Strategy

Air Asia Sells not Just Air Tickets; They Sell a Dream

mibrand_Case Study Air Asia Competing with an advantage
Business Award Malaysia

Air Asia Sells not Just Air Tickets; They Sell a Dream

What is Your Competitive Advantage?

The needs and wants of the market do not differ much. Everyone needs food, clothing, shelter, technology, and so on. How then can businesses shine through all the competition? Why would someone buy an iPhone instead of a Samsung Galaxy?

This is where ‘Competitive Advantage’ comes into play. What do you have to offer which is different from your competitors and beneficial to your customers? That is your competitive advantage.

Differentiation advantage is when a business provides better products and services than its competitors.

When Do You Identify Your Competitive Advantage?

Is competitive advantage accidental? Is it something you cook up at the marketing level? The renowned marketing guru, Michael Porter in his book, Competitive Advantage (1985) defined the two ways in which an organization can achieve competitive advantage over its rivals; cost advantage and differentiation advantage.

The cost advantage is when a business provides the same products and services as its competitors, albeit at a lesser cost. Differentiation advantage is when a business provides better products and services than its competitors.

In Porter’s view, strategic management should be concerned with building and sustain competitive advantage. A businesses’ competitive advantage should be spelled out as early as the business plan writing stage.

Marketing is only a tool to highlight the competitive advantage to the masses. The answer to the question is that competitive advantage needs to be identified at the product or service development stage itself.

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How Can a Competitive Advantage Boost Your Business?

Competitive advantage gives prospective customers a reason to choose your product or service over another. Competitive advantage, in fact, is not just something for businesses but also for individuals. What sets us apart from others?

Why should I get this job as opposed to the other candidate? A competitive advantage will give you and your business a reason to exist.

It is your business offer to the market, a promise your business is making and you will be motivated to always keep to that promise. Developing a good competitive advantage automatically creates advocates amongst customers for your business.

Happy customers who benefited from your offer are definitely going to speak to others about your product and services. This word-of-mouth marketing aspect will help boost the bottom line.

Marketing Your Competitive Advantage

Marketing does not necessarily be an expensive investment, especially this day and age with the presence of powerful tools in the social media network infrastructure.

Is word-of-mouth alone enough to shout out your competitive advantage? Probably not. Once a competitive advantage is identified, a proper marketing plan needs to be put in place to get the word out there.

Various techniques and tactics can and should be used. A business should not shy away from advertising, public relations and below and above the line promotion methods to market its products and services.

Businesses often neglect marketing due to budget constraints. However, marketing does not necessarily be an expensive investment, especially this day and age with the presence of powerful tools in the social media network infrastructure.

Marketing can be almost free if the selected channels are properly utilized. Based on a reasonable budget allocation, you can easily create an impactful marketing campaign that will work positively in positioning your product and services.

Public Relations is another powerful tool to lower the marketing cost but can increase your reach and credibility. Public Relations is a paid-up form of advertising and is a credible source of promotion.

Development of the said competitive advantage is extremely important; If it is something that was never done before and something that delivers greater benefits to your customers, you can comfortably talk about it in the mass and social media at no cost at all.

Air Asia – Competing With an Advantage

On 2 December 2001, a heavily-indebted airline was bought over and rebranded by former Time Warner executive Tony Fernandes thru his company, Tune Air Sdn Bhd for the token sum of one ringgit (about USD 0.26 at the time) with USD 11 million (over MYR 40 million) worth of debts.

AirAsia now operates at the globally lowest unit cost while recording profits in the billions. AirAsia has been recently named the World’s Best Low-Cost Airline at the 2016 Skytrax World Airline Awards. It is also Asia’s Best Low-Cost Airline for the eighth year running.

Air Asia has become a household brand in Malaysia and beyond in less than a decade. How did a low-cost carrier which had no market in Malaysia or neighboring regions in 1996 emerge successfully? It was nothing but a mind-blowing competitive advantage. Air Asia sold not just air tickets, they sold a dream.

Air Asia’s key competitive advantage was the offering of a travel dream with the most affordable pricing. It is not something new. There are thousands of budget airlines around the world, however, Air Asia’s business model is designed to offer the customers almost full-service carrier services within a budget.

Air Asia has also managed to add many exciting destinations in their route map and thus enable people to liven up their travel dreams. They also had a competitive advantage of being one of the first low-cost movers in the region.

Great leadership is also a big contributor to Air Asia’s success. Air Asia is also big on marketing; they are experts in getting the word out there. They tell common people stories of affordable travel that excites the population. Their competitive advantage: Now Everyone Can Fly!

So, if you have a business idea, start thinking about what ‘Competitive Advantage’ you can offer you would be customers. Make it an unique one, learn how to market it and thus win in the business!

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