Strategic Marketing Plan for Qantas Airways - Case Study Example

Executive Summary Qantas Airways which has been operating over decades has been able to improve its brand name because of quality services. The report highlights the manner in which the airlines has developed strategies based its competitors. The internal analysis highlights the manner in which Qantas Airways has worked on its strengths to develop its services. This has helped to keep check on the external factors as the Porter five Force Model highlights the manner in which external factors in influencing the working environment. Qantas has thereby been able to identify its target market and based on it develop the required products and services to be offered. The organization has also ensured competitive pricing through the use of JIT and has used different promotional and selling tools to be able to attract a large section of the society. The overall impact has been positive and provides an opportunity through which Qantas Airlines will be further able to develop its services. Table of Contents Introduction 3 Company Overview 3 External Analysis 4 Internal Analysis 5 Segmentation, Targeting & Positioning 7 4 P’s of Marketing 8 Conclusion 10 References 12 Introduction The purpose of the report is to analyze one of the existing product or services and to identify the manner in which the organization has been able to use the different internal and external factors to enhance their performance. This is matched by further looking at the manner in which differentiation, marketing, targeting, positioning and segmentation strategy are being adopted by the organization. This thereby helps towards evaluating the manner in which the business will be able to find out the different direction through which efficiency will be achieved. The report focuses on Qantas Airways which is one of the oldest airlines in Australia and connects more than 80 destinations over 40 countries all around the world. This is matched by analyzing the target market for Qantas and the manner in which the organization has grown its business by further looking at understanding the different aspect through which better performance can be delivered. Company Overview Qantas Airlines which started its operation in 1920 has grown to become one of the largest airlines in Australia. Qantas had achieved excellence in providing safety, reliability, engineering and maintenance and customer service. The main focus of the organization is in providing travel services which has helped them to expand their network in over 40 countries (Qantas Airways Limited. 2010). Qantas Airways provides employment to over 33000 employees and has contributed immensely towards the Australian GDP. Its current revenue is over 15.7 billion Australian dollars with an operating income of 3.01 billion Australian dollars with net assets over 21.15 billion Australian Dollars (Flight Global. 2010). The organization had focused on providing quality services which has helped them to enhance their brand image and has thereby helped them to create a market for its services. External Analysis The external analysis for Qantas Airways is being analyzed through the Porter Five Force Model which will help to understand the different strategies which has to be developed and is as (Hamel & Prahalad, 2004) Threat of Entry of New Player: The threat of new player is low because of the high initial cost which has to be incurred to start the business. The only threat in the airline industry is that the opening up of economies has enabled the other players to operate in different skies which have thereby multiplied the threat of new player (Hamel & Prahalad, 2004). This is matched by the fact that the airlines faces strict competition from different areas and requires development of better services to reduce the level of competition Threat of Substitute Product: The threat of substitute is low especially for long distance travel as airlines ensures that people can commute over long distance over a shorter period of time. In case of domestic airlines the airline has to deal with rail and road players but is limited to a large extent thereby reducing the threat of substitute product (Matt, 2010). Customer Bargaining Power: Customers have a low bargaining power as the customers have to accept the prices which are offered. The increase in the degree of competition has ensured that ensured that due to competitors pricing the customers are charged fair prices but despite that the bargaining power of customers is largely limited (Hamel & Prahalad, 2004). Suppliers Bargaining Power: The bargaining power of suppliers is high as there are a few players which look towards supplying flights. With regard to the different catering services the degree of bargaining power for supplier is low as there are many players but instead on the overall basis the bargaining power of suppliers is very high (Hamel & Prahalad, 2004). Degree of Rivalry among Competitors: The degree of rivalry among the different players is very high as all players look at providing the same services. There is very little differentiation between the different offers as the basis of