Marketing Management of British Airways - Research Paper Example

Marketing Management of British Airways Contents Introduction 3 Research question and objectives 4 Literature review 4 Methodology 6 Analysis & findings 6 PESTEL Analysis 7 Swot Analysis 9 Porter five force model 10 Marketing Mix 12 Sales, market share, profits, costs, customer profile 13 SMART Analysis 14  Ethical and sustainability issues and new product idea 15 Conclusion 16 References 17 Introduction British Airways is one of the largest companies of United Kingdom. It is a very famous International airline company of the world. British Airlines main hub is at London Heathrow Airport. The company was established in 1974. The British Airways board was founded in the year 1972 by the UK government. With the merger of Cambrian Airways, British Overseas Airways Corporation, Northeast Airlines and British European Airways, the company British Airways was formed. The government of UK owned the company for the first thirteen years. The organization became private in 1987. The firm is the founder of Oneworld alliance. Its business is mainly concentrated with huge number of domestic and international flights. British Airways provides its flight service approximately 550 places of the world. Through various merger and acquisition this organisation has expanded its business worldwide. British Airways is registered in London Stock Exchange. The organisation is involved in different strategic alliances with other companies. It contributes a lot in its global expansion. This firm provides easy and luxurious travel facility to its customers. British Airways covers a large number of destinations with frequent and improved flight facilities. Through this excellent service the company acquire more customers and increases its revenue. It helps the firm to be in the leading position in the international competitive market. Research question and objectives This paper is based on the research done on Competitor environment and market environment of the company British Airways. The thesis of this paper is to understand the position and marketing management of British Airways in the modern market through different market analysis tools like PESTLE, SWOT, Marketing mix etc. The objective of this research paper is to evaluate the position of the company by identifying its markets and business situation. The research questions of this paper are associated with the quantitative and qualitative marketing objectives of British Airways. Another objective of this paper is to estimate the market share, sales, customer’s profile, and cost of the company. Literature review According to the author Philip Kotler, in the early times the marketers formed their strategies based on their assumption of zero impact of environment and infinite resources. But with the passing time they realized the scarcity of resources with different environmental costs. As a result they implemented new marketing management theories and practices for the development of their business. The author highlights the fact that marketers revised their policies regarding pricing, product development, branding, distribution etc for fitting into the competitive environment of the modern time. He has also focused on the issue that a balance should be maintained carefully between the growth of the company and its sustainability (Kotler, 2011). He stated that social marketing can meet the unique and new challenges of marketing management. As per the author Cravens and Piercy the concept of marketing management is about gaining power and advantage in the competitive marketplace. The company uses various marketing strategies with a strong emphasis on planning, analysing and implementing. The writers states that the functions of the companies in the modern time are examined from all the aspects of marketing managements (David and Nigel, 2008). The decision making process of the companies depends on basis of this analysis. . According to the writers O. C. Ferrell and Michael Hartline marketing management and planning holds a very important position in the modern firms. It builds a strong and long time relationship of the company with its customers. Efficient and effective marketing management system influences the company in its technological and economical changes (Ferrell and Hartline, 2012). The author states that a good marketing management helps to know the taste and preference of the customers affecting the business. The authors Archie Carroll and Ann Buchholtz stated that sustainability and ethical issues have a huge impact on the business in the modern world. Sustainability of a company has a huge contribution in its financial and social developments. Ethical issues of a company determine its values. The fundamentals of business ethics influences the decision making process. The writers highlights the fact that in the modern world of globalization the position a company is also determined on the basis of its sustainability and ethical issues. The modern company have their business all over the world targeting different types of customers. Major strong event has the power in changing the position of the business. As per the authors the ethical issues of accompany should be made in such a way that it does not hamper its relationship with its customers. Important task of marketing management is to deal with the stakeholder of the business in an ethical way along with reconciling conflicts between the company and its stakeholders. Without the support of the stakeholders the organisation cannot perform their marketing activities in the global competitive environment. According to these authors sustainability issues of the business develop its ability to hold its position for a long time in the competitive market (Carroll and ‎ Buchholtz, 2014). The modern firms have long term goals which are possible to achieve only by the sustainable development of the company. As stated by the author D. Chandra Bose effective marketing management holds an important position in the business of present world. Many complexities and complications are involved in the marketing process. So proper marketing management can results in effective decision making and business planning. Managing the marketing activities helps to accomplish the company’s objectives which increase the profit, sales and revenue of the firm. The author highlights the fact that marketing management influences the planning process of the company. It helps to determine the purchasing power of the customers and the position of its competitors. He also states that the employees of the company get a clear idea about their duties and responsibilities for effective management system. The employees then can perform their work dedicatedly which helps to conduct strong marketing activities by the company. According