Tài liệu Solution for improving customer relationship management of vietnam airlines

Paris Graduate School of Management Thai Nguyen University INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION PROGRAM THESIS: SOLUTION FOR IMPROVING CUSTOMER RELATIONSHIP MANAGEMENT OF VIETNAM AIRLINES Student’s name: LA THE QUANG Intake I 2012 i ACKNOWLEDGEMENTS During implementation process of this project and perfect thesis of International Practice Master of Business Administration Program (PGSM), I always get the help and attention of instructor. On this occasion I would like to express deeply gratitude to: Assoc.Prof Dr. Tran Van Binh, Faculty of Management Economics, Hanoi University of Technology, he is always busy with work and family, but still gave me my attention during the execution of this project. - Board of Directors of Thai Nguyen University, the Board of Directors and Training Board of Program PGSM has supported me during learning process and complete the project. - Students in MBA B01 PGSM, my colleagues at Vietnam Airlines has dedicated to support and help a lot in finding material for this thesis. Despite conscientious efforts, but due to poor qualifications as well as practical experience so thesis is inevitable shortcomings certainly. Therefore, I hope to receive comments from teachers and classmates for my thesis is completed. Hanoi, October 2012 Student La The Quang ii TABLE OF CONTENT Cover page Acknowledgements i ii Contents iii List of symbols and abbreviations vii INTRODUCTION...................................................................................................1 1. Reasons for choosing the subject .........................................................................1 2. Rationale and objectives of the subject ................................................................2 3. The object and scope of research topics. ..............................................................2 4. Research methodology.........................................................................................3 5. Structure of the thesis: .........................................................................................3 CHAPTER 1 ...........................................................................................................4 SOME BASIC RATIONALE OF THE CUSTOMER CARE OF THE AIRLINES. ................................................................................................................................4 1.1 Factors affecting the airline customer care. .....................................................4 1.1.1 The concept and characteristics of air transport services. .......................4 1.1.1.1.The concept of air transport services................................................4 1.1.1.2. Characteristics of air transport services..........................................6 1.1.2 Concepts and characteristics of airline customers...................................8 1.1.3 Factors that affect customer care of the air transport enterprises. ........13 1.2 The basic content of the airline customer care. ..............................................14 1.2.1 Customer Relationship Management (CRM) of the airline. ...................15 1.2.2 Business development efforts of the airline customer oriented focus......19 1.2.2.1.Products and services.....................................................................19 1.2.2.2.Service price ..................................................................................20 1.2.2.3.Distribution channels. ....................................................................25 1.2.2.4.Trade promotion. ...........................................................................26 1.2.3 Development of human resources and corporate culture of the airline. .29 1.2.3.1. Human resource development. ......................................................29 iii 1.2.3.2 Corporate culture...............................................................................31 1.3 Lessons learned about the customer care of the international airlines. .........32 1.3.1 Some research experience in the customer care of a number of international airlines. ....................................................................................32 1.3.1.1 Singapore Airlines..............................................................................32 1.3.1.2. Thai Airways International................................................................ 33 1.3.2 Some lessons for VNA. ..........................................................................34 CHAPTER 2…........................................................................................................37 SITUATION OF CUSTOMER CARE OF VNA.............................................37 2.1 Overview of the VNA. .....................................................................................37 2.1.1 Process outline of formation and development of VNA. .....................37 2.1.1.1 Foudation and development history ................................................37 2.1.1.2 Functions and tasks. .......................................................................38 2.1.2 Overview of business results of VNA from 2005 to present .................40 2.2 State of solution to customer care of the VNA ..........................................41 2.2.1 Reality of Customer Relationship Management at the VNA. ...............41 2.2.2 The reality of the business effort development of focus customeroriented of VNA. ............................................................................................ 