differentiation arises only on the basis of services which have thereby ensured a very high level of rivalry among competitors (Hamel & Prahalad, 2004). Micro Analysis The internal analysis will focus on the internal strength of Qantas Airways and will use the Value Chain Analysis to determine the strength in carrying out the different operations and is as The primary objectives achieved by Qantas Airways are as Inbound Logistics: Qantas Airways has looked its brand to develop its services both for domestic and international travelers. The use of JIT has helped to price its products and also determined the minimum level of inventory which has to be maintained to provide services to its customers (Creedy, 2009). Operations: Qantas uses both in house and outsourcing mechanism to supply different products. For example, the different eatables are procured from outsourcing where as the in house staff looks towards other additional services for its customers (Creedy, 2009). Outbound Logistics: Qantas Airways for its carrier servicer has looked to develop its outbound logistics which has helped them to develop the freight courier and has thereby improved the overall operations. Marketing & Sales: Qantas Airways has used different promotional pricing strategies like discounts, loyalty schemes, corporate fares and other to attract the customers. To ensure maximum efficiency different agents and portals have been created to ensure effective sales for the business (Creedy, 2009). Services: The airlines focus on safety and quality of services which has acted as a distinguishing point and has created the required differences from other players. The focus on customer satisfaction has helped to differentiate their services and ensure better standards. The primary objectives are being assisted by the secondary objectives for better achievement of the goals and is as Infrastructure of Firm: Qantas Airways has purchased the best fleet of airlines, have developed the required contracts with the different agents and have the required infrastructure to support services in the airline industry (Ireland, Hoskisson and Hitt, 2007). Human Resource Management: Qantas has hired the best staff who have the required knowledge and able to satisfy the needs and wants of the customers Technology: Qantas uses JIT technology to ensure pricing and logistics requirements within the industry (Ireland, Hoskisson and Hitt, 2007) Procurement: Qantas ensures that the procurement are as per the needs and requirements of the customers and has ensured maximum penetration for its services. Segmentation, Targeting & Positioning Market segmentation is a process where the organization tends to divide the entire market into smaller groups so that the focus can be diverted towards each individual group and the business is able to develop a process which will help to satisfy the needs and wants of the customers. The segmentation strategy used by Qantas is very complex as each group of customer is distinct and looks towards different services which include both in flights and other services. This has forced Qantas to segment their market in such a manner which is aimed at improving the overall effectiveness and efficiency in carrying out the different operations. Qantas Airlines mainly uses behavioral or differentiated marketing strategy to target its potential customers. The organization has looked at differentiating its customers based on different purposes like business or leisure and non- business travelers. These broad targeted markets are further subdivided to focus on individual needs and wants as business or leisure trips can be divided into routine business, conferences/seminars and emergency business (Harcourt, 2009). This has helped Qantas Airways to focus on each section of the customer and develop their services in such a manner that maximum customer satisfaction can be provided. This has made Qantas to focus on a differentiated marketing strategy where they focus on its motto which is to value to the individual needs of customers and achieve group excellence, thereby ensuring that the services are developed based on the needs and requirements of the customers (Luther, 2011). This has thereby helped Qantas to adopt a differentiated strategy which looks towards providing the customers with wide varied services which will aim towards customers’ excellence and satisfaction. 4 P’s of Marketing The 4P’s of marketing in relation to Qantas Airways has been discussed below and will help to understand the strategy that has been adopted to increase penetration and ensure growth for the business Product Qantas provides its customers with a large number of products like Qantas couriers, Qantas Charter, Qantas airlines. The organization has adopted a dual-brand strategy where it has aimed at using its brand name “Qantas” for all its offerings and thereby ties the different offerings under a single brand umbrella. Out of the different services provides by Qantas its aviation sector is the most renowned sector and the organization looks at using the brand name, the logo “Spirit of Australia” which has helped them to distinguish their services from others (Hoffman, 