Qatar Airlines E-Marketing Strategy - Case Study Example

Analysis of the Current and Future use of Internet Technologies of Qatar Airways Number and Number of Professor Date of Submission Number of Words: 2,251 Executive Summary The business profitability of Qatar Airways (QA) is highly grounded over the effectiveness and efficiency of its e-Marketing strategies. Therefore, marketing examination with regards to the business-to-business (B2B) strategies used by QA should be conducted to enable QA maintain its market position as one of the most sophisticated airline companies in the global airline industry. Using the Porter’s Five Forces framework, the external factors that could affect QA’s market performance among its rivalries will be examined. Based on the Porter’s Five Forces analysis, the strength, weaknesses, opportunities, and threats in QA’s business performance will be tackled in this report. As part of discussing the SWOT analysis, reasons why QA should consider entering partnership with other relevant website companies and strengthening its business alliances with other companies will be tackled in details. The use of e-Marketing strategies plays a significant role over the ability of QA to satisfy its target and valued customers. Likewise, factors that contributed to decisions made by QA’s marketing manager will be identified and included as part of the highlighted issues presented in this report. Aside from discussing the e-promotional strategies used by QA, the overall corporate website and its B2B strategies will also be analyzed to determine the best ways on how QA can maintain its reputation and brand equity as one of the most highly competitive airline companies of the 20th century. Table of Contents Executive Summary …………………………………………………….. 2 Table of Contents ……………………………………………………….. 3 I. Introduction ……………………………………………………….. 4 II. E-Business Background ………………………………………… 4 a. Porter’s Five Forces Analysis ………………………… 5 b. SWOT Analysis …………………………………………. 6 III. E-Marketing Analysis ……………………………………………. 9 IV. Web Design Analysis ……………………………………………. 10 V. Business-to-Business (B2B) ……………………………………. 11 VI. Sales and Customer Service …………………………………… 11 VII. Conclusions and Recommendations …………………………. 12 Appendix I – QA’s Official Website …………………………………….. 13 Appendix II – List of QA’s Competitors and Its Corporate Website … 14 Appendix III – Porter’s Competitive Forces Model: Qatar Airways …. 15 Appendix IV – Comparison between Qatar Airways’ e-Marketing Strategy and Its Competitors ........................................... 16 Appendix V – Partnership Stragies Adopt by QA ……………………... 17 Appendix VI – Summary of QA’s SWOT Analysis …………………….. 18 References …………………………………………………………….. 19 - 21 Introduction In relation to Qatar Airways (QA) success in the global airline industry, this report will discuss the company’s E-business background. Using the Porter’s five Forces model and SWOT analysis, the competitive advantages of QA as compared to its competitors will be tackled in details. Considering the company’s growing number of electronic sales of services, QA’s e-Marketing strategy will be discussed taking into consideration the factors that made QA’s e-Marketing strategy unique and adept to the over growing change in e-Business. As part of the main discussion, QA’s e-Marketing Mix will be elaborated in relation to QA’s business strategy. Prior to conclusion and recommendation, a thorough analysis on the company’s web page design and business-to-business (B2B) environment will be examined. Eventually, the importance of improving QA’s sales and customer service to the overall success and stability of QA in the global airline industry will be explained thoroughly. E-Business Background E-business is a key factor that enables an airline companies compete in the global airline industry. Although E-business is useful in terms of establishing the company’s competitive advantages over its rivalries, marketing managers should be aware that the implementation of E-business could create a lot of risks that could impede the business growth of the company (Huang et al. 2004, p. 2). QA’s decision to create its E-business environment is because most of its competitors are utilizing its official company websites to sell their airline services. Since most of QA’s target customers are using information technology and the web, QA’s management decided to take advantage of the business benefits associated with establishing their own E-business environment. This is possible by making QA’s official website more efficient and easy to use. (See Appendix I – QA’s Official Website on page 13) Porter’s Five Forces Analysis Based on five forces analysis, QA has a low-medium threat for potential entrants because of the high cost of establishing an airline company aside from the monetary requirements of creating a competitive B2B through the use of the company’s website. Considering the numbers of existing airline companies around the world, QA should take into consideration that majority of its competitors are capable of developing their own corporate website in order to capture as many customers as possible. (See Appendix II – List of QA’s Competitors and Its Corporate Website on page 14) There is a very tight competition in the global airline industry. Because of the numbers of QA competitors that can equally provide good quality flight services to people at a relatively low price, substitutes for QA’s passenger flight services is very high. This makes the bargaining power of QA’s existing and target customers also high. Since people will have many choices to choose from when choosing an airline company, the target customers of QA can easily purchase their airline tickets from the web site of QA’s competitors. Because of globalization, QA has more bargaining power with regards to its qualified suppliers. Since QA can readily select global suppliers that could provide the company with good quality products and services at a very low price, QA will have the competitive advantage of keeping its operational costs low. For this reason, QA will be able to compete in the global airline industry by offering competitive market prices for its passenger flight tickets. (See Appendix III – Porter’s Competitive Forces Model: Qatar Airways on page 15) SWOT Analysis One of