Developing and Managing a Strategic Marketing

Plan
Mohamed Mamoun Kahk
21 january 2013
Table o !ontent"
1- Report body :
2-1 Task (1)
Section 1: Use appropriate marketing techniques to
4
ascertain growth opportunities in the market
.

Section 2: Plan how to use marketing strategy options in the market
7

Section 3: reate appropriate strategic marketing o!"ecti#es $or the market
%
.

2-2 Task (2)
Section 1: &eport on the impact o$ changes in the e'ternal
en#ironment on a marketing strategy
13

Section 2: on(uct an internal analysis to i(enti$y current
17
strengths an( weaknesses in a marketing strategy

Section 3: Propose strategic marketing responses to key emerging
1%
themes in the marketing strategy
2- References .
20
Use appropriate marketing techniques to ascertain growth
opportunities in the market
To ascertain growth opportunities using marketing techniques in )irline in(ustry
$or *ritish )irway we must a((ress the (ata a!out the airlines market an( a!out
*+) marketing o!"ecti#es an( strategy an( how *+) target an( segment this
market an( how they position themsel#es in the segmente( market an( what
their plan to accomplish this goals an( o!"ecti#es+
,tarting $rom *) mission statement to !e un(ispute( lea(er in the worl( tra#el
passionately committe( on e'cellence an( highest le#el o$ customer ser#ices *)
allu(es to create a glo!al network o$ which airlines seem to !e only apart+
,o they $ocuse( on their strategic o!"ecti#e to !ecome the worl(-s lea(ing glo!al
premium airline+
The actions they are taking now to make their cost !ase more e.cient an( their
unstinting $ocus on outstan(ing customer ser#ice are critical parts o$ this long-
term #ision+ They will (etermine how strongly they emerge $rom the current
(ownturn an( will help them to create a sustaina!le an( pro/ta!le $uture $or the
!usiness0 !ene/ting their customers0 colleagues an( sharehol(ers+
1n this report we e'plain the strategy in (etail an( (escri!e the actions they are
taking to pursue it+
GL!"L
2hat they o3er will appeal to customers across the glo!e+ 2here#er they
operate0 in(i#i(uals an( !usiness tra#ellers alike will want to 4y with them
whene#er they can+ ompany continues to !e accessi!le all o#er the worl(5 this
means that company will open more new markets where it can operate+
ompany strategic strategy is to !ecome the most pre$era!le airline across the
worl( in e#ery point0 !ut it6s really #ery har( an( long-term strategy
#R$%&U%
They will make sure all their customers en"oy a unique premium ser#ice
whene#er an( where#er they come into contact with them +their customers will
recognise that the ser#ice they o3er is worth paying that little !it more $or+
This section co#ers the quality an( ser#ice topics0 which nee(s constant
impro#ement+ 1t is one o$ the !asic strategic (irections o$ the new company
strategy planning company+ *) has seen what means to compete !y quality0
especially in strong competition con(itions on airline market+
"&RL&'$
They will remain $ocuse( on a#iation 7 mo#ing people an( cargo is their core
!usiness+ They will (e#elop new pro(ucts an( ser#ices to complement this+
These o!"ecti#es will !e accomplishe( !y achie#ing these 8 strategic goals an(
there$ore they achie#e the (esire( growth
*e the airline o$ choice $or long haul premium customers
9ong haul premium customers are key to their pro/ta!ility+ They will use their
(eep un(erstan(ing o$ what is require( to !e customer-s airline o$ choice to (ri#e
their (esign choices on pro(uct0 network an( ser#ice+ They will also maintain a
strong presence in the cargo0 economy an( short haul segments0 which play a
critical supporting role+
:eli#er an outstan(ing ser#ice $or customers at e#ery touch point
Their customer-$acing sta3 ha#e long !een passionate a!out (eli#ering
outstan(ing customer ser#ice+ They want to !uil( on this through a re#olution in
the way they lea(0 train an( rewar(0 so that all their customers0 on all routes an(
classes0 en"oy a premium e'perience+ They will in#est !oth in impro#ements
targete( at their premium customers0 such as ser#ice style training0 an( in those
!ene/ting all customers0 such as Terminal 8 an( !a+com+
;row their presence in key glo!al cities
They aim to pro#i(e the !est glo!al connecti#ity $or their customers+ They will
!uil( their presence in the top tier glo!al cities0 either (irectly or through their
e'pan(ing network o$ airline partnerships+ 2hilst the esta!lishe( glo!al cities
such as 9on(on an( <ew =ork remain critical0 we will place a special emphasis on
(e#eloping their position in the glo!al cities o$ tomorrow+
*uil( on their lea(ing position in 9on(on
9on(on is their home city0 the emotional an( /nancial heart o$ their !usiness+ 1t
is also the worl(-s !iggest an( most competiti#e international air market+
>nsuring ?eathrow remains a worl(-class hu! is #ital to gi#e them a strong
9on(on !ase to ser#e the largest international long haul markets+ To support this0
they will look to in4uence go#ernment policy (ecisions0 an( work with the airport
owners on the continue( (e#elopment o$ the in$rastructure+
@eet their customers- nee(s an( impro#e margins through new re#enue streams
