Integrated Marketing Communications Plan for Virgin Atlantic - Essay Example

?Virgin Atlantic Airways Limited runs under the of Virgin Atlantic. It is a British based airline which is currently owned by the Virgin Group and the Singapore Airlines. The percentage share in the company is 49 % and 51% respectively for both companies. The company’s headquarters are present in Crawley, West Sussex in England. The airline is enroute between a lot of countries and regions of the globe. It covers the United Kingdom, North America, and the Caribbean region, Africa, the Middle East, Asian Countries and Australia. Its bases are at the London Gatwick Airport and the London Heathrow Airport. The airline uses both Airbus and Boeing’s wide bodied aircrafts. A unique thing about these airlines is that it doesn’t operate for short-haul services. Its shortest route is from London to Accra. By the year 2010, this airline was home to above 5 million passengers. It is currently the eighth largest airline in UK based on the number of passengers it caters too. Its turnover in the same year was above 2000 million pounds. (Parker et all : 2001) SITUATIONAL ANALYSIS Demographic: The type of customers Virgin Atlantic Airways caters to vary across different status, genders and age. Most of its travelers are business and leisure travelers. Children above 5 years old are allowed to travel on the airline. For those kids who are younger than 5 years, should be accompanied by their guardians or parents. The company also has the policy of accepting trained pets on their flights provided that they are there to carter after a disabled person, for instance a blind person. The airlines are home to passengers who could include friend circles, family troupes and business travelers. Technological: Virgin Atlantic Airways attaches a great deal of importance to technology. Technology re-vitalizes and also builds up the expectations of the passengers. Once you are in the air-line business you just cannot undermine the importance of technology in running the air-craft. Virgin Atlantic understands how important it is for its technology to be up-to date and how cortically dangerous it can be if the fleet is run without a check on latest technology. They have their own set of air-craft engineers who continue to work and improve the airlines at the technical level. Similarly, the airline has also incorporated and put technology to efficient use to entertain passengers during their flight. Technology has been used to come up with more innovative and novel ways for keeping the passengers busy and entertained during the flight. These included various incentives such as video entertainment, Sony watchman, ensuring that there is an individual video screen for every seat. The company’s entertainment was offering at least 20 audio channels and 16 video channels to its passengers. These ideas were implemented as a part of company’s plan to ensure that its passengers feel that they are being returned the right value for the money that they invest in Virgin Atlantic’s airways ticket. Political-Legal: The Heathrow Airport was opened to Virgin in the year 1991 by the UK government. This was when it removed the London Air Traffic Distribution Rules owing to pressure from within the industry. The London Air Traffic Distributions had taken form and effect in the year 1978. They had been implemented to ensure that the traffic between UK’s two main airports Heathrow and Gatwick was fairly distributed so that even Gatwick can make profit. Under the rules, it was stipulated that those airlines which did have an international scheduled service before 1st April 1977 would not be allowed to conduct their operations from Heathrow but would have to use Gatwick. On the international front, the rising trend in travel has been keenly observed by many. As developing countries continue to grow, their citizens have become more and more open to travel. A major trigger in encouraging air travel has been the industry’s privatization and de-regulation. Before the 1980s, most of the airlines especially in countries like US were state-owned. The efficiency of these airlines was poor and required support from the state. However the paradigms have started changing today. Most of the airlines have evolved and dies-embarked towards partial private ownership. The airline industry is also becoming more and more flexible regarding fly-zones and routes. Typically speaking, air-travel rights are mostly negotiated between countries themselves. While air-travel is an international business, there are a lot of companies that remain nationally focused. However now, a lot of markets are moving towards a more de-regulated “Open Skies” policy. Under this policy there is freedom of exit and entry on various routes. The US domestic market and the UK market are an example of this. The de-regulation has been particularly beneficial in allowing many carriers the freedom to venture into new markets. As a result, the competition in the market has risen remarkably and with that the yields have seen an overall dip. Economic: Economic issues associated with the industry are mostly related to de-regulation. Due to de-regulation and the over-all evolution of the industry structure, air-fares have become lower than ever before. De-regulation has kept the air-fares relatively low compared to those in other countries. This is because, irrespective of failure of new-entrants, investors continue to invest in this business and the market keeps seeing new contenders. There are various market implications of the afford-mentioned. As a result ticket costs go down, discounts are offered to senior citizens and group travel and the over-all turn over the company decreases. Socio-Cultural: The staff at Virgin Atlantic Airways has always been prim, proper and at par with any standard quality measures despite the low-income offered to them. The employees at Virgin have a sense of responsibility and put the passenger’s needs and wants above and before anything else. The idea is to inculcate the feeling of belongingness in the passengers. The