A

PROJECT ON

EFFICIENCY MANAGEMENT

AT SPICE JET

Submitted To:

Ms. Subhra Behl

Submitted By:
Deepak Agarwal

Jagannath Dash

Manisha Gupta

Nitish Kumar

Poonam Yadav

Praveer Saini
 Plan Outline

1. Executive Summary
2. Objectives
3. Introduction
4. Marketing Audit
Market Trends
Key Factor Affecting Aviation Industry
5. Competitors
6. Situation Analysis
PEST Analysis
Porter Five Forces Analysis
7. Competitive Analysis
Value Chain Analysis
8. STP
9. Marketing Mix
10. Key Issues & Opportunities
SWOT Analysis
TOWS Analysis
11. Marketing Strategy for chosen options
Corporate and SBU’s Strategy
Functional Strategy
12. Overall Competitive Strategy & Action Plan
Value Addition to Customer
Perceptual Mapping
Branding Strategy
Blueprinting
Moments of Truth
Cause & Effect Chart for Airline Departure Delays
13. SERVQUAL Analysis
14. Conclusion
Executive Summary:
In this project we have studied the cost efficiency management at Spice jet. The various
marketing strategies followed by it like cost focus, focusing to new market segment,
follower strategy, visionary strategy etc. We have also quantified the customer satisfaction
level by determining the service quality of Spice jet using SERVQUAL Method.

OBJECTIVES

To find out the various factor of strategy which makes spice jet more efficient?
To find out level of customer satisfaction of spice jet.

INTRODUCTION

Spice Jet is a low-cost airline based in Delhi, India. It began service in May 2005 and by
2008, it was India's second-largest low-cost airline in terms of market share. Earlier it was
known as Royal Airways. And this was the first private company which had kept their step
into Indian Aviation Sector. Spice Jet marked its entry in service with Rs. 99 fares for the
first 99 days, with 9,000 seats available at this rate.

It was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax in
2007. Spice jet had its own 11 Boeing 737 to 800 aircraft. And currently it is operating 83
flights daily which are connected to the 14 destination and it is highest in India for the
utilization of aircraft.

In the year 2008 the Spice jet is awarded as emerging company of the year. It is ranked
among the top 10 airlines in Asia.
It had enjoyed the market share of 8%. Rising fuel costs and increasing competition
resulted in Spice Jet posting a loss in the first quarter of 2008-09.
In August 2008, Spice Jet announced plans to raise US$100 million through foreign
investment in terms of market share. Spice Jet is one of India’s leading LCCs with a market
share of 10%; during the past three years of its operations, the airline has flown more than
6 mn passengers. Currently Delhi-centric, the airline covers 17 sectors; Spice Jet plans to
attain a strong pan-India presence by expanding into Tier II cities such as Indore, Raipur,
Bhubaneswar, and Trivandrum, amongst others.
Spicejet operates 20 Boeing 737-800/900ER aircraft and has a 12% share of the Indian
market. In 2010, it was ranked India's No. 1 low cost airline in a nation wide survey.

Promoted by - Ajay Singh and the Kansagra family.

Headquarters - Delhi, India
Secondary Hubs - Mumbai
Destinations - 18
Key executives - Sanjay Aggarwal (CEO), J.S. Dhillon (Exec. VP), Samyukth Shridharan
(CCO)
Fleet Size – 20 (+9 orders)
Website - www.spicejet.com

MARKETING AUDIT

Market Trends – Existing Market

o India - Fastest growing tourism destinations

o Robust economic growth, higher disposable incomes, and growth in tourism
& business travel, are the major demand drivers.
o Low-cost carriers (LCCs)

Resulted in middle-income people and self-employed shifting from premium class

travel in trains to air travel. Domestic air passengers grew at a 38.5% with 35.3
million passengers flying in FY07 against 25.5 million in FY06. The Centre for Asia
Pacific Aviation (CAPA) predicts that the domestic traffic would grow at 25%-30%
annually until 2010* *Recent slump due to high ATF prices

Market Trends – Emerging Market

o Well-suited to emerging markets of Asia - many first time travelers as well as

budget conscious short-stay holiday takers.
o Different Traveler tribes which may emerge in the next 10-15 years, and that
have the potential to transform how the airline industry delivers products
and services
o Global Executives
 o Elite business travelers that want a private jet type experience,
predominantly from emerging economic markets such as Brazil, Russia, India
and China.
o Active Seniors:
o The wealthy, healthy older travelers, aged between 50 and 75, that will
continue to travel for cultural and leisure pursuits.
o Cosmopolitan Commuters:
o Those that live in one city but work in another and will use air travel to
commute.

