Conventionally, marketing is seen as a business function. The goal is to identify the needs and wants of consumers, determine which target markets to serve, design appropriate products, services and programs, and then publicise and deliver these offerings. This view of marketing is important, but it is a partial view. The discipline is more than a business function - it is also embodies "an attitude of mind".
Everyone in the organisation is encouraged to focus on customers. The goal is to create customer satisfaction profitably by building valued relationships with customers, clients, suppliers, distributors, and others. This is about shaping attitudes and behaviour among all employees, not just those whose business function is formally described by the marketing label. This underscores the fact that the principles of marketing have a central role to play in contemporary businesses such as Qantas and within society.
In many ways the current marketing activities within Qantas are following traditional and well-tried methods which reflect decisions regarding the product/service provision of routes, seat allocation and types, in-flight and ground-based services, the price structure, distribution channels and promotional activity. The marketing environment, however, is becoming more competitive, as external influences have affected the efficiency and profitability of the airline industry. Many developments have been technologically pushed: thus larger aircrafts have increased capacity, leading to reduced real fares and improved many aspects of the in-flight experience (though the tendency to large aircrafts might have ended with the introduction of smaller plans (Jetstar) to fly domestically);computer reservation systems have simplified bookings; airport infrastructure improved within the Qantas terminals to improve pre- and post-flight aspects of travel, and investments by government agencies to improve flight navigational systems and air traffic control to advance the punctuality of all airlines.
Marketing Planning Process
Planning is an essential component for success in any business operation. In order for a business to infiltrate a marketing program, a business needs a plan which will put the objectives of the business in to prospect and makes them easier to achieve. The way in which a company does this is to create a marketing plan, which requires 5 main steps in its process.
Analyse Present Marketing Situation (situation analysis)
This situation analysis should then be summarized in a SWOT analysis showing the important Strengths, Weakness, Opportunities and Threats facing the firm. The external environmental factors may impose threats on the firm's ability to operate, or they may create opportunities to develop new products, increase market share, or develop new markets. By analysing the firm's existing resources, both human and financial, the marketing manager can gain an understanding of the firm's strengths and weaknesses and hence develop its marketing strategies to build on its strengths and reduce the influence of its weaknesses
The blanket approach of mass marketing was touted by marketing professionals of years past, today's industry experts are singing the praises of one-to-one, or relationship marketing. And rightfully so. Today's consumers are savvier than ever before. With access to nearly any piece of information they want via the Internet, consumers don't want salespeople spouting off scripted presentations. Rather, they need advocates who are willing to help them find real solutions. How can you do that? By learning who your customers are; by finding out their real needs; and by offering them tailored products and services that work for them. The first step in attaining those lofty goals is to choose a customer base that is appropriate for your business. In order to find out who your target market is there are three steps that need to be followed:
I. Identify Potential Customers
II. Conducting Market Research
III. Choosing a Target Market
Qantas airlines offer a range of products and services which allows them to have different market segments with different wants and needs. Knowing who their customers are and what they want allows them to compete more effectively while products are able to be defined and altered according to their price, place of sale determined. Promotions are also better focused for each market segment. e.g. Customers who are after more space, personal laptops, personal phone and other luxury items are ...
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I. Identify Potential Customers
II. Conducting Market Research
III. Choosing a Target Market
Qantas airlines offer a range of products and services which allows them to have different market segments with different wants and needs. Knowing who their customers are and what they want allows them to compete more effectively while products are able to be defined and altered according to their price, place of sale determined. Promotions are also better focused for each market segment. e.g. Customers who are after more space, personal laptops, personal phone and other luxury items are able to buy a first class or business class ticket, parallel are those customers who want a standard seat and would benefit from buying a economy seat. In order to provide the best products and services, Qantas has to conduct market research to find out who their customers are and what they are after. Research is performed by a range of research technique such as surveys of passengers in flight, mail based surveys, complaint monitoring and discussion with customers by contacting staff, all of which are primary sources of data collection. Secondary data includes government statistics, airlines magazines etc.
