Kingfisher Airlines is one of India’s favorite airlines as it offers a premium first class service

for domestic routes. Kingfisher had introduced many ‘Industry first’ features, offering in-
flight entertainment on every seat in the domestic routes.

The main objective of the Kingfisher Airlines ad campaign was to create a buzz for the
Valentine’s Day offer where passengers could win a diamond free on every Kingfisher
Airline.

Solutions offered by 160by2 for the Kingfisher Airlines ad campaign included the following:

Age-wise targeting: Based on the TG and the market presence of Kingfisher Airlines, tagged
messages were sent to people aged 25 years and above which were created by 160 by 2. The
taglines were designed to create a buzz about the Valentine’s Day offer.

Keyword targeting: All the messages included keywords like holiday, trip, meeting, enjoy,
journey, friend, love, travel, sweetheart, fly, etc and were tagged to the Kingfisher Airlines
Ad.

Template tagging: Templates are pre-defined messages forwarded by 160 b 2 users to their
respective contacts. This is one of the most interesting offers of 160 by 2 with the help of
which advertisers can accurately target their customers. Templates like Friendship, Love and
Valentine’s Day were tagged with the Kingfisher ad text. This solution did not only promote
Kingfisher Airlines but the Valentine’s Day offer as well.

Post View: After the tagged messages were sent by 160 by 2 to the users, a link was provided
with the Kingfisher logo thereby directing the users to the Kingfisher Airlines website.

Forward Contest: A forward contest for the 160 by 2 users with the Kingfisher Airlines ad
text was to be forwarded to the peer user groups to create a further buzz about the
Kingfisher’s Valentine’s Day offer. The user who would forward the most number of SMS’s
in his contacts was rewarded with a gift hamper.

Kingfisher Landing Page and WAP Page: 160 by 2 hosted a page on its website that was
dedicated to the Kingfisher Airlines. The landing page sought to promote Kingfisher’s
Valentine’s Day offer. The landing page also contained the details of the offer, Kingfisher
Airlines flight schedule, city guide line and fly buy SMS link.

A WAP page was also created for the Kingfisher Airlines. This page contained the details
about the pendant, the flight schedules, city guide link and the fly buy SMS link. The WAP
service was provided for mobile users with GPRS connection in their mobiles.
 Brand management : The Kingfisher Airlines Saga
Faculty Contributor: Mithileshwar Jha, Professor
Student Contributors: Arun Subramoniam, Geraj Vinny Rajesh, Monomita Roy, Ravi
Parimi, Sundar Rajan G S

The Kingfisher brand has always been associated with glamour, vibrancy and lifestyle. When
the premium airlines player made a move to acquire the largest low cost carrier in India, there
seemed to be a clear mismatch between the two brands. However, Kingfisher Red had
recently been displaced by Indigo Airlines as the preferred low cost carrier for Indian
customers. This article aims to understand the reason for this step down even as it
characterizes the needs of an air traveller. It also examines whether Kingfisher was right in
straddling itself along the economy-luxury axis and the parameters it would have to meet to
regain lost ground.

Owned by India's biggest liquor baron, Mr. Vijay Mallya, Kingfisher Airlines (KFA) is one
of the finest luxury airlines of India1. Based in Bangalore, the Kingfisher Airlines started
operations in May 2005 as a wholly owned subsidiary of the United Breweries Holdings
Limited. It entered the Indian aviation market at a time when the low cost service model had
galvanized the market and made air-travel accessible to the Indian middle class.

KFA today offers three unique classes of service -Kingfisher First, Kingfisher Class and
Kingfisher Red. Kingfisher first is the business class service of KFA focused on business
class passengers who are willing to spend for premium services. Kingfisher Class is the
aspirational premium economy service of KFA focused on the growing middle-class that is
trendy, savvy and upwardly mobile. Kingfisher Red is the low fare service of KFA focused
on the growing middle class who are price conscious. KFA has carved a distinct position for
itself by its flamboyant lifestyle image and by offering a great flying experience with comfort
seating, personalized entertainment and services to its passengers. KFA has adopted a
plethora of marketing strategies since its inception and continues to do so in its growth stage.
Its marketing efforts aimed at building a distinct brand image for KFA play a huge role in the
success of the airlines.

