MINISTER OF FINANCE
UNIVERSITY OF FINANCE – MARKETING
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GROUP ASSIGNMENT
FIRST SEMESTER, 2022
SERVICES MARKETING
Class code: 2121702052701
ANALYSE MARKETING MIX 7P’S
STRATEGY OF VIETNAM AIRLINES IN
VIETNAM MARKET
Instructor: Mr. Dang Huynh Phuong
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Ho Chi Minh City – 2022
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MINISTER OF FINANCE
UNIVERSITY OF FINANCE – MARKETING
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GROUP ASSIGNMENT
FIRST 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 – 2022
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MỤC LỤC
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DANH MỤC HÌNH
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CHỮ VIẾT TẮT
USD
United States Dollar
COVID – 19
Coronavirus disease 2019
VND
Viet Nam Dong
JSC
Joint Stock Company
No.
Number
TTg
Thu Tuong
TV
Television
VTV
Vietnam Television
B2C
Business to Customer
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CHAPTER 1. INTRODUCTION
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: (+84.24) 3827 2289 | Fax: (+84.24) 3872 2375
Website: www.vietnamairlines.com
Email:
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).
- Management consulting (investment, capital
management of direct
investment in production and business; foreign investment; business
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purchase and sale; capital contribution to purchase shares or capital
transfer).
- 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.
1.3
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)
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.
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- 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.
1.5 Hightlight Achievement
« 2016: Ranked as one of the World's Most Improved Airlines by Skytrax
« 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
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« 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 sevenstar 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
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CHAPTER 2. MARKET & COMPETITOR ANALYSIS
2.1 Market Analysiss
2.1.1 Size
According to statistics from the Civil Aviation Authority of Vietnam, the number of
passengers through airports in February 2022 reached 6.16 million (up 57.8%
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).
2.1.2 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 17.6 million.
2.1.3 Location
Vietnam has now reopened flights to 20 countries and territories, including
Cambodia, Hong Kong, Japan, Korea, Malaysia, Philippines, Qatar, Singapore,
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Taiwan, Thailand, Turkey, United Arab Emirates, Laos, China, France, Germany,
UK, Australia, Russia, and America.
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.
2.1.4 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 2.7 million seats. 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.
2.2 Competitor Analysis
Currently, Vietjet Air and Bamboo Airways are two competitors that Vietnam
Airlines is facing directly.
2.2.1 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
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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.
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Heavily dependent on large financial funds to finance their operations
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Few international airports in Vietnam (especially in Qui Nhon) to port
Bamboo Airways large aircraft.
2.2.2 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.
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VietJet's brand awareness in Vietnam is relatively high.
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Young, professional, and enthusiastic staff.
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.
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There are often problems in the service that make passengers unsatisfied:
overcrowded and often delayed flights.
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CHAPTER 3. STP ANALYSIS
3.1 Segmentation
3.1.1 Income
Image 3.2 Income of
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,
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quality of 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.
3.1.2 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. And finally, there are the unskilled
workers, the simple workers, and the farmers. According to the top-down order of
the pyramid, the demand and requirements for using air services are decreasing
and inversely proportional to the price sensitivity.
3.1.3 Psychographic
Image 3.3
Acrophobia - is an extreme fear or phobia of heights, especially in people of
normal height. It causes a lot of psychological obstacles when consumers make
purchasing decisions and reduces their confidence.
Accompanying the above syndrome is the fear of taking risks when taking a
flight. Consumers are always very aware of participating in service experiences -
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which means they put their lives on the line for the pilots, so that fear is
inevitable, especially for first-time customers.
The view of airline service is a luxury service. When airline service first appeared
in the world, it was positioned as a service for aristocrats or rich people - the
upper class. This leads to an increase in the value of the service that stimulates
the demand to experience it at least once, especially for those with low-middle
income.
The view of superior transportation service. The luxury, as well as convenience of
airline service, compared to other services, so some people have come to
believe that this is the best transportation service with high-quality experience
and outstanding speed.
