Virgin Australia's Marketing Mix, 7Ps to Market Its Services, Social Media Promotion - Case Study Example

Marketing Table of Contents Table of Contents 1 Abstract 2 1.0 Introduction 3 1.1 Purpose and scope 3 1.2 Method 4 1.3 Limitations 4 1.4 Assumptions 4 2.0 Background 5 2.1 Marketing Mix 5 2.2 The 7P’s of Marketing 5 2.3 Virgin Australia 5 3.0 Discussions 6 3.1 Product 6 3.2 Place 7 3.3 People 8 3.4 Promotion 10 3.5 Physical Evidence 11 3.6 Process 13 3.7 Price Decisions 13 4.0 Recommendations 14 5.0 Conclusions 15 References 15 Abstract Marketers are interested in understanding how companies utilize the marketing mix strategies in order to promote their products. This is due to the increased global competition hence the need for organizations to focus on delivering value to their customers. That is why studying how companies utilize the marketing mix elements is essential for the success of a company. This report tries to explore and analyze how Virgin Australia uses the 7P’s to market its services. The report uses both primary and secondary data in order to understand how Virgin Australia uses the 7P’s to promote its services. The report starts by finding the application of the 7P’s in Virgin Australia services. The report then goes ahead and recommends how the company can further improve its services using the 7P’s framework. 1.0 Introduction 1.1 Purpose and scope Firms must continuously delight their customers by becoming customer driven in order to achieve success in their operations (Sudhir & Reddy 2010, p. 50). Marketing mix strategies provide organizations with the best tools of developing and promoting their products in order to achieve their marketing objectives. According to Vrontis, Thrassou & Lamprianou (2009, p.478) firms must begin by identifying and understanding their customers’ needs, design their product mix strategies, inform the public about the prices of their products and promote the products in a unique and attractive way. Firms must identify the best marketing mix strategies so as to meet the needs and the desires of their customers. Modifying the marketing mix strategies enables the firms to overcome the challenges that they might encounter while delivering their products and services to their customers. A firm should plan its marketing strategies according to the needs of its customers. Effective marketing mix strategies enable a firm to increase its popularity and to maximize its customer’s satisfaction hence this is important towards creating and building competitive advantage. Rosenbloom and Dimitrova (2011, p. 54) state that marketing mix strategies are important for customer satisfaction, product and service innovation as well as building customer loyalty hence this ensures long term profitability. Moreover, efficient marketing mix strategies enable organization to deliver customer value. This is by delivering products that offer more benefits than the sacrifices made by the customers in buying the products. Therefore, it is evident that marketing mix strategies play an important role in enabling firms to excel in their activities. That is why the study of 7p’s of marketing has gained increased attention from marketers and academicians. The purpose of this report is to explore how Virgin Australia applies the 7p’s to market its services. 1.2 Method The information used in this report was collected from both the primary sources and the secondary sources of data. Primary data was obtained from personal experiences and observations of Virgin Australia services. Secondary data was obtained from journals, the company website as well as from Virgin Australia publications. The primary data and secondary data were integrated in order to understand how Virgin Australia applies the 7P’s of Marketing in order to promote its services. 1.3 Limitations The secondary sources of data may not completely reflect how the company utilises the 7P’s to market its products. Thus, there might be noteworthy differences between the way the company utilizes the marketing mix strategies and what is reflected by the secondary sources. Due to time constraints and lack of opportunities it was personally impossible to make frequent visits to the company. Therefore, there might be some differences between my experiences and observations and the how Virgin Australia utilises the marketing mix strategies to promote its services. 1.4 Assumptions The report assumes that all information from Virgin Australia publications and website is true and accurate. Moreover, the report assumes that personal observations and experiences reflect how the company utilizes the 7P’s to market its services. 2.0 Background 2.1 Marketing Mix Marketing mix are strategies adopted by any given firm on the supply side in order to conform to the needs and desires of the customers (Rosenbloom and Dimitrova 2011, p. 53). They are set of marketing strategies which comprise the marketing mix 2.2 The 7P’s of Marketing According to Sudhir and Reddy (2010, p. 16) the 7p’s of marketing include; product, price, place, promotion, people, physical evidence and process. These elements are important in delivering customer needs in service industries. 2.3 Virgin Australia Virgin Australia is part of Virgin Group and it is the second largest Airline in Australia. The company was established in the Australian market in 2000. The airline serves 29 cities in the country from its hubs in Melbourne, Sydney and Brisbane. In 2012, Virgin Australia launched its business class airline in the country. The company was also awarded the best airline and best staff service in 2012 Skytrax World Airline Awards (Virgin Australia 2012). Virgin Australia believes in making a difference by offering its customers with the best value for money. It does this by providing its customers with quality services and continuously monitoring customer feedback in order to improve its customer’s experience through innovation. The airline is committed towards conserving the environment by reducing its airlines emissions. It does this by combining sustainable aviation, fuel efficacy and carbon offsetting strategies. 