Marketing
Role of Marketing
 Identify/satisfy customers – revenue generating
 Effective as:
 Achieve goals/profitability
 Plans/strategies comprehensive
 Identify/satisfy customer needs
 Gives direction and manage change
 Encourage product development
 Emphasis market segmentation
 Create distribution outlets
 Focus on market research
Marketing Plan
Situational Analysis
SWOT Analysis
Strength:
 Extensive network e.g. Oneworld Alliance
 67% domestic market and 90% corporate market
 Launch of Jetstar domestic and international
 Purchase of aircraft, lounge upgrade, routes
 Airport locations/facilities/terminals
 Brand name/logo
 Safety record – world’s best
 Largest Australian based airline loyalty programme
 Fuel hedging program
Weakness:
 High risk nature
 Complex fleet of aircraft
 High labour and operating costs
 Disputes between Qantas management
 Gov. refusal to lift foreign ownership restrictions
 ACCC – denied for Qantas and Air New Zealand alliance
 Failure of Australian Airlines
Opportunity:
 Expansion of Jetstar International
 Development in E-commerce operations
 Growth opportunities in travel, catering, freight
 Evolving aircraft technology
 Aviation growth in Asian Pacific region
 Merge with international airlines
 Joint venture opportunities in Asia
Threats:
 Competition e.g. Singapore Airlines, Air New Zealand, United Emirates,
Virgin Blue
 Jetstar will ‘cannibalise’ Qantas routes
 Fuel costs
 Competition in domestic market
 Government regulation to protect rivals
 Fall in Australian dollar
 Weakening in international market/economy
 Competition in Pacific Route
Competitor Analysis
 Domestic competition – Virgin Blue – launched in 2000 (33% of market)
 Virgin Blue launched joint frequent flyer scheme with Emirates
 International competition – Singapore Airlines, Air New Zealand, Cathay Pacific
 New competition – Emirates, Qatar, Virgin Blue
 As partially gov. owned – harder for Qantas to compete as doesn’t receive gov.
subsidies
 Singapore, Emirates, Virgin Blue – negotiating gov for access to compete with
Qantas
Product Life Cycle
Stage in
Example
PLC
Introduction Jetstar International
Nov 2006
Jetstar (domestic)
Growth
Characteristics
New Product
Increased sales,
profit (34%)
Maturity
Qantas
Sales levelling off
Decline
Jetstar Asia
Falling sales,
increases losses
Marketing Strategies
Employed
Promote heavily - $20M
advertising
Encourage brand loyalty,
expansion routes,
purchased more aircraft
Redesign packaging e.g.
online check-in
Scale back fleet, seek new
finance
Marketing Objectives
 Listed on ASX
 Main goal  provide satisfactory return to shareholders and generate enough
profit in reserve to fund growth and acquisition of new aircraft
 Include:
 Increase sales of passenger tickets
 Maintain domestic market share at 67%
 Grow its route network in developing markets e.g. USA and Chine
 Increase internet sales
 Increase customer service/service standards
 Decrease operating/labour costs
 Diversify – freight
Market Segmentation and Selection of the Target Market
 Divide potential/current customers into smaller groups
 Enables Qantas to:
 Meet needs of customers, compete effectively, attain financial goals
 Better
tune
marketing
mix
to
particular
group
–
refine
product/price/place/promotion e.g. Economy Business and First Class
travellers
 Qantas market segmentation – complex – each segment has different
needs/expectations e.g. stop-overs, ability to pay fares, expectations of in-flight
services/comfort
 Uses behavioural segmentation to select target market
 Distinguished according to trip purposes e.g. bus/leisure/non-bus
 Further broken down:
 Business - routine business/conference/seminars/emergency
 Leisure – holiday (tour segment, multi-destination, weekender), visiting
friends and relatives (VFR)
 Further broken down into age, sex, family life cycle, income
 As result established number of airlines with own target market:
 Jet Connect – Tasman route and NZ\
 Jetstar (20 domestic) – Gold Coast, Sunshine Coast, Alice Springs, Cairns
 Jetstar International (leisure travellers) e.g. Bangkok, Phuket, Bali
 Jetstar Asia (12 destinations in 9 countries) e.g. Cambodia, Hong Kong, India
Marketing Strategies
Positioning
 Image Qantas projects in relation to competitors
 Variety of positioning strategies:
 Relation to competition e.g. launch Jetstar competing with Virgin Blue
 Relation to target market e.g. secure corporate/bus market e.g. City Flyer
express, lounge upgrade, Frequent Flyer Scheme, Qantas Club Services
Formulating the Marketing Mix: The Four Ps
Product
 Attributes/benefits designed to satisfy Qantas customer needs
 Include:
 Scheduling Features:
 Route frequency, time of departure/arrival, number of stops, direct flight,
aircraft type
 Largest/strongest domestic carrier – national coverage
 Qantas’ City Flyer – flights ever ½ hour in peak periods
 20 new Airbus A380s – 2008
 A380s – allow Qantas to offer increased passenger services and flights leaving
every 15 mins
 Best connecting airlines on preferred basis with Oneworld Alliance




 Flights to Europe, UK, Asia, NZ, US and merging into China, India, Vietnam
Comfort based features:
 Domestic food menu – Neil Perry
