Strategy MPP Dec13 10504791

Marketing Planning Process
Option one
Development of Customer retention strategy to
reduce customer churn
CIM Membership No: 10504791
Accredited Study Centre: Strategy Sri Lanka
Task 01 Marketing Audit 6 sides of A4

Task 02 Marketing Plan 3260
Task 03 Evaluation Report 3290
Appendix-I Company Background 2 Sides of A4
Appendix-II Balance Score card 1 Side of A4
Marketing Planning Process-December 2013 CIM Membership No:10504791
Declaration
“I confirm that I understand and have applied the CIM policies relating to word count, plagiarism and
collusion for all tasks. This assessment is a result of my own independent work except where
otherwise stated. Other sources are acknowledged in the body of the text, a bibliography has been
appended and Harward referencing has been used. I have not shared my works with other candidates. I
further confirm that I have submitted an electronic copy of this assessment in accordance with the
regulations.
2
Table of Contents
1.0 Rationale for the chosen scenario .................................................................................................. 6
2.0 Marketing Audit ............................................................................................................................ 7
2.1 Macro Environment ................................................................................................................... 7
2.2 Task Environment...................................................................................................................... 8
2.3 Marketing Strategy Audit .......................................................................................................... 9
2.4 Marketing Organization Audit................................................................................................. 10
2.5 Marketing Systems Audit ........................................................................................................ 10
2.5 Marketing Productivity Audit .................................................................................................. 11
2.6 Marketing Function Audit ....................................................................................................... 11
3.0 Situational analysis ...................................................................................................................... 13
3.1 Currant Position ....................................................................................................................... 13
3.2 Critical Issues .......................................................................................................................... 13
3.3 Other Issues ............................................................................................................................. 14
3.4 Over View of the market ......................................................................................................... 14
3.5 Competitor analysis ................................................................................................................. 14
3.6 Future Trends ........................................................................................................................... 14
3.7 TOWS Matrix .......................................................................................................................... 15
4.0 Campaign Objectives ................................................................................................................... 16
4.1 Financial Objectives ................................................................................................................ 16
4.2 Marketing Objectives .............................................................................................................. 16
5.0 Strategy Formulation ................................................................................................................... 16
5.1 Marketing Segmentation.......................................................................................................... 16
5.2 Targeting Approach ................................................................................................................. 17
5.3 Positioning ............................................................................................................................... 18
6.0 Marketing Mix Program .............................................................................................................. 19
6.1 Product Strategy ...................................................................................................................... 19
6.2 Price strategy ........................................................................................................................... 19
6.3 Distribution Strategy................................................................................................................ 19
6.4 Promotion Strategy .................................................................................................................. 19
6.5 The extended marketing mix strategy (People, Process & Physical evidence) ....................... 20
7.0 Implementation & Control........................................................................................................... 22
7.1 Schedule of the Key Activities (2014-1015) ........................................................................... 22
7.2 Resource Allocation ................................................................................................................ 23
7.3 The Balance Scorecard ............................................................................................................ 23
8.0 Explanation and assessment on the ways in which marketing planning can benefit Qatar
Airways? ............................................................................................................................................ 26
8.2 Benefits of marketing planning ............................................................................................... 27
9.0 Critical evaluation of marketing audit ......................................................................................... 28
9.2 Characteristics of an effective marketing audit ....................................................................... 28
9.3 Components of marketing audit .............................................................................................. 29
9.4 Information Gathering & Analysis .......................................................................................... 29
10.0 Explanation and justification on the competitive strategy......................................................... 31
10.1 STP Strategy .......................................................................................................................... 31
10.2 Segmentation ......................................................................................................................... 31
10.3 Targeting ................................................................................................................................ 32
10.4 Positioning ............................................................................................................................. 33
10.5 Development of the marketing mix ....................................................................................... 34
3
11.0 Identification of issues associated with implimentation. ........................................................... 34

11.1 Proposal for developing an action plan. ................................................................................ 36
12.0 Conclusion ................................................................................................................................. 36
Bibliography & references................................................................................................................. 37
Appendix-I ......................................................................................................................................... 38
Appendix-II ....................................................................................................................................... 40
List of Tables
Table 1:PESTLE Analysis ................................................................................................................................. 7
Table 2:Five-force analysis ................................................................................................................................ 8
Table 3:Competitor Comparison-by size and destinations ................................................................................ 8
Table 4:Competitor comparison-Skytrax & Airlinetrends................................................................................. 9
Table 5:Sources of competitive advantage ........................................................................................................ 9
Table 6:Ansoff’s Strategy Matrix .................................................................................................................... 10
Table 7:TOWS Matrix ..................................................................................................................................... 15
Table 8:Marketing Objectives .......................................................................................................................... 16
Table 9: IBM Analysis ..................................................................................................................................... 17
Table 10:Positioning Strategy .......................................................................................................................... 18
Table 11:Promotion Strategy ........................................................................................................................... 19
Table 12:SERQUAL Model on the Value Proposition of QA......................................................................... 20
Table 13:Schedule of key activities ................................................................................................................. 22
Table 14:Resource Allocation .......................................................................................................................... 23
Table 15:McKinsy’s S7 ................................................................................................................................... 35
Table 16:Company Vision & Mission ............................................................................................................. 38
Table 17:Proportion of passenger traffic by the region ................................................................................... 38
Table 18:Passenger traffic growth of Qatar Airways....................................................................................... 38
Table 19:Market position ................................................................................................................................. 39
Table 20:Proportion of passenger traffic by the class travelled ....................................................................... 39
List Of Figures
Figure 1:Targeting Strategies ........................................................................................................................... 17

Figure 2:McKinsy’s S7 .................................................................................................................................... 34
4
Task-I
Rationale and Marketing Audit
6 Sides of A4 Page
5
1.0 Rationale for the chosen scenario

Qatar Airways is one of the fastest growing airlines in the world and in terms of passenger traffic and the
average growth rate has been over 1.5% for the last few years. However, in related to the annual international
passenger traffic growth figure of over 5% and comparing to the expansion of the airline in terms of
destinations and frequency, the company cannot be satisfied with its currant rate of growth in terms of
passenger traffic. The major reason behind the declining customer growth rate has been identified as the high
level of customer churn.
Annual industry growth rate Vs. Qatar Airways growth Customer Churn Rate
35%
5% 30%
4% 25%
3% Industry growth 20%
2% Rate 15%
1% 10%
Qatar Airways
Growth rate 5%
0%
Source: CAPA-Centre for Aviation
Privilege club is the Qatar Airways frequent flyer program and it has three different membership tiers
starting from Burgundy progressing through Silver to Gold. The Q points decides the level of the
membership in the program and Q points are awarded based on the booking class purchased and the
destinations travelled. Currently there are about 550,000 members enrolled in the program and it is about
65% of the total number of frequent travellers. Majority of the frequent travellers (about 60%) consist of
corporate customers whose buying decisions are made by the organizations they are sponsored by.
The currant loyalty program ‘Privilege Club’ has neglected the fact that most of the frequent travellers of the
airline consist of cooperate customers and focused only on offering benefits based on individual or family
basis.
The company’s ambition has not been to the number one airline in the world in terms of passenger numbers,
instead to be the benchmark airline in the industry, by which the standers and levels of service of others are
measured. This strategy suits best for the company, as it is a full-service airline that focuses on less price
sensitive & high quality conscious customer segments.
As per the Boing Currant market out look for 2012/2013 the airline industry is expected to grow at existing
growth rate of 5% annually for the next 10 years and Middle East and Asia Pacific will see the strongest
passenger growths. As Majority of passengers that Qatar Airways carry comes from these two markets, the
company has the potential to improve its profits and passenger traffic by improving the customer loyalty and
reducing the customer churn rate.
As the marketing manager for Qatar Airways I have been asked to develop a Marketing plan in order to
reduce the customer churn by 50 percent in three years. In order to identify the currant position of Qatar
Airways & internal and external factors which may effect the in the execution of a marketing plan focused
on reducing the churn rate a marketing audit will be carried out.
6
2.0 Marketing Audit

