Marketing Plan and Strategies of Qantas Airlines - Case Study Example

EXECUTIVE SUMMARY This report focuses on the marketing plan and strategies of Qantas Airlines one the most renowned airline company of Australia. The report throws light on the various stages of a product life cycle and different strategies which can be implemented by Qantas to gain maximum advantage of each stage. Qantas airline is more inclined towards a pioneer or leader strategy through its constant efforts to introduce new innovations in its products and services offered. The company follows a functional organizational structure to monitor and control its large business connecting over 40 countries across the globe. Qantas is experiencing a growth stage and is looking for repositioning its current products and services with expansion in the Asian market. A SWOT analysis has been drafted to provide a better understanding of the internal and external factors affecting the company with strategies to be developed for future potential threats and opportunities. Finally the report is concluded with a marketing metrics and marketing audit tool to ensure Qantas achieve its goals and objectives in a realistic manner and strengthen its brand image to generate higher returns and profits in the longer run. TABLE OF CONTENTS Introduction 3 About Qantas Airlines Business 3 Product Life Cycle 4 New Market Entry 6 Pioneer or a Follower Strategy 7 Growth Strategy 8 Shakeout, Mature and Decline Strategies of a PLC 10 New Economy Market 12 Organizational Structure 13 Marketing Plan 14 Marketing Metrics 16 Marketing Audit 16 Conclusion 17 References 18 INTRODUCTION This report focuses on the marketing strategy of Qantas Airlines which has been successful in emerging as one of the market leader in Australian airline business. The report provides an insight of successfully developing, implementing, formulating and measuring of the marketing strategies. The report covers various marketing concepts and strategies which includes new market entry planning, different phases of a product life cycle along with suitable strategies drafted for Qantas Airlines to deal with such stages of a product life cycle in an effective and efficient manner. The report also focuses on the company’s outlook of whether it follows a pioneer or a follower strategy and emerges as a market leader or follower. Organizational structure of the company is identified along with a SWOT analysis to identify the potential threats and weaknesses of the company and converting the same into strengths and opportunities in order to gain maximum advantage from the same. Finally the report is concluded with marketing metrics and marketing audit techniques most suitable for the organization for effective management and control of the business. It is to be noted that the report is prepared with a prime objective to develop intense marketing plans for Qantas Airlines in order to get optimal utilization from its available resources and generate higher returns with equal opportunities to create a brand image unique in nature and make it presence felt in the market. ABOUT QANTAS AIRLINES BUSINESS Qantas Airlines has emerged as one the market leaders in Australian economy with over 90 years of experience in the business of airlines. The company has been able to create an impact of its own and people recognize the same with trust. The company with a tagline “Spirit of Australia” and a kangaroo emblem is well recognized by masses. The company aims in delivering safety, reliability, engineering and maintenance and excellent customer satisfaction with higher standards of customer service. The company mainly focuses on transporting people from one place to another in Australia and other 40 countries across the globe. The company also offer other allied services like courier services, aircraft services, catering services etc. with large infrastructure base and latest use of technology Qantas Airlines promises to offer premium service to its loyal customers. Travelling with Qantas is often regarded as a life time experience for its customers due to the latest facilities, hospitality and warmth. The companies major competitors includes Singapore Airlines and New Zealand Airlines however still the company stands on a good financial position and covers a larger market share than its customers. Qantas current revenue is over 15.7 billion Australian dollars and impacts Australian economy to a considerable extent by providing employment to over 33000 employees based on complete talent. Qantas in order to make its services easily available to its potential customers has windows in major airports, agents and its own easily accessible portals where tickets can be easily purchased to make it customers experience a comfortable journey in Qantas airplanes PRODUCT LIFE CYCLE Just as human beings have a life cycle so does a product. A product life cycle comprises of 4 different stages and it is of prime importance for management to critically examine the phase in which its products lies and develop strategies accordingly. Failure to do so may exit the product much earlier than expected. Different phases or stages of product cycle have been discussed as under. Introduction Stage: This is the first stage or introductory phase of a product life cycle. It starts after the actual launching of the product