Task 2 of 2

1. Question/Answer

a) The Importance of Quality is essential for small businesses. Quality product

facilitate to take care of client satisfaction and loyalty and cut back the chance and
value of substitution faulty product. firms will build a name for quality by
gaining certification with a recognized quality commonplace, like ISO
9001, revealed by the global organization for Standardization.
b) Marketing is the action, set of foundations, and procedures for making, conveying,
conveying, and trading contributions that have an incentive for clients, customers,
accomplices, and society on the loose.
c) One necessary thing in social science is that of needs and wants. Wants would
be outlined as product or services that are needed. This is able to embody the
requirements for food, clothing, shelter and health care. Wants are product or services
that don't seem to be necessary however that we tend to want or would like for.
d) Market Segments-
1. Demographic segmentation: Demographic segmentation can be seen applied in the
automobile market. The automobile market has different price brackets in which
automobiles are manufactured. For example – Maruti has the low price bracket and
therefore manufactures people driven cars. Audi and BMW have the high price
bracket so it targets high end buyers. Thus in this case, the segmentation is being
done on the basis of earnings which is a part of demography. Similarly, Age, life
cycle stages, gender, income etc can be used for demographic type of market
segmentation.
2. Geographic Segmentation: people who are located in non municipal areas might
require a RO water purifier whereas those located in municipal areas might need UV
based purifiers. Thus, the need can vary on the basis of geography.
Similarly in cold countries, the same company might be marketing for heaters
wheresa in hot countries, the same company might be targeting air conditioners.
Thus, many companies use geographic segmentation as a basis for market
segmentation.
3. Behavioral Segmentation: This type of market segmentation is in boom especially in
the smart phone market. For example – Blackberry was launched for users who
were business people, Samsung was launched for users who like android and like
various applications for a free price, and Apple was launched for the premium
customers who want to be a part of a unique and popular niche.
4. Psychographic Segmentation: Psychographic segmentation can be seen all across
nowadays. For example– Zara markets itself on the basis of lifestyle, where
customers who want the latest and differential clothing can visit the Zara stores.
 Similarly Arrow markets itself to the premium office lifestyle where probably your
bosses and super bosses shop for the sharp clothing. Thus, this type of segmentation
is mainly based on lifestyle or AIO.
5. Firmographic Segmentation: Firmographic segmentation is similar to demographic
segmentation.

e) The marketing mix is a foundation model. The marketing mix has been defined as the "set
of marketing tools that the firm uses to pursue its marketing objectives in the target". Thus
the marketing mix refers to four broad levels of marketing decision, namely: product, price,
promotion, and place.
f) Market Research: The process of gathering, analyzing and decoding info a few market, a
few product or service to be offered available therein market, and regarding the
past, gift and potential customers for the merchandise or service; analysis into the
characteristics, outlay habits, location and desires of your business's target market,
the trade as a full, and also the specific competitors you face.
g) Micro Environment: Factors or components in Associate in Nursing organization's
immediate space of operations that have an effect on its performance and decision-making
freedom. These factors embrace competitors, customers, distribution channels,
suppliers, and also the general public.
Macro Environment: The major external associated uncontrollable factors that influence
an organization's higher cognitive process, and have an effect on its performance and
methods. These factors embrace the economic factors; demographics; legal, political, and
social conditions; technological changes; and natural forces.
Specific samples of macro setting influences embrace competitors, changes in interest
rates, changes in cultural tastes, unfortunate weather, or government laws.
 2. Case Study
Qatar Airways SWOT Analysis

Strengths

(Aviationeconomics.com, 2013) says that, “While the country's oil industry has also contributed
to Qatar Airways' growth, the airline's location appears to be the strongest competitive
advantage: from the Gulf region, the vast majority of the world's population could be reached
within a single connecting flight, making the region an excellent transfer point for long-haul
international travellers”. Apart from Qatar Airways' location, the airline was able to successfully
establish itself as a premium airline, consistently scoring a five-star rating on Skytrax surveys. In
addition to this, Qatar Airways operates a fleet of modern and fuel efficient aircraft that ensures
low operating costs and the opportunity to serve distant, low-margin destinations as well (Qatar
Airways, 2016). As of 2017 Qatar Airways maintains a mixed fleet of 197 aircraft (Qatar
Airways, 2016). Although Qatar Airways denies all government subsidies, the airline is fully
owned by the Qatari government that offers the airline an increased bargaining power in
international markets (Nunes, 2016).

Weaknesses

Qatar Airways does not run any internal flight, which is not essentially a unruly, but since the
company's incomes are reliant on on the performance of international markets, the airline is
greatly exposed to developments beyond the organisation's control (this weakness is generally
present for most international airlines with limited domestic operations). Despite the fact that
Qatar Airways reported a profit for 2016, the political improvements in the Middle East
combined with the expected overcapacity in the industry could further expose Qatar Airways to
volatility in international markets (Arab News, 2017).