This article delves into the merger of Air Deccan and Kingfisher, in order to comprehend
how Kingfisher managed its brand and seamlessly incorporated a low cost carrier in its kitty
of premium airlines. A survey has been conducted to identify the psychology of economy
travellers and how Kingfisher Red has fared on the parameters that had been cited by the
sample. Taking off from the primary research, the article identifies certain approaches that
KFA must take up going forward, in order to ensure that they remain leaders in air travel.

Branding Kingfisher

KFA is a pioneer in the concept of bringing luxury, glamour and lifestyle to the skies. The
brand image of the parent Kingfisher brand gave further credibility to its marketing
campaigns, featuring India's then top models. Kingfisher airlines sold the concept of lifestyle
through its glamorous airhostesses, red-the colour of vibrancy, and added hospitality which
made every passenger feel like a guest on board-a-craft. It marketed itself as a budget airline
targeting the middle of the market. It used multiple promotional campaigns, from having
India's top model Yana Gupta on flight, to schemes on discounted tickets, initially, to invite
people to experience the 'good flying' concept. Some of these initiatives have been
summarized in Exhibit 1.

However, the airlines industry soon entered a phase of consolidation with mergers like Jet-
Air Sahara and Indian Airlines-Air India. This eroded the KFA value offering. Unfazed,
Kingfisher evolved into a full-fledged carrier and continued to pursue aggressive marketing
strategies, sometimes even entering into advertisement wars with its competitors. At the same
time, the Indian economy started to boom and the airlines industry entered a phase of
unprecedented growth. This launched KFA in to its growth phase.

Exhibit 1 Marketing Expansion & Branding Initiatives4

From Air Deccan to Simplify Deccan to Kingfisher Red and Beyond

We are from different planets; he is from Venus, I from Mars

Captain Gopinath on Vijay Mallya

KFA, on its merger with Air Deccan, retained the name 'Deccan' in the new entity because of
its tremendous recall value in the LCC segment; hence the tag 'Simplify Deccan'. Instead, had
they directly changed the name to Kingfisher Red, it may have eroded the 'loyal' customer
base that Air Deccan enjoyed due to its 'emotional connect' with its customers. At the same
time, KFA changed the logo to the Kingfisher bird5 depicting vibrancy and activity.
Kingfisher's red and white replaced Deccan's yellow and blue.

After a period of ten months, when Kingfisher had established the fact that people could
associate 'Simplifly Deccan' with Kingfisher by means of the image makeover of the former's
crew and fleet, Simplifly Deccan was rebranded to Kingfisher Red6, eliminating the Deccan
name altogether, and establishing the movement of the airline towards the Kingfisher 'flying
experience'7. While Simplify Deccan was a no-frills low cost carrier, Kingfisher Red
highlighted the 'delight of flying' in spite of offering low fares, keeping up Kingfisher's brand
promise. Kingfisher Red offered new features like web check-in, in-flight reading material,
and frequent flier programs8.
KFA is all set to redefine the low cost carrier (LCC) segment by using Kingfisher Red as a
flanker brand. An exhaustive market survey done by Kingfisher revealed that an average flier
even in the low cost segment expects certain basic services. Kingfisher Red is positioned
between a low cost and full service carrier. It is the only airline that offers additional services
compared to other traditional low cost carriers and yet economical compared to full service
carriers. Kingfisher Red has carved for itself a straddle position: low fare flying with the
experience of a premium one - a premium low cost carrier as it proudly calls itself. It hopes to
foster loyalty amongst its customers through such positioning.

