Marketing Plan

Contents

Contents 2

Introduction / Executive Summary 3

COMPETITOR ANALYSIS - Domestic: Qantas, Jetstar, Virgin Blue 3

The components of competitor analysis 3

Assess competitors' current and future objectives 4

Assess competitors' current strategy: 4

Assess competitors' resource profile 4

Predict competitors' future strategies: 6

CUSTOMER ANALYSIS - Domestic: Qantas, Jetstar, Virgin Blue 8

Case Study 13

Conclusion 13

Reference List 15

Introduction / Executive Summary

COMPETITOR ANALYSIS:

Something here about the international airline industry. State that we are comparing SIA and Qantas only.

The domestic airline industry has become a competitive and growing market Australia wide. Since its conception in 2000, Virgin Blue has attracted attention and met with fierce rivalry from Qantas Domestic Airlines (Qantas) in the form of Jetstar, a low cost airline aimed at the "no-frills" market segment. Although wholly owned by Qantas, Jetstar is operated and managed separately to the Qantas business.

Qantas provides a two-class, full service while Jetstar and Virgin Blue (Virgin) offer a low cost, no-frills alternative. Prior to Virgin, the Australian domestic airline industry was over-priced, hence the market for a low cost point-to-point airline. Partly due to the inability of Compass to access scarce terminal resources and Ansett's failure, Virgin saw an opportunity and gained better access to terminals, provoking Qantas to respond. In this case, Qantas implemented a "straddling" business model, whereby companies copy the new model (i.e. Virgin) and run it as a separate business (i.e. Jetstar) while retaining the existing model Qantas. (Kerin, 2005)

A little bit here about Qantas v's SIA on international level........

According to Swain (1993) , competitor benchmarking is the process of measuring your company's strategies and operations against 'best-in-class' companies. (Hooley, 2004) . Qantas basically imitated the no-frills, low-cost culture of Virgin to create Jetstar. (something about SIA) In order to fully understand competitors, Lehmann and Winer (1991) have suggested that four main stages are paramount in assessing them, as below:

The components of competitor analysis

the reference for this please (Hooley, 2004, p208)

Assess competitors' current and future objectives

Qantas is one of Australia's strongest brands and its Kangaroo symbol has remained one of Australia's most iconic symbols for over six decades. Qantas' objectives are to provide high service standards and excellent safety. It co-ordinates its network with Jetstar to provide the best mix of product and service. This has given the Qantas Group (Qantas, Jetstar, QantasLink- [Regional]) 65% share of the total domestic market. (Qantas Annual Report (QAR) 2005) .

Virgin is Australia's leading low-cost carrier with 30% of the domestic market. Its competitive advantage is its excellent customer and low cost service. Its current objectives are to service the corporate sector with new services. (Virgin Annual Report (VAR) 2005) .

New entrant, Jetstar has performed remarkably well against the dominant Virgin. It became the lowest cost carrier in 2005, with 7.62 cents per ASK (Available Seat per Kilometre). (QAR 2005) . JS current and future objectives are to increase share of the no frills market will maintaining its low cost culture.

Something about SIA here.

Assess competitors' current strategy:

Qantas' strategy is to further improve its domestic service i.e. extended use of mobile phones in the air, increased dining options and gourmet snacks. (QAR 2005) .

Virgin's strategy is to attract more business travellers through services like 'Web Check-in' that allow passengers to check in from home/office via the Internet, prior to arrival. Airlines no longer rely solely on agents for ticket distribution. (Ferguson 2006) They have also introduced 'Blue Check kiosks' and "Velocity" reward programme to compete with Qantas.

Something about SIA here.

Assess competitors' resource profile

Objectives and strategies provide companies with a vision and goals to pursue; however resources are required to implement them.

Airlines now pursue customer loyalty for the crucial competitive advantage. (Krishnamurthi et al, 1991) Offering high quality services that increase customer satisfaction is the bridge to customer trust and loyalty. (Bruhn and Grund, 2000; Sharma, 2003) .

Singapore Airlines (SIA) is established as an industry leader in providing high quality services to its customer base. (SIA Annual Report 2005, 2004)

Qantas competes heavily with SIA and have spent $385m on improving international business class and other services for customers i.e. 'Skybed sleeper'. (Qantas Annual Report 2005, 2004; Qantas Media Release, March 2006)

Virgin is a low budget carrier with major brand power and is expanding its services to gain some of the business market. (Virgin Blue Annual Report 2005)

Both SIA and Qantas are well financed, with SIA clearly ahead of Qantas as follows:

2005 SIA Qantas Virgin

Cashflow $3.99 billion $1.95 billion

Net profit $1.355 billion $0.7636 billion $0.105 billion

Total assets valued at $21.8396 billion $18.1344

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