Opportunities

Emirates, one of the strongest rivals of Qatar Airways, has launched flights outside its main base
(currently Athens and Milan with flights to New York and Newark). This option has not been
explored by Qatar Airways, even if the region's escalating political conflicts should incentivise
the management to discover new markets to continue the organisation's development (looking at
a large number of aircraft orders of Qatar Airways, there are ample amount of resources to
expand abroad). Another opportunity for Qatar Airways is to launch a subsidiary targeting
travellers with a limited budget, but with a strong desire to explore faraway destinations (e.g.
Generation Y travellers). This related diversification could partially offset the lower demand for
premium travel and could enable Qatar Airways to benefit from a recent development in the
global social environment (rise of middle class and generation Y travellers).

Threats

Industry analysts' general consensus is that the phenomenal growth of middle eastern airlines
may come to a sudden end, including but not limited to Qatar Airways, as long as these airlines
do not adjust their strategy. Alongside the political uncertainty in the region (US travel ban,
growing terrorist threat that reduces the demand for air travel), the current outlook for airlines
based on the Gulf region is highly uncertain. Gulf airlines have never been seen in a favourable
light by their European rivals, often citing such arguments that these airlines engage in unfair
business practices (e.g. receiving government subsidies, which is illegal in the western world)
that reduces European and American airlines' access to the lucrative Gulf region (and as both the
European and the US market has been rather profitable for Qatar Airways, the probability of
legal actions that restrict Qatar Airways' access creates a significant threat to the organisation's
success). Finally, but not least importantly, low-cost long-haul airlines are gradually increasing
their market share (Gulliver, 2017). These airlines operate mostly on Asian routes, however,
visible steps have been taken by other airlines to examine the feasibility of extending the low-
cost model to the long-haul market, that is likely to hurt the interest of Qatar Airways following
the full-service business model.

References

Arab News. (2017). Trump may not be such a pushover for US aviation lobby after all. [online]
Available at: http://www.arabnews.com/node/1108196 [Accessed: 7th Jan, 2019].

Aviationeconomics.com. (2013). Market Update: The Big Three Gulf Airlines. [online]
Available at: http://www.aviationeconomics.com/NewsItem.aspx?title=Market-Update:-The-
Big-Three-Gulf-Airlines [Accessed: 25th Dec, 2018].

Gulliver, M. (2017). The Middle East's once fast-expanding airlines are coming under pressure.
[online] Economist.com. Available at:
https://www.economist.com/blogs/gulliver/2017/03/narrowing-gulf [Accessed: 25th Dec, 2018].

Nunes, A. (2016). Government Airline Subsidies... So What?. [online] Forbes.com. Available at:
https://www.forbes.com/sites/realspin/2016/11/17/government-airline-subsidies-so-what/
[Accessed: 7th Jan, 2019].

Qatar Airways (2016). Our Fleet. [online] Available at:

https://www.qatarairways.com/en/fleet.html [Accessed 25 Jul. 2017].

Reuters UK. (2016). Qatar Airways 2015-16 net profit jumps 328 pct. [online] Available at:
http://uk.reuters.com/article/qatarairways-results-idUKL8N19X1WI [Accessed 25 Jul. 2017].
Skytrax (2017). Certified 5-Star Airline Ratings. [online] Airlinequality.com. Available at:
http://www.airlinequality.com/ratings/5-star-airline-ratings/ [Accessed 25 Jul. 2017].

b) Qatar Airways PESTEL Analysis

Political

The most recent political developments for the Qatari airline industry include the travel ban, the
region's diplomatic tensions and the growing terror threat. A group of Muslim countries have
decided to cut all political and commercial ties with the state of Qatar, banning Qatari citizens
from entering these countries and making it illegal for businesses to trade with Qatari firms
(including but not limited to Qatar Airways) (Aljazeera.com, 2017). While Qatar Airways stated
that its operations have been largely unaffected by the diplomatic crisis, this political decision
forced Qatar Airways to suspend its flights to Saudi Arabia, the UAE, Bahrain, Egypt and the
Maldives (these countries' airspace is also off limit for all aircraft registered in Qatar that
required Qatar Airways to reroute certain flights) (Firstpost, 2017). On the top of this regional
crisis, the Trump's administration decision to restrict travel to the US from certain Muslim
countries (to address the escalating terror threat) and to ban laptops (which have been lifted
recently, but the unpredictable nature of the Trump administration remains) notably influenced
Gulf airlines' load factor on US routes (Gulf Insider, 2017).