Of late, Kingfisher is offering free wholesome Indian meals on its flights9, a move aimed to
regain its lost market share from Indigo, which recently replaced Kingfisher Red at the top.
The remainder of this article analyses Kingfisher's strategic positioning and raises some
pertinent questions, the answers to which point out the shortcomings in the management's
strategy. In order to corroborate and give credence to our analysis and to capture more
opinions, we conducted an opinion survey of 50 people to understand the consumer
psychology for the airlines industry and appreciate the way ahead for the airlines.

(i) Has Kingfisher Successfully Understood Customer Needs?

A typical LCC customer would have certain basic needs: economy, convenience, comfort and
luxury. The fact that the customer chooses a LCC indicates one's sensitivity to price and
hence economy seems to be the first basic need. This is followed by a need for convenience,
which would translate into wants like punctuality, appropriate baggage handling etc.
Following this is a need for comfort, which includes in-flight reading material, food etc. that
Kingfisher Red offers. And finally luxury, which would comprise the entire set of value
added services like personalized entertainment that KFA (Class & First) provides. Perhaps,
akin to the "Maslow's hierarchy of needs" concept, the higher order need might appeal only
when the lower order one has been satisfied.

Exhibit 2 Hierarchy of flyer needs

(ii) Has it Ignored Points of Parity and Given Too much Importance to Points of
Difference?

While Kingfisher Red has focused on higher order needs of the customer, it has ignored the
lower order needs of the customer like economy and punctuality.

The Points of Parity comprise basic services like scheduling, connectivity, cleanliness, low
price (especially) whereas Kingfisher Red's point of difference is clearly the comfort and the
delight experience that the airline highlights. While Kingfisher Red has focused on services
like tele-booking, free food etc, it has ignored the lower order needs of the customer like
economy and punctuality.

Exhibit 3 Survey results about expectations

The survey clearly shows that people expect basic services from Kingfisher like cheaper
tickets and adherence to schedules before facilities like free food. Indigo is the most preferred
choice of consumers in the LCC segment because it delivers extremely well on the price and
punctuality dimensions. In Kingfisher Red's case, the key to positioning now remains not so
much in highlighting the points of difference as much in focusing on the points of parity.

(iii) How Sustainable is the Concept of Premium Low Cost Carrier?

Costs increase in proportion to the services offered. The model of an increasing number of
value added services along with low prices seems like a 'best-of-both-worlds' that might be
difficult to sustain. Hence, any addition of value-added services would further erode the value
of the airline with respect to the prices that it can offer.

Taking the case of meals on the airline, a meal increases the price of a ticket by 300 - 400
INR. Is the price-sensitive consumer ready to bear this for getting a 'free' meal? With the
LCC customer being most concerned about price than any other dimension of value-added
services, increasing fares in order to offer a not-much-sought-after 'free' meal may not be the
best move. Perhaps the Spicejet model of selling food on-flight is a better answer, as it
enables the airline to cater to the needs of both the classes of customers, those who value
economy and those who don't mind paying an extra buck for grub.

(iv) How does Kingfisher Red's Promise Impact Customer Satisfaction?

With the Kingfisher Red campaign emphasizing the shift towards the spirit of 'good flying',
customer expectations might be raised to the level of the experience that Kingfisher Class
offers. This would lead to dissatisfaction when the customer flies Kingfisher Red, as his
experience would not live up to his expectations. This is so since Kingfisher Red is not even
remotely close to the lifestyle advantage offered by Kingfisher Class. Hence it might be
better for the promotional campaigns of Kingfisher Red to highlight only what one can
realistically expect of Kingfisher Red. At the same time, there should be campaigns for
Kingfisher First and Kingfisher Class that accentuate the flamboyancy and luxury offerings.

(v) Is Kingfisher Red a Threat to the Kingfisher's Brand Identity?

With Kingfisher Red not really gelling in with the entire Kingfisher portfolio of products and
services, the frugality of the brand may impact the brand equity of Kingfisher. After all,
Kingfisher Red has tried to match up to Kingfisher in a number of stark areas, for example,
the colour red itself. Would it have helped to not associate the colour Red with the Kingfisher
Red and create a distinct image?