3.0 Discussions This section will analyse Virgin Australia services using the 7P’s of marketing mix strategies 3.1 Product According to Rosenbloom and Dimitrova(2011, p. 55) the value of a product or service determines the level at which the customer is satisfied . A service includes the company image, product value as well as the brand name. Virgin Australia offers flight services across the country and internationally. The airline offers its customers with business class cabin, premium economy and economy class cabins. The class cabins are aimed at satisfying the needs of the airline target market. Virgin Australia offers its customers with seat maps, on board meals, in fright entertainments, in flight heath facilities. The offers enable the company to satisfy its customers hence this leads to customer retention. Sneed at el (2011, p. 122) states that brand identity influences customers towards purchasing a product. Companies with strong brand identities make high sales as compared to those companies which weak brand names. Virgin Australia has a strong brand name due to its link with the Virgin group and this ensures that it receives a high number of customers willing to use its services. The company reputation for quality services has enabled it to gain and build competitive advantage over its competitors. Shaw (2012, p.31) notes that the idea of product differentiation strategy is to position a firms brand as different from the competitors in the minds of the customers. Virgin Australia permits its customers to use their electronic devices in certain areas when on board. This enables the company to differentiate its products hence add value to its customers. 3.2 Place According to Sneed at el (2011, p.122) place refers to the contact between the customer and the service provider. Place decisions involves considering the distribution coverage of the service and the ease of accessing the service. Virgin Australia flights cover major cities of the country. The company has its popular flights covering Melbourne, Sydney, Brisbane, Gold Coast and Adelaide (Virgin Australia 2012). To ensure easy access of its services, the company offers its customers with safe and secure parking locations with competitive rates. The airline customers can move from the airports to the parking locations through the use of a free shuttle bus services. Moreover, the company provides its customers with airport guides as well as providing its customers with information on customs requirements. This makes it easier for the company customers to access the airline. Furthermore, customers can book flights online, through the company agents or by the use of their mobile phones and credit cards. This means that customers are not required to visit the airport in order to book flights hence this ensures easier access to the company services. Sudhir and Reddy (2010, p. 56) note that the use of information technology offers customers from far distances with an effective distribution and delivery of companies products and services. Place decisions also involves considering all the channels that a firm utilizes in order to try to get the service to the customer ( Rosenbloom & Dimitrova 2011, p.58). This requires companies to establish linkages and networks with other companies in order to reach their customers. The company may also use intermediaries in order to try to and get its services to the customers. Virgin Australia has established networks with other airlines in order to enable its customers to be connected with the company flights. Moreover, its partnership with other airlines enables the company to deliver its customers to their destinations by connecting them with other airlines. Connecting its customers with other airlines makes sure that they arrive at their destinations conveniently and at the right time. Ivy (2008, p. 290) emphasizes that place decisions involve making sure that the service is available at the right time and in convenient locations. 3.3 People People play an important role in the service delivery process. The people in an organization influence the way customers perceive the value that is provided by the organization. The staff reputation can play an important role in attracting clients to an organization (Ivy 2008, p. 290). Virgin Australia employees are organized in departments in order to ensure that they deliver customer satisfaction hence creates a positive image about the company. The employees who form the people team are focused with coming up with systems guidance and tools that assist the company in delivering its services to its customers. Rosenbloom and Dimitrova(2011, p.54) emphasize that the people in an organization play a dual role of performing the service and also marketing the service. Thus, the people team market the company by coming up with systems and tools that ensure that the company’s customers are satisfied. On the other hand, the corporate communications department is composed of employees who deliver public relations, corporate and financial communications, general publicity, media relations and internal employees’ communications, as well as corporate promotions and sponsorships. This department plays a critical role in safeguarding the image of Virgin Australia and marketing the company to the public. The people assist in building the image