Service to Customer of Qantas Airline Ltd - Case Study Example

Marketing Audit Report: Case Study Scenario on Qantas Overview of the market audit report The market audit report is a case study of the marketing management of Qantas airline ltd. The report aims at reviewing how Qantas airline ltd manages it marketing and relations within and outside the organization. Qantas airlines ltd was formed in1920 and was known as Queensland and northern territory aerial services (Qantas, 2009). The airline is Australia’s largest and operates both domestic and international flights. The headquarters of the airline are located in the city of Sydney. The airline flies over 60 domestic destinations and over 67 international destinations in over 20 countries. Qantas has some subsidiaries airlines which help in covering all the existing destinations by expanding its flight zones. The routes with the most domestic travelers are between Adelaide, Canberra, Perth, Brisbane, Melbourne and Sydney. Qantas advertises these routes as the city flyer domestically within Australia. The international routes always have travelers who are moving to or from Australia. Most of the travelers are either for leisure or business (Qantas, 2009). Qantas is always customer focused (Skytrax, 2009). This altitude has made it the market leader for domestic flights within Australian territory. The airline offers extremely quality service to its customers, while charging very fair prices. The airline has reduced its costs and passed the savings to customers. This has always helped in establishing customer loyalty to the airline. The airline has a dedication to quality customer service it provides to its customers. This is delivered with warmth and friendliness by the staff. The staffs of the airline have created a brand for the organization for providing good customer service to their clients compared with other airlines. The dedications of the staff in serving customers helps differentiate the brand from the others within the industry (Skytrax, 2009). The major marketing objective of Qantas airline ltd is to create a brand within the market so that the airline becomes the airline of choice to customers it serves. The airline tries to attract and keep as many royal customers as possible. The airline has dedicated staffs that offer their experience to travelers and want to make them loyal to the company. By having these dedicated travelers, the airline is able to maximize its revenues from these customers. The company’s marketing mix provides air transport within Australia and other travel services. The major goals of the firm are to achieve an appeal to the target customers, so that the company can provide the travel services. By promoting services properly coupled with their affordability, it remains profitable and also makes its customers happy (Skytrax, 2009). The research paper is a case study of Qantas airline target market and channel relations. It provides information on the target market of the airline, the market segmentation, and the channel relations in marketing, how the company maintains market relations with customers and suppliers, the market growth and strategies of the airline, the market research and recommendations. All the marketing information discussed in the paper is got from journals and references from customers and the airline management. Target customers for Qantas airline ltd Businesses usually identify their target customer in order to market their products specific to those customers. Businesses that do not identify their specific target customers do not optimize on their sales. It is crucial for a business to understand their target customers and their needs. For an airline company like Qantas identifying target customers is common sense. Qantas airline provides air transport service the general population, who wish to travel within and outside Australia. The company target market includes business and individuals that are interested in air transport for both goods and people. Researching of target customers provides an understanding of target customers needs. Target customers for airlines include both business and individuals. The individuals travel for both leisure and business. Businesses are mostly involved in the transportation of goods to different locations. Targeting individuals requires more dedication for the airline because everybody has his own opinion over the different airlines. The budget of individuals also influences their travel patterns. Qantas airline targets customers who wish to get more value for less money. Businesses are better targets because they have better budgets to cater for their travel. It’s important to target both individuals and businesses equally. The airline operates domestic flights to different cities within Australia and international flights to different cities across the globe. The airline attracts customers who are flying for both business and leisure. The airline has made flying simple for everyone by opening the flying market in Australia. Segmentation bases of identifying the customers The segmentation of market is done to identify the markets that are different from each other. Segmentation of the market allows the airline to better keep customers the customers happy. Consumers in the airline industry are few and evaluate the packages offered in more details. The market segmentation can be done depending on the behavior characteristics of the customers. The market segments for Qantas are divided into business travelers and leisure traveler. The two major segments are also divided into