2.1 Macro Environment
PESTLE Analysis has been used for the analysis of the macro environment.
Factor Impact and Implication Strength
2.1.1 Political
Political stability in the The political stability of the country has affected the economic High
country & instability in the condition of the country and the growth of the airline in a positive way.
region But the political instability of the region has affected the company in
both positive and negative ways. For example While the riots in Turky
was a reason that Qatar was chosen as a transit destination over Turky
and Turkish Air , the civil war in Libya caused ceasing operations to
Tripoli.
2.1.2 Legal
Increase of industry related This may affect the operating cost and the final price that is charged High-
taxes & insurance premiums from the customer.
Limitations on frequency In order to protect the national airlines the local governments may limit Medium-
and access to certain air the frequency of flying to certain destinations and access to air-travel
routes routes. This may affect the expansion of the airline and in turn level of
connectivity. This may affect the passengers in terms of ease of
booking and transit.
Open Skies policy Open skies is an international policy concept that calls for the High+
liberalization of the rules and regulations of the international aviation
industry, especially commercial aviation, in order to create a free-
market environment for the airline industry
2.1.3Economic
Strong economy of the Qatar is the richest country in the world and therefore company has a High+
country strong financial background.
Economic down turn in While this may effect the growth of the airline trade and in turn the Medium
other parts of the world passenger traffic in a negative way it has presented certain advantage
for the company, such as diversion of the passenger traffic of those
airline and acquiring ex-employees.
Globalization This has a direct effect on the growth of the airline industry. High+
2.1.4 Technological
Development in ICT & e- It has improved the level of interaction with customers while High+
commerce presenting cost advantages.
The development of on-line Through the use of popular social media networks and viral media such
community & Social media as Facebook, Twitter and you tube the company has improved the level High+
networking of interaction and communication with the customers.
Technical Problems with Recent grounding of ‘Dreamliner’ Boing-787 had a huge impact on the High-
Aircraft. profits of all the airlines that bought it. Qatar Airways owns 3 B-787s.
2.1.5 Social
Growth of segments such as Growth of segments such as nouveau rich target audience, yuppies due High+
nouveau rich target to the globalization and the retired baby-boomers has had a positive
audience, yuppies and effect on the air travel industry.
retired baby boomers.
Immigrations form East to Considerable proportions of customers who travel form the East to the High+
the West West consist of immigrants.
2.1.6 Environmental
Social projects and Qatar Airways has shown its dedication to support the communities Medium+
community support they interact with through various charity projects.
Environmental Awareness The company has shown its commitment to protect the environment by Medium+
funding research on alternative fuels and taking initiatives to minimize
the carbon footprint. Besides that they try to reduce the effect on the
environments by controlling the air traffic, minimizing the wastage and
usage.
Natural Disasters, Natural Disasters such as Tsunami, Volcanic Eruption in Iceland in High -
Communicable Deceases & 2011, Outbreak of Bird flu & Swine flu, 9/11 , had a direct effect on
Terrorist Attacks the air travel industry.
Table 1:PESTLE Analysis
7
2.2 Task Environment

2.2.1 Industry analysis
In order to identify the currant competitive position of Qatar Airways, trends in the industry and where the
power lies, here Michial porter’s Five forces analysis (Porter,1980) can be used.
Factors Details Impact

Bargaining power The bargaining power of the jet fuel suppliers is low as the company has the
of suppliers access to the local supply of jet fuel, produced by government owned oil
companies. In terms of supply of Aircrafts it is dominated by Boing, Airbus, AJ
Walter and Rolls-Royce. The bargaining power of suppliers is high due to the High+/-
few number of suppliers in the market and high cost involve in switching
suppliers. The recent grounding of Boing Dreamliner B-787 due to manufacturing
defects have raised questions about the safety standards of the airline that may
affect the churn rate in the long run. The bargaining powers of travel agents are
reducing with the increased use of online booking systems and e-commerce.
However, due to the low level of English and IT literacy in certain parts of the
world they may remain still important.
The Bargaining It is high due to the price-based promotions between airlines and emergence of
power of buyers low cost airlines. The low level of switching cost between the airlines is another Medium-
reason the churn rate is high.
Intensity of Due to the economic boom in the Middle East and growth of the airline industry
competitor rivalry the intensity of competitor rivalry is high. Due to the alliances among different High-
airlines and the emergence of low cost airlines such as Fly Dubai in the region it
has become even fierce.
Threat of new Due to the high growth rate of the industry it is attractive to new entrants. As
entrants discussed above emergence low cost airlines also need to be considered as a Medium-
potential threat. However high level of investment and the time it takes to achieve
return on the investment may act as a barrier for the new entrants.
Threat of Sea cargo is a substitute to the air cargo and low cost airlines will be a substitute
substitute for the other high quality service providers. The introduction of new Medium-
transportation modes such as Hyper-Loops, which is faster and safer than air
travel may be a threat in the future.
Table 2:Five-force analysis
2.2.1 Customer Analysis (Refer appendix-1, table 02 for customer segmentation)
2.2.3 Competitor Analysis (Refer to appendix-I, table 4 for competitive position & 5 for proportion of
passenger traffic of the key players by the class travelled.)
The major direct competitors for Qatar Airways may include Emirates and Etihad as they target the same
segments in the market and offer similar products and services with a full service operation. All three
companies have adopted a premiumisation strategy for the Premium class and value for money for the
economy class.
Emirates The largest in the region and has been in the industry for 24 years. It is fully owned by the UAE
government. Emirates is the key competitor for Qatar Airways. The recent step over in to the position of
the best airline in the world over Qatar Airways is a significant achievement for the company.
Etihad It is the national airline of UAE and just 8 years old. It has had the fastest growth rate in the region.
Airline Number of Destinations covered Key growth strategy

Aircrafts
owned
Qatar Airways 120 120 destinations in 70 Penetration and Market development (Focus
countries on expanding both in terms of destinations
and frequency)
Emirates 162 129 destinations in 72 Penetration (Focus on increasing the
countries frequency)
Etihad 66 84 destinations in 42 Product development (Focus is on the
countries profitable niche markets)
Table 3:Competitor Comparison-by size and destinations
Source: Company websites
8
2.2.4 Competitive advantage
The competitive position of the Qatar Airways has in terms of the delivery of the service and overall
customer satisfaction level over the other key two competitors can be analyzed using the Skytrax research
star ratings(Based on skytrax Audit) & ‘Airline of the year’ ratings which is based on skytrax customer
satisfaction survey findings.
Skytrax is a UK based privately owned consultancy (originally known as Inflight Research Services), which
runs an airline and airport review and ranking site. They provide specialist & expertise to the air transport
industry through professional audit & service benchmarking programs of products and service quality which
can be used to get an insight to the standards of customer service delivered & ultimate customer satisfaction.
The level of innovation has been compared based on Airlinetrends.com ratings.
Airlinetrends.com is an independent industry and consumer trends research agency. They monitor the global
aviation industry for commercial innovations in response to changing consumer behavior
Airline Skytrax Air line of the year ratings- Airlinetrends.com

Star Ratings Year 2012 ratings-Year 2013
Qatar Airways 5 Star 2 6
Emirates 4 Star 1 12
Etihad 4 Star 7 18
Table 4:Competitor comparison-Skytrax & Airlinetrends
Source: Skytrax Research Survey & Alirlinetrens.com
Besides that in order to compare the sources of existing advantages they may have over each other Harley
Davidson’s Sources of competitive advantage model (Davidson,1980) can be used:
Source Qatar Airways Emirates Etihad

Superior product benefits High High High
Perceived advantage Medium High Medium
Low cost operations High Medium Low
Legal advantage Medium High High
Superior contacts Medium High High
Superior relationships Medium High Medium
Superior Competencies Medium High High
Table 5:Sources of competitive advantage
2.3 Marketing Strategy Audit

2.3.1Company vision and mission
(Please refer to the appendix-1 Company background for vision and mission statements.)
The vision and mission statements are stated in a marketing oriented manner.
2.3.2 Marketing Objectives

The marketing objectives of the company may include;
1.To be the number one Airline in the world again in the year 2014.
2.To increase the load factor up to 85% by the end of 2016.
3.To increase the Premium passenger traffic proportion up to 12.5% by the end of 2016.
4.To reduce the churn rate by 50% and increase loyalty by the end of 2016.
9
2.3.3 Ansoff’s Strategy Matrix

Growth strategy of Qatar Airways can be analyzed using
the Ansoff’s strategy matrix. The Qatar Airways group
strategy may focus on all four strategies available. But
Products
here, only the airline sector has been taken into
consideration. Existing New
The increase of frequency can be identified as a market Market Product
penetration and the expansion of number of destinations Penetration Development
Existing
can be identified as a market development. Qatar Airways One-world
The recent alliance of One-world loyalty program can be & Cargo Loyalty
identified as a new product development. Besides that the program
products offered and service processes are continuously Market Diversification
improved. Development
Qatar Airways Qatar Executive
Markets
The recent launch of Qatar Executive, business jet service
& Cargo
New
is a diversification in to a profitable niche market.
Table 6:Ansoff’s Strategy Matrix
2.4 Marketing Organization Audit

Chief Marketing OfAicer
SVP Coperate SVP Production SVP Revenue SVP Marketing & SVP Marketing & SVP Marketing &
communication Planning Management Sales-‐Americas Sales-‐Europe Sales-‐Asia PaciAic
Man.-‐ Production Man.-‐Revenue Station Managers-‐ Station Managers-‐ Station Managers-‐

Man.-‐Media & public Planning Management-‐Airline Americas Europe Asia PaciAic
Man.-‐Crisis
management & Man.-‐Revenue Sales and marketing Sales and marketing Sales & marketing
employee Management-‐Cargo executive executive executive
communication
Sales & Marketing Division Of Qatar Airways
The Marketing structure of Qatar Airways can be recognized as function and regional based. The Chief
Marketing Officer holds responsibility of the marketing function of the organization. Under the CMO there
are a range of other related functions, which are supervised by a set of Senior Vice Presidents. The
responsibilities of VPs further divided to the managers of each sub division. By integrating functions such as
production planning & Revenue management the productivity of the marketing function has been improved.
Regional-based structure is appropriate for the global operation as the function is closer to the action.
However due to high level of centralization, formalization, and limited autonomy in the lower levels of the
hierarchy decision-making process has been hindered. Low levels of affiliated motivation caused by poor
internal marketing have affected the work based relationship networks.
The structure has no focus on the management of key clients such as cooperate customers.
2.5 Marketing Systems Audit

