Essays on Qantas Airways Limited Marketing Planning Case Study

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The paper "Qantas Airways Limited Marketing Planning" is a good example of a marketing case study.   Qantas Airways Limited marketing situation analyses provide information that any other company faces in pursuit to perform in the related industry. Conversely, the analyses of its SWOT, PEST and position vis-à -vis the market it operates to provide a need to identify elements of a marketing plan with a view to analysing problems and propose solutions. To begin with, marketing situation analysis shows that Qantas Airways Limited faces intense rivalry among different airlines and to be specific, Virgin Australia Airlines which offers the stiffest.

To put this in the rightful context, going by the data regarding the financial position, in the pre-deregulation days, Qantas Airways Limited and Virgin Australia Airlines competed mostly based on services like meals and in-flight movies. However, in the post-deregulation era, the rivalry between the two companies is now taking the form of severe price competition with Virgin Australia Airlines ruthlessly undercutting each other with fare promotions. To counter this effect, Qantas Airways Limited must be specific in its market approach; first, market mixed is the key here.

Secondly, catering and other support services to the customers should be specific and unique to what these competitors offer. That is, dealing with prices calls for the Company to provide such services to customers associated with other airlines and such must include corporates, institutions and other Companies. This argument is in tandem with what Graf and Kimms (2011) explain about marketing orientation. That is, the normative philosophy that underlines modern marketing thoughts in airline argues that for airlines to effectively deal with competition from other companies, such firms need to determine specific needs and wants of its customers so as to satisfy them more effectively than their competitors.

Secondly, as Ç etiner and Kimms (2012) posit, Virgin's mission is to redefine Australia's airline industry and shift from a leader in the low-fare market to a new world carrier. This is to mean that for Qantas Airways Limited to be successful with regard to offering catering services that sway customer; their marketing strategies must define market orientation from Shumsky (2006) perspective---a cultural perspective looking for “ the company culture that most efficiently and effectively creates the needed behaviours that ultimately creates superior value for its customers thus ensuring continuous effective performance” (p.

32). As it has already been, Qantas financial situation has become weaker since 2012, especially when it reported a loss for the first time. This is to mean that in light of the competition the Company is facing, the industry is already facing very high fixed costs. That is, the majority of the operations such as landing fees, labour and cost of aircraft among others have been high regardless of how full the Company has their planes.

This factor also negates the fact that the marginal cost of adding an extra passenger is almost negligible. Furthermore, these statistics, as it stands show that the margin of every seat sold as a contribution to the bottom directly. While the bottom of this effect is to develop a marketing strategy that undercuts other competitors’ prices until such prices reach marginal cost, adopting S. M.A. R.T. which is specifically results-focused and time-bound. The best marketing strategy for this company is to create a Computer Reservation System and such must be coupled with innovative pricing.

As Topalogu (2012) notes, one of the basic elements of a marketing plan is to assess its situation analysis and specifically, deal with product category review. To this regard, the creation of computer reservation system will not be a new strategy to the Company but it enhances pricing overview, distribution profile and sales trends. This marketing strategy can be connected to one noted issue discussed earlier: Qantas turning to the international market, particularly Asia market (Qantas Airways, 2013). The interpretation of this with regard to Computer Reservation System is that the Company needs dynamic revenue management so that as it considers adopting the integrated Computer Reservation System dynamic revenue management systems adjust its limit as time passes and the number of seats available in a particular flight increases.

This adjustment will further allow the airline to maximize its revenue generation fully through dynamic seat allocation and pricing. As Brueckner and Whalen (2013) note, most airline alliances consider dynamic revenue management as an effective approach in maximizing revenue in the industry.

Indeed, most critics argue that compared to static revenue management, dynamic RM has more benefits to airline alliances and this is where Qantas Airways Limited creates the problem as far as what Nguyen (2014) refers as to as “ Qantas has steady been failing to concentrate on how to cease to lose and return to make profit” (p. 37).

References

Belobaba, P and d’Huart, O. (2011). A Model of Competitive Airline Revenue Management Interactions. Journal of Revenue Management and Pricing Management. Vol. 11, 1, 109-124. Macmillan Publishers Ltd.

Brueckner, J., & Whalen, W. (2013). The Price Effects of International Airline Alliances. The Journal of Law and Economics, 43, 78-132.

Çetiner, D. and Kimms, A. (2012) Approximation nucleolus-based revenue sharing in airline

alliances. European Journal of Operations Research 220(2): 510–521.

Graf, A &Kimms, A. (2011). An option-based revenue management procedure for strategic airline alliance. European Journal of Operational Research, 215: 459-469.

Nguyen, K. (2014, February 27). Qantas results: Airline posts $252 million loss, cuts 5000 jobs, freezes wages. Yahoo Finance. Retrieved from http://au.finance.yahoo.com/news/qantas-results--airline-sells-brisbane-airport-lease-for--112-million-221118676.html

Qantas Airways. (2013). Qantas annual report 2013. Retrieved from www.asx.com.au

Shumsky, R. (2006). The southwest effect, airline alliances and revenue management. Journal of Revenue and Pricing Management, 5: 83-89.

Topalogu, H. (2012). A Duality Based Approach for Network Revenue Management in Airline Alliances. Journal of Revenue and Pricing Management. Vol. 11, 5, 500–517. MacMillan Publishers Ltd.

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