Marketing and Innovation: Qantas vs. Virgin Australia Analysis

This report analyzes the marketing and innovation strategies employed by Qantas and Virgin Australia, two prominent airlines in Australia. It explores their price and non-price competition tactics, examining how these companies differentiate themselves in a competitive market. The report highlights the impact of innovation and technology on the airline industry, including the introduction of intelligent personal assistants and economy sleeper classes. It discusses the market share of both airlines and how they have adapted to changing market dynamics. Furthermore, the report provides insights into the competitive landscape and the strategies used by the airlines to maintain a competitive edge. The report references the competitive pricing strategies of the airlines, the non-price competition strategies and how they have been used to ensure customer satisfaction. The impact of technology on the airline industry is also discussed.

Running head: MARKETING AND INNOVATION
Marketing and innovation
Name of student
Name of University
Author note

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Introduction
The topic is based on the marketing and innovation managed by the two most popular
airlines companies in Australia named Qantas and Virgin Australia. The price and non-price
competition strategies followed by these companies and impact of innovation and technology
have been demonstrated here (Ngo and O'Cass 2012).
Price competition strategies
The price competition strategies or competitive pricing strategy has allowed the
organizations Qantas and Virgin Australia to lower the prices of services according to the prices
that have been charged by its competitors in business (Lertpachin, Wingwon and Noithonglek
2013). The service attributes remain same and in order to create sustainability and bring
something new to enter new market, these two companies have followed the competitive pricing
strategy. The profitability margin for Virgin Australia has increased from 1.5 % to 5.6 %. The
cost of services is reduced with improved yields, thereby making VA earn profit, which is much
more than Qantas (virginaustralia.com 2017).
The price competition strategies followed by these two airlines companies have helped in
enabling the products and services delivered to compete in the immensely competitive
marketplace. The competitive pricing allows the customers to judge the two similar kinds of
products based on the pricing and then prefer that one, which is cost effective and reliable. The
increasing competition arises while entering new market segments and expanding services
(Lertpachin, Wingwon and Noithonglek 2013). The need for capital in high and prevent other
new airlines to enter. The cost of switching for customers is low and thus it is essential for the

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companies within the airlines sector to set proper prices of products and services delivered and
ensure satisfaction of customers, thereby gaining a competitive edge over its competitors too
(virginaustralia.com 2017).
Non-price competition strategies
Non-price competition strategy has helped in distinguishing the products and services of
the company from similar services offered by other companies in Australia. The design, brand
name and workmanship are essential components, which can ensure differentiation of products
with ease (Qantas.com 2017). On example showed that due to the immense popularity and
services available at lower prices, Virgin Australia and Qantas as well managed to sell more
services than the generic counterparts despite being expensive.
Virgin Australia has gained 30 percent share of Government and corporate travel market,
because of the enhanced capability to pay attention to services and maintain an aggressive
campaign to handle the Qantas Frequent Flyers to Velocity program (Ngo and O'Cass 2012). On
the other hand, Qantas provides comfort based features like large lunges, in-flight meals, drinks
and other in-flight entertainment services, which has attracted customer and fulfilled their needs
too (virginaustralia.com 2017).
Market share
Virgin Australia used to have a good market share but with time, there have been many
competitors in business. The company did not lose market share to its rivals such as Qantas
despite the soft trading activities. The airlines company has made new features available for
attracting more customers though the shares have fallen 1.5 per cent to 19 cents

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(virginaustralia.com 2017). On the other hand, Qantas has an average of 28 percent passenger
share within the global markets. The company loosest a good amount of market share and the
international traffic has also increased largely. The domestic market share though has
experienced a dip below 40 percent and from various evidences, it can be seen that the average
load factors annually was below 7 percent (Qantas.com 2017).
Technology and innovation
Technology and innovation has brought enormous changes and improvements within the
airlines industry of Australia. There has been introduction of intelligent personal assistant which
can allow customers to gain help and support and even make in-flight payments by using transit
smart cards. Economy sleeper class had been introduced along with other features, which had
sped up the boarding of passengers in the flight (Lertpachin, Wingwon and Noithonglek 2013).
Technology and innovation has brought up newer ways of travelling and created convenience for
passengers and ensure that all their needs and preferences are fulfilled (virginaustralia.com
2017).
Conclusion
The topic discussed all the important aspects of Australian airlines industry including the
marketing strategies, price competition strategies and impact of technology on the business
functioning and deriving good outcomes too. The effective strategies and technological
procedures have helped the two companies to maintain a competitive position and sustain within
the marketplace.

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References
Lertpachin, C., Wingwon, B. and Noithonglek, T., 2013. The effect of marketing focus,
innovation and learning organization on the building of competitive advantages: empirical
evidence from ISO 9000 certified companies. Journal of Strategic Marketing, 21(4), pp.323-331.
Ngo, L.V. and O'Cass, A., 2012. In search of innovation and customer‐related performance
superiority: The role of market orientation, marketing capability, and innovation capability
interactions. Journal of Product Innovation Management, 29(5), pp.861-877.
Qantas.com. (2017). Flights to Australia, New Zealand and Dubai | Qantas UK. [online]
Available at: http://www.qantas.com [Accessed 17 Aug. 2017].
virginaustralia.com. (2017). Virgin Australia | Book flights & holidays with Virgin Australia.
[online] Available at: http://www.virginaustralia.com [Accessed 17 Aug. 2017].