Comparative analysis of marketing strategies

INTERNATIONAL MARKETING

SUBMITTED BY:

Robin Masih Rohin Rai

Prabhjot Singh Risam

Hardeep Singh Chawla Kirtivardhan Banthiya

Virgin Atlantic

Vs
British Airways

The Industry
The airport dominance has grown competitive in the

hospitality industry. In the accommodation of this competitive growth, the aviation or airline industry plays an essential role in helping the economy to survive although this type of business requires huge investment.
The strategies applied in this kind of industry can

help the entire organization in finding the dominant position. Connection with media serves good opportunities.

Introduction
Virgin Atlantics
The owner of Virgin Atlantics is Sir Richard Branson, who is famously

known for Virgin records. In 1984, Richard announced to the world that a high quality, value for money airline would begin operating within a short span of time. In this way, Virgin atlantic airways was born.
In 1992 Richard sold Virgin Music to Thorn EMI and invested the

proceeds into Virgin Atlantic, improving on an already great service.

In the same year they launched the first super economy service that

went on to become their award winning Premium Economy.

 They spent most of the Nineties buying new planes, expanding their

route network and generally breaking new ground in passenger service, both on the ground and in the air.
In 1999 Richard sold a 49% stake in the company to Singapore Airlines

valuing it at a minimum of 1.225bn. In the same year, for services to entrepreneurship Richard received a knighthood.
And then the list of innovations and over- increasing facilities goes

endless.

British Airways
British Airways (BA) is the flag carrier airline of the

United Kingdom, based in Waterside, near its main hub at London Heathrow Airport.
British Airways is the largest airline in the UK based on

fleet size, international flights and international destinations. BA's UK passengers originating at non-London airports must connect via London after British Airways discontinued all direct overseas flights from UK airports outside London following the sale of BA Connect to British regional carrier Flybe in 2007.

History
The British Airways Board was established in 1971 to control the two

nationalized airline corporations, BOAC and BEA, and two smaller, regional airlines, Cambrian Airways, from Cardiff, and Northeast Airlines, from Newcastle upon Tyne.
On 31 March 1974, all four companies were merged to form British

Airways. After almost thirteen years as a state company, that was sold in February 1987 as part of a privatization plan by the Conservative Government.
The carrier soon expanded with the acquisition of British Caledonian in

1987 and Dan-Air, Gatwick-based carrier, in 1992.

 On 12 November 2009, British Airways confirmed that it had

reached a preliminary agreement to merge with Iberia. The merger between the two carriers will create the world's third-largest airline in terms of annual revenue and the second largest airline group in Europe. The merger was confirmed on 8 April 2010, and on 14 July 2010, the European Commission approved the merger under Competition law and also allowed American Airlines to co-operate with the merged entity on transatlantic routes to the United States of America. The British Airways merger with Iberia was finally completed on 21 January 2011, formally creating the International Airlines Group, IAG.

Marketing of Virgin Atlantics

Its Customers
The percentage of UK originating passengers varies

from route to route, but on average there's a 60/40 bias to the UK.
Upper Class passengers are predominately travelling

on business and are male, 35 to 45 years old, and earning 50K plus per annum.
Passengers in Premium Economy are split fairly

evenly between travelling for business or leisure; most are male, average age 41.

 Those travelling on business are often doing so

because their company operates an economy travel policy.

Economy passengers are a much broader group,

travelling mainly for leisure and evenly spread across most socio economic groups and age ranges.

Marketing of services
Advertising activity in the UK includes TV, press,

magazines, outdoor posters and taxi sides, all featuring their distinctive logo. Advertising is used to encourage people to try the airline, to raise awareness of new product developments and new routes.
Direct mail is also used to encourage trial and to support

above the line product or route messages.

During traditionally low seasons, tactical promotions and

price advertising are also used to maximize aircraft capacity.

Advertising

 Virgin Atlantic operates a frequent flyer programme, flying

club to encourage loyalty in existing flyers. However, in addition to offering miles which can be exchanged for free flights and other rewards, flying club members are rewarded with a host of other benefits, e.g., a "one call does it all" support service and Clubhouse access.
In addition to communication to consumers, they market to

travel agents, who are the primary distribution source for airline seats. In addition to advertising in trade publications, they support their sales team with a wide range of promotions, trade incentives, familiarisation trips and educational/social events.