3.1.4 Lifestyle
Image 3.4
Conservative lifestyle: People are often not willing to try new products/services.
They spend a lot of time researching before making a consumption decision.
However, they are very opinionated and not affected by exogenous factors. In
addition, their brand loyalty is also very high.
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Modern lifestyle: The complete opposite of the conservative lifestyle, they value
experience and are always ready to discover new things. They tend to follow
trends and the crowd. However, building brand loyalty in them is also relatively
hard.
3.1.5 Need
Image 3.5
Work-related needs: In some professions and fields, fast traveling over long
distances is in high demand. Especially for business people, the use of air
services is almost inevitable and regular.
Personal needs: other purposes such as travel, study abroad, repatriation, etc.
will use air services when traveling relatively long distances, they still undergo
screening, comparative evaluation before making a consumption decision.
3.2 Targeting
As the face of Vietnam's air services, Vietnam Airlines has used the concentrated
segmentation strategy - to concentrate all of its resources on building and
consolidating a premium airline brand in Vietnam. Specifically, Vietnam Airlines
focuses on customers, who have a middle and high income, are usually
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merchants and entrepreneurs with a certain status in the social class, and often
have to use airline services for many different purposes.
3.3 Positioning
3.3.1 Positioning A Premium Airline
Since its establishment, Vietnam Airlines has always held the number one
position in the Vietnamese market. Compared to other competitors in the market,
Vietnam Airlines has a distinct advantage when being called with the name
"Vietnam's national airline". With this name, it easily positioned the brand,
attracting a number of customers who believed in the national branded service
even though the fares are much higher than other airlines.
In Vietnam, the trust in "national" businesses is very large. As the national airline
of Vietnam, it is compulsory that Vietnam Airlines strictly comply with regulations
and its initial promise is to provide services of high quality.
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According to the positioning diagram, Vietnam Airlines has clarified that their
customers, who have a good financial status, want to receive perfect services
when using its services.
Nowadays, Vietnam Airlines is the only traditional airline in Vietnam with
differentiated domestic products (Business class, frequent flyer program - GLP).
The airline's number one position in Vietnam is also shown in its extensive
domestic network through all regions of the country, heavy operating frequency,
convenient
connecting
schedules,
the
airline's
punctuality
index,
and
accompanying service - these are all superior to their opponents.
3.3.2 Service Positioning Strategy
Vietnam Airlines also designs products that create Vietnamese cultural identity in
services, distinctly different from domestic competitors. Specifically, Vietnam
Airlines’s products meet quality, the international 4-star international standard,
and aim to achieve 5-star standards (80% of Vietnam Airlines’s criteria are rated
5 stars by Skytrax, Vietnam Airlines has been awarded the 4-star airline
certificate by Skytrax).
3.3.3 Communication Positioning Strategy
Building a brand image with national identity: modern, creative, friendly, dynamic,
efficient, and socially responsible. The slogan "Reach Further" emphasizes the
national spirit, the determination to rise strongly of a country. Besides that, it also
conveys a desire to reach the success of passengers and Vietnam Airlines on
each flight. It is an affirmation: the development path of Vietnam Airlines always
focuses on customer experience. Bringing passengers not only a flight but also
the feeling of a journey of experiencing 5-star-oriented services according to
international standards, luxury, and class. Six-petal golden lotus, which is a
special symbol of Vietnam Airlines, contains the soul of the Vietnamese nation. It
has become very familiar to many Vietnamese people and is used for many
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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 large0 financial funds to finance their operations
-
Few international airports in Vietnam (especially in Qui Nhon) to port
0
Bamboo Airways large aircraft.
2.2.2 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.
0
0
-
Young, professional, and enthusiastic staff.
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.
0
0
0
0
CHAPTER 3. STP ANALYSIS
3.1 Segmentation
3.1.1 Income
Image 3.2 Income of
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,
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0