46 2.2.3 Reality of human resources development and corporate culture. ........66 2.3 Evaluation of customer satisfaction for business activities of VNA .........68 2.3.1 Achievements .....................................................................................68 2.3.2 Shortcomings and limitations of the VNA ...........................................69 CHAPTER 3 ........................................................................................................71 PROPOSED SOLUTIONS FOR IMPROVING CUSTOMER CARE OFVNA TO 2020................................................................................................................71 3.1 Some overview forecasts of the business environment and air transport services-oriented development of VNA after Vietnam joined the WTO in the period to 2020. ......................................................................................................71 3.2 Proposed solutions to customer care period 2012-2020. .................................78 3.3 Some macro petition. ......................................................................................91 iv CONCLUSION REFERENCE LIST v List of symbols and abbreviations 1. VNA: Vietnam Airlines 2. WTO: World Trade Organization 3.CRM: Customer Relationship Management 4. LCC: Low Cost Carrier 5.ISO: International Organization for Standardization 6.TCT: Corporation 7. Transit: Transit Passengers through Vietnam 8. IATA: International Aviation Association 9. SITA: Type of cable to transmit information in aviation 10. ATPCO: revenue management program in aviation 11. VPCN: Branch Office 12. Representative: Representative Office 13. VPKV: Regional Office 14. ASEAN: Association of Southeast Asian Nations 15. FDI: Foreign Direct Investment 16. ODA: official development assistance capital 17. APEC: Association of Petroleum Exporting 18. HKDD: Civil Aviation 19. PAX: Passenger vi INTRODUCTION 1. Reasons for choosing the subject Vietnam is a country joined the WTO in 2007 and integration into the world economy. In addition to these opportunities, businesses in general and Vietnam Airlines (hereinafter referred to as VNA) in particular face the challenges, risks and competition. To survive and grow, Vietnamese enterprises have to constantly improving competitiveness. As an air transportation business enterprise, as well as other Vietnamese enterprises, VNA are faced with the situation of increasingly fierce competition from domestic rivals, including: Jetstar Pacific, Vietjet Air, Air Mekong and foreign airlines flying the same routes. Competition is not only with other airlines that VNA must compete with other means of transportation such as rail transport, road transport, sea transport ... To be able to propose solutions to improve customer care, VNA has to study, to understand the needs of customers by analyzing customer groups, determining your target market, development Customer relationship management system (CRM) to take care of existing customers. Besides, VNA also need to develop internal resources, efficient use of organizational resources, especially human resources to develop its customers. VNA was founded in 1995 with amount of passengers were transported increased by an average of 15% / year. Revenue increased by an average of 12% / year. VNA has direct flights to 40 cities around the world in 18 countries and 20 provinces and cities in Vietnam. As national airline, besides political tasks, VNA has been contributing to economic development, strengthen exchanges and integration between Vietnam and the world. However, in the context of globalization world economy becomes inevitable competition between airlines increasingly fierce, competition with other forms of 1 transport equally harsh, beside opportunities, prospects, VNA is facing competition. To achieve long-term development goal is to maintain existing customers and attract new customers, VNA to reinforce modern fleet, constantly improving the quality of services, and applied advanced sales technology, in line with market characteristics as well as to satisfy the increasing demand of our customers. For customer care, VNA has to study, to understand needs of customers by analyzing customer groups, determining the target market, developing customer relationship management system (CRM) to maintain existing customers. Through the process of studying Master of business administration program, I have more knowledge of economic management, methodology as well as the method of administration, I would like to use my knowledge to suggest solutions to improve the quality of customer care for the company that I am working. Because of these reasons, I chose the subject "Proposed solutions for improving customer care quality of VNA" as the subject for my thesis. 2. Rationale and objectives of the subject - Systematized theoretical basis for solutions to improve quality of customer care in the field of air transport operations; Activities assessment to improve quality of customer care solutions for VNA;  Propose measures to improve the quality of customer care for VNA, namely development Customer relationship management system to maintain existing customers and make efforts to obtain business solutions new customers for VNA in conditions Vietnam's integration into the world economy. 3. The object and scope of research. Research objects: Concept of customer in the thesis is understood that passengers use transport services of VNA. Thesis addresses elements affecting between VNA and customers, these solutions to improve the quality of customer care of VNA.  