Exhibit 4 Survey result shows confusion

From the results of the primary survey summarized in Exhibit 4, 55%+ of people say that
there is confusion between the brands Kingfisher and Kingfisher Red. The word association
tests that were carried out on the respondents indicate that "Red" is the first word that comes
to one's mind when Kingfisher Airlines is mentioned (Exhibit 5).

Exhibit 5 Survey results on word association with KFA

It may have been worthwhile to not donate the highest recall factor of Kingfisher to its
flanker brand's name in the first place. However, having already undergone rebranding twice,
it wouldn't be wise to rebrand Kingfisher Red yet again. Instead, Kingfisher could focus on
the promotional campaigns which had been described earlier to distinguish between
Kingfisher and Kingfisher Red.
(vi) Has Kingfisher Factored in the 'Brand Loyalty' that Operates in this Segment?

Delving into consumer psychology, it seems that once a passenger has a pleasant experience
with a particular LCC and develops an image of reliability, he/she prefers to stick to the LCC.
Taking an example from our survey, if a person has a built a good impression of Spicejet, he
would prefer to travel by Spicejet again, even if there are seats available in other LCCs within
a similar price band. The person switches only when there is no flight from Spicejet at his
convenient time of departure.

Therefore, there exists a strong case for Kingfisher to cash in on this brand loyalty found in
LCC segment. For this to happen, it must first fix the points of dissatisfaction like punctuality
and safety concerns. Once these concerns are addressed, people will tend to stick to
Kingfisher Red. Exhibit 6 graphically denotes the reasons why Kingfisher Red has failed to
deliver on its promises.

Exhibit 6 Survey results about why people do not prefer Kingfisher Red

(vii) Is Kingfisher's Current Positioning and Market Coverage a Source of Competitive

Advantage?

With the introduction of Kingfisher Red, Kingfisher has 3 product offerings: premium
business, premium economy and premium low cost. Kingfisher's offerings span the entire
market. Such a strategy is generally not a very good one, as it does not send out a very clear
positioning message and may only serve to drive away customers from both ends of the
market segment, instead of serving both.

However, in the current scenario, at a time when the future of the aviation industry is
uncertain, this very positioning and market coverage may be the best thing to do. It becomes
a source of competitive advantage as it gives Kingfisher the flexibility to consolidate its
position, if need be, in any direction depending on the future course of the industry. Also, in
future, Kingfisher would have high flexibility to change its product mix amongst the three
classes contingent on segment attractiveness and changing customer wants.
The Way Ahead for the King of Good Times

Kingfisher Airlines should focus on bridging its 'points-of-parity' before enhancing its points
of differences. It must improve its performance on key parameters like punctuality & air fares
and should not introduce points of differences which increase the air fare of Kingfisher Red.
KFA should consider implementing a promotional campaign in mass media which educates
people about Kingfisher & Kingfisher Red. While Kingfisher can continue with flashy ads
featuring models depicting exuberance and lifestyle, Kingfisher Red ads can be more subtle
focusing on safety, comfort & experience. It can be along the lines of "Queen of your heart
deserves to fly like one" campaign10 which Kingfisher launched in December 2007, which
focused on emphasizing a comfortable journey for women. The idea is amalgamate the two
ends of the spectrum, to keep the consolidated identify of Kingfisher, while clearly spelling
out to customers the differences between its premium and budget classes.

Authors

Prof. Mithileshwar Jha is a Professor in the Marketing area at IIM Bangalore. He obtained
his Fellowship Programme in Management and his Post Graduate Diploma in Management
(Agriculture) from the Indian Institute of Ahemedabad. He can be reached at
mjha@iimb.ernet.in

Arun Subramoniam (PGP 2008-10) holds a B. Tech. Degree in Electronics and

Communication Engineering from National Institute of Technology (NIT) Trichy and can be
reached at arun.subramoniam08@iimb.ernet.in

Geraj Vinny Rajesh (PGP 2008-10) a B. Tech. in Information Technology from Velammal
Engineering College, Chennai and can be reached at geraj.vinny08@iimb.ernet.in

