The Qantas Airlines Services Analysis in Australia - Report Example

QANTAS MARKETING OF SERVICES Table of contents ……………………………………………………………………………………….3 0 Introduction…………………………………………………………………………………4 2.0 Discussion……………………………………………………………………………………5 2.1 Industry analysis……………………………………………………………………..5 2.2 Qantas operations……………………………………………………………………7 2.3 Economic analysis…………………………………………………………………...8 2.4 Customization………………………………………………………………………..9 3.0 Recommendations…………………………………………………………………………..10 4.0 Conclusion…………………………………………………………………………………..11 Abstract The Qantas airlines in Australia is among the most vibrant and most successful air travel service providers in the country owing to effective and efficient service marketing and delivery frameworks. Increase in passenger base have seen the company make great fortunes and hence the favorable business despite the increased competition in the industry over years. Today, the service provider serves many destinations across the globe and has wonderful reputation on personalized customer service as well as on safety (Leahy, 2005). Evidence to the company’s endeavor to incorporate and use technology on customer service is seen in the creation of Qantek (Qantas information technology limited) as a distinct subsidiary to the company to facilitate on information systems of the main airline company. This paper therefore focuses on Qantas airlines service delivery processes with special attention on customization and contact frameworks adopted (Hermann & Dolan. 1998). Besides, the paper establishes critical areas in which the company needs to improve on in matters of service delivery and as such makes appropriate recommendations. 1.0 Introduction The process through which needs as well as wants of persons are determined and appropriate procedures are adopted in order to deliver products or services, which are required to meet the wants and needs, is called marketing. The marketers in service industry are strategic people who carry out promotions and ascertain that services are effectively and efficiently delivered to consumers by the service providers. Moreover, certain services following sales are also included within the marketing services in all industries. Generally, marketing entails a wide range of activities, which span from production, transportation, processing, packaging, advertising as well as sale in the case of goods while promotions are the main marketing activities involved in service industries such as is the case with air travel industry. However, it is worth noting that the marketing concept revolves around goal achievement, customer orientation as well as integrated efforts between the various marketing players (Quang, 2013). Research studies that have been done in the recent past reveal that majority of modern marketing techniques are used to deal with consumers’ behaviors. The information that marketers get from the consumers is seen to be very important while deciding on the appropriate marketing procedures as well as practices for achieving efficiency within the market. This explain why majority of modern marketing revolves around consumer behavior while carrying out a market analysis, target market selection, market-mix determination as well as the marketing strategies mostly reliable within a certain market segment. This also explains the various marketing mechanisms that are in use today, and which are determined by the consumer behaviors exhibited. For instance, Singh and partners reason that human behaviors in purchasing as well as consumption are greatly influenced by attitudes or preconceptions about the specific products or service on offer. This imply that consumers are driven by some preconceived ideologies about goods or services and this influences the decision making process by the consumers.Market segmentation on the other hand is a critical concept in marketing and alludes to classification of market segments on lines of commonality, kinship as well as similarity. What this implies is that people sharing one segment, have much shared attributes, a fact which assists in helping the marketing agents, concentrates common efforts. Through concerted efforts towards a single segment where people share common attributes a marketing agency gain a competitive advantage against other competitors within the industry. 2.0 Discussion 2.1 Industry analysis From the analysis of various service models and frameworks in use within the service industry today, measurement and quality of services provided depends on service setting, time, situation as well as particular needs among other factors. The expectations of customers especially within the service industry are very dynamic as influenced by time, number of experience years on particular service as well as competition in the industry (Seth, Deshmukh & Vrat, 2005). However, players within the service industry increasingly face the challenge of evolving the existing infrastructures or building new infrastructures that are efficient in service delivery within the modern day economic frameworks. Service industry requires such affective infrastructures in order to deploy the new revenue generating services appropriate for business growth as well as reducing operational costs incurred. Players within service industries such as is the case with Qantas airlines have had particular attention focused on development of next-generation networks architectures together with development of business and operating support systems. Previous versions of operating and business systems have been limited in only providing efficient means of communication through telecommunication infrastructures. However, technological advancement coupled with changing times in business transactions necessitate the adoption