or service in the market. It involves huge investments to make people aware about the products and its advantages over other similar products available (Brassington and Pettitt, 2001). Return is on the lower side however the focus is on awareness and creating a market for itself. Growth Stage: This stage involves supernormal profits for firms and organizations. Returns are much higher than investment and there is a rising upward curve in the product life cycle curve (Brassington and Pettitt, 2001). The longer the stage pertains it involves higher profits, higher growth, better brand recognition and larger market share. New strategies are developed to gain maximum advantage of the available resources during this phase of product life cycle. Maturity Stage: This stage is characterized by the product life cycle reaching its peak or zenith and a saturation level for products in the market. Business is stagnated and management fears the lower profits or losses in future years to come (Brassington and Pettitt, 2001). This stage further requires new innovations and added features to revive the product and again bring it towards the growth stage. Decline Stage: This stage is characterized by lower profits and many a times losses in spite of continuous investments. Product life cycle curve shows a sharp continuous dip with the product becoming obsolete, declining profits and intense competition from its rivals (Brassington and Pettitt, 2001). Management constantly seeks to develop new strategies to revive the product, however many a times the management decides to shut down business to save more than take risks and look for a complete new product. Qantas Airlines through its new innovations, risk taking abilities and quality services with its presence in over 40 countries is likely to be in the growth stage. Further the company is still looking for new market expansions specifically the Asian markets. Qantas Airlines today is experiencing super normal profits in the Australian economy with the largest Australian market share in terms of airlines business and low competition from its rivals. The management is constantly seeking for adding new features to its existing products to attract more customers and boost up its sales and improve its brand image (Canhoto, Clark & Fennemore, 2013). Management is much aware about the next stage of its product life cycle and constant efforts are made to prolong the growth stage in order to maximize on its available resources and gain optimal advantage and opportunities from the same. NEW MARKET ENTRY Growth stage of the product life cycle is the best suited stage to make new market entries. An organization can look upon a number of ways to make new market entry and strengthen its position in the market with higher profits, higher risks, continuous development and better brand recognition. Organizations may completely target a new market or a different segment of the customer pyramid, or look for repositioning of its existing products and services or add new products and services to its product line or look for cost reduction techniques or new market expansion for gaining the advantages of new market entry (Doole and Lowe, 2001). It is to be noted all this techniques aim at better positioning of the organization in the market and ensure higher market share with higher returns and continuous development. Qantas Airlines in order to make a new impact in its existing market and further expand its market looks forward towards the following new market entry techniques. Qantas Airlines seeks to reposition its existing products and services in the existing market to emerge itself as the market leader. The company is looking to add new features with innovation and latest use of the technology. Recently the management has announced its new initiative to comfort travelling experience for its customers by adding new airplanes which are considered to be more safe and reliable with extra leg spacing and entertainment facilities even in its services offered for economy class. The same is characterized with minimum price rise and further providing catering services to make its customers experience a comfort travelling and deliver the best of services to gain maximum customer satisfaction (Daniels, Radebaugh & Sullivan, 2007). Qantas Airlines is looking to expand its market share by making its services available in the Asian market and providing its best services in the targeted market. Further new windows and portals are opened to enable customer’s easy accessibility of its services. In addition to the same Qantas is seeking to strengthen its courier services in the Asian market and offer promotional schemes and offers to make its presence felt in the Asian market and building on its brand equity. PIONEER OR A FOLLOWER STRATEGY Organizations through its risk taking abilities and innovation develops strategies accordingly and is more likely to follow either of the two strategy i.e. a pioneer or a follower strategy. A pioneer is someone who acts a market leader and makes constant efforts to develop new innovative ideas. Risk is always on the higher side with higher returns and constant efforts are directed to be a differentiator or an icon for others to follow. A follower on the other hand is averse to risks taking and is more inclined to follow a market trend to sustain