How Budget Airlines in India leverage on Online Marketing to increase the Competitiveness

Table of Contents

Acknowledgement

Executive Summary

Abbreviation

Figures

Chapter 1: Introduction
1.1 Project Title
1.2 Purpose and specific aims of study
1.2.1 Primary and Secondary research objectives
1.3 Problem statement
1.4 Significance of research problem
1.5 Research questions
1.6 Research hypotheses

Chapter 2: Literature Review
2.1 Online Marketing Introduction
2.2 Budget Airlines strategies in India
2.3 Today’s online Marketing Technique
2.3.1 Social Media Marketing Tools
2.3.2 Search Engine Optimization
2.3.3 Search Engine Marketing
2.3.4 Internet Blogging
2.3.5 Google and Social Media
2.3.6 Online Video Marketing
2.3.7 Email Marketing
2.3.8 Paid Search Marketing
2.3.9 Mobile Apps Marketing
2.3.10 Traditional marketing versus Online Marketing techniques
2.4 Interconnection among online marketing tools
2.5 Effective Marketing plan of online marketing campaign
2.6 Factors that affect Online Marketing success
2.7 Critical success factors of Online Marketing campaigns
2.7.1 Target Market and most commonly used Keywords
2.7.2 Unique and Quality Content
2.7.3 Pay-per-click Campaign
2.7.4 Facebook and Twitter Social Media Campaign
2.7.5 Utilizing Popular Blogging Sites
2.7.6 Regular Updates on Social Media Websites
2.8 Summary

Chapter 3: Research methodology
3.1 Research Process aspects
3.1.1 Observation
3.1.2 Preliminary Data Gathering
3.1.2.1 Primary Data Gathering or Primary Research Method
3.1.2.2 Secondary Data Gathering or Secondary Research Method
3.1.3 Problem Definition
3.1.4 Theoretical Framework
3.1.5 Generation of Hypotheses
3.2 Design aspects
3.2.1 Sampling Design
3.2.2 Measurement
3.2.3 Advantages and disadvantages of Questionnaire design
3.2.4 Questionnaire Design
3.3 Data Analysis and interpretation
3.3.1 Feel for the data
3.3.1.1 Measures of Central Tendencies
3.3.1.2 Measures of Dispersion
3.3.2 Testing Goodness of Data
3.3.2.1 Validity
3.3.2.2 Reliability
3.3.3 Hypothesis Testing
3.4 Deduction (Research approach)
3.5 Research Report
3.6 Limitation of the study
3.7 Summary

Chapter 4: Data Analysis and Findings
4.1 Data Analysis and Interpretation
4.1.1 The frequency distribution of the variables
4.1.2 Validity checking using The Pearson correlation matrix
4.1.3 Reliability checking of Cronbach’s alpha for the measures
4.1.4 The results of hypotheses testing
4.2 Summary

Chapter 5: Conclusion and Recommendation
5.1 Conclusion
5.2 Recommendation

Personal Development Review

References

Appendices

1. Dissertation proposal

2. A proposed timetable for completion of dissertation

2. Questionnaires

3. Descriptive statistics measures especially the Mean and Standard deviation

4. TURNITIN Receipt

5. TURNITIN Report

Acknowledgement

The author would like to express his gratitude to God for all the blessings that he has given to him. The author would also like to thank his parents, family and friends who always mentally and physically support him.

The author would like to thank his supervisor Mr. Frankie Lim who has guided and supported the author patiently throughout this dissertation process.

Special thanks to my friend Sugianto Malik without his helps, support, advice and guidance, this dissertation will not be successfully completed.

The author would like to take this opportunity to thank all people who have helped him in making this dissertation successful.

Executive Summary

Online marketing techniques have become the popular trend that helps organization to promote products and services globally. Budget airlines industry in India can leverage on the online marketing in order to increase the competitiveness in the market as most of the people choose to fly budget airlines. This research paper identifies and analyses various online marketing techniques and factors that contribute to the success of online marketing.

Both primary and secondary data gathering techniques are used in this research study. The primary instruments for this research study is questionnaires with the sample sizes 381 of working adults and students of Indian community in India and overseas. The secondary sources used for this study are books, newspapers, magazines, journals, articles, and previous research papers. Both qualitative and quantitative research methods are used to analyse the data. IBM SPSS version 22 application software is used to analyse the data and generate the graphical output in pie chart diagram.

From the research study, the researcher has found several success factors that play an important role in the successful execution of online marketing campaign such as quality content of the website, regular updates of the social media website, blogging on the popular blogs website to increase the website traffic, online video marketing, email marketing and paid search marketing. Lastly, there are six critical success factors identified in this research study.

Abbreviation

illustration not visible in this excerpt

Figures

Figure2.1 Market share of scheduled domestic airlines in India (2013)

Figure2.2 Google Search Engine Result page

Figure2.3 Google Index size of major social media website

Figure3.1 The research process for basic and applied research

Figure4.1 Age category of the respondents

Figure4.2 Gender of the respondents

Figure4.3 Respondents who have travelled with any budget airlines in India

Figure4.4 Respondents who prefer budget airlines for their leisure trip

Figure4.5Respondents who prefer budget airlines for their leisure trip

Figure4.6 Respondents who prefer to book ticket through Internet

Figure4.7 Online check-in facility is faster and convenient

Figure4.8 Online seat selection and pre-book meals are convenient

Figure4.9Online chat agent facility for any related query about online booking is helpful

Figure4.10 Website and online media (e.g. Facebook, Twitter) play important role in the success of online marketing

Figure4.11 Low pricing strategy has a significant impact on successful online marketing in budget airlines industry in India

Figure4.12 Online membership programme has a significant influence on customer satisfaction and loyalty in budget airlines industry in India

Figure4.13 In-flight service quality of budget airlines influence customer satisfaction level

Figure4.14 Good airlines safety records

Figure4.15 Prefer more flight frequency and timings

Figure4.16 Flight punctuality is important

Figure4.17Easy accessible to budget terminal/airport

Figuer4.18 Prefer online seat accessibility

Figure4.19Ticketing flexibility (e.g. change flight 48 hours prior to departure)