sub segments based on length of the trip i.e. international or domestic, number of trips and loyalty to the airline. Business travelers are very profitable for the airline because they pay higher and their flights are mostly fixed. They also don’t have other alternative means of travel. Business travelers are offered different levels of services compared with leisure travelers. These are divided into first class business class and economy. Leisure travelers are not as profitable because they are more willing to change their travel depending on prices. These markets is good for low cost carriers Forms of relationship channels for the company Business relationships involve two parties working together to achieve goals of the company that they can’t achieve alone, where long term success depends on the outcome of these goals. The relationships between Qantas and partners are strategic and important for running the airline successfully. The first relationship the company has formed is its part of an alliance with other airlines to provide customers with standardized service from all airlines. Qantas has code sharing agreements with other airlines operating along the root it operates. There is an e-commerce relationship, where there company outsources its booking management system from Amadeus. This system helps customers manage their flight bookings online without having to depend on the company’s staff. Thing that Qantas does to build relationships with customers Building a good customer relationship is vital for the success of an airline business (Acuff &Wood, 2004). There is need to put up a good strategy to build good customer relations for Qantas to satisfy its customers. Customers are not very decisive when making decisions and a business which builds good customer relations is able to attract and retain its customers. The first thing that Qantas does is offering products that meet the customer’s needs. The value for money is usually offered to the customer. The quality of products offered to the customer is high. The other thing that Qantas does is following through on the promises that they have made to customers. The products and services offered are delivered according to what is promised. False claims are not there with Qantas. Another thing the airline does is it listens to the customers. All complaints are handled professionally and quickly. The customer care is always available and accessible, when the customers have questions, concerns or comments. The airline understands that people always look for someone to share their problems with and therefore, the airline staff is available to listen. This helps them to bond with the company’s staff (Acuff &Wood, 2004). The other way that the company builds relationship with the customer is through their brand. Customers are able to identify themselves with Qantas among other travelers. The company has invested a lot in its brand to make sure customers identify with it. The other way that Qantas build relationship with their customers is rewarding royal customers. The company does not forget existing customers when going for new customers. There is a loyalty program that builds an effective relationship. Loyal customers can redeem free flights or goods at partner shops. The company also has a blog where customers can discuss freely among themselves. The company is also able to keep in touch with its customers. The company is also able to improve on its brand online via the blog. The customer relation can increase via getting immediate feedback from the customers (Acuff &Wood, 2004). The other way the company improves customer relations is via giving valuable information to its customers via emails web social media and other methods that are not invasive. The customers are also able to reach the airline more easily. Thing that Qantas does to build relationships with suppliers All successful companies build a relationship with their suppliers (Christensen, 1997). Building a good supplier relationship is part of the company’s strategic plan, as the success of the company depends on the suppliers. The supplier is important in making sure the company maintains quality, timeliness, competitiveness, innovations and maintaining costs down. The first way that Qantas builds a good relationship is by paying the bill on time to the suppliers. The company negotiates good payment terms and when the order is placed it does not try to change these terms. If the company is unable to pay in time it calls the supplier and informs him. The second thing Qantas does is giving orders on time. The lead time provided is always adequate to allow the supplier to organize on the supply (Christensen, 1997). The company also shares the information on its estimates with the supplier when there is need to do so. The supplier is able to plan on production. The other way Qantas builds a relationship with the supplier is by making the relationship personal. This relationship is made personal by visiting the supplier’s premises. The suppliers are also invited during the functions held by the company. The other way Qantas keeps a good relationship with the supplier is by sharing information. The information is about what is going on in the company. The information is about promotions, new products and changes in key personnel. Another thing the company doe to maintain good relationship is submitting all complaints and damage claims on time with all the evidence intact. The goods that are broken, damaged by water or soil are returned and not discarded. Market growth and strategies The key to a company’s growth