British Airways as a Service Company - Case Study Example

Report-Service product analysis Table of Contents Executive summary 2 Introduction 3 Background on British Airways 3 BA as a service industry 5 Personal experience with BA New First class 5 Analysis of BA venture using 7 Ps 7 Product 9 Price 10 Promotion 10 Physical evidence 11 People 12 Process 13 Place 13 Recommendations 14 Place 14 Promotion 14 Product 14 People 15 Conclusion 15 Work cited 16 Executive summary The need of offering high quality services to customers, especially in the service industry has become essential for success of many firms across the globe. In the service industry, the success of the firms solely dependents on the way service is delivered. For British Airways (BA), UK largest international airline established in 1971, has continued to perform well in the domestic and international markets. This is based on the high quality services offered by the contact employees and other stakeholders who enhance customers’ welfare in all their regions. In one of my personal experience on the new first class cabin offered in all its planes, the firm offers seats having ample space for the passengers to place their bags, laptops, and iPads among other devices on board with them. To enhance on service delivery the firm employs the 7P’s model of marketing to attract and retain its customers across the globe. For example, the firm enjoy a strong brand name on all its products across the globe at affordable prices. BA promotes its services by giving loyalty schemes to its customers as well as using the modern forms of advertisements using the social networks. The firm also employs hire-qualified staffs having the right interpersonal skills, service knowledge and attitude to provide services required by the customers. Other elements of marketing mix used by BA include place, price, physical evidence and process. One of the recommendations to improve on the aspect of people in the marketing mix is to motivate the contact employees, through training, promotion among others. To improve on products, BA should invest in research and development to develop high products and services acceptable and economical to the customers. In conclusion, firms in the service industry should employ the elements of market mix to improve on service delivery. Introduction For firms to remain profitable in the current competitive marketing environment there is an urgent need to address the aspect of quality customer experience. As marketing environment becomes stiffer, due to economic hardships facing many consumers across, businesses have taken stringent measures aimed at attracting and retaining the loyal customers. As witnessed during the last global recession, only those businesses that offered efficient customer care services, both online and offline were able to expand their businesses territories (Schullz 89). However, it is worth noting that, companies in the service industries are highly affected as compared to their counterparts selling products. This is based on the fact that, the service industry solely dependents on the way service is delivered and failure to meet customers expectation leads to decreased number of customers. In all service industries I have visited in different parts of the globe, the need of receiving high quality services is imminent. This paper critically analyse my personal experience in British Airways. Background on British Airways British Airways (BA) is United Kingdom largest international airline, which operates domestic and international charter and scheduled services for carriage of passengers, mail and freight as well as ancillary services. BA flies more than 600 destinations across the globe and is one of leader in airline industry. Established in 1971, the airline has largely grown from the domestic market to the international markets thus being able to compete with other notable airlines such as American Airways, Lufthansa Airline, Qatar Airways among other notable global airlines. The firm is a founding member of Sky team, Oneworld and Staralliance airline along with airlines such as Qantas, Cathay Pacific and American airline. In the year 2009, the firm merged with Iberia airline, making the two airlines to create the third largest global airline with regard to annual revenue. After the merger, the firm constituted FTSE 100 Index under title of the international airline group. BA, whose headquarters is in waterside, Heathrow Airport has it operations across the globe. The firm hold a Type an Operating licence from UK Civil Aviation Authority, thus permitted to carry cargo, passengers on its crafts more than 20 seats (Campbell-Smith 49). Being an American citizen, am a frequent visitor of European countries Britain, Germany for academic and holiday matters, I frequently use the services of BA to connect between these countries. This is based on the fact that BA dominates Heathrow, the largest airport connecting US and European continent, due to its 40% slots ownership at this airport. From its globalisation approach of marketing, BA is keen at ensuring that customers’ satisfaction level both in the domestic markets to increases the profitability levels. To satisfy the needs of customers, the organisation has addressed the internal and external situations, which includes customers as well as its own capabilities. Further, BA has understood and adapted uncontrollable and dynamic marketing environmental factors. As a means of cutting