Marketing Information system The MkIS is consist of different software solutions by a range of different service
providers and therefor the integration between the systems used is low and cause
problems in data migration. The recent introduction of CRM system module, which
runs on ipads used by ground and cabin staff, provides essential information
needed for an effective service delivery. The intranet and the internal mail system
used as main internal communication channel.
Marketing Planning System The integration of Revenue management and Production planning within the
marketing function has improved marketing planning. The CMO is has the main
responsibility for setting the direction in marketing planning. The company
conducts marketing research and analysis to inform the planning process. Besides
that software programs are used to assist the planning teams.
Marketing Control System Due to the availability of systems the key decision makers get an up-to-date
information with regard to the performance on different aspects of the marketing
division. Besides that monitoring & control mechanism are integrated in the
system.
10
The NPD teams of the cabin and ground services divisions are very active. They do
continues R & D to ensure highest level of quality service is delivered. Here
New Products Development marketing division is actively involved in NPD process by giving suggestions and
Systems feedback for improvements. The response from of the customers for new products
& processes are analyzed before continuation.
2.5 Marketing Productivity Audit

In order to analyze the productivity of the airline in different regions Passenger Load factor can be used as a
matrix. It is a measure of how much of an airline’s passenger carrying capacity is utilized. It is the revenue
passenger miles as a percentage of available seat miles.
RPM-Revenue Passenger Miles Number of total paying passengers x Distance Travelled
ASM-Available seat Miles Total number of passenger miles that could be generated
PLF-Passenger Load Factor (RPM/ASM) x 100 %
2.5.1 PLF by Region
Region PLF The company has withdrawn itself from certain destinations such as
Middle East 80% Cebu (Philippines) & Nice (France) due to low level of Load factor
Europe 72% and increased the frequency in to sectors such as London, Paris & Sri
Asia Pacific 75% Lanka to meet the growing number of passenger traffic
Americas 78%
Africa 70%
Source: Sales & Marketing Division Of Qatar Airways
2.5.2 PLF by Class
Class PLF Fist class operation is not profitable
due to high operation cost involve and
First class 35%
the low level of occupancy.
Business Class 65%
Economy Class 75%
Source: Sales & Marketing Division Of Qatar Airways
2.6 Marketing Function Audit

Product & Products are high in quality & service is customer focused. The business class mainly focuses on quality
Service conscious segments in the market and the economy class focus on the price conscious segments. The
First class operation should be phased out due to the low level of demand and only few aircrafts are
configured for first class operation.
Price Price varies based on the class travel, season, and degree of alteration flexibility of the booking. The
pricing strategies of major competitors are taken into consideration. The pricing strategy can be
identified as a premium, yet competitive.
Place Company uses an exclusive and selective channel of travel agents and global network of regional
offices. With the development of on-line booking and checking systems the role of mediators has
become insignificant. The booking systems has a compatibility issue with Mac OS.
Promotion Company uses all ATL, BTL and TTL media for promotion. The company has a focus on its online
community and use of new media such as SMS, Social networks. Due to the aggressive advertising
strategy of the key competitors in the region the noise that Qatar Airways made in the market place was
not adequate.
People Staff is highly professional. The company focuses on the development on the technical skills of staff.
Due to low level of internal marketing the level of employee motivation and loyalty is low.
Process Qatar Airways is highly process driven organization and careful market research has been done on
designing the processes. It ensures the consistency of the high quality of the service delivered. But, due
to the highly centralized nature of the organization, where there is a need for deviation from the
standards and procedures it takes time for the decisions to be made, as they need higher management
approval.
Physical Ambiance is pleasant in Aircrafts and premises, Spatial layout and functionality serves the propose.
Evidence Cooperate branding does not incorporate sponsorships and CSR activities of the organization.
11
Task-II
Qatar Airways Marketing Plan
2013-2016
Task-II Word Count-3260
12
Executive Summery
Qatar Airways is one of the worlds’ five star airline and national flag carrier of State of Qatar. Despite the
rapid growth of the industry & the continues effort of the company to improve in terms of service, products
& safety, the growth rate of the company has been declining. The rationale behind the declining growth rate
has been identified as the high level of customer churn rate. In order to exploit the opportunities in this fast
growing market and to retain existing customers, the company should develop a retention strategy, which
will be effective in retaining not only individual buyers, but also corporate buyers.
A medium term marketing plan outlining a retention strategy in order to reduce the churn rate by 50% has
been specified below. The plan is scheduled to be implemented form 2014 to 2016.
3.0 Situational analysis

3.1 Currant Position
1.Qatar Airways is the second largest carrier in the Gulf region and one of the seven airlines with Five-star
ratings by Skytrax.(Refer Appendix-2,Figure 6 & 7)
2.Currant growth strategies adopted may include combination of all four strategies available.(Refer
Appendix-2,Figure-9)
3. The capacity utilization of the organization in terms of carrying passengers has not reached its maximum
potential.(Refer Appendix-2,Figure-12)
4. Due to lack of brand visibility and PR the brand has not been properly positioned in the market.(Refer
Appendix-2,Figure-13)
5. The loyalty program of the company has not been very effective as it does not focus on the cooperate
sector. (Refer Appendix-2,Figure-13)
6.The financial background of the company is very strong. (Refer Appendix-2, Figure-2.1.6)
7. The growth rate of the company is low compared to the industry growth due to the high churn rate. (Refer
Appendix-2, Figure-12)
3.2 Critical Issues

1. High level of competition in the industry
Competition is high due to the low level of product differentiation between the competitors in the region and
emergence of low cost airlines.
2. Declining growth rate of the passenger traffic due to high churn rate.
The industry continues to grow. Despite the continues expansion, the growth of the company in terms of
passenger traffic is declining. Ineffective retention strategy targeted towards cooperate customers, decline in
service standers have been identified as the major reasons behind the high churn rate.
3.High level of centralization and bureaucracy.

This has affected the internal marketing and the level of employee motivation & the decision-making process
has been hindered.
4. Declining profit margins

Profit margins are declining due to the increased taxes imposed on the airlines and fuel prices. The company
is not able to impose increased taxes on customers or lower service standards and quality of the products.
Therefore the company has to maintain the service standers in order to attract new customers and to retain
existing once while maintaining competitive price structure.
5. Lack of Brand visibility

Compared to the key competitors in the region the brand visibility of Qatar Airways is not adequate.
13
3.3 Other Issues
1. Infrastructure Issues
As company has several software solution providers form that they take the services from. The level of
integration between the systems used is low. Besides that manual feeding of data for data-migration between
systems duplicates the work.
2.Safety and security issues

The recent grounding of the Dreamliner Boing-787 due to technical faults raised safety concerns among the
travellers. Besides that the bomb found in the cargo hole of a flight to Dubai in 2010 raised concerns on
security standers of the company.2.0 Internal and External analysis
The marketing audit has been undertaken in order to analyze the currant position of Qatar Airways in macro
& micro environments.
3.4 Over View of the market

(Refer appendix 2, Marketing Audit for detailed analysis)
External Environment Detailed PESTLE analysis was undertaken in order to understand the effect of the
external forces on the organization.
Internal Environment Detailed analysis was undertaken in order to analyze the internal environment.
3.5 Competitor analysis
Refer appendix 1 for market position of key competitors in terms of passenger traffic and proportions of
passenger traffic by the class travelled.
Refer appendix 2 section 2.2.3 & 2.2.4 for market position of key competitors in terms of number of
aircrafts, destinations covered, Skytrax ratings, airlinetrends.com ratings and comparison of sources of
competitive advantage.
As per the Skytrax research audit findings Qatar Airways stay ahead of the competition in terms of products
and the service quality. But as per the customer satisfaction survey done by the skytrax Emirates has been
perceived as a better service provider. As per the airlinetrends.com ratings Qatar Airways is the 6th best
innovative airline in the world.
3.6 Future Trends

A detailed analysis was undertaken in the audit in order to identify the currant competitive position of Qatar
Airways, trends in the industry and where the power lies, using porter’s Five forces analysis.(Refer
Appendix 2, Figure 3)
Here I have further analyzed the feature tends in the industry based on the audit undertaken.
1. The bargaining power of the aircraft suppliers may be reduced due to the technical faults of the new
models introduced by both Boing and Airbus.
2. The bargaining power of the buyers cam be reduced through the introduction of effective loyalty
programs. Besides that alliances between different airlines may allow the airlines to wider their horizons in
terms of destinations, frequency and travel routes while offering better benefits to the travellers.
3.The economic development of Qatar and hosting of events such as 2022 FIFA World Cup may result in
increased passenger numbers.
4. Due to the high growth rate airline industry is attractive for the investors. The key competitors of Qatar
Airways have already diversified its investments to budget airline segments and try to increase their market
share through acquisitions and alliances.
14
5. The increasing popularity of Cruise Travels and low cost airlines is a considerable threat for the airlines
such as Qatar Airways. Due to the high cost of air cargo, sea cargo is used as an economical alternative.
3.7 TOWS Matrix

In order to match the internal strengths & weaknesses of the organization with the external opportunities and
threats here the TWOS matrix can be used. It allows for the systematical identification of each of the factors
and development of strategies based on them.
External Opportunities External Threats