the strengths of QA is that the company has established a good reputation in the global airline industry. Since the company was able to successfully develop a strong brand name, the company has the competitive edge to be chosen by its target customers as compared to other small-scale airline companies. Aside from having a strong brand name, QA is known as a provider of high quality passenger airline services, competitive prices, and on-time flights. This makes the company able to maximize the use of internet technology. Considering that QA has strongly established domestic and international market network and a reliable e-marketing strategy by regularly updating software technology used in its website, it is so much easier on the part of the company to maintain its strong position as one of the finest passenger airline companies available in the world market. Basically, the website enables the users to get real-time information about QA’s flight schedule. This makes the company able to close business deal with its potential customers within a short span of time. This makes the company able to maintain good customer service. Since QA is capable of maintaining efficient and effective customer service through the use of its website, QA’s annual sales and revenues is not highly affected despite the global economic recession and tight competition within the global airline industry. Despite the success of QA as one of the most competitive passenger airline company, there is still so much work to be done in terms of improving its B2B strategies and innovate its e-marketing plan. Likewise, QA has not yet fully utilized all options available to improve its online sales and marketing strategies. As a common knowledge, resolving these problems will increase the ability of QA to encourage more of its target customers to purchase their passenger tickets from QA. (See Appendix IV – Comparison between Qatar Airways’ e-Marketing strategy and Its Competitors on page 16) To empower QA in terms of dominating the entire global airline market, QA should continuously exert an effort to enter into partnership agreement with other website companies like Bezurk.com that focuses on offering cheap airline tickets to its online viewers (Wego Travel Search, 2007). Since Bezurk.com’s viewers can be directed to the company’s official website, the company can increase the traffic of its online viewers. Likewise, QA should consider developing more business alliances1 with travel agencies and other airline companies. In line with this, QA has a “Codeshare agreement” with a number of airlines from which some of them are members of Star Alliance (Qatar Airways, 2010 e). (See Appendix V – Partnership Stragies Adopt by QA on page 17). Since there are few cases wherein small-scale airline companies are entering into partnership agreement in order to increase their annual revenues and sales, QA’s overall financial and market performance can be greatly affected given that the company failed to develop useful e-marketing strategies that will increase QA’s ability to offer competitive market price for its passenger airline tickets. Poor quality passenger airline services could effectively discourage some of QA’s target customers from availing passenger tickets from the company (Bott, 2010). In case negative reports or massive boycott campaigns is publicly exposed online, there is a higher possibility that QA will lose some of its loyal customers to its competitors. (See Appendix VI – Summary of QA’s SWOT Analysis on page 18) E-Marketing Analysis Promoting the company’s official website is already a part of its e-Promotion as a brand. Aside from the webpage of other websites, QA’s banner advertisement is available on the left-hand side of the webpage (Qatar Airways, 2010 b). Aside from the use of e-leaflets send through e-mail, Web public relations (WPR) such as positive news report regarding QA products and services seen on the company’s website and other websites is another form of e-Promotion strategy (Qatar Airways, 2010 d). Establishing a strong brand is important factor that contributes to QA’s success. Having a strong brand does not only enables QA to easily penetrate the global passenger airline market but also increases the company’s success in terms of maintaining effective marketing communication through the use of its e-Promotion strategies. Having a good brand equity is highly associated with brand loyalty, brand awareness, perceived quality, and a strong brand association (Aaker, 1991). With regards to the company’s annual revenues, brand equity increases QA’s target customers’ willingness to pay premium prices offered by the company (Yoo et al., 2000; Pitta & Katsanis, 1995). As part of QA service marketing strategies, the website provide the public with clear information concerning the requirement for advance passenger information, baggage counters services, on-line check-in services, mobile services, city guide information service, transit-hotel accommodation service, visa and passport requirements, and other special services like BMW 7-series Pick-Up, special lounge areas for first- and business-class passengers, and the free use of the premium terminal spa for first-class passengers (Qatar Airways, 2010 b). Web Design Analysis QA’s official website is competitive as compared to its competitor’s websites. In line with this, QA’s website was able to make the purchasing process of online tickets easy to use. Likewise, QA’s website was designed for easy online checking and tracking of flight schedules. Because of continuous improvements in QA’s website technology, the company is able to provide its customers with real-time flight schedules depending on their location and preferred destination. As an added customer service option, customers can anytime pick their preferred in-flight meal using the company’s website. To be able to capture more price-conscious customers, QA regularly offers affordable economy class fares to 90 countries around Africa, Asia, Europe, Middle East, North America, and South America (Qatar Airways, 2010 a). Another best feature of QA’s website is its ability to persuade more target customers to patronize QA’s passenger flight services by making the company’s website capture the interests of its viewers using its 360o virtual tours, attractive