of new generation infrastructures that are effective in sharing information and management of business processes and respective services. This paper however notes that standard programming interfaces have been in use within the company especially for logic execution, control of service networks as well as for application accessibility. Besides, companies in service industry are adopting domain specific solutions towards solving own challenges and overlapping from the functionality in business support systems commonly in use (Hao, 2008). Besides the technical restructuring, expressive display has been show through research to be part of most successful service industry marketing. The expressive display refers to such features as smiling, friendliness as well as genuine concern to customers as these contribute towards increased customer satisfaction (Gountas, Ewing & Gountas, 2007). In particular, air travel service delivery such as is the industry within which Qantas operates presents along (extended duration) service provision and hence such positive displays are associated with stronger satisfaction for the experiences. This on the other hand goes a long way in influencing the likelihood for the customers to be loyal and continue using the company’s services. It is logical that in the event that customers fail to perceive such appreciation, they derive low satisfaction and this result to negative effect on the customer evaluation and probability of re-purchase from the company.Interpersonal relations between service providers and customers have a critical influence on success and or failure in general service industry such as Qantas operates. In a study to evaluate airline passenger’s satisfaction and responses, Gountas, Ewing and Gountas found a positive correlation of expressive displays with customer satisfaction and the likelihood of repurchase of the services on offer. 2.2 Qantas operations A critical analysis of the services on offer by Qantas reveals that the company offers a wide range of services besides customer freight services. The other services includeretailing, networking, ground handling, fleet and equipment as well as online solutions among others. Extensive network in the operations of the airline facilitates the ease of offering such services across almost entirely toward all destinations across the globe. On the ground handling services, the company has invested extensively in systems of visitors guide, contacts information on facilities and on the network terminals as well as agents in order to facilitating the trading operations within the industry. Retailing services offered by the company include such services as courier forwarding as well as baggage delivery services. Qantas courier, a subsidiary to the main Qantas airlines specialize with the logistic services and these are equally critical services within the airline industry. Moreover, the company has well-structured fleet and handling equipments, which basically facilitate the third party logistic services. It is also worth noting that the company has adopted technology in merely all aspects of its operations as shown by the e-business service charter which specializes with handling and tracking customer shipments and ease the processes of invoicing and payments (Qantas Airways Limited, n.d). Global trends in the aviation industry show that increased competition characterizes the industry. It is however noted that competition and the pressure are not majorly as a result of contraction in customer base but rather due to the reason of increased players within the industry. The dominant players as well as the new entrants are striving to gain a competitive edge through improved marketing strategies which are aimed at improving effectiveness and efficiencies in serving customers besides improving on their experience. Increased demand for air travel has necessitated players within the industry to diversify on the services on offer as well as intensifying on marketing research (Silvestro, Fitzgerald, Johnston & Voss, 1992). Key outcomes to these efforts are higher partnerships being formed besides individual service provides evaluating on strategic strengths and weaknesses in short and or long term investments. Automation and computerized online bookings and reservation systems (CRS) are among the major strategies exploited in the industry with Qantas characteristically having already invested in the system. This paper notes that CRSs have been in use already to link customers and service providers where the subscribers get ease of connection to service terminals. This has been exploited effectively by Qantas airlines with better results notable in customer satisfaction through e-reservations and bookings and ease of communication between the company and the customers. User friendly systems developed through technological advancement has enabled the interaction between the customers, airlines as well as the travel vendors which include the operators of hotels, car rentals as well as such subsidiary service providers as logistics providers (Niketic & Mules, 1993). 