Another major component of Analysing the Present Marketing Situation (situation analysis) is the prediction of market opportunities .Businesses use a SWOT analysis when evaluating themselves and the competitors. The SWOT Analysis enables the businesses such as Qantas to identify what their Strengths are, and try to further develop these; where its Weakness are and try to overcome them and improve in these areas; what possible Opportunities are in the marketplace; and what threats could arise from changes in external influences
Strengths
70% domestic market share with 90% of corporate market
Excellent airport location
Globally recognized brand name and
logo
Currently one of the most profitable airlines
One of the worlds safest airline
Introduction of Jetstar into the low cost airline industry.
Weaknesses
Speculations British airways will withdraw its $1.3 share in Qantas
High labour costs
Government refuses to lift foreign ownership restrictions
Opportunities
Developing further e-commerce operations
Expanding its travel, catering and freight division
Continually evolving aircraft technology
Take advantage of aviation growth in Asian Pacific region.
Threats
Increase in government regulations preventing takeovers
Continuing international threats creating a weaker market/economy
SWOT analysis of Qantas
Identify Target Market
For effective advertising a firm should first identify its customer (Target Market) in order to decide how advertising and other forms of promotion mesh with the various parts of the marketing mix (product-place-price-promotion) and to better reach the customer while creating an appropriate image.
We regard the Target Market as those customers on whom you will place primary emphasis when developing an advertising program. In other words, the Target Market will not include everyone. To be able to develop a profile of your Target Market, you need to first determine the characteristics of the Consumer Market in order to learn who the potential customers for your market are. The characteristics of your Consumer Market include: Age, Income, Education, Occupation, Marital Status, Gender, Life Style, Consumption Patterns and Reasons for Purchase.
The airline industry offers a range of services which caters for many transportation needs. Qantas has four main air services ranging from international to their new low cost domestic carrier. These four airlines generally differ on the destinations they fly as well as their pricing of tickets. All four of these airlines attract different customer, further more, within each of these airlines, they segment the market into even smaller categories by offering a variety of facilities onboard each airline, e.g. Business, First and Economy class.
Fig1.1
Qantas's passenger transportation attracts the highest amount of revenue out of all there subsidiary and associated businesses (fig 1.1). Qantas's marketing team promotes this sector of the business as well as the Tour and Travel sector to the general public, while their Freight services are directed at companies rather then consumers .The other remanding companies associated with Qantas's core operations were developed to cut costs for passenger services and therefore require no marketing towards any consumer groups.
Determine marketing objectives
The marketing objectives of a business set down the goals which businesses wish to maintain or develop in the future operation of the company. Qantas which is a public company listed on the Australian Stock Exchange has a duty towards its fellow shareholders. Operating as a public company means that the marketing objectives are developed in order to satisfy the shareholder, and consequently this leads to the core objective of Qantas is to make a profit. The profit created will provide the shareholders with a satisfactory return on their investments (fig 1.2) as well as to generate enough profit in reserve to fund expansion and acquisition of new aircrafts. Qantas's primary aim to maintain affordable air travel in order to keep enough demand to sustain profits will help reach this main objective of theirs.
Fig 1.2
Other such objectives include:
* Maintain Its domestic market share of 70%
* Increase internet sales( currently accounting for 28% , a 50% increase form last year)
* Increased customer services
* Decrease operating costs, aprox. $1 billion over a 2 year period
* Develop non-flying services, so Qantas doesn't base its total reliance on its flying services and has is able to fall back onto non-flying businesses when air travel have decreased.
* Introduce new routes and expand the corporate size
Select appropriate Marketing Mix (Develop Marketing Strategies)
When you establish your marketing objectives, you are really asking "what are the company's aims". These aims can only be achieved through the development of marketing strategies. It is now up to management to develop strategies that will satisfy the wants and needs of the target markets and ultimately achieve its marketing objectives. Qantas has successfully created subsidiary and associated companies in order to lower the cost of operations. Qantas's well organisation of companies allows them to work together to capitialise on their corporate strengths and minimise the effect of any weaknesses they may have. Whether companies increase sales, create new products(Jetstar), drop prices or increase the amount of advertising they usually refer to what is known as the Marketing mix.
Fig 1.3: Standard Marketing mix
The Marketing mix consists of four elements. The Product (and service) offered for sale, the place (distribution) networks of the businesses, the promotional activities and the pricing structure. These interdependent products are coordinated to make up the business's tactics.