Key factors affecting domestic aviation industry in 2008-09:

i. Aviation Turbine Fuel

ii. USD Exchange Rate
iii. Fares
iv. Economic Slowdown

Major players in the Industry:

Launch: 1st August 1953 Launch: 1st August Launch: May 2005
1953
Current Fleet: 91 Current Fleet: 105
Variable fare, all frills.
Variable fare, all frills. Merged with Indian Variable fare, all frills. Its
Flies to over 80 Airlines in 2007. economy class
destinations over the subsidiary Jetlite. Flies to
world. Largest airlines in over 62 destinations
India. both domestic &
international.

Launch: August ‘03 Launch: May 2005 Launch: May 2005

Low, variable fare, no Current Fleet: 94 Current Fleet: 21

frills. Only Economy
Class. Mix of metro and Variable fare, all frills. Low, variable fare, but
cross-country Single Kingfisher class. not cheap quality
destinations. Premium in-flight service. Low frills, small
service. Only metro complimentary snack.
Was acquired by destinations.
Kingfisher and later
renamed Kingfisher Red
 Launch: August 2005 Launch: November Launch: October 2005
2005
Proposed Fleet: 8 Current Fleet: 17
Proposed Fleet:19
USP: Low fare, all frills. USP: Low-cost, low-frill
Only Business Class at Low-cost, low frill airline. Mix of metro and
less than economy fares. airline. Mix of metro small cities. Initial focus
Mostly non-metros. and cross-country to be western India.
Focus South India. destinations.

Situational Analysis
PEST ANALYSIS

Political
Open Sky Policy

Deregulations in different spheres

National and airport security

FDI : 49 % in Airlines, 100 % in airports
Freedom to determine fares
Up gradation of airport infrastructure

Economic
Income for salaried class up : 14 to 16 %
GDP growth of 8 % - 9 % in last 5 years
Nil Import tariff on Aircraft
Seat inventory Pricing
Tourism industry growth :14 %in 2005

Social
Increasing travelling lifestyles
Increasing business travelling
 Growing Middle class
o 1993-1999 : 39.5 m to 56.7 m households
o 2005 : 300 m
o 2010 : 400 m (Estimated)
LCC as mass Transport medium
Air travel: from luxury towards necessity

Technological
Modernization & Privatization of Airports
Modern Technology for efficient handling of aircraft,
passenger and cargo
IT revolution
Online Ticketing
Best price shopping services

PORTER’S FIVE FORCE ANALYSIS

Competitive Rivalry within the Industry:

o Competitive and over-crowded market,

o Commoditized nature of product - Aggressive pricing, efficient distribution
and innovative communication mixes
o Differentiation – eg., narrow versus wide customer base
o regional towns versus main cities
o Competition with conventional carriers - With low fares but a higher level of
service (more frills and main airport servicing) they are a big threat.
o Consolidation in the market - Mergers, acquisitions and alliances (eg.,
Kingfisher Airlines acquired Air Deccan, Jet Airways acquired Air Sahara and
merger of Air India with Indian Airlines)
o Net Impact – HIGH

Threats of new entrants:

o Entry Barriers
o High start up costs – capital intensive industry
o Over-crowded low cost airline market (too many budget airlines in the
Indian skies)
o Dearth of aviation professionals (pilots, aviation engineers)
o Limited infrastructure facilities
 o Price wars against newcomers.
o Exit Barriers
o Long gestation period
o Net Impact - LOW

Bargaining power of suppliers:

o No control over ATF (Aviation Turbine fuel) prices

o Negotiate favourable deals with most of their suppliers ( eg., Airline
operators do not have their own catering department for on-flight
consumables. )
o Leased aircrafts
o Specialized spare parts and limited number of manufacturers
o Net Impact - HIGH

Bargaining power of customers:

o Price dominated short-haul market with little or no product differentiation.

o Low switching costs
o Price conscious consumers - little or no customer loyalty.
o Net Impact - HIGH

Threats of substitutes:

o Videoconferencing and other telecommunication technologies

o Super fast trains for short haul flights
o Net Impact – LOW

COMPETITIVE ANALYSIS:
VALUE CHAIN
Value chain analysis, the company is split into primary and support activities. Primary activities are
those that are related with production, while support activities are those that provide the
background necessary for the effectiveness and efficiency of the firm, such as HRM. The primary
and secondary activities of the firm are discussed in detail below.

Primary activities-
The primary activities of the company include the following-

Inbound logistics:-
These are the activities concerned with receiving the materials from suppliers, storing these externally
sourced materials, and handling them within the firm.
Buying the plans
Buying the software and other supportive system.