Figure4.20 Cleanliness and comfort of aircrafts

Figure4.21 More variety of food and beverage

Figure4.22 Food and beverage quality

Figure4.23 Spacious leg space

Figure4.24 Renting iPad on-board

Figure4.25 Priority check-in for member

Figure4.26 Frequent flyer benefits

Figure4.27 Promotional update via email for member

Figure4.28 the Pearson correlation validity test on factors that impact successful online marketing in budget airlines in India

Figure4.29 the Pearson correlation validity test on factors that will not impact successful online marketing in budget airlines in India

Figure4.30 the Pearson correlation validity test on reliability factors that impact customer satisfaction or perception level on budget airlines in India

Figure4.31 the Pearson correlation validity test on inflight service quality factors that impact customer satisfaction or perception level on budget airlines in India

Figure4.32 the Pearson correlation validity test on customer loyalty programme factors that impact customer satisfaction or perception level on budget airlines in India

Figure4.33 Cronbach’s alpha reliability – factors that affect successful online marketing

Figure4.34 Cronbach’s alpha reliability – factors that will not affect successful online marketing

Figure4.35 Cronbach’s alpha reliability – reliability factors that affect customer satisfaction

Figure4.36Cronbach’s alpha reliability – inflight service quality factors that affect customer satisfaction

Figure4.37 Cronbach’s alpha reliability – customer loyalty programme factors that affect customer satisfaction

Figure4.38 Chi Square analysis on hypotheses 1

Figure4.39 the Pearson correlation matrix on hypotheses 2

Figure4.40 the Pearson correlation matrix on hypotheses 3

Figure4.41 the Pearson correlation matrix on hypotheses 4

Chapter 1: Introduction

Nowadays, most of the people choose to fly because of the budget airlines and its promotions. In order to meet the demand of the passengers, Indian government has given approval for the budget airlines to set up a business in India. Budget airlines like SpiceJet, Indigo, GoAir, Air Asia India and JetKonnect are booming in Indian sky (Cook 2014). Increasing passengers every year booking tickets online through airline websites directly or through third part travel websites like Cleartrip.com, Makemytrip.com, Yatra.com instead of going to a travel agents.

Today, website and online social media play an important role in the success of online marketing for budget airlines in India. More and more people have become IT-savvy in India and budget airlines such as AirAsia is trying to connect people using their AirAsia India Facebook, regular update of twitter, and online ticketing website to promote the brand. The AirAsia India Facebook has about 735,000 likes so far, this opens up the opportunity for AirAsia to maximize on the online marketing. Budget airlines provide facilities like web check-in, 15kgs free check-in luggage, customers can buy meals on-board, on-board shopping. Customers need a good service and on time performance in order to gain their trust.

Traditional travel agency has become less popular for budget airlines industry as online marketing and ticketing system is maintaining a lower cost and broader market reach. Online marketing has become more competitive in low-cost carrier industry, people are likely to come back to the website that are more user-friendly in term of ticket booking and have more facilities such as seat selection, book your meals and online check-in in advance. AirAsia India agrees that budget airline is a very competitive industry in India as they have eight competitors, so the battle for passengers is high (Gupte 2014).

The main objective for the budget airline is to acquire customers and retain the old customers. They choose to advertise on social media websites like Facebook and Twitter. People are likely to follow social websites daily and do so many activities like connecting to their friends and loved ones, checking the promotional ads posted by the Airline and other companies. This is how they get to know the promotional offers posted by the budget airline companies (Singh & Diamond 2012, p137-p144). Budget airlines website also have customer’s review page where they posted images of events happen in the company and also the new aircraft images and many more. This will eventually attract customer to fly at least once with the airlines.

Usually, budget airlines keep in touch with its customers by posting walls on the social websites like Facebook, Twitter, about Promotions, Real time weather alerts, using honest reviews for judging performance, update on any flight cancellation or any ongoing events and also job posting in the airline industry (Kaushambi 2011). It also provides feedback on customer’s questions through the social website wall posts.

1.1 Project Title

This project entitles “A Study on How Budget Airlines in India leverage on Online Marketing to increase the Competitiveness”.

1.2 Purpose and specific aims of study

The objective of the study is to assess on how budget airlines in India leveraging online marketing in order to increase competitiveness. The main purpose is to find out various critical success factors that play apart in successful online marketing campaign. These include several online marketing techniques e.g. search social media marketing, email marketing, search engine marketing, blog marketing and etcetera.

1.2.1 Primary and Secondary research objectives

There are two main objectives for this research study. The primary objective is to construct a framework for budget airlines in India to successfully execute online marketing campaign using various online marketing techniques. The secondary objectives are to support the primary research objectives, it includes:

- To study the significance and impact of various online marketing technique for budget airlines in India.
- To evaluate the interconnection among online marketing techniques and tools.
- To analyze and identify various effective ways to execute online marketing campaign.
- To analyze factors that influence the effectiveness of online marketing.
- To identify effective marketing plan of Online Marketing campaign in order to address the competitive issue in budget airline online marketing success.

1.3 Problem statement

Budget airlines in India encounters a strong competitiveness. Some budget airlines benefited from product and brand strategy, pricing strategy, better service quality and online promotion. Few are unable to keep up with the budget airlines market trend. Online marketing strategies has been widely used for the last decade, however many organization fail to understand the significant success factors of online marketing and promotional campaigns to improve the success rate. The budget airlines need to find the best ways to utilise online marketing strategies and techniques efficiently in order to stay competitive using the right implementation methods.

Membership programme is one of the example on how the budget airlines connect with the consumers through email communication about their promotional campaign. In-flight service quality is another factor to attract new customers and retain the existing one. They need to constantly improve not only the in-flight service quality but also the ground service quality such as check-in facility and baggage handling.

1.4 Significance of research problem

Online marketing is one of the tools for this profitability strategy and with more people are IT-savvy in India, the budget airlines industry can leverage on online marketing to boost their revenue and profit. In addition, other factors such as pricing strategy and in-flight service quality also play an important part in determining customer satisfaction and loyalty.

1.5 Research questions

The research questions are as follow:
1. What are the critical success factors that make successful online marketing campaign in budget airlines industry in India?
2. How membership programme impacting customer’s contentment and loyalty in budget airlines industry in India?
3. How in-flight service quality of budget airlines influence customer satisfaction level?
4. What are the most commonly used online marketing methods or techniques in today’s context?

