Product and Branding Strategy

Qantas’ intangible product is its service of quality and professionalism aimed at both business and leisure travellers. Since Qantas only provides services, consumers cannot try the service before purchasing the service. Therefore, Qantas depends on its advertisements campaign and consistently provide the exact same service all the time as they need to gain the trust of consumers in order to maintain customer loyalty.

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The value added to this service is the quality. All airlines include similar services but Qantas differentiate theirs by promoting their service through commitment. Their commitment is portrayed through their current advertisements with the logo ‘Spirit of Tomorrow.’ The company depicts their commitment to the future by illustrating Qantas’ pilots, cabin crew, airport staff, engineers as well as customer service officers as part of their whole service.

Qantas is just a name, but once it is associated with the kangaroo, Qantas’ symbol, it is instantly identified. The kangaroo is their trademark and their service mark. It was originally copied from an Australian coin representing Australia’s post-war era. Throughout time, the kangaroo logo that had formerly encouraged pride and speed in the modern society of Australia eventually became old fashioned. [38] Qantas has altered the identity of the logo but the original meaning behind the symbol remains the same. In the year 2007, Qantas’ symbolic kangaroo logo was stated to “reflect the changing structure of the airline’s new generation aircraft, and keeping with Qantas’ increasing focus on contemporary design for its in-flight and on-the-ground products”[39]. This shows it adapts to the changing Australian society.

With the new Qantas Airbus 380, people are more aware of the luxurious and comfortable seatings, entertainment and service and are interested to see and experience it for themselves. After testing it out on a selection of customers, it was found to be successful. It was not difficult to adopt as media placed an awareness of the plane through advertisements, which caught people’s interest. They acknowledged that the price was worth their value for money because of all the extra entertainment, etc included. There was a trial for celebrities, faces of Qantas all tested it out, and advertised what they thought of the new airbus.[40] Qantas sales increased as more travellers desired to become a passenger on the airbus.

Their subsidiary airline carrier Jetstar, delivers services to different destinations at a lower cost. The two brand strategy grants Qantas unique strength for networking, scaling and customer communication. Qantas still remains Australia’s carriers of choice for premium and corporate travellers. In 2010, Qantas won The Chicago Anthenaeum’s Annual Good Design Awards for their design of the Qantas A380 First Class Suite.[41] It is the second award, since the Qantas A380 Economy Seat won the previous year called the Australian International Design Award of the Year. It boasts fourteen luxurious private suites with sofas that become a wide, long and flat bed. This shows customers that Qantas hopes to achieve the best services for their customers, and want them to enjoy a pleasant journey.[42]

‘I still call Australia home’ is another one of Qantas’ brand campaigns which has an emotional appeal as it gives Australians a sense of pride and belonging to the Australian society. With the choir advertisement, started in 1997, marketing manager Geoff Dixon flew them all around the world to sing the song ‘I still call Australia home.’ During the Olympics, this advertisement was played on TV continuously, engaging people all over the world portraying Australia as a home to all Australians.

Pricing Strategy Qantas’ is a profit orientated company in that, it aims to maximise profits by offering high quality services, increasing seating capacity available and by charging higher prices. They also utilise a premium strategy, whereby the quality of service is high and prices then follow suit. Internal and external factors can greatly affect the supply and demand of the airfares which can lead to price changes.

Internal factors are those involved directly in the business. The marketing objective for Qantas is to maintain a high level of quality in their services and so this must reflect in the price. The marketing mix can also influence the way the price is set. The ‘place’ where tickets are sold can affect prices greatly. Generally, if purchased online; fees are reduced as there are less employee payments, however if sold in an intermediary, it usually involves extra costs as it’s sold through a third person. Promotions are used to increase both sales and service awareness. Qantas has many types of promotions which add to its sales expenses including, television advertisements, sponsorships[43], etc.

They also have promotions that require no expenditures through services such as Facebook and Twitter[44]. Their service is designed to generate high quality experiences aimed at business people and those who enjoy luxuries of life. The quality of the service affects the prices through means of training costs the employment costs and others[45]. Prices can also be affected by the costs of the actual parts in manufacturing the aircraft and the distance of the destinations can even alter prices through discounts.

External factors can usually have more impact on prices because they’re much more volatile. It can be affected by factors including the nature of market demands, patrons who are likely to be deterred from aerial travel and prefer other travelling means when they hear news of terrorists, engine failures or even thunderstorms[46], etc. This creates obstacles for Qantas. Also, to keep customers happy, they would have to find quick alternative solutions. Competition also affects the prices because as quality is much lower, they substitute this for minimal costs and so Qantas can charge a higher price as seen in fig10.1. There are also many other external factors that can affect pricing which includes petrol prices, volcano eruptions creating smog, or government laws and more.

International airfare prices[47] are determined mainly on competition and demand, while domestic airfares[48] are based on the wide range of internal and external factors[49]. The price elasticity of demand for Qantas services is likely to be relatively elastic in the market as a whole. This is due to the substitutes in the market, and its known volatile behaviour in response to price changes. However, the price elasticity will likely be inelastic to a certain point for those customers who have brand loyalty and travel specifically for Qantas’ services.