Scope of research: 2 + Concept of customer in the thesis is understood that passengers use transport services of VNA, including retail and group. + Limited: Customer purchasing passenger transport services on international routes and domestic routes. + Time and the number of actual survey: VNA policies from 2000 to present base on VNA survey data from 2000 to present. 4. Research methodology. - Methodology: The subject use dialectical materialism method. Specific methods: Statistics and detailed analysis of existing solutions to improve quality of customer care of VNA, the thesis points out limitations and reasons so that it is to become basis for the proposed solutions to improve customer care policy for VNA up to 2020. 5. Structure of the thesis: In addition to the preface and table of contents, the thesis is divided into three parts as follows: Chapter 1: Some basic rationale of the customer care of the airlines. Chapter 2: Current status of customer care activities of VNA over time. Chapter 3: Proposed solutions to improve customer care quality for VNA period to 2020. 3 CHAPTER 1 SOME BASIC RATIONALE OF THE CUSTOMER CARE OF THE AIRLINES. 1.1 Factors affecting the airline customer care. 1.1.1 The concept and characteristics of air transport services. 1.1.1.1. The concept of air transport services. To give an idea of the service is difficult. So far, the researchers, the wellknown experts came up with a lot of concepts. But there are still a lot of controversy surrounding the concept and also very limited. The main problem is not capacity issues, research capabilities in the constantly changing variety of services. But also need to figure out the concept more acceptable. Here are some concepts to meet it. Services by Philip Kotler were understood as follows: an activity or service to supply benefits to swap, mainly intangible and do not result in the transfer of ownership. The implementation of the service can be associated or not associated with the physical product. So services are activities such as: rent a room at the hotel, travel by air, seek medical attention, sending auto to repair, watch movies, take clothes to laundry ... Another concept: a service is activity includes factors do not exist, addressing relationship between client or customer owned assets to the supplier without the transfer of ownership. Products and services within or beyond the range of physical products. Air freight service is any service that uses transport aircraft in service, on the basis of regular or irregular, and is defined in the Chicago Convention of the United Nations on civil aviation as follows : "Air Transport Service is any regular air transport service that uses the aircraft for the purpose of public transport of passengers, cargo or mail, parcel". Products of air cargo services business are load supply, or the amount of goods that can be transported in accordance with the predetermined time. Air 4 transport product is composed of factors including: load supply, network routes, flight time, tranfer points, connection time and other complementary products. General transport and air transport in particular has an important role and has great effect on the national economy of each country as well as for the world economy, a special catalyst push national economy and international economic relations to be developed. International Air Transport Association (IATA) evaluated the role of air transport industry in this era as follows: "Air transport is one of the most vital resources of the world. Its development as an economic sector and the field of air transport services have put in the place of one of the largest branches contribute to the achievement of modern society. Air transport is essential for economic development. In a community and the global market is growing fast, air freight transport to facilitate a quick millions and billions of dollars of goods to markets all over the world. "[1]. Air transport industry has an important role in the integration process of a country with the world that other vehicles can not match. Air transportation network is important arterial system of international economic activities, contributing to the economic concept of the border beyond the borders of individual countries. Open air also means expanding economic cooperation, political and socio-cultural exchanges, strengthen economic linkages between regions, serving the needs of the growing movement of social , contributing to the overall development of the socioeconomic and cultural between the regions in the country. Besides, aviation also promotes the development of international tourism and regional integration among countries and among regions of the world. Air transportation system serving all areas of social life such as production and circulation, consumption, contribute to ensuring national security and defense. Therefore, we can say the development of air transport reflect the level of each country. In current trend of integration, air transport has advantages compared to [1]: Website: www.iata.org 5 other means of transport in terms of speed. Air transport is a modern type of traffic and safety; Air transport have the ability to connect many parts of the country and many countries in the world where other vehicles can not do it; air transport takes place regularly and rapid revolving funds. In summary, the basic role of air transport: sector generated a significant portion of the total social product and national income; Meeting the needs of the growing movement of goods and passengers in the society ; contribute to overcome the uneven development between regions; expand economic ties and cultural exchanges with foreign countries; enhance the defense capability of the country. 