Key areas within Marketing Department

Communications - The role of the marketing

communications department is to keep business and leisure travelers informed through press and TV advertising, mailings and a variety of offers and promotions. Running special promotions - like fare discounts on particular fares increases the popularity of seats on each route all year round. The Communications department works alongside the Sales department, offering support to the trade. This is a process that involves working closely with larger corporate clients and travel agents on joint marketing activity.

 The website (www.virgin.com/atlantic) offers full

electronic booking capacity, allowing passengers to reserve and pay for tickets online, plus full destination information and a comprehensive guide to what's in store when flying with Virgin Atlantic. flying club members are able to use the site to check their mileage balance, rewards and earning opportunities. New members can also enroll online.

 Creative Services - The in house design team

produces everything from sales literature, trade material, newsletters and posters to photography and video production. The design crew also manage the development and use of Virgin Atlantic's corporate identity.

 Charity - In conjunction with the Virgin Healthcare

Foundation, Virgin Atlantic's onboard charity, Change for Children, supports four charities a year as well as special appeals to support national fundraising days or natural disaster relief. In 2000 Change for Children donated a whopping 401,850 to its chosen charities. The Charity team receive on average 150 letters each week asking for charitable assistance. Priority is given to people who are terminally ill, the emergency services, schools and organizations looking after people with special needs, and environmental and conservation concerns. Virgin Atlantic does not seek publicity for support of charitable activities.

 At Virgin Atlantic theyre passionate about supporting local

communities both in the UK and in their global destinations. They tackle difficult social challenges by using all the global resources available to them.
Last year they gave over 1 million to children and young

people who face extreme neglect, abuse, poverty, violence and social exclusion. With their support, people have real choices and opportunities to build a positive future.

 Change for Children is at the centre of a network of local

and global social and environmental programmes and is one of the many ways they give something back to communities in our destinations. Each month Change for Children raises an average of 45,000.
For the next three years (2010 - 2012) their Change for

Children appeal will be supporting Free The Children, who support long-term sustainable change in our destinations.

 We've already developed excellent working

relationships with Free The Children and are looking forward to what the next three years will deliver. Virgin Atlantic Charity climb

 Sponsorship - This is sometimes used to support

new routes. For instance, Notting Hill Carnival was the perfect platform for Virgin Atlantic to launch the flights to the Caribbean, while becoming the Official Airline for the Lions' rugby tour to South Africa was spot on for the launch of the Johannesburg service in 1997.
F1(09) NFL

Virgin London Marathon

When the London Marathon announced they were looking for a

sponsor, Virgin jumped at the opportunity to be part of something amazing.

Acc to Virgin- We knew the London Marathon raised massive amounts

for great causes each year, but we hadn't realized the race was in fact the single biggest annual fundraising event on the planet. The runners have raised over 500 million for good causes since the first race in 1981.
We were so inspired by the London Marathon's commitment to raising

money for charity that Virgin Money, Virgin's financial services arm, wanted to get involved and lend their expertise. As lead sponsor of the race, their ambition is to help the runners raise even more.

 Internal Communications - The Internal

Communications department looks after a variety of publications and activities that are aimed at Virgin Atlantic staff, ranging from the intranet, Verb, and Buzz videos, to the annual staff party at Richard Branson's home in Oxfordshire.

 Events - the Events team manages a wide variety of

exciting activities to promote Virgin Atlantic and its routes. The team looks after new product launches for corporate and trade clients, as well as training and social events for travel agents, exhibitions, road shows and press launches. For upper class at Business Travel.

 Loyalty - flying club, the airline's loyalty

programme, allows Virgin Atlantic to reward and recognise its most important customers. The Loyalty team manages all forms of communications with the frequent flyers, including letters and other mailshots.

 Partner Liaison - the Partner Liaison team is the

core of the flying club, linking the Loyalty department, the flying club partners and the flying club members, and negotiating contracts with potential partners to provide a huge selection of mileage earning opportunities and rewards to spend those miles on.

 Research - Virgin Atlantic commissions quarterly

customer satisfaction studies that are conducted by the prominent market research organisation NOP. The surveys monitor everything from the punctuality of the flight departures to the length of check in queues and the quality of the inflight entertainment and service. Results of the surveys are fed back to managers globally, providing the airline with the valuable opportunity to review and improve its services wherever it can.

