Air New Zealand began as Tasman Empire Airways Limited which from 1940 has been operating Short Empire flying boats on trans-Tasman routes. Tasman Empire Airways Limited has operated flights in world war II weekly from Auckland to Sydney and also added Fiji and Wellington to its route. In 1953 New Zealand and Australian governments purchased 50% stakes in Tasman Empire Airways Limited and the airline ended flying boat operations in favor of propeller and turboprop airliners by 1960. With the introduction of the DC-8 in 1965, Tasman Empire Airways Limited became Air New Zealand—the New Zealand government purchased Australia’s 50% stake in the carrier. In 1978, the domestic airline National Airways Corporation and its subsidiary Safe Air were merged into Air New Zealand to form a single national airline, further expanding the carrier’s operations.
As a result, NAC’s Boeing 737 and Fokker F27 aircraft joined Air New Zealand’s fleet alongside its DC-8 and DC-10 airliners. In 1981, Air New Zealand introduced its first Boeing 747 airliner, and a year later initiated service to London, United Kingdom. 1985 saw the introduction of Boeing 767-200ER airliners to fill the large size gap between the Boeing 737 and 747. In 1989 the airline was privatized with a sale to a consortium headed by Brielle Investments Ltd. The New Zealand air transport market underwent deregulation in 1990, prompting Air New Zealand to acquire a 50% stake in Ansett Australia in 1995.
PART A- TASK 1
Outcome 1- assess the potential for market segmentation
A) Resource implications: We urge the Advisory Group to consider the human resource implications for these employees and the consequent impact any restructuring consultation has on their morale and productivity. HRINZ (Human Resource Institution of New Zealand) is the professional organization for people who are interested or involved in the management and development of human resources in the workplace. HRINZ (Human Resource Institution of New Zealand) represents the interests of individual members only.
B) Understanding and meeting customer needs: They meet every requirement of the customer travelling in air new Zealand. They provide every kind of facility to the customers and fulfill the needs and demands of people. C) Identification of competitor activates: The following is a list of airlines, other than Air New Zealand, who have joined the domestic air travel market in New Zealand over the last 20 years: Ansett New Zealand
D) Evaluation of market performance: There are some kind of problems with air new Zealand like people feel like food is not proper but now they have evaluated the things. They provide better service to the customers and they are happy. E) Segment viability and attractiveness: Air New Zealand topped eight of the ten attractiveness categories in national airline, which offers the best salary, career progression and work-life balance opportunities, as well as quality training and strong management. Air New Zealand was rated well in the study, which assessed organizations perceived attractiveness amongst the country’s working and non working population. In 2012, Air New Zealand took out the top spot for strong management, interesting job content, pleasant working atmosphere, and salary and employee benefits, and was also noted for providing good training for its employees.
PART B- TASK 2
Outcome 2- apply market segmentation processes
2. Profile the segmentation
A) Geographic segmentation: Geographic Segmentation calls for dividing the market into different geographical units such as nations, regions, provinces, parishes, cities, or even neighborhoods. A company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants. World region or country: Europe, Spain, Africa, Ivory Coast, Middle East, Qatar, North America, Canada Country region: East Asia, South Asia, North Asia
City size: Under 5,000; 5,000-20,000; 20,000-50,000; 50,000-100,000; 100,000-250,000; 250,000- 500,000; 500,000-1,000,000; 1,000,000-4,000,000; over 4,000,000 Density: Urban, suburban, exurban, rural
Climate: Northern, southern
B) Demographic segmentation: Demographic Segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality. Age Under: 20-34; 35-49; 50-64; 65+
Gender: Male, Female
Family size: 1-2; 3-4; 5+
Family life cycle: Young, single, married with no children, married with children, single parents, unmarried couples, older, married, no children under 18 or older, single, other Income: Under € 20,000; € 20,000-€ 30,000; € 30,000-€ 50,000; € 50,000-€ 100,000; € 100,000-€ 250,000; € 250,000 and over
Occupation: Professional and technical, managers, officials, and proprietors; clerical; sales; craftspeople; supervisors; farmers; retired; students; homemakers; unemployed
Education: Primary School or less, some secondary school, secondary school graduate, some college, college graduate
Religion: Jewish, Muslim, Hindu, Buddhist, Christian, other Race: Asian, Hispanic, Black, White
Nationality: British, Swiss, Spanish French, German, Italian, Japanese C) Psychographic segmentation: Psychographic Segmentation divides buyers into different groups based on social class, lifestyle, or personality characteristics. People in the same demographic group can have very different psychographic profiles.
