Fundamentals of Marketing Report: Qantas Airways Market Assessment

This report provides a comprehensive market analysis of Qantas Airways, the flag carrier of Australia. It begins with an introduction outlining the report's objectives, which include examining Qantas's micro and macro environments, customer segments, and current market position. The report then offers an overview of Qantas Airways, detailing its history, operational hubs, and focus on global customer service. The core of the analysis uses Porter's Five Forces to assess the microenvironment, examining the threats of new entrants, bargaining power of suppliers and buyers, threat of substitutes, and rivalry among existing firms. The macroenvironment is analyzed using a PESTLE framework, covering political, economic, social, technological, environmental, and legal factors influencing the airline's operations. The report also delves into Qantas's market segmentation, identifying key customer groups based on psychographic, behavioral, geographic, and demographic variables. Finally, the report assesses Qantas's current market position, highlighting the competitive landscape and challenges faced by the airline.

Running head: FUNDAMENTALS OF MARKETING
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Name of the Student
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Author Note

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Introduction
The main aim of this paper will be to discuss the present market situation that are faced
by the organization of Qantas Airways. A thorough analysis will be done on the selected
organization, where the micro as well as the macro environment in context of Qantas Airways
will be performed. The various customer segments of this particular organization will also be
analyzed in this paper, which also involve the identification of the targeted customers who are
avail the wide services of the organization of Qantas Airways or may be targeted for future
purposes. The current market position that the organization is holding in the market places where
they are performing will also be analyzed here.
About the Organization
Qantas Airways Limited was founded in the year 1920, and started their business
operations in the year 1921. They are the flag carrier of the nation of Australia and in this context
it can be stated that they are the largest aviation company in terms of fleet size along with
international destinations and international flights (qantas.com 2020). Qantas Airways is the
third oldest aviation company across the world, just after the companies of KLM Royal Dutch
Airlines and Avianca S.A. At present, the major hubs through where the fleet is operated are
Melbourne Airport, Brisbane Airport and Sydney Airport. These are the primary hubs, whereas
the secondary hubs are Perth Airport and Adelaide Airport. The management of this organization
is focused enough to serve the global customers, which they are doing for almost 100 years. The
continued success of this business entity depends on the combination of daily operational
excellence and scanning the globe, through which the management is able to identify the specific
requirements of the people and serve them the wide array of services through unique and

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innovative ways in order to satisfy the needs and requirements of the people. The full form of
this business entity is Queensland and Northern Territory Aerial Services Ltd. The management
is successfully enjoying their Centenary Celebrations as the Spirit of Australia in this year, with
aiming to dream bigger, creating a brighter future and flying the Australians as well as the nation
of Australia to further through their overall business operations (Law and Breznik 2018).
Throughout their journey, Qantas Airways were pioneer in operating first non-stop flight in
between Europe and Australia. They successfully help to fly more than 50 million passengers
across the world within a year.
Environmental Analysis
Micro Environment
Here the micro environmental analysis will be done, which will analysis the business
environment with the help of Porte’s Five Forces, which is described as follows:

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Fig 1: Porter’s 5 Forces of Qantas Airways
Source: Created by the Author
Threat of New Entrants
The threat of new entry is low for Qantas Airways, as it can be noted in this context that
it requires huge amount of money as investment, as aviation companies require lots of
investment in infrastructure that is required by an airline organization which is difficult to
perform. As aviation industry is fully based on technological aspects a lot, it will also require a
huge investment. The competitive advantage is, thus, enjoyed by the management of this
business entity over the rival institutions like Air India, Singapore Airlines, Etihad Airways,
Emirates and others.

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Bargaining Power of Suppliers
The bargaining power that is faced by Qantas Airways is also low, as there are many
suppliers who are present in the global market place and offer similar kind of services. It is also
low as there are many aviation businesses houses who present in the market places where Qantas
Airways operate. They purchase their raw materials from various suppliers, but it can be noted in
this context that the high bargaining power of the suppliers reduces the overall profitability of the
company of Qantas Airways.
Bargaining Power of Buyers
The bargaining power of the buyers is high, as there are lots of options available in the
services that are offered by the aviation industries, like low cost air travelling services, premium
class air travelling services and others. The buyers or the passengers most of the times want the
best services by paying lesser amount of money, which puts pressure on the long-term
profitability of the organization of Qantas Airways. Increase in the customer base of this
company will reduce the bargaining power of the customers and will also increase the
profitability of this business house.
Threat of Substitutes
The threat of substitutes is comparatively lower in the aviation industry as it is the fastest
way of travelling from one place to the other. This facility is impossible to provide in road,
railway or water transport. The service that is provided by the originations cannot match with
that of the companies that are present in road, transport and railways, and the value offerings
cannot be matched by any other business entities apart from who are from the aviation industry
(Epstein et al 2019).