)irline re#enue streams will always !e the core o$ their !usiness+ ?owe#er0 they
will look to augment this !y !uil(ing pro/ta!le ancillary ser#ices that o3er
customers great #alue an( re-en$orce their !ran(+ They will e'plore how they can
(e#elop new pro(ucts an( ser#ices which e'ploit their assets an( capa!ilities0
an( meet the nee(s o$ their core customers an( enhance loyalty+
Arom *) strategy an( o!"ecti#e we o!ser#e how they segment the market in to 2
segments accor(ing to the length o$ 4ight to long haul an( short haul0 an( how
they (eal with !oth segments !ut with targeting an( $ocusing on long haul
customers !ase( on re#enue potential o$ this segment where the ma"or income
came $rom its BAirst lassC0 an( B*usiness lassC0 seats+
)lso there is other parameter $or market segmentation accor(ing to price as $ull
$are an( low $are (!oth are consi(ere( in *) marketing plan)
*) plan is !uilt aroun( their ;lo!al Premium )irline strategy0 an( (e/nes in
(etail !oth what they nee( to achie#e as a !usiness0 an( how they nee( to work
together+ 1t encompasses their ompete 2D12 change programme+ This is linke(
to their sponsorship o$ the 9on(on 2D12 Elympics an( Paralympics ;ames0 an( is
with re$reshing their culture+ The plan is structure( aroun( /#e key themes 7
olleagues0 ustomer0 Per$ormance0 >'cellence an( Partnerships
They position themsel#es as pro#i(ing a superior #alues an( truly glo!al nature+
2hich appears $rom their plan an( it structure( aroun( customer as they say
(what we (o to (eli#er an outstan(ing e'perience $or all our customers) as they
will continue to e#ol#e their pro(ucts0 $or instance through the roll-out o$ the
restyle( Airst ca!in0 an( through the (e#elopment o$ pro(ucts /t $or the *oeing
7F7s an( )ir!us GFDs they ha#e on or(er+ They will re/ne the Terminal 8
e'perience $or premium passengers0 as well as making targete( in#estments in
o#erseas lounges+ ) new in-4ight entertainment system is !eing intro(uce( on
their new long haul aircra$t0 starting with *oeing 777- GDD>&s in 2D1D+ They will
continue the targete( (e#elopment o$ !a+com that has ma(e it such an
important part o$ the way customers interact with them+ They will work to
rea.rm their !ran( in a changing an( /ercely competiti#e marketplace+
2hen we talk a!out growth opportunities we must talk a!out "nso()s mode*0
The )nso3 implies !usiness growth either !y marketing new or e'isting pro(ucts
in e'isting or new markets+
%arket #enetration
)lthough *) alrea(y has presence in the e'isting market it is $acing sti3
competition+ Aor e'ample0 in the short haul market0 rapi(ly saturating with
!u(get airlines0 *) lost H1 !illion in re#enues !y en( o$ 2DD%I2D1D /nancial year+
The ma"or options currently are 1) 1mpro#ing on people processes inclu(ing !ag
han(ling 2) Aurther in#estment on in$ormation technology especially on internet
!ookings (*ritish )irways 2D1D0 8F)
%arket de+e*opment
@arket (e#elopment strategy $ocuses on non-!uying clients in alrea(y currently
targete( segments an( $ocuses on new customers in new segments +*) is trying
to regain some !usiness class customers $rom Jirgin airlines an( other
competitors+ *)-s loyalty programme where small to me(ium siKe( !usinesses
earn loyalty points is a starting point+ Aurther0 *) intro(uce( the success$ul all
!usiness class ser#ice $rom 9on(on to <ew =ork in 2D11 (*ritish )irways 2D1D0
L8)+
#roduct de+e*opment
Pro(uct (e#elopment entails the process use( to !ring new pro(ucts into the
market+ Aor e'ample0 *) intro(uce( a new in-4ight entertainment system in the
*oeing 777-GDD >&s in 2D1D an( the Airst a!in0 a sophisticate( ne ca!in that
o3ers customers the chance to work0 recreate0 eat an( sleep (*ritish )irways
2D1D0 L7)+
,i+ersi-cation
:i#ersi/cation is a !usiness strategy that attempts to increase pro/ta!ility !y
intro(ucing new pro(ucts in new markets+ <ew an( emerging markets in the $ar
an( @i((le >ast o3er the greatest promise o$ goo( re#enue returns an( re(uce
the e3ect o$ re(uce( re#enues in the tra(itional markets+ Aormation o$ alliances
is a relati#ely new tren( in new markets0 $or instance5 !y colla!orating with
1n(ia-s Ming/sher airlines0 *) will increase (estination connections an( impro#e
4ight sche(ules (*ritish )irways 2D1D0 7L)+
#*an how to use marketing strategy options in the market
2hen we a((ress using strategic options in the market we must talk a!out
#orter.s Generic /ompetiti+e 0trategies The generic competiti#e strategies
is (i#i(e( into three other parts which is calle( ost lea(ership0 (i3erentiation
an( $ocus+ The $ocus strategy has two #ariant0 cost $ocus an( (i3erentiation
$ocus+
(They outline the three main strategic options open to organization that wishes
to achieve a sustainable competitive advantage
1# !o"t $eader"hip#
The low cost leader in any market gains competitive advantage from being able
to many to produce at the lowest cost
2# Di%erentiation
Diferentiated goods and services satisfy the needs of customers through a
sustainable competitive advantage
3# &ocu" or 'iche "trategy#
The focus strategy is also known as a 'niche' strategy .Where an organization
focuses efort and resources on a narrow de!ned segment of a market.