its business and enjoy lower profits. A follower usually follows the examples and direction of a pioneer to make a new move in the market with lower chances of failure as the same business strategies had already been implemented by the pioneer successfully. Qantas Airlines is more pruned to follow a pioneer strategy than a follower strategy since the company constantly looks to new innovative ideas and develop strategies and build on new business model to give a complete different outlook to business operations. The same has been discussed as under Qantas Airlines looks to target a niche market from the very beginning of its inception. Further the management has recently decided to purchase new airplanes which are regarded as more safe and reliable with new facilities and advantages to deliver best customer service. The company being a pioneer is constantly seeking for new innovations in its existing services by introducing more leg space and entertainment facilities for travelers even in the economy class. Skimming strategy is most suited for Qantas Airlines as it shall help in targeting the niche market in a much more logical and systematic manner. Further innovations shall be fairly rewarded by following a skimming strategy. It shall help the management to develop strategies desired to achieve maximum advantage of its available resources and further prolong its growth stage to generate higher income and building on its brand image beneficial to company in the long run in terms of better productivity, growth and development. GROWTH STRATEGY Growth strategies are developed with prime motive of future development and building on a base to cater a larger market for higher returns and sustainable profits for the company in the long run. An organization either seeks to a leader or follower through its strategy implementation and proactive planning. A leader constantly seeks to set a market trend with new innovations, higher risks and higher returns as a reward. On the other hand a follower is less pruned to take risks and follows a leader to ensure success with lower risks and lower returns. A follower strategy is usually more inclined towards the market leader of the specific industry and chances of failure are mitigated to a considerable extent. A follower usually adopts the following strategies like gorilla, leapfrog, frontal, flank or encirclement strategies whereas a leader is more directed towards market expansion, confrontation, fortress and contraction strategies. Qantas Airlines has emerged as market leader in the Australian airlines market and the company targets to become a global leader in airlines business (Daniel, Charls & Joseph, 2003). Efforts have been directed to capture the Asian market and new innovations are constantly searched to provide higher customer satisfaction. Growth strategies most appropriate for Qantas Airlines had been discussed as under. Confrontation Strategy: Qantas Airlines looks to follow a confrontation strategy to deliver high customer service and build its brand equity. New innovations have been regularly developed with the company looking to repositioning its existing services and expanding its market to far Asian countries (Drummond and Ensor, 2001). Qantas has already set high standards and efforts are constantly made to set new benchmarks for others to follow in the airline business. Market Expansion: Qantas Airlines has emerged as the market leader in Australian airline business and made its presence felt in over 40 countries. Recent announcements from company officials suggest more expansion in the Asian market as well. Further the company is looking for a revolutionary change in its operating style and bringing new innovations in travelling service to ensure higher customer satisfaction with extra comforts and luxuries to make travelling with Qantas a memorable life time experience for its customers. SHAKEOUT MATURE AND DECLINE STRATEGIES OF A PLC A product life cycle is characterized by different stages or phases and an organization needs to develop strategies accordingly to ensure longer growth and optimal utilization of its resources. Strategies related to different stages for Qantas Airlines has been drafted as under. Shakeout Strategies Shakeouts are situations when an organization needs to critically develop its strategies in order to mitigate the risk of declining profits and difficulties in sustaining its market share with intense competition and new market entry of potential entrants (Daniel, Charls & Joseph, 2003). Qantas Airlines should look to develop the following strategies to phase out the shakeout stage. Market Share: Qantas in order to sustain its market share can look to follow a leader’s strategy by infusing new innovations and repositioning its products and services. Further the company can look to make tie-ups with other airline companies and strengthen its market share to mitigate the risk of losing market share and declining profits. Competitive Strategy: Qantas Airlines has been able to dominate the Australian aviation business and not much competitors actually threats the current operations of the company. However with market expansion it is more likely to face higher competition and the company should focus on its superior quality service with new innovations and customer satisfaction to gain an edge over its