Operations-
These are the activities related to the production of products and services. This area can be split into more
departments:
Creating a climate for positive behaviour
Recruiting right people and offering proper training

Outbound logistics-
These are all the activities concerned with distributing the final product and/or service to the customers.
Ways of boarding the customer

Marketing and sales-

This functional area essentially analyses the needs and wants of customers and is responsible for creating
awareness among the target audience of the company about the firm’s products and services.
Advertisement
Service:
There is often a need to provide services like pre-installation or after-sales service before or after the sale of
service.

Efficiency
Helpfulness of staff
Cabin crew in air & ground staff at check-in

Support activities-
The support activities of a company include the following:
Procurement:
This function is responsible for purchasing the materials that are necessary for the company’s operations. An
efficient procurement department should be able to obtain the highest quality goods at the lowest prices.
Fuels & Oil
Human Resource Management:
Human resources are increasingly becoming an important way of attaining sustainable competitive
advantage.
Recruiting
Training & Development
Retention of Employees
Welfare of Employees

Technology Development:
This is an area that is concerned with technological innovation, training and knowledge that is crucial for
most companies today in order to survive.

Online check-in service

Inflight email system
Notify
Airport lounges

Firm Infrastructure:
This includes planning and control systems-
Finance, accounting, and corporate strategy
 The Porter Value Chain of Spicejet

FIRM INFRASTRUCTURE (4.41%)

HUMAN RESOURCE MANAGEMENT (8.36%) (-0.523%)

TECHNOLOGY DEVELOPMENT (12.33%)

PROCUREMENT (2.13%)

INBOUND OPERATIONS OUTBOUND MARKETING SERVICE

LOGISTICS (3.735%) LOGISTICS & SALES (1.427 %)
(2.704%) (1.339%) (2.611 %)

(-0.523%)

Primary Activity – 11.806%

Support Activity – 27.23%

Support Activity > Primary Activity

So it indicates that company is occurring loss.

STP
Segmentation- Demographic segmentation on the basis of income.

Target- Middle class family- who are currently travelling in AC 1st class railway, frequent
business executive traveler.

Positioning- ‘To fulfill everyone’s dream of flying’

7P’S OF MARKETING MIX

PRODUCT

The Core Service: The core service of the airlines industry is to transport goods and
services to various destinations. As the needs of the people increased the entire system
became more organized and formal. After this stage comes the various supplementary
services.

FLEET: The SpiceJet fleet consists of the following aircraft as of April 2010.

SpiceJet Fleet

Passengers
Aircraft In Service Orders Notes
(Economy)

Boeing 737-800 15 9 189 Deliveries re-starting 2010.

Boeing 737-900ER 5 – 212

Total 20 9

The Supplementary Services: As per Government of India regulations and for the comfort
of our Guests, smoking is not permitted on any SpiceJet flights. SpiceJet also does not
permit the serving or consumption of alcohol on any of its flights.

SpiceJet sells snacks/refreshments and juices on selected flights subject to

availability. Water is provided free of cost on all flights of SpiceJet

The Augmented services : This phase is where the customer’s expectations are met; the
service providers kept working on new methods to meet the ever-changing customers’
demands.

Spicejet provides online booking, which is very convenient for the service users.
This phase is the most crucial one; with increased competition service will become the final
differentiation.

PROCESS

The process of airline service lays emphasis on the involvement of channels, front line staff,
travel agency offices, offices of the tour operators or so form where the services flow &
reach to the ultimate users. Spicejet Airlines India offers daily flights to almost all
important domestic destinations like Mumbai, New Delhi, Bangalore, Chennai, Goa, Kolkata,
Pune, Ahmedabad and many more.

Purchasing process: Go to Spicejet Airlines India website. Spicejet India online ticket
booking is very simple, you just need to follow few steps. On the top left side, one is Round
trip and second one is One way. You can choose according to your requirement. Then select
your city and destination where you want to go. Now choose your date, month and day of
travelling. After then choose number of seats for people who would travel. You get your
Spicejet India ticket booked after clicking on the find flights button.

Forms of payment: SpiceJet accepts MasterCard, VISA and American Express credit
cards. SpiceJet also accepts Internet Banking.

Check in Procedures: Guests require "Indian Armed Forces" Identity card to be

carried, for the contract of carriage to be fulfilled. The identification proof should be
produced at the time of check-in & must be in possession of the guests throughout the
journey. The same will also be checked at time of boarding at the Boarding gate.

Check-in Time – Guests are required to report at the Airport at least 2-hours prior to
departure time, at SpiceJet Check-in counters for all flights. Check-in counters for all our
flights close 30 minutes prior to departure.