2.3 Economic analysis An analysis of the industrial performance of Qantas airlines in the current year shows that the year 2014 financial report carries a surmountable loss calculated before tax. The main cause of the loss as indicated by the report by the current CEO is loss in capacity growth. The industrial factors in the Australian aviation sector which has contributed to the poor performance have been pointed as to include market distortions high fuel costs as well as uncompetitive costing while compared to the peers within the industry. Accordingly, the report outlines possible means through which the company would improve from such a loss as being through acceleration in business transformation, aligning capital expenditures with the foregoing financial performance as well as through right sizing in networks and fleets. Alan Joyce pointed to the need for the company to strengthen service delivery infrastructure together with exploiting the business long-termadvantage in competition within the industry of aviation in Australia. However, the customer loyalty has increasingly been commendable through Qantas cash and AQUIRE as an initiative to target the SME market segment. Nevertheless, the analysis of the company’s performance over years shows relative slow performance while compared with the competitors especially after 2012. Airline alliances across the globe have been pointed out as the major feature that contributes to the low competitiveness of the company. Formation of such alliances explains how the growth trend of the Qantas’ competitors have outpaced its growth and hence the need to have a strategy to counter such effects if the company were to remain at the competitive edge it enjoyed over years (Joyce, 2014). 2.4 Customization The customization frameworks that are in position with Qantas airlines are somewhat well developed and satisfactorily competitive as shown by the success that the company has increasingly enjoyed (Kumar, 2007). Through better CRS systems that have enabled ease in communication between customers, the company as well as subsidiary service providers like in hotels and car rentals, customer evaluation rates satisfaction higher while compared with other players within the industry. High flexibility in online bookings as well as on terminal bookings increases on customer satisfaction. Electronic systems of service delivery enable customer feedback to be easily accessible by the company management which contributes towards improved service delivery. Besides, automation and mechanization of the processes in booking and logistics improves the quality of the services delivered by the company as compared to the rather cumbersome traditional processes through open office operations as well as slow procedures through queuing for bookings. Moreover, advancement in technology has improved the customer experiences such as improved timing to avoid delays in freight scheduling. Qantas airline terminals are also well served with recreational facilities and internet services which all contribute to improved customer satisfaction which accounts for the improved performance of the airline compared to rival players. This therefore shows that the entire process from bookings to reaching the final destination through Qantas airline is relatively effective and efficient except for the shortcomings as were noted previously. 3.0 Recommendations Basic to the recommendations of this report is on the need to have the company reevaluate on the structural weaknesses through which the company is losing on the market segment to increased competition. It is notable that although there is increased competition within the aviation industry this cannot be attributed to contraction in customer base. In order to minimize on operation costs which has been pointed out to outdo the revenues, there is need to adopt favorable mechanisms in reducing unnecessary costs through improper marketing methods besides strengthening the business infrastructure in use. Moreover, alliances in the industry have been exploited for an advantage by players within the aviation industry. This paper therefore cites the following as recommendations to Qantas airlines for improved performance and increased customer satisfaction (American airlines and Qantas plan joint business agreement. 2011). The leadership should therefore consider following recommendations: a. Consider mergers: over years, the history of airlines have been characterized of mergers and acquisition which have been exploited positively in overcoming economic shocks, social cultural structures as well as effects of technological advancement. This paper proposes the mergers as a strategic method of overcoming increased pressures from competition and in efforts to have a higher bargaining power especially in fuel prices and general pricing mechanisms. b. Expressive display: customer satisfaction in any service industry is positively influenced by expressive display as shown in the discussion. This therefore forms the basis of this recommendation to the Qantas airline that improving on customer satisfaction has the capacity to restructure the company’s performance through increased loyalty from customers c. Technological advancement: with the changing times, technology has revolutionized all trading activities by companies especially through interaction with customers as well as through marketing and promotion services. It’s therefore the recommendation of this paper that Qantas airlines requires to improve on the methods online marketing services adopted in order to target wider segments of customers besides diversifying on the service range on offer (Johnsson, 2007). 4.0 Conclusion In conclusion however, this analysis in service delivery processes by Qantas airlines shows that the company has been strategic in its operations within the aviation industry but more efforts in improvements are necessary for effectiveness and efficiency. References American airlines and qantas plan joint business agreement. 2011. Airline Industry Information (May 12), http://search.proquest.com/docview/866072951?accountid=45049 (accessed May 7, 2014). Gountas, Sandra, Ewing Mchael & Gountas, John, I. 2007. Testing airline passengers responses to flight attendants expressive displays: The effects of positive affect. Journal of Business Research (60): 81–83 Hao ,Qingwang Michael. 2008. 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