Qantas’ target segment

At present, Qantas’ target segments are mainly corporate travellers and customers who seek premium leisure. As other airlines are beginning to offer higher quality services, Qantas should consider performing research to identify other potential target segments. The annual report of 2008/09 reveals that international flights exceeded the number of domestic flights by around 10%. This indicates that Qantas should seek to put more emphasis in targeting international travellers – either in the segments for corporate or premium leisure travellers. Before attempting to do this, Qantas should first wait and observe if this trend continues by reviewing their sales trends for a number of years and forecast it for the future.

Market research through surveys and questionnaires could also be undertaken to find out which segments would most likely be interested in travel. For example: ‘Do you intend to travel domestically or internationally in the next 3 months?’ Because these travelling decisions may change rapidly, these surveys should be taken on a frequent basis. The issue with the implementation of this recommendation is how to distribute the surveys and how to ensure the highest accuracy of the survey results. Another issue with re-segmenting is that if the target segments are not well segmented, the company may incur losses in effort and sales. To avoid this, Qantas should plan their research and ensure that the proper procedure of target segmentation is implemented.

PRODUCT AND BRANDING STRATEGY

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With Qantas, they should acknowledge procedures in case of accidents. After the mini explosion, passengers claim they were stranded inside the plane for hours because the Qantas crew would not let them leave. There are exits, life jackets and more. This altered the reputation of Qantas but due to lacking of pressured situations, people feel unsafe about flying with Qantas. There has been quite a number of complaints and consumers had started to reject Qantas in case any more explosions occurred. However, Qantas number one priority is safety. Although they have further training in safety awareness, they need to apply their new knowledge to their cabin crew, captains and ensure the procedures will go smoothly. Otherwise, the reputation of Qantas will fall more as more complaints are noted and demand for Qantas will decrease. Qantas services should involve safety procedures, which is highly important as customers need to feel secure with flying on an aircraft.

DISTRIBUTION

A marketing strategy for Qantas’ distribution is to channel their ticket sales through more means. Currently, they sell tickets online, through intermediaries and offer phone sales centres to certain states. To increase distribution, they may firstly opt to increasing the seating in their planes by either using space more wisely or designing a larger aircraft. In doing so, this will mean more customers are able to purchase tickets and possibly improve their economies of scale. This strategy would involve engineering costs, architectural costs and monthly costs. However, if they are just using their space more wisely then petrol costs, etc. would stay the same.

It is expected for their economies of scale to improve as a plane of the same size with more seating capacity would lead to more customers being able to fly with Qantas, therefore increasing overall profits. Secondly, they may choose to make the phone sales centres available to more people. Those who are limited in accessibility may find it more convenient to make a phone call rather than to purchase online. In doing so, they may experience set up costs to build the centres and employee fees etc. Although convenient, it may not be as successful as most of the market can access through various means.

PROMOTION

Through the finds of the report, Qantas’ main promotion strategy relates to the ‘quality’ that is offered in their services. Although this strategy is effective in maintaining purchases from target segments who opt for premium services, for customers who are concerned about safety and efficient departure and arrival times the current promotion strategies may not be effective in this sense. Especially due to the recent episodes of major flight disruptions, customers who are worried about their safety would be more conscious in purchasing airfares.

Therefore, rather than only promoting the ‘high quality’ of their service, they should also aim to maintain the confidence of their customers by promoting their ‘safety standards’ and perhaps by offering other benefits such as insurance. These promotions should be undertaken as soon as possible because the longer the delay of this, the more customers’ confidence in travelling with Qantas would decrease. If Qantas offers packages and deals or promotional sales for a certain period, this will appeal to customers who’re price sensitive and compete with Qantas’ competitors, in particular Virginblue who are now offering higher standard services for a lower price. An issue that needs to be considered is the profitability of these promotions and how it’ll affect the company in the long term.

