After a turbulent phase of low traffic and lower revenue, Indian Airlines soared back into the reckoning. The first part of a two-part study on how the airline did it.
Since its incorporation in 1953, Indian Airlines was the only domestic airline in the Indian skies. It was a monopoly and was perceived to have all the ills of a monopoly: Because for passengers rejection was not an option, they were disgruntled and frustrated. Therefore, when in 1992 private operators appeared on the Indian skyline they were more than welcomed by these passengers. The problem was further compounded when Indian Airlines pilots went on strike from November92 till February93. During the same period, five new private airlines came into being.
Identifying the problem
Indian Airlines really did not have to look far to identify the problem. They had a poor product and an even poorer image perception of the product. Indian Airlines was always the whipping boy in the press, was plagued by industrial unrest and nothing it did was ever deemed right. The market share had dipped sharply, with the decline being even greater on the lucrative trunk routes.
Developing the turnaround strategy
In June 93 Indian Airlines took stock:
161 pilots and 93 licensed engineers had left and joined private operators.
lAircraft utilisation fell to more than 20 per cent below the desired norm.
Service standards were substantially below par.
It found itself totally ill-equipped to handle the new competitive scenario.
From the latter half of 1993 and through 1994, Indian Airlines launched a multipronged turnaround strategy to address the various ills with which it was plagued.
Productivity linked agreements were entered into with various unions to increase aircraft availability and utilisation.
Pilot availability was increased through agreements to fly additional hours and rationalisation of training patterns.
Industrial relations were improved through agreements with the different associations.
Various HRD steps were taken to improve morale and attitude (e.g., training by the Time Management Institute, Denmark, which was responsible for the turnaround of British Airways).
The organisation adopted a marketing orientation and well thought out marketing strategy was embarked upon.
Evolving the marketing strategy
In October93, for the first time in its history, Indian Airlines invested heavily in research by hiring IMRB, one of Indias foremost research agency, to do two detailed surveys:
Passenger Profile Survey
Agent Motivation Survey
The above two studies were designed to help Indian Airlines understand the consumer pull and the agent push factors in airline decision making. The studies were carried out in the 5 major metros, viz. Delhi, Mumbai, Chennai, Bangalore and Cochin. A total of 3700 interviews were conducted, covering passengers on 78 flights.
This survey helped Indian Airlines identify and classify the various passenger segments, and develop the product, distribution and communication strategies in a segmented manner. Moreover, it strongly underlined that brand loyalty for Indian Airlines was not just fragile, but non-existent.
The various segments identified were:
Corebusiness traffic
- Full fare, frequent flyers on company account
Self paying incidental traveller
- Domestic emergencies
- Families on vacation
Foreign Tourists
- Groups
- FITs
Non-resident Indians
- Mainly from Gulf (predominantly blue collar and labour)
- US, Europe and S E Asia (white collar professionals on home visits)
Recognising that changes and improvements could not be carried out across the length and breadth of the airline, it was decided to focus attention on the first segment which comprised 75 per cent of the traveller universe. The corebusiness traveller was characterised as follows.
Profile:
Sex: Male
Nationality: Indian
Average Age: 40 years
Education: Graduate +
Occupation: Executive (middle/senior)/ Self employed professionals/ Affluent businessmen
SEC: A1/A2
Purpose of travel: Business/Official
Payment: Corporate Account
Booking: Primarily through Travel Agents
Not overly price sensitive and therefore unlikely to be swayed by discounted introductory fares of other airlines.
More discerning and hence more susceptible to brand switch away from Indian Airlines as also towards Indian Airlines, if improvements could be affected.
Also influenced by travel agents in the choice of airline.
Accordingly the following strategies were put into place:
1. Product upgradation:
i. Creation of a Business class in the A320 fleet:
Recognising the business travellers penchant for specialized service, a segregation of the single class A320 fleet was reconfigured in 1993 to introduce the Business class
ii. Increasing the seat pitch in the A300 aircraft:
In an unprecedented move, Indian Airlines increased the seat pitch in the wide-bodied A300 Economy class to 36 (way ahead of the conventional 28-29 seat pitch in the competing Economy classes).
iii. Improvement in Inflight Service:
For Executive Class passengers: Visible improvements were made in the meal and presentation through little touches such as: table linen, linen napkins, three-course meals, choice of Indian and Western meals, hot and cold towels.
For Economy class passengers: Welcome drink, cold towel, additional salads, yoghurts, etc. to increase meal appeal.
IV. Enhancement of baggage allowance for A300 passengers to drive home the wide bodied advantage.
v. Improvement in groun handling:
Personalised check in for J class passengers and a choice of newspapers and an offer of tea/coffee during check-in.