of the organization and this is importance in enhancing its performance (Sudhir & Reddy 2010, p. 65). According to Judd (2003, p. 1302) people in the organization are powerful elements in assisting the organization to differentiate itself hence gain competitive advantage and provide value to its customers. Organization employees can either be directly involved in providing service or be involved in creating value for the organizational customers. The operations group is involved in creating value to the customers by ensuring that the company activities are completed within the customer service requirement as well as within the airline brand. Moreover, the group ensures that the company airlines maintain their schedule and operate safely and timely. This makes sure that value is delivered to the airline customers by ensuring that they arrive at their destination on time, safely and conveniently. The brand and customer experience division is composed of employees who are directly involved in delivering services to the company customers. The division ensures that the company guests receive exceptional services while in flight and when they are in the company lounge. Ivy (2008, p. 290) notes that the people in the organizations are the one who interact with the customers in order to ensure efficient delivery of the service. On the other hand the alliances and network yield management team aims at implementing strategies in order to enhance customer value hence maximise revenue generation for the firm. The sales team constitute of employees who are focused on generating revenues for the company by undertaking sales activities, promotions, loyalty initiatives and creating awareness of the company services. People in the organization are responsible for creating awareness of what is inside the organization by selling the services or promoting them and this enables the organization to create value to its customers (Judd 2003, p. 1302). 3.4 Promotion Promotion acts as a means of helping the company to persuade, inform and to train the customers so as to have a better experience of the services provided by the company. Promotion enables the customers to be aware of the available services that are offered by the company. According to Pitta, Weisgal and Lynagh (2006, p. 156) markers may decide to employ personal selling, advertising, publicity or sales promotion in order to promote the organization products and services. Advertisement is used to communicate information pertaining to the prospective and the existing customers of the business. It is aimed at capturing a group of individuals hence an effective tool of influencing potential buyers. Virgin Australia has an interesting advert that features a passenger driving across the bridge in Sydney harbour and is then joined by employees of Virgin Australia as he walks through the terminal. The advert ends with pictures of its A330 aeroplane and a guarantee to restore magic back in flying. The advert is aimed at influencing customers to fly with the airline in order to gain the experience of feeling good. Moreover, the advert is focused on enhancing the Virgin Australia brand. Moreover, the company adverts in billboards gives the customers an idea of what the airline is aiming to deliver in future According to Fan (2006, p. 43) corporate gifts and rewards are essential tools in the marketing communication mix. Gifts and rewards provide corporations with a valuable means of building and strengthening relationship with their key customers and thus promoting the company products and services. Rewards and gifts offered by firms can assist in accelerating sales hence enhance advertising, personal selling and sales promotions as well as create goodwill. Virgin Australia offers its customers holiday packages, gift vouchers, flight fare offers and offers relating to hotels and car hire services. The company also enables its customers to accumulate points whenever they use the airline and redeem them with exiting rewards. The company uses the rewards and the gifts to express appreciation to its loyal customers, to enhance its image, to enhance the awareness of its brand and to promote new services. Furthermore, the rewards are used to motivate the employees of the company ( Sudhir & Reddy 2010, p. 63). Corporate gifts add value to Virgin Australia services by promoting the company image and creating goodwill with its customers. Virgin Australia undertakes sales promotion activities by offering its customers with iPods. The company uses sales promotions to create and deliver value to its customers. Pitta, Weisgal and Lynagh(2006, p.479) note that sales promotion enables an organization to gain attention from the public hence enable it to create awareness of its products and services. 3.5 Physical Evidence A customer should be able to see and feel the elements that support the actual services. Physical evidence refers to the surroundings that influence customers to purchase a product. According to Sudhir and Reddy(2010, p. 64) the physical evidence of a service providing firm involves the appearance of the staff , segregation of the organization into departments , provision of spacious areas for customers and the physical appearance of the area at which the service is offered. Ivy (2007, p. 290) emphasizes that the physical evidence is the tangible component of the service offering. Physical evidence involves the resources and the appearance of the facilities used in order to offer the service. Virgin Australia business class Cabin provides customers with a spacious and comfortable area which allows them to relax or undertake their work in lavish leather seats (Virgin Australia 2012). Customers in the business class cabin are