CUSTOMER SERVICE AND RELATIONSHIP ACTIVITIES

Frequent flyer points has been easier to earn now, since joining forces with Woolworths, etc. Qantas is also part of the oneworld Alliance which points can be additionally earned while flying on different planes. However, after earning and claiming the points, it was always something small but insignificant. Frequent flyers do not need another phone, or another notebook, etc. From the findings of the report, the very frequent flyers prefer to spend more time with their families and friends rather than fly and work, gaining frequent flyer points for extra services such as hotel booking deals, upgrades to a higher cabin class, and more. They have only recently involved a few family activities including swimming lessons for a family taught by a professional swimmer, as well as inviting the whole family a season pass to watch sports games. It is recommended that more family activities should be offered to these frequent flyers, so they feel Qantas is making the most of their service by giving the consumers extra little gifts for themselves and their families.

Conclusion

In conclusion, Qantas’ overall marketing performance is relatively stable. The current strategies implemented by Qantas are evidently strong. Its brand power is its most competitive advantage over other airlines as it has been a long established carrier. The main concern is that Qantas should consider expanding their market and offer the services to more destinations to broaden their market. Qantas should aim to maintain their existing customers’ loyalty by building upon customer-to-airline relationships. As it is less costly to maintain existing customers than attempt to draw in new customers, Qantas should focus on satisfying their current customers’ expectations and to create long term relationships with them.

Recommendations

1. Internal environments involve factors which affect their ability to serve customers therefore Qantas should manage internal factors as much as possible because external factors are out of their control. Qantas is able to control internal factors to minimise the effect external factors have on the company. 2. Qantas’ Competitive Situation Analysis shows that they are at the top of their game. A possibility for them to sustain their competitive edge is to possibly offer high quality, no frills and lower priced tickets. They should also look into other catering groups of they want to gain a better bargaining position with their suppliers.

3. To continue to strengthen their business strengths, Qantas should take advantage of every opportunity. Qantas should also provide the opportunity for their customers to give suggestions on improvements, to discover what their target market wants or needs. Although entering the airline industry is difficult due to high start up costs and established competition, Qantas should be aware of potential threats of new entrants. New entrants could be international airlines trying to enter the Australian airline industry. Qantas should also be mindful of shifts in consumer tastes and values – consumer perception could change leading to them seeking alternative services.

4. The firm should make use of market research and establish all the opportunities available to them to continuously meet the needs of their target market – for instance advancing technologies, reduced restrictions allowing for more services, new routes to new destinations, and flying carbon neutral. 5. Qantas should offer special deals, so price-sensitive customers can try the services Qantas offers, which would increase the market range. During system failures, they should respond in an efficient procedure to avoid unnecessary delays. This affects the reputation of Qantas, and costumers are not satisfied, therefore will not rely on their services in the future.

6. The current target segments are primarily corporate travellers and customers who seek premium leisure. Because other airlines are beginning to offer higher quality services, Qantas should consider performing research to identify other potential target segments. 7. Qantas should continue to position themselves to offer premium services and maintain a high standard reputation. Repositioning themselves may lead to a decrease in demand especially due to the historically built reputation that they’ve established.

8. The kangaroo logo is recognised as Qantas, so when innovating their exterior design, they should consider not altering it too dramatically as recognising the brand is crucial to distinguishing them from competitors. 9. Qantas’ pricing strategy is aimed at achieving high profits and by maintaining current prices. Although the prices are quite high, people’s perception of high prices would connect to the high quality service. If it decided upon that Qantas would reduce their prices, it must be taken into consideration that it may compromise their quality.

10. The current distribution strategy effectively aims to sell as many tickets as possible, limited to the number of seats available. Qantas should firstly consider increasing seating on their planes to increase their distribution size and should aim to sell through more intermediaries or even opting to increase the phone sale centres. 11. The firm should consider offering packages and deals or promotional sales for a certain period to appeal to customers who’re price sensitive. In addition, rather than promoting the ‘high quality’ of their service, they should aspire to maintain the trust of customers by promoting their ‘safety standards’ due to the recent episodes of major flight disruptions. 12. Qantas needs to keep their services consistent to avoid deterring their customers. They should involve more family activities for those very frequent flyers to maintain them.

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