Social class: Lower lowers; upper lowers; working class; middle class; upper middles; lower uppers; upper uppers
Lifestyle: Achievers; strivers; survivors
Personality: Compulsive; gregarious; authoritarian; ambitious
D) Behaviour segmentation: Behavioral Segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product or service Many marketers believe that behavior variables are the best starting point for building market segments. Occasions: Regular occasion; special occasion; holiday; seasonal Benefits: Quality; service; economy; convenience; speed
User status: Nonuser; ex-user; potential user; first-time user; regular user User rates: Light user; medium user; heavy user
Loyalty status: None; medium; strong; absolute
Readiness stage: unaware; aware; informed; interested; desirous; intending to buy Attitude toward product: Enthusiastic; positive; indifferent; negative; hostile
3. Evaluation on segment potential for following
A) Product usage and potential: they product used in air New Zealand are of very good quality. If you’re booked to travel in Economy on a 777-300 long-haul international service, you can choose to upgrade to our Skycouch™ with this upgrade product option. It is important that you request your product upgrade on the website for the currency you used to purchase your flights. For bookings paid in Euros, please use our Continental European website, www.airnewzealand.eu, to upgrade the products in your booking.
B) Competition: Due to poor industry returns, the airline industry is fiercely competitive. In the long-haul market, Air NZ is exposed to both direct competition, as well as competition from different airline alliances (West, 2009). Comparatively, competition in the long-haul market isles intense than short-haul and domestic markets due to the lack of substitutes as well as increased brand identity. Additionally, competitive pressure in the long-haul market is somewhat all evicted as a result of codeshare alliance agreements. C) Segment attractiveness: There can be no greater vote of confidence in the growth potential of the airline, and of the attractiveness of New Zealand as an international destination, than expanding and upgrading our fleet. D) Organizational objectives and resources: Key goals are maximize the overall Group return on capital employed , Bring diversity and balance to the Group’s earning streams , Take full advantage of the Group’s competencies in markets where we have influence.
PART C- TASK 3
Outcome 3- Determine target market and positioning strategy 4. Select one that is suitable and why other strategies are not suitable. A) Undifferentiated marketing- An undifferentiated targeting strategy is used when a company decides to communicate the benefits of its product by sending the same promotional message to everyone. For an undifferentiated strategy to be successful, the company’s product must be readily available and affordable and must provide the same benefits to all consumers. Very few companies with consumer products meet these criteria. B) Differentiated marketing-Differentiated product markets are those in which the product offering of suppliers varies to some degree and in which buyers make their purchase decision on the basis of product characteristics as well as price. In such a market, suppliers’ products are imperfect substitutes for one another and less close substitutes impose a lesser competitive constraint than others.
C) concentrated marketing-A concentrated marketing strategy is targeted to one specific market segment or audience. For example, a company might market a product specifically for teenage girls, or a retailer might market his business to residents in a specific town. Concentrated marketing strategies are often geared for smaller groups of people, because they are designed to appeal to a specific segment. 5. Justify strategy in terms of organizational marketing objectives A) Sales- By selling the Product to the purchaser, Air NZ does not guarantee any freight services. Any such services must be arranged and paid for with Air NZ separately and will be subject to Air NZ’s Conditions of Carriage – Cargo which can be viewed at Conditions of Carriage Cargo International. Air NZ does not guarantee that the Product will meet Air NZ’s cage requirements (such as fleet hold size and / or capacity on any particular flight), or IATA requirements, for cargo or baggage on any date in the future on which the purchaser wishes to use the Product for carriage of any animal, on Air NZ or any other carrier. The current requirements can be found at Travelling with Pets.
B) Attitude: As a final variable to the behavioural segmentation is attitude toward a product. People can be divided into segments based on whether they have an enthusiastic, positive, indifferent, negative or hostile attitude toward a product. By considering the customers’ attitudes toward a brand or product the company will get a wide-ranging view of the market and its segments C) Revenue- Air New Zealand has refreshed its core strategy to drive sustainable, profitable growth across the Air New Zealand Group. Optimise your career in this opportunity to create value at the core where key business decisions and plans impact shareholders’ value and deliver to the growth strategy. Lead and develop the long term strategy and maximise revenue growth and performance and manage the Ancillary Revenue Team. You will develop a long term strategy for ancillary revenue that maximises revenue growth opportunities and delivers product enhancements that customers value. As well as defining annual roadmaps for ancillary product development that deliver the strategy. You will also lead the tactical performance management of ancillary revenue performance process across multiple sales regions and channels.