 Flight Update – send details of flight in text message
 SMS ticket booking system
 $300M total entertainment in-flight system e.g. personal phones, video games,
16 audio channels
 Upgraded domestic/international lounges
 Quick Check  self-service kiosks
 Online check-in  customers check in for same day return flights – preferred
seat and print own passes
 Qantas Club – private meeting rooms, workstations, photocopying, local
faxing services, postal services, personal message service, refreshments,
news/entertainment/hot showers
 International Business Class ($300M) – Skybed, cocoon-style sleeper seat,
specially trained flight attendants, new food/wine, noise cancellation headsets,
self-service bar
The Qantas Frequent Flyer Scheme (FFS):
 2.6M members and over 100 programme partners
 Retain customers, increase market share
 Provides large data base of specific customer information
Intangible Benefits:
 History and safety record
Brand Name:
 Powerful marketing tool
 Brand name, kangaroo symbol, ‘Spirit of Australia’ logo
Price
 Variable changed quickly
 Pricing Methods:
 Cost Plus Margin – cost of production + profit
 Market – demand and supply
 Competition based – other airlines e.g. Virgin Blue
 Pricing Strategies:
 Price Penetration – lowest possible price e.g. Jetstar, Jetstar International, Jet
Connect
 Full Fares – flexibility as full fares refunded
 Promotional Fares – not advertised as discount but quoted as a price
 Departure time limitation – period it could offer low cost outside peak
 Packages for inclusive holidays
 Loss Leading – launched Jetstar 04 and Jetstar International 06 – low fares to
gain initial market share
 03 introduced new ticketing structure – mix and match on-way fares, end min.
stay restrictions and make changes until day before travel
Promotion
 Communicate products and image to consumer
 Promotional strategies used:

 Advertising:
 Uses agencies for TV, radio, magazines, newspapers, brochures, posters,
billboards
 04 shot ‘I still call Australia home’ ($10M)
 1st commercial break in opening ceremony of Athens Olympic Games
 Jetstar – TV with comedian Magda Szubanski
 Trying to use less black and more direct advertising – cheaper and targeted
 Sales Promotion:
 Qantas launched Jetstar – 10000 tickets at $49
 Opinion Leaders:
 Publicity:
 Enhance image e.g. news releases, feature articles, press conference,
interviews
 02 hired John Travolta as brand ambassador
 Sports – rugby union, NRL, netball, swimming
 Personal Selling:
 Advertising:
Sponsors Clean Up Australia, CARE Australia, Starlight Children’s Foundation,
World Vision, Australian Youth Orchestra, Sydney Dance Company, Art Gallery
Place
 Distributed in two ways:
 Direct
 Via own retail outlets
 Network of wholly owned Qantas Travel Centres - Qantas Holidays
 Bought into Viva and Jetabout – reduce likelihood of selling competitor
tickets
 Represents vertical integration of the distribution chain  telephone sales
centres and airport ticket sales
 Internet bookings growing
 Sells more than 90% tickets online – saves $30 per seat from call
centres/travel agents
 Indirect
 Travel agents e.g. American Express Community Travel, Flight Centre,
Harvey World Travel and Jetset
 Selective about intermediaries – good reputation, financial strength,
expertise
 Agents get commissions on sales – reduces Qantas profit
 Now made by Computer Reservations System (CRS)
Implementing, Monitoring and Controlling the Marketing Plan
 Implement – turn marketing tool into action
 Systematic base:
 Develop financial forecast using statistical models, past sales data, executive
judgement, surveys – then estimates market research, promotion,
development, distribution costs
 Compare actual against planned results – use:
 Sales analysis – sales by product, segment, territories
 Market share analysis – domestic market share 67%
 Market profitability analysis – profitability of products e.g. Jetstar 43.6%
05/06
 Revise marketing strategies and take corrective action e.g.
 Introduce own budget domestic carrier Jetstar in response to Virgin Blue
 New domestic fare structure
Market Research – Identifying Customer Needs
 Gather/analyse info to make marketing decision
 Accurate, up to date information
1. Identify information needs e.g. customer needs, attitudes, brand preferences,
buying intentions, characteristics
2. Identify/select date source – primary/secondary – surveys, complaints, gov.
statistics, airline magazines
3. Analyse/interpret data e.g. replaced cold food box with hot breakfast and
dinner choice of menus after recent survey
Ethical and Legal Aspects
 Produce enviro. responsible products
 Introduced boxed meals – reduce waste
 Introduced lighting and air condition improvements using solar energy
 Reduced greenhouse gas emissions
 Partner of Landcare Australia
 Some practices challenged as unethical:
 Previously hidden extra charges and levies
 Accused of anti-competitive behaviour under Trade Practice Act 1974 –
increase number of seats
 Accused of ‘ambush marketing’ during 2000 Olympic Games
 Logo labelled as ‘flying rip off’ – resemblance to Aboriginal art
 Used photograph of 10 y.o. Abo girl – living conditions were like 3rd world