"ompetitive advantage is generated speci!cally for the niche. # niche strategy is
often used by smaller !rms. # company could use either a cost focus or a
diferentiation focus$
%

*ritish )irways using (i3erentiation strategy as it (i3erentiates its ser#ice $rom
its competitors !y pro#i(ing outstan(ing ser#ice $or customers at e#ery touch
point (class0 com$ort0 an( care) using
1
&ichael 'orter ;eneric ,trategies0 marketing teacher0 (web page) (*+%,$
-http.//www.marketingteacher.com/lesson0store/lesson0generic0strategies.html1 accessed *2
3anuary. *+%,
9argest airline in the UM !ase( on 4eet siKe0 international 4ights an(
international (estinations+
ompany aims to pro#i(e superior ser#ice $or the complete 4ight e'perience
$rom air to groun(+ *ritish )irway pro#i(es (i#ersity ser#ice passenger air0 cargo
air an( corporate tra#el (*) E.cial 2e! ,ite)
using (i3erentiation strategy *) create $our classes o$ air tra#el - economy0
premium economy0 !usiness an( /rst - with higher-quality ser#ices in
!usiness an( /rst-class than competitors+ *) then0 #ia aggressi#e marketing0
sought to premium price its !usiness an( /rst-class tra#el in or(er to raise
pro/ta!ility $rom a growing market share+
2hen we a((ress using strategic options in the market we must also talk a!out
Genera* e*ectrica* mode* which i(enti/es marketing strategy options an(
positions an( pro#i(es e#i(ence o$ opportunities $or growth through market
(e#elopment in new markets an( market penetration in e'isting+
Arom the analysis a!o#e0 it is e#i(ent that i$ a market (e#elopment strategy was
to !e pursue( !y
*)0 )sia Paci/c an( >astern >urope woul( !e prime markets $or pro/ta!ility (ue
to high growth+ 1t may also !e a requirement to !uil( (e$ence strategies in *)-s
core market0 2estern >urope0 (ue to low growth an( intense competition+
/reate appropriate strategic marketing ob1ecti+es for the market
2hen we talk a!out strategic marketing o!"ecti#es we must talk a!out *)
marketing mi' which (e/ne( !y Philip Motler as (the set of controllable tactical
marketing tools that the !rm blends to produce the response it wants in the
target market+)
2
)n( through which the marketing o!"ecti#es met+
The marketing mi' in#ol#es o$ $our main elements+
#roduct
(:e/ne( as anything that is o3ere( to a market $or attention0 acquisition0 use or
consumption an( that might satis$y a want or nee(+)
G
Page 11D
*ritish )irways is a !usiness o3ering ser#ice pro(ucts0 4ights across (estinations0
in the transportation in(ustry+
There are three le#els o$ pro(uct in regar(s with the quality an( the e'pectation
o$ the customers an( each le#el a((s more #alue to the customer
(The most basic level is the core product which addresses the 4uestion. What is
the buyer really buying5$
6
'age 72%
1n *ritish )irways customers !uying 4ight tickets to satis$y their !asic nee( which
is to 4ight $rom one (estination to another+
(Then build an actual product around the core product. #ctual products may
have as many as !ve characteristics. a 4uality level features styling a brand
name and packaging. $
7

1n *ritish )irways were customers !ook their seat on a sche(ule 4ight to a
particular (estination0 *ritish )irways 4ies to the !usiest airports in >urope in %8
(i3erent cities an( to 8F other (estination across the worl(+ 1t is !y $ar the
!usiest )irways company in the worl( operating a !ig num!er o$ airplanes0 )lso
it contains what customers e'pect when the purchase their tickets+ 1n *ritish
)irways customers e'pect to ha#e an allocate( seat0 meals an( (rinks0 on !oar(
entertainment goo( ser#ice+
(Then build an augmented product around the core and actual products by
ofering additional consumer services and bene!ts.$
2

1n *ritish )irways they o3er a((itional ser#ices an( !ene/ts that e'cee(
customer e'pectation+ The augmente( pro(uct is the e'tra ser#ices that *ritish
)irways pro#i(es an( the support $acilities+ 1t has three (i3erent e'ecuti#e
classes $or (i3erent nee(s: the !lue0 the sil#er an( the gol(+ Aor the mem!er o$
the sil#er an( gol( there are e'ecuti#e lounges in all the main airports where
customers can rela' away $rom the noise an( eat something or e#en ha#e a
shower an( go to the gym+ ustomer $rom the /rst class can e#en en"oy an on
!oar( sleep in their own !e( seat+ Aor !usy people were time is money *ritish
)irway o3ers great ser#ices to eliminate any time lost+
#rice
(The amount of money charged for a product or service or the sum of the values
that consumers e8change for the bene!ts of having or using the product or
service.$
9
'age %%+
*ritish )irways prices are o3ere( to ensure that customers get what they pay+
*ritish )irways has set its pricing strategies in a manner that customers can
chose the how much $rom the e'tras the company pro#i(ing they want0 Aor these
(i3erent types o$ customers *ritish )irways has set (i3erent prices consi(ering
their (i3erent nee(s: a) the e'ecuti#e class (gol(en mem!ers)0 !) the mi((le
class (sil#er mem!ers) an( the economy class (!lue mem!ers an( $ree
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tra#ellers)+ *ritish )irways pricing strategy attacks with three strategies:
1+ Premium strategy (?igh-qualityI?igh-price)0
