The market environment largely defines a firm’s marketing approach to its products and its target customers. Therefore, understanding the nature of the product and its offerings, the target customers and packaging can be determined. This paper aims to analyze the marketing environment of Qantas Airline for their rout from Australia to Bali, Indonesia.
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The marketing elements are segregated into two parts – microenvironment and macro environment elements (Cant, Strydom, Jooste, & Plessie 2006). Microenvironment elements are forces that are ingrained within the system of the firm that may affect the ability of the company to serve its target customers (Cant et al. 2006). The macro environment analysis relates to the larger market forces that have a strong impact on the microenvironment and consequently the firm’s ability to gain competitive advantage in the market (Cant et al. 2006).
The microenvironment can be analyzed based on the organization, market channels, competitors, and market for the customers, and public. The organization analyzed in this paper is Qantas Airlines. It is important to understand that the other departments are also responsible for success of the marketing department within the organization. For instance, the stations at Bali and Australia are responsible for handling the proper marketing of the Australia-Bali route of the airlines.
The first aim of Qantas should be to align all their departments to gain customer focused marketing. Qantas has streamlined departments that operate in conjunction with one another. They operate seamlessly, providing assistance and coordination to each other. The suppliers are also important. Qantas has sufficient supply of food and other refreshments for their passengers on the route from Australia to Bali (Qantas 2014). However, Qantas has faced problems on the labor front when the company had to downsize due to the financial crisis.
The competition in the rout is intense as there is a lot of demand for the destination. There are other airlines like Cathy Pacific, China Southern, Virgin Australia, Garuda, China Eastern, and China Airlines who present a strong competition to Qantas (Farecompare 2014).
Qantas being a low cost airline, provides competitive prices to their customers. Further, regular flyers can exchange their points with fare and hence can pay with both, points and cash. However, the prices for a one-way ticket in Qantas would cost around $750, while that in Virgin Australia or Garuda, Indonesia will cost around $300 to $400 (Farecompare 2014). The stark difference in the prices of the flights may become an impediment for the company to operate competitively on the route. The price competitiveness is one area where Qantas is far behind competition, and hence may affect the operations in the route.
The third party online ticket sellers, like travel agents, always try to book the airline tickets at the lowest cost in order to bring down their overall cost and increase their sales.
The customers of Qantas are usually business flyers and individual customers. Bali is essentially a tourist destination. The individual customers may be affected due to higher prices of the tickets in the route compared to other airlines. However, the company provides frequent flyers with points and other facilities, but these are necessary conditions to retain competitive advantage in the field, but not sufficient condition enough.
The direct competitors of Qantas are other airlines that operate on the same route like Cathy Pacific, China Southern, Virgin Australia, Garuda, China Eastern, and China Airlines. In order to compete with the direct competitors Qantas provides complete trips on per person basis, which covers their travel and hotel stay at Bali. Such tours would cost customers $500 to $900. Other competitors for Qantas’s Bali-Australia route are cruises that operate from Australian ports to Bali. Bali being mostly a tourist destination has attracted many travelers to take a leisurely travel option, which provides stiff competition to the airlines.
Employees of Qantas also have a role to play in the operations of the airline in the route. The airline services have to be perfect in order to provide condition, which will make the holiday of the customers special. Employees, especially the flight attendant and the pilots, are important part in delivering good services to the customers, and affect the marketing plans of the company.
The forces of macro environment that influence the firm are demographic, economic, natural, technological, and political factors (Cant et al. 2006). Economic factors have been a strong impediment to the operations on the route, as the economic downturn reduced consumer spending and hence, reduced the number of people eager to travel abroad for vacation. Bali being primarily a tourist destination was hit due to the global recession.
Natural factors also affect the marketing and services provided to Bali for the island is prone to earthquakes and storms. The advent of the tsunami in 2009 affected the island’s infrastructure badly, and therefore, created a gulf in the tourist inflow in the island. Natural disasters and political upheaval have adversely influenced the tourism industry in Bali, which in turn reflected on the customers for Qantas on the route.
However, Bali is rich in culture and historical heritage that attracts lot of tourists. For instance, the island’s Buddhist-Hindu religion can be traced back to the ancient ages and the island houses many ancient monuments. Further, natural beauty is immense in the island, which can become an important area of marketing for Qantas. The island provides great opportunities for adventure sports that are strongly associated with Australian culture preferences.
The demographics of Australia has a strong impact on the marketing of the Qantas airlines. The population of the country has increased by 1.8 percent in 2013. Further, the population is constantly aging, with increase in life expectancy of the population. The average age for men is presently 65, which is expected to increase by 19 years and that for women by 22 years (Australian Bureau of Statistics 2013). This poses a strong problem for marketers of Australian products to the Australian markets. Marketing a destination like Bali to an aging population may become difficult, as leisure travelling becomes the last agenda of an aged person’s spending list.
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The main marketing area that Qantas must concentrate on while marketing their Bali destination from Australia is their target customers. The travellers to Bali are usually young people, who want to explore a different culture and tradition. The older generation travels and very old ones prefer not to travel at all. In order to attract the younger generation, student discounts are to be provided. Further, Bali has to be marketed as an adventurous and exciting tourist destination to the young demographics. The prices have become an impediment in the marketing process with more airlines providing cheaper flight tariff for the same destination. Thus, the marketing of Bali route of Qantas must be targeted at the young, below 30 years of age. Further, the company has to provide more package deals or cheaper flights in order to compete with increasing competition from other airlines. Further, family travelers may be attracted with special offers for family vacations.
Australian Bureau of Statistics 2013, Australian Demographic Statistics. Web.
Cant, MC, Strydom, JW, Jooste, CJ & Plessis, PJD 2006, Marketing Management, Juta and Company Ltd., Cape Town, SA. Web.
Farecompare. 2014. Web.
Qantas 2014. Web.