1.6 Research hypotheses

The hypotheses to support the research questions include:

H1. There is an association between gender and preference to book ticket through internet.
H2. Preference to book ticket through Internet is positively correlated to website and online social media, online low pricing strategy, online membership programme, and in-flight service quality.
H3. Online membership programme is positively correlated to Customer loyalty programme i.e. priority check-in for member, frequent flyer benefit, and promotional update via email for member.
H4. In-flight service quality is positively correlated to cleanliness and comfort of the aircrafts, more variety of food and beverage, food and beverage quality, spacious leg space, and renting iPad on-board.

Chapter 2: Literature Review

Generally, low-cost carrier or budget airlines has a different business model practices. Different practices depends on different location but there are some common practices as well. The common idea behind the budget airlines is cost reduction and air fares reduction as compared to traditional airlines.

In the mid-1950s, the marketing concept was introduced as a customer-centered and sense-to-response idea. The main idea is to find the suitable products for your customers not the other way round (Kotler & Keller 2012). In the past, organizations depended on traditional marketing media such as newspapers and televisions. These traditional marketing media is costly, hence organizations especially budget airlines prefer to use cheaper marketing media such as online marketing website and social media like Facebook and Twitter. The competition among the organizations that provide the same products and services has become more intense (Kotler & Keller 2012).

In the early 1960s, modern marketing managers started to request the top management to involve all employees and understand the marketing activities. At the same time, many organizations started brand promotion as well. As technology advanced, many organizations started to adopt wide-scale marketing techniques to market their services or products. Between 1980s and 1990s, many organizations relied heavily on print, television and radio to market services and products and reach out to potential customers (Kotler & Keller 2012). The electronic media establishment has altered the way organizations market their services and products.

The traditional marketing channel is considered influential to customers as it promotes products and services and reach out for the domestic population. This traditional marketing is very costly, but most company in those days prefer to use it because the promotion of the products and services through televisions and newspapers has a significant impact on the sales (Croll & Power 2009). Although modern marketing methods like online marketing techniques successful in the market, many organizations still prefer to use the traditional marketing techniques to capture newspapers and televisions audience.

The main weakness of the traditional marketing media is that they are unable to penetrate international market. In this globalization era, organizations need to consider international customers from all over countries. In order to serve international customers, marketing techniques that can reach out to worldwide customers is necessary (Patterson 2008). In today’s context, this can be achieve through internet technology. Therefore, online marketing techniques is also known as Internet marketing technique or online advertising.

2.1 Online Marketing Introduction

Online marketing is a way of advertising or marketing products and services through the use of website and email to push direct sales through electronic commerce (e-commerce) and also to provide sales leads. Online marketing has become a crucial tool for marketing strategy for most of organizations from small to large scale. Almost all organization leverage from online marketing in some way. Between year 1990s and 2000s, organizations started to see the opportunity of marketing services and products online (Lenskold 2003). Today, budget airlines in India are all using online marketing website and social media to communicate with customers and to stay competitive.

In 1990s, many organizations have started using website but they could not identify the best way to bring traffics to their websites (Lenskold, 2003). They relied on referrals and email to inform customers about their website. With the arrival of search engine optimization (SEO), online marketing technique started to increase. Google is one of the dominant search engine, has led the search engine market to all time high. Although the search engine optimization was found in late 1990s, only in early 2000 it started to show effective usage (Lenskold, 2003).

The introduction of social bookmarking, social networking and blog creation have also increased the effectiveness for an organization to promote their services and products (Patterson, 2008). The social networking sites like Twitter and Facebook have transformed the online marketing way (Weber, 2007). Youtube and other video sharing website are another huge milestone for organization to start utilizing on promoting services and products on Internet (Patterson, 2008).

2.2 Budget Airlines strategies in India

In 2003, the country started welcoming Low Cost Carrier (LCC) and Air Deccan started its services. In 2008, the Parliament approved the Airports Economic Regulatory Authority (AERA) Act and the AERA was established to regulate the economic aspects of airports and to approve the setting up of new airports (DGCA 2014).

Globally, after US Congress approved the Airline Deregulation Act in 1978 that allow a new companies a greater freedom easier to enter the business and established their own fares and routes, the LCC model was born. Southwest airline is the pioneered of the LCC concept. External factors contributed to 60-65% of airline cost which cannot be managed by LCC such as maintenance cost (about 12%), fuel cost (about 40%), and ownership cost (about 12-15%). However, LCC attempts to achieve efficiency by excluding in-flight services, selling tickets through the internet, operating from secondary airports, more seats in the aircraft, inventory reduction and lesser employees per aircraft.

With the introduction of LCC back in 2003, the Indian aviation industry was opened to strong competition. The success of Air Deccan prompted the entry of other budget airlines such as Indigo, SpiceJet, and Go Air followed by Jet airways and Kingfisher airlines low fare offerings. Consequently, low-cost airlines are now dominated the airline industry sector instead of full-service airlines. However, long term sustainability issues remains to be seen with Kingfisher exit the industry recently. This is due to airport charges are the same for Full Service Carriers and Low Cost Carrier in India. In addition, the fuel costs contributed to a bigger portion of entire costs as compared to International standards because of higher levies from central and state government and high traffic at major airports which translate to hovering at main airports would increase fuel costs. As such, LCCs should operate on secondary airports in order to address the problem (Ray et al 2014).

LCC strategies are as follow:

Abbildung in dieser Leseprobe nicht enthalten

Source: Company Fillings, ICRA Research (Ray et al 2014)

The DGCA announced the market share of India’s domestic airlines. The market share overview for the year of 2013 for the different operators in the scheduled airline services as follow (DGCA 2014):

- Indigo, started operational in August 2006 and has a market share of 29.5% of the Indian skies.
- Jet Airways (India), started operational in 1993 and has secured second place along with subsidiary Jet Konnect with a share of 22.5% of the Indian skies.

- Spice Jet, the airline started operational in May 2005 and owned by Sun Group of India. Spice Jet has 19.8% of market share.
- Air India (Domestic) has 19.1% of market share.
- Go Air has 9.0% of market share in the Indian skies.

