CHAPTER 1 MARKETING PLAN 1.

1 INTRODUCTION Marketing communication has been described as the medium through which companies make use of dialogue to communicate their values of their products to customers and shareholders (Keller, 2001). The importance of marketing communication has grown in recent years as a result of advancement in information technology and customers desire to stay updated with the companys future plan, new services and products offerings, and corporate relationship schemes (Schultz, 1999; Low, 2000). This chapter will focus on analysis of the market and development of marketing plan. The airline industry as discussed earlier is a big industry with high market volume, but competition now means that brand must compete in order to survive. As such, an aggressive marketing plan has been designed in this chapter, and it features areas such as market analysis, customers segments, target market, branding and rebranding issues, marketing mix, USP, control and evaluation, and marketing budge. PESTLE ANALYSIS This analysis is conducted to understand how the company will fair in face of numerous environmental factors in Malaysia. Political factors Malaysia is a pseudo-democratic nation, with some of its leaders elected while the rest are selected based on cultural and family ties (Michelle, 2009). There is still a high case of Malay favouritism and authoritarianism in the country, and the past government have enacted certain policies to favour local (Malay) companies at the expense of their competitors. Thus, this is a big political issue for the new merger. However, it must be acknowledge that the Malaysian government has stakes in Malaysian Airlines and this means they will have some share of the MAS-AIRASIA brand. Thus, it is expected that with the presence of the government in the ownership of the company, such policy will not be deployed.

Economic factors The level of GDP per capita of Malaysia is estimated to be US$ 8,118 per year by IMF (2008), US$ 7,221 per year by the World Bank (2008), and US$ 8,800 per year by CIA Factbook (2008) (Michelle, 2009). It also been argued that the countrys continue appreciation of democracy will further increase the per capital income. Thus, this is a good new for the new merger as it offers Malaysians high purchase power and increases possibility of choosing air transportation instead of road transportation. If this is the case, then the new merger is more or less guaranteed to rip high profit in the Malaysian Aviation Industry. Social factors Malaysia is more of a socialist society, and group activities are well encouraged (Dalat, 2009; Communicaid, 2009). As such, families travel together and friends enjoy going out with each other. In the transportation industry, it increases the number of people flying by air as group travelling is encouraged. Additionally, there is a growing trend of adventures holidays, so most Malaysian doesnt stay back at homes during holiday because of cheaper tourism and holiday packages. This creates a favourable economic environment in Malaysia for the new merger since travelling will be done in groups. Technological factors Malaysia is one of the most technologically advanced countries in South East Asia (Malaysian industries development authority, 2009; Hobday, 1995). Most production processes are usually automated, and this increased production efficiency for the new merger because they can easily access these technologies in Malaysia and use it to enhance their production process and capability. Legal factors This business environment is also favourable to Mas-AirAsia because of the highly advanced business laws, patent right law, and other bylaws (Mida, 2011) established to protect the business operations of the new merger. Also given the fact that these companies have been operating in the company before, they will have quality lawyer that will legally protect all the companys assets.

Environmental factors Geographically, Malaysia is sparsely distributed and this means that some areas are either inaccessible by road or too far with road transportation (Malaysian Employment Federation, 2007; Chew, 2005; Chew and Basu (2005). This creates a favourable business condition for air transportation because people who want to access these areas or seek faster travelling means will turn to air transportation. Thus, this is a favourable factor for Mas-AirAsia.

1.2 MARKET ANALYSIS As Iloka et al (2011) reported, the Malaysian Aviation market is huge and offer numerous potentials for airline businesses operating in the country, and AirAsia has taken a giant step towards conquering the market through its low-cost flights. However, Malaysian Airline System is still preferred as a result of its quality, class, eloquence, and cultural representation. Thus, the current merger between these two companies now offers customers an all-in-one quality experience at a lower price. A recent feasibility study by the Australian Tourism board projects airline travelling from Malaysia to reach a monetary value of AUS$ 2 to AUS$ 2.5 billion by 2020 (Tourism Australia, 2012), as Malaysians alone spent a whopping AU$ 1 billion on air travels to Australia alone in 2011. The above expenditure is actually below the 2010 figure but 2%. Thus, it can be seen that the Malaysian Aviation market is really huge and profitable for businesses that can take extra time and care to increase their marketing communications efficiency in the country. Figure (1): Main passenger airlines in Malaysia

