Marketing Audit: External as well as the Internal Environment

Marketing Audit: External as well as the Internal Environment

Marketing Audit helps the organization to look into the External as well as the Internal Environment. The audit helps the enterprise to know where the organization is & where it wants to be in near future.According to Philip Kotler – “Marketing audit is a comprehensive, systematic, independent, and periodic examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance”.

For step one in the marketing planning process Qantas uses a SWOT analysis in order to see opportunities and threats and well as acknowledging where the business is now and taking on change to create a vision for the future. At the moment Qantas is in the maturity stage of the product life cycle. Therefore business is seeing a loss of sales, increase in competition and also consumer’s choice. The business has launched their A380 which has 4 classes and has increased competition, they have online check in to reduce check in time, they have upgraded their lounges and entertainment system as well as decreasing their prices in order to attract more customers. Jetstar, which was introduced in 2004, is currently in the growth stage. Therefore Qantas sees profits increasing as well as sales. Jetstar has encouraged brand loyalty as well as providing 10% off if customers find a cheaper route, they have expanded and purchased routes which will increase profits as well as competition.Qantas has made up a SWOT, which helps them see clearly where the business is. The strengths that Qantas has seen include the successful launch of Jetstar, have a successful fuel hedging program, have received skytrax awards, have an extensive network and dominate 66% of domestic shares of the total domestic market. Qantas has many strengths that favour them however they do suffer from more than a few weaknesses. Weaknesses include ongoing disputes between Qantas management and unions, the business has a high labour operating costs compared to their competitors, suffer from the high risk nature of airlines as this weakness results in very high insurance premiums and recently Qantas’s safety has decreased. Opportunities that Qantas have gained is the expansion of Jetstar international routes however the airline does not fly to the US or Europe, further developed their strategic alliances, have taken advantage of the aviation growth in the Asia Pacific and they have continued to make more effect aircrafts. Threats that Qantas face include their latest drop in the domestic/international economy which was 88%, competitors have increased for Qantas in both the domestic and international routes and the price of fuel has increased.Step 2 of the marketing planning process involves the business to establish market objectives. A market objective is a statement of what is to be achieved through the marketing activities. The business needs to make sure that they have clear objectives in order for the marketing plan to be effective. Creating these objectives is the most crucial part in the overall marketing planning process.  It is important that business make their objectives SMART, which means that they will be realistic and the business will be able to measure if they achieved their specific objective.

At Qantas their main marketing objective is to make a profit. The business is unable to function if no profits are made. As well as this main marketing objective Qantas has many other objectives. They plan to increase sales of passenger tickets both domestically and internationally, they want to improve efficiency across all areas of business, want to see maintenance of market share increase by 65%, they plan to extend geographical representation by sourcing new routes and deleting those that are unprofitable, want to enter into a strategic alliance and gain the marketing benefits of belonging to one of these as well as creating and sustaining customer awareness. Qantas marketing objectives are not SMART and they are quite varied. Only one of the objectives has a measure however it does not contain a time frame. Qantas’s marketing objectives need to be specific, measurable, attainable, realistic and timely and not one of their objectives has all 5 of these goals. By having SMART objectives the business will be able to set a realistic objective and then will be able to assess it after the time frame is over and see if they achieved what they wanted to, otherwise Qantas will not be able to see what they need to specifically achieve.Step 2 of the marketing planning process involves the business to establish market objectives. A market objective is a statement of what is to be achieved through the marketing activities. The business needs to make sure that they have clear objectives in order for the marketing plan to be effective. Creating these objectives is the most crucial part in the overall marketing planning process.  It is important that business make their objectives SMART, which means that they will be realistic and the business will be able to measure if they achieved their specific objective.