down on cost, BA has taken deliberate measures such as reducing the number of staffs across some of the major branches as well as forfeiting salaries at some selected months. By doing this, the firm has increased on service deliveries by reducing transport charges to its customers among other notable aspects such as loyalty schemes. It is clear that the success of BA both in domestic and international markets is due to vast international presence and operations, enhanced operating performances and productivity for more than 40,000 employees globally (Penrose 162). Generally, I can attribute the success of BA to high quality of service offered by staffs across major countries such as US, factor that enable the firm to attract and retain all end customers. For instance, in the JF Kennedy Airport, my home airport, BA offers real-time check-ins through online methods as well as great value rental cars and hotels for all its customers. BA as a service industry Provision of services is an economical activity where buyer does not generally obtain exclusive ownerships of commodity purchased. Campbell-Smith (34) argues that service industry is a form of industry that earns revenues through provision of intangible services and products. The service industries include tradesman ship, tourism, computer services, and restaurants among others. It is worth noting that the service industry has increased by more than 34% and accounts for almost 60% of global economy. This is attributed to increased levels of automation, enhanced need of travelling, communicating among other notable aspects. From above information, it is evident BA is a service industry firm, due to the fact that the firm offers intangible services and products to its customers. The service offered by BA is insubstantial and intangible, thus there is no need of stocking, storage or transport. In the case of BA, there is provision and consumption of services at the same time without delay or friction. The other characteristic of services offered by BA is their variability, based on the fact that every service is unique (Schullz 32). All services are rendered as well as consumed and cannot be repeated as another one, location, condition, circumstances or configuration. From the above characteristics, it can be deduced that BA offers services to its customers, as most of them including transport, food, and accommodation among others are intangible, perishable, inseparable, offered simultaneously and variable thus fulfilling all vital aspects of the service industry. Personal experience with BA New First class Over the years, I have flown on several world-class airlines such as Asiana, Lufthansa, Virgin Atlantic, Korean Air, Swiss International Airlines, Gulf Air, and Qatar Airways among other notable global airlines. However, it is worth noting that the services offered by British airways cannot be surpassed by any other airline I know of. For instance, in the long haul flights, the airline has up graded its first class cabin as well as the hotel the customers stay. In my experience, most of the first class products offered by other global airlines are slightly larger in terms of personal experience with enhancement to cabin services. However, BA new first class products have not only upgraded its products in the cabin, but has created entirely new environment in the cabin and coupled it with the firms existing stellar service levels (Penrose 121). This has created a first class that I have not experienced over the years with any other global airline. Earlier on, when entered into BA first class cabin, one could notice standard airplane windows and have now replaced with larger rectangular window. The window have a larger window pane that is placed over the two window portals, thus giving all their passengers a sense of brighter and less confined environments while on board. Rather than the plastic pull-down window shades, the management have replaced this with automated window shades having capability of changing colours during flight. The feel of the BA seats is relaxed even in full upright positions. The new BA first class seats have installed seats with angle of recline to a bed controlled by a dial as compared to a button (Hayward 24). Dials allows for ultimate control when finding maximum confort for duration for long flights. The spacious area, which surrounds new BA first class seats greatly, leaves ample space for passengers to place bags, laptop, iPad or even cameras for their tours, without impeding personal comfort or space. As compared to my previous experiences with BA business class and first class, personal attention to details from flight attendants is enormous. It is stellar and close to services, I have experienced with Asian Airlines as compared to services offered by most European carriers in the first class. While first class experience may be outside price rage of most of the passengers my self included, although I upgrade through miles, for those customers seeking outstanding experience from or to Europe, the choice is the BA new and great first class products. Generally, it is worth noting that BA has continuously provided world-class services to its customers regardless of whether they are on board of first class or business class experience. Despite the hard economic times faced by the global airlines, BA has been able to stay ahead of the pack by increasing its collaboration with technological innovations. The organisation has increased