Economic

The state of Qatar owns large oil reserves, which has been the key driver of economic growth in
the country (the oil industry has contributed approximately 36% of the country's GDP) (Ministry
of Development Planning and Statistics, 2016). The declining oil prices put a downward pressure
on premium travel that influenced the number of business visitors to Qatar (and the Gulf region
as well) (Kamel, 2017). Most of the growth for Gulf airlines was coming from the emerging
regions of the world (Such as Africa and Asia) with a growing middle class having an increasing
amount of disposable income to travel (EY, 2015). Qatar Airways conduct business
predominantly in foreign markets, so any exchange rate fluctuation (especially the recent
appreciation of the USD) could influence the airline's earnings (Reuters UK, 2016).

Socio-Cultural

Qatar Airways is a global organisation, so it is worthwhile to examine globally recognisable

social changes that may affect the industry's outlook. Under the previous section, the analysis
mentioned that emerging markets' growing middle class carries a valuable opportunity for
airlines to grow in these regions (Rotsky, 2017). Further to this, in established markets,
Generation Y customers' demand to travel is also increasing: this generation (in contrast to
previous generations) have a strong desire to travel and to explore different cultures (BCG,
2013). Whilst Generation Y travellers are not yet the largest segment for airlines, it will be the
largest customer base both for the leisure and the business travel market (BCG, 2013).
Technological

The airline industry has been constantly exploring the opportunities presented by digital
technology to optimise operations and to proactively forecast changing customer needs (Power,
2016). This requires airlines to invest in their digital strategy and to understand how emerging
platforms (such as social media and mobile applications) could be used to communicate with the
target audience (Power, 2016). Aircraft technology is not expected to rapidly develop in the next
five to ten years, however, both manufacturers and airlines are actively seeking new processes to
reduce fuel consumption and emissions (e.g. biofuel, optimised routes… etc.) (ICCT, 2015).

Environmental

The airline industry is often criticised for its high amount of carbon emission contributing to
climate change (Iata.org, 2017). While aircraft have become more fuel efficient, the massive
increase in the demand for air travel increased the industry's carbon footprint
(Aviationbenefits.org, 2017). Regulators in the western hemisphere are gradually implementing
new processes to incentivise airlines to modernise their fleet (Aviationbenefits.org, 2017). The
consequence of climate change (manifested through frequent inclement weather conditions) is an
additional environmental challenge for the airline industry (Wichter, 2017).

Legal

An actual legal issue the Qatari airline industry is facing (in addition to the regional tension
between Qatar and most of its neighbouring countries) is the new travel policies implemented by
the US government, restricting electronic devices on board and travel to the US for certain
citizens in the Muslim world (these countries include Iran, Iraq, Libya, Syria, Somalia, Sudan
and Yemen) (The National, 2017). EU airline lobbyists are also exploring viable legal means to
curb Gulf Airlines' growth in European markets (Reuters, 2017).

References

Aljazeera.com. (2017). Akbar al-Baker: What's next for Qatar Airways?. [online] Available at:
http://www.aljazeera.com/programmes/talktojazeera/2017/06/akbar-al-baker-qatar-airways-
170613020759574.html [Accessed 25 Jul. 2017].

Arab News. (2017). Trump may not be such a pushover for US aviation lobby after all. [online]
Available at: http://www.arabnews.com/node/1108196 [Accessed 25 Jul. 2017].

Aviationbenefits.org. (2017). Aviation and climate change : Aviation: Benefits Beyond Borders.
[online] Available at: https://aviationbenefits.org/environmental-efficiency/aviation-and-climate-
change/ [Accessed 25 Jul. 2017].
Aviationeconomics.com. (2013). Market Update: The Big Three Gulf Airlines. [online]
Available at: http://www.aviationeconomics.com/NewsItem.aspx?title=Market-Update:-The-
Big-Three-Gulf-Airlines [Accessed 25 Jul. 2017].

BCG (2013). Travelling with Millennials. [online] Available at:

https://www.bcg.com/documents/file129974.pdf [Accessed 25 Jul. 2017].

Campbell, M. (2017). Can Emirates Airline Dominate the Skies?. [online] Bloomberg.com.
Available at: https://www.bloomberg.com/news/features/2017-01-05/is-emirates-airline-running-
out-of-sky [Accessed 25 Jul. 2017].

Ellis, N. (2017). Emirates to Launch Fifth-Freedom Between Newark and Athens. [online]
Available at: https://thepointsguy.com/2017/01/emirates-launches-newark-to-athens/ [Accessed
25 Jul. 2017].

EY (2015). [online] EY: growth drivers. Available at:

http://www.ey.com/Publication/vwLUAssets/EY-growth-drivers/$FILE/EY-growth-drivers.pdf
[Accessed 25 Jul. 2017].

