Marketing Strategy Of Qantas Airways In Sydney

Company Background

Discuss about the Marketing of Qantas Airways in Sydney.

Qantas Airways, based in Sydney, is Australia’s largest airlines founded in 1920. They dominate the domestic airline market with a reported market share of approximately __. The name Qantas comes as an acronym from Queensland and Northern territory Aerial services. The company is known for their standard air fares and for providing good quality domestic and international flights. In 1992, the Australian government sold off their domestic carrier and made the airlines private, which later on went on to merge with British airways. Sydney is the main aviation hub for the airlines and is connected to all the major airports all around the globe. It is one of the ten biggest airlines group in the world and is even believed to be the second oldest airlines after KLM from Netherlands (Qantas.com 2017). The airline is a member of the oneworld international airline alliance that is led by British Airways and American Airlines. To maintain their competitive edge in the market, they have chosen to better their connectivity through all the major cities around the globe. They have their business line expanded to different other areas like catering and holiday tourism for bettering the bottom lines, which has further differentiated them from their competitors. The airline boasts of an outstanding standard of service when it comes down to safety, reliability, engineering and most prominently customer satisfaction and services. Qantas has a business mission of continuing as a leading premium airline and are dedicated towards being the best in business. They have a vision of meeting the expectations of their customers every time they avail their services. For making sure of that, Qanats invests in their business and always strives for providing their customers with an exceptional service level. For achieving their vision, Qantas focuses on five factors: offering the best possible customer service, putting safety on first antecedence, operational effectiveness, providing the proper aircraft to match right routes and two best complementary airline brands of Qantas and JetStar. Qantas follows some specific values of never compromising on safety, always lending a hand for helping, protecting customer privacy and supporting environmental initiatives. Currently the airline is providing the comfort of completely flat Skybeds in Business, economy seats designed by the award winner Marc Newson, in-seat entertainment offering in every seat and a full self-service snacks bar in economy in every Qantas B747-400 aircraft. Qantas has five Boeing 747-400 aircraft that is operating on some specific B747 routes that includes Sydney-Dallas, Brisbane-Los Angeles, Sydney-Santiago, Brisbane -Singapore and Sydney-Los Angeles- New York (Qantas.com 2012).

Target Market Analysis

Qantas targets customers in the Asian and South American regions internationally. Qantas mainly targets the mid-level income group customers instead of the low-level. They are even targeting families and professional through the use of different offers and the loyalty card for lifetime in case of each frequent fliers (Roy Morgan 2013). A market segmentation of the brand is provided below:

Segmentation bases		Customers segment for Qantas international flights Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Geographic	Area	Europe, Latin America, Australia, Asia
	Density	Domestic and international
	Age	All age groups
	Gender	Male, females, family members and others
	Income	High and Middle-income groups
	Profession	Workers and experts
Demographic	Social position	Higher class, middle class and working class
	Family size	Single, nuclear, joint family
Psychographic	Lifestyle	Old-style and modern
	Events	Consistent and other Festive seasons
Behavioural	Assistances	Price benefits and many services under one roof alike B2B business
	Events	Festive season, non-festive season and for the workers

Table 1. Market segmentation of Qantas international flights

Source: As created by author

Qantas has attempted to have a reputation of being an international brand among their customers and in order to do so they have made goodwill ambassador John Travolta, Hugh Jackman and Miranda Kerr promote their products more known and recognizable (Blake 2015). The company even invested in social media sites like Twitter and Facebook for attracting more customers. Qantas customers are most likely to belong from households that have high disposable income rate. They have more probability of having a household income more than the average Australians.

Qantas targets both consumers and business markets, as travel is a kind of need that is common to both. Qantas offers aviation service that are required by both these markets segments. Qantas’s target market consists mainly of leisure travelers who have an above national average annual income. These kind of people groups consists of those people who have a spending power of providing for travelling for relaxing, leisure, gaining experience and exploring the world. In 2010-11 Australia’s actual net disposable income per person was $51,800 (Abs.gov.au 2012). People who have buying power of more than $70,000 have the capacity of spending on other items even after they spend on buying basic necessities (Brown 2013). In terms of leisure travelers, people between the ages of 18-59 are the people who have the option of making choices of travelling or not, and they even have the purchasing power. People who are business travelers, specifically GMs and C Suites, are generally older in comparison with the fresh college graduates who have just started working and might not travel as regularly for work. People who are open to spending a lot on fashion, restaurants and fun are open to having new experiences, as they have the opportunity to acquire unique fashion pieces from their abroad trips, all the while trying out different types of cuisine from different countries that they find interesting to explore. In families, guardians plan in advance for the activities and the locations for visiting that would be family friendly and as the best possible price, as travelling as a whole family could be costly.