Sources as adopted from: Tourism Australia (2012). Additionally, Iloka et al (2011) stated that at least 1.7 million of Malaysians travelling by air year are expected to spend between RM 978.37 to RM 1,021.63 per household per annum. Considering such a figure, it is evident that a business partnership as such between AirAsia and Mas, where AirAsia provides the low price whole Mas provided the class and quality will essentially yield huge profitable growth for both companies. Malaysian Airlines shareholders on the other hand can use such profit to leverage the companys RM2.52 billion loss in 2011 (Chartnexus, 2013). 1.3 COMPETITORS ANALYSES With the new merger, Mas-Asia will be commanding almost all domestic flight because they were initially the biggest players domestically. However, they still have domestic competitor in the form of Berjaya Airline, and uncountable international competitors. Their main focus should be conquering the global market, as it will offer high financial benefits and increase their performance domestically. Since the new merger targets all customers seeking air transportation services, it can be said that their competitors include all airlines in the markets where they operate in. 1.4 NEW TARGET MARKET Targeting specific markets have been described a s crucial stage in decision making for organizations undertaking strategic marketing plan (McDonals, 1995; Piercy, 1992) because it helps in identification of the right customers for the right products and services (Dibb and Simkin, 1996). Basically, the target customers still remain airline passengers across the globe. Prior to the merge, the companies had different types of target markets, where AirAsia focused on customers seeking low price, while Malaysian Airline focused on customers seeking quality and unique experience that is blended in luxurious services.

Figure (2): New Target Market

By combining the qualities of AirAsia and Mas Airline, the new Mas-AirAsia will offer customers unique benefits of having affordable flight which features a full blend of luxury, class, and culture in one Malaysian experience. Thus, the new market now broadens to basically feature all customers seeking airline transportation services. Such broader outlook increases the potential of success for the new merger as both AirAsia and Mas Airlines customers will still be with the company considering the fact that nothing is lost, while new customers will be persuaded to switch to the merger. 1.5 NEW LOGO With the new target market analysedabove, a new logo is necessary to communicate a new corporate image that combines all the qualities of the new merger. The logo must represent both Mas Airlines and AirAsia at the same time in terms of: services, corporate image, culture, and commitment to customers. Figure (3): new logo for Mas-AirAsia

The new logo represents both companies in their old form, whereby the Mas is coloured with Malaysian Airlines blue and red, and AirAsia coloured with its original red colour. The dove on top the log represents safe delivery (calm, unique, and safe flight). This new logo is expected to communicate the new idea of safe, simple, quality, and unique flight with the image of a dove. 1.6 NEW SLOGAN the new way to fly This new slogan is designed to communicate to the customers that cheap and luxurious experience that is blended in rich cultures as offered by Mas-AirAsia is the new way to fly.

1.7 COMMUNICATION MIX: MESSAGES, OBJECTIVES, POSITIONING Messages adopted in marketing communication serve as important information to customers and influences their purchase decision making process when reviewing new products and brand (Verlegh et al., 2005). As such, the messages, objectives and positioning developed in this marketing plan are geared towards influenced customers purchase decisions towards Mas-AirAsia positively. 1.7.1 OBJECTIVES 1. To increase Mas-AirAsias market share by at least 5% per annum for the next 5 years. 2. To increase the brand awareness across the globe by at least 30% by 2014 3. To increase customer loyalty and brand preference by at least 3% per annum for the next 3 years.

1.7.2 POSITIONING AND EXPECTED PERCEPTION OF THE NEW BRAND The new brand will be positioned in customers mind with two elements quality, and affordable. This is will communicate to the market that the new merger is simply a combination of the attributes of AirAsia and Mas Airlines. Thus, the new merger will represent a combined market value where customers can seek their services by choosing from two of the most sort after features in the airline industry (safe flight quality, and affordability) with the new way to fly by Mas-AirAsia.