1.High Growth rate of the industry. 1. Emergence of low cost airlines and
2.Growth in high quality conscious increase of price sensitivity in the
and less price sensitive customer low-end segments of the market.
segments. 2. Political instability of the region.
3.Development of the country and 3. Restricted access to air routes and
political stability. airports to protect national airlines
4. Development of information from foreign competition.
technology and use of internet and e- 4. Global economic crisis and hike of
commerce. fuel price.
5. Political instability of the region. 5. Natural disasters, terrorist attacks,
6.Development in aircraft communicable diseases and other
technologies. environmental factors, which may
affect the airline industry directly.
Internal Strengths SO ST
1. Brand Recognition-One of biggest "Maxi-Maxi" Strategy-Strategies that “Maxi-Mini” Strategy-
and five star airlines in the world. use strengths to maximize the Strategies that use strengths to
2. Member of One-World alliance. opportunities minimize threats
3. Differentiation through customer
orientation and high quality 1.Improved marketing to attract more 1. Introduction of loyalty based
4.Substancial cost advantage due to customers. (S1 & 6= O1) benefits to attract price sensitive
local supply of fuel. 4. Use of e-commerce to eliminate customers segments. (S2 & 11=T1)
5. Loyal, profitable and less price mediators and achieve cost 2. Diversifying investments to low
sensitive customer base. advantages. (S9=O3) cost airline segment through
6. Strong financial background & 5. Cost savings through automation in acquisitions and alliances to increase
government support. on-ground process & fuel efficient the market share. (S6= T1)
8. Strategic geographical location aircrafts.(S 6 & 9=O 3 & 6) 3. Acquiring memberships of global
advantage. 6. Segmentation and targeting for airline alliances may percent cost
9. High level of technological better market penetration. (S 1 savings and access to restricted air
infrastructure. &11=O1 & 2) routes (S1, 2= T3 &
10.Highly trained and experienced 7. Improve service products quality 4. Use of new fuel efficient aircraft
Staff. standards ( S 3,6 & 10=O1& 2) technologies (S6=T4)
11.Ability to segment the market and
establish different levels of services
and pricing decisions.
Internal Weaknesses WO WT
1. Higher risk organic growth “Mini-Maxi” Strategy-Strategies that “Mini-Mini” Strategy-Strategies that
strategy. minimize weaknesses by taking minimize weaknesses and avoid
2. Highly centralized management advantage of opportunities. threats.
hierarchy, formalization and narrow 1. The organic growth strategy should 1. Inorganic growth strategies to tap
span of control in the bottom of the be combined with inorganic growth the price sensitive segments of the
hierarchy. strategies such as acquisition and market. (W1,4 &6=T1,3 &4)
3. High cost of maintaining matrix- mergers, which may give shorter term 2.Decentalization of power to
structure. ROI compared to a organic growth improve the speed of response to
4. Low level of diversification. strategy. (W1,4 &6=O1) PESTLE factors. (W2=T5)
5. Seasonal nature of the demand. 2.Use of technology for improved
6. High level of investment needed & communication to support global
long term ROI. scale operation.(W3,7 &8=O4)
3.Effective revenue management to
7. Complexity in the global scale mange the seasonal nature of the
Operation. demand & improve the load factor.
8. Lack of internal marketing. (W5=O1 & 4)
Table 7:TOWS Matrix, Source: Heinz Weihrich, Professor of Management, University of San Francisco
15
4.0 Campaign Objectives

4.1 Financial Objectives
1.To increase operating profits by 25% by the end of 2016.
2.To achieve 20% return on investment by the end of 2016.
3.To increase cash flow by 25% by the end of 2016.
4.2 Marketing Objectives

Here the marketing objectives, strategies and the financial objectives are discussed.
Marketing Objective Marketing Strategy

1. To increase the market share by 15% by the end of Implication of all four-growth strategies.
2016.
2. To increase premium customer base up to 12.5% Effective use of CRM & implementation of
by the end of 2016. sophisticated CRM system to assist.
3. To reduce the churn rate by 50% and improve
customer loyalty by the end of 2016. Implementation of ERP(Enterprise resource Plan)
solution to improve the level of integration.
Alliance with the best and the most prestigious

global airline alliance –One World.
Recognition of customer needs and market trends

through market research.
4. Reposition the brand and increase the brand Increased advertising, Sponsorship agreement with
awareness and visibility. Barcilona FC.
CSR programs and Green Marketing(Orex Flys

green).
Use of new media and social network media.
Improved internal marketing, services and products

5.To be the ‘Airline of the Year’ again in 2014. quality standards.
Recognition of weak points of the service process

through the analysis of Skytrax research survey and
development.
Table 8:Marketing Objectives
5.0 Strategy Formulation
5.1 Marketing Segmentation

Refer Appendix 2 figure 4 for customer segmentation and profiling of Qatar Airways.
16
5.1.1 Segment Evaluation
In order to identify the most profitable segments that Qatar Airways should focus on to achieve its objectives
here I have used IBM’s Value Based Customer Segmentation, which allow the segmentation of passengers
based on Monitory value and Travel Frequency. Besides that I have identified the respective drivers of each
of the segments in order to develop value proposition that suits the best and proportions of each of the
segment.
High Corporate Masses High-tire road warriors Global stars

US$ 3.5k/4 trips per year US$ 6.5k/7 trips per year US$ 8.2k/12 trips per year
Miles Flexibility Recognition
11% 13% 14%
Snowbirds Captains of the industry Low-tire road warriors
US$ 2.1/2 trips per year US$ 3.8k/6 trips per year US$ 6.3k/12 trips per year
Excess baggage Status & prestige Legroom
Monetary Value
3% 10% 8%
Far East Asia & Latin Hoppers Domestic young bloods
Transfers US$ 2.4k/6 trips per year US$ 5.3k/10 trips per year
US$ 1.8k/2 Trips per year Seamless transfers Perks
Language speakers 11% 8%
3%
Dormant Short Term project Regional flyers
US$ 0.9k/2 trips per year US$ 1.6k/5 trips per year US$ 4.9k/8 trips per year
Non-air earnings Convenience Nonstop services
2% 5% 12%
Low
Low Frequency of Travel High
Table 9: IBM Analysis
Source :IBM analysis
Based on this the company will be able to set acquisition, development and retention targets for each of the
segments, pursue strategies for lowering the cost of serving low value passengers, invest more on high value
passengers and develop targeting strategies unique to each segment.
Having analyzed above segmentation it is suggested that the airline should give more emphasis on the
segments with higher frequency and higher value.
5.2 Targeting Approach
Differentiated
Segment Targeting
Undifferentiated Concentrated
Broad Target Narrow Targeting
Targeting
Strategies
Figure 1:Targeting Strategies
17
Due to the different characteristics of the segments & respective drivers that each segment driven by it is
advisable for the company to go for a differentiated targeting strategy.
5.3 Positioning
Qatar Airways is positioned in the market as a high quality premium brand with a premium price. This
aspiration driven positioning strategy is ideal for the high quality, convenience, comfortability conscious and
less price sensitive segments such as High and Low tire road warriors, Global stars, and captains of the
industry in the market. But it is not appropriate for the price sensitive segments in the market. Therefore
company should develop a positioning strategy based on the characteristics of the each of the segments
identified.
With the implementation of the proposed marketing strategies the company will be able to deliver better
benefits & higher perceived value for the customers. Based on these benefits, Qatar Airways brand can be
repositioned using different set of positioning prompts in order to differentiate and occupy an occupied
position in the market to gain competitive advantages.
Marketing Strategy Benefits delivered to customers Positioning Prompts

One World Alliance Seamless transfers, flexibility and Benefit driven
convenience
Cooperate sector based benefits
Customer Relationship Tailor-made combination of products and Problem solution, Target
Management System services with attention to individual needs Driven
Ethical marketing To be a part of a good cause Emotions driven
Sponsorship Brand association Emotions & Aspiration driven
Table 10:Positioning Strategy

The below perceptual maps may represent how Qatar Airways could position against the respective drivers
of their target markets in order to deliver a higher perceived value.
Qatar Airways
Emirates
Etihad
High Price Seamless transfers, flexibility Personalized Service

And convenience
High Quality Cooperate sector based benefits Cooperate citizenship
18
6.0 Marketing Mix Program

Here I will discuss the development of the marketing mix strategy in order to achieve the objectives of the
organization. (Refer appendix-2, Marketing function audit for currant analysis of the each of the elements of
the marketing mix)
6.1 Product Strategy

As the airline industry is in its maturity stage the competition does not take place at the basic product level,
but at the augmented product level. The company has the potential to develop the products at augmented and
potential levels in the following ways;
1. Alliance with the ‘One World’ global airline alliance to provide better loyalty benefits for the
frequent travellers and provide significant competitive advantage over the key competitors as they do
not have any alliance with global airline alliance.
2. Through effective use of CRM personalization of product and services.
3. Introduction of facilities such as on-air mobile service, Wi-Fi on board and limousine services.
6.2 Price strategy
The existing premium pricing strategy may not suit the price sensitive segments of the market and price
based promotions may result in brand dilution and price wars. Low price alone is inherently imitable by the
larger players in the market and therefore not a sustainable competitive advantage. Furthermore the low
prices may deliver a higher market share but at the cost of profit. Therefore it is suggested the company
adopt a value based pricing strategy where the company offer unique or highly valuable features with the
product and service offer in order to better position the brand and distinguish from the competition.
Customers >> Value >> Price >> Cost >> Product
6.3 Distribution Strategy