Marketing Strategy

The 2010 financial crisis effected several people hugely and they understood that there is benefit in cutting down on unnecessary expenses. The economy has not been able to recover from this blow till today. The economy went on to become unpredictable and stopped following the 5 years business cycle, as they fear recession can hit any time. Thus, irrespective of the situation that whether of a personal or business level, people look for more cost-effective ways for obtaining the things that they ask for. Organizations encourage workers for travelling in economy class or on budget flights, specifically for short distance trips that can help cut down costs and result in tremendous savings. For regular Qantas travelers, frequent flyer programs are very lucrative as they can be put to use for upgrading their seats or redeeming for free tickets on complete service flights. This happens specifically in case of business travelers who are into travelling often as it is easier for them to build up points (Roy Morgan 2015). These kinds of loyalty programs motivate brand loyalty and push customers to return for next flights. Understanding the market needs and even comprehending the different market variables and profiles, Qantas has the capability to accomplish the preferences and needs and in turn acquire the attention of customers and then convert them into regular ones.

Marketing strategy for Qantas can be analyzed with the help of the marketing mix analysis:

Product

The airlines industry is facing an increasing competition and Qantas has been paying extreme importance for product planning. Qantas products are crafted while keeping in mind the need of attracting new customers and holding on to the existing ones. High priority is provided to profitability. Qantas products either include passenger travelling assistances for their airlines or freight containers. In short, Qantas offers their customers premium travelling arrangements (Creedy 2013). Different types of flying arrangements are presented by Qantas: first class, premium economy, international economy and international business class. Different types of seating arrangements, meals, in-flight services, and other facilities are presented to each class. Domestic flights contain distinct economy and business class, along with dispersed in-flight passenger entertainment services. Qantas has always attempted to better their products with the help of better services, Flight information are shared both online or sent from Qantas via SMS. Qantas has even attempted to add more polished and advanced aircrafts to their fleet frequently. With more investments made in this, in-flight entertainment received more boost. Qantas is known for providing their customers with the best connecting flight services all across the globe. They even conduct the best and most well-known frequent flyer programs among all airlines across the world. Being one of the best in business and the topmost industry brand names, Qantas has been able to use this to their advantage for attracting more passengers to their customer list. Qantas freight boasts of better tracking system then other freight carriers. Qantas is truly the king of better connecting flight service, quickest routes around the world and safer containers (Qantas.com 2017).

Price

The method of product pricing used by Qantas is mainly cost plus margin. In markets where there is more demand, Qantas is prompted to have higher pricing. Qantas is also known to use competitive pricing methods. For low cost airlines, penetrative pricing method is used. Customer flexibility is offered by fair refunding. Qantas famously also provides their customers with price discounts instead of portraying them as just discounts. It is to ensure that customer price perception is maintained. For newer destinations, Qantas makes sure to offer lower pricing. Their frequent flyer program presents some superb customer benefits (Qantas News Room 2014).

Promotion

Qantas uses different advertising methods like magazines, billboards, brochures, internet advertising and so on for the purpose of branding and product promotion. Messages are sent across by direct marketing. Messages to each customer are customized so that it can hit them at an emotional and personal level. So far, this strategy has worked out for Qantas. In fact, it has been for helpful than the using of mass media for sending across mass communication messages. During low seasons, sales promotions are put to use. Corporate customers see direct selling, and social media sites, blogs and email marketing methods are used for getting further close to the customers. Qantas is also involved in sponsorships of sports and event, involvement and sponsorship of various charitable programs, PR activities, and art and entertainment related programs (Newscorpaustralia.com 2014).