2+ @e(ium-#alue strategy (@e(ium-qualityI@e(ium-price)
G+ >conomy strategy (9ow-qualityI9ow-price)
Those three strategies use( !y *ritish )irways in or(er to satis$y the three
(i3erent types o$ tra#ellers an( gi#e them the opportunity to choose the price
they want in relation with quality o$ the ser#ice they woul( like+ *ritish )irways
(i3erent pricing strategies in relation with quality+ 1t shows how the competitorsN
pricing strategy is attacking the market+ *ritish )irways has split its pricing
strategy in or(er to co#er the three possi!le segments+
O The premium strategy gi#es high quality in high prices $or e'ecuti#e an(
!usiness users+ 2ith this strategy *ritish )irways attacks the !usiness class o$ its
competitors in o#erseas an( international 4ights like Jirgin0 )merican )irlines
an( 9u$thansa+
O The me(ium price strategy gi#es me(ium quality0 less than quality than the
premium strategy an( more quality than low price strategy0 in me(ium prices+
O The low price strategy has !een (e#elope( to gi#es the !asic pro(uct as the
low cost airlines (such easy "et an( &aynair) with some more e'tra !ene/ts which
a(( more quality plus the a(#antage o$ the !ran( image o$ *ritish )irways+
urrent pricing o$ airline tickets is generally (etermine( !y the Btime pricing
conceptC where ticket prices (epen( on seasons (4ights (uring holi(ays are
usually more e'pensi#e as (eman( is higher) as well as Byiel( pricingC where
tickets !ooke( well in a(#ance are usually cheaper than tickets !ooke( one (ay
!e$ore the 4ight+
*ritish )irways ha( a pricing o!"ecti#e to ma'imiKe pro/ts+ ?owe#er since the
intro(uction o$ the low cost airlines an( the increase( competition the game has
change( an( with those o!"ecti#es *ritish )irways was going nowhere+ The low
cost airlines wante( to penetrate the market an( thus they use( a ma'imiKe
market share pricing o!"ecti#e+ 1n other wor(s0 small airline companies with low
prices willing to gain more an( more customers than the !ig airline companies+
Un(er this change o$ $ortune an( the higher competition *ritish )irways ha( to
change its pricing o!"ecti#es $rom ma'imiKing pro/ts to market share
ma'imiKation+ 1t intro(uce (i3erent price plans0 the economy class0 with lower
prices which matching those $rom the low cost airlines+
)nother pricing o!"ecti#e o$ *ritish )irways is the pro(uct-quality lea(ership
which is still ha#ing it (espite o$ the changes+ They ha#e the e'ecuti#e clu!
which o3ers the !est quality o$ the pro(uct+ This o!"ecti#e *ritish )irways will
keep it an( $ollow !ecause it is the !ran(Ns image+
#romotion
('romotion means activities that communicate the merits of the product and
persuade target customers to buy it+)
F

1n *ritish )irlines multiple choices are a#aila!le $or communication+ 1t has
!ecome easy to select own choice o$ me(ia+ )mong these innumera!le choices
one can select the me(ium o$ TJ0 &a(io channels0 @agaKines0 <ews papers0
2e!sites0 Ji(eo games etc+
,ales promotion
F
Philip Motler et al+0(e(+) 0Principles E$ @arketing (e(n+0secon( >uropean >(ition0 1%%%)+ Page 11D
,ales promotion is !asically a short term incenti#e in or(er to increase the
purchase+ 1t can !e #ery e3ecti#e in com!ating against ri#alries marketing
campaigns+ Aor e+g+5-*ritish )irways is the pioneer carriers through the worl( an(
ha#e !een operating $or o#er %D years+ urrently0 they 4y o#er GDD (estinations
glo!ally+ 1ts main hu! is at 9on(on ?eathrow+ 1n a((ition to this *ritish )irways
now sells holi(ays an( hotels on their we!site it an( attracts the loyalty o$ the
customers implementing the (e#ice o$ e'ecuti#e clu!+ ,pecial o3ers are pro#i(e
year the roun( like e'emption in check-in $ees $or !aggage an( online check-in
so that passengers can (irectly take the pre$er an( choose their seats o$ the
e'ecuti#e clu!+ This sche(ule is known as *) miles which is known to !e a #ery
loyal scheme as it also o3ers car rental0 hotels an( their /nancial an( shopping
partners+ There are other sales promotions too which inclu(e: Pro#i(ing e'tra
$ree accommo(ations $or the price o$ two0 competitions like win a holi(ay0 $ree
gi$t like $ree tra#el insurance when a holi(ay is !ooke(+
)(#ertising
)(#ertising is the !est me(ium a#aila!le to marketers $or the communication+
)lmost there are GD tools o$ a(#ertising !y *ritish )irways me(ia they are
magaKines0 TJ0 )u(io0 :irect mail0 airport an( En !oar( me(ia+ 1n a((ition to
these there are *usiness 9i$e online which is the magaKine we!site0 ?igh 9i$e
Enline the tra#el magaKine0 @etro-Twin a social networking we!site which
com!ines <ew =ork an( 9on(on+
:irect marketing
2hen the people are approache( (irectly !y an organiKation this metho( is
calle( (irect marketing+ *ritish )irlines is known $or its esteeme( ser#ices an(
ha#e always respecte( pri#acy an( it has always o3ere( the opportunity to
collect the (ata!ases a!out e'clusi#e $ares0 special o3ers an( other news stories
$rom *ritish )irlines group+ The (etails o$ the customers will 4ow only in the
*ritish )irways group+ The customers can sign up $or (irect marketing !y getting
registere( on its we!site an( !y "oining e'ecuti#e clu!+ The mo!ile phone users
can get an a(#antage o$ knowing special o3ers through the te't message alerts+