2010). A look at the product life cycle for the different offerings suggest that Qantas domestic airlines is at its maturity phase where as the Qantas international airlines and courier services are at its growing phase (Bamber, 2006). The use of different Frequent Flyer Scheme has enabled the business to grow over different areas and has helped to enhance the productivity of the different product offerings. Price Qantas has developed its pricing policies keeping in mind the competitors policies and designing a system where they look towards penetration pricing and having a mark up after the normal cost for the business. The airlines further follow a policy of cartel where the prices offered by most airlines are similar with little differences which arise due to limited number of seats (Coley, 2001). This has been matched by the use of Just-In-Time technology which has enabled the airlines to determine the price based on time and seat availability. The organization has also used different pricing strategies like promotional pricing where they look at discounted pricing along with physiological pricing by offering certain discounts. In addition to it the airlines has corporate fares and other strategies in place to ensure that the prices charged are as per the prevailing market conditions and competitors prices (George, 2006). Promotion Qantas Airways due to the long term association with the industry has been able to develop its brand name which acts as a main point of juncture for advertising the products. Despite, having brand popularity Qantas has used different advertising techniques like media, radio, magazines, newspapers, brochures, posters and billboards. This is matched by the fact that the airlines uses sales promotion strategies by offering discounts, loyal fare, corporate fares and other medium to attract people towards the brand. Qantas Airways also relies on personal selling where they use the services of travel agents, corporate and governmental departments to sell their products. This is followed by different public relation and publicity methods like news release, articles, press conferences and interviews. The overall methodology has added towards popularity and has ensured growth for the business. Place Qantas to ensure its presence has used dual distribution network where they sell tickets directly through Qantas Travel Centre and Qantas Holidays to its customers. This is followed by having an indirect connection through travel agents and indirect portals which links directly to the company for its services. The overall strategy of dual distribution has been adopted with the objective of expanding their operations which has ensured that they are able to provide services over different regions of the world and has thereby ensured its operations in over 40 countries. The overall impact has been growth in the popularity of the airlines. Conclusion The report shows the manner in which Qantas Airlines has used the different opportunities to develop its services and have relied on proper positioning of the products. The use of different promotional and selling tools has maximized the opportunity of growth and has ensured that Qantas is able to identify the different areas to be worked on. The overall impact has thereby ensured best use of the internal resources and dealing with the external factors. This thereby will ensure an opportunity of growth in the future and increase the chances of being successful over a longer period of time. References Bamber, T. (2006). Market analysis of Qantas Airlines and Virgin Blue Airlines, Business Category, OPPaper.com, page 6 Coley, A. (2001). Qantas Airways Fire sale wreaks havoc online. Business News, CBS Interactive, A CBS Company Creedy, S. (2009). Qantas aims for better customer service with $10m training centre, Retrieved July 31, 2013, from http://www.news.com.au/back-to-school-for-battered-qantas-staff/story-0-1111118695362 Flight Global. (2010). Airline Profile: Qantas, Retrieved July 31, 2013, from http://www.flightglobal.com/landingpage/qantas.html George, T. (2006). New Corporate Plus Fare Delivers Significant Cost Savings to Corporate. News & Press Release, Qantas Airlines Pty Ltd Harcourt, T. (2009). Pigs can fly – The economic implication of swine flu, Australian Trade Commission Hamel, G. & Prahalad, C.K., (2004). Competing For The Future. United States of America: The Harvard Business School Press Hoffman, B. (2010). Qantas Announces 7 Million Frequent Flyer Members Milestone, Retrieved July 31, 2013, from http://biztravelguru.com/blogs/airline-hotel-news/archive/2010/04/28/qantas-announces-7-million-frequent-flyer-members-milestone.aspx Ireland, R. D, Hoskisson, R. E, and Hitt, M. A, (2007). Competing for advantage, Cengage Learning Luther, W. (2011). The Marketing Plan: How to Prepare and Implement It, Fourth edition, AMACOM Div American Mgmt Assn Matt. C. (2010). Core Competence by Hamel And Prahalad, Retrieved July 31, 2013, from http://www.sayeconomy.com/core-competence-by-hamel-and-prahalad Qantas Airways Limited. (2010). Qantas Fact File, Retrieved July 31, 2013, from http://www.qantas.com.au/infodetail/about/FactFiles.pdf Read More