic Fare Rules of Business.7 – Vietnam Airlines’ domestic flight ticket price 2022.8 – Vietnam Airlines’ epatriation flight during the COVID-19.9 – Vietnam Airlines’ booking procedure.10 – Online Check-in Procedure.11 - Kiosk Check-in Procedure.12 – Infographic of connecting Vietnam domestic flight.13 – Change/refund ticket prices of Business.14 – Change/refund ticket prices of Premium Economy.15 – Change/refund ticket prices of Economy.16 - Vietnam Airlines’ aircraft maintenance area.17 – Vietnam Airlines’s staff uniform.49 Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 Image 4.19 – Vietnam Airlines organize training to deal with emergency situations.20 – Vietnam Airlines’ Organization Structure 2019.51 TABLE LIST Table 3.1 – Compare the difference of each income level.2 – Comparision table of Conservative lifestyle and Modern lifestyle.3 – Comparision of Work-related needs and Personal needs.1 – Vietnam Airlines’ Fair type.22 Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 LIST OF ABBREVIATIONS Acronym Definition COVID – 19 Coronavirus disease 2019 VND Viet Nam Dong JSC Joint Stock Company No. Number TV Television VTV Vietnam Television B2C Business to Customer CAPA Center for Asia Pacific Aviation VOV Radio The Voice of Vietnam PR Public Relations US United States UK United Kingdom KOL Key Opinion Leader VASCO Vietnam Air Services Company 3D Three – dimensional APEX Airline Passenger Experience Association HVN Stock code of Vietnam Airlines VASCO Vietnam Air Services Company VAT Value-Added Tax Air France Industries KLM Engineering & AFI KLM E&M Maintenance Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 VIP Very Important Person GLP Golden Lotus Program Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 CHAPTER 1.1 About Business Name in Vietnamese: Tổng Công ty Hàng không Việt Nam - CTCP Name in English: Vietnam Airliness JSC Name in short: Vietnam Airliness Date of establishment: May 27th, 1995 Address: No.
200 Nguyen Son, Bo De Ward, Long Bien District, Hanoi Telephone number: (+84.com Email: nhadautu@vietnamairlines.com Field of activities: Aviation & Finance Image 1.1 – Logo of Vietnam Airliness 1.2 Business Sectors - Air passenger transportation (air transport services for passengers), air cargo transportation (transportation of luggage, cargo, parcels, postal items, mails). Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 - Direct support services for air transportation. - Manufacturing of measuring, testing, navigating, and controlling equipment, such as spare parts, supplies, technical equipment and other aviation industry components, provision of technical services and spare parts to domestic and international airlines.3 Establishment & Development History The history of Vietnam Airliness began in January 1956, when the Civil Aviation Administration was established by the Government that marked the birth of the civil aviation industry in Vietnam. At that time, the fleet was very small, with 5 propeller aircraft: IL 14, AN 2, Aero 45, etc.
The first domestic flight was opened in September 1956. April 1993, Vietnam Airlines was officially established as a large-scale business unit of the state (then called Vietnam Airliness). On May 27th, 1995, Vietnam Airliness Corporation was incorporated - following Decision No. 328/TTg by the Prime Minister and merging 20 enterprises in the aviation industry with Vietnam Airlines as the core entity.
Throughout 20 years of development, Vietnam Airliness Corporation has made an important contribution to the development of Vietnam's civil aviation industry as well as made a great contribution to economic development, society, industrialization, and modernization of the country. (Appendix 1 contains Vietnam Airliness’ development history of each milestone) Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 Image 1.2 – Vietnam Airlines’ aircraft 1.4 Vision & Mission - Uphold the No. 1 position as Vietnam’s aviation group leader. - Vietnam Airlines to become a leading Asian airline of customer’s choice and be the main force transportation of Vietnam as a flag carrier.
- Provide diverse and high-quality air transport up to customers’ expectations. - Create a civilized and professional working environment with various opportunities for career development for employees. - Run effective business operation, ensure sustainable benefits for shareholders. « Toward the future: A modern carrier with an internationally recognizable brand characterized by Vietnamese traditional culture.
Throughout 20 years of development at a double-digit annual growth rate, Vietnam Airliness has spearheaded Vietnam's aviation market - one of the fastest-growing domestic markets in the world. As a modern airline with a brand widely known for its distinct cultural identity, Vietnam Airlines aims to achieve 5-star status and become a major airline in Asia.5 Hightlight Achievement « 2016: Ranked as one of the World's Most Improved Airlines by Skytrax Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 « 2016: Asia's Leading Cultural Airline and Asia's Leading Airline - Economy Class by World Travel Awards 2016 « Top 4 largest carriers South East Asia in terms of passengers transported « 20 years of safety record - no fatal accidents since 1997 « 2017: CAPA Asia Pacific Airline of the Year « 2017: Skytrax ranked Vietnam Airliness as a 4-star airline for the second year in a row « 2018: one of winners of the 2018 TripAdvisor Travelers’ Choice awards for Airlines for Asia « 2018: Skytrax ranked Vietnam Airliness as a 4-star airline for the third year in a row « 2018: APEX (Airline Passenger Experience Association) awarded Vietnam Airliness with Four-Star Official Airline Ratings « 2018: Vietnam Airliness and Jetstar Pacific are awarded the highest seven-star safety rating from the world’s only safety and product rating agency AirlineRatings.com « 2018: World's Leading Cultural Airline and World's Leading Airline - Premium Economy Class by World Travel Awards 2018 Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 CHAPTER 2. MARKET & COMPETITOR ANALYSIS 2.1 Size According to statistics from the Civil Aviation Authority of Vietnam, the number of passengers through airports in February 2022 reached 6.8% compared to February 2021). In which, international visitors have begun to exceed the milestone of more than 100,000 visitors (up 350% compared to February 2021).
