At the moment Korean Air is focusing on middle/upper middle class passengers. In order to strengthen its competitive force in the global market, the two advisable market segments for Korean Air are lower middle class families and young families with children.
Geographically, the least and less developed countries are facing both the low income as well as increasing fertility rates (Haub, 2012). More specifically, sub-Saharan Africa, Asia, Caribbean and some low-income European countries have a need for cheaper transportation for families. Demographically, young parents should be targeted, because most often they have only one young breadwinner due to one of the parents staying home with a child.
The lifestyle of young parents in the less developed world does not include much leisure. They prefer free or cheap activities, such as sightseeing, short distance travel, sports, hiking, or local entertainment. Usually, the father is working long hours and gets a few days a year to spend with his family. During that time, the young parents are able to spend their vacation money on travelling, usually to the seaside. Psychographically, such families value peaceful and quiet family time by the beach, because they undergo much stress over the working year.
The proposed target markets can be reached with the help of television, parenting magazines, newspapers, billboard commercials, leaflets in kindergartens, etc. These segments have been selected for two main reasons. Firstly, low cost airlines are presenting danger for Korean Air (CAPA, 2013), especially since a large part of the population is learning low incomes. Secondly, fertility rates all over the developing world remain high (Haub, 2012). The sizes of these segments can be approximated to be more than 20% of the South Korean population for the low income class (Savada & Shaw, 1990) and, with more than one child born per woman annually (United Nations, 2015), about 50% of the South Korean population would be targeted by default.
Lastly, besides international low cost carriers, Korean Air faces competition from the local Asiana Airlines, All Nippon Airways and AMR Corporation. Rising fuel costs and currency fluctuations have hit all of the competitors hard, but Korean Airlines manage to stay on top (CAPA, 2013) due to eco-friendly innovations, loyalty programs, multiple destinations and the support of the government, which are lacking in other local carriers.
References
Savada, A. M., & Shaw, W. (1990). Social classes in contemporary society. In A. M. Savada & W. Shaw (Eds.), South Korea: A country study. Washington, DC: GPO for the Library of Congress.
United Nations. (2015). The 2015 Revision of World Population Prospects. Retrieved from https://esa.un.org/unpd/wpp/
Haub, C. (2012). Fact sheet: World population trends 2012. Population Reference Bureau. Retrieved from http://www.prb.org/publications/Datasheets/2012/world-population-data-sheet/fact-sheet-world-population.aspx
CAPA. (2013, August 14). Low-cost airlines capture over 20% of South Korean Market for first time; domestic nearly 50%. Centre for Aviation. Retrieved from http://centreforaviation.com/analysis/low-cost-airlines-capture-over-20-of-south-korean-market-for-first-time-domestic-nearly-50-120685