is increasing sales among existing and new customers. The company is pursuing aggressive market strategies to increase sales among existing and new customers. Qantas already has a head start as the airlines brand is already established. For airline companies, the most important thing is achieving growth (Christensen, 1997). The airline has developed practical tools and tactics to achieve growth in the market. The airline has put productive behavior in the long term goals. Growth strategies have been put in the company for value refinement of the airline. The market growth strategies that Qantas has adopted are market penetration which is a less risky strategy. The company aims to sell more to its existing clients as it’s an established airline. The airline is developing new ways of penetrating into the existing market. The company is also strategizing on market development to offer flights into new locations. For example flights to Santiago in Chile are underway. It is also forming joint ventures to find new markets where it can operate with partner airlines. The airline is also using alternative channels of developing alternative channel strategies to enter into new markets. It’s pursuing new customers in a different way such as establishing a low cost airline in Japan to cater for premium customers. The airline is also using product development as a way of gaining new customers (Christensen, 1997). There is development of new products to sell to existing and new customers. This is because new markets are different to penetrate with new products. There is creation of new products for new customers as a market strategy. The new products are meant for new customers within the market. Ones these new products are bought by customers, they can also be able to buy the existing products of the company. Intellectual property and idea generation capacity The idea generation capability and intellectual property are important to the success of any company. Qantas operates in an environment that is highly competitive and changing more than ever before. In order to compete effectively in the market it is important to combine productivity competitiveness and customer needs in development of new products (Slater & Narver, 1994). The company has developed ways of idea generation and capitalization. The company focuses on the main drivers of innovations in large firms such as idea generation, acquiring new technology and internal environment technology for exploiting innovations. The success of new product depends on how the management deals with the management of new ideas and concepts. The company identifies new ideas that are commercially significant. These ideas are natured until they achieve business success. The company has not left the exploration of new ideas on products to chance. The company makes changes to the innovation process to make it more efficient. The company has deep understanding of customers needs when making new product developments (Slater & Narver, 1994). These products are also protected by intellectual property rights. Market research and recommendations The technology within the industry has continued to improve. There is also more awareness on many environmental issues. The industry is always progressing and new sources of energy and means of travel will continue to improve (Slater & Narver, 1994). Many airlines are contemplating using alternative fuels to beat fluctuating fuel prices and deal with raising green house gases. The new aircraft that are to be used must meet stringent quality qualification. Qantas is always looking for ways to cut costs if it’s possible to cut the costs. Between January 2004 and July 2006 jet fuel has risen by $1.16 per gallon. This has caused significant rise in operating expenses. There is need for change in the airline industry to eliminate the oil price effects in the airline industry. The other way of the future is to employ employee knowledge to conduct market research. The flight crew is learning about all the new books and gadgets before they are widely accepted in the market. The airline sells this information to marketing firms allowing them to have information on new items in the market. The airline can carry out research on the latest gadgets they can undertake and could be additional products used by the company (Slater & Narver, 1994). The recommendations includes Engaging in more aggressive marketing strategies through advertising to gain more customers Increasing the marketing budget a modest value to meet all the advertising needs Conclusion Qantas is providing high quality service to customer for a fair price. The firm should aim to remain profitable without compromising on these services. Qantas controls a large section of the domestic market but should increase this by increasing sales through aggressive marketing. References Acuff, J & Wood, W. (2004). The relationship edge in business: connecting with customers and colleagues. Hoboken: Wiley Christensen, C. M. (1997). Making Strategy: Learning by Doing. UK: Harvard Business Review. Skytrax . (2009). Customer Reviews and Qantas Passenger Trip Reports. Retrieved 7 September, 2011 from http://www.airlinequality.com/Forum/qantas.htm Slater, S. F & Narver, J. C. (1994). Market Orientation, Customer Value and Superior Performance, Retrieved 8 September, http://academics.eckerd.edu/instructor/trasorrj/Consumer%20behavior/Consumer%20Behavior%20Articles/Value/Market%20Orientation.pdf Qantas, (2009). Our company. Retrieved 7 September, 2011, from http://www.qantas.com.au/travel/airlines/company/global/en Read More