The organiKation will make sure that the customers (o not recei#e any (uplicate
calls or recei#e any unauthoriKe( messages+ 1$ the people ha#e registere(
themsel#es in the e'ecuti#e clu! they are e#en allowe( to change their market
pre$erences !y !ringing alterations in their mem!ership pro/le online !y going
into change my (etails option+

#*ace2-
Placing means (istri!ution o$ the pro(ucts an( ser#ices an( also how they mo#e
$rom the manu$acturer to the customer+ the recent wake o$ time the
organiKations like *ritish )irlines (irectly sell their pro(ucts #ia telephone an( the
internet which howe#er re(uces the cost o$ retailers an( there$ore the worl( o$
manu$acturers an( the customers ha#e !ecome a small #illage as they are
coming closer+ *ritish airlines /rst use( to sell their pro(ucts #ia retailers !ut
howe#er they switche( on to sell their pro(ucts on their well pu!lishe( an( well
$urnishe( we!site which inclu(es all the (etails an( $eatures o$ the ser#ice
pro(ucts+
)lso we must talk a!out customer relationship management in *) which is one
o$ the most important strategic marketing o!"ecti#es0 *) respon(e( to
ustomers- opinions an( recommen(ations an( that re4ecte( in organiKation
actions:
The customers- opinions an( #iews o!ser#e( strictly through PThink customer
sur#ey+ This is sel$-go#erning market research in#ol#ing large num!ers o$
customers on monthly !asis+ The organiKation also pins (own the customer
#iews on organiKation presentation with ri#al0 as well as uni#ersal airlines+ The
customers are the !ack!one o$ any !usiness organiKation (*ritish airways0 2D11)+
?owe#er0 the target0 which was set out in 2DD%I1D0 not achie#e(+ *ecause o$ the
slightly (ecrease in satis$ying the customer $or change catering ser#ices+ The
nee( is to make strong !ri(ge0 !etween *ritish airways an( mighty customers+
This will !e more $ruit$ul $or !oth o$ them+ 1t will !ring more !usiness to the
organiKation an( great satis$action to the customers (*ritish airways0 2D11)+
)lso there are (i3erent consi(erations the re4ect on customer satis$action as
"-3aste and its impact on en+ironment and actions2
To counter the waste pro!lems an( its worst e3ects0 like (iseases0 lan(/ll0 etc+
The organiKation is trying to practice an( /n( out the ways like5 all workers will
make use o$ internet an( computers+ The airplanes arri#ing on airport0 the
newspapers are recycle(+ There are se#eral other recycle centers (*ritish
)irways0 2D11)+
!-'oise4 its impact and actions2
The noise ha( always !een worst e3ects on en#ironment+ The population0 which
is li#ing near the airports0 has great concern a!out the noise+
The *ritish )irways is trying their !est to complete the goal !y re(ucing the noise
track !y 18Q !y 2D18+ The 1nternational i#il )#iation ErganiKation (1)E) will !e
managing this approach+
?owe#er0 tow ways are to !e e'perience( to re(uce the noise+ Aor take-o3 to use
the single engine ta'i0 airspace management0 airport management0 an( (esign
the use o$ aircra$t secon(ary0 power units ,ame as $or lan(ing0 the e3orts are
continue like gentle lan(ing approach with constant spee( 5!ritish "irways4
20116. This is also to put into consi(eration that
<ighttime-s mo#ements a#oi(e(+ 1t is trying to maintain the proce(ure to a#oi(
take-o3 at night+ ?owe#er0 it shoul( $ocus while a(opting the new scienti/c
metho(s to (eal with pro!lem+
Report on the impact of changes in the e7terna* en+ironment on a
marketing strategy
There are (i3erent tools we can use when we e'amine the e'ternal
en#ironments an( their impacts on marketing strategy
Airst we start with #$08$L analysis

#o*itica*2
1-?ea#y regulation ()>)0 2DD%)0 in which ompliance is essential i$ *) wants to
continue operations+
2- 1ncrease( security (ue to past terrorist threats (:AT0 2DDF)0 which lea( to
,u.cient security measures shoul( !e in place to ensure consumer con/(ence
an( competiti#e a(#antage is maintaine(+
$conomic
1- ;lo!al economic crisis: 2orl( growth is pro"ecte( to "ust o#er 2 percent in
2DD% (1@A0 2DDF)+ Poun( weakens especially against the >uro0 2hich lea( to
possi!le re(uction in the amount o$ !usiness tra#el as companies are cutting
costs an( using alternati#e means o$ communication such as
telecon$erencing+ *) is #ulnera!le as a UM operating airline to a poor
e'change rate+
2- Eil prices: (ecline( !y R8D Q since their peak retreating to 2DD7 le#els+
:ecline in $uel price S strengthening o$ the (ollar (1@A0 2DDF)0 this
Aluctuations in oil prices an( e'change rates will (irectly a3ect *)-s cost !ase
G- UM consumer spen(ing saw its sharpest (ecline $or 1G years !etween Tuly an(
,eptem!er 2DDF (hannel 40 2DDF)0 2hich lea( to more intense competition
0ocia*
1- The UM has an aging population0 which has its implications on *) as
Potential opportunity $or growth as ol(er generations ha#e more time to
spen( on leisure acti#ities such as international tra#el+
2- 1ncreasing unemployment (Mollewe an( ,ager0 2DDF)0 which lea( to
1ncrease( !argaining power as an employer+
8echno*ogica*
1- ) recent sur#ey re#eale( that G4Q o$ online consumers plan to use price
comparison sites more in 2DD% (<@)0 2DD%)0 that in(icate 1ncrease(
consumer awareness an( there$ore !argaining power+