Abbildung in dieser Leseprobe nicht enthalten

Source: DGCA Report ( DGCA 2014)

Figure2.1. Market share of scheduled domestic airlines in India (2013)

Budget airlines offer different services and quality, but they share common principles to stay afloat:

- Standard fleet for lower training and maintenance cost and buying aircraft in bulk.
- Eliminate optional features such as reclining seat.
- Use of secondary or low cost airports.
- Maintain short time for aircraft on the ground.
- Online ticketing sales.
- Online check-in.
- Provide smaller weight of baggage and impose charges for extra baggage.
- Buying fuel in advance or with cash to get a better deal.
- Charge optional services such as meals, reserved seating, on-board services.
- Market and sell combine set of air tickets and hotels, rental cars etcetera.

2.3 Today’s online Marketing Technique

Controlling distribution channel can translate to greater profit and this is especially the case for airline business (Shaw 2004, p.196). The future is going to see a significant change to direct distribution for airline industry. In this case, Airline call centres, airport ticket desks and sales offices will continue to play a crucial role. Undoubtedly, most of the growth will be from the airline websites usage. Today, Internet connection has become daily life needs for hundreds and millions of people around the world and it is spreading very fast. These people are potentially will be the regular air travellers that are drawn by airline website due to airlines are increasingly adopting easier and straightforward booking and ticketing process. These are necessary to make Internet booking a commonplace (Shaw 2004). However, it is not the case that travel agents’ position will be extinct from airline industry. Numerous better-managed travel agents would be able to sustain and adapt their business by embracing new policies, which will offer added-value advantage to their clients. One of the example is that the travel agent transforming as travel consultants instead of pure airline sales agents. In this case, the travel agent can advice the flight and available fare options and provide the best recommendation because they have visibility of all the flights in the system.

There are many online techniques used by organizations to promote their products and services and many organizations have adopted online marketing. In late 1990s and early 2000s, many organizations saw the opportunity to market their services and products using online campaign method (Lenskold 2003). Budget airline organizations in India can leverage from various marketing techniques that will be discussed as follow.

2.3.1 Social Media Marketing Tools

A good first step when launching a social media marketing campaign is to assess social activity volume on the Internet. This is to enable organizations to see the potential customers based on demographics, psychographics, and techno graphics. This can be done by utilizing the social media marketing tools that provides such information. Many of these social media marketing tools are free and serve as a good starting point for research efforts. It is useful to always use multiple tools to get the best data (Singh & Diamond 2012, p367). Various online blogging sites that provides blog traffics include:

- Technorati (www.technorati.com), is one of the leading blog search engine that indexes more than 112.8 million blogs. It also has 250 million tagged social media. The website provide information that helps to understand how many people read blogs and from there we can better understand the percentage of total customer base that you will reach via blogs marketing.
- BlogPulse (www.blogpulse.com), is a blog search engine that offers trend data. This is said to be more powerful than Technorati as it enables to track the trends and analyse data at a deeper level.
- Google blog search (Blogsearch.google.com), this is another strong alternative search engine for searching blogs.
- Quantcast (http://quantcast.com), is an independent media measurement service that search the basic patterns for mainstream and social networks. The search result will enable you to dig deeper to find where the audience goes online.
- Compete (www.compete.com), is a web service that offer statistics of websites. They provide monthly visits and percentage of change from month to month and also provides demographic and income information at premium rate.
- Nielsen Buzz (www.nielsen-online.com/products_buzz.jsp?section=pro_buzz), is a monitoring service for the social website.
- ComScore (www.comscore.com), is another high-end web service that provide website statistics analysis.
- YouTube insights (www.youtube.com/my_videos_insight), it offers great summary of activity including demographics and popularity among competitors.
- Boardreader (www.boardreader.com), is a tool to view and analyse activity on discussion boards.
- Facebook insights (www.facebook.com/insights), this tool can help in determining demographics and readership data.

2.3.2 Search Engine Optimization

Search Engine Optimization (SEO) is commonly used by online marketing technique. SEO technique is a method to display the website in the first page of various search engines based on the desired keywords (Thurow 2008). As such, marketing managers can use unique and popular keywords to increase the traffic to the website. This could be one of the most effective and creative ways to draw prospective customers who does not recognize the company website including the products and services. SEO techniques are using similar techniques as blog commenting, bookmarking, forum posting, and article posting to draw traffic to the website. SEO has become essential part of online marketing (Smith 2014).

Successful SEO techniques begin with identifying the unique and appropriate keywords for the website. And quality content is essential in order to attract customers. In the SEO process, marketing managers will create various articles and allocate them to various blogs, social media and posting website. The SEO industry has been growing greatly, estimated 9.1 million internet users interested to use SEO services or to understand SEO techniques by searching through search engine each and every month (Buono-Daly 2012). Countries such as India, Pakistan and Philippines have been offering SEO services to global organizations. In conjunction with the changing algorithm in SEO, many organizations have been changing the way to implement SEO strategies as well (Thurow 2008). SEO deals with analysis of external and internal website such as link construction, competitor analysis, good website design and development, content development, and keyword research. Optimizing for search engine only may not be enough, marketers should consider social media websites together with social bookmarking as well (Jerkovic 2010).

2.3.3 Search Engine Marketing

Search Engine Marketing (SEM) is known for the usage of pay-per-click (PPC) advertisement such as through Google AdWords. Some elements are the same for both SEO and SEM, however PPC advertisement is much easier to implement and faster results, especially for getting visitors to see your website in a matter of minutes. This is Google’s capability to count incoming traffic and considered a major breakthrough in Online Marketing Technique. Marketers often ignores or confuse that SEO in the favour of SEM (PPC), this indirectly ignoring the great opportunities. In SEO process, it takes effort and works, and works cost money especially if they hire a consultant. Nonetheless, there will be no advertising bills coming in as compared to SEM and SEO work delivers long-term value (Jerkovic 2010).

Abbildung in dieser Leseprobe nicht enthalten

Source: SEO Warrior (Jerkovic 2010, p2).

Figure2.2. Google Search Engine Result Page

The above search result is one of the worst scenario result or SEO context, when a customer search for a popular keywords, the search results tend to mix with other results, which will make the website cluttered along with many websites. According to Jerkovic (2010), the following are the advantages and disadvantages of SEO and PPC:

illustration not visible in this excerpt

2.3.4 Internet Blogging

Internet blogging or Blogs is one of the most influential communications channels that influence the search engine results and is considered one of the most revolutionized online marketing methods. Many organizations have also been using blogs to promote their services and products online. Online marketing revenue has been increasing by many folds by using blogging method. Social networking and blogging are another aspect for effective promotional purposes (Patterson 2008).