sound effects, and informative information concerning the products and services offered by the company. By satisfying the sound and visual senses of its online viewers, it is easily for the company to effectively convince its target customers to consider patronizing the flight services available from QA. Business-to-Business (B2B) To can increase the traffic of its online viewers, QA marketing manager can take advantage of using other websites to promote the company’s official website. Therefore, QA should continuously improve its B2B strategies by continuously dealing with other reliable website companies. Website such as ‘Expedia’ enables QA’s target customers to easily compare air fares from different airline websites (Expedia, 2010). For this reason, pricing is one of the most sensitive issues in e-marketing of passenger airline tickets. QA should also consider developing more business alliances with travel agencies and other airline companies. This strategy helps QA secure a strategic position in the market. It also increases QA’s airline sales and customer awarness. Sales and Customer Service Satisfied customers normally lead to customer loyalty (Entel, Grayson, & Huttner, 2007). In line with this, the ability of QA to increase the loyalty of its customers it the key factor that will enable the company to capture the biggest market share in the global airline industry. For this reason, QA offers special programs like bonus Qmiles and privilege club programs (Qatar Airways, 2010 f & g). QA can satisfy its customers in many ways. Increasing the customers’ satisfaction is not only dependent on advertisements, marketers, sales personnel or the customer experiences but more on how the company is able to meet the specific needs and preferences of its customers. Aside from maintaining the quality service rendered by QA to its valued customers (Luo & Bhattacharya, 2006), it is equally important for the company to continuously innovate new product and services that will attract the attention of the consumers. Emotional loyalty is one of the most important aspects that QA should consider in order to create a long-term relationship with its customers. In fact, it has been proven that customers who are emotionally satisfied has a lower attrition and tends to pay premium price of QA’s passenger airline services as compared to customers who are less satisfied with the service (Fleming et al., 2005). Therefore, QA should focus on establishing customer loyalty. Conclusions and Recommendations The available e-Marketing strategies are endless. To enable QA maximize the advantage of using e-Marketing strategies, it is highly recommended that the company should regularly examine the kind of e-Marketing strategies used by its competitors in order to get hold of its target customers. For instance: Cathay Pacific is active in maintaining its business alliances with the Asia Digital Marketing Association (ADMA) as one of its board members (ADMA, 2010). Since Cathay Pacific is an active member of ADMA, the company has the competitive advantage to be informed about the latest e-Marketing strategies that are applicable in promoting Cathay Pacific airlines. *** End *** Appendix I – QA’s Official Website Source: Qatar Airways 2010 c Appendix II – List of QA’s Competitors and Its Corporate Website Airline Companies Official Website Air Algerie Air Cairo Air Canada Air Gemini African Express Airways American Airlines Cathay Pacific Airlines Cebu Pacific Airlines Chanchangi Airlines China Airlines Delta Air Lines Diexim Expresso Egypt Air Hewa Bora Airways JetBlue Airlines Kenya Airways Nas Air Nova Air Oman Air Philippine Airlines Royal Air Maroc Rwand Air Saudi Arabian Airlines Singapore Airlines Southwest Airlines Tassili Airlines Tiger Airways United Airlines http://www.airalgerie.dz/ http://www.aircairo.com/ http://www.aircairo.com/ http://www.airgemini-va.org/ http://www.africanexpress.co.ke/ http://www.aa.com/homePage.do?locale=en_US&pref=true http://www.cathaypacific.com/cpa/en_INTL/homepage http://www.cebupacificair.com/ http://www.chanchangi-airlines.com/ http://www.china-airlines.com/en/index.htm http://www.delta.com/ http://www.dieximexpresso.com/ http://www.egyptair.com/English/Pages/splashpage.aspx http://www.hba.cd/hewaboraairways/index.asp?id_sessionlangue=2 http://www.jetblue.com/ http://www.kenya-airways.com/home/ http://www.flynas.com/ar/ http://chartersnovaair.com/ http://www.omanair.com/wy/ http://www.philippineairlines.com/home/home.jsp http://www.royalairmaroc.com/Marchand/Eng/Home.jsp http://www.rwandair.com/index.php http://www.saudiairlines.com/portal/site/saudiairlines/Welcome http://www.singaporeair.com/saa/ http://www.southwest.com/ http://www.tassiliairlines.dz/index.php?lang=en http://www.tigerairways.com/ http://www.united.com/ Appendix III – Porter’s Competitive Forces Model: Qatar Airways References Appendix IV – Comparison between Qatar Airways’ e-Marketing strategy and Its Competitors Appendix V – Partnership Stragies Adopt by QA Appendix VI – Summary of QA’s SWOT Analysis Strengths Weaknesses Opportunities Threats QA has established a good reputation in the global airline industry in terms of its brand name, reliable e-marketing, high quality airline services, competitive price, and on-time flights. Despite the success QA’s global performance, there is still so more work to be done in terms of improving its B2B strategies. QA has not yet dominated the entire airline global market. QA could be under attack by external sources such as boycotts or media in terms of poor quality passenger airline services. QA has strongly established domestic and international market networks QA’s failed to utilize all options available to improve its online sales and marketing strategies. QA should continuously tie-up with other website companies that offer airline tickets. Increase in the number of domestic and international competitors. QA maintains an efficient and effective customer service to its customers. There is a need to innovate QA’s e-marketing plan that will encourage more target customers to purchase their passenger tickets from QA. QA should enter into business alliances. i.e. partnership with travel agencies, other airline companies, etc. References Aaker, D. (1991). 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