company also encourages a fun-filled atmosphere amidst hard-work. The crew is encouraged to work hard but is also asked to feel light and have fun and ensure that they are satisfied with what they are doing and offering to the passengers at large. Environmental: Virgin Atlantic adheres to a strict environmental policy for its airline business. The company has introduced various environment friendly initiatives such as recycling in the company’s offices and on –board. These measures tend to be cost-effective and environmentally savvy in their bid to preserve the environment. Recycling is conducted under the guidelines of the Ministry of Agriculture. According to their director, “The current environmental policy identifies Virgins’ position with regards to recycling and re-using paper, printer toner cartridges, plastic glasses, vending cups, aluminum cans, duty free bags, duty free bags, amenity kits, menus, linens, and brochures.” (Keegan:2000) OVERVIEW OF COMPANY’S CURRENT IMC STRATEGY: The aim of the company’s IMC strategy is to build a profitable airline which people would love to fly and where employees would look forward to work at. In order to retain its competitive edge Virgin Atlantic has remain focused on their core competencies. The company is keen on sustaining the quality of their services and retaining customers like-wise. They have also built their IMC strategy around fostering and developing relationships with Upper Class customers. As a result, the company’s routes to Toronto, Chicago and Cape Town have come down. The company has also worked to reduce the number of flights it handles every day and the personnel it handles by 20%. (Millenium Group: 1996) The company focuses on good quality service to attract customers. Virgin Atlantic works to offer service to satiate all the needs of its customers. Mr. Branson’s entrepreneurial attitude and perception is acknowledged by many for its fearless antics. Similarly the managing director of Virgin Atlantic, Mr. Steve Ridgeway is considered to be equally passionate and an active advocate of brand values. The management attitude of the company has played a key role in the over-all success of the brand at large and for promoting values that consumers can relate too. As far as IMC techniques are concerned, the company uses a huge range of marketing techniques. On the advertising front, the company uses TV, press, magazines; out-door promotions, posters and taxi-sides. The promotional material carries the unique logo of the company- the flying lady. The aim of advertisements is to increase awareness about the product developments and keep the customers informed of new routes. The company spent above 8 million dollars on a promotional campaign that linked Virgin with the movie Austin Powers. An enlarged version of Austin Powers was painted on the tail while Virgin was re-branded as Virgin Shang antic. (Rifkin : 1998) STRENGTHS AND WEAKNESSES OF THE COMPANY: Strengths: Virgin Atlantic is a very famous brand in the UK and more than 98% of the British Public recognizes it. Clients generally expect good quality service from the company in each of its class – Business as well as Economy. Virgin as a brand is a very strong front in the eyes of most customers and is known for its innovative breakthroughs in this business. They have not only come up with more exciting things to entertain their customers during flight but have also introduced different type of membership plans like Gold club holders and J class to ensure brand loyalty. The brand is a part of a huge brand the Virgin Brands and enjoys great brand loyalty and reputation due to its association with the bigger family of brands. It is led by Richard Branson who is known for his acute insight into entrepreneurial management. The brand had also partnered with the Singapore airlines. The partnership was mutually beneficial because of their non-overlapping routes. The brand enjoys positive publicity and is known to every man. Weaknesses: The company needs to work on their flights. They need to ensure that flights are no longer delayed and there is greater flight efficiency. The travel routes the company embarks on are limited and do not cover a lot of areas. They have cut out on routes to places like Chicago, Toronto and Cape after September 11. Their avalanche into the world of e-commerce was rather late in the day when most other companies had already settled for it. The company has witnessed drop in demand off-lately from the US for travel and other things. Opportunities: There are various opportunities available that Virgin can capitalize on. Strategic marketing can be made more innovative and fun and frolic based. They can build on their information system capabilities by installing an advanced inventory system. They can also provide potential in-flight internet connection to their customers. The website needs to be complete revamped and made user-friendly. Additional routes need to be added on to the flight base of the company. They can also venture into a lot of online and social media marketing campaigns through Facebook and twitter. STRATEGIC DIRECTIONS FOR THE COMPANY: The two strategic directions that the IMC will support would be the re-launch of the company’s brand website and to increase the market share of the product-service of the organization. With new entrants coming into the market every now and then it is important to not just retain the market share of the company but also build on it. The target market for this campaign varies and will depend on the gender and income status. Males in the age bracket of 35 to 45 years will be the prime focus for widening the market share in the Upper Class passenger’s category. Their average income per year should be above 50,000 pounds. These passengers are mostly travelling for business purposes and their company mostly operates on an economy travel policy. The other target market of the company would be for the economy classes and they would be spread across a wider socio-economic strata and age-ranges. Their product would thus be purchased by these two markets: 