Qatar Airways Marketing Strategy

Qatar Airways marketing StrategyAbstractThe respiratory tract constancy has been known to be volatile and competitive. It is volatile in the sense that any negative news either from the attend tos such as air mishap, economic downturn, perceived affright of terrorism, the potential outbreak of the birdflu virus or the factors of harvest-feastion like rise in prices of crude oil impacts negatively on the strategic position of each of the players in the industry be it market leader, fol first baseer or challenger.The case of disconnect States (Countries) such as Bahrain, Iran, Qatar, UAE, Oman, Kuwait, Saudi Arabia to mention just a a few(prenominal) calls for closer attention. This is because the so Gulf states are have the resources and capabilities to compete in all the four fronts of marketing mix which is often referred as the 4Ps of People, Price, Place, Promotion. In ordering to wean their economies away from declining oil reserves some Middle easterly countries pursue substantial investments into their aviation sector. The bulk of these investments concentrates on the United Arab Emirates and Qatar and comprises fleet expansions stoked by massive airport extensions and development projects. The million dollar question is how Qatar airways can turn its fortune from being a market follower in the Gulf air duct industry to a leader. In this academic work withal, we would use the following framework for evaluating and writingCustomers Who are the organizations customers?Products/services What are the organizations major products or services?Location/markets Where does the organization compete?Technology Is technology a primary concern of the organization?Concern for survival, growth and profitability Is the organization commit to economic objectives?Philosophy What are the basic beliefs, values, aspirations, and philosophical priorities of the firm?Self-concept What is the organizations distinctive competence or major competitive advantage?1.0 Int roductionThe airline industry has grown to be one of be one of the largest industries in half century of its existence. Its origin could be deduced from the end of World war get along l merely it was not until World War II that saw peace restored cosmopolitan that accounted for the burgeoning of the crinkle. Statistics have it that the industry often airlift more than 1.5 billion industry worldwide and generates more than $ 300 billion in taxation and employ 1.7 million people worldwide (Hanlon Pg 1,2006). Good to note is the fact that the post World War II airline industry are dominated by state owned airlines known as Flag Carriers and the government which owned them often employ them as instruments to further their mercantilist interests or to promote their countries status, power and prestige. Airline course in the Gulf States is often associated with government (Hanlon Pg 2, 2006). Government desire to protect ease up carriers often lead to artificial market, in which t he profitability of the airlines were determined more by the competitors that are allowed to fly the route rather the forces of quality and pricing.Airlines suited in the Middle tocopherol currently hold 9% of long haul capacity worldwide. They will be responsible for about 25% of all global long haul aircraft deliveries over the next decade (Flagnagan, 2006). Dubai based emirates airlines accounts for the largest buyer, which approximately 70% of all new long-haul aircraft orders in the Middle East. Some airline commentators yell that come 2012, the airline would double its fleet (Flagnagan, 2006). After Emirates come Qatar airlines. The airline has placed an order of 140 wide body aircraft. The expansion plans of the gulf airline operators are shown in Fig 1 withinQatar airways just like some opposite airlines in the Gulf States is part of the government strategy to diversify its revenue base, economies, commerce, tourism and global transport importance. The airline has a ric h mission statement which is Excellence in everything we do. According to a survey carried out by Pearce and David (1987) to analyze the mission contents of airline companies, the mission, it showed that Qatars mission statement is one of the best in the world. Amongst 9 points, it has 6 points.Fleet expansion plans of Middle Eastern carriers (as March 2008). Source Journal of Transport Geography 18 (2008) 388-3943.0 Current Marketing Mix of Qatar Airways3.1.1 Product StrategyNew ProductsExisting ProductsServices is defined as involving one party crack something that is essentially intangible and where the interaction does not result in ownership of anything (Kotler, 2008). Applying Ansoff product grid matrix, it can be verbalize that Qatar airlines is tranquillise in market penetration. This is because the airline as was shown in the introductory section of the work, has projected the number of aircraft it wish to buy before 2012. The attributes of a community in growth stage o f company life cycle is expansionary qualities.Existing MarketMarketPenetrationProductDevelopmentNew MarketMarketDevelopmentDiversificationansoffs product / market matrixThe attributes of market penetration strategy in which Qatar airways are using includeMaintain or addition the market share of current products this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources devote to personal selling As part of this growth plan, Qatar Airways will extend its route network to 50 destinations by the end of 2003. It has recently added Manchester and Rome to its increase route network. It will soon be adding Shanghai, Seoul and Tripoli to its route network. (Airhighways Magazine, 2005, p. 1).Secure dominance of growth markets. Qatar airlines have been known to dominate the ever reside African- Middle east air routes. The company always has some flights available from any part of Africa to the Gulf States. The topology of the area has encouraged the airline to interlock in product penetration strategy of Ansoff product grid. Its sparsely populated area has encouraged move aroundling by air for intra-regional transport. Furthermore, a high per capita income that is steady increasing quickly, offers a base for a strong aviation industry. But there are socio-economic constraints, limiting both domestic leisure and business travel potential.Increase usage by existing customers for example by introducing loyalty schemes .A market penetration marketing strategy is very more about business as usual. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer take. It is unlikely, therefore, that this strategy will require much investment in new market research. There is no evidence that Qatar airways is investing on market research because they are not expanding into unknown routes such as Kula-lumpur Sydney route.3.1.2 Pric ing Strategy Going-rate-pricing strategyPresently Qatar airline practice what is called Going-rate-pricing strategy. The market leader in the middle- east airline industry remains Emirates. Qatar charges its fare based on the price of Emirates which is slightly higher. This is because being the market follower, Qatar does not need to disturb the established market dynamism because it business leader not be able to compete on the equivalent take aim with Emirates.Comparing the price of Qatar and Emirates, on the same route of Kuala-lumpur (Malaysia) Johannesburg ( South Africa)Price of Qatar on 21st Nov return on 23rd Dec from Kuala-Lumpur to JohannesburgPrice of Qatar on 21st Nov returning on 23rd Dec from Kuala-Lumpur to Johannesburg3.1.3 Promotion StrategyQatar airlines are not practicing product differentiation but it is practicing promotion differentiation. According to its chief Executive Officer Akbar Al Baker he said that Qatar By offering a multifariousness of enterta inment options, we are able to differentiate our passenger service through live entertainment programming while also setting new standards of relaxation to ensure we are the airline of choice (Rockwell Collins, 2005, p. 1). Some of their promotion strategies are as listed below and experienced by its passengers are asBiggest and best business figure in the Middle EastInteractive Audio, Video on Demand Entertainment SystemLargest personal TV screens in the Middle EastElectronic seat controlsIn-seat back massageFirst Middle East airline in First Class with flat bedsQatar has engaged the services of orbiculate media industries to help spread the good news. Such internal media includeTVCorporate VideosBBC Campaign to position it as a premium carrierCNN testimonials from airline staffSky News reports as a browse of the weather serviceSponsors a travel show through Al-JazeeraQatar is a major sponsor of high profile sporting activities such as World Tourism Day, WorldTravel and Tourism Council Summit, World Economic Forum, Leading International sports events. Qatar airlines was the semiofficial sponsor of 15th Asian Games, Doha 2006. The company has come up with a new product called Flying bezoar goat Newsletter that it distributes to travel agents. The newsletter is also available through its websites. More links could be established to the newsletter through the Internet. The airlines also give away products to passengers that promote the logo of the Burgundy Oryx and Taking you personally, such as watches, computermice and hand towels.3.1.3 Place StrategyThis places a little impact on the business strategy of Qatar. Qatar airways like any other airways have developed a system of getting their ticket. Unlike the normal businesses, whose distribution channel goes from the manufacturer wholesaler-retailer-consumer. The normal business cycle Qatar airline and other airways are from the airline operators to consumers when online booking is done or through travele r agent.Airline operatorAirline operatorManufacturerWholesalerConsumerTravelling ingredientRetailerConsumerConsumerTraditional Supply channel Online booking channel intermediary booking channel4.0 MARKET ANALYSIS4.1 Qatar current marketQatar airways is one of the confidential information airline industry in the gulf states. There is no hiding from the fact that Qatar airways is manakining on the booming market of Dubai to feed the ever expeditious Dubai route. Qatar currently targets those customers who considers Emirates too expensive. Those that want a little bit high quality and class at an affordable price. Qatar market can be divided up into two as followsGeographic SegmentationQatar Airways is currently operating in most of the regions of the world.They are displayly hoping to expand their routes to include the south pacific routes of Australia and its neighbouring countries. Qatar Airways is a dynamic, high service carrier, which utilises the geographic location of its Middle Eastern hub to link 72 international cities. From the UK the airline operates regular services from London Heathrow, London Gatwick and Manchester to Doha. forwards connections are available to cities including Dhaka, Ahmedabad (coming soon), Chennai, Delhi, Hyderabad, Cochin, Mumbai, Nagpur (coming soon), Trivandrum, Mal, Kathmandu, Islamabad, Karachi, Lahore, Peshawar, Colombo, Denpasar, Jakarta, Kuala Lumpur, Myanmar, Yangon, Cebu, Manila, Singapore, Bangkok, Ho Chi Minh City, Bahrain, Mashad, Tehran, Amman, Kuwait City, Beirut, Muscat, Dammam/Dhahran, Jeddah, Riyadh, Damascus, Abu Dhabi, Dubai, and Sanaa,Bangkok,Hong Kong, Singapore, Kuala Lumpur, Manila, Cebu, Nairobi, Johannesburg and the Seychelles. Qatar Airways entering the US market with flights to New York and Washington, DC direct from the airlines hub in Doha, capital of the State of Qatardemographic SegmentationBelow is the demographic basis for the market segmentation for Qatar airwaysDemographicVariablesBreak downSexMale FemaleAgeUnder 12 13-25 26-40 41-55 55 +Income (monthly)USD 300.00 and overReligionMuslims (Halal status) Non-Muslims (Non-Halal status)EducationDesigned for5.0 STRATEGIC ANALYSIS (SWOT analysis)SWOT analysis helps to explore the internal and external environmental factors affecting Qatar