1.7.3 KEY MESSAGES AND TASK DEFINITION 1. The new merger still retained the features of AirAsia and Malaysian Airlines. 2. Customers can now experience luxurious flight and Malaysian heritage at a reduced cost.

MARKETING MIX 1.8 PLACE AND PEOPLE MIX The new merger will still maintain all Malaysian Airlines and AirAsias outlets, booking offices and agents to ensure effective and efficient selling of tickets. Additionally, the online website will be changed to www.Mas-AirAsia.com with their previous websites redirected to this website. All customers in their previous website will be moved to the customers database of the new website to ensure effective e-marketing features. Their social media will however remain the same for 6month, before being switched to Mas-AirAsia in all Social Medias (such as Facebook, Twitter, Google+, Youtube, Flickir, Instagram etc.). The idea is to communicate with customers and understand their perception about the new merger as well as build quality public relationship with the stakeholders. All their telephone numbers (both fixed and mobile) will be retained, but receptionists will change the name Mas-AirAsia when attending to customers.

1.9 ADVERTISING MIX Advertisement is important because it has the potential of directly increasing product awareness as well as building stronger brand image by communicating positive brand value to the customers (Grein and Gould, 1996).Thus, this advertisement section is designed to increase the awareness of Mas-AirAsiain Malaysia from 2013 to 2014. 1.10 THE MESSAGE AND INFORMATION The message is as discussed earlier, and it will involve communicating the value of the new merger to customers by assuring them that they can now have luxurious flight at a lower price. This message will be delivered from the appeal formula below. 1.11 PERSUASIVE CONTENT AND MESSAGE APPEAL The advertisement and promotion message will be designed and delivered in two aspects, encouraging customers to use the flight because of its new value. 1.11.1Classical Conditioning - The classical conditioning advert will present two families stranded at an airport. One family will be stranded because of high price, and the other family stranded because of low quality. Suddenly, Mas-AirAsia staff will appear to ask then why they are stranded and immediately issue them a Mas-AirAsia ticket after they voiced out their complaints. The advert will conclude with a voice saying the new way to fly 1.11.2 Cognitive Learning - This will be based on a bus driver who is angry because of MasAirAsias services. The bus driver is angry because road transport passengers are now booking Mas-AirAsias services as a result of its unique Malaysian experience at a reduced price. 1.12CHOSEN MEDIA AND PATTER FOR ADVERTISEMENT As such, it can be seen that the two adverts are designed to represent the two messages. In line with this marketing plans objectives to increase awareness and attract new customers, numerous media have been reviewed and the following are the chosen media and pattern for the above advert.

Table (1): chosen media and patter Advertising Media and Time TV ~ Cable and Network through Cable TVs = 2,000 seconds Network TVs = 3,000 seconds Reason for Choosing Media High level of customer reach. Present a better image of the merger as an affordable Malaysian experience in flight services. Radio ~ Hitz.fm, Litefm and My fm. Time = 2500 seconds per Radio network. More affordable than TV and also high customer reach. Better medium to present a clearer message to our customers. Newspaper ~ Borneo post, The star and China press. Front page = per week for first 6 months. Trump card = per week for 7th to 10th month. Ear piece = per week for 11 to 12 month. Internet, Mail order and Posters
th th

Borneo post is the main Newspaper in east Malaysia. The Star is the main Newspaper in west Malaysia China press is the main Chinese newspaper in Malaysia. Affordable and can reach huge market if well implemented.

1.13 PROMOTIONAL MIX 1.13.1 Personal marketing and selling marketers will be deployed to all existing agents and potential agents in order to negotiate new grounds for doing businesses, based on new approached developed by the new merger. During such campaign, the focus will be on retaining all existing agents and adopting approach that will see interested agents gain licence in order to increase ticket sales. 1.13.2 Sales promotion in other to maintain AirAsias culture and further attract new customers, there will be seasons discounted flights. 1.13.3 Public relationnew fan pages will be developed in major social networks such as Facebook, Twitter, and YouTube to maintain close relationship with the public and review

their perceptions about the new merger. Additionally, the new merger will not participate in any political or religious related campaign that might endanger the corporate image.

