Virgin Atlantic - Report Example

Virgin Atlantic – A Premium Brand January 11, Strategic marketing plans increase the demand for Virgin Atlantic Airlines’ services. The research delves on the implementation of Virgin Atlantic Airlines core value strategies. The research delves on critical evaluation of the competitive strategy of Virgin Atlantic Airlines. Implementation of strategic marketing plans successfully increased Virgin Atlantic Airlines passenger ticket sales. 1. Competitive strategy of Virgin Atlantic Airlines. The company, Virgin Atlantic, implemented the core value marketing strategies (Czinkota, 2007). The company’s Steve Ridgeway, VirginAtlantic’s Marketing Director, focused on advertising the many benefits of flying the London and other skies within the comfortable passenger planes of Virgin Atlantic. Mr. Ridgeway joined Virgin Atlantic Airlines in1989. Ridgeway’s successful marketing strategies triggered his promotion to the more responsible and more hectic head of marketing position in 1992. The promotions activities included offering discounts and other special privileges to frequent flyers. The company offered busy airline travelers to enroll in the company’s frequent flyer programme. Ruth Blakemore, Virgin Atlantic’s Marketing Head, coordinates with Mr. Ridgway as one of the top marketing officers of Virgin Atlantic (Doyle, 2012). Further, the company implemented excellent quality customer services to increase customer demand(McDonald, 2007). The company’s in-flight catering service is on the same level as the catering services of other competing airline companies. The company’s airport retail area caters to the personal and other travel needs of the company’s airport passengers. Within the airports, the customers can easily access the busy duty free shops. The company also implements a prestigious product development as well as public relations campaign under the strong leadership of Mr. Ridgeway. Specifically, the company’s advertising budget is equal to two percent of the company’s overall turnover or revenues. The advertising campaigns are described as several short advertisements being handled by several professional advertising and promotions organizations (Doyle, 2012). Further, Virgin Atlantic’s management structure focuses on customer-based marketing. The company’s pricing and services are geared towards filling the current and future customers’ demands or wants. The company’s headquarters is in Crawley, near Gatwick. The organisation implements flexible communication activities within the line and staff setup. The organization is described as loose. One senior officer of the company described the management structure as filled to the brim with entrepreneurial trimmings, independent, and autonomy. Management exercises strong control of both the employees and the scarce company resources. Most of the company’s employees had prior experiences in other competing United Kingdom airline companies. The people are given the free will to make decisions within the necessity of wasting time trying to seek approval from the upper levels of management. The management policies include scrutinizing and managing organizational expenses and costs. Each sector of the airline company is mandated to reduce operating expenses. The company’s top three management officers are managing director Roy Gardner, managing director Syd Pennington, and finance director Nigel Primrose. The three officers report directly to Virgin Atlantic Airlines founder Richard Branson (Doyle, 2012). The company’s Managing Director Roy Gardner brings a vast airline operations experience to uplifting the operational management of the company. Gardner was the former technical director of Virgin Airways in 1984. Prior to his Virgin Airways stint, Gardner worked with Laker Airways. Garner also had several years’ experience working with British Caledonian Airways. Mr. Gardner’s airline experiences, prior to Virgin Atlantic Airlines, included technical responsibilities. The technical responsibilities focused on quality airline operations, constant supply of food, raw materials, and other airline operation needs. Gardner also managed the emergency operations of the airline companies. Similarly, Finance Director Primrose is a seasoned Virgin Atlantic Airlines upper echelon management officer. Primrose is a chartered accountant. As such, Primrose is well versed in the collection of costs, revenues, expenses, and other airline operational quantitative data. As accountant, Primrose scrutinized the budgets for possible realignments or adjustments ensuring that organizational goals and objectives are achieved within the prescribed time periods. The finance director handles the budget preparation process. Likewise, Primrose controls the viability of the company’s feasibility aspect of business operations (Hilton, 2007). Managing Director Pennington focused on ensuring that the current high demand for Virgin Atlantic Airlines passenger seats continues to rise to higher more profitable levels (Rix, 2007). Pennington’s