rivals. Maturity Strategies This stage is characterized when the product or service reaches its zenith and there is higher probability of the product life cycle curve taking a sharp dip. Management constantly seeks to bring revolutionary changes to revive its products and services by repositioning and adding new features to its products and services. Qantas Airlines should look to build on the following maturity strategies to mitigate the arising risks of the maturity stage. Increased Penetration: Qantas Airlines should look for increased market penetration strategies by targeting a different segment of customers in the customer pyramid to attract more loyal customers. Different promotion tools can be effective ranging from discounts, group packages and offers (Cook & Dave, 2004). Further other product lines should be strengthen like courier and catering service to boost up sales and bring a complete outlook to the present working style of the company. Market Expansion: Qantas Airlines during the maturity stage can look to make tie-ups with other airline companies for market expansion and retreat back to growth stage. Further since the company follows a pioneer strategy and is renowned for its world class innovations and superior services with brand image of its own entering into new markets is much easier than any of its rivals in the current scenario. Decline Strategies A decline stage is often considered to be near death of the company in few years to come. Investments are lowered by declining profits or rather losses and organizations tend to save more than invest and look for new opportunities. However, many analytics through their constant efforts and proactive planning tends to revive the business by giving it a completely different dimension and outlook. Qantas Airlines in order to deal with the declining stage should look upon the following strategies. Maintenance: Qantas Airlines should look to maintain its brand image and provide high quality services with basic aim of customer satisfaction. Adding more cash flows can act as a useful tool to implement new features in its products along with promotional offers to attract a larger customer base. Niche: Qantas Airlines during the maturity stage should look to target the niche market of all segments of the customer pyramid which shall provide company with larger customer base and help to increase its sales (Chawla, 2003). This shall also ensure for Qantas to act differently and target different dimensions with best utilization of its available resources and makes an effort to revive the growth stage of product life cycle and ensure better responses from its loyal pool of customers. Thus, we see how Qantas Airlines can make use of different strategies during different phases of a product life cycle and ensure optimal utilization of its resources with higher growth and returns as rewards from the same. NEW ECONOMY MARKET Business models have become much more complex owing to rapid changes in the working style and support mechanism. Further the use of internet has made the entire world a global market. Qantas Airlines in order to keep in pace with the same and offer its customers with the best quality services (Stone & Woodcock, 2013)looks to develop the following strategies towards new market economy in order to sustain its business longer and maximize its gains Increased Promotions: Qantas Airlines has been successful in creating a brand name of its own in the Australian market, however with the company looking to capture new markets specifically the Asian markets it should look to bring new promotional schemes, offers and discounts to penetrate the market in a better way (Chen, 2003). Further the company should look to upgrade its quality services and attract a larger pool of customers for better growth and improved revenue. Customer satisfaction: Customer satisfaction has always been the prime motive of Qantas Airlines. Its new announcements of adding new airplanes to provide a safer, reliable entertaining and comfort experience to its customers for a better travelling experience shall set new standards and help to achieve maximum customer satisfaction to attract more customer and create a new market for itself in the longer run (Duncan, 2008). ORGANISATIONAL STRUCTURE Organizational structure provides a base for a better formal and informal communications and creates a managerial hierarchy to make crucial decisions in a logical manner with systematic communication of the same (Chrisan, 2001). Depending upon the operational activities it can range from product or functional management to marketing or matrix organizational structure. Qantas Airlines in order to create a more controlled and well monitored base looks to create a functional organizational structure for its operational activities. The company looks to appoint and create different functional departments working in a synchronized manner to ensure effectiveness and efficiency in its working pattern and decision makings (Hill & Jones, 2004). Each departmental head is responsible and accountable for their respective departments and the organization as a whole. Functional organizational structure further helps Qantas to bring diversity in its working pattern while operating in different countries and ensures optimal utilization of its available resources towards a common