1.14BUDGET The marketing communication budget for 2011/2012 has been budgeted at RM1, 000, 000.00 (One million Malaysian Ringgit). Research has been conducted on the cost of producing adverts for various media and the cost of airing these adverts. Item (s) Projected Expenditure (2013) First Quarter March - June Computers and accessories 4,000.00 Projected Expenditure (2013) Second Quarter July - October Projected Expenditure (2013 / 2014) Third Quarter Nov - Feb

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Software and program monitors 1 marketing consultant 10 Marketers Production cost (TV Ads) Production cost (Radio Ads) Production cost (Printed Ads) Transportation and Accommodation Cost of Airing (10,000 views per 30 seconds on air) TVs Cost of Airing (10,000 views per 30 seconds on air) Radio Newspapers, Mail order and posters Total = RM, 1, 000, 000.00

1, 500.00 12, 000.00 80, 000.00 33, 500.00 15, 000.00 5, 000.00 14, 500.00 133, 333.33

1,000.00 12, 000.00 80, 000.00

1,000.00 12, 000.00 80, 000.00

5, 000.00 12, 000.00 133, 333.33

5, 000.00 8, 000.00 133, 333.33

38, 666.67

38, 666.67

38, 666.67

50, 000.00 387, 500.00

25, 500.00 307, 500.00

23, 000.00 305, 000.00

IMPLEMENTATION 1.15 COMMUNICATION SCHEDULE Advertisement will be aired on daily bases as illustrated above, but there might be differences in terms of the Media where the advert is being aired.

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Table (3): implementation of the advertisement Time Schedule February 2013 development stage of the Tasks 1. Design all advertisements to be aired in the advert mediums discovered above. 2. Update social network pages with news, press releases or promotions. 3. Ensure that all questions and complaints from customers are undertake

whole program

March 2013 February 2014

1. Start airing the adverts in different mediums. 2. TV adverts will be aired evenings and peak hours, while radio adverts will be aired throughout the day (5times / 1minutes 5

Implementation

seconds per day). Newspaper adverts will be on weekends. Online advert will be aired daily through the campaign

April

2013

1. The advertisement campaign will be evaluated to review the implication it has on growth of the company. This will be done through survey designed to review where customers heard about

April 2014

Evaluation and control stage

the company and how the advert influenced their purchase decision. The revelation will be used to implement future campaign and control the impact of present campaigns.

1.15.1 IMPLEMENTERS The campaign will be run only in-house marketers. As discussed in the company information in the previous chapters, Mas-AirAsia has a huge base of talented and experienced workforce that comprises of outstanding marketers with numerous years of proven track-records. Thus, they will undertake the whole marketing programs. The idea of adopting in-house employees

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is also to ensure that the marketers clearly understanding the marketing objectives of the company. 1.16 EVALUATION Through the campaign, the communication and marketing plan will be continually amended based on findings from review and complaints or comments from customers. The method to be adopted for reviewing the campaign is as discussed below. 1.16.1 SURVEY RESEARCH Both offline and online survey will be conducted to understand customers perception about the new merger, their expectations and comparison of actual service offerings. The findings from such survey will be used to develop new products and services that better meet customers demand and increases customers satisfaction. 1.16.2 MEDIA MONITORING Additionally, all the media adopted throughout the company will be closely monitored in relation to their impression. Expenditure on underperforming Medias will be reduced and the money pumped into Medias with high impression. The media monitoring will take two forms 1.16.3 WEBSITE PARTICIPATION Another area that will be evaluated is the performance of online advertisement and customers traffic on the new mergers corporate website during the period of the campaign. Such evaluation will be done in the following manner: 1. Visit to the official website (www.Mas-AirAsia.com) during the campaign as compared to other periods. 2. Time spent per page during the period of visit and the most visited webpage. 3. Volume of referrals from our online advertisement during the period of the campaign.

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