2- Enline !ooking ser#ices an( check-in is !ecoming increasingly use( !y the
airline in(ustry0 which has its implications on *) as *) must ensure that
they remain up to (ate with these technological a(#ances whilst a#oi(ing
!ecoming o#erly reliant0 as this may isolate certain consumer markets (i+e+
the el(erly) who (on-t $eel com$orta!le using such technology+
$n+ironmenta*9 $thica*
1- <oise pollution controls0 an( energy consumption controls (:AT0 2DDF)0
this <ew legislation (e+g+ limate hange *ill) en$orcing tighter
en#ironmental regulation an( may increase operational costs each year+
2- 9imite( lan( an( $or growing airports 7 >'pansion is (i.cult at ?eathrow
as it woul( result in a loss in the 9on(on-s ;reen !elt area+ (** <ews
2DDL) which has its implications on *) as 9imite( capacitySR utiliKation
o$ capacity+
G- onsumers are !ecoming increasingly Pgreen- an( more aware o$ the
en#ironmental impact o$ their actions+ 2hich result in Aailure to a(opt an
integrate( en#ironmental strategy coul( lea( to a (etrimental e3ect on
the *)-s reputation an( income+
4- ancellations o$ 4ights an( loss o$ !aggage (hannel 40 2DDF)0 such
ethical issues coul( ha#e a (etrimental e3ect on reputation i$ le$t
unresol#e(+
Lega*
1- ollusion an( price /'ing0 lea( to restriction on mergers an( will ha#e an
impact on *)-s propose( alliance with )merican )irlines+
2- &ecognition o$ tra(e unions an( in(ustrial action e+g+ a!in rew strikes+
?as its impact as goo( employee relations are essential i$ *) wants to
a#oi( in(ustrial action an( interrupte( operations+
:- Epen ,kies )greement ()>)0 2DD%)0 which is Epportunity $or *) an( its
competitors to $reely transport aircra$t !etween the >U an( U,+
-----------------------------------
Ether tool use( to e'amine the e'ternal en#ironments an( its impacts on
marketing strategy is
#orter)s ;i+e ;orces2
1t is important to analyse the competiti#e nature o$ the airline in(ustry in or(er to
assess the position o$ *)+ The PAi#e Aorces- tool will ena!le *) to make strategic
(ecisions in or(er to increase pro/ta!ility+
ompetiti#e &i#alry
U*) caters $or !oth long haul an( short haul 4ights+ 2ithin long haul there is little
(i3erentiation !etween *) an( their competitors0 in terms o$ price an( ser#ice
o3ering+
UThe short haul market is more $ragmente( with many small players+
U:irect competiti#e ri#alry is /erce0 e+g+ Jirgin has a we!site opposing the
propose( strategic alliance !etween *) an( )) - P<o 2ay *)I))- (Jirgin )tlantic0
2DDF)+
Uonsoli(ation o$ competitors has increase( competition+
,trength: ?igh
Power o$ ,uppliers
UTwo aircra$t manu$acturers S ?igh !argaining power+
U*) restricte( !y sole supplier o$ $uel to the airport+
UPriority o$ lan(ing slots is gi#en to historic rights o$ e'isting users (1)T)0 2DDF)+
U*) employees use collecti#e !argaining through tra(e unions in or(er to
increase their !argaining power+
,trength: ?igh
Power o$ *uyers
U9ow concentration o$ !uyers to suppliers means they ha#e little !argaining
power+
U1ncrease( internet usage has ampli/e( awareness an( interaction o$ customers
(Meynote0 2DDFc)+
,trength: @e(ium
Threat o$ <ew >ntrants
U,igni/cant !arriers to entry: such as the competiti#e en#ironment0 high
regularity requirements an( high capital cost requirements+
U*arriers to e'it are in place which (eters new entrants+
UThe $ailure o$ recent airlines such as V9 an( Woom is likely to (eter new entrants
(Times Enline0 2DDF)+
,trengths: 9E2
Threat o$ ,u!stitutes
UThere are $ew (irect su!stitutes:
-,hort haul 4ights: the >uro star or a $erry+
-9ong haul 4ights: no nota!le su!stitutes+
,trengths: 9ow
The impact o$ this analysis on marketing strategy appears in high competiti#e
ri#alry an( !argaining power o$ suppliers so (e$ensi#e strategies nee(e( to
protect market share+
-----------------------------------
Ether tool use( to e'amine the e'ternal en#ironments an( its impacts on
marketing strategy is
/ustomer "na*ysis
E#er the past (eca(e there has !een increasing comple'ity in customer nee(s0
as the customer has !ecome more e(ucate( an( (eman(ing+ Particularly0 the
$ollowing changes ha#e occurre(:
X ) shi$t in (emographics to ol(er passengers+
X 1ncrease( glo!al connecti#ity allowing the usage o$ internet an( search
me(iums (e+g+ comparison an( re#iew we!sites)+
X 1ncrease( requirement $or con#enience (e+g+ new (estinations0 quick check-in)+
X Price has !ecome more o$ a priority
X ,egments ha#e !ecome more (e/ne( within their nee(s+
>#i(ence that *) is $ailing to respon( to the changing customer lan(scape
inclu(es:
X The amount o$ *) customers recommen(ing their ser#ices re(uce( $rom L1Q in
2DDLID7 to 8%Q in 2DD7IDF+
X *) ha#e !een criticise( $or slow inno#ation+
X Poor relia!ility an( !aggage han(ling+
X Aaile( attempts to target the price conscious consumer through low cost airline
operation+
1n a((ition customer sur#eys re#eal that *) per$orms not as goo( as e'pecte(+
)$ter months o$ (ealing with #olcanic ash clou( (isruption0 *ritish airlines ha#e
!een (ealt another !low: they are some o$ the worst carriers in the worl(0
accor(ing to a customer sur#ey $rom the consumer magaKine+ )$ter a year
plague( !y strikes an( recor( losses0 *ritish )irways came out mi((ling in the