1.1.1.2. Characteristics of air transport services. Characteristics of air transport services, including "The Invisible", "can not be separated from the source", "The unstable and difficult to standardize quality", "not preserved". The "invisible" is that it does not exist as an object. This invisible for each type of service has different levels of expression. In terms of types of air freight services, intangible shown in that customers choose airlines to go from one point to another point, that is, they buy the company's products and services. But before buying the product, they can not measure the specific quality of products and services. They can only be expected through the previously sold product or information about the company, the customer can not see, can not stop touching the product. This feature requires that managers need to pay attention to the material goods transport services so that customers feel and that he has served. If so, the attempt to improve the quality of new services mean. "The inseparable from source" Service is not formed, the production and consumption then that the production and consumption of services take place at the same time. If service can provide by human, the presence of the supplier is inevitable. This characteristic leads to the main limitations to the effectiveness of service delivery channels. Inseparable of products and services is also reflected in 6 the participation of clients in the aviation service. In essence, consumers decide the producer must produce goods to satisfy their needs. Relevance of consumer in the production of services are often more pronounced than goods. Services provided by a air freight services company can be consumed by customer travel needs is in the shortest time. "The unstable and difficult to standardize quality."It is original performance of the products produced by an advanced industrialized society is the level of standardization of product quality. Moreover, the production will not be carried out without a high level of standardization. Consumers buy a product by the manufacturer in the hope that this product will be the same with thousands or even millions of other products of the same type. Air transport services is also unstable and difficult to standardize; previous product with next product often have certain differences. This is because in the provision of air services with the participation of many employees provide services. When booking, ticketing, customer contact staff in the ticket office or agent; flight procedures at airports customers to communicate with the staff in-flight procedures and customer served by the hostess. Of course, the staff is very difficult to provide the same services at different places, in different times and for different customers. Moreover, customers are consumers and service quality decisions based on their feelings. Experience of each person is different and even the feel of a day at a time is also different. Aviation products and services will be of high value to meet customer's individual needs. Therefore, in the aviation service provider in no small part be personalized, free from regulation. That makes air services increased level of difference. The conclusion drawn is to see clients as separate individuals, even if they are large organizations. "Not store" is products and services consumption directly or quickly damage can not be stored. The service can not be produced in advance, then stored in a warehouse until sold. Air freight service is the transportation industry especially 7 where the production and consumption processes occur simultaneously. Air transportation service products can not be stored or saved. While providing a certain number of seats on a particular flight, if the number of seats that are not sold out when the flight takes off, the excess number of seats can not be stored for sale on the next flight. It was not kept of products and services air freight. To overcome this difficulty for effective service delivery, need to have accurate market forecasting, demand management measures well (for example, application of the reservation system, the Revenue administration system Yield Management System, diversification rates attached conditions fence ...) which can fill up the flight, take advantage of the even on flights to avoid excess demand or lack of short supply, keep credibility with customers. Above characteristics of the service can be illustrated by the following model: ` Not availbale Integral Services Heterogeneous quickly broken Figure 1.1: The relationship between characteristics of products and services. 