Baggage Allowance

Checked Baggage – SpiceJet allows a free checked baggage allowance of 20 kg

per Guest. Excess Baggage will be charged at Rs. 100 per kg per flight.

Assigned Seating

SpiceJet offers assigned seating for all the guests at the Airport check-in
counters.As a further value to its customers, SpiceJet allows Guests booking
through its internet website/ 24x7 Reservations Center/ Airport
Ticketing Counters to make an advanced seat selection of their choice at the
time of their booking on payment of a fee of Rs.50/- per seat selection.
 Boarding: Guests should be at the boarding gate at least 30-minutes prior to
departure as the boarding process closes 20-minutes prior to departure.

Special Assistance

The use of wheelchairs is limited to only 4 guests per flight, which needs to
be booked in advance through our guest Sales & Service Reservation center.
There is no charge for this service. Spice Jet also offers appropriate assistance
to blind guests. In-flight Services

Spice Jet Airline Flight Status:

Spice jet flight status gives real time information about flight departures, arrivals
and even delays of all Spicejet flights across the country. You can find your flights
information via flights status. You can fill your flight information in the online form;
first you select your location and arriving location. Then select your flight date and
next flight number and get your flight status.

PR0MOTION

A successful product or service means nothing unless the benefit of such a service can be
communicated clearly to the target market.

Previously they were not doing any promotional activity. But later on they went for it.

They do promotion through

i. Newspaper
ii. Online
iii. Television

Promotional Activities

SpiceJet: Spicing it up on TV
A set of five commercials of 25 seconds each, in Hindi and English, will kick start the
campaign. The commercials have started live from January 25, 2010, prominent
Hindi and English, news, infotainment and movie channels.
Sam Sridharan, COO, SpiceJet

Sam believes that since LCCs in India are only 3 years old, in the consumer’s mind, they’re
all the same. Most of the LCCs are still very price driven, and have not built a distinct brand
positioning yet.

SpiceJet brand stands for, Sam answers, “warmth, Indian-ness, “Masti”(fun) and vibrancy.”

SpiceJet launches new 'Get more' brand campaign

The airline will spend between Rs 3 crore and Rs 5 crore to launch its new campaign, 'Get
more when you fly SpiceJet', in magazine media and radio advertising.

SpiceJet SBI Card

NOW Keep flying and get rewarded!
The Card gives you 5 Reward Points for every Rs 100 you spend to buy Spicejet
tickets on the Card. That’s not all, you get 1 Reward Point for every Rs 100 spent on
the Card otherwise.
Quick Reward Points = Free Tickets!
* You can request for Spicejet Vouchers once you earn a minimum of 1000 Reward
Points. Redemption of reward points would happen only for buying Spicejet
Tickets.
50 lacs of Personal Air accident Insurance cover
This insurance cover is meant to provide indemnity to Spicejet SBI MasterCard
Holder in case accidental death is caused while traveling by spicejet Airline only.

PLACE
Hubs – Delhi

• Secondary Hubs – Mumbai

• Focus cities – Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Pune

• Online Booking - www.spicejet.com

• Online Booking - Yatra.com, MakeMyTrip.com, ezeego1.com

• Credit Cards & Debit Cards Payment, SMS / Call

• Outlets in every major city and at every airport across the country.
 • Destinations: Hyderabad, Visakhapatnam, Guwahati, IGI Delhi, Vasco da Gama,
Ahmedabad, Jammu, Srinagar, Bangalore, Kochi, Mumbai, Pune, Jaipur, Chennai,
Coimbatore, Agartala, Varanasi, Kolkata, Siliguri.

DISTRIBUTION NETWORK

Direct Sales is becoming the norm for Low Cost Carriers. While implementing an Internet
based airline distribution for a LCC in Asia, InterGlobe Technologies (IGT) architected a
solution that provides
standard XML based
interfaces to other sales
channels like banks, travel
portals etc.
PRICE

Spice jet plays on the low cost segment.

Now it sets its standards high as it competes with the Indian Railway passengers
traveling in the AC coaches; this speaks tremendously for the cheap and discounted
SpiceJet airfares.
SpiceJet marked their entry in the service with INR. 99 fares for the first 99 days and
then followed with an INR. 999 promotional fare for select sectors.
Spice jet offers 'every day spicy fares' to budget conscious travelers.
Low cost airlines that offers budget travel at discounted rates with the best of services.