D) Organizational goals- Air New Zealand Limited is an international and domestic airline group that is publicly listed on both the New Zealand Stock Exchange (ticker: AIR) and Australian Stock Exchange (ticker: AIZ). We are principally involved in providing air passenger and cargo transport services to, from and within New Zealand. Air New Zealand directly serves 51 cities in 13 countries (including 26 destinations within New Zealand). The most recent additions to the route network include direct flights to Adelaide, San Francisco, Shanghai, Vancouver and Beijing. In the financial year to June 30, 2008, we carried almost 13.2 million passengers Flights range from a 25 minute Wellington to Blenheim trip, to a 14 hour, 11,571 km flight from Vancouver to Auckland. Air New Zealand is a member of the Star Alliance, the world’s largest multi-national alliance, providing access to 965 airports in 162 countries.
E) Awareness-New Zealand’s brand awareness is flying high following recent wins for best image and number one dream holiday destination. In April, both UK and India travellers voted New Zealand number one dream holiday destination in Trip Advisor’s bi-annual Trip Barometer study, with 33 per cent of Indian travellers voting for New Zealand and nearly seven out of ten respondents saying they planned to travel abroad in 2014 to destinations including New Zealand
6. Establish positioning variables of market segments
A) Usage and users- The usage rate segmentation divides the customers according to how much they use a product. They are divided into groups of non-users, light, medium and heavy product users and companies often seek to target one heavy user rather than several light users . This is due to the fact that the heavy users constitute a small percentage of the market but account for a high percentage of the total buying .Thus a company should seek to adapt their marketing strategy according to these customers B) Product class- health and safety in employment act- safeguarding passenger and airline staff safety. Ensure best standard food for people.
C) Competition- Air New Zealand’s low-cost operator, Freedom Air was established in 1995 in response to the launch of Kiwi Air (see above). The airline operates services from New Zealand to Australia and Fiji, and briefly operated on the main-trunk domestic routes.On September 6, 2007, Air New Zealand announced it was folding Freedom Air into the main airline, pointing to changes in the market, and the fact that there was little difference in consumer pricing between the two airlines. D) Lifestyle factors-Lifestyle and environment affect health and are shaped by socio-economic factors. The material circumstances of people’s lives and the behavioural choices they make are influenced by things like income, employment status and education.
E) Consumer needs and benefits- following is the example for consumer needs and benefits: Delivering baggage on time: Air New Zealand will make every effort to ensure your bags arrive at your destination on schedule. Despite all care being taken, baggage sorting systems are complex and involve both human and mechanical interaction which sometimes results in baggage being delayed. In the event that your baggage is delayed, Air New Zealand will endeavour to have it returned to you within 24 hours of receiving your written missing baggage claim. We will provide you with an amenity kit on request and if we are not able to return your bags within 24 hours, authorise limited emergency expenses to be issued to you.
PART D- TASK 4
Outcome 4- Identify, research and evaluate opportunities for business development 7. Implications for marketing strategies for each of organizational market The following are some implications for marketing
a New strategy for new times
b Segment and decide
c Look at distribution channels
d Help the consumer- teach, train, comfort and reassure
f Find new pastures, Keep permanent hand on pulse of consumer
8. Monitoring mechanism for market positioning strategies to strategic marketing plans. Air New Zealand target to provide best service to the customers with unique and refresh kiwi way. Air New Zealand challenges with finding forward the thinking ways to engage and provide services to the customers. Air New Zealand and UK sought out new styles top use email to focus on customer relationship and their feedback to their unique services. Air NZ welcomes this approach. It is a much needed departure from the artificial distinctions previously drawn between “aeronautical” and “non-aeronautical” in respect of an airport’s business.
There is widespread international acceptance of airports’ market power in operations such as car parking, retail space in the terminal, and taxi access to airports. Customers just loved the all facilities available for them at air new Zealand and the unique service provided to the customer during their journey. They have online support when we have any enquiries regarding their services and all about the journey. If any complaints air new Zealand committed to meet customers’ expectations and make customers to have an amazing journey with them. Air new Zealand dedicated to reach a goal of zero complaints across their business.