This audit report analyses and evaluates the present performance and strategies implemented by Qantas Airways Ltd. This report also provides suggested recommendations to improve the current strategies used by the company. The appendices include graphs, tables and images that support the findings and recommendations discussed in the report. The relevant market comprises of the internal environment factors which affect the organisation’s ability to serve their customers (company, customers, suppliers and competitors) and external environment which affects the factors of the direct environment (economic, technological, political, legal, and cultural and social environment. In addition, the competitive situation analysis shows that Qantas has the upper hand in competitive advantage within the market. Being a long term participant, their brand power alone is renown and its competitors are faced with high barriers to entry.

The SWOT analysis reveals Qantas should capitalise strengths, take advantage of opportunities, avoid threats and address the weaknesses. To accompany this, Qantas is situated on the borderline of growth and no growth on the GE grid with high business strength and low industry attractiveness. Qantas’ market research requirements can be improved through more effective marketing strategies such as online surveys for Frequent Flyer members to establish destinations of interest they would like to be offered and an opportunity to provide suggestions, and observational research to recognise appropriate times to offer holiday packages or sale prices due to peak and inter-peak times to fly.

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Consumer behaviour issues have given rise to purchasing decisions from their current customers. People are influenced by the price, there are ‘price-sensitive’ customers who only want cheaper airfares. Natural disasters and epidemics also influence the flight services for Qantas. Qantas should aim towards a wider range of customers. Qantas’ primary target segments are domestic business and international business travellers. The reason for selecting these segments to target is because of psychographic factors. Corporate travellers are likely to be willing to spend more on the luxuries. Apart from the core benefit of getting from one location to another, customers who travel with Qantas also experience quality service.

Qantas is a prestigious brand that focuses on quality. The current strategy of Qantas’ product and branding aspect is the slogan ‘Spirit of Australia,’ but from their previous incidents, they need to build their reputation by providing more commitment to safety. They should position themself this way to avoid changes to the perception of the brand name. In regards to pricing, Qantas’ strategy is purely profit based in that they aim to increase profit as much as possible. Internal and external factors influences Qantas’ pricing, however if Qantas decreases their prices they may need to substitute their quality and their quality of service is the reason why their customer base choose to fly with them.

The distribution strategy aims to open up as many sale opportunities at Qantas and allows them to reach their ideal market exposure by operating two channels, the direct and indirect distribution. Current promotional strategies include advertising, sponsorship and networking. The present methods of marketing communication are sufficient and the only improvement is additional research about the expectations of relevant target segments.

Frequent Flyers points maintain customer relationships and allow Qantas to provide extra services for Frequent Flyer members. Qantas should keep their services consistent to all of their customers. Introduction Qantas Airlines Ltd. is an airline company that has renown reputation for quality service and offer premium service experiences on top of the core benefit of aerial travel. In recent times, Qantas faces challenges of competition, natural disasters which cause delays. The performance of the company’s current marketing strategies will be analysed in this report.

Throughout the audit, limitations were encountered. These included the limitation of access to sensitive company information such as their marketing strategies. Additionally, because Qantas offers a service as opposed to a product, the evaluation and analysis was relatively difficult in terms of finding relevant information. Lastly, the constraint faced was because the audit is only based on Qantas’ current strategies. Qantas also have subsidiary companies such as Jetstar and Qantaslink which are not analysed in this report. Therefore, the evaluation of Qantas’ current performance in the relevant market may be influenced.

During the reporting process of this audit, assumptions also were needed to be made. For the purposes of the analysis, it is assumed that Qantas does not currently undertake any form of market research. The following report will evaluate Qantas’ marketing performance and the current strategies used. Relevant Environments Internal Environment The direct market environment includes the forces which directly affect the organisation and their ability to serve their customers. The forces include the company, customers, suppliers, and the competitors of the organisation[1].

Qantas provides transportation of passengers with “a vision to create the world’s best premium and low fares airlines in Qantas and Jetstar“[2]. Qantas’ target market is both business travellers and leisure travellers. Qantas is focused on the quality of their service – business and leisure travellers can afford to pay higher airfares and are willing to pay higher rates because they value quality highly. The suppliers of Qantas include Q Catering – responsible for the in-flight food on Qantas and other airlines (Singapore Airlines, Philippine Airlines, Cathay Pacific, etc.). Competitors facing Qantas include other companies that provide a method of transporting passengers such as domestic airlines (Tiger Airways, Virgin Blue etc.), other methods of transport (boat cruises, driving cars, etc.), and other international airlines (Air New Zealand, etc.).

External Environment The external market environment includes the factors which affect all the forces of the direct market environment. The factors include the economic environment, technological environment, political and legal environment, and cultural and social environment[3]. The key economic concerns for markets include economic development, changes in income, and changes in consumer spending patterns. Qantas was affected by the Global Financial Crisis (GFC). The GFC affected consumer spending patterns and income – the demand for travel declined – causing annual profit to drop from nearly $1 billion to just over $100 million[4]. There was a decline in consumer confidence which reduced spending on luxury items.

The technological environment includes fast pace of change, high research and development budgets, focusing on minor improvements and increased regulation. Qantas has continuously improved the quality of in-flight experience through new add-ons such as in-seat televisions for each passenger on international flights and other sources of entertainment (selection of movies and music). They have recently begun using the new A330-200 aircraft, which is more comfortable and luxurious.

The key trends in the political and legal environment include legislation and enforcement. Legislation and regulations relating to Qantas include: Code of Conduct and Ethics Group Policy, Standards of Conduct Group Policy, Legal Matters Group Policy, Competition Law Compliance Group Policy, Legal Matters Group Policy, and Competition Law Compliance Group Policy and Competition Law Compliance Roadmap. Qantas must also be aware of the regulations and legislations in different states and countries as these will affect their flight times – for instance in Adelaide[5]

...the airport operates 24 hours of the day, but is operationally constrained, particularly to passenger carrying jet aircraft, by a legislated curfew between 2300 and 0600 hours local time. Cultural and social environment include shifts in customer tastes and values. More people have a fear of flying due to events like terrorist attacks. Values in society are also changing and as a result, the perception of luxury is changing among customers. Therefore Qantas could be affected by this – people may no longer value the quality of flights and opt for a less costly alternative.