Physical Evidence

Physical Evidence includes:

i. Spice jet SBI Card

ii. Ticket Counter
iii. Flight Infrastructure
iv. Spice jet replica (Terminal 1D of IGI Airport New Delhi)

PEOPLE

This mix of marketing constitutes of 3 factors.

 v. Employees
vi. Consumers
vii. company

Employees: These are the people who are present at the time of delivering the service.
These are boarding staff, pilots, air hostess, and security officers. These are well trained
prospects so as to meet the expectation level of travelers.

Consumers: These are travelers. These are in contact with the employees from the time of
arrival at the air port till the end of the board.

Company: These mainly imply the people at the back end i.e. the technicians, the people
helping spice jet to function at the customer end.

KEY ISSUES & OPPORTRUNITIES

THE EXTERNAL ENVIRONMENT

This sector is largely affected by the tourism sector as well as the policies of Indian
government. key factors like the growth of tourism sector; number of passenger is
anticipated to increase and increasing wealth and lifestyle of Indian middle class as key
opportunities. Because increase in purchasing power allows them to travel frequently
through airlines.

THE INTERNAL FACTOR ESTIMATION

The foremost strength of this company is its promise for the lowest fare at any route where
it exists. It is also important from this prospective that it has grown up its image in the
mindset of customers as the cheapest airline. This company also has the tie-up with India’s
leading bank State Bank of India (SBI) for ticketing. Its management team is also proving as
strength for them as they have international experience of
managing low cost airlines.

SWOT ANALYSIS :
STRENGTH

i. Cheapest airline in customer’s mind.

ii. Second in LCC segment.
iii. Fleet with highest no. of seats.
iv. Tie-ups with SBI for ticketing.
v. First to target middle classs
WEAKNESS

I. Very limited advertising.

II. Reached at the threshold of cost efficiency (not profit generating).
III. Small load efficiency.

OPPORTUNITIES

I. Growth in tourism sector.

II. Increase in purchasing power of Indian middle class.
III. International fleets.

THREATS

I. High attrition rate.

II. Huge competition in LCC (Indigo, Go Air, Air Deccan).

TOWS MATRIX

SO Strategy WO Strategy

1. Can start on some new route to grab
huge market potential.
2. Company should come up with new
schemes for those new markets.
1. Can purchase new high efficient
carrier with the help of FDI investors
for cost efficiency.
2. Initially these new carriers can be
used for new route so new customer
will feel happy with the service.
ST Strategy WT Strategy

1. Contract with pilot training institutes 1. It can launch new marketing

and pilots to stop attrition. campaign showing its services
2. Added services for competitive despite of bad infrastructure and
advantage. services.

In the TOWS matrix we use company’s internal strength, weakness and external
opportunities, threats to make strategy.

SO Strategies:

As company is known among customer as the cheapest airline of India as well as India has a
huge market potential. So, Spice Jet should act aggressively and start services on some
more route, it can also enhance its market by starting in Bangladesh, Nepal and Burma. By
doing this they can take first mover advantage because there is no low cost airline existing
on this route.

WO Strategies:

Spice Jet’s major weakness is its cargo efficiency and its carriers which are on lease. Spice
Jet can do one thing is that there are FDI investors available to give financial aid so it can
return its low efficient leased carrier and purchase new high efficient carrier. It will also
help it in cost controlling.

ST Strategies :

There are many threats where we cannot do much but for few we can make
strategy.
i. There is a shortage of pilots in India so they can make a contract with pilot
training institutes for pilots. To stop attrition rate they can sign a long term
contract with pilots so they became legally bound and cannot leave company.

ii. Because of high competition in the segment there are a very little margins,
for more margins they can start giving added services like showing movie in
flight or describing the outer scenario as on where we are flying etc. These
 services can be charged or given for free but these services can give Spice Jet
a competitive advantage.

WT Strategies:

i. As we already mentioned that the airport infrastructure is not good

and it is affecting service of Spice Jet. Spice Jet can highlight this in its
advertising that despite the poor infrastructure and facilities we are providing
cheaper and good services. It can be helpful to get customer’s attention.

ii. The biggest threat is the intense competition and price war so the best way to
eliminate this is horizontal integration. They should act aggressively and acquire
‘Go Air’.

MARKETING STRATEGY FOR CHOOSEN OPTIONS

Marketing Strategies

SpiceJet has a unique marketing strategy that focuses on word-of-mouth marketing, supported by
print and Internet media initiatives. To build further on its branding value, SpiceJet has introduced
on-board merchandise sales such as goggles, airplane models, perfumes, caps and watches. Sales of
branded merchandise will also be available through the company's website.

While there is stiff competition in the low-cost carrier market in India, the competitive edge for
SpiceJet lies in the quality of service offered during the flight. This has resulted in 42% repeat flyers,
45% of business travel and over 90% of passengers recommending the airline through word of
mouth.