As a part of the branding strategy the company has focused on opening up flagship high street ticketing
offices in the most prestigious locations in major cities in the world. The recent opening of ticket office in
Harrods department store in Knightsbridge London is one of them.
The company should establish a key clients division to handle cooperates customers.
6.4 Promotion Strategy
ATL Increased media presence in press and media with incorporation of CSR, Sponsorship and global
airline alliance with one world.
BTL Sales promotions
PR, Sponsorship and CSR programs.
The customers should be engaged with them where possible.
TTL Social media networks & emails should be used as a tool to direct customers to promotion &
customer satisfaction surveys.
Table 11:Promotion Strategy
19
6.5 The extended marketing mix strategy (People, Process & Physical evidence)
In the strategy development for the components of the extended marketing mix (People, Process & Physical
evidence) the SERQUAL model can be used.
Here the use of SERQUAL model to develop a strategy to meet the value proposition and customer values of
Qatar Airways will be discussed.
Company values Value proposition-'A thoughtfulness that reflects

individuality, attention & comfort beyond the
expected'
Customer values-comfort, ease, individual attention,
competence, quality & variety
Marketing mix SERQUAL Component Relevant aspects of the Qatar Airways service
Component delivery
People Responsiveness Individual Attention
Empathy
Assurance Competence
Process Reliability Ease, Quality & Variety
Physical Evidence Tangibles Quality
Table 12:SERQUAL Model on the Value Proposition of QA
Source: CIM, DCVM, SERQUAL Model- Zeuthmal, Parsuraman & Berry 1980.
Most of the value proposition and the customer values that the company intended to deliver consist of the
intangible aspects of the service and related to the extended mix of the marketing.
The strategies in which each of these aspects could be developed has been described below
6.5.1 People Strategy
In the industry of service the people aspect is very impotent as they are at the end of the service delivery
process. In the context of Qatar Airways the people element consist of both cabin crew and the ground staff.
The above-described relevant RETAR aspects can be achieved from the people element in the following
ways;
1. Development of Internal marketing to motivate and educate staff.

2. Employee reward program
3. Marketing orientation throughout the organization.
4. Training and development to improve not only interpersonal skills, but also attitudes.
5. Empowerment through decentralization of power.
6.5.2 Process Strategy
Qatar Airways is a process driven organization and it has been one of the reasons behind the high quality &
consistency in the service delivered to the customers. The company can further improve its service delivery
process in the following ways;
20
1. Implementation of ERP solution to manage data, improve communication and cross-functional

coordination.
2. Implementation of CRM techniques such as Key client relations to manage profitable accounts.
2. Processes should be developed to monitor customer satisfaction level and market response.
3. Processes should be benchmarked against major competitors and the best industry practices.
4. The adaptation of existing processes to comply with quality management systems such as ISO 9001 or
TQM should be considered.
5.Implementation of performance measurement systems such as balance scorecard should be considered in
order to measure the effectiveness of the processes implemented.
6.5.3 Physical Evidence
The physical evidence in the marketing mix very is important as it can be used to meet the tangible aspects
of the service offered. Besides that this could be used to differentiate the service experience. The physical
environment is made up from its ambient conditions, spatial layout and Functionality & signs and symbols.
Ambiance conditions should be pleasant and should convey consistency and quality. Spatial lay out and
functionality should focus on improving facilities such as legroom and comfortability and seating in aircrafts.
Cooperate image and identity are supported by cooperate branding. Here branding of Aircrafts, premises and
staff uniforms need to be taken in to consideration.
21
7.0 Implementation & Control
7.1 Schedule of the Key Activities (2014-1015)

Marketing Marketing Responsibility 1st Quarter 2nd Quarter 3rd Quarter
Mix Activities
J F M A M J J A S O N D
Infrastructure Head of IT
Development &
‘One World’
system
Product integration
One world
product launch
On board service Head of Sales &
improvements(Ins marketing
tallation of on air
mobile & Wi-Fi)
Market research
Competitor Head of Finance
Price pricing & Revenue
Analysis management
Opening of Head of Sales &
Flagship high marketing
street ticketing
offices
Optimization of
online booking
Place channels
Website Head of IT
development and
maintenance
Channel Head of Sales &
development marketing
Promotion TV Advertising
Print media
Radio
Sales Promotions
Sponsorships Head of Sales &
Direct marketing marketing
Social media
marketing
Personal selling
People Training &
development Head of HR
Employee reward
program
Process Implementation Head of IT
of ERP & CRM
systems
Customer Head of Sales &
satisfaction marketing
survey
Implementation Head of Quality
of Quality assurance
management
system
Physical Branding Head of Sales &
evidence marketing
Aircraft Head of Line
reconfiguration maintenance
Table 13:Schedule of key activities
22
7.2 Resource Allocation
Resource Allocation (2014-2016)
Activities Total cost

£ ‘000,000
Infrastructure 1.5
Development & ‘One World’ system integration
One world product launch 0.5
On board service improvements 5
(Installation of on air mobile & Wi-Fi)
Market research 0.75
Opening of Flagship high street ticketing offices 6
Optimization of online booking channels
1.5
Website development and maintenance 0.75

Channel development 0.5
TV Advertising 6.5
Print media 2.5
Radio 1.5
Sales Promotions 3.0
Sponsorships 60
Direct marketing 5.0
Social media marketing 0.5
Personal selling 3.5
Training & development 5.0
Employee reward program 2.5

Implementation of ERP & CRM systems 1.0
Customer satisfaction survey 0.25
Implementation of Quality management system 0.25
Branding 1.5
Aircraft reconfiguration 20
Total cost 128.5
Table 14:Resource Allocation
7.3 The Balance Scorecard

Refer Appendix-II for The Balance Scorecard
23
Task-III
Evaluation Report
Task Three Word Count-3290
24
To-Senior Management of Qatar Airways

From-Marketing Manager
Date-1st of December 2013
Subject-Evaluation Report of Qatar Airways
Executive Summery;
Qatar Airways Company Q.C.S.C. operating as Qatar Airways, is the state- owned flag crier of State of
Qatar and it is one of the only six airlines in the world to be awarded the "five star" rating by Skytrax. It is
the third largest airline in the Middle East region and the second best airline in the world as per the Slytrax
world airline awards ratings.
In relation to the average industry growth rate of over 5% , the growth of the company in terms of passenger
traffic has been declining for the last few years despite the increased number of aircrafts, destinations and
frequency. The rationale behind the decline of passenger numbers has been identified as the low level of
customer loyalty and the high level of customer churn. The major reasons behind the issues as identified in
the marketing audit may include problems with customer relationship management, decline of service
delivery standards & branding and positioning.
The customer relationship management processes of the company has not implemented techniques such as
key client relations and CRM systems to manage the high income customer segments and the currant loyalty
program of the company does not offer cooperate sector based benefits. The degree of visibility and
incorporation with sponsorships and CSR projects of the company with the brand is not adequate. In order to
position the company in the market to gain a competitive advantage, lack of product differentiation has been
an issue as major competitors also have similar offers.
Besides that, despite the continues effort to improve its services and products offered to the passengers the
company has not been able to maintain its position as ‘Airline of the year’ in 2013 and it is an indication of
the decline in service delivery standards. This has a strong connection with poor internal marketing, level of
employee motivation and customer orientation.
Due to the economic growth and political stability of the country the Qatar as country has the potential to be
the trading hub of the region and the Qatar Airways will be able to take the maximum out of this
development.
The evaluation report will be carried out to address the below areas in relation to the marketing audit and
marketing plan proposed for the Qatar Airways.
1. How marketing planning can benefit Qatar Airways?

2. The role of marketing audit as a part of marketing planning process and identifying the problems
associated with information gathering and analysis.
3. How an appropriate competitive strategy has been developed as a part of the plan?
4. Problems that may encounter in the implementation of the marketing plan and practical proposals for
resolving them?
25
8.0 Explanation and assessment on the ways in which marketing planning can
benefit Qatar Airways?
Marketing planning is essential to the success of the company as it provides the basis from which all the
other operational and management plans are derived from.
According to McDonald & Wilson “Marketing planning is simply a logical sequence and series of
activities leading to the setting of marketing objectives and the formulation of plans for achieving
them” & they further state “The overall purpose of marketing planning and its principle focus is the
identification and creation of sustainable competitive advantage”
According to Dibb & Simkin (2008) “Marketing planning is a systematic process involving assessing the
marketing opportunities and capabilities, determining marketing objectives, agreeing target market
and brand positioning strategies, seeking competitive advantage, creating marketing program,
allocating resources and developing a plan for implementation and control.”
In the context of Qatar Airways ,the marketing audit has been carried out to identify the currant situation of
the company and marketing plan has been developed to determine the future activities to be performed in
order to reduce the customer churn and improve the customer loyalty.
8.1 The marketing planning process
The marketing planning process consists of the following main stages;
1. Analysis
Here an analysis will be done on both internal and external environment in order to where the company
stands in terms of market position, resource and capabilities, strengths and weaknesses. Furthermore it will
give an idea about the other factors in the external environment that may effect the organization and industry
in general.
2. Planning
Here the objects will be defined on where the company wants to be and strategies will be developed based on
resources and timing available.
3. Implementation
The developed strategies will be implemented as per the scheduled timing and allocated resources.
4. Control
In order to ensure that the set objectives are achieved the performance will be measured against the set
objectives using performance metrics and control mechanisms will be introduced.
26
8.2 Benefits of marketing planning

In order to identify the benefits of marketing planning for Qatar airways, Drummond’s reasons for planning
can be used as a framework;
Advantage Description Impact to the company