Firstpost. (2017). Gulf diplomatic crisis: Qatar Airways says operations running smoothly,
unaffected by ban. [online] Available at: http://www.firstpost.com/world/gulf-diplomatic-crisis-
qatar-airways-says-operations-running-smoothly-unaffected-by-ban-3638543.html [Accessed 25
Jul. 2017].

Gulf Insider. (2017). Gulf airlines facing crisis. [online] Available at: http://www.gulf-
insider.com/gulf-airlines-facing-crisis/ [Accessed 25 Jul. 2017].

Gulliver, M. (2017). The Middle East's once fast-expanding airlines are coming under pressure.
[online] Economist.com. Available at:
https://www.economist.com/blogs/gulliver/2017/03/narrowing-gulf [Accessed 29 Jul. 2017].

Iata.org. (2017). IATA - Climate Change. [online] Available at:

http://www.iata.org/policy/environment/Pages/climate-change.aspx [Accessed 25 Jul. 2017].

ICCT (2015). Fuel efficiency trends for new commercial jet aircraft:. [online] Available at:
http://www.theicct.org/sites/default/files/publications/ICCT_Aircraft-FE-Trends_20150902.pdf
[Accessed 25 Jul. 2017].

Kamel, M. (2017). Emirates Profit Down 70% on Oil-Hit Economies, Terror Impact. [online]
Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2017-05-11/emirates-
profit-tumbles-70-on-low-oil-prices-terror-concerns [Accessed 25 Jul. 2017].

Ministry of Development Planning and Statistics (2016). [online]

http://www.mdps.gov.qa/en/knowledge/Doc/QEO/Qatar_Economic_Outlook_2016_2018_EN.pd
f. Available at:
http://www.mdps.gov.qa/en/knowledge/Doc/QEO/Qatar_Economic_Outlook_2016_2018_EN.pd
f [Accessed 25 Jul. 2017].

Nunes, A. (2016). Government Airline Subsidies... So What?. [online] Forbes.com. Available at:
https://www.forbes.com/sites/realspin/2016/11/17/government-airline-subsidies-so-what/
[Accessed 25 Jul. 2017].

Power, R. (2016). Digital Marketing in the Airline industry. [online] Smart Insights. Available
at: http://www.smartinsights.com/b2b-digital-marketing/b2b-strategy/digital-marketing-in-the-
airline-industry/ [Accessed 25 Jul. 2017].

Qatar Airways (2016). Our Fleet. [online] Available at:

https://www.qatarairways.com/en/fleet.html [Accessed 25 Jul. 2017].

Reuters UK. (2016). Qatar Airways 2015-16 net profit jumps 328 pct. [online] Available at:
http://uk.reuters.com/article/qatarairways-results-idUKL8N19X1WI [Accessed 25 Jul. 2017].

Reuters. (2017). Exclusive: EU sharpens competition tools to face Gulf carrier challenge.
[online] Available at: http://www.reuters.com/article/us-eu-aviation-exclusive-
idUSKBN15O2RW [Accessed 25 Jul. 2017].

Rotsky, N. (2017). Rising Middle Class in Emerging Countries Promotes Global Air Traffic.
[online] The Borgen Project. Available at: https://borgenproject.org/middle-class-in-emerging-
countries/ [Accessed 25 Jul. 2017].

Skytrax (2017). Certified 5-Star Airline Ratings. [online] Airlinequality.com. Available at:
http://www.airlinequality.com/ratings/5-star-airline-ratings/ [Accessed 25 Jul. 2017].

The National. (2017). Arabian Gulf airlines a target as Trump vows 'phenomenal' tax aid for US
carriers. [online] Available at: https://www.thenational.ae/business/arabian-gulf-airlines-a-target-
as-trump-vows-phenomenal-tax-aid-for-us-carriers-1.82524 [Accessed 25 Jul. 2017].

Topham, G. (2015). Gulf airlines' success prompts hostility from US and European carriers.
[online] the Guardian. Available at: https://www.theguardian.com/business/2015/apr/20/gulf-
airlines-emirates-etihad-qatar-success-hostility-us-european-carriers [Accessed 25 Jul. 2017].

Wichter, Z. (2017). Too Hot to Fly? Climate Change May Take a Toll on Air Travel. [online]
Nytimes.com. Available at: https://www.nytimes.com/2017/06/20/business/flying-climate-
change.html?mcubz=2 [Accessed 25 Jul. 2017].The National. (2017). Arabian Gulf airlines a
target as Trump vows 'phenomenal' tax aid for US carriers. [online] Available at:
https://www.thenational.ae/business/arabian-gulf-airlines-a-target-as-trump-vows-phenomenal-
tax-aid-for-us-carriers-1.82524 [Accessed 25 Jul. 2017].