Virgin Blue airline commenced its operation in Australia as a domestic carrier i
ID: 3254680 • Letter: V
Question
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 Using the probabilities given in (2), calculate the probability that a randomly selected Australian domestic traveler is either in the 35-49 age category or traveled with Virgin Blue during the 4-year period. What is the probability that a randomly selected domestic air traveler traveled with Virgin Blue during the 4-year period given that the domestic air traveler is in the 35-19 age category? Suppose 79% of all domestic air travelers are concerned about value for money. Of those who are concerned about value for money. b8% traveled with Virgin blue at lead once in the last 4 yean. Of those who are not concerned about value for money. 12% traveled with Virgin Blue at least once in the last 4 years. Suppose a domestic air traveler is selected randomly and it is learned that they traveled with Virgin Blue during the last 4 years. Revise the probability that this traveler was concerned about value for money and the probability that the traveler was not concerned about value for money.Explanation / Answer
3.
Probability of domestic traveller in age 35-49 = 0.12
P(Traveller is in age 35-49 or traveller travelled with Virgin Blue) = P(Traveller is in age 35-49) + P(Not in age 35-49 and Travelled with Virgin Blue) = 0.12+0.88*0.34, as Virgin blue has 34% of the market
= 0.4192
P(travelled with Virgin Blue| Age is 35-49) = P(Travelled first time with Virgin Blue|Age is 35-49) + P(Travelled again with Virgin Blue | age is 35-49) = 0.24+0.85*0.34 = 0.529
4.
P(Value for money) = 0.79
P(Travelled with VB|Value for money) = 0.68
P(Travelled with VB | No value for money) = 0.12
P(Travelled with VB) = P(Value for money).P(Travelled with VB|Value for money) + P(No Value for money).P(Travelled with VB|No Value for money)=0.79*0.68+0.21*0.12 =0.5624
P(Value for money|Travelled with VB) = P(Travelled with VB|Value for money).P(Value for money)/P(Travelled with VB) = 0.68*0.79/0.5624 = 0.955
P(No Value for money|Travelled with VB) = P(Travelled with VB|No Value for money).P(No Value for money)/P(Travelled with VB) = 0.12*0.21/0.5624 = 0.045
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