At Qantas their main marketing objective is to make a profit. The business is unable to function if no profits are made. As well as this main marketing objective Qantas has many other objectives. They plan to increase sales of passenger tickets both domestically and internationally, they want to improve efficiency across all areas of business, want to see maintenance of market share increase by 65%, they plan to extend geographical representation by sourcing new routes and deleting those that are unprofitable, want to enter into a strategic alliance and gain the marketing benefits of belonging to one of these as well as creating and sustaining customer awareness. Qantas marketing objectives are not SMART and they are quite varied. Only one of the objectives has a measure however it does not contain a time frame. Qantas’s marketing objectives need to be specific, measurable, attainable, realistic and timely and not one of their objectives has all 5 of these goals. By having SMART objectives the business will be able to set a realistic objective and then will be able to assess it after the time frame is over and see if they achieved what they wanted to, otherwise Qantas will not be able to see what they need to specifically achieve.

The third step in the marketing planning process is the need to identify the businesses target market. A target market is a group of customers that share one or more characteristics and the business will intend to sell their product to that specific group of customers. Once a business identifies their target market they are able to concentrate on their marketing activities towards the specific group. Firstly business owners needs to do to some basic research in order to identify their customer’s needs in order to tailor stock and service standards to the groups expectations. The owners may gather this data through questionnaires, informal interviews with potential customers as well as written interviews. The marketing managers then segment the total market according to four main variables which include demographic, geographic, psychographic and product related.Qantas has segmented their target markets into the four common variables. It must be acknowledged that Qantas has two distinct markets for both Qantas and Jetstar. Qantas has identified their target markets age, gender, occupation and social class as well as other demographic components. Qantas has aimed their aviation services towards corporate and business clients, who maintain a fly buys card and is directed towards wealthier customers, typically the middle class. Jetstar is directed towards low income earners which is great for customers who are on a budget and do not require the prestige aviation service. The second variable that Qantas has identified is the geographic element. Qantas has set up domestic and international fliers with alliance partners therefore Qantas can access a greater range of people. Jetstar offers low yielding leisure routes and is aimed for customers who use the service for holiday’s purposes rather than business commitments. Qantas’s psychographic variable states that the business has great track record as well as great safety which ultimately sums up the personality of the business. The fourth variable that Qantas has identified includes rewards to those customers who are loyal or who use the service more than once and by Qantas offering initiatives such as frequent flyer and Qantas club lounge ensures that the business is being loyal towards their customers.The fourth step of the marketing planning process involves the business to develop marketing strategies. Marketing strategies are plans that outline how a business will use its resources to achieve its marketing objectives. In order for a business to reach their target market they need to be able to manage their product, price, place and promotion. These four strategies form the marketing mix. Once they have been identified the business will need to determine how much emphasis they will put on each of these 4 p’s, which will largely be determined by where the product is poisoned or its stage in the product life cycle. The marketing mix can be altered by making changes to one or more of the four marketing strategies. Some businesses may find they need to adopt one marketing mix which is based at one of their target markets and then they will need to use another marketing mix to reach another target market. A business will need to segment the market in order to direct their marketing strategies to a specific group of people rather than directly it to the whole market. By doing this a business is able to satisfy the wants and needs of a targeted group. The business needs to be able to brand their product. Brand name can be a powerful marketing tool and can consist of a name, term, symbol, design or combinations of any of these that identifies the product and sets it apart from its competitors. Another key element to marketing strategies is the use of packaging, which involves the development of a container and the graphic design for a product. Well designed packaging will give positive impression of the product and will attract first time users, however marketing managers need to be sensitive towards the environment.