 Virgin Atlantic also participates in industry wide

surveys conducted by IATA (International Air Travellers' Association), TAPS (Transatlantic Passenger Survey) and SPEAR (Survey of Passengers on Europe Asia Routes). These provide a benchmark for all competing airlines on service levels, both on the ground and in the air.

 Public Relations - The Press Office handles all direct

communication with the press, television and radio, working closely with Virgin Group's main Press Office in London. The Press Office drafts and distributes press releases providing journalists with information about Virgin Atlantic, as well as organising press briefings, running press conferences, accompanying the press on new route launches and setting up photo opportunities for national and overseas media. The office also works with broadcasters and filmmakers to secure product placement for Virgin Atlantic.

 Database Marketing - Working closely with the flying

club team, the Database Marketing team manages and maintains the extensive customer database.
This database holds a wide range of information including

details provided by customers who register their interest in Virgin Atlantic when visiting its' web site.
As well as being used to run precisely targeted campaigns

and promotions, the database is also used to produce management reports on the behaviour of the customers and to track the mileage of the airlines frequent flyers.

Environmental Policy
Virgin Atlantic has introduced a number of recycling

initiatives both on board aircraft and throughout the company's offices. These measures are environmentally conscious and cost effective, enabling the airline to assist a number of charities and institutions. Recycling is carried out in compliance with Ministry of Agriculture directives to ensure the highest health and safety procedures are adhered to.

Office initiatives

Paper- Strand Cleaning Services at Gatwick.

Printer toner cartridges- CLIC (Children's leukaemia

charity) Vending cups Plastic glasses- Save A Cup Recycling Company. Aluminum cans- Ifield Hall to raise money for their transport.

Onboard Initiatives
Duty free bags- Virgin Atlantic was the first airline to

use Byoplastic, a biodegradable material, with duty free bags introduced in 1988. Magazines- Consumer and specialist magazines are covered with protective plastic covers to enable reuse. Economy amenity kits Upper class amenity- Leftover snoozesuits are laundered for re-use.

Marketing of British Airways

Product strategy
British Airways is a business offering service

products, flights across destinations, in the transportation industry. Service is an intangible product involving a deed, performance or effort that cannot be stored or physically processed, were customers directly participate in the production process. Product strategy is therefore very vital for the organization's success. It needs to be developed and manage very careful in order to be successful

 British Airways product strategy includes flight

services, quality of flights, various destinations across Europe and the world, executive class, business class, speed, security, support facilities and years of experience.
It provides the basic product and various alternatives

to satisfy all the different customer needs.

Product levels
1. At the beginning is the core benefit, the fundamental
service or benefit that the customer really buying. The most fundamental level is the core benefits; what the customer really buys. In British Airways customers buying flight tickets to satisfy their basic need which is to flight from one destination to another. 2. The second level is the basic product, were customers book their seat on a schedule flight to a particular destination. British Airways flies to the busiest airports in Europe in 95 different cities and to 58 other destination across the world. It is by far the busiest Airways company in the world operating a big number of airplanes

3. The third level is the expected product in other words the condition buyers expect when the purchase their tickets. In British Airways customers expect to have an allocated seat, meals and drinks, on board entertainment good service, in contrast with Easy-Jet were customer just buy a ticket with no allocated seat and without on board service of food and drinks.

4. The fourth level is the augmented product that exceeds customer expectation. The augmented product is the extra services that British Airways provides and the support facilities. It has three different executive classes for different needs: the blue, the silver and the gold. For the member of the silver and gold there are executive lounges in all the main airports where customers can relax away from the noise and eat something or even have a shower and go to the gym. Customer from the first class can even enjoy an on board sleep in their own bed seat. For busy people were time is money British Airway offers great services to eliminate any time lost.

Adding value to the customer

In the product development a key factor is the company's

positioning in order to choose the best possible strategy. British Airways has positioned it self as high standard, high quality airline and it's the leader in its category. Thus the strategy that follows it is not stop at the expected level but continues with emphasis to the augmented product level. British Airways does not only concern for the core product, but it pays a lot of attention to the augmented product as well. It tries to satisfy all the different customer needs and expectation from an economy class to the business and the first class providing various services.

 It has different lounges for the first class customer and an on-

board menu for the food and wines than it has for the economy class. British Airways offers business class seats, blue / silver or gold card for frequent fliers and executive lounge at all main airports. It also provides customers with free food and drinks on flights and very good service. It has as well two in-flight magazines, a great collection of movies, four radio channels and TV programs for the entertainment of the people. It also flies the busiest and more convenient airports and flies from and to almost every country in the world in 153 different destinations around the world.