on the number customers by delivering quality of satisfactions and services. Albeit bothered by the challenges in nature of business involved in, BA remains highly committed in serving in all ideal for the air safety to all its customers. In all my flying experiences with BA, the firm has been able to deliver adequate solutions for all its customers in most satisfying and safety means. O cater for the needs of customers from different races, the firm have employed employees, mainly female to enhance gender equality, speaks in different dialects , thus enhancing the commitment of the firm towards equal rights (Penrose 56). Further, the firm use high quality technology in monitoring activities such as check-ins processes, accommodation, transport among other services required in enhancing quality delivery of services. Analysis of BA venture using 7 Ps It is worth noting that the success of any given firm largely depended on the marketing strategies employed. Hayward (24) says that marketing covers areas such as public relations, sales, adverting among other notable areas. Marketing is the process of introducing and promoting services or products and encouraging sales from the targeted consumers. A sale is the actual transaction, where customers buy the intended service or product. For British airways, the need of marketing its products both in the domestic and international markets remains an essential part of the organisation. Without adequate marketing strategies, the firm would not be bale to compete with upcoming airlines, which are offering similar services with BA. All types of marketing approaches used by BA promotes service awareness, thus educating its customers on the various services they may take advantage. The main aim of marketers from any business is to create strong brand name recognitions or products recalls. To most of the consumers, there is a tendency to associate themselves to particular brand names, captions or logos that they see or hear in advertisements. For instance, British Airways is known across the globe for its high quality advisement designs that attracts people, thus easily indentifying the image as BA. Marketing has played an essential role for the success of BA. Through marketing, the firm has educated its esteemed customers on latest marketing trends, thus boosting the firm’s sales and profit levels as well as develop company’s reputation. To achieve the expected results, BA invests more than 10% of its annual revenues for the aspect of research and development to enable the firm to understand on the needs of their customers. By employing emotional type of research, the firm has been able to understand their customers from different and diverse backgrounds so that the services developed are based on these forms of understanding. Kotler (12) argues that marketing professionals use different tactics and methods in attracting and retaining custom market mix. It is worth noting that, 4P and 7P are the major concepts used in marketing mix. The concept of 7Ps has emerged as successful proposition for service industry while 4Ps is used to analyze the product industry over the years. For British Airways, the 4ps concept have helped the firm to improve on the services rendered to its esteemed consumers, especially in the aspect of improving the existing products such as means of communication, seats among other notable areas that facilitate delivery of firm services. Product There is a need of developing product or service that all customers aspires to buy, although most of the businesses first decide on the product or service to offer and hope to get desired markets there after. In great contrast to this, successful firms such as British Airways establish on the needs and wants before developing the right product, which will meet the current and future needs of the customers. Kotler (28) indicates that products are tangible goods or intangible services, mass-produced on large scales, with specific number of units. Intangible products are the services offered by industries such as hotel and tourism. To distinguish its products from the competitors, BA has employed product differentiation in most of its products. This has enabled easy identification of services offered by the firm, thus attracting and retaining a high number of customers as compared to close competitors such as American Airways and Gulf Airways. BA also enjoys a strong brand name on all its products across the globe. The strong brand name originates from the intensive marketing awareness carried out by the firm, coupled with many years of service as compared to other airlines across the world. From my first flight using BA; it was evident that, the company offers perfect products creating value to the eyes of the customers. The management tries all its level best to offer customers with want they need and not what the firm think is the best for them. The organisation has put several systems in place to enable it conduct regular check on what the customers feels about their products, supporting services. For instance, the firm has placed customers suggestion box on all their planes, hotels and in the airports to enable customers give back their feedbacks on the type of services or products offered by the company. Price Products are worth what the customers feels it is the right amount to pay for. The price offered by a firm should be competitive, but not necessarily have to be cheap. For British airways, it is able to