Strategies for Future sustenance

a) Expansion Plans
SpiceJet started its operations with 5 Boeing aircrafts in its fleet and ramped it up to 18 aircrafts
covering 17 destinations and 117 flights daily by May 2008. It reported a net loss of Rs. 133.51
crores in the year 2007-08 and a loss of Rs. 17.91 crores in 3rd quarter of 2008-09. SpiceJet still has
major expansion plans. It has another 30 aircrafts on order for delivery between 2008 and 2011.

b) Open to Foreign investments as well as buyouts

On July 15, 2008 Billionaire Wilbur Ross invested $80 million (about Rs 345 crore) in the low cost
airline.

"If any foreign airline comes on board as a strategic partner, we will certainly welcome them.If the
right opportunity is presented SpiceJetcould be a buyer too." – Chief Executive Officer, Sanjay
Aggarwal on Feb 18, 2009. He expects consolidation in the Indian airline industry over the next 12
to 24 months as the landscape is too small for so many players.

c) Convenience to passengers

It plans to initiate roaming agents wherein passengers without baggage are assisted by the roaming
agents at the airport to skip check-in are some of the other initiatives. In future, Spicejet plans to
start Web Access Protocol (WAP) on the mobile phones of the passengers and SMS check-in
through which passengers can skip check-in by just showing the barcode or the notification on their
mobile phones.

d) Ancillary Revenues

SpiceJet have entered into a Joint venture with The UK based online retailer UnderFivePound.com.
The company through its website, sells a range of men’s, women’s and children’s clothing along
with other items such as jewellery and houseware gadgets, all for less than £5 and is known for its
discounts and freebies.

Keeping the pricing of the merchandise in sync with the image of a LCC, SpiceJet expects to sell
value-for-money items on board, to its customers.

e) Automation to sustain expansion

SpiceJet has automated its cargo business processes to support its aggressive expansion plans for
its domestic cargo operations. This will ensure an integrated management of cargo reservations
and ground operations including flight planning, inbound cargo operations, billing and shipment
tracking. SpiceJet becomes the first Indian LCC to use this high-end business solution.

HIERARCHY OF STRATEGIES

Corporate & SBUs – Spice Jet’s mission is to become India’s preferred low-cost
airline, delivering the lowest air fares with the highest consumer value, to price sensitive
consumers. We hope to fulfill everyone’s dream of flying.

With India's economic and business growth, the percentage of traveling population is
burgeoning. More and more Indians are traveling for both business and pleasure and
everyone needs to save both time and money. SpiceJet's vision is to address that and
ensure that flying is for everyone.
-The power to fly for everyone

With a dynamic fare structure, SpiceJet offers fares that are affordable and significantly
lower than most airlines. With contemporary interiors, modern graphics and vibrant
colours, SpiceJet is very much like today’s traveler - practical yet stylish. A SpiceJetter will
feel ‘this is the smart, international way to travel, I've made the smart choice’. SpiceJet is
committed to make sure you feel good at the end of a flight, arriving at your destination -
fresh and on time.

The power of technology

SpiceJet's new generation fleet of aircraft is backed by cutting edge technology and
infrastructure to ensure the highest standards in operating efficiency. With maintenance
support by KLM and state of the art technology from world leaders like Star Navigation,
Russell Adams and Tech Log there will be no compromise on safety, reliability or on-time
travel. The company has tied up with Navitaire the world’s renowned low-cost support for
reservations and revenue management. E-booking and e-ticketing facilities are available
online along with tele-booking.

The power of performance.

From aircraft to crew and ground staff the focus is on performance. Each SpiceJet employee
is groomed to be smart, friendly, efficient and well-informed, ensuring that any interaction
will make you feel welcome and looked after. Experienced pilots, well-trained cabin crew
will make every flight a comfortable one. The philosophy is no-frills but high-performance.

The power of safety

SpiceJet invests heavily in safety, impeccable maintenance and a high level of expertise.
Experienced pilots, engineers and maintenance crew go through rigorous training and are
hand-picked for their technical knowledge and expertise. So you can rest assured that there
is no cut-back in this key area of modern day flying.

The power behind the power to fly

SpiceJet's key management personnel are all senior, seasoned professionals and have
significant international experience in both launching and managing low-cost airlines. With
thousands of cumulative man hours in the industry, the management is committed to bring
to customers in India all the benefits of the global revolution in the skies. SpiceJet aims to
make travel comfortable, affordable and refreshingly efficient experience for all.