2.3.5 Google and Social Media

Social media and Google play a crucial role for the successful Online Marketing technique. Google has shown high interest in the social media playing fields. With the acquisition of the most popular video sharing website YouTube, the most popular web feed tracker FeedBurner, and a microblogging Jaiku similar to Twitter, Google is making a statement about its interest in social media domain. So far, YouTube is Google’s most popular social media asset with tens of millions video downloads daily (Jerkovic 2010). According to Jerkovic (2010), Facebook is by far the most popular social media website, followed by MySpace, Flickr, YouTube, and Twitter consecutively. The following lists are the Google index size of major social media website:

Abbildung in dieser Leseprobe nicht enthalten

Figure2.3. Google Index size of major social media website

Source: SEO Warrior (Jerkovic 2010, p.324).

Social networking websites have the greatest reach to potential customers and share information. Facebook and Twitter are widely used social networking website and have really proved the power of social networking to market services and products. However, Facebook is the most popular, widely spread and powerful networks on the Internet (Weber 2007). Hence, organizations need to create the company’s page on Facebook to tap on the global customers. YouTube and Vimeo are the two most popular video networking that should be considered (Walther 2010).

Approximately in 2009, Facebook has 68 million of distinct users, 58 million users for MySpace, and 11 million users for LinkedIn (Razmerita 2009). The unique visitor number are growing steadily on every social media websites in the forthcoming years. In 2012, Facebook has 1 billion users worldwide (Vance 2012). This is an amazing example of how social networking website has transformed in the last few years.

Social media is the fastest growing site as compare to any online marketing strategy to date. Many organizations has been utilising the social media marketing campaigns in order to market or create awareness about their product to the public (Li & Bernoff 2011). Social media adopts fun environment, consumers are happy to see attractive marketing idea and campaign. Organizations could take advantage of using the social media to create brand awareness, product and services (Li & Bernoff 2011). It is crucial for organizations to include social media as a communication tool with consumers as it contributes to promote brand and spread positive talking point (Sernovitz 2012).

2.3.6 Online Video Marketing

Another marketing technique is online video marketing. In 2011, online video started to become popular and has been steadily grow every year. People are less interested to read blog posts, articles, books et cetera, many organizations has moved to introduce their products and services through online videos. The most popular online video site is YouTube and Vimeo. The traditional electronic media can now be watched on YouTube and Vimeo. Marketers should take advantage on this video social media apart from online social media marketing. Marketing with YouTube is one of the cost effective way of Online Marketing (Li & Bernoff 2011). Online video marketing should be shorter than that of television advertisements.

2.3.7 Email Marketing

Email marketing is another effective and popular online marketing tools. Many organizations have been using this marketing technique to inform about the promotion or sales of their products and services. Online email services was introduced in 1996, Hotmail was the first internet based email system and started to become popular in early 2000s. The following year, Yahoo mail offered an alternative to Hotmail which provides the same functionality web-based email system accessible through web browser (Hill 2004). Since then, email has become a new communication tool for students and organizations and nowadays are widely used in the online marketing campaign. Quality content in email marketing play an important roles, organizations need to ensure the quality content of the email template sent to customer (Singh & Diamond 2012). The email subject and template design will also attract customers’ attention. Hence, it is imperative for the marketing teams to spend time on writing a compelling content that contain knowledge and promotional driven.

2.3.8 Paid Search Marketing

Another type of online marketing is Paid Search Marketing. Paid Search Marketing was popular in 1997 and it was invented by Goto.com. Paid Search Marketing is a method where organizations post various advertisements in the form of text and banner, the organization will have to pay when a customer click on the banner. It is payable for every click the banner received (Hill 2004). In early 2000s, most search advertisements are offered as pay-per-click basis. The advantage of paid search marketing is quick results unlike SEO marketing technique (Hill 2004). When a consumer searches for the desired products and services using specific keywords online, the relevant paid search marketing advertisement will appear on search engine. Google is dominating the market as the biggest service provider for paid search marketing.

2.3.9 Mobile Apps Marketing

Today, with the introduction of Smartphones, many organizations have been utilizing this as a tool to market their products and services through applications (apps) software. This is considered the emerging market for online marketing technique as people can check their emails through smartphones and many apps have advertisement contents that can reach out to the public with minimum cost. YouTube, Facebook and Twitter are available in various smartphones brand and people can easily download the apps from the apps store.

2.3.10 Traditional marketing versus Online Marketing techniques

In airline industry, organizations can select from various different distribution channel to sell their services and products. For example, direct distribution to end customer or through travel agency. It is expensive to own sales shop in shopping mall or every busy street around the globe. Nevertheless, some passengers prefer to have a personalized ticket source and rely for advice and assistance (Shaw 2004, p.199).

A travel agent sells ticket on behalf of all airlines or tour operators, and provide other services like car rental and hotel. Agents can also identify and explore special markets that dealing with customer’s hobbies such as golf or any sports, and concentrating on certain ethnic groups. The second advantage is that agency will not give overhead burden to the airlines. Although, the airlines have to incur cost by provide training to the travel agency but it is the fact that airlines only reward the agent when the agent closed the deal on behalf of the airlines. In contrast, if airlines to own and operate sales shop in the city center, there will be overhead cost burden regardless whether or not they make any business. The third advantage would be the agency has certainly relieved the airlines costly administrative work related to air travel such as air ticket issuance, assist with visa applications and provide answer to passengers’ queries about airport security rules, baggage rules, check-in times. Airlines would have hired extra staff and resources if the agency had not done so. However, over the time the airline agency has become more expensive especially more and more tickets were purchased by credit cards, hence higher commission payout to credit card company. Rising commission costs are the biggest worry for airlines (Shaw 2004, p198-p201).

In 1996, many airlines started to make drastic changes, the Internet has become a promising alternative of distribution channel for travel agent. Some new entrant of Cost Leader airlines used the Internet as their alternative distribution channel and they achieved substantial cost savings as a result and that was indirectly put up more pressure to traditional travel agent. Various market today has seen reduction or elimination in commission. Instead the flat rate was paid by airlines to the travel agent for each task the travel agent has performed including making the booking, the issuance of tickets, and dealing with payment. Travel agent has seen a significant drop in number of tickets sold because the increase popularity of airline websites. A new online travel agent follow suit, since then the relationship between travel agents and airlines has changed (Shaw 2004, p.198-p.203).