2. Pricing innovations:
I. Reduction in cancellation charges long considered an irritant by the business traveller. Moreover, the additional complication of having to pay a slab wise cancellation charges was also done away with.
ii. A short-term frequent flier programme was introduced whereby for 18 sectors travelled in 3 months a return free ticket would be won for any sector. This tested the brand loyalty of the business travellers and Indian Airlines was pleasantly surprised at the response. It formed the plank for its subsequent frequent flier programme.
3. Distribution strategies:
i. Through 1993 and 1994, agent appointments were liberalised as a major departure from the earlier restrictive practice of Indian Airlines and many additional agents were appointed.
ii. An innovative productivity linked incentive scheme was put in place for both domestic and foreign passenger agents to boost sales in a radical departure from the earlier flat and uniformly applied commission system.
Developing the communication strategy
Having implemented the above through 1993-94 in January95, Indian Airlines looked towards its advertising agency, Nexus Equity, to change public perception about Indian Airlines and start the process of an image turnaround.
The key to the communication strategy that was thereafter developed lay in a Tracking Study carried out in October94 by IMRB. This clearly revealed that while the reasons for preferring Indian Airlines were more evenly spread out across the various parameters, the strongest reason for choosing a private airline was in-flight service. Despite the product improvements made by Indian Airlines, it was unrealistic to expect them to be able to compete overnight with the smaller private airlines in terms of quality and personalised nature of inflight service.
Moreover, there is enough empirical evidence to show that a service organisation needs to constantly keep exceeding customer expectations to register improvements in brand image. Merely meeting customer expectations is a downhill road. It was believed that since the private airlines had begun by increasingly pampering the hitherto attention starved passenger, it would be a tough act for them to maintain. The passenger would get more and more demanding and thus satisfying him become increasingly impossible.
Also it was felt that expectations from Indian Airlines were low. It was best to keep it that way, since then it would be far easier to exceed them.
We thus decided to let the various private operators battle amongst themselves over in-flight service. For Indian Airlines, the communication focus became to highlight the other major attributes which were their comparative and irrefutable strengths, namely:
Extensive fleet
Widest network
Extensive and self-owned maintenance infrastructure (with implications for safety)
Greater leg room
More liberal baggage allowance
Tone of voice
The real communication challenge was in evolving a creative strategy which could be credible and effective in communicating to a hostile and cynical target audience, who had for long waited for the day that they could get out of Indian Airlines monopolistic clutches. Given a strong negative brand attitude amongst the target consumers and the fact that airline choice is a high involvement/informational decision, a refutational approach was adopted. Confronting and acknowledging our past failings helped disarm the angry passengers and compelled them to hear what Indian Airlines had to say. It took courage on the part of the organization to whole heartedly back this creative strategy.
The first phase of the campaign, which began in May 1995 consisted of a series of five advertisements. Headlines like We confess, Indian Airlines planes are constantly grounded and We acknowledge, Indian Airlines can fly you around in circles, made Indian Airlines come across with a refreshing candour, totally unexpected of such an organization. The baseline, Come home to Indian Airlines warmly implored the passengers to return to the fold.
{5 Ad rational campaign for Indian Airlines Key nos 2591 to 2595}
It was recognised that the choice of an airline goes beyond mere rational parameters. Factors such as familiarity and a feeling of security as a consequence of Indian Airlines long experience needed to be projected in emotional terms. hence, the second phase of the campaign was developed and released in August 95.
{ 5 Ad emotional campaign for Indian Airlines. Key nos 2596 to 2600}
This again was a series of five advertisements which used a quasi-testimonial approach to effectively bring out the emotional bond which Indian Airlines enjoyed with its fliers and also further the various strengths of the airline which were unique to it. The endeavor was to turn the emotion of anger which passengers felt to trust and understanding.
The press campaigns were supported with similar messages on billboards. The trade was reached through participation in travel marts (in India and overseas) and distribution of collaterals like posters and folders.
The market response
The quarterly Tracking Studies carried out by IMRB began to reflect the results.
Image ratings rose by 25 per cent in February96.
In fact the image ratings grew across all the various parameters like Schedule, Safety, Punctuality, Attitude of Staff and Comfort. Interestingly, the overall image rose much more than that on various individual parameters. This clearly underlined the contribution made by the marketing and communication efforts towards moulding perceptions.
The media began to pick-up on Indian Airlines new thrust, with positive stories on the campaigns and the new initiatives.
For the first time since the award was instituted, Indian Airlines was voted Domestic Airline of the Year.
Marketshare which had continued to fall during 1995 began to reverse its trend from January 1996.
The stage was now set to capitalise on the gains and to further build brand image and start working towards establishing stronger brand loyalty.n
(This will be covered in the Part two of the same case study.)