Strategy at Functional level-

Cost Focus- Spicejet is operating at very low cost. The aim of Spicejet to provide better
service at lower cost. It is able to achieve low cost because its operational cost is very low.
Functional Strategies
 Marketing Strategies

 Product-Market definition and analysis

ANSOFF’S PRODUCT/MARKET
EXPANSION GRID
Ansoff’s Product-Market Expansion grid
CURRENT NEW
Market
PRODUCTS PRODUCTS
Penetration
Strategy 1. More purchasing and 1. Product modification via
usage from existing new features
CURRENT Product
customers Development
MARKETS 2. Gain customers from 2. Different quality levels Strategy
competitors
3. Convert non-users into 3. ‘New Product’
1. users
New market
(where segments
both are in 1. Joint venture
the same market 2. Mergers
NEW 2. segment)
New distribution 3. Acquisition/take- Diversification
MARKETS channels over Strategy

Spice jet
3. New geographical areas

Market
Development
Strategy

Competitive position-

Market follower- There is Air-Deccan has already operating in LCC (low cost carrier)
segment. It entered in the market as a market follower. It followed the strategies like low
pricing and aircraft on lease etc.

Entry Level
 The Chasm –
Early  Late Markets

CHASM
Spicejet

Company Techies Visionaries Pragmatists Conservative Sceptics

Consumer Innovator Early Early Late Laggard

Adopter Majority Majority

It is Visionary because in 2003 the LCC segment has introduced and in 2005 Spicejet has
entered in that segment. Spicejet entered in the market in growth stage before CHASM.

VALUE-ADDITION TO CUSTOMERS

SpiceJet has introduced online travel insurance in partnership with TATA AIG with
which they have maintained a consistent rate of 28 per cent of sales since the introduction
of the product.

It provides value-adds to clients by having internet banking for customers, wherein

they can select any bank with which they have an account and can use their own login
credentials, which is essentially for customers not owning a credit card or not inclined to
using one, are among the other major initiatives.

Apart from these, it provides efficient information flow to clients, wherein the
system gives the clients a recorded call giving information about the flight; creating a portal
for crew (pilots and cabin crew), which enables them to communicate with each other.
SpiceJet plans to introduce an on-board wireless telephone system for all Spicejet
passengers.
PERCEPTUAL MAPPING
Branding Strategy:
Spice Jet was conceptualized as an airline that provides safe, value-for-money, comfortable
and hassle-free air travel. The brand’s rapid progress over its first four years was built on
excellent customer experiences and positive word of mouth. We realize that as we grow,
we need to expand our brand’s reach and appeal to an audience who will want to travel
more than before and for reasons other than price; with a wider range of expectations from
the airline. The challenge will always be to connect with this audience and position Spice
Jet has a brand that offers more than others in its competitive set.
In keeping with spice jet objective of establishing top of mind recall, Spice Jet has launched
a campaign moving away from pure market driven ‘price point’ announcement to
communicating unique brand offerings, crystallized into clear brand message “Get more
when you fly Spice Jet”. The unique value propositions that Spice Jet brings to each
consumer, forms the essence of this national campaign.
The communication highlights the unique value offerings including complementary
supervision of unaccompanied minors; free of charge web check-in; introduction of hot tea
and coffee service; waiver for sports kits etc. The brand emerges as a product of customer’s
voice - as one that listens, understands and acts to deliver a superior service experience.
This campaign positions the brand as one beyond price as one that offers experiences that
consumer’s value. This positioning cuts through the clutter in a market driven by price
based competition and distribution channels which commoditize our services.
2. Competitive Analysis
o Consolidation to result in increase in fares and yields
 Consolidation in the domestic aviation sector. From a fragmented sector
with more than 10 players, today there are 3 major players, and a couple
of other smaller players in the LCC space.
o The top three players together have a combined market share of around 80%
Government plans to invest Rs 40,000 crore during the 11 th five-year plan to
improve airport infrastructure in India
3. Cost Comparison : Domestic Peers Cost leadership gives Spicejet an edge over peers
Available Seat Kilometres (ASKM) : Represents the aircraft seating capacity multiplied
by the number of kilometres the seats are flown
4. Cost and Value Drivers
o High seat density
o Single economy class having 189 seats.
o Focuses on maximum space utilization for generating more revenue per aircraft.
5. Cost and Value Drivers
o Direct Distribution of Tickets
o Sells its tickets via the Internet or call centre route.
o Bypasses travel agents commissions, and expensive GDS (global distribution
system).
o High aircraft utilization
o Consistently reporting high aircraft utilization (around 12 hours a day), in line
with international benchmarks.
o Because of its high on-time performance (82% within 15 minutes) and a low
turnaround time of 20-25 minutes No loading of meals or complex cargo and
faster check-in system helps in reducing turn around time.
BLUE PRINT

Moment of Truth

Gift bags for kids on board.