The future airline distribution will be direct distribution channels. Airline call centers, airport ticket sales and sales offices will remain crucial but the growth in this direct sales is unpredictable. Clearly, the growth of the sales will be coming from the airline websites. Air traveler around the world are increasingly using the Internet as part of their daily life.

2.4 Interconnection among online marketing tools

One of the effective online marketing technique is to combine multiple online marketing tools in order to promote the products and services and reach out to more audiences. Organizations need to carefully choose the suitable online marketing techniques according to the target market, location and environment on the product or services that they offered. Majority of online marketing tools are interconnected (Kim et al 2004). For example, marketing teams can utilise Search Engine Marketing or pay-per-click to start with, the blogs, social media marketing like Facebook, YouTube, Twitter, email marketing to effectively implement the online marketing campaign. Integrating the above mentioned tools with search engine optimization is the key to desired results. This is due to the target audience and market used within a marketing strategy is the same. Furthermore, the prospective customers will have a solid idea of what is being conveyed hence it create a major impact on mind-set among them. Therefore, a successful marketing campaign that is established by integrating all existing marketing techniques, strategies and tools, would be very much effective and efficient for better results.

2.5 Effective Marketing plan of online marketing campaign

Marketing managers should think of various ways to help organizations to effectively implement marketing strategies not only about the success factor of online marketing strategies. Marketing plan plays an important role in the implementation of online marketing strategy (Croll & Power 2009). There are five phases in order to have better Online Marketing plan. The first phase is to define the goals and purposes of the marketing plan. This purpose will help marketing managers to better understand what organizations want and expect people to do before and after the completion of marketing campaign. The marketing campaign purpose could be influencing people to tell others about the products or services (Croll & Power 2009). Depending on the purpose of online marketing within the budget airlines in India, organizations have to choose the suitable online marketing strategies.

The second phase is to determine the company strength or competitive advantage of the company’s brand, products and services then to highlight more on it (Lenskold 2003). Many organizations are selling similar products and services due to market competitiveness. Hence, organizations have to make clear of what make their products or services better than the rest, what are the unique features that they have to distinct out from the competitor. Marketing managers should ask themselves “what would attract customers to call or email to ask about the products and services?” “Why will they care to contact the company about the products and services?” Generally, customers are attracted or influenced by the competitive advantage that is highlighted in the promotional campaigns or it offers a solution to their current problem. Internal marketing communication play an important role in the success of online marketing. It will help organization to inform everybody in the company especially sales and marketing team about the company goals.

Identifying the target audience is the third phase of online marketing plan. Organizations need to identify the target audience demographically or geographically while planning for online marketing technique like Social Media Marketing. Facebook is one of the social media that helps to identify potential customers in this way. This phase helps the organizations to identify which group of people are the most willing to accept their products and services. Furthermore, segmenting the market audience will also help organizations effectively target only potential customers who will most probably buy the products or services. According to Shaw (2004), “A market segment is a group of customers who have sufficient in common that they form a viable basis for a product/price/promotion combination.”

The fourth phase in online marketing plan is to choose the most suitable marketing mix. Organizations can use multiple online marketing techniques depending on the target market and type of services or products that they offer (Rowley 2001). Organizations should analyse if the internal team has the strength to promote the products and services by using various marketing techniques. Most commonly used these days are search engine marketing, social media marketing, paid search marketing, video and email marketing. If the internal team does not enough knowledge in promoting the products, they can engage third party marketing firm for assistance.

The last phase in online marketing plan is to set the online marketing budget. Many organizations fail to realize that budget play an important role in the online marketing process, due to lack of funds they fail to proceed further and fail the marketing campaign (Li & Bernoff 2011). Online marketing process is an ongoing and long term process, organizations have to keep pace with the market trends and customers’ need. Organizations need to allocate some budget for market research as it is important in understanding market trends. By adopting the five phases of online marketing plan, organizations would have a better chances of success in online marketing campaign.

2.6 Factors that affect Online Marketing success

There are internal and external factors that will influence the way organizations execute the online marketing campaigns. Some examples of internal factors that affect online marketing campaigns are little involvement of top management, readiness of internal communication system, resource availability and commitment.

Each and every online marketing campaign is important and the involvement of top management must be 100 percent because the top management involvement helps to cultivate active environment where every team member enthusiastically participate in the campaign (Lenskold, 2003). Top or senior management has the responsibility to communicate the objectives of every online marketing campaign. With lack of participation and monitoring, they will not be able to transform the objectives into daily working environment hence it will jeopardize the success of online marketing campaign.

The organization should adopt internal communication system tool that integrates both sales and marketing team so that the communication flow between these two departments are smooth and effective. One of the tool in the market is Customer Relationship Management (CRM) application. This tool is used internally to maximise and ease external communication. CRM involves in all aspects of interaction between a company and its customers be it sales or services related. This tool also handle business contacts, clients, sales lead, opportunity and contract wins. CRM helps to provide products or services that the customers need, offer better customer service, cross sell more effectively and better understand the customers (Beal 2014). The information and communication flows help marketing and sales teams to better understand customer’s needs, buying behaviour and market trends.

Resource availability always a crucial issue for organizations who plan to execute online marketing campaign (Lenskold 2003). Organizations need to take into consideration and analyse the resource availability in the budget. Skilled resources, efficient operation and properly managed facilities will be the biggest assets and strengths of the organizations while carrying out the online marketing campaign.

Some of the external factors that affect online marketing campaigns are ever changing market trends, changing technologies and buying behaviours of consumers (Ambler 2003). The market trends are influence by increasing competition and changing needs of the customers. The increasing competition will drive the organization to adopt a new communication channels to reach out to its customers. Today, new technology has becoming increasing and every now and then there will be a new technology being launched. Changing technologies in the marketing area have changed the way organizations communicate with customers (Hoffman & Novak 2000).

Customer’s buying behaviour is another crucial factor that influence the way organizations carry out the marketing campaigns (Hoffman & Novak 2000). Organizations need to carry out customer buying behaviour analysis regularly in order to know factors that are influencing their buying decisions.

2.7 Critical success factors of Online Marketing campaigns

2.7.1 Target Market and most commonly used Keywords

Critical success factors will take marketing campaigns to the next level. Marketing team needs to carefully select and handle the marketing campaign. For instance, when implementing search engine marketing strategy, marketing team need to analyse target market and most commonly used keywords searchable over the internet. Finding the best keywords is the principal success factor for search engine marketing. It is important to optimize website for some popular keywords to get the best results.

