MMK251 Assignment 1: Impact of Macro-environment on Qantas Airways

This report analyzes the service marketing strategies of Qantas Airways Limited, focusing on the impact of macro-environmental factors. It begins with an introduction to service marketing and the selection of Qantas as the case study. The report then uses a PESTLE analysis to examine the political, economic, social, technological, legal, and environmental factors affecting Qantas. It assesses how these factors influence customer demand and the airline's operations. The report further outlines the current strategies employed by Qantas to manage these impacts, such as adapting to changing customer preferences and adhering to government regulations. Additionally, the report proposes additional strategies, like adopting new technologies and conducting competitor research, to further enhance Qantas's market position and customer satisfaction. The conclusion summarizes the key findings and emphasizes the challenges faced by companies in today's dynamic business environment, highlighting the importance of proactive strategies to navigate these complexities. References are provided to support the analysis.

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Contents
Introduction......................................................................................................................................2
Macro-environmental factors...........................................................................................................2
Strategies are currently in place to manage this impact..................................................................4
Additional strategies........................................................................................................................4
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

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Introduction
Service marketing is the marketing activity that is based on the relationship and on value. It is
refers to as the application of the various set of the strategies and tactics which helps in
anticipating the needs of the customers for an intangible product. The aim of the report is to
present service organisation in Australia who is affected by the macro-environmental factors and
also to analyse the impact on the demand of the customers on its services. Further, it includes the
strategies that are currently adopted by the company to manage the impact from the macro-
environmental factors. In addition to this, it includes the additional strategies that the
management need to apply to further manage this impact and to attain the needs of customers.
The service company that has been selected for this report is Qantas Airways Limited which is
known as Flag carrier and it is also considered as the largest airline by fleet size including
international flights and destinations (Qantas 2020). The company falls in the service industry
because it is offering the service to their customers to travel from one place to another.
Macro-environmental factors
The macro-environmental factors that affect the working of the company are the external factors
(Wilson, Zeithaml, Bitner and Gremler 2016, p. 254). These external factors can be understood
with the help of the PESTLE analysis of the company which is presented below.
Political factors: - The political factors are related to the government of company who can bring
the changes in regulation which directly affect the working. This has been found that the
connections of the company are stable with the political countries with the help of which they are
able to run operations (Chivandi, Samuel and Muchie 2019, p.89). Currently, the emergence of
coronavirus has affected the services of airline across the world which is followed by Qantas. In
addition to this, the government is looking for the help from the airline companies for exchange
of medical facilities, passengers from different nations and many others which is required to be
taken care by company.
Economic factors: - The economic factors directly influence the customer spending and
business of Qantas. This has been found that the economy of Australia is growing due to which

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the customer are likely to spend more (Bitner and Wang 2014, p.95). However, they don’t want
to go in the countries where they find the high currency exchange because they don’t find it
affordable due to which the business of the Qantas gets affected at UK routes where the
exchange currency is dollar. This will lead to impact on the profit of the company which is
clearly visible as 2009 financial report shows revenue as $14.3 billion but in 2012 it declined to
$13.6 billion (Qantas 2020).
Social factors: - The social factors include trends, patterns, and lifestyle of the Australian people
towards the brand. According to the analysis, there are many customers who are looking for the
services at the affordable prices which are provided by company as they are considered as the
low-cost carrier who is able to offer the services in the market (Lovelock and Patterson 2015,
p.125). However, the major challenge that has been witnessed by the company is that customers
are looking for the personalized value and high customer experience which they want to show
due to which they switch to other brands.
Technological factors: - Technology change or up-gradation plays a vital role in the company.
Qantas Company makes use of the technology with the help of which they can meet the needs of
the customers related to services. The company offered the booking facility, have their app,
make use of advance aeroplanes, provide the convenience of updates, stay connected digital and
many others (Baxter, Srisaeng and Wild 2018, p. 32). Qantas has applied the satellite technology
which is based on the global landing system which shows that they are able to upgrade towards
the new technology.
Legal factors: - The legal factors are followed by the company which are related to the health
and safety rules for the employees and customers. The company also face the legal obligation of
the carbon tax which is required to be faced by the company.
Environmental factors: - The environmental factors can lead to the direct impact on working of
the company. In Australia, the airline authorities, as well as regulatory boards, have few
regulations which help them to deal with the environmental ineffectiveness (Latemore 2013,
p.125). The company finds that they are the one who is contributing to the emission which is
required to reduce.

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Strategies are currently in place to manage this impact
The strategies that are used by the company to manage the impact of the macro-environmental
factor are presented below: -
 The company understand the changing patterns of the customers due to which they try to
connect with the new routes where either they want to visit or they have to pay the less
currency exchange rates. This shows that they are concerned about the pricing strategy
which needs to be low.
 The company have a strategy to abide with all the rules and regulations of the
government and also to follow the legal element as this is the way through which they
can remain connected with the government (Lovelock and Patterson 2015, p. 114).
 The company has formed the goal to bring the reduction in the emission of pollution by
50% at the end of 2050.
Additional strategies
 The company should adopt new technology or devices that include new technology as
this is the way through which they can attract the customers towards them and meet their
needs. The customers who want to use new technology and services related to technology
will be satisfied.
 Company should adopt the research strategy to research the competitors which will help
them to understand the changes that they can make and adopt the competitiveness in the
market.

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Conclusion
At the end of the report, this can be summarised that companies find it challenging to deal in the
business environment as they find different factors that affect their operations. The analysis of
the macro-environmental factors has been done with the help of the PESTLE analysis tool which
shows the changes that are available with the company response. However, the strategies which
are adopted by the company are analysed as it helps in reducing threats and adopting
opportunities.

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References
Baxter, G, Srisaeng, P and Wild, G 2018,The role of freighter aircraft in a full-service network
airline air freight services: The case of Qantas Freight. MAD-Magazine of Aviation
Development, 6(4), pp.28-51.
Bitner, MJ and Wang, HS 2014, Service encounters in service marketing research. In Handbook
of service marketing research. Edward Elgar Publishing.
Chivandi, A, Samuel, MO and Muchie, M 2019, Social Media, Consumer Behavior, and Service
Marketing. In Consumer Behavior and Marketing. IntechOpen.
Latemore, G 2013, Restoring Trust in Two Australian Organizations: The Cases of Herron and
Qantas. In Integrity in Organizations (pp. 119-145). Palgrave Macmillan, London.
Lovelock, C and Patterson, P 2015, Services marketing. Pearson Australia.
Qantas 2020, About, retrieved 8 April 2020, <https://www.qantas.com/in/en/qantas-group.html>
Wilson, A, Zeithaml, V, Bitner, MJ and Gremler, D 2016, Services marketing: Integrating
customer focus across the firm.