1.1.2 Concepts and characteristics of airline customers. Any business or organization will also need customers. In other words, the customer is aim of every business. A business can only exist when have customers. Of course, needs to understand that customer concept here means that people buy something of the business or organization. Most people agree that actions related to 8 the exchange of money. In many cases, understanding is enough. However, in a broader perspective, can be considered customers with whom we exchange their values (value).They give us something (usually, but not always money) in exchange for something else (usually goods or services). In a world of increasingly fierce competition, competitive pressures force more businesses to better serve. The business can not stand the pressure of competition will fail. To be able to develop strong, the company is always trying to keep up with changing customer needs and meet those needs. So the airlines have to analyze the needs, behavior of customers, thereby making the overall solution and appropriate policies on products, customer care before, during and after the trip fly. Here is some sort of group of customers that the airlines are using. Classified according to the number of passengers in the group, the airlines divided by a number less than 10 delegations called retail customers, number of delegations from 10 or more call Group. Classified according to the market, airlines divided by the market.For example: the local market, market Indochina, Japan, Korean market, French market ... Classified according to the purpose of the trip, the airline divides customers into groups of passengers traveling for business purposes, workshops, rest, student, medical treatment, military transfers, labor, immigrant ... Passengers travel for business purposes including journeys related to work and pay for the travel company. Passengers traveling for business purposes and sometimes a boss but passengers traveling for business purposes does not pay directly from their pocket money from the company. Passengers traveling for the purpose of attending conferences and seminars at home and abroad is a modern trend. This group is also the company paid for travel as long as they can attend the seminar on time. Hotels to conference workshops 9 often went into winter. The conference they attend usually held in the city luxury hotel system. Passenger market travel for the purpose of rest is divided into two categories: passengers traveling and visiting relatives (VFR-visit friend and relative-visiting friends or visit relatives). Unlike traveling for business purposes, passengers traveling for leisure purposes have to pay airfare. Students to study abroad is an emerging group of customers by increasing the learning needs of students wishing to study in the university they wish. This audience demand for flexible, high weight of luggage to carry books, documents and personal belongings. They usually come in the season (school holiday). Therapy passengers were emerging customer groups and the number is increasing. When increasing life, the need to travel to places that can heal more. When treatment of travelers, who often goes by. Therefore, additional airlines to note the special service for customers located stretcher services, service use oxygen tanks, service trolley ... Workers often run by organized labor export worry visa, airline tickets. Customers usually travel in large groups, urgent get tickets due to wait for a visa from the embassy, the demand for low cost, go an urgent get tickets. Move troops also was a new trend as previously they often travel by road and sea.They often take a turn and needs to go low. Immigration was relatively common when the object exit needs to be living in a better country in the country they are living still occur. This audience is usually a turn to the other countries, they also have low demand. According to “Flying Off course, the Economics of International Airlines”, in early days of international air transport, the majority of passengers travel for business purposes. The passengers traveling for leisure purposes are usually rich. Market consumers do not expand with an increase in personal income and a reduction in the real cost of airfares, hotel rates for the purpose of reducing business travel fast. In Europe, the proportion of business travel for the purpose of reducing 10 to rest approximately 15.3%, 72.5% traveling, 10.4% visiting friends and relatives, about 1, 8% are traveling for other reasons (according to Business Monitor). Thus, traveling for leisure purposes (traveling and visiting relatives) accounted for 83% of the air transport market comes from England. Also it is statistically the relative proportion of customers travel frequently by plane is called regular customers (Frequent Flyer). Number of this regular customers usually fly with business purposes but sometimes travel for tourism purposes. According to statistics in the United States in 1989 regular customers at least 10 flights a year accounted for 6% of air passengers flying but over 41% of the total number of flights. Travel purpose affects the frequency of travel and the time of flight. While passengers flying for business purposes more often, they usually make the trip shorter. Meanwhile, customers who travel for the purpose of resting, visiting relatives or long vacations and travel packages are often customers wishing to set time. When resting analysis, we find the rate that women make up 53% (London airport figures) and even more when guests are visiting relatives. We analyze the amount of travel for the purpose of rest focus on ages 30 to 49. Rate from 60 years and older is also very high. However, at the age of 50 or under 16 years old in the UK make up less than 10% of passengers traveling for leisure purposes. The important social and economic factors also affect the travel needs of each individual client by traveling for the purpose of rest to pay for their holiday and their wives and children. As a result, those with higher income get market share of traveling for the purpose of more rest. In addition to the factors of gender, age, income, politics, culture, we also investigated the social and economic problems such as: the number of people in the family put together, walks of passengers, passengers profession. Evaluation of socio-economic problems of customers