Virgin Blue airline commenced its operation in Australia as a domestic carrier i
ID: 3254679 • Letter: V
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Virgin Blue airline commenced its operation in Australia as a domestic carrier in August 2000. Starting with a 'tin shed facility. Virgin Blue promoted an image as a low-cost air line with a high level of customer tare. The two competitors Qantas and Ansett, were long established in Australia with convenient and more comfortable terminal facilities. So Virgin Blue had to come up with another way of marketing its airline to Australian consumers. Market researchers told Virgin Blue that air travelers were confused, that Ansett and Qantas were exploiting the domestic airline market, and that the market was suffering front elitist positioning. Consumers wanted reliable and low-cost air travel, but it was not available. From this understanding, Virgin Blue tackled what it identified as the most crucial issues: in the words of its advertisers credibility and Aussiencss.* Virgin Blue s advertising company Cummins & Partners launched a campaign to position Virgin Blue as a brand that challenges people to fly more for less. The slogan 'Keep the air fair' was used in a series of commercials featuring Virgin owner Sir Richard Branson. Within four years of launching the airline. Virgin Blue secured 34% of the market. During this same time period, 30% of domestic air travelers traveled with Virgin Blue for the first time and 85% of those who initially traveled with Virgin Blue were flying with Virgin Blue again. To prevent any further loss of market share. Qantas responded by creating a new cut-price subsidiary airline, Jetstar. However, this move has only resulted in the transfer of Qantas domestic market share to its new subsidiary. In the highly competitive domestic environment. Virgin Blue has maintained its position, whilst Qantas's market share has dropped to just over 50%, having passed some 12% of its share to Jetstar. Thus. Virgin Blue had been successfully introduced into the Australian domestic travel market in 2001 and continues to maintain the position in the market. Discussion What probabilities are given this ease? Use this probabilities and the probability laws to determine what percentage of domestic tracts traveled with Virgin Blue least twee in the last 4 years. Is age category independent of the willingness to travel with this new airline? Reliable statistics suggest that approximately 12% of all domestic travels are in the 35-49 age category. Suppose 24% of the domestic travelers who travelers with Virgin Blue for the first time during the initial 4-year period were in the 35-49 age category. Use this information to determine whether age is independent of traveling with Virgin blue tor the first time during the 4-year period. Explain your answer.Explanation / Answer
Answer to question# 1)
The probabilities given are:
Probability of market share of Virgin blue = 0.34
Probability of market share of Qantas = 0.50
Probability of market share of Jetstar = 0.12
Probability of firt timers with virgin blue = 0.30
Probability of repeaters with virgin blue = 0.85
.
To find P(at least twice in four years) = 0.85 *0.15 *0.15 +0.85*0.85*0.15 +0.85*0.85*0.85
P(at least twices in four years) = 0.741625
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