&esearch+ ustomers on its short haul 4ights praise( *)s ca!in sta30 cleanliness
an( approach to (ealing with (elays0 !ut it was still rate( "ust 11th out o$ 1F
airlines+ En long haul 4ights0 *)s in-4ight entertainment was well rate(0 !ut the
airline $ell short on #alue $or money0 legroom an( re$reshments+ The airline
image has su3ere( a !low a$ter the sur#ey0 as it has alrea(y en(ure( months o$
strike chaos an( resultant /nancial turmoil+
*ase( on responses $rom more than 20DDD recent 4yers across the UM0 the
sur#ey showe( that one in G+F *ritish )irways passengers has ha( their checke(
luggage lost0 (elaye( or (amage( in the last /#e years0 E#erall in the UM only a
quarter o$ those airline passengers whose luggage was (amage( recei#e(
compensation $rom the airline0 accor(ing to the sur#ey !y insurance company
9J0 Those who were compensate( recei#e( an a#erage o$ "ust 72 poun(s $or their
(amage+ Thirty per cent o$ tra#ellers waite( three months or more to !e
compensate( $or their (amage( luggage+
) total o$ GF per cent ha( to wait $or !etween one week an( a month0 while "ust
2D per cent were compensate( $or the (amage within a week+ 2hen it comes to
lost luggage0 only 27 per cent were reunite( with their !ags within 24 hours0 the
paper reports+
1+ *ritish )irways: one in G+F passengers
2+ Jirgin )tlantic: one in F+G passengers
G+ >mirates: one in % passengers
4+ 4 >asy Tet: one in 11+1 passengers
8+ &yanair: one in 12+8 passengers
L+ Thomas ook: one in 14+2 passengers
7+ *mi: one in 1L+L passengers
F+ *mi !a!y: one in 2D passengers
)$ter we analyse the customers we must ensure changing customer needs are
understood and met.
-----------------------------------
Ether tool use( to e'amine the e'ternal en#ironments an( its impacts on
marketing strategy is
/ompetitor "na*ysis
"-0trategic group
*)s (irect competitors are those who operate similar ser#ices an( lie within the
same strategic group+
The competition is likely to !e most intense within this group as they are seeking
similar strategies+ 9u$thansa an( M9@-)ir Arance are the 2 lea(ing >uropean
)irlines @em!er carriers in terms o$ passenger num!ers0 with 18+1Q an( 14+1Q
respecti#ely o$ the total num!er o$ passengers carrie(+ *) comes in thir( with
%+GQ o$ the total (Meynote0 2D11)+ *) $aces competition $rom a small num!er o$
serious conten(ers in the UM+ 2ithin the main conten(ers are Jirgin )tlantic an(
Unite( )irlines in the ,tar )lliance soon controlling *@1 (>uro monitor)+ )lthough
they (o not lie within the same strategic group as *) the a(#ent o$ low-cost air
tra#el has change( the $ace o$ the airline in(ustry+ )irlines such as &yanair an(
>asy Tet ha#e esta!lishe( themsel#es among the lea(ing carriers in >urope0
whilst the more esta!lishe( long-haul carriers such as *) ha#e struggle( to keep
up with their counterparts growth rates+ @oreo#er the economic (ownturn an(
sharp $all in oil prices has cause( a price war !etween >mirates0 *) an( Jirgin
)tlantic on the 9on(on-:u!ai route+ Aares ha#e (roppe( !y GDQ across the
airlines+ Thus competition still remains /erce+ *ase( on the strategic group
analysis it coul( !e argue( that there is a gap in the market $or a low cost airline
operating a high !rea(th o$ ser#ice howe#er it is likely the reason no airlines
ha#e a(opte( this strategy is (ue to the $act that it woul( !e (estine( to $ail+
This assumption coul( !e supporte( !y *)s $aile( attempt to enter this market
in recent years (Telegraph0 2DD2)+
)lthough low cost airlines are the !iggest threat to *)0 mo#ing into low cost
market is not (eeme( appropriate !ase( on pre#ious $aile( attempts+
b- "ir*ine <ua*ity Re+iew ()Y&)
,kytra' is an in(epen(ent we!site an( there$ore gi#es an o!"ecti#e #iew o$ *)-s
quality o$ ser#ice in comparison to its competitors an( may highlight strategic
issues that nee( to !e a((resse(+
/ompetiti+e 0pider &nde7
reate( using (ata source( $rom ,kytra'0 2DDF+
-The o#erall )irline &ating $or *) was 4+ 1ts ma"or competitors all score( 4 apart
$rom M9@0 which score( G+
- *) an( Jirgin )tlantic are #irtually i(entically marke( in all categories with the
rest less highly rate(+
- *) is not a Yuality )ppro#e( )irline0 whilst Jirgin )tlantic is+
- *) nee(s to impro#e upon its interaction with its passengers across all classes
in or(er to outper$orm its nearest competitor Jirgin )tlantic+
- *) nee(s to impro#e its !aggage (eli#ery ser#ice+
- ;eneral customer re#iews ha#e shown a common theme: poor in-4ight
entertainment which regularly !reaks (own+
- *) nee(s to look at impro#ing its online ser#ices !y pro#i(ing a((itional
ser#ices all with a more personal touch+
- ,i' competitors hol( a /#e-star rating with the in(epen(ent e#aluator+
*ase( on ()Y&) ,er#ice Yuality nee(s to !e impro#e( to gain a competiti#e
a(#antage+
/onduct an interna* ana*ysis to identify current strengths and
weaknesses in a marketing strategy
2hen we con(uct an internal analysis to i(enti$y current strengths an(
weaknesses in marketing strategy we must analyse the strengths an(
weaknesses o$ the company
&nterna* 0trengths
X *ran( 1mage
X Partnerships Z )lliances
X Ainancial siKe an( sta!ility
X Terminal 8
&nterna* 3eaknesses
