Commerce on the Airline Industry - Business Plan Example

Sales and Marketing on airline industry Contents Sales and Marketing on airline industry Contents 2 Company Overview 4 SWOT Analysis 4 Strengths 4Weakness 5 Opportunities 5 Threats 6 PESTLE Analysis 6 Political 6 Economical 7 Social 7 Technological 8 Legal 8 Environmental 8 Examples to Support 4Ps 9 Product 9 Place 9 Promotion 10 Price 10 Competitor Analysis 10 Promotion Plan 11 Focus on 4P’s 11 Materials to be Used 12 Chronological Sequence 12 Forecasted Expenses 13 References 14 Company Overview Qatar Airways is one of the most reputed, luxurious and preferred aircraft carriers in the world. With operations started only a decade back, this airline currently covers around more than 100 locations. Qatar acts as the main hub for a hub and spokes kind of a flight network system. It has operations in six continents and as per the Skytrax Industry audit, it has been acknowledged as the best airline for the year 2011. As of the year 2011, the airline has received around 30% growth for route expansion counting on a year on year basis. Its fleet comprises of carriers with the latest technology on board as well as in the cockpit. The vision of the airline was to be the best in the airline industry in terms of service which mainly comprises of on board services and products and superior operational efficiencies and excellence (Qatar Airways, 2012). SWOT Analysis Strengths New addition of 200 new aircrafts to its flight, going to increase the fleet strength and operational capabilities for the airline (Business Line, 2012). Modern technology based fleet reducing CO2 emission in flights, making the fleet eco friendly and thereby reducing the carbon footprint for the business. Ownership rights equally distributed amongst the government and the private sector, thereby having strong support from the government sector. The fuel advantage deriving out of the fact that Qatar lies in the Middle East zone, an area rich in oil reserves. Mode of operations is on a hub and spokes formation, with so many international locations being serviced with Qatar as the hub. Has been voted as the best airline of the year for the year 2011 by Skytrax Weakness The bulk majority of the profits come from servicing international customers. The majority of the business performance is highly dependent on the economies of foreign countries and their related macroeconomic factors, which may trigger a sudden rise and fall of demand. Opportunities Acquisition of new aircrafts in the fleet will lead to an increase in the operational capabilities of the airline and in terms of the number of routes covered. Acquisition of new aircrafts will also lead to an increase in the frequency of operations of the flight on the multiple routes, that are currently serviced by the airline It is assumed that with the increase in frequency of flights, passengers will be able to opt for variable timings due to the increase in number of flights for a particular route. Threats Qatar Airways has been impacted due to the uprising of the Arab Spring and hike in fuel prices. Continued civil disruptions in the Middle East countries coupled with the hike in fuel prices will collaborate to form a dynamic macroeconomic threat factor for the airline and can hamper the airline’s performance and operational efficiencies in its multiple routes in the short as well as in the long term. The global economic slowdown has impacted Qatar airways and it has decided to postpone the IPO offer for the reputed airlines (Arab News, 2012). This will, to some extent hamper the sentiments in the global market and may hamper the reputation of the company for a short term period. The slowdown in the economies of the developed countries of the western world may hamper the profit performance and revenue generation for the state based airline in the years to come. Competition can also rise in the international arena where prominent players like Lufthansa Airlines, British Airways, Emirates and Southwest Airlines are existent strongly in their regional areas PESTLE Analysis Political The entire political situation of the entire Middle East is acting as a threat to the growth and prosperity of Qatar Airways. It has already started to affect the business of the airways through effects of hike in fuel prices as a result of instability in the Middle East region. If this goes unchecked, it will spell more disastrous conditions for the airways’ growth prospects. Economical The global economy is going through a phase of slowdown since the middle of 2011, thanks to the fears arising out of the Euro Zone crisis. As an impact of this slowdown, there has been a significant decline in the amount of profits generated for the current year. Also, there has been a significant amount of slowdown in the amount of air freight movements that has happened over the period of last one year. Also, the civil disturbances happening in connection with the Arab Spring Uprising in the Middle East region is impacting the business of the airways in a negative manner. Social The business of Qatar airways may continue to face a grave danger in the coming days if the continued civil unrest due to the emergence of Arab Spring uprising is not mitigated. Though most of the flights are outward and covers routes for six continents across the globe, but still the social image of the country and the Middle East region is embedded with it. Also, as an upshot of the civil uprising, more severe macroeconomic factors like the hike of oil prices is affecting the business of airline industry. Though Qatar airways has a governmental backing and has a stronghold in the market, but still it is going be affected in the long run. Also, due to the continued civil unrest in the Middle East region, morale of the employees working as on board staff of the airways can be severely hit as their families may come in the path of danger and harm caused by the civil uprising. This will surely take a toll in the image presented by the airways and may hamper the airways social image in the long run. Technological Senior official claim that Qatar Airways employs the latest technology available in the aviation sector for its flights on board, which helps to increase the operational efficiencies and performance of the aircrafts on an overall note. Qatar Airways has recently placed a massive order for an addition of 200 airlines to its existing fleet. This is definitely going to give the state based Middle East carrier a boost in its operational frequencies. Also, due to the usage of latest technology in the aircrafts, it is reducing the carbon dioxide emission in the environment, thereby reducing the carbon footprint for the airways, as claimed by the official of the company. Legal With the airways being owned by the government and the private sector on an equivalent basis, it is assumed that the business operations for the airways are in line with the legal guidelines of the government. Also, since the operations of the airways are spanning over six continents, it has been assumed that such a large scale global operation is handled by paying attention to details of the legal frameworks that are existent in the airline sector in the various countries. Environmental Qatar Airways increasingly uses the latest technology, when it comes to maintenance and handling of its airlines, both on and off the ground. As a