responsibility includes harnessing the marketing of the company’s prestigious airline brand. Prior to his entry into the Virgin Atlantic Airlines environment, Pennington was instrumental in the establishments of Air Europe in 1978. Additionally, the managing director aided in the successful establishment of Air United Kingdom Airlines during 1983. The managing director formally entered the Virgin Atlantic Airlines fold in 1986. A survey conducted among 141 respondents indicates the public’s perception of Virgin Atlantic Airlines, in relation to the other United Kingdom competing passenger airline companies. In terms of airline travel brand name, 24 percent of the respondents chose Virgin Atlantic Airlines. American Airlines got only 2 percent. United Airlines produced only 1 percent. British Airways generated the highest votes at 70 percent (Doyle, 2012). Other survey factors indicate that Virgin Atlantic Airlines ranks second, close behind top ranking British Airways. In terms of spontaneous awareness factor, Virgin Atlantic Airlines got 74 percent. On the other hand, British Airways got a higher 96 percent of the respondents’ votes. In terms of brand name rating, Virgin Atlantic Airlines got 80 percent of the votes. However, British Airways produced a higher 85 percent (Doyle, 2012). The company’s Virgin Freeway frequent travelers programme increased demand for Virgin Atlantic Airlines air travel seats. The programme was started in the United States during 1992. Specifically, the programme was offered to Virgin Atlantic Airlines passengers paying for the Mid Class or Upper Class ticket options. Another condition for the programme was that the prospective programme members must be patronizing the international services of other related entities. The related entities included American Express, Intercontinental Hotels, SAS, and British Midlands. The programme members’ benefits included using free flights to Europe, North America and Japan. The members can also avail of the hot air balloon tourist destination benefits. The other programme benefits included free polo lessons, rally driving benefits, luxury country tours for two and four days of United States skiing activities. Lastly, the programme members were offered free tickets for each upper class passenger ticket bought (Doyle, 2012). The company has a value chain partnership with other beneficial third parties (Weele, 2007). The company entered into a viable partnership with SAS and other international brands. Ms. Ruth Blakemore, marketing head, emphasised that the partnerships increased Virgin Atlantic Airlines’ capacity to compete with the top British airline company, British Airways. Additionally, the British Midlands partnership increased the demand for the Virgin Atlantic Airlines passenger seat tickets. Ruth Blakemore reiterated that the partnership among SAS and British Midlands was a join force aimed to toppling the British Airway’s air travel passenger market segment leadership (Doyle, 2012). 2. Critically evaluation of the competitive strategy of Virgin Atlantic Airlines. Virgin Atlantic Airlines advantageously established a profitable competitive strategy in the development of its current competitive position (Weihrich, 2009). First, the company offered lower priced airline tickets to the company’s current and future customers. With the lower priced tickets, many of the competing airline’s current passengers shifted to riding Virgin Atlantic Airlines passenger planes. Likewise, offering benefits to repeat customers under the company’s frequent flyer programme increased Virgin Atlantic Airlines passenger seat ticket sales. Virgin Atlantic Airlines’ marketing success includes the advantageous implementation of the company’s successful innovative in-flight and pricing business model strategies. Virgin Atlantic Airlines’ founder, Richard Branson, emphasized that he will give all his efforts to ensure that Virgin Atlantic Airlines will surpass Virgin Atlantic Airlines’ first ten years of adjusting the saturated United Kingdom airline passenger market segment. After establishing Virgin Atlantic Airlines in 1984, Mr. Branson envisions Virgin Atlantic Airlines will survive for more than 20 years. Mr. Branson maximized resources and marketing strategies to innovatively swim above the deepening economic turmoil enveloping the United Kingdom airline industry. First, Mr. Branson focused on prioritising filling the demands of the company’s United Kingdom customers. The success of Virgin Atlantic Airlines is pegged on pricing strategy. The entire marketing strategy of Virgin Atlantic Airlines focuses on giving the current and future customers what they want, in terms of airline ticket prices. The customers eagerly bought the low priced Virgin Atlantic Airlines passenger tickets. The customers can afford the lower priced Virgin Atlantic Airlines tickets, compared to the higher priced tickets of competing United Kingdom airline companies. Further, Virgin Atlantic Airlines offered new service concepts that included the