Roving check-in facility at the airport.
A parking person offering to park the car for the customer in a crowded parking area.
Spicejet staff wishing a warm and unexpected ‘Good Morning’ while passing by a customer
in the corridor.
A person reached an hour early and he went CCD with his friend. He forgot his flight & he
got a reminder call from Spicejet.
During the checks, cargo fire alarm module (unit) failed and it went off. As a matter of
caution the plane was declared unserviceable and passengers were shifted to another
aircraft.
Delay in take-off.
Well-mannered and enthusiastic, the flight attendants of Spicejet.
The warmth and friendliness of in-flight services.
Employee ask to customer for ticket.
Flour manager instruct to customers.
 Wishing of airhostess.
Use of sheet belt.
Boarding pass is given after an avoidable delay, it is a dull moment of truth.
The ground staff person goes out if its way to help a passenger load his bags on the trolly, it
is a bright moment.
Wheelchair assistance at the airport.

Cause and Effect Chart for Airline Departure Delays :

 SERVQUAL ANALYSIS

Analysis and conclusion of servqual

Rating :

1.very poor 2.poor 3.good 4.very good 5.excellent

S.No VARIABLE RATING

(1 to 5)
1 Up-to-date aircraft and in-flight facility 3 Good
2 Meal service (items, tastes, freshness, quantity, appearance, etc) 3 Good
3 Seating comfort 3 Good
4 Seat space and Legroom 3 Good
5 In-flight entertainment services (books, newspapers, movies, magazines, 2 Poor
etc.)
6 In-flight entertainment services (books, newspapers, movies, magazines, 2 Poor
etc.)
7 Promptness and accuracy of reservation and ticketing 3 Good
8 Frequent flyer program 3 Good
9 On-time performance 3 Good
10 Sincere interest in solving problems (flight cancellation, baggage loss, 3 Good
etc.)
11 Safety record 4 Very good
12 Check-in service (waiting time, efficiency, etc) 3 Good
13 Promptness and accuracy of baggage delivery 3 Good
14 The amount imposed for overweight baggage 2 Poor
15 Providing seat that passengers prefer 2 Poor
16 Neat appearance of employee 3 Good
17 Employees who are willing to help passengers 4 Very good
18 Courtesy of employees 3 Good
19 Employees who have the knowledge to answer passengers’ questions 4 Very good
20 Give passengers personal attention 3 Good
21 Convenient flight schedule 2 Poor
22 Non-stop flight 2 Poor
Airline image

Question Yes (%) No

(%)
I have always had a good impression of this airline? 100 0

I believe that this airline has a better image than its competitors? 64.9 35.07

In my opinion, this airline has a good image in the minds of 78.57 21.42
passengers?

Would you consider flying on this airline again in the future? 78.57 21.42

Would you recommend this airline to other people? 92.85 7.14

Conclusion
The awareness strategy are very good as all customers have a good impression of
the airline.
It is better positioned as low cost airline than its competitors.
Its able to create product loyalty.

Factor analysis

Factor Variable Variable Factor

rating rating
Reliability and Courtesy of employees 3
Customer services Employees who are 4
willing to help passengers
Employees who have 4
knowledge to answers
passengers’ questions
Give passenger personal 4 3.62
attention
Neat appearance of
employees 3
Safety of flying 4
Sincere interest in
problem solving 4
On-time performance 3

Convenience Convenience of 3
and reservation and ticketing
accessibility Promptness and accuracy 3
of reservation and
ticketing 3
Check-in service 3
Frequent flyer program 4
Promptness and accuracy
of baggage delivery 3 3.12
Non – stop flight
Convenient flight 2
schedule 2
Providing seat that
passenger prefer.
The amount imposed for 2
overweight baggage
In-flight Seating comfort 3
Services Seat space and legroom 3
Meal service 4
In-flight entertainment 3
services 2
Up-to- date aircraft and
in-flight facility 3

The reliability and customer service is in between good and very good.
Te convenience and accessibility is good.
The In-flight services are also good.

Conclusion
In Aviation industry in India there are very high competition and less profit opportunity.Spicejet is
a low-cost airline. Their marketing theme “offering low” everyday spicyey fares and great guest
services to prices conscious travelers. Their aim to compete with the Railways passengers
travelling in AC coaches. They are running in losses for last 2 years so they expand their business
by entering in the cargo services in 2009 which are running profitably. Spicejet also planning to
expand their business by increasing theit fleet size by 2012.

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