1. Mainly the male class for business purposes 2. The economic class for leisure and visiting purposes. Virgin Atlantic would mainly target the upper class customers. They are primarily business passengers who tend to travel on transatlantic routes. IMC Objectives: An Over-all view There would be many concrete objectives of the IMC campaign of Virgin Atlantic. At the forefront, the main objective would be to keep the customers informed of our products and services and any new offerings in the process. Similarly passenger interest in the Flyers club and other brand loyalty related offers will be ignited. On the side-lines, the web-site re-vamp would be focused on educating and informing the customers about the benefits that they can have by taking various services that the company offers. There is a huge need to create more awareness of Virgin’s frequent flyer program. The primary aim of the flyer program is to encourage brand loyalty. The program will be massively promoted on the company’s website and social media. Under this program miles will be offered in exchange for free lights and various other rewards. Qualitative objectives: At the qualitative level, the main objective of the IMC as mentioned before would be to create more awareness of the services and products offered by the company and to trigger brand loyalty through the Flyer Club program. These objectives will be in sync with the core IMC strategy of creating mass appeal, attracting more market share and eventually do that by re-vamping the website of the company. This will help build brand loyalty on the process and customers will refrain from switching to other products and services. It will also create more credibility and confidences for the products offered by Virgin and sustain demand throughout the year. The company faces stiff competition from the British Airways on all its routes. In order to gain more market share it needs to attract customers from British Airways in particular. Virgin Atlantic in the past has been extremely aggressive. They also engaged in inculcating negative publicity for British Airways and American Airlines by stating that these airlines were unhealthy for competition. Virgin Atlantic has had a tough struggle with all routes into and out of London. Quantitative Objectives: Two primary quantitative objectives would be to increase the overall revenue of the company by 20% before the next quarter and ensure that brand loyal customers are increased by at least 10% which means more re-purchases. Specifically speaking, this would mean working on an elaborate and a comprehensive website to all destinations inclusive of Chicago and Toronto. The revenue would be measured in terms of pounds and should be 20% higher than the current fiscal year’s target. The target is to be achieved by the end of June 2012 which is when the next Annual Statement would be released. Budget: Communication tools: TV- Advertisement: A new series of TV ads promoting Virgin and its current product offerings will be sent on air. The ads should cost us around 100,000 pounds. The ads will be run all year round and during Christmas the runs would be heavier, which means more money will have to be pumped in these ads. In order to trigger more brand loyalty, terrestrial channels will be used. This will mean more expensive TV outing. 20,000 pounds will go in the production and around 80,000 pounds in the placement. Website Revamp: The website revamp would mean coming up with new banners ET all for the website. This should cost around 1000 pounds at the most. Social Media marketing: The company will be massively promoted on most social media sites such as Twitter and Facebook. The costs encountered would be nil in the process. This is a relatively cheap and user-friendly way of promoting product offerings. Celebrity Brand Endorsements: Stars will be roped in to endorse the company and this will be relatively more expensive. The total budget set aside for celebrity fees and all would be around 150,000 pounds. Other Promotions via Print Media etc: Around 100,000 pounds. Agency name: Blue-ray TACTICS: SOCIAL MEDIA CAMPAIGN: Facebook and Twitter: Regular updates will follow on Facebook and twitter regarding the company’s offers and incentive. Any discounts offered will be immediately updated on each of the social networking sites. The target should be to increase the membership of the Facebook and twitter page by 10 times at least every month. Sales Promotions: Flying Club Posters. Promotional message would be: Do you have what it takes in you to be classy? Virgin makes you one? Discount offers and coupons for different seasons will also be given. TV advertisements : The ads will highlight all the incentives that passengers can avail during the course of their flights. They will also use celebrities from different genres of life, sports, entertainment and business to attract the elite and business class. Ads will follow the basic theme of red and white and the promotional message would be “Fly relaxed...fly Virgin” Print Media Ads Print Media Ads would also be central to the theme that would be followed on TV ads. Mass promotions will be followed using Print Media Ads. The Ads will appear in all kinds of newspaper particularly business newspapers and magazines. SCHEDULE: Month 1: Social Media Marketing and Web Marketing Month 2: Social Media and Print Media Month 3- 6: Social Media, Print Media and Electronic Media. Success Evaluation: The success of the campaign will be evaluated by looking and comparing the sales generated at the end of every month and finally at the end of six month. Over-all revenue and the number of re-purchases made by passengers will be used to evaluate the success of the campaign. Reference: Keegan, Warren J & Green, Mark S., Global Marketing, 2nd Edition, New Jersey: Prentice Hall, 2000. 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How Richard Branson Works Magic, Strategy and Business, Booz, Allen, & Hamilton, 1998, http://www.strategy-business Virgin Atlantic Customer Service Representative, Quick Reference Guide, 2001. Read More