further provided with foods and beverages designed by a reputable chef in Australia. The business class cabin provides in flight entertainment to its customers as well as coat check services. The items in the business class enhance the services provided by Virgin Australia and make it easier for the corporation to deliver value to its clients. Delivering value in the business class enables the customers to satisfy their desires hence this makes sure that the company builds long term relationships with its clients. Furthermore, Virgin Australia is divided into departments which are geared towards ensuring customer satisfaction Physical evidence influences customers to make the first impressions about the organization. The environment in which the service is delivered help to perform, communicate and rely the ability of an organization to satisfy its potential customers. Shaw (2012, p. 36) notes that the physical evidence enables customers to perceive whether an organization will satisfy their needs based on the image formed by examining the organizational physical resources. Virgin Australia airport lounges provide customers with an area where they can unwind, work and socialize before boarding the company aeroplanes. The lounge provides the airline customers with food and beverages, entertainment and news. The lounge enables the customers to perceive the kind of services they would receive on board. Virgin Australia lounge delivers value to the airline customers by providing them with a comfortable area where they can relax and chart before boarding an aeroplane. Furthermore, the company posses’ powerful and attractive aircrafts which are housed with the most advanced technology and designed to meet the needs of the company’s market (Virgin Australia 2012). Moreover, the company aircrafts are embedded with the Virgin Group signatures. The physical appearances of Virgin Australia aircrafts acts as a means of advertising the company hence enhance its brand. The company cabin crew wear beautiful red uniforms in order to give confidence to the airline customers as well as to show their cohesion. 3.6 Process Lin (2011, p. 10635) processes refer to the methods through which an organization provides services to its customers. Processes include policies, procedures, employee discretion, mechanisms and how activities flow in an organization in order to ensure that customer needs are fulfilled. Virgin Australia booking process ensures that customers receive services conveniently and efficiently. Virgin legal policies ensure that the privacy of the airline customers is maintained hence this ensures that the company observes individual rights. 3.7 Price Decisions Hakansson and Waluszewski (2005, p.114) argue that the price adopted for service determines its ability the company ability to create revenue. The price of a service is determined by the preferences of the customers as well as how the service is integrated with other resources. The marketing mix model requires firms to modify the price of their services in order to create an optimal mix between the market share and the revenues and profits made by the company. Virgin Australia saver fare is the company’s discount economy fare and offers its customers with the best fright charges. The flexi fare option offers the company customers with an option of changing their flights without incurring any changes. It also offers its clients with food and drinks while they are on board. The business class fare is a fully flexible and offers its customers with a range of services while on board and in the airport. The various pricing options enable the company to meet the diverse needs of its customers hence create value to them. 4.0 Recommendations To enhance the promotion of its services, Virgin Australia Should undertakes social media promotion. According to Wood (2012, p.101) social media promotion presents firms with a cheap means of reaching and communicating to their customers. A study conducted by Sudhir and Reddy (2010, p. 6) indicated that most of service companies do not utilize social media to promote their products hence this means that they are not utilizing their physical environment effectively. The fact that most people are currently using the social media to communicate requires the airline to utilize social media in order to promote its services. Sarker, Aimin and begum (2012, p. 275) note that organizations offering airline services deliver physical evidence in relation to the travel experience, comfort and stay of the customers. However, according to studies conducted by Sudhir and Reddy (2010, p. 6) most service offering firms provide similar services hence this makes it difficult for the customers to make their selection decisions. To create differentiation in its physical resources, the company should consult its customers in order to determine their needs. Moreover, the company should develop more diversified and new products in order to reduce its overreliance on freights. Finally, the company should come up with more policies and procedures in order to guide its employees hence ensure that Virgin Australia is focused towards delivering customer value. 5.0 Conclusions In conclusion, Virgin Austria has been able to create and build competitive advantage through its quality airline services. The company brand name has enabled the company to attract and retain customers due to its worldwide reputation and image. The company offers its services in a majority of cities around hence this eases customer’s access to the company. Virgin Australia airlines are spacious and comfortable and this makes sure that the company delivers value to its customers. 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