Sanjiv Kapoor, chief strategy and commercial officer, Vistara, who has been with the brand for around six months, spoke to us about the use of traditional versus new media, the 'premium economy' positioning and not wanting to 'commoditise' brand ambassador Deepika Padukone.
Difficult though it may be to operate in the competitive aviation business in India today, Vistara, the full-service airline, seems to have carved out a niche for itself in a short span of 20 months. Known for its premium pricing and also as the first full-service carrier to introduce the 'premium economy' class of travel, the brand was recently in the news for its first television commercial featuring its newly appointed brand ambassador Deepika Padukone.
Last week, Vistara launched the all-new Club Vistara (CV) frequent flyer programme, claimed to be the fastest rewarding frequent flyer programme in the Indian aviation industry, and also the "most generous and least restrictive of all". On Friday, it also inaugurated daily service to Port Blair from Delhi and Kolkata.
Kapoor, who has 19 years of experience in the airline industry, joined team Vistara in March. He strongly believes that the airline business is a service business. "Ritz-Carlton (a leading brand in luxury lodging) has a motto 'We are Ladies and Gentlemen serving Ladies and Gentlemen'. And so are we; people serving people," he says.
Club Vistara re-launch and the making of the Vistara Elite
Brand Vistara's core audience include corporate and frequent flyers who value the service experience and are willing to pay a reasonable premium for it. To redesign Club Vistara, a study was conducted on a focus group comprising 70 per cent senior management professionals and 30 per cent from the middle management. The aim was to know their pain points and what they valued most.
But, who's this Vistara Elite? According to the brand, it's the super achievers, the jet-setters and the boardroom high fliers. "A full-service airline needs to have a proportionate amount of high-yield customers for the model to work," asserts Kapoor.
Striking a chord: Advertising and branding
"One of the briefs that I gave when I joined Vistara was that I don't want to see airplanes in the ads. It should be about people. Use our crew, or customers, or our brand ambassador, but not a picture of the airline, unless of course, it's something special such as a special livery or a different colour scheme," shares Kapoor.
Vistara's strategy is to engage its TG with three types of ads. For the brand ads or television commercials it makes use of brand ambassador Padukone. Network and pricing updates and offers are promoted by the cabin crew, and for programmes such as Club Vistara and other initiatives the brand is using non-celeb models.
Brand Vistara also makes it a point to differentiate its communication based on the medium deployed. "The digital demographic is quite different from the traditional. So, although our digital campaigns are more edgy and fun, we're refined and restrained on mainstream media," notes Kapoor.
Owning the 'premium economy' segment
While discounting and price wars have led to the commoditisation of the economy class, Vistara believes that it has also created a new opportunity in terms of business and brand positioning, and it calls that opportunity the 'premium economy segment'.
And, the brand's first television commercial featuring Padukone was an attempt to articulate this difference and encourage people to pay a little more for a better experience (even if it's economy), one that will make them look forward to fly each time.
Also a testimony to this claim is the DGCA data which shows that among airlines with pan-India operations, Vistara had the lowest number of passenger complaints.
"People who have flown premium economy have really liked it. It's a promising segment, but since it's still a new product, it will need time to grow," he remarks.
The Vistara premium economy class consists of a private cabin with four rows, more leg room, enhanced meal service, and priority check-in and baggage handling. This translates into a more exclusive, comfortable, and hassle-free experience for frequent flyers/business travellers.
Snubbing the price wars
Kapoor tells us that while discounting has a place in the industry and helps to get rid of excess capacity, especially during off-season, the right way to do it is to offer discounts a couple of months prior to departure (30-90 days) so as to sell the seats that would otherwise go vacant. Discounting close to departure does not yield.
"The purpose of discounting is to stimulate demand. If you do it early, you pull people out of trains or make them leisure travel, or travel more frequently. An offer two days prior to departure just means that you are giving a discount to someone who is anyway going to fly," he says.
According to Kapoor, even as it's true that everyone, especially Indians, are value seekers, there are certain price points beyond which other attributes become more important. Business and corporate customers don't value discounts much. For them time is money, and they value the service experience. They are less price sensitive.
For instance, if someone has to take a Delhi-Mumbai flight for a business meeting tomorrow, whether it costs Rs 3,000 or Rs 4,000, it will not change the customer's mind/plan. If the airline is charging Rs 12,000, people might react, but for Rs 1,000, they won't.
"Hence, mindless discounting is neither necessary, nor does it make for a sustainable strategy. There was a time when Mumbai-Delhi all-in fare was Rs 2,200. It's cheaper than many train fares! This means that you are offering a fare lower than what the customer is comfortable paying, thereby generating a consumer surplus," he notes.
On the challenges unique to managing brand Vistara, Kapoor, whose last assignment was as chief operating officer at SpiceJet - a Gurgaon-headquartered low-cost airline, surmises, "To be able to differentiate a full-service airline in such a commoditised and price-sensitive market is a huge task, but we are making good progress, and people are appreciating us."
Vistara claims to have achieved the benchmark of flying more than 2.5 million customers.