Monomita Roy (PGP 2008-10) holds a B. Tech. in Mechanical Engineering from Indian
Institute of Technology Kanpur and can be reached at monomita.roy08@iimb.ernet.in

Ravi Parimi (PGP 2008-10) holds a BE (Hons) in Chemical Engineering from BITS Pilani
and can be reached at ravi.parimi08@iimb.ernet.in

Sundar Rajan G.S (PGP 2008-10) a B. Tech. in Computer Science Engineering from
National Institute of Technology (NIT) Trichy and can be reached at
sundar.rajan08@iimb.ernet.in

Keywords

Strategy, Automotives, Tata Motors, Globalization, India, Light Commercial Vehicles,

Medium & Heavy Commercial Vehicles

References

1. Wikipedia, "Kingfisher Airlines", en.wikipedia.org/wiki/Kingfisher Airlines, Last

accessed on: 20th September, 2009.
2. "Fly Kingfisher", http://www.flykingfisher.com, Last accessed on: 20th September,
2009.
 3. Rajiv Fernando, Surekha Pothraju, "Kingfisher Airlines - The 'Funliner' experience",
2006. www.icmrindia.org, Last accessed on: 20th September, 2009.
4. Shashidhar, Ajita, "Kingfisher bets on co-branding promos",
http://www.thehindubusinessline.com/2006/04/14/stories/2006041401220800.htm,
Last accessed on: 20th September, 2009.
5. Chatterjee Surojit, "Bye bye Air Deccan, Hello Kingfisher Red", 2008,
in.ibtimes.com/articles/20080901/air-deccan-kingfisher-red-budget-airlines-vijay-
mallya.htm, Last accessed on: 20th September, 2009.
6. "Finally Deccan paves way for Kingfisher Red", 2008,
www.labnol.org/india/corporate/finally-deccan-paves-way-for-kingfisher-red/4331/,
Last accessed on: 20th September, 2009
7. Yatra.com, www.yatra.com/YT/specialOffers/kingfisher_red.html, Last accessed on:
20th September, 2009.
8. eConference 2007 - Issue 6, "Interview with Girish Shah - Marketing head,
Kingfisher Airlines Limited", 2007,
www.airlineinformation.org/publications/Issue6_shah_kingfisher.html, Last accessed
on: 20th September, 2009.
9. "Kingfisher Red offers free food on flights",
goindia.about.com/b/2008/09/18/kingfisher-red-offers-free-food-on-flights.htm, Last
accessed on: 20th September, 2009.
10. Ixigo.com, "Kingfisher Red airlines overview",
http://www.ixigo.com/html/info/airlines/kingfisherRed.ixi, Last accessed on: 20th
September, 2009

The strategic marketing planning process flows from a mission and vision statement to the
selection of target markets, and the formulation of specific marketing mix and positioning
objective for each product or service the organization will offer. Leading authors like Kotler
present the organization as a value creation and delivery sequence.

In its first phase, choosing the value, the strategist "proceeds to segment the market, select the
appropriate market target, and develop the offer's value positioning. The formula -
segmentation, targeting, positioning (STP) - is the essence of strategic marketing." (Kotler,
1994, p. 93).

Market segmentation is an adaptive strategy. It consists of the partition of the market with
the purpose of selecting one or more market segments which the organization can target
through the development of specific marketing mixes that adapt to particular market needs.
But market segmentation need not be a purely adaptive strategy: The process of market
segmentation can also consist of the selection of those segments for which a firm might be
particularly well suited to serve by having competitive advantages relative to competitors in
the segment, reducing the cost of adaptation in order to gain a niche. This application of
market segmentation serves the purpose of developing competitive scope, which can have a
"powerful effect on competitive advantage because it shapes the configuration of the value
chain." (Porter, 1985, p. 53).

According to Porter, the fact that segments differ widely in structural attractiveness and their
requirements for competitive advantage brings about two crucial strategic questions: the
determination of (a) where in an industry to compete and (b) in which segments would focus
strategies be sustainable by building barriers between segments (Porter, 1985, p. 231).