Place

Qantas counters at all airports conduct direct sales. Their own retail stores are put to use for ticket selling. More and more frequently internet is being used for their benefits. Selling tickets also take involvement from company website and other travel agency sites. Tickets can now be brought with the help of mobile phones and telephones too. At times, even travel agents are used as intermediaries (Hepworth 2017).

Conclusion

Since its inception, Qantas has always proved to be the leader in premium airlines service all across the globe. They have continuously ranked topmost in terms of world class products and services to their customers. Recent years have witnessed an increasing competition in the airlines industry and companies have started focusing on product strategies. Innovative and creative services and products have formed the base of success in this industry. Qantas is spending a lot on advertisements and they target people from both consumers and business markets. Qantas offers aviation service that are required by both these markets segments. To maintain their competitive edge in the market, they have chosen to better their connectivity through all the major cities around the globe. They have their business line expanded to different other areas like catering and holiday tourism for bettering the bottom lines, which has further differentiated them from their competitors. Qantas has a business mission of continuing as a leading premium airline and are dedicated towards being the best in business. They have a vision of meeting the expectations of their customers every time they avail their services. The company even invested in social media sites like Twitter and Facebook for attracting more customers. For regular Qantas travelers, frequent flyer programs are very lucrative as they can be put to use for upgrading their seats or redeeming for free tickets on complete service flights. Understanding the market needs and even comprehending the different market variables and profiles, Qantas has the capability to accomplish the preferences and needs and in turn acquire the attention of customers and then convert them into regular ones.

References

Abs.gov.au. 2012. 1370.0.55.001 – Measures of Australia’s Progress: Summary Indicators, 2012. [online] Available at: https://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/1370.0.55.001~2012~Main%20Features~National%20income~16 [Accessed 5 Sep. 2017].

Blake, S. 2015. Hugh Jackman the new face of Qantas. [online] NewsComAu. Available at: https://www.news.com.au/travel/travel-updates/hugh-jackmans-new-job-selling-australia-to-international-tourists/news-story/0948da627bd3ab4e25f56cdd4e4b514d [Accessed 5 Sep. 2017].

Brown, L., 2013. The economy. Teaching Secondary Mathematics as If the Planet Matters, p.16.

Creedy, S. 2013. Qantas blames rivals for market share drop. [online] Theaustralian.com.au. Available at: https://www.theaustralian.com.au/business/aviation/qantas-blames-rivals-for-market-share-drop-on-routes-to-australia/news-story/e6be4f473beb4772b4a8db2ee10242ef [Accessed 5 Sep. 2017].

Hepworth, A. 2017. Fare price? London-Perth direct. [online] Theaustralian.com.au. Available at: https://www.theaustralian.com.au/business/aviation/london-to-perth-direct-qantas-fares-could-drop-below-2000/news-story/f4f8a4d502d2bc7774f8d2e935ee5c0a [Accessed 5 Sep. 2017].

Newscorpaustralia.com. 2014. Anything Could Happen – Qantas. [online] Available at: https://www.newscorpaustralia.com/sites/default/files/YL-Digital-Brief_Qantas.pdf [Accessed 5 Sep. 2017].

Qantas News Room. 2014. Qantas Group Strategy Update. [online] Available at: https://www.qantasnewsroom.com.au/media-releases/qantas-group-strategy-update-2/ [Accessed 5 Sep. 2017].

Qantas.com. 2017. Fly with Australia’s most popular airline | Qantas AU. [online] Available at: https://www.qantas.com/au/en.html [Accessed 5 Sep. 2017].

Qantas.com. 2017. Qantas – Investor Day. [online] Available at: https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/presentations/QAN-Investor-Day-2017.pdf [Accessed 5 Sep. 2017].

Qantas.com. 2012. Qantas Product. [online] Available at: https://www.qantas.com/agents_us/dyn/usqf/info/qantasproduct [Accessed 5 Sep. 2017].

Roy Morgan. 2013. Qantas regaining favour with domestic business travellers. [online] Available at: https://www.roymorgan.com/findings/qantas-regaining-favour-business-201305170442 [Accessed 5 Sep. 2017].

Roy Morgan. 2015. Qantas reaches new high in customer satisfaction. [online] Available at: https://www.roymorgan.com/findings/6208-qantas-reaches-new-high-in-customer-satisfaction-201504270141 [Accessed 5 Sep. 2017].