organizational goal MARKETING PLAN A marketing plan of Qantas Airlines can be better understood by the help of a SWOT analysis which provides insight about the organizational strengths, weaknesses, opportunities and threats taking into factor both internal and external factors affecting the same. A SWOT analysis of Qantas Airlines has been drafted as under. Strengths Market leader in the airline business of Australian economy. Known its superior quality airline services with higher customer satisfaction guaranteed. A large pool of loyal customers and a brand image of its own. One of the oldest airline company’s in the world. Strong backing and support from Australian government. A market leader or a pioneer in the airline business. Weaknesses High infrastructure cost making the services costly. Difficulties in controlling and monitoring international markets. Cultural clashes and conflicts among employees due to diversity of culture. Highly concentrated in the Australian and its adjoining areas. Opportunities Ample scope to widen market share by targeting new Asian markets. Low level of competition from new entrants owing to high infrastructure cost. Opportunities to make tie-ups with other airline companies to strengthen its presence globally. Rapid increase in the number of travelers by air. Threats Rising fuel prices making cost of operation shoot up. New industrial policy and rising air traffic Huge intervention from governments of other countries which Qantas Airways connects. Rising inflation with rising labor cost. Thus we see that Qantas Airlines has its own strengths and weaknesses which enable the organization to develop contingency plans to mitigate the alarming threats and weaknesses. Further contingency plan can be regarded as backup plans directed towards organizational goals and objectives to ensure lower losses and less deviations in case the main plans suffers a setback. Qantas has looked to develop contingency plans with higher promotional tools to ensure regular sales even in situations of contingency (Clegg & Walsh, 2004). Further contingency plans includes special fares and low cost operation method with arrangements to enter into tie-ups and partnerships with other aviation giants and ensure situations of contingency are dealt in a logical manner with little or no losses for smooth running of the business. MARKETING METRICS Qantas Airlines with a view to capture the Asian market should look to create a brand presence of its own in the Asian market and attract larger customers which can be best achieved through delivering higher customer satisfaction. In order to ensure the same the company is looking to introduce new airplanes which are more reliable, safer, and comfortable with modern techniques to ensure entertainment during travelling and provide a lifetime travelling experience to its customers (Berkman & Gilson, 2001). Qantas Airlines should look to penetrate the market with new promotional tools and offers with a cost reduction strategy to provide superior quality services at lower price and gain a competitive edge over its rivals. MARKETING AUDIT Marketing audit is an intense tool to make regular checkups and monitor the variances in the operational activities in a logical and systematic manner to ensure long run success and higher transparency in its work. Qantas Airlines looks upon the following marketing audit tools as most appropriate for the organizational success. Ethical Audit: Qantas looks upon an ethical audit to ensure higher ethics in its workplace environment and build on its brand image. It helps the company to monitor its ethical dilemmas and objectives and provide means to avoid and mitigate ethical conflicts in its diverse nature of business operating in over 40 countries. Strategy Audit: This ensures that the strategies developed and implemented by Qantas are directed towards achieving organizational goals by creating a win-win situation for both the organization and its employees. It further monitors the strategy implemented by competitors and provides a base to develop better strategies to gain competitive edge over its rivals and ensure better success and growth of the company. CONCLUSION This report provides an insight to understand the current operations of Qantas Airlines and its future operations. The report focuses on the different strategies which Qantas looks to develop to gain maximum advantage of the opportunities available in different stages of the product life cycle. Further Qantas through its innovation and business model looks to act as a pioneer and leader to ensure higher success. The company follows a functional organizational structure and a SWOT analysis has been prepared to identify the potential opportunities and threats to the business. The report is finally concluded with Qantas marketing metrics and audit tools to provide a better understanding of how the company monitors and checks its resources to emerge as a market leader. REFERENCES Berkman, H. & Gilson, C. (2001). Consumer Behavior Concepts and Strategies, Kent, Boston Brassington, J. and Pettitt, M. (2001). Principles of Marketing, 2nd Edition, Prentice Hall Chrisan, P. (2001). Marketing: A Behavioral Analysis, McGraw – Hill. New York Clegg, C. & Walsh, S. (2004). Change Management: Time for a change. 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