Through market segmentation the firm can provide higher value to customers by developing
a market mix that addresses the specific needs and concerns of the selected segment. Stated in
economic terms, the firm creates monopolistic or oligopolistic market conditions through the
utilization of various curves of demand for a specific product category (Ferstman, C., &
Muller, E., 1993).

Segmentation as a process consists of segment identification, segment selection and the

creation of marketing mixes for target segments. The outcome of the segmentation process
should yield "true market segments" which meet three criteria:

(a) Group identity: true segments must be groupings that are homogeneous within segments
and heterogeneous across groups.

(b) Systematic behaviors: a true segment must meet the practical requirement of reacting
similarly to a particular marketing mix.

(c) The third criteria refers to efficiency potential in terms of feasibility and cost of reaching a
segment (Wilkie, 1990). In addition, Gunter (1992) recommends considering the stability of
market segments over time and different market conditions.

In the last three weeks, Vijay Mallya, Chairman, UB Group, has hit the headlines for inking
some major business deals.

For starters, UK's Scottish & Newcastle bought a 37.5 per cent stake in United Breweries
[Get Quote] Limited for Rs 940 crore (Rs 9.40 billion). UB Group's IT solutions company
also acquired a couple of IT consulting services companies in the US. That's not all.

Mallya signed a deal with Airbus to acquire 14 A-320s for his Kingfisher Airlines to be
launched in April. The maverick Member of Parliament (Janta Dal Secular) also introduced
the third edition of the much-coveted swimwear calendar.

Though Mallya was keen to discuss his 'beautiful' calendars, he did not mind fielding
questions on his airline venture. Excerpts from the interview with Business Standard:

This is your third edition of the swimwear calendar. Is it big business?

The calendars are not for sale so there is no money in it. I print about 1,500 of them and
personally prepare a list of who to send it to.

But it is a coveted piece of art. Basically. I am very passionate about the Kingfisher brand
and the calendar is one of the manifestations of the ongoing, brand building exercise.

Since the traditional advertising media is not available to us [read liquor brands], we've
always sponsored music and fashion shows. The calendar extends our association with
fashion and celebrates the fashion designers and models.
But why use swimwear every year? Are you copying Pirelli?

I must admit that I was inspired by Pirelli. But we are not copycats. And yes, it will always be
swimwear. Kingfisher is the king of good times and ghagras do not go with the brand image.

This year the beaches have been replaced by a walk on the wild side in South Africa. I
actually wanted to shoot in Angkor Wat (Cambodia) but was weary of the mahila sangathans
knocking at my door for defiling the temples.

On the business side, why start an airline? Isn't it a highly capital intensive and
foolhardy business to get into?

An airline is not a new idea for Kingfisher. We operated scheduled flights in 1990 with two
Dorniers. But government restrictions prohibited us from buying new planes, There were so
many restrictions that one day I said I don't want to be in this business.

But it is not a foolhardy business any longer with 27 per cent growth in passenger traffic in
one year. Yes, it is capital intensive but it is the only business where the assets are moveable.

If an aircraft is not flying in India, it can fly in Australia. It makes for a good business case.

But the business is meteoric in nature.

The advantage is that we are not launching in a mature market where it may be tough to
survive, but in an emerging market. Which other country has seen a 27 per cent growth in
airline traffic?

What kind of an airline are you planning?

Our airline will be modelled after the US carrier JetBlue. It will be a low-cost operation but
the aircraft will have frills.

We have chosen brand new aircraft. We will have eight aircraft in the first year of operation
and 16 by the second year. All are Airbus and 174 seaters.

What's Kingfisher Airlines' positioning?

The airline will offer one single Kingfisher Class for all. There'll be no business class. The
front and the back rows will be treated royally, in the same way, but charged janata fares.

All the seats will have individual TV sets. You have noticed that companies are encouraging
their executives to travel in the economy class. Everybody from Azim Premji downwards at
Wipro travels economy. My fares will be 25 per cent lower than Jet Airways.