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Rivalry among Existing Firms
It can be stated in this context that Qantas Airways is currently competing with Virgin
Airline, and both of them are suffering losses due to this. Competition in this industry is high
which will lower down the prices of the services as well as the overall productivity of the
organization. It can be stated in this context that aviation industry is one of the most competitive
business sectors among all other business sectors that exists in this global business world. So,
rivalry or competition the above-mentioned aviation organizations along with other companies
that exist competes against each other to gain the competitive advantage, earn and maintain the
leading position in terms of market share as well as revenue for their respective companies
(Lytvynenko 2017).
Macro Environment
The macro environment analysis will be done through PESTLE analysis, which can be
described as follows (Itani and Mason 2018):

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Fig 2: PESTLE Analysis of Qantas Airways
Source: Created by the Author
Political Factor
Political stability helps to maintain the flow of the business operations and perform the
business efficiently. It can be noted in this context that the management of the aviation
organizations like Qantas Airways as they have to maintain several governmental actions across
the nations. The political unrest in Europe in the context of Brexit and recent issue with Corona
Virus has affected the business operations of Qantas Airways. Warm relation with China along

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with a business opportunity in the huge market place of India. Australian government has
supported in this cyclical airline industry, and helps in the overall business operations that is
presently being performed by the management of Qantas Airways.
Economic Factor
This factor also influences the performances of Qantas Airways. It can be noted in this
context that liberal aviation policy that has been undertaken by the government of Australia has
reduced the growth of the regional or domestic airline companies like Qantas Airways. The
inflation rate, foreign exchange rate, the gross domestic product and the present stage of the
economic cycle affects the overall flow of the business operations that is followed and
maintained in the region of Australia. The rate of gross domestic product at the end of 2018 in
Australia was a deficit of 1.50, which is adversely affecting the business of this business entity
(Chang et al 2014).
Social Factor
The social trends also affect the business operations of this airline company. The ever-
changing tastes and preferences of the customers need to be identified by the management of the
organization, so that top class services can be provided to the passengers who avail the services
of this institution. As they offer premium class air travelling services to their passengers, the shift
towards low cost airline services are adversely affecting the operations of the business that is
performed by Qantas Airways. The trust and loyalty are enjoyed by the management of this
organization as they are the national carrier of the region of Australia. Partnerships with
domestic entities has also increase the customer base of this company along with providing
numerous job opportunities that helps in providing jobs to various people of Australia.

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Technological Factor
It can be stated in this context that aviation industry hugely depends on the technical
aspects, and a huge sum of money is required to be invested to maintain the flow of the business
operations of Qantas Airways. It has been already discussed that aviation industry is one of the
most competitive business sectors, so innovation plays an integral part in the overall business
operations of this company. Currently, Wi-Fi services and Stan streaming is offered within the
flights of Qantas Airways in order to enrich the overall experiences of the customers. Apart from
this, they are the first aviation organization to perform landing through application of satellite
technology which s totally based on global landing system (tradingeconomics.com 2020).
Environmental Factor
Necessary rules and regulations are followed by the management of Qantas Airways to
deal with safeguarding the environment, which is severely affected adversely by the emission,
and it can be noted in this context that the management has focused to reduce the emission of
pollution within 2050 (Chandra et al 2014). Currently, 95% of the overall carbon footprint is
mainly occurred from the flying operations of Jetstar Airways, which is a subsidiary of Qantas
Airways (Graver and Rutherford 2018). The recent development in the technological area has
changed the strategies of the business operations of Qantas Airways through the services that are
offered by the management. Technological innovations will help to increase the market share
along with the profit of the company and will encourage to avail more better and efficient to the
passengers.
Legal Factor
The main factor that is maintained by Qantas Airways is to borne the carbon tax from the
performance of this organization, which is regarded as the legal formality that is fulfilled by this
aviation industry in operating their performances efficiently and effectively. Health and safety

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laws are also need to be maintained by the management of Qantas Airways along with the
discrimination laws. A minimum level of quality is also need to be maintained by them to the
passengers in providing safety and security to the them along with the employees like cabin crew
and pilots (Baxter, Srisaeng and Wild 2018).
Market Segmentation
It has been already discussed that Qantas Airways offers premium services to their
passengers, so the present set of customers are mainly from the segment who possess healthy and
expensive lifestyle. The segmentation of this organization is performed in the basis of four
variables, which can be described as follows (Rankin et al 2013):
Psychographic Segmentation
People who possess a high interest level of availing the aviation services are the main
targeted segmented for the organization of Qantas Airways. Positive minded people who like to
avail the services also forms to be a part of this market segment as well. People who love to
travel are also part of this market segment in the context of this variable.
Behavioral Segmentation
People who are loyal to the brand of Qantas Airways are part of this group. Brand loyalty
plays an important part here, and repeated customers are also part of this market segment. People
who are satisfied with the services of this company falls under this group.
Geographic Segmentation
Mainly the people from urban areas re the major targeted segment of this company.
People from semi-urban region is also under this segment. Mainly the major cities are the
targeted segment under this variable of market segmentation.

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Demographic Segmentation
People who possess a healthy income irrespective of the age and gender falls under this
market segment. Prices of the tickets are expensive, so it cannot be afforded by all segments of
people. People who belong from corporates are a major group of segments under this variable.
Current Market Position
The present market share that that was enjoyed by the organization of Qantas Airways
was almost 90%, but as discussed earlier, the competition with Virgin Airlines has increased in
the last few years. Due to this, the market share has fell to 65%, whereas the market share of
Virgin s at 30%. The management is fully focused of offering high quality services to the
passengers by offering wide range of innovative and modern technology-filled service to their
passengers (Seufert 2014).

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Reference
Australia Current Account to GDP | 1959-2018 Data | 2019-2020 Forecast | Calendar. (2020).
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Appendix
Fig 1: Porter’s 5 Forces of Qantas Airways
Fig 2: PESTLE Analysis of Qantas Airways