The first element of the marketing mix is product. Business owners need to determine the quality, design, name, warranty and guarantee, packaging, labelling as well as exclusive features for the particular product. Customers feel inclined to buy the product when the product will offer them a number of intangible benefits including feeling secure and safe with the prestige product.Qantas have established their 4 p’s and over time alterations are made to the marketing mix by varying one or more of the marketing strategies. The product strategies that Qantas has adopted include branding, packaging, range and positioning. Qantas has come up with a successful brand name and flying kangaroo symbol and logo that is acknowledged all over the world. Jetstar’s branding consists of an orange and silver logo which reflects the modern image. In regards to packaging Qantas offers their newly updated lounges to customers, their inflight meals as well as mobile and internet service which on the flight. Qantas have also formed strategic alliance across the globe which provides many benefits towards the airline. Jetstar’s packing offers low cost airfares domestically as well as flights to the Asian region. Qantas airlines offer a range of classes to customers, they consist of first, business premium economy and economy class. Jetstar offers star class as well as the economy class. Qantas is positioned as premium and is directed towards the corporate and business market, whereas Jetstar is poisoned as a no frills carrier directed towards people on budgets and competes one on one with Virgin Blue.The second element of the marketing mix is the price of the product. Often business owners have difficulty when selecting the right price for the particular product. A high price will only lead to a loss in sales and setting the price to low will give customers the opinion that the product is ‘cheap’. It is essential that owners set the correct price. Pricing methods are based on cost, market or competition. Pricing strategies that business can adopt include price skimming, penetration, loss leader and price points

Qantas uses a number of pricing strategies and methods. Qantas methods include the use of a cost plus margin which helps the owners determine the cost of production and then add a bit more onto the price in order to make a profit. Qantas managers and owners look at their competitors pricing. If Qantas’s prices are more than their competitors it is likely that customers will use the competitor rather than Qantas. The demand for aviation will match the price of tickets. At the moment demands are low therefore prices are low in order to attract customers. When Jetstar was established in 2004 Qantas used a loss leader method which involved selling 100000 tickets for only $49 and then again in 2009 when Tiger was introduced Jetstar sold tickets for $19 for Sydney to Melbourne in order to exceed the sales of Tiger airline.  Jetstar will match competition by 10% is a customer finds a cheaper route. One pricing strategy that Qantas uses for their pricing is price skimming. In price skimming Qantas sets their prices high in order to attract to the premium and wealthier end of the market. Another pricing strategy that Qantas uses is the use of price points. As Jetstar is a no frills airline they have set prices for luggage, there is a certain price if you have no luggage and then another price if you are carrying 20kg.

The third element in the marketing mix is promotion. This involves the business to inform, persuade and remind customers about their product. Main forms of promotion include personal selling, advertising, below the line promotion and public relations.

Qantas uses more than one form of promotion. Firstly they use a below the line strategy which involves the airline aiming their service to a mass market. Therefore the business promotes their service through mixed media advertising in order for them so generate sales and create awareness of their product. Qantas has access to some well recognises people. Qantas uses John Travolta in order to promote their service as well as Jetstar using Magda Zubanski to endorse flights. Qantas sponsors the wallabies whilst Jetstar sponsors the Gold Coast Titans. Qantas uses one of the main forms of promotion which is personal selling. They do this through travel agents as well as online wholesalers and Qantas holidays. Qantas uses a below the line sales promotion strategy, which involves the business to offer sales such as 2 for 1, kids fly free and match and beat the competitor by 10%. The last form of promotion that Qantas uses is public relations which involve the business to be a part of press conferences and interviews as well as appear in featured articles.The final element in the marketing mix is the placement of the product.  This element deals with the distribution of the good or service and consists of two parts. The first part is the distribution and storage of the finished product. The second part involves the business owner to make a decision about how many intermediaries will be involved in the distribution of the product. The number of intermediaries chosen will determine how widely the good or service will be distributed.

Qantas’s distribution is achieved directly and indirectly. The distribution that is achieved through directly includes sales of flights and holiday packages and they do this through retail outlets. Retail outlets consist of Qantas travel centres, Qantas holidays, telephone sales centres, airport tickets and the internet. Jetstar’s sales are 90% online. The use of distribution that is done indirectly include the use of intermediaries and selective channels. This includes the use of travel agents, American express which is responsible for majority of bookings and ticket sales for Qantas however this is not good for Qantas because commissions reduce their revenue.

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