joining the previously discussed freeway membership programme. With the introduction of better in-flight service comfort, Virgin Atlantic Airlines gave the customers a sense of unforgettable flying comfort at affordable prices. The low price and quality in-flight service made each customer excited to reserve another long distance ticket (Doyle, 2012). There are limitations in Virgin Atlantic Airlines’ above marketing strategies. In terms of pricing, the company should not lower their passenger ticket sales prices to lower than the amount needed to recover the cost of running the company. Likewise, the airline ticket prices must not be large enough to recover the daily expenses of company. The daily expenses include gasoline expenses, food expenses, employees’ salaries, electricity expenses, rent expenses, telephone expenses, advertising and promotions expenses and other related Virgin Atlantic Airlines operating expenses (Fifield, 2012). Further, the introduction of innovative marketing strategies must be based on realistic goals and objectives (Doole, 2008). For example, some airline passengers prefer a smoke free airplane environment. The company must ensure that cigarette smoke does not bother the smoke-hating airline customer. The company must also cater to airline customers who prefer to watch movies onboard the planes by directing the passenger to the movie seats. Other passengers prefer a reclining seat so that they can sleep during the entire flight. In this case, the company should not force the customer to take a non-reclining seat since an emergency resulted to the passenger being forced to sit in an unfavorable seat. The innovative marketing strategy’s limitations include failing to fill the desired needs of the airline company’s needs and wants (Carpenter, 2012). For example, the company’s marketing strategy includes offering free beverage to all airline passengers. The diabetes passenger will not be happy with the offer of free sugar-containing drinks. Likewise, offering the passengers free movies onboard may not amuse some of the airline passengers. Some passengers prefer to sleep during the flights. Consequently, the company’s allocation of budgets to place television sets in the planes would not be appreciated by the sleepy airline passenger. 3. Appropriate Recommendations There are recommendations that should be implemented to keep abreast of and surpass the market segment position of the current leader of United Kingdom airline passenger market segment, British Airways (Kotler et al., 2010). First, the company should increase the number of flights. An increase in flights precipitates to more airline passengers buying Virgin Atlantic Airlines tickets. Likewise, the Virgin Atlantic Airlines should increase the number of airline passenger destinations. Increasing the destination choices will increase the demand for Virgin Atlantic Airlines passenger ticket reservations. Offering discounts on nonpeak airline travel months will increase Virgin Atlantic Airlines ticket sales. Many current and future customers will grab discounted travel tickets in order to save on the travel costs. Enhancing and maintaining the current quality in-flight services will increase ticket sales. The company will continue to sell tickets through its online ticket reservation website, http://www.virgin-atlantic.com/us/en.html. Lastly, the company should continue advertising the many benefits of riding the comforts of each Virgin Atlantic Airlines’ plane. Advertising will open the enthusiastic eyes of current and future customers to increase their Virgin Atlantic Airlines travel itineraries. Summarizing the above discussion, marketing increases the customers’ desire for Virgin Atlantic Airlines’ services. The implementation of Virgin Atlantic Airlines core value marketing strategies includes innovative marketing’s selling low priced tickets. The critical evaluation of the competitive strategy of Virgin Atlantic Airlines shows that there is a high demand for Virgin Atlantic Airlines passenger tickets. Evidently, the setting into motion of Virgin Atlantic Airlines’ continuing strategic marketing plans profitably increased Virgin Atlantic Airlines passenger ticket revenues. References: Carpenter, G, 2012, Handbook of Marketing Strategy, Edward Elgar: London. Czinkota, M, 2007, International Marketing, Cengage Learning: London. Doole, I, 2008, International Marketing Strategy, Cengage Learning: London. Doyle, P, 2012, Innovation in Marketing, Routledge: London. Fifield, P, 2012, Marketing Strateg,. Routledge: London. Hilton, R, 2007, Managerial Accounting, McGraw-Hill: London. Kotler et al., 2010, Marketing Strategy from the Masters, Financial Times: London. McDonald, M, 2007,. Marketing Plan, Butterworth- Heinemann: London. Rix, P. 2007, Marketing: A Practical Approach McGraw-Hill: London. Virgin-Atlantic, Virgin Atlantic, Retrieved January 11, 2012 from Weele, A, 2007, Purchasing and Supply Chain Management, Cengage Learning: London. Weihrich, H, 2009, Management, McGraw-Hill: London. Read More