The number of passengers transported by domestic airlines reached 3 million passengers (up 56.8%) and 39,400 international arrivals (equivalent to 3,009% over the same period in 2021).2 Composition Since March 15, Vietnam has removed many barriers and restrictions for international visitors to enter, creating favorable conditions for international visitors to travel, contributing to increasing the volume of international visitors to Vietnam. Before the development of the COVID-19 pandemic, the international and domestic aviation market was still affected by the epidemic, with the efforts of airlines, the Government, the Ministry of Transport, the Civil Aviation Authority of Vietnam, and other management agencies, etc. Vietnam's aviation market has been gradually recovering, with good changes in 2022. The number of visitors mainly has come from domestic and international tourists.
In early 2022, the total number of international visitors to Vietnam reached 7,358, domestic tourists reached 17.3 Location Vietnam has now reopened flights to 20 countries and territories, including Cambodia, Hong Kong, Japan, Korea, Malaysia, Philippines, Qatar, Singapore, Taiwan, Thailand, Turkey, United Arab Emirates, Laos, China, France, Germany, UK, Australia, Russia, and America. Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 Currently, there are 6 airlines, including Vietnam Airliness, Vietjet Air, Pacific Airlines, Bamboo Airways, Vietravel Airlines, and VASCO; exploiting 56 domestic routes with a total frequency of 2,570 flights/week/way, equivalent to 367 flights/way/day, reducing respectively 2 routes and 217 flights/week/way, equivalent to 31 flights/way /day compared to the 2019 winter flight schedule.4 Trends Statistics from the Civil Aviation Administration of Vietnam shows that the demand for passengers traveling on the Ho Chi Minh City - Hanoi route and from Ho Chi Minh City to/from the Tay Nguyen, Central and Northern provinces during this period increased sharply with the seat utilization ratio is over 70%. During the 2022 Lunar New Year period, the frequency of operation on domestic routes is about 14,000 flights with about 2. Besides the above routes, the number of other routes with the number of bookings has not increased significantly, such as: from Ho Chi Minh City to Da Nang, Tuy Hoa, Da Lat; Hanoi to Dong Hoi, Tuy Hoa, Can Tho; etc.2 Competitor Analysis Currently, Vietjet Air and Bamboo Airways are two competitors that Vietnam Airlines is facing directly.1 Bamboo Airways Bamboo Airways is positioned to become Vietnam's first Hybrid airline, combining traditional and low-cost airlines.
5-star-oriented services according to international standards, luxury, and class with the following criteria: Hospitality, kindness, dedication, and responsibility. Strengths Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 - The slogan "More than just a flight" is highly appreciated when it conveys the common goal of the business when trying to perfect the experience without simply aiming for the basic purpose: satisfying the mobility needs of customers. - Punctuality as well as time flexibility for “night flights” and other added services such as Bamboo Eco ticket - for customers who do not need to check-in baggage and fly less than 2 hours domestically; flexibility in serving specific customer needs, etc. Weaknesses: - The company's current communication strategy has not been very effective for the target audience because of its sensational and misleading communication style that easily receives mixed opinions.
- Heavily dependent on large financial funds to finance their operations - Few international airports in Vietnam (especially in Qui Nhon) to port Bamboo Airways large aircraft.2 Vietjet Air A brand-oriented as a low-cost airline, impressing customers with the dynamism and youthfulness of its staff, attracting customers with attractive promotions. Strengths: - The "low-cost" communication strategy, which mainly focuses on consumers' price awareness, is suitable for a wide range of customers. The message “Dream of flying for all Vietnamese people - Giấc mơ bay cho mọi người dân Việt Nam” that Vietjet evokes is a beautiful dream in a market with a rapidly growing middle class like Vietnam. - VietJet's brand awareness in Vietnam is relatively high.
- Young, professional, and enthusiastic staff. Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 Weaknesses: - Using the "offensive" communication method, associated with the name "Bikini Airline". This is not in line with the national media culture, receiving a lot of mixed opinions. - There are often problems in the service that make passengers unsatisfied: overcrowded and often delayed flights.
Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 CHAPTER 3.1 – Compare the difference of each income level The low-income and middle-income earners have high price sensitivity. They are less likely to choose air services. They conceive that airline service is still a type of luxury and expensive service, not suitable for their income. The high-income earners have lower price sensitivity.
They prioritize using airline services because of the benefits they seek related to convenience, reputation, quality of Downloaded by XINH BONG (bongbong2@gmail.com) lOMoARcPSD|39514913 goods/services, airline services as a tool to help them assert their status. However, they have high standards and expectations about the goods/services they experience.2 Social Class Social class in Vietnam, in addition to income, is also divided by occupation, position, and position in work. It is formed as a pyramid with the top part occupying the highest position, arranged in order from top to bottom, including leaders, managers, entrepreneurs, and highly qualified experts. On the next floor is staff, workers, small traders, handicrafts.