X Poor employee relations history
X &elia!ility an( trust
X 1nno#ation Z change
0trategies for 3eaknesses not to e7pose threats2
1mpro#e( en#ironmental stance
1n marketing strategy
,trengths
[ 2ell positione( among !usiness tra#eller who are less price sensiti#e
[ Aoun(ing mem!er o$ the Ene 2orl( alliance as the (ri#ing $actor !ehin( alliances is
long-term pro/ta!ility0 an( their $ormation ten(s to !e $or strategic reasons0 such
as accessing larger markets0 esta!lishing glo!al !ran( loyalty an( !uil(ing hu!-
to-hu! tra.c (1%%F)+ This mo#e is a(#antageous -$or the airline to ser#ice more
passengers an( esta!lish market reputation+
-other strength is the great opportunity $or *ritish )irways0 since it has got the o.cial
airline $or the 9on(on Elympic0 2D12+ They won this position $or the 9on(on Elympic0
2D12 $rom Jirgin )tlantic )irlines+ ?ence this mo#e $rom *ritish )irways might open new
(oors $or opportunity worl(wi(e+ There might !e a price !attle in the market with *+)5
-other strength in marketing strategy is how they customiKe their pro(uct using (i3erent
pricing strategies in a manner that customers can chose what they want+
- They target 9ong haul premium customers which are key to their pro/ta!ility+
2eaknesses
-*ritish )irways (*))0 has a weakness in winning o#er customer loyalty0 they lack in their
marketing strategy+ This weakness has to !e a((ress !y the organiKation+ :espite the
$act0 its growth through glo!aliKation an( the increase in tra#elers nee(s0 the marketing
campaigns were ine3ecti#e in the growth o$ the company+ *ritish )irways has a great
in$rastructure !ut they nee( a !oost in their marketing strategy to gain more customers
an( their loyalty+
#ropose strategic marketing responses to key emerging themes
in the marketing strategy
*) strategic marketing responses to (i3erent key emerging themes such as
G*oba*i=ation impact
1ncrease tra#el aroun( worl(0 0o *) response !y using huge 4eet inclu(es 248
aircra$t comprising 87 *oeing 747s0 42 *oeing 777s0 21 *oeing 7L7s0 1G*oeing
787s0 L% )ir!us )G1%IG2DIG21s0 GG *oeing 7G7s an( 1D smaller aircra$t !eing
use( in the company regional !usiness0 it also ha#e ser#ice network which is one
o$ the worl( largest an( through its mem!ership in Ene 2orl(0 the most
international an( o$ the glo!al airline alliances0 the network e'ten(s to some 87D
(estination in 1G8 country+
/hanges in the po*itica* en+ironment2
Politically there is a hea#y regulation+ 0o *) "oins alliance in(ustry that will !e
approach an unapproacha!le route+ This has a monopoly that each national
carrier ties in with slots0 in their home cities+ The airline in(ustry gets two si(e(
agreements this is another political !ene/t $or in(ustry0 which all mem!er can
utiliKe+ Political en#ironment concern a!out the role o$ go#ernment an( its e3ects
on the company+
&mpro+ement in hea*th and safety factors at work p*ace
The organiKation is committe( to pro#i(e the !est health an( sa$ety ser#ices0
an( is highly engage( to pro#i(e support at work place an( remain in touch with
liaison E.cers an( station comman(er+ The ?ealth an( ,a$ety section
enthusiastically monitor all actions0 haKar(s0 assessments an( tasks ()nnual
report0 p44)+ The Eperational 1ntelligence section continues to pro#i(e #ery
use$ul support to $rontline Aire/ghters !y capturing risk in$ormation that may !e
risky to the sa$e conclusion o$ operational happenings+ The organiKation also has
(e(icate( its ser#ices to the ommunity ,a$ety+ The ommunity ,a$ety
:irectorate has responsi!ility0
Aor =outh commitment0 :eman( &e(uction 1nno#ations an( Partnerships ,er#ice
:eli#ery
?owe#er0 the e3orts together $or /re sa$ety in the *uilt >n#ironment0 This
process in#ol#es the !roa(casting o$ in$ormation in relation to new !uil(ings an(
any other !uil(ing to
2hich material changes ha#e !een ma(e\+ ErganiKation is also running the
?ealth an( ,a$ety relate( training courses an( continues to satis$y its legal
requirements to pro#i(e the !est health an( sa$ety ser#ices 5!ritish "irways4
2010. #>6.
/hange due to market en+ironmenta* factors
-*ritish )irways has ma(e signi/cant changes in its !usiness strategy+ The
changes are a response to (e#elopments in the market en#ironment which
o#erturne( some o$ the assumptions un(er which the company was (e#eloping
its !usiness in the mi(-1%%Ds+ hanges implie( ra(ically impro#ing the company
/nancial per$ormance0 con#incing their work$orce o$ the paramount importance
o$ customer ser#ice0 (ramatically impro#ing *) perception in the marketplace0
an( maintaining momentum an( recapturing the $ocus that woul( allow them to
meet new challenges+
-Eil price 4uctuation is one o$ en#ironmental $actors so *) responses !y !uying
$uel sa#ing aircra$ts+
-Ether en#ironmental $actors are pre#iously (iscusse( in this report+
)lso pricing strategies o$ *) is clear in(icator $or the response to
competitors strengths an( strategies which (iscusse( pre#iously in (etails
References
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,T&)T>;=-*&1T1,? )1&2)=,0 (web page) (*+%*$
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!usiness+html1 accessed *2 3anuary. *+%,
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