Brand Identity
A brand identity is the message sent out by the company

through its form, name, visual signs, advertising etc. Kapfferer introduced the brand pyramid shown in the figure below to help marketers analyze brand's identity (Peter Doyle 1994). British Airways application to Kapfferer's brand pyramid can be analyzed as:

1. Brand core: "Quality flights for all people". This brand core is applied to focus on the quality of the British Airways brand which is available at different levels for different types of customers.

2. Brand style include:

o Culture: An airline company based in the United Kingdom. o Personality: Confident, glamour, convenient. o Self image: Quality of service, Business class.

3. Brand themes:

o Physical: Quality flights across the world. o Reflection: For everyone, with any needs and any wants. o Relationship: Reliability, security, convincingness, comfortableness.

Branding
Branding is a major issue in product strategy. It is the art

and cornerstone of marketing. It is the name, term, sign, symbol or design, or a combination of them, indented to identify the good or services of one seller or group of sellers and to differentiate from the competitors (The American Marketing Association). British Airways brand is the safeness, the assurance, the confidence, the luxury, the comfortableness that the brand has built in the years. It is the symbol of British Airways when you see generate awe of a brand strong enough to fulfill every customer attitude. A symbol which is simple but represent the one of the best in safety and luxury airlines in the world on customers minds.

Levels of Branding
1. Attributes: British Airways is a luxury, safety, reliable
and convenient airline which transfer people to different destinations.
2. Benefits: In other words the translation of the attributes into functional or emotional benefits.
The term luxury represents functional benefit when having

your own comfortable seat with a nice meal and beverages of your choice and all the kind of comforts a customer would like to make his flight easier and better.

 The attribute safety could be translated into

emotional benefits that calms down the customers and make them feel safe. The attribute reliability represents an emotional and functional attribute. British Airways makes the customer feel important with safe, reliable, scheduled flights always on time. 3. Values: British Airways brand stands for a prestige, glamour, comfortableness, safety and reliability that he airline has which can be used by all kind of people.

4. Personality: Flying with British Airways gives a personality which makes you feel like a business man or an executive traveler. It has the glamour any traveler would dream and the right on time concept for people on a hurry. 5. Culture: British Airways is an airline company based in the United Kingdom representing the English culture: organized, reliable, kindly. 6. User: The brand suggests the kind of consumer using the service. For example in British Airways you see more business people than you see students. However people from any background can afford to use the service.

However, a brand is more than a name or logo or color or symbol. It is a marketers promise to deliver a specific set of feature and benefits to the customer. British Airways is a big airline which flight international and oversea and offers great deals of luxury safety and comfort flying from and to the most central and busiest airports in the world.

Pricing
For these different types of customers British

Airways has set different prices considering their different needs:

a) The executive class (golden members), b) The middle class (silver members) c) Economy class (blue members and free travelers).

Pricing Strategy
* The premium strategy gives high quality in high prices for executive and business users. With this strategy British Airways attacks the business class of its competitors in overseas and international flights like Virgin, American Airlines and Lufthansa. * The medium price strategy gives medium quality, less than quality than the premium strategy and more quality than low price strategy, in medium prices.

* The low price strategy has been developed to gives the basic product as the low cost airlines (such easy jet and Raynair) with some more extra benefits which add more quality plus the advantage of the brand image of British Airways.

Promotional Pricing
British Airways has set some promotional prices on flights to some special occasion: 1) Christmas gift voucher. The promotional offer for the Christmas known as British Airways escape ticket offers a perfect present. Flying to 14 travel zones from 59 return on UK and Europe destinations and from 269 return on the rest of the world. 2) Domestic and European fares from 49 return: Low fares to 135 destinations across Europe.
3) Club World business class offer: When flying to club world

business class you can upgrade to first class on a free one way ticket.

Conclusion
Both the airlines are different from each other in some or

the other way. British airways do not focus mainly on low pricing because of its already established brand whereas Virgin Atlantic provides a lot of low cost offers. VA shows its responsibility towards the environment. BA do not compromise with its services. Believes in providing the best as you pay whereas VA believes in Customer Delight. VA is working a lot for charity so as to brand its product and services and its introducing a lot of elite services to compete with BAs Upper