matter of fact, this leads to better operational performances by the flights and reduced emissions of carbon dioxide in the environment. This contributes in checking the carbon footprints of the business and reducing the overall impact of the business on the environment. Examples to Support 4Ps Product Qatar Airways is one of the most famous and reputed airlines in the world. Credited with the Airline of the Year award for the year 2011 by the global air travelling mass, it can act as an example to claim that the airline provides excellent service to its passengers and provided high level of customer satisfaction. Also, with its effort to increase the customer satisfaction and to serve them better and provide more flexibility to the passengers to avail the airlines’ services, they have also booked a large number of aircrafts for purchase and which will be delivered to the airline in the next couple of years. This shows that customer satisfaction and customer convenience is in the forefront for staying in the airline business for Qatar Airways. Place The airline is covering six continents across the globe, connecting over 100 locations worldwide. By providing a service of this category, it is has developed a hub and spokes kind of a network system, with the Middle East as the centre. As a matter of fact and evidence, it can be pointed out that this kind of a network system has been established with the main motto to avail the easily accessible low jet fuel in the Middle East. Also, this kind of a network system also highlights that it provides better connectivity to people around the globe by servicing the largest number of routes from the Middle East while availing the advantage of jet fuel at low costs available exclusively in the Middle East. Promotion Qatar Airways promotes its services in an extremely classy and unique manner. They try to advertise the locations by promoting the cultures and specialties associated with that particular country, region or location. They try to advertise the cultural diversities related with that particular region and try to promote the entire region or country as a global tourist spot for luring global masses to that particular location. The recent global campaign promoted by the airways in the year of 2011 in an effort to advertise its routes and services can acts as a point of reference (Marketing Week, 2012). Price In an effort to serve the customers better, Qatar airways have categorized the customers in the basis of their purchasing power parity and provides on board facilities with divisions of Economy class, First Class and Business Class. Needless to say, in order to cater to such a diversified segment of people, the airlines promotes variable pricing for the various kinds of on board categories that are provided to the travellers. Competitor Analysis In the international arena, there are a large number of strong players like Lufthansa Airlines, British Airways, and Southwest Airlines which can compete directly with Qatar Airways. Also, most of these foreign airlines have an additional advantage of not being located or based out of the Middle East. The macroeconomic civil disruptions that are continually happening in regards to the Arab Spring Uprising in the Middle East, poses a significant amount of threat to Qatar Airways. It is also providing a significant amount of benefits to the international players based on foreign locations. On the regional front, there are two very prominent airlines like Etihad Airways and Emirates Airlines which can pose a competition to the growth and business prospect for Qatar Airways. Though the regional competitors are not the major players in the Middle East segments and are facing the same kind of macroeconomic disruptions, yet in the bigger picture, these regional airlines are also eating into the profit of Qatar Airways. Promotion Plan In an effort to make the services provided across the multiple routes by Qatar Airways reach out to a large number of global travellers, a global promotional plan has to be rolled out. The duration for the promotional campaign will be for the next 3 months. The promotional campaign should be targeted towards a growing number of middle class customers all over the globe. Focus on 4P’s Product: The focus for the campaign is to highlight the services offered by Qatar Airways worldwide. Promotion: The promotional campaign should have a target audience all over the globe, with special emphasis on middle class customers around the globe and customers from India and China. Place: The promotions should be carried out in locations all over the world, with special emphasis on emerging economies. Price: Since the main focus of the promotional campaign is to reach out to the middle class customers, it is important to promote a reduced price on the fare charts which will obviously accompany limited benefits on on-board services. Materials to be Used The following materials are to be used for the 3 month long promotional process: Exotic Advertisements highlighting the locations serviced by Qatar Airways Standees to display the reduced fare charts at various travel offices around the globe. Print media ads in travel magazines Travel Blog to promote online followers (Tourism Victoria, 2012). Chronological Sequence To start up with the campaign, it is necessary to highlight the routes covered by Qatar airways across various continents connecting multiple locations. The best way to promote the campaign is by rolling out exclusive and exotic promotional videos highlighting the multiple locations covered by the airlines. To promote the services of the airlines to the middle class customers around the globe, Qatar Airways should also highlight the exotic services offered by the airlines to its travellers and the various benefits related to it. It should focus on the onboard facilities that the customers can get access to, when availing the famed services of the Qatar Airways. Also, in an attempt to gain more support and recognition from the airlines, the airlines should collaborate with various national level travel magazines which have high level of circulation in emerging economies like India and China and provide print media ads. Also, to create interests amongst today’s tech savvy customers, it will be very innovative to come up with a travel blog of its own and promoting the exclusive and exotic factor for every location serviced by the airlines. All the promotional activities should be carried out in a linked up manner over the period of 3 months. Forecasted Expenses Activity Name Projected Expenses Ad Videos For Promotional Purposes $ 1,000,000 Designing and Promotion Of Standees in Travel Offices Worldwide $ 300,000 Collaborating with Travel Magazines $ 100,000 Print Media Ads in Travel Magazines $ 500,000 Maintenance of Travel Blog $ 100,000 Total Projected Expenses $ 2,000,000 References Arab News, 2012. Qatar Airways IPO shelved for up to 8 years; CEO. [Online] Available at: [Accessed 28 April 2012]. Business Line, 2012. Qatar Airways denies ‘unfair advantage. [Online] Available at: [Accessed 28 April 2012]. MarketingWeek, 2012. Qatar Airways rolls out global TV campaign [Online] Available at: [Accessed 30 April 2012]. Qatar Airways, 2012. CEO’s Message. [Online] Available at: [Accessed 28 April 2012]. Tourism Victoria, 2012. Surprise Me campaign. [Online] Available at: [Accessed 30 April 2012]. Read More