to the author marketing management plays a vital role in maintaining strong organisational strategies and satisfying the customers by delivering innovative and excellent product and services (Bose, 2012). Methodology Research methods are of two kinds. One is primary and another is secondary. Primary research is the collection of raw data directly from the people by filling up questioners, interviews, direct observations etc. Secondary research means collecting information from these primary sources and conducting research on that. This research paper is done on the basis of secondary research. Both qualitative and quantitative secondary research methods have been used here. A detailed study of different books and website is done for conducting the research on this topic. Primary research is not conducted because it is very time consuming as the targeted market and customers is vast. Therefore in many incidents it becomes very difficult in extracting data from individuals Analysis & findings The marketing management of British airways is highly sophisticated. It holds a very vital position in the organisation and its development. It covers all the activities of the business. The company has managed to build up a range of diverse marketing roles which involves research, planning, strategy development, product design, ecommerce etc. British Airways marketing management helps the company to meet the expectation of its customers by implementing different strategies which transform the organisation into a leading premium airlines company of the world. It direct the business to remain focused on its objectives (Gaskell, 2005). PESTEL Analysis Political There is an increase in the security and safety measures in the aviation industry for reducing terrorism activities. As a result British Airways have to bear high regulation on scheduling its flights. Bombing and hijacking flights have become frequent in recent times which arise for many political factors. So the company needs to very conscious about these facts as it can have adverse effect on the business. Economic The economic crisis of 2008 had a negative effect on the airlines business of UK. It weakened Pound against Euro which had a bad effect on British Airways. UK is experiencing a decrease in consumer spending capacity from last 13 years. For different cost cutting measures of the individuals there is a huge decline in the number of flight passengers. Social The aging population of UK are willing to make long vacations and travel plans which increase the customer base of British Airways. But unemployment has become a major problem of UK which gives rise to the price competition and comparisons. It creates a tough situation for the company. Technological With the development of online booking services it becomes very easy for the company to get more customers. But it also strengthens the competition. British Airways maintains and improves its technological developments. The company also implements different strategies and plans for developing new technologies in its flights. Environmental The environmental policies like energy control, noise pollution etc has created many issues for the company. Heathrow airport which is the hub of British Airways needs land for expansion. But environmental issues of land acquisition are becoming barrier in it. The consumers of the modern world are very much concerned about these environmental issues. Therefore British Airways have to maintain environmental friendliness to get maximum customers. Legal The open skies agreement of 2009provided a huge opportunity to British Airways to run its flight service between US and UK. This legal agreement helped the company to merge with American Airlines. But some of the legal issues like cabin crew strikes, price fixing among the competitors creates a major problem for the company. Swot Analysis British Airways as a strong presence in UK and global market. The UK government provides a strong support to the company. The firm is into this business for a long time so it has established a strong present of its brand. The company has many national and international flights which covers many destinations of the world. British Airways is the third largest aviation company. Weakness British Airways is facing a tough competition from Cash Rich Middle Eastern Airlines. The market share of British Airways reduces for intense competition. Relation among the employees in this company is not good which weakens the organisation. The process of innovating new service is slow in British Airways. Opportunity The Skytax quality system of British Airways boosts its image in the international market. The high cost of competition has forced many competitors of British Airways to leave the industry. It has a strong customer base which provides the company the opportunities to expand its business in different places. Threats There is an increase of labour cost in the aviation industry which is a problematic factor for British Airways. The rising fuel cost also creates threat. The increase in competition of airlines industry threatens the position of the company. The customer’s environmental awareness is pressurizing the company to reinventing its policies. Global economy is not in a good shape which gives a financial threat to British Airways. The competitors of this company have low operational cost which creates problem for British Airways for maintaining its profit margins. Porter five force model Bargaining Power of Suppliers British Airways faces a high bargaining power of aircraft suppliers. There are two big aircraft manufacturers. They have a strong competitiveness. The company is restricted as only supplier of fuel in the airport. Bargaining Power of buyer The customers of British Airways have a low bargaining power. Internet usage allows the customers to find and compare air ticket price. The market offering of airlines industry is almost same. Therefore price differentiation is low. Threat of new entrant The company faces low threat of new entrants as airlines industry has a strong competitive market. High capital cost is involved in it which creates a major barrier. Failure of big airlines companies deters new companies. Competitive Rivalry British Airways faces a high competitive rivalry with its direct competitors like Virgin Airlines. This industry has a very low growth. The only option for the company to grow is by acquiring more customers. Product and service of all the airlines companies are almost same which generates strong competition. Threat of Substitutes British Airways experiences a high threat of substitute in domestic market of UK. Many small airlines company like Ferry and Eurostar provides good service at a low price. In the international market the company faces low threat of substitute. Marketing Mix