in each market will be very useful for airlines in advertising planning, launching and promoting the sale of other sales 11 activities and also help to decide advertising strategies. The knowledge of this market will assist airlines in product planning, pricing decisions as well as forecasts. Moreover, airlines know the customer's purpose of travel, time of flight, an understanding is needed of the hotel is also very useful to make policies to maintain existing customers and attract more customers in the future. Crops by day, week, high season is a very important issue and airlines often increase during peak load to serve the travel needs of passengers.Distribution time school student, the annual holiday in offices, factories, public holidays such as Christmas, New Year, cultural events, sports are important factors create travel demand much of customers called high season. In Europe, the traditional summer holidays of child labor and the person who did what he identical with beautiful climate conditions in the Mediterranean. In those days this summer who did northern Europe to southern Europe usually to rest, the influence of the high season flight schedule of the airline. Customers who bought air transport services are often the income in society. The rich client or senior officials need to sit in luxury cabins, is distinguished from other customers. Therefore, traditional airlines aviation service classification according to three classes of services includes: First Class (First Class-Class F), Business Class (Business Class - Grade C) and often (Economy Class- class Y). In the service class, the airline division of the different booking classes corresponding to the different rates (sub-class) to serve different customer groups that satisfy the different needs of each customer groups. In short, the traditional airline market segment in routes, according to the market, the purpose of the trip. Others will divide customers into traveling for business purposes, traveling for the purpose of resting, visiting relatives and traveling for other purposes. This division is important because it relates to predict customer demand for product planning flight planning, in-flight service and especially the price.The figure below shows the market segmentation based on the trip's purpose and needs of the customer. 12 Table 1.2: Segmentation based on the purpose of the trip and customer needs. Customer Ratings Demands High The have frequenc Bay stops Services Check-in Low ability to inflight procedur Price y of cancel comfort es, quick flights and checkout change reservati ons It is important 5 4 3 2 Does not matter 1 (Nguồn: Flying Offcourse) : public service PAX : visiting relatives PAX : tourists PAX : workers PAX 1.1.3 Factors that affect customer care of the air transport enterprises. Factors affecting the enterprise customer care air transport system is the measure of organization, technical and professional skills to influence economic customers to commercialize products products and services, attract more customers both in terms of number of customers and increase the volume of customers buy products and services. Factors affecting this include the impact from inside and outside the enterprise. The external factors affecting business including the policies of the ministries, other airlines.Now the Civil Aviation Administration of Vietnam 13 (Department HKDD) managing unit management issues related to aviation enterprise licensing as established, approved commercial rights to fly to the aviation business, shop browse published rates between countries, approved ceiling for domestic flights network in Vietnam ... The emergence of a range of cheap airlines (Low Cost Carrier LCC) is also a factor affecting the traditional airlines. LCC firms have an impact on the market. Along with the sale at very low prices, the company LCC bring benefits to the community, creating new flows as low-income people can also participate using air freight services. However LCC carriers have a certain influence as the majority of its LCC to use the aircraft is about to expire use, technical costs too little leads to flight safety is not high. The factors affecting the business which is the organizational structure of the enterprise.Air transport enterprises should have the organizational structure and customer-oriented culture. Businesses need to have the professional research customer needs, proactively deploy products according to customer needs, specific operational deployment to maintain and develop customer relations. Structure of the enterprise of the necessary customer care center (Customer Care Service Center) function to find out what customers need and air transport enterprises can do to be able to meet the highest customer needs.The efforts of the business itself are presented in the modern fleet development, human resources, product accompanying services marketing and customer ... 1.2 The basic content of the airline customer care. Customers determine the sustainable development of any business including airlines. Therefore, improving the quality of customer care is the goal of the airline.To maintain customers, airlines need Customer Relationship Management system (Customer Relationship Management - CRM) and implementation of content management customers seriously, seriously Customer Relationship Management System to take good care of their existing customers to always choose the company.Besides taking care of existing customers, airlines have to find appropriate measures to develop its customers, attract new customers to use its 14