Focus : Lessons from the Kingfisher Airlines exit from the low cost segment

(Image Source: www.dancewiththeshadows.com)

Indian corporations have never had it so good in the last decade or so. As the west grinds to a halt, India and China are the new beacons of hope for driving the world market. But in their enthusiasm they often forget the basic rules of marketing and that is focus on the value that the customer seeks from you.

Now let us look at the recent Kingfisher Airlines announcement.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/rivals-including-spicejet-and-indigo-to-gain-from-kingfisher-airlines-exit-from-low-cost-operations/articleshow/10164653.cms


Some time ago Kingfisher airlines acquired what was earlier known as Air Deccan the low cost Airline founded by Capt Gopinath, the pioneer in Indian Low cost aviation. It was renamed Kingfisher Red. I had earlier written a piece about airlines and how they are perceived http://doctersoccer.blogspot.com/2010/09/airlines-matter-of-perception.html. Today I want to talk about how Kingfisher has lost its way in the way it is positioned.

Before we get into these details just try this exercise, close you eyes and think of the first thing that comes to your mind when you think Kingfisher Airlines?
Some of the words and thoughts that come to my mind are Opulence, Dr Vijay Mallya : King of Good Times, Lovely Air Hostesses dressed in Red, Yana Gupta in a flight attendant uniform, In -Flight Entertainment, A Guest in Dr. Mallya’s house.
But does the word low cost, economy or cheap come in your mind? The answer I am sure is no. then why the hell did Kingfisher Airlines buy Deccan and try to run a low cost airline?

The fact is that Kingfisher Airlines has lost focus, and while they somersault on their strategy, it is to be seen how the Airline which is losing money ever recover from the loss in brand equity due to the this move.



Let me take you on a step by step process on three key steps in defining a strategy

Step one- Define your market. (Segmentation)

In this particular case the target market for Kingfisher Airlines is this upwardly mobile urban traveler who values good things in Life. He/she is not a budget traveler and would fly only on a full service airline.

Step 2 – Define your offering (Targeting)

So the value sought by this class of flier is a comfortable flight which leaves and arrives on time and also he is given some services on the flight including in-flight entertainment, meals and beverages. Frequent upgrades and access to premium lounges can be the other premium services being offered. Now Kingfisher did start out by providing all this, but then in a sudden change of strategy went and acquired the low cost, economy class Air Deccan. Now this was not what the Kingfisher customer sought and was totally against the brand attributes of the airline.

Step 3 Positioning

Now the positioning was based on the above two factors. I still remember my first Kingfisher flight, I t was a great experience. The minute I got off at Delhi airport I was ushered in by the Kingfisher attendants who also carried my bags. I was referred to as a guest. The flight left on time, the air hostesses were lovely, and the in-flight entertainment was superb. The handle of my bag was broken when my checked in luggage arrived and I was compensated immediately with many apologies from the staff. On the way I watched some good programming which I loved.
Now imagine how many people I had spoken to about this flight. I have never flown Air Deccan and avoid Low cost airlines if possible. I have flown Indigo a few times and I find them very efficient and smooth.

But coming back to Kingfisher, why would a premium brand like Kingfisher align themselves with something as basic as a low cost Airline. This lack of focus on its core market and brand attributes totally flummoxes me and I am not able to understand any rationale behind it.

Also running a low cost airline would require very different operations than running a full service airline. I don’t want to get into operational details but I am sure the supply chain would be totally different.
Had Kingfisher goofed up? I would say yes. Are they right to make this about turn? I would say yes.

Will it cost them? I am not sure about that, now that Jet Airways has also shot themselves in the foot and done the same mistake I am sure Kingfisher will get time to recover the brand equity. Also The national carrier Air-India was never in the fray.

In the end it is this lack of focus that hampers corporations, Nokia lost sight of the smart phone market, RIM never thought of targeting non-office users and Kingfisher thought they could run a low cost airlines. For Nokia and RIM I think the challenges are enormous but for Kingfisher the Good times loo like here to stay.