Product It is the most important thing for company. The product of British Airways is providing an excellent transport service to its customers with various offerings. It has its flight service in many destinations around the world. The flights of this company are also a part of its product. Different categories of flights provide services to its customers. Price It is a vital factor in aviation industry. Different pricing strategies are used by the companies to attract customers. British Airways has many deals and offers using pricing tool which helps to generate more revenue. This company also have premium, medium and economic pricing strategies which satisfies different needs of its customers. Place No airline company can operate its business without proper location. British Airways has its main operational base in UK. Apart from that the company operated its business from various locations of the world. Its presence in different countries helps the business to grow. Promotion Advertisement and marketing of British airways helps to establish its brand in the International market. For immense competition the company uses different marketing strategies for communicating with its customers. British Airways promotional strategies are proving mobile and text service to its business class customers. Sales, market share, profits, costs, customer profile British Airways provides various offers of selling its flights tickets. The company has different holiday packages which offer low price cheap flights to attractive destinations of the world. The company generated revenue of £11.421 billion in 2013. In the present time the company is experiencing a decline in its passengers for strong competition. It leads to the decrease of its market share both in UK and couther countries. The company is experiencing a huge collapse in its profit in the recent years. British Airways is facing a loss of £2 million per day. The organization is also involved in a massive debt of £6.5 billion. Various types of costs are involved in operating the airlines business. The firm has to incur the costs of maintaining its infrastructure, aircrafts, technology, employees etc. British Airways also has to bear many costs related to the company’s internal matters. The customer profiles of this company are high profile businessman, pleasure travellers. British Airways target’s the people having huge income. SMART Analysis Specific The main objective of British Airway is to provide transportation service to people from one place to another. Advertising about the product and services of British Airways generates awareness among the people and helps to position the brand. The PR activities of the company establish a direct relationship with its customers. Measurable The productivity of British Airways is an important measurable objective of the company. The work performance of its employees is also a measurable factor of the business. It has a huge contribution in the growth and development of the organisation. Customer’s feedback helps to measure the quality of company’s service and the level of customer’s satisfaction associated with it. Achievable British Airways main goal is to achieve a large number of loyal customers for a long term. For this reason the company provides training of superior quality to its employees to motivate them in their work. The company has the financial capabilities to perform these activities. Realistic British Airways tries to increase its sales by maintaining a specific time frame. The company carry out different ad campaigns and marketing activities for generating more revenues. The firm analyses its targeted customers and offers them services according to their needs. Time Bound The company provides service which is very much time bound. The business objective of British Airways is to satisfy its customer within the scheduled time by proving excellent quality of service.  Ethical and sustainability issues and new product idea The environmental issues of reducing carbon emission, noise have become a strong challenge for the company. The modern customers are very conscious about the environment. So they prefer to avail the service of those companies which performs its business ethically and have a good impact on the environment. As a result the company performs its marketing activities maintaining the ethical and sustainability issues. The firm focuses on its fuel efficiency for its sustainable development. British Airways develop new product ideas introducing many benefits and options to its customers. It expands its service by establishing new routes connecting many destinations. The company’s modern aircrafts have many new facilities which satisfy the changing need of its customers. British Airways improves its flight services by implementing different luxurious services to its customers. The product idea of the holiday finder service of this company helps in its development. British Airways has three different classes in its flight which are characterised by the facilities of providing attractive services. Conclusion British Airways is characterised by excellent services. The main reason behind the success of this company is its motivation and commitment in satisfying its customers and innovating new product and services. The continuous growth of the company in the competitive market of the aviation industry is for the implementation of its strong and effective strategies and policies. The firm has established good relation with the other players of this industry. The strategies of the British Airways related with target investments have helped the company in its growth. The external environment of British Airways creates a huge impact in achieving an overall competitive advantage on its competitors. It helps to meet the present and future challenges of the business. Various external and internal factors have a huge contribution in affection the airlines business of British Airways. Presently for many reason the company is experiencing a decline of its growth. Therefore by applying marketing analysis tools British Airways can estimate its position in the market which will help the company to develop suitable marketing activities for initiating the growth of the company. References Bose, C. 2012. Principles of Management and Administration. Delhi: PHI Learning Pvt. Ltd. Carroll, A and ‎ Buchholtz, A. 2014. Business and Society: Ethics, Sustainability, and Stakeholder Management. Stamford: Cengage Learning. David, C and, Nigel, P. 2008. Strategic marketing. Boston: McGraw-Hill Irwin. Ferrell, O and Hartline, M., 2012. Marketing Strategy. Mason: Cengage Learning. Gaskell, K. 2005. British Airways. London: Crowood Press UK. Kotler, P., 2011. Reinventing Marketing to Manage the Environmental Imperative. Journal of Marketing: 75(4). pp.132-135. Read More