Qantas's businesses will all have a different marketing mix; therefore we cannot have a look at Qantas as one company in detail. As the elements are interdependent, the differentiating products and services will influence the price which they will sell for, the different P&S are available from different locations and depending on which P&S you look at, there promotional activity changes.
Preparing the Marketing Plan
The final stage in the marketing planning process is the marketing plan. The marketing plan organises and puts the information discussed above in a structured and understandable report that will direct and communicate the objectives and strategies of the business and ultimately set the businesses direction. The marketing plan also provides the implementation process, cost involved as well as expected revenue that will be generated. How the Marketing actions will be monitored and controlled will also be discussed.
Over the past four years the international market has become far more volatile, particularly since the terrorist activities of September 11, 2001. Qantas and its part-owner British Airways (BA) have maintained a strong alliance in the face of turmoil in the aviation industry generally. While BA has become cash strapped, Qantas has remained cash positive and profitable. Qantas's strategy is to remain flexible-not only by ensuring that its fleet can operate as a single-class carrier or be quickly converted to a mix of business and economy class, but also by cutting costs. Importantly it plans to ensure that its non-airline businesses stay profitable. These businesses accounted for 30 per cent of the company's profits in the six months to December 2001, and include Qantas Flight Catering Ltd, Qantas Holidays, Qantas Defence Systems, Australian Air Express, Qantas Business Travel and also includes its frequent flyer programs and co-branded credit card operations.
Marketing Strategies in Qantas
Over the past year, Qantas has been conducting in-flight questionnaires that are completed during the flight in order to monitor customer satisfaction. Hidden within these questionnaire answers were valuable insights about the drivers of overall satisfaction and of customer's intent to purchase. The 1,500 questionnaires gathers were analysed and gave Qantas statistically how important customers' stated satisfaction with each product and service feature (such as seating, cabin crew or entertainment).From these they were able to identify which areas would incremental investment have the biggest business impact on. The results from this survey are below.
From the questionnaires, it is apparent that there needs to be certain investments that are needed to be made into improving customer satisfactions. Such areas as entertainment, cabin crew, seating and check-ins are all proving to be performing under the customers expectation level. These results attained in 2002 have allowed Qantas to make significant changes to their business and improve customer satisfaction.
Food Service and In-flight dining
The food service and In-flight dinning was well approved by the customer, but Qantas believed there was still room for improvements. In December 2002, Qantas introduced new menus and larger serving to those traveling in international economy class as well as Snack on Q, an assortment of snacks all in a drawstring bag. In September 2003, Qantas introduced more flexible and healthier menu choices for those traveling business and first class, as well as providing a room service like breakfast meal.
Check-ins
Check-in were a major time consuming issue which irritated many customers, Qantas introduced a new system called QuickCheck .These self service kiosks in Sydney and Melbourne domestic terminals were installed in August 2002.QuicChecl provide a fast flight check-in service for all the passengers who have no language and are able to get checked-in in less than a minute. There are also plans to expand the Quick Check kiosk to Canberra and Brisbane.
Entertainment
Qantas also needed a entertainment investment as there old system was proving to fall behind and other airlines were a lot more advanced in their in-flight entertainment systems. Qantas invested more than $300million on upgrading there in-flight entertainment system on it Boeing 747's.The new systems includes video screens mounted on the back of chairs-offering movies and video games for the Economy class. Business and First class received new individual touch screen monitors as well as in-seat power points, while all classes received personal telephones.
All the following things are a few thing Qantas had invested in to provide a better Product to its consumers. Qantas has all used other strategies concerning Price, Place and Promotion to increase customer numbers and make Qantas the brand of choice.
Place
Qantas has to provide easily accessible ticketing and purchaseing facilities to maintain a large customer base.Accessablity is an important factor which relies on both direct and in-direct distribution channels.
Directly, customers can visit any of the Qantas Travel Centres called Qantas holiday or such companies as Viva and Jetabout which are also partly owned by Qantas.This vertical intergration Qantas has invested in limits the likelihood of owner entity selling compeditors' tickets.Other services such as telephone and airport ticket sales are were also installed to make the process quicker and more efficient.
"Marketing is probably the key ingredient in a company's success. It is hugely important factor in how companies differentiate themselves and get a competitive edge. With airlines we are fighting against becoming a commodity and the way to do that is marketing, positioning ourselves as a company that is offerings something different from our competitors." Geoff Dixon