compete with other global firms in terms of pricing, based on the aspect that it adds extra details and services, which offers customers better and improved value for their money. For instance, the improvement that took place in the first class cabin come with no extra cost to the firms esteemed customers (Kotler 47). Promotion Corke (88) argues that promotion is one of the ways in which an organisation communicates to the customers on activities it carries out as well as what it offers to its customers. This includes activities such as advertising, branding, public relations, sales management, corporate identity, special exhibitions as well as offers. For promotion to be effective, it must gain the required attention fro the customers, appealing, carry constituent message and give the customers reasons for choosing the product or service offered as compared to those of the competitors. For British Airways, the firm has effectively communicated the benefits of its products to the customers rather than just focusing on their features (Gregory 102). For instance, the firm has organised several gallery events organised by BA CEO, aimed at displaying the new seats in the first class as well as promoting the use of BA facilities to customers using other global airlines. To attract and retain customers across the globe, BAS has come up with several loyalty programs or the frequent-flier schemes namely the executive club, which is the primary programme, while the other one is referred to as highly exclusive simply known as premier. The executive club is split into three main tiers namely the gold, silver and blue. The gold and silver cards help the customers to enjoy dedicated reservations lines as well as access the airport lounges. Unlike the frequent flyer programmes used by other airlines globally, executive club keep a separate account on the redeemable miles and loyalty tier points. By flying in first or business premium economy customers earn extra tier points and BA miles the table below briefly indicates the tier points earned on any of the companies flight. Class of travel BA miles per mile for the Blue Tier members BA miles per mile for the gold or silver Tier members Euro/World traveller 1 2 World traveller plus 1.25 2.25 Club Europe /world 1.5 2.5 First 2 3 (Gregory 67) BA also runs an invitation only premier programs that gives extra benefits as compared to Gold card in Executive club scheme as it includes increased number of miles for every flight to Concorde Lounges regardless of the travel class. It is worth noting that the expiry of the redeemable miles is 36 months of full inactivity. Physical evidence This refers to environment that the services area assembled and in which customers and seller interacts, combined with the tangible assets that helps to facilitate communication or performance of the service offered. Physical evidence of the service includes all tangible representations such as letterhead, brochures, signage, cards, internet presence, reports or equipments. For BA things such as craft designs, layout, lighting, decorations among other aspects represents physical evidence, which are important in enhancing the firms’ servicescape. People The term people refers to employees, customers, management and all other stakeholders involved in the day to day running of a business. Anyone who meets the customers makes an impression and have profound effects, whether positive or negative to the satisfaction of customers. It is important to note that customers make judgement as well as deliver perceptions of service based on employees whom they interact. It is important for companies to hire qualified staffs, who have the right interpersonal skills, service knowledge and attitude to provide services, which customers have paid for. For BA, it has recognized that the success of the firm rests on the hands of people working in the firm across the globe (Kotler 179). As a result of this, the firm rigorously trains, motivates and ensures that employees have right attitude when serving their customers at any point of the world. Further, the firm’s advice and the after sales support are well trained to ensure that they add value to the operation of business, thus giving it a competitive edge. To most of the customers, this is the most important aspect compared to price or any other element in market mix. Due to inseparability of the production and consumption of services that involves production and consumption simultaneously, BA heavily depends o ability of its contact employees in delivering the desired service to the customers. Over the years, it is clear that contact employees in BA have created the right image of the firm thus a strong brand name as compared to many competitors who fails to fulfil this aspect. Generally, for most of British companies and organisations they apply for IPA (investors in people accreditation). This way, they are able to ensure that the staffs are well taken care off and trained to required standards. Process This refers to procedure, flow and mechanism of activities through which services are delivered; that is operating and service delivery. For instances, process of travelling in a budget airline is different from that of travelling on fully-fledged and premium airline. Issues such as the waiting times, type of information given to the customers and helpfulness of the staffs are all vital in attracting and retaining customers. For British airways, it has realized the fact