2.7.2 Unique and Quality Content

Website contents plays a key role in the success of search engine optimization. Unique and quality content will help the organization to get the best result from the search engine. Therefore, organizations should request their third party service providers to compose a unique content while optimizing the traffic for the website (Thurow 2008). In other words, the main success factor in search engine optimization are both quality and unique content and in accordance with search engines algorithm and targeting popular keywords (Thurow 2008).

2.7.3 Pay-per-click Campaign

Pay-per-click campaigns is another important factors that help marketing team to successfully implement Search Engine Optimization campaign. Usually, SEO campaigns will take approximately 6 to 7 months to get the results. Google separates normal search and paid search website, pay-per-click marketing strategy is crucial to improve ranking in the beginning of search optimization process. Hence, it will boost ranking of the website and implement the search engine strategy effectively (Thurow 2008).

2.7.4 Facebook and Twitter Social Media Campaign

Facebook and Twitter are the main social media websites that play a key role in promoting products or services. Some contribution factors for successful social media marketing is constantly updating the sites about the promotions and sale of the products or services, involve audience to participate in the social media campaign, being honest and genuine during the campaign, ensure traffic to the sites are manageable during the campaign, and providing feedback facility about the products or services. As social media campaigns are long term campaigns, organizations need to give time for it to see the results.

2.7.5 Utilizing Popular Blogging Sites

The information over online website are hardly credible as there are less credible sources (Li & Bernoff). Quality content plays vital role when it comes to blog promotion as well. Updating the blog regularly is also an important aspects in case the organisations running the promotions campaign. The blogs should provide information that help customers to decide whether to buy a product or not so that it will serve its purpose of existence (Turow 2008). Organization can tap on popular blogger in order to attract customers as it will give an edge to reach out the customers (Odden 2012). Naturally, customer would like to read blogs written by popular blogger in their respective expertise. Blog post of products or services by popular blogger will create major impact in the market. Since, the customer based are already established, organizations would be able to create buzz in the market easily.

2.7.6 Regular Updates on Social Media Websites

Regular updates on social media websites will help organizations to stay relevant and customer-centric. Hence, this is one of the important aspects of social media marketing. The probability to attract customer attention are lessen if the social media sites are not updated regularly, especially for the new entrant (Weber 2007). Apart from updating the social media sites regularly, organizations need to engage the customers as well. Many organizations fail to engage the customer, as a result the success rate of social media marketing campaign is slim. One of the example of engaging customers is by interacting with them and provide feedback for improvement. After all, customers’ feedback will assist the organizations to improve future marketing campaigns and provide a better services.

2.8 Summary

Online Marketing is a crucial marketing strategy and it has been used by almost all organizations in today’s environment. In order to stay competitive in the market, organizations need to make use of online marketing tools and strategies to promote their products, services and brand. Search Engine Optimization, Search Engine Marketing or Pay-per-Click, Social Media Marketing, Online Video Marketing, Email marketing, Paid Search Marketing are some of the best online marketing techniques available. Organizations should utilize those marketing techniques and tools to advertise their products and services. However, the effective marketing technique is to combine two or more online marketing tools to reach out to more audiences. In order to achieve effective implementation of online marketing strategies, organizations should take into consideration on five stages plan. The first step is to define the goals and purposes of marketing plan, follow by identifying the company’s strength, identifying target audiences, selecting the most suitable marketing mix, lastly to set the online marketing budget. Effective implementation of online marketing campaign is influenced by internal and external factors. Some of the internal factors that affect online marketing campaigns are lack of involvement from top management, availability of internal communication systems and resource availability. Whereby some of the external factors are ever changing market trends, changing technologies and buying behaviors of consumers. Organizations should also consider the critical success factors of online marketing campaigns. While marketing the products and services through social media such as Facebook and Twitter, organizations should engage customers to participate in the campaigns and foster long term interactive online marketing campaigns.

Chapter 3: Research methodology

The purpose of this chapter is to explain about the research process which the author adopt in this research study. According to Sekaran (2003), the research process for basic and applied research consist of four important phases. The first phase is the research process aspect, the second phase is the design aspects, the third phase is deduction from the hypotheses testing, and the fourth phase is the research report aspect. The complete process can be depicted as follow:

Abbildung in dieser Leseprobe nicht enthalten

Source: Research Methods for Business (Sekaran 2003, p56)

Figure3.1. the research process for basic and applied Research

The first five boxes above are the research process which is the process to develop the conceptual framework and the hypotheses for testing. Box 6 and 7 are the design aspect which comprises the planning of actual study, dealing with aspects such as the location of study, the selection of sample, and collection of data analysis. Box 8 is the deduction aspect which involves the compilation of hypotheses testing. This is where the researcher check overall or majority of the hypotheses are supported and the research questions are completely answered. Finally, box 9, 10, and 11 are the research report which consists of writing the report and making presentation, hence the manager can assess various ways of problem solving and making ultimate decision. Note that the dotted line in the above figure indicating the process that might need to be repeated at any point in time when the researcher feels the need for re-examination. However, in case the decision needs to be made based on the available findings and lack of time or other reasons, the researcher will draw a conclusion based on this limitation and tries to make certain assumption based on the fact finding as to why certain hypotheses were not supported and writes the report that describing these. That is depicted by the curved line from the rectangular “No” to Report Writing. In practice, the research might not follow the linear process as depicted in the diagram above in case the researcher needs to find further information or refine the theory (Sekaran 2003, p.55-p.57).

3.1 Research Process aspects

The research process is the process of developing the conceptual framework and the hypotheses for testing (Sekaran 2003). It consists of the first five boxes from figure4 above.

3.1.1 Observation

The observation refers to the identification of broad problem area through the process of observing and focusing on the situation where there is a possible need for research and problem solving. The specific issues that need to be researched such as (Sekaran 2003):

- Current existing problem in an organization that need to be addressed.
- Possible area of improvement identified by a manager of an organization.
- Conceptual or theoretical issue that needs to be strengthen for the understanding of certain phenomena.
- A basic researcher looking for further answer for some research questions.