Qantas’ approach to price setting is established on the cost-based pricing system. It looks at the level of service and service quality before putting a price and value for customers. Qantas also adjusts their pricing to reward customers through seasonal discounting where during non-peak seasons they reduce their prices to encourage customers to travel. They also offer functional discounts for the intermediaries selling their services to ensure that they promote and sell the services of Qantas to customers. Qantas can make many changes to decrease prices. However, in doing so they would have to substitute price for their quality. Their quality of service is their differentiating factor within the market and is what their target market and customer base their perception of flying with them on.

Distribution Strategy Qantas’ distribution strategy involves making their services accessible anywhere, anytime through an increase in internet services. The quantity of patrons able to fly with Qantas is limited to the size of the plane. However, Qantas are designing aircrafts that have a larger seating capacity to meet these needs[50]. Qantas’ distribution strategy involves the distribution of tickets. The level of market exposure for Qantas is considered intensive within the ‘airline’ market. It aims to expose itself and sell through as many intermediaries who will sell airline tickets as possible.

There are two possible channels of distribution for Qantas. The first is the direct channel, where Qantas directly deals with their customers. This is made possible, when they make flight arrangements with customers online[51] or even through telephone sale centres[52]. The reason Qantas likes to have direct distribution is to maintain their control over their prices. The second is the indirect channel where Qantas channels the sale of tickets through intermediaries such as Flight Centre[53]. Qantas uses these agents to increase convenient locations and to meet the needs of customers more effectively. By channelling the sale of tickets through these intermediaries Qantas can avoid the cost involved with investment in establishing facilities and hiring people.

The business to business relationships established between Qantas and travel agencies complement each other by composing package deals to advertise and sell tickets[54]. While Qantas loses part of their control on sale of tickets, they increase their market exposure by allowing a range of travel agencies to sell their services. The ideal market exposure for Qantas is by selective distribution which means that certain outlets aimed at providing travel services would be able to provide customers with the option of flying with Qantas.

Qantas’ reverse channels deal with product recalls and complaints from customers. Qantas allows customers to cancel their bookings and depending on their circumstances some are able to claim a refund[55]. When their services are made unavailable, Qantas offers their patrons a number of options, including deferring their travels or changes in destinations with the previous ticket, etc. In distributing their services, Qantas is expected to maintain a high and prestigious level of customer service. Qantas flight attendants are expected to undertake training to meet a certain criteria in dealing with customers[56].

Qantas’ overall distribution strategy effectively works for them and opens up many sale opportunities for Qantas. Through direct distribution, Qantas keeps their costs to a minimal by selling tickets online and are able to keep control of their service. By means of indirect distribution, Qantas can channel the sale of their tickets through intermediaries such as Webjet and Flight Centre and while it may cost them to do so in regards to both money and control, it enables them to increase their advertising strategies. Indirect distribution also meets needs of customers more effectively and cuts out establishment costs.

Promotion Strategy Promotion objectives Promotion strategy is also known as “marketing communication”, in which a firm attempts to deliver messages or information to their target market and potential customers. The general purpose of marketing communication in a firm is to influence the behaviour of customers.[57] The major theme of Qantas’ promotional strategies is their slogan, Spirit of Australia.[58] Qantas employs distinct promotional strategies that have push and pull effects, discussed below.

Advertising A large proportion of Qantas’ promotion is through means of advertising. The company has also produced various new television advertisements that include, ‘The Spirit of Tomorrow,’ which advertises their experience, quality service and commitment to customers; and the ‘Airbus’, a new aircraft designed to cater for larger numbers of travellers.[59] The infamous television commercial, ‘I Still Call Australia Home’,[60] along with their kangaroo logo, portrays Qantas as a proud Australian owned company. This influences Australian customers as they are positioned to feel a sense of national pride and are encouraged to support the Australian company.[61]

Networking and communication Embracing current technological trends, the company and customers can connect on the popular social networking programs, ‘Facebook’ and ‘Twitter’.[62] Through these programs, ‘Qantas Travel Insider’ updates customers with new service changes or flight information. This has a pull effect as consumers may wish to enquire about and demand for these services. Qantas also delivers promotional e-mails to appeal to their subscribed customers. [63] Qantas also has a service which allows customers to access and view up-to-date flight information using their mobile phones.[64] This service is efficient and convenient, especially to busy customers.

Sales promotion – Loyalty Programs “Frequent Flyer” and “Qantas Club” are Qantas’ loyalty programs. Customers who join Frequent Flyers can earn points to receive membership benefits such as special offers on flights, gift vouchers and exclusive access to lounges on board.[65] By rewarding members who travel with Qantas on a regular basis, the Frequent Flyer club maintains customer loyalty as they have incentives to travel with their airline. The Qantas Club is a similar system. Members can receive exclusive access to lounges and shows on board, upgrades, priority baggage services and more.[66] These programs appeal to customers who fly frequently; for example, business travellers.