Airways and hence alter us to make strategic decisions (Aaker, 2005). The recommended strategies that would be adopted in this paper would be based on the on the SWOT analysis of the company.External psychoanalysisStrategic decisionsWhere to compete?How to compete?IdentificationTrends/Future eventsThreats/OpportunitiesStrategic uncertaintiesHow to compete?AnalysisInformation-Need areasScenario AnalysisInternal AnalysisSource Adapted and modified from Aaker, D. A (1998), Strategic Market Management, 5th Edition, John Wiley Sons, Inc., USA, p 405.1 INTERNAL ANALYSISStrengthWeaknessBrand RecognitionThe airline has been able to build a strong brand that was described by Kelly Kaur, Marke ting Director, as getting to know the audience and using communication to build loyalty, stimulate desire, make out confidence and build awareness.ConsistencyThe airline has been noted for offering consistence services which was one of the criteria that enabled it to get a FIVE champ RATING.FIVE STAR RATINGQatar Airways is just one of the few airlines in the world ranked Five Star by Skytrax, the independent aviation industry monitoring agency. The same organization Skytrax also named Qatar Airways cabin crew as Best in the Middle East for the third year running and fifth best in the world, following a survey of more than 12 million passengers worldwide. (World Economic Forum, n.d., p. 1).Qatar Airways are the proud winners of the TTG Travel Awards 2009 Airline of the year. In recognition of the world class service and their commitment to offer only the best to over 80 destinations worldwideNumerous FlightsThe airline currently operates a fleet of 42 all-Airbus aircraft, which is judge to triple in size to 110 aircraft by 2015.Qatar Airways recently made an agreement to buy up to 60 of the new generation Airbus A350s. The airline also plans to acquire 20 Boeing 777s,with a total value for both orders set to be worth US$ 15.2 billionAgeMany still accept that Qatar cannot maintain their high standard for a very long time because they are not too experienced in the industry.ArabizationMany people still believe that the airline is Arab based because of their Logo. Qatar Airways logo uses an animal (Arabian oryx) that may be familiar to people in the Arabian Gulf, but not to people outdoors the region.National CarrierHistory has shown that most national does not last and they are often abused by the government. People would love to invest so that they can control or have shares in the business but thats not the case here.5.2 EXTERNAL ANALYSISOPPORTUNITIESTHREATSBooming tourism industryThe present surge in tourism in the gulf states is plus for the company to expand its business capacity.ImageThe Airlines has gained some reputation in the region and in Europe and its other sitesStrategic adhesionsThe airline has the reputation of forming strategic alliances with some airline operators in the pacific rim. This can be done either via isobilateral with the respective government.TerrorismThe incident of 9/11 is a wheel in the spanner of most airline industry. It has greatly reduced the ability of airline operators to attract some frequent fliers.New EntrantsThere is possibility of new entrants to the market especially Etihad. Etihad has the financial capacity to compete on the same level with QatarVolatilityThe industry itself is known to exhibit high volatility. This may be in the form of fuel price, technology change or epidemic and instinctive disasters.6.0 PROJECT RECOMMENDATION STRATEGIES6.1. Market penetration via new productsLow costQatar airways have the leverage to engage in more competitive prices that what they are offering pr esently. They should borrow a leave from what Qantas did. Qantas came up with a low cost carrier called JETSTAR. The low cost strategy can compete in the low cost flight category of the airline industry while the parent company keeps their normal standard.AlliancesQatar airways have the brand image to form strategic alliances with many similar airlines where they can get the benefits of economics of scale. This might come in the form choosing one airline company in the continent to form a loop. They might borrow a look from what Singapore airlines deed as shown below.SingaporeAirlinesAir New ZealandStar AllianceDinners ClubAvisSingapore Airlines alliance network strategic alliance, follower ( Kotler Pg 812, 2008)6.2 Maximizing sales revenueReduction of booking agentsCommissions and other incentives to sales staff add to the operational cost of the company. These be either passed on to the customers or absorbed by the organization lowers the margins of the company. The company shoul d come up with a structure of appointing GSA (General Sales Agent) in major cities and towns. They might even pass it to the post office to sale for them since they post office has their fixed cost already running.Web Friendly SiteThe company should as a matter of urgency design a friendly user web site. Their current web site is not user friendly. They should borrow a cue at Airasia website. Airasia website is fast, user friendly and updates every minutes. This has greatly encouraged customers to use the web more frequently than physical office space thereby limiting people or place contacts to the barest minimum.7.0 ConclusionIn its relatively few years of operation has shown that they can ranked amongst the best in service delivery. They have grown from a small company to a major player in the airline industry. They have put in place lead management principle and good chief executive Akbar Al Baker believed his airline was leaking significant amounts of revenue. A series of shor t diagnostic exercises confirmed his hunches needs continuous improvement.The company has adopted a relatively moderate marketing mix by targeting its customers, positioning the company World Class Young, but evolution fast Forward Thinking, open-minded On-time, Clean image Friendly/helpful/warm/hospitable airline. The People is good, Price affordable, Place great and Promotion best.