Adopting to As the strategies are developed based on the Through marketing planning the
changes factors such as currant position, resources, company can adopts its marketing
capabilities and core competencies it enables mix according to the changes in
the organization to be proactive & offensive the external environment while
rather than being reactive & defensive. This keeping the organizational
will minimize the company being pulled and directions set. (Refer Task-II, 6.4-
pushed in multitude directions in reacting to Marketing Mix program).
changing market conditions. Furthermore it will improve the
response time to changes.
Resource Through the marketing audit the organization Through the planning Qatar
Allocation can identify the resources needed in order to airways can manage resources
take the maximum out of the opportunities more effectively and efficiently in
arise. Here the requirements on resource order to achieve its marketing
elements (6Ms) Material, Machine, Man, objectives set. (Refer Appendix-V
Method, Money and Minutes will be taken in for Resource Allocation)
to consideration. Furthermore it will identify
the gaps in the currant resource allocation
and its effective utilization.
Consistency Marketing planning will provide a common Qatar airways can use marketing
base for everyone to work as it acts as a point plan as a vehicle for
of agreement on objectives, strategies and communicating the organizational
tactics set. It gets everyone aliened, objectives and the role that
contributing and unites the organization in everyone play. Besides that they
achieving the organizational goals. should ensure that everyone is
agreed to the objectives set. Refer
Task-II, 5.2-Marketing Objectives)
Integration Through marketing planning integration and Qatar Airways should identify the
coordination of all marketing activities can gap between the external and
be achieved in order to generate synergy. internal marketing communication
(Refer Task-II, 6.4-Marketing Mix program) and synchronize. Proper
coordination and integration of
marketing activities will generate
synergy that will help achieve the
objectives set.
Communication As discussed the marketing plan can be used Effective communication is the
& Motivation as a vehicle to communicate the strategic key to the successful
intent to its stakeholders. implementation. Clear
communication on role of
employees and how they can
contribute to the success will
generate sense of ownership and
motivation.
Control Marketing plan provides a framework to Effective monitoring and control

measure and control. In the plan Key ensures the resources are used
Performance Indicators can be set and effectively and efficiently and set
monitoring mechanism can be developed. objectives are achieved with in the
Through the marketing audit the company given time period.
can identify the controllable elements and
this could be used to control the resource
elements identified.
27
9.0 Critical evaluation of marketing audit as a part of the marketing planning

process, and identification of problems associated with information gathering
and analysis encountered in undertaking the marketing audit.
2.1 Importance of undertaking a marketing audit.
The airline industry is one of the highly sensitive industries to the changes of external market conditions. On
the other hand it is one of the rapidly growing industries with promising profit potential. Therefore, provided
that Qatar Airways identifies the internal strengths and weaknesses, and external threats and opportunities
the company can take the maximum out of these opportunities and manage threats to minimize the negative
impact of them on the organization. Marketing auditing will be an essential tool to achieve these tasks.
In the context of Qatar Airways a marketing audit has been undertaken in order to analyze the internal and
external environments and based on this a marketing plan has been developed to minimize the customer
churn and increase customer loyalty.
Kotler and keller (2006) defined marketing audit as “ A comprehensive, systematic, independent and
periodic examination of a company’s or business unit’s marketing environment, objectives, strategies
and activities with a view of determining problem area and opportunities and recommending a plan
of actions to improve the company’s performance.”
The marketing audit analyses the areas such as macro environment, task environment, customers,
competitors, competitive advantage, strategy, structure, systems, productivity and the elements of the
marketing mix. It recognizes the fact that in order to be successful there has to be an integration and
coordination in between these functions.
It give an assurance that the company is well aware of the context in which it operates and can be used to
make adjustments to the marketing plan by pointing out trends in the market and areas of improvement.
Furthermore it will provide company a performance baseline for measuring performance.
It provides a blueprint of the business as it helps to understand where it is now, where it wants to be and how
it will be there. The audit is the central to the planning process as it provides the basis on which cooperate
and marketing decisions are made.
In the context of Qatar Airways the marketing audit has enabled the company to understand the areas of
strengths, which could be used to gain competitive advantage, and areas of weaknesses, which need to be
improved. It has uncovered inefficiencies that had not been identified before. It has sparked life into the new
strategy and direction to achieve its objectives while reminding its initial cooperate goals and direction.
9.2 Characteristics of an effective marketing audit

According to Kotler and Keller (2006) the marketing audit of Qatar Airways should meet the following key
aspects ;
Factors Impact on Qatar Airways
Comprehensive The marketing audit of the Qatar Airways can be identifies as a comprehensive audit
as it horizontally cover the company’s marketing environment, objectives, strategies
organizations and systems (Refer Appendix-2, Marketing Audit) and vertically takes a
deep look into the currant customer relationship management activities and the
effectiveness of the loyalty program in customer retention and reducing churn. (Refer
Appendix-II Rationale for the chosen scenario) . Furthermore it takes a deep look in to
Key elements of the marketing mix (Refer appendix-II, marketing function audit)
Systematic The effectiveness of the marketing audit has been improved by the incorporating an
orderly sequence of diagnostic steps. Besides that it has adopted industry specific
Quality audit ‘Skytrax’ which evaluates product and service standards against a variety
of different quality measures;
1. versus Quality Benchmarks
2. versus potential quality levels for airline
3. versus target quality levels designated for airline
28
Independent Due to the closed communication policy of Qatar Airway, audits on certain areas such
as financial performance is conducted by in house group of auditors, but they consist
of people outside the operations being evaluated. The other areas of the operation such
as products and service delivery are audited by independent research agencies such as
‘Skytrax’. Therefore the audit findings can considered as unbiased and adequate for
effective planning.
Periodic The Skytrax audits are conducted annually. But internal audits are conducted on when
things go wrong or in the event of implementation of new marketing plan. The
frequency of the audit needs to be improved as it operates in a highly sensitive
industry.
9.3 Components of marketing audit
Audit Description Analysis tools used

Marketing The Macro environment was audited to identify the PESTLE Analysis
Environment opportunities and threats and impact on the
organization’s performance
Marketing Strategy The task environment was audited in order to identify Porters Five force analysis
the industry trends, customers, competitors and Davidson’s Source of
company’s competitive position, competitive Competitive advantage
advantages and impact on the organization from these
forces. Furthermore it gives a general idea about the Porter’s generic strategy
industry.
Marketing Strategy The feasibility of marketing objectives in related to the Ansoff’s Growth Matrix
market conditions have been evaluated along with the
compatibility of the marketing objectives with the
business vision and mission.
Marketing The structure of the marketing function has been Organizational Structure
Organization evaluated on the formal structure, functional efficiency
and interface efficiency.
Marketing Systems Marketing systems were evaluated for the evaluated for Marketing Systems
the structure, technology implemented, processes and Structure
mechanisms used used and efficiency. MkIS
Marketing The products and the markets were audited for the BCG matrix and Passenger
productivity profitability and cost effectiveness. The products and Load Factors
markets that need to be invested and divested have been
identified.
Marketing Function The elements of the marketing mix have been 7P’s
evaluated.
9.4 Information Gathering & Analysis
9.4.1 Sources of information and techniques used
In order to gather information required for the marketing audit both primary and secondary research data
gathering techniques have been used.
Here to gather information on the internal environment mostly primary research techniques have been used
and to gather information on the external environment secondary research techniques have been used.
29
Primary Sources Secondary Sources

Interview with the senior managers of Sales and Annual report of Qatar Airways
Marketing & HR departments.
Interview with the Sales & Marketing team members Annual Reports of Competitors
Information on the company websites and social IATA (International Aviation Training Academy),
media sites. CAPA (Centre For Aviation) and Skytrax reports
9.4.2 Issues encountered in gathering information
The following problems were encountered with primary research;
1. Labor-intensive operation
Collecting primary data is a highly labour intensive operation.
2. Making Appointments
It was difficult to get an appointment from the senior managers of the company due to their busy schedule
and unavailability in the base (Doha, Qatar).
3. Closed communication policy of Qatar Airways

Qatar Airways has a closed communication policy and therefore the employees were reluctant to share
information and the people in the lower level of the hierarchy had no any valuable information with them.
4. Lack of knowledge
Some of the employees lack knowledge on the company and the industry.
Following problems were encountered with secondary research;
1. Unavailability of information
Due to the confidentiality, sensitive information on the competitors was not freely available.
2. Lack of independent research agencies in the region

Unlike the other parts of the world there are not much independent research agencies in the Middle East
region.
4. Poor documentation and data management

Some of the data was properly documented and not in a proper order. Due to the lack of integration between
the systems used data gathering was difficult and time consuming.
5. Insufficient time
Time available for data gathering was not adequate.
9.4.3 Issues encountered with information analysis
1. Unavailability of information in the correct format and up-to-date

Some of the information available was not up-to-date and they were not in the relevant format and
incomplete.
2. Incompatibility of data formats

AS the data was gathered from many different sources the data formats were not compatible with each other
for analysis purpose.
3. Difficulty with analyzing qualitative data

In the service industry the importance of qualitative data is high as they provide a great depth in to consumer
attitude buy they need to be converted in to quantitative format for evaluation purpose. The process of
evaluating qualitative data is not well regulated.
30
10.0 Explanation and justification of how appropriate the competitive strategy

that has been developed as a part of the plan for Qatar Airways utilizing
segmentation, targeting and positioning approach.
10.1 STP Strategy