3.1.2 Preliminary Data Gathering

Typically, there are two types of data gathering methods i.e. primary data gathering and secondary data gathering. Depending on research study nature, researcher will use either one or combination of both data gathering method to collect the necessary data for the research.

3.1.2.1 Primary Data Gathering or Primary Research Method

Primary research is a crucial activity in the data collection process. The primary research data is considered as original data which will be collected after the researcher gains better insight of the research problem (Williams 2007). Primary data is certain types of information such as perceptions or opinion based on experience obtained through interviews, observations, or questionnaires from the actual site of occurrence of events (Sekaran 2003, p59). In this research study, the researcher use questionnaire to strengthen the problem definition analysis. Approximately, a total of 450 online questionnaire will be distributed to the majority of working adults and students in India and overseas to understand their response. The questionnaire is designed for better understand the service quality and customer satisfaction in budget Airlines industry in India. A questionnaire is a term used to illustrate methods and techniques of the data gathering in which a person is asked to answer the same set of questions (Williams 2007). It is very important to inform the survey participant before they take part in the survey process. Researcher will have to outline all necessary information and instructions in the cover page of the questionnaire. The questionnaire is designed in such a way that the time taken to complete all the questions should be within 8-10 minutes.

3.1.2.2 Secondary Data Gathering or Secondary Research Method

Secondary data are the information used to gain insight on the actual research problem and they are data that already exist and do not have to be collected by the researcher. For instance, company policy, procedures, and rules that can be obtained from the company’s website. Some secondary sources of data are statistical bulletins, government publications, information published or unpublished, data available from previous research study, journals, magazines, newspapers, case studies, library records, online data, websites and the Internet (Sekaran 2003). Hence, the secondary data act as a complimentary information that helps researchers while investigating the research problem.

For this research study, the author is using both primary and secondary data gathering methods to collect data and information. The primary data is collected by using the online questionnaire. The data collected through questionnaire will be used to test the hypotheses statements. The secondary data is collected to gain more knowledge of the area of study, the research problem and to build hypotheses.

3.1.3 Problem Definition

The problem definition is said to be one of the main criteria that need to be identified before researcher carried out the research. There will be no good solutions to the situation if the critical issue or problem is not clearly define. A problem in this context does not necessarily mean critical issue that need to be rectified immediately, rather it is refer to an interest in an issue that need to have right answer to improve current situation. A problem can also be viewed as a gap that exists between current and desired ideal states (Sekaran 2003, p.69).

3.1.4 Theoretical Framework

Upon completion of Interviews, literature study and problem definition, researcher is ready to develop a theoretical framework. A theoretical framework is a conceptual model that the researcher formulate to make logical sense of the linkage among several factors that have been identified as important to the problem. The hypotheses can be tested from the theoretical framework by assessing the validity of formulated theory. Hence, by using the correct statistical analysis, the hypothesized relationships can be tested (Sekaran 2003, p.87).

3.1.5 Generation of Hypotheses

A hypotheses refers to logical imaginative association between two or more variables that can be tested. The solution might be expected after the hypotheses testing and relationship hence the problem can be rectified or improved. The relationship between underlying variables of the problem situation can be obtained by using statistical test analysis or the negative test in qualitative research (Sekaran 2003, p103).

3.2 Design aspects

Having identified the research process aspects, the next step is to design the research to gather and analysed requisite data and to arrive at a solution. The design aspects can be further divided into issues relating to decisions about (Sekaran 2003, p.117-p137):

- Purpose of the study which include investigation study, descriptive study, and hypotheses testing study.
- Its location which is the study setting.
- The type of investigation it should correspond to.
- Extent of researcher interference with the study refer to the degree of the researcher influence in data manipulation and control.
- Time horizon refers to time frame in order to gathered data to answer a research.
- Unit of analysis refers to the level at which the data will be analysed.
- Sampling design refers to the decision making based on the type of sample to be used. This includes identification of sample size, population, sampling method and sampling frame. Sampling design is a broad technique that to be discussed as a stand-alone topic.
- Data collection methods refers to how the data will be collected.
- Measurement refers to how variables such as operational definition and scales are to be measured.
- Data analysis and intepretation is about how the data will be analysed to test the hypotheses.

3.2.1 Sampling Design

Sampling is the process of choosing the right individuals, objects, or events for study. The sampling consist of population, element, population frame, sample and subject. The identification of population, sample size, sampling method and sampling frame is important aspect of any research study (Sekaran 2003, p.246-p.297).

- Population is the group of people, activities, events, or subject of interest that the researcher wanted to investigate. This research target the working adult and students of Indian community who prefer to book budget airline tickets online. The target population will help to understand how the online marketing influence the buying behaviour and determine what are the critical success factors for online marketing campaign especially for budget airline industry.
- Element refers to a single member of the population.
- Population frame is a listing of entire elements in the population which the sample was derived. Generally, the population frame is the list of people chosen from the population to obtain the information. For this research study, the population frame is the working adult and students of Indian community in India and overseas.
- Sample is actually a subset of the population. It comprises some members selected from it. It means that some but not all elements of population would form the sample. In this research study, the sample is 381 people of working adult and students of Indian community in India and overseas. The questionnaire has been sent to all the target people through emails, social networking websites and mobile phone messages.
- Sample size refers to the respondent size of the sample. Total of 381 out of targeted 480 individuals, all have responded the questionnaire. Thus, the sample size for this research study is 381 individuals.
- Sampling method, mainly there are two major types of sampling designs i.e. probability and non-probability sampling. In probability sampling, the elements in the population have some probability of being selected as sample subjects. Whereby in non-probability sampling, the elements do not have known predetermined probability being selected as subjects. Probability sampling is used when the representatives of the sample is more importance than wider generalizability. Non-probability sampling is used when time or other factors rather than generalizability become crucial. Probability sampling consists of simple random sampling, complex probability sampling, systematic sampling, stratified random sampling, proportionate and disproportionate stratified random sampling, cluster sampling, single-stage and multi stage cluster sampling, area sampling and double sampling. Non-probability sampling consists of convenience sampling and purposive sampling. The purposive sampling is subdivided into judgement sampling and quota sampling. For this research purpose, non-probability sampling especially convenience sampling is used to obtain some preliminary information in a quick and inexpensive way. Convenience sampling refers to the gathering of information from the members of the population who are conveniently available to provide the data (Sekaran 2003, p.246-p.297).

[...]