that customers especially in the airline industry are no longer interested in detail of the way the business operates, but what is important is the way the entire system works. This implies that, failure of one system may make the customer to lack confidence on the entire system. Based on the evidence that, BA keeps employs the latest technologies such as social media to notify their customers on what is happening in the firm. To enhance the aspect of the company website is highly updated to ensure that, all its customers are up to date with what is happening inside the firm. For instance, by logging on the firm’s website, customers can be to know all the flights cancelled as any form of delays and the reason causing it. For most of the other competitors, they have not realized on the need of streamlining their processes in order to attract and retaining the existing customers. For instance, customers trying to reach these organisations by phone stay on hold for long time listening to recorded voice messages. Most of these customers give up making them to seek for the service in other firms (Christensen 69). Place This refers to all points where the customers can buy the products and services as well as the means of distribution employed by the firm. For BA, products are available at the convenient and appropriate places, where customers can be able to access the services offered by form. For instance, customers are able book and check-in through online method, thus minimizing on areas such as time and associated costs. Customer queries can also be solved on the firm’s blogs and through social networks, thus creating high customer loyalty. Recommendations From above 7Ps of marketing, it is clear that appropriate use of marketing mix is an integral part of any service industry. Based on above fact, it is important for BA to improve on the way these elements, especially people are handled by the firm (Kotler 50). Place To improve on the element of time, BA should engage its customers through the social media network, as they have become socially acceptable forms of communication in many organisations. This way the firm will easily be able to market it services thus attracting customers. The firm should also set physical canters to handle customer queries. Promotion Promotion is one of the vital aspects of marketing mix. Through marketing, customers can identify on the services offered by the firm thus increased sales revenues. To improve on this aspect, it is recommendable that BA use modern forms of promotion such as through the social networking sites. For instance, the firm has more than 100,000 and 60,000 fans on Face book and twitter respectively. By raising this number to at least 500,000 fans, they can be able to promote products and services hence more revenues (Christensen 35) Product To improve o its products, it is recommendable that BA to invest heavily in research and development, to develop high products and services, which are economical to most of customers. This is based on the fact that the buying powers of most customers have decreased due to harsh economic times thus making it hard to travel for most customers globally People For BA to have improved levels of service delivery, the staffs and all the other stakeholders dealing with customers welfare must be well looked into. To improve on this, it is recommendable that, contact employees are fully motivated to ensure they possess the right behaviour and attitude when delivering the service. To motivate the contact employees, the firm should give them promotions based on merits as well as offer them study leaves to further their expertises on aviation industry. By encouraging teamwork, the contact employees are able to encourage one another as compared to competing against each other. Further, the human resources department should organise regular trainings and internships in different regions where the firm operates. This will expose the employees to modern problems affecting the aviation industry, thus enhancing their service delivery levels (Gregory 24). Conclusion From the above it is clear that BA is one of the most successful companies of the 21st century. Despite the prevailing hard economic times, the firm has remained viable due to high quality services offered across the globe. By flying using BA, my flight experience has increased, due to high quality service offered by the contact employees and the firm in general. In conclusion, firms in the service industry should employ the elements of market mix to improve on service delivery. Work cited Campbell-Smith, Duncan .The British Airways Story: Struggle for Take-Off. Hodder and Stoughton, 2009. Print. Christensen, Clayton . The innovator's dilemma: when new technologies cause great firms to fail. Massachusetts : Harvard Business School Press, 2008. Print. Corke, Alison .British Airways: the path to profitability. Pan, 2007. Print. Gregory, Martyn .Dirty tricks: British Airways' secret war against Virgin Atlantic. Warner, 2003. Print. Hayward, Keith .Government and British civil aerospace: a case study in post-war technology policy. Manchester: Manchester University Press, 2008. Print. Kotler, Philip .A Framework for Marketing Management .Chicago: Pearson Prentice Hall, 2010. Print. Penrose, Harald.Wings Across the World: An Illustrated History of British Airways. Cassell, 2006. Print Schullz, Stanley.Integrated Marketing Communications. Newyork: NTC Publishing Group, 2009. Print. Read More