STP strategy allows for identification and classification of the customers in to homogeneous groups. Then
the company can determine which of these segments are viable target markets and the respective drivers of
each of these segments can be identified in order to develop a product differentiation strategy to gain a
competitive advantage.
By reducing the risk involve with deciding where, when, how and to whom the products will be marketed the
company can increase its marketing efficiency by directing its effort towards the designated segments while
increasing the value delivered to the customers.
Kotler (2006) states “Segmentation, targeting & positioning (STP) is the essence of strategic
marketing”.
Stages of STP Strategy
Situational Analyis
Market segmentation
Targeting
Positioning
Marketing Mix
10.2 Segmentation
According to Debb et al (2006) segmentation defined as the “The process of grouping customers in
markets with some heterogeneity into smaller, more similar or homogeneous segments”
A market segment consists of a group of customers who share a common set of needs or characteristics.
In the context of Qatar Airways geodemographic segmentation methodology has been used and the
effectiveness of the market segmentation carried out can be justified as it meets the below criteria.
Criteria Impact to Qatar Airways

Measurable The segments can be measured according to the size and the income generated
Substantial The profitable segments can be identified with the data available
Accessible Qatar Airways has the capability to reach these segments
Differentiable Segments can be differentiated from each other
Actionable The company can develop specific marketing programs to cater these segments
profitably
Appropriateness The chosen segments are compatible with the business objectives of the company
and what Qatar Airways offer
Stable The chosen segments will help to reduce the churn rate and increase profitability
As per the market segmentation developed in the marketing plan using the IBM’s value based customer
segmentation, it has been identified that most profitable markets that Qatar Airways should focus on are the
high value and high frequency.(Refer Marketing plan-6.1, Market segmentation)
31
This segmentation has enabled the company to effectively analyze the attractiveness of segments identified
in terms of frequency and monitory value. Applying the Shell directional policy matrix Qatar Airways can
further analyze the competitive strengths and capabilities in order to cater these segments.
Market segment attractiveness

Unattractive Average Attractive
Qatar Airways Competitive
Weak Strongly Avoid Avoid Possibilities
Average Avoid Possibilities Secondary Targets

Regional Flyers
strengths
Domestic young blood

Low-Tire Road warriors
Strong Possibilities Secondary targets Prime targets
Hoppers Cooperate masses
Global Stars
High-tire road warriors
Captains of the industry
Table 15:Shell Directional Policy Matrix
Based on Shell Directional policy matrices Cooperate masses, Global stars, High-tire Road warriors and
captains of the industry have been chosen as prime targets due to the attractiveness of those segments and the
resource capability of the company to cater them. Company should identify the needs of the segments such
as Low-tire road warriors, Regional flyers and Domestic young blood improve in weak areas such as
legroom, perks & nonstop services to make them a prime target due to the attractiveness of those segments.
Hoppers have been set as a secondary target due to the low level of market attractiveness yet the company
has the capability to cater them.
According to Doyle (1994) through effective segmentation the company can gain the following advantages;
1. Through the identification of specific needs of these segments a distinctive marketing mix can be
developed in order to increase the value delivered to the customers. This will result in improved customer
satisfaction and in turn customer retention.
2. Through the development of distinctive marketing mix company can differentiate itself from the
competition and gain a competitive advantage.
3. Through focused communication using specific channels identified the company can improve the
effectiveness of the communication.
4. Through the effective allocation of resources on the identified profitable segments will minimize the
wastage.
10.3 Targeting
Once the target segments have been defined, both similarities and the differences of those segments will be
identified. The segments identified will be grouped based on the similarities identified. Then the elements of
the marketing mix will be adjusted according to the varied needs of segment groups identified. Qatar
Airways therefore adopt a ‘Differentiated target market strategy’. Here secondary target markets with high
market attraction also will be taken in to consideration. Therefore targeting approach would be as follows;
Marketing mix 01 Group 01

Focus will be on the loyalty Cooperate Masses, High-tire road warriors
program benefits such as Air Domestic young blood, Regional flyers, Hoppers
miles, Flexibility, seamless
transfers & perks
32
Marketing Mix 02 Group 02

Focus will be on self- esteem Global Stars, Captains of the industry
needs such as status, prestige
recognition & individual attention
Marketing Mix 03 Group 03
Focus will be on comfortability Low-tire road warriors
As company adopt a differentiation strategy along with cost leadership it is not advisable to differentiate the
marketing mix for each segment as it may represent additional cost for customization of marketing mix
elements. Furthermore it will minimize the ability to achieve economies of scale, which result in lower profit
margins.
10.4 Positioning
Debb et al (2006)“Positioning is not what is done to the product, but what is created in the mind of the
customers”
Kotler & Keller (2006) define competitive Positioning as “ The act of designing the company’s offer and
image so that they occupy a meaningful and distinctive position in the target customers mind”
As discussed the marketing plan the currant positioning strategy as a high quality Premium brand with a
premium price is not appropriate for price sensitive segments in the market. (Refer Task-II-6.1 Customer
Segmentation).
Therefore Qatar Airways it has been suggested to reposition the brand based on the alliance with ‘One
World’, Personalized service achieved through effective CRM, Ethical marketing and sponsorships in order
to deliver a higher perceived value for the customers. Through this the company can differentiate itself and
crate a competitive position in the target market.
Through this positioning strategy the company can gain advantage due to following factors;
1. Alliance of ‘Privilege Club’ with ‘One World’

As per Skytarx ‘One World’ is the best global airline alliance in the world in year 2013.It is the second
largest global airline alliance in the world and it is associated with quality, safety, service, punctuality.
The alliance would provide the customers access to a global network with enhanced benefits and rewards
while providing additional revenue and cost savings for the airlines.
Qatar Airways will be the first in the Gulf region who was qualified to be a member of a global airline
alliance and it will be difficult for the major competitors in the region to match the benefits given with ‘One
World’. Besides that ‘One World’ has a special benefits for the cooperate customers.
2. Customer relationship management

The marketing plan suggested the use of CRM techniques such as key client relations and implementation of
sophisticated CRM system to identify personal needs of customers and personalize service offered
accordingly. Through effective CRM the company can create and deliver unique set of benefits that is
difficult replicate by the competitors.
3. Ethical marketing
The marketing plan suggested the incorporation of ethical marketing initiatives such as sponsorships for
charity, green marketing activities and other cooperate social responsibility projects as a part of the
positioning strategy. Due to the increased concern on the other two elements of ‘the triple bottom line’-
People and the planet, not only for profit, consumers learn to trust ethical brands and remain loyal to them.
33
4. Sponsorships
Association with ‘Barcelona FC’ will give Qatar Airways huge opportunity to increase the brand awareness
and visibility. This will create brand preference and loyalty among the target markets.
It is evident that Qatar Airways intend to position itself as high quality ethical premium brand, which offer
highest level of benefits, flexibility, safety, security along with the best products and services with individual
attention through the positioning strategy.
10.5 Development of the marketing mix

In line with the STP strategy development of the marketing mix has been discussed in the marketing plan.
(Refer 5.5-Marketing mix program)
11.0 Identification of possible issues that may encountered when implementing

the marketing plan for Qatar Airways over the stated period and practical
proposals for resolving them.
Acoording to Piercy(2002) “ The real strategic problem is not the strategy ; it is managing the
implementation and change”
Despite of the effort put in to the development of the marketing plan the success of the marketing plan
depends on the proper implementation.
McKinsy’s 7s framework can be used to identify the problems related to the implementation of marketing
plan.
Figure 2:McKinsy’s S7
Component Issue Description Action Plan

Strategy Delay in A reactive strategy has been The company should adopt a
adjustment of implemented as opposed to a proactive strategy in order
Strategy proactive strategy. improve the response time for the
changes in market conditions and
to gain competitive advantage.
34
Isolated Planning A top-down management style has Hybrid system needs to be

been implemented and the senior implemented and middle
management does the planning management also needs to be
without any involvement from the involved in planning.
middle management. Therefore
problems occur in the execution of
plans.
Complexity of the Requirement of duel authority and Technology such as SharePoint
matrix structure dual communication in projects web application platform,
where employees have to report to teleconferencing and intercom
more than one manager may cause should be used to avoid the duel
confusion and conflicts. communication. Job descriptions
Due to high level of communication and chain of command should be
Expensive to required, matrix structures are specified in order to minimize
Structure maintain expensive to maintain. duplication of work and the
confusions and conflicts caused
by duel authority.
Interface efficiency can be

Lack of interface The level of integration and improved by improving internal
efficiency coordination between different marketing and interpersonal skills
divisions are low due to the lack of of the coordinators who are at key
interface efficiency. positions
Lack of As the company has different Company should implement a
integration software solution providers and the ERP solution which consist of all
between the level of integration between the the relevant modules needed for
systems used systems are low. This has caused the operation. Here integration
duplication of work due to manual with ‘One world’ software
Systems feeding of data for data migration. modules also needs to be
considered.
Lack of Productivity of the employees Proper training need to be
knowledge of the effected by lack of knowledge of the provided to ensure that systems
staff effective use of systems available are used effectively.
and use of new systems.
Style High level of Level of bureaucracy is high and the A democratic leadership style
formalization and power is not evenly distributed. This should be adopted which allows
centralization has hindered the speed of decision- for innovation and creativity.
making process. Power should be evenly
distributed and there should be
room for diversion from standards
and procedures for the benefit of
the customers .
Skills Lack of required In the implementation of new plan The company should invest in the
skills the existing employees may not have personal development of
required technical of interpersonal employees. The skill levels of
skills needed. employees should be monitored
and assessed.
Shared Compatibility There is a set of core values that are The compatibility of the plan
values with the shared evidenced in the cooperate culture developed, with these core vales
values of the and general work ethics. should be considered and
company adjustments should be made
accordingly.
Staff Human resource It is difficult to find the people with People who are specialized in
required level of general capabilities relevant fields should be
for the successful implementation of appointed in key positions and
the plan gaps in required competencies
should be identified for training
and development purposes.
Table 15:McKinsy’s S7
35
11.1 Proposal for developing an action plan.
Through a preparation of action plan for the implementation of marketing plan the company can improve the
coordination between activities and minimize the risk of failure
The following format can be used for this;
Campaign Title
Campaign Duration
Campaign Objectives
Marketing Activity Resources Staff Responsible Deadline Cost
Required
12.0 Conclusion
The evaluation report out lines the importance of undertaking planning process in order to reduce the
customer churn and improve the loyalty with an evaluation of the role of marketing audit as a part of the
planning process and issues encountered in gathering data. I have further justified how STP has been used to
develop a competitive strategy and finally outlined the barriers that may encounter in the implementation of
the plan and practical proposals for resolving them.
36
Bibliography & References
Books
Annual reports of Emirates, Qatar Airways & Etihad
Delivering Customer Value Through Marketing-CIM Course Book

Managing Marketing-CIM Course Book
Marketing Planning Process-CIM Course Book
Author: Kotler P. & Armstrong G.; Year of Publication: 2008; Title: Principles of Marketing; Edition:
12e; Publisher: Asoke K Ghosh; Place of Publication: New Delhi;
Author: Kotler P. & Armstrong G.; Year of Publication: 2005; Title: Marketing Management; Edition:
12e; Publisher: Asoke K Ghosh; Place of Publication: New Delhi;
Websites
Skytrax-
http://www.worldairlinesurvey.com/
http://www.airlinequality.com/
http://www.skytraxresearch.com/
Centre for aviation

http://centreforaviation.com/
International Aviation Training Academy-

http://www.iata.org/Pages/default.aspx
www.qatarairways.com
www.emirates.com
www.etihad.com
www.Airlinetrends.com
www.cim.co.uk
www.marketing-audit.co.uk
www.mindtools.com
www.ibm.com
www.oneworld.com
Author:Declan Boland, Doug Morrison & Sean O’Neill ; Year: 2002; Title of Article:The Future of
Airline CRM; Last Accessed: 15th of October2013; URL;
http://scholar.googleusercontent.com/scholar?q=cache:nDjpGtoxDIsJ:scholar.google.com/&hl=en&as_sdt=0
,5
Author: Lisa Robbins;Year: 2010;Title of Article: 5 Benefits of Marketing Audit

Last Accessed:20th of October 2013; URL; http://www.johnsondirect.com/2010/07/28/5-benefits-of-a-
marketing-audit/
37
Appendix-I
Qatar Airways-Company Profile
1.1 Company Background
Qatar Airways Company Q.C.S.C. operating as Qatar Airways, is the state- owned flag crier of State of
Qatar and one of the big success stories of the aviation industry. It is one of the only Seven airlines in the
world to be awarded a "five star" rating by Skytrax.Qatar Airways was formed in November 1993 and
commenced operations in January 1994.In its original incarnation the airline was entirely owned by members
of the Qatar Royal Family and was structured as a no-frills carrier.Currently the airline is 50% owned by the
government of Qatar and 50% owned by private investors.
Qatar Airways made a net profit in of US$215 million & revenues of US$5.8 billion in 2013.
Company Vision To be recognized as a world class global brand

Company Excellence in everything we do
Mission
Company World’s 5 star airline
Slogan
Table 16:Company Vision & Mission
Qatar Airways was names as the Airline of the Year 2011 & 2012 at the annual Skytrax World Airline
Awards.However Qatar Airways has not been able to retain its position as the Airline of the year 2013.
Qatar Airways operate in the air travel & leisure industry and offers a a range of products & services.The
subsidiaries & divisions of Qatar Airways includes;Qatar Aircraft Catering Company,Doha International
Airport,Qatar Airways Holidays,United Media Int.,Qatar Duty Free,Qatar Aviation Services,Qatar
Distribution Company,Qatar Executive & Qatar Airways cargo.
Today The carrier operates an extensive Proportion of passenger traffic by the region
network of regional services in Asia and
the Middle East together with international
services to Australia, Europe, Africa, South
& North America.it operates a hub-and-
spoke network, linking over 125
international destinations from its base in
Doha, using a fleet of more than 120
aircraft. The majority of customer base
consist of passengers from The Middle
East & Europe.
Table 17:Proportion of passenger traffic by the region
Passenger traffic growth of Qatar Airways
20000000
15000000
10000000
5000000
0 Number of
passengers
Table 18:Passenger traffic growth of Qatar Airways, Source: Centre for Aviation
38
Market position Of Qatar Airways in the region as per the passenger traffic for the year 2012
Emirates
Qatar airways
No. of passengers

Etihad Airways
Fly dubai
0 200000 400000 600000 800000 1000000 1200000
Table 19:Market position, Source: Center for Aviation
Qatar Airways has aircrafts with both bi-class (Business and Economy) and Tri-class (First, Business and
Economy) configuration.10% of passenger traffic travelled in the premium classes account for 60% of the
income.
Proportion of passenger traffic by the class travelled
Qutar
2.70% 7.30% 90%
Airways
Etihad 0.80%
89%
airways 10.20% First
Emirate 2.60% Busines

84.20%
s 13.20% s
econom
Global y
1.70% 4.60% 93.70%
Average
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00%
Table 20:Proportion of passenger traffic by the class travelled, Source: Center for Aviation
39
Appendix-II
The Balance Scorecard
Perspective Objective Strategic Target Initiatives

measures
Customer Reduce Customer Churn 50% Improved loyalty benefits and
Perspective customer rate service and products quality
churn standards & personalized service
through CRM
Improve Passenger growth 2.5% Increased brand visibility
customer rate
growth rate
Improved Skytrax ratings Airline of Improved internal marketing &
customer the year CRM
satisfaction
and loyalty
Financial Increased Operating profit 25% Execution of all four growth
perspective operating margins strategies and improved employee
profits productivity through internal
Return on ROCE 20% marketing
capitol
employed
Increase Cash flow 25%
cash flow
Learning Level of Airlinetrends.com Number Continues product and process
and growth innovation Ratings one development based on careful
market research
Motivated Employee 50% Improved internal marketing,
and loyal satisfaction communication and employee
workforce surveys benefits
Empowered Balance score 50% Staff training and decentralization of
and card power & authority
competent
workforce
Internal Improve Mystery customer 50% Implementation of ERP system &

business service survey CRM
processes delivery
process
Increased Yield gap, Share 30% Improved customer satisfaction
customer of target segments through reliable business processes
value
40

Strategy MPP Dec13 10504791

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Strategy MPP Dec13 10504791

Uploaded by

Copyright:

Available Formats

Marketing Planning Process

CIM Membership No: 10504791

Accredited Study Centre: Strategy Sri Lanka

Task 01 Marketing Audit 6 sides of A4

11.0 Identification of issues associated with implimentation. ........................................................... 34

Figure 1:Targeting Strategies ........................................................................................................................... 17

Rationale and Marketing Audit

1.0 Rationale for the chosen scenario

Source: CAPA-Centre for Aviation

2.0 Marketing Audit

2.2 Task Environment

Factors Details Impact

2.2.1 Customer Analysis (Refer appendix-1, table 02 for customer segmentation)

Airline Number of Destinations covered Key growth strategy

Source: Company websites

2.2.4 Competitive advantage

The level of innovation has been compared based on Airlinetrends.com ratings.

Airline Skytrax Air line of the year ratings- Airlinetrends.com

Source: Skytrax Research Survey & Alirlinetrens.com

Source Qatar Airways Emirates Etihad

2.3 Marketing Strategy Audit

2.3.2 Marketing Objectives

2.3.3 Ansoff’s Strategy Matrix

Table 6:Ansoff’s Strategy Matrix

2.4 Marketing Organization Audit

Man.-­‐ Production Man.-­‐Revenue Station Managers-­‐ Station Managers-­‐ Station Managers-­‐

Sales & Marketing Division Of Qatar Airways

2.5 Marketing Systems Audit

2.5 Marketing Productivity Audit

2.6 Marketing Function Audit

Qatar Airways Marketing Plan

Task-II Word Count-3260

3.0 Situational analysis

3.2 Critical Issues

3.High level of centralization and bureaucracy.

4. Declining profit margins

5. Lack of Brand visibility

3.3 Other Issues

2.Safety and security issues

3.4 Over View of the market

3.5 Competitor analysis

3.6 Future Trends

3.7 TOWS Matrix

External Opportunities External Threats

4.0 Campaign Objectives

4.2 Marketing Objectives

Marketing Objective Marketing Strategy

Alliance with the best and the most prestigious

Recognition of customer needs and market trends

CSR programs and Green Marketing(Orex Flys

Use of new media and social network media.

Improved internal marketing, services and products

Recognition of weak points of the service process

Table 8:Marketing Objectives

5.0 Strategy Formulation

5.1 Marketing Segmentation

5.1.1 Segment Evaluation

High Corporate Masses High-tire road warriors Global stars

Low Frequency of Travel High

Table 9: IBM Analysis

Source :IBM analysis

5.2 Targeting Approach

Figure 1:Targeting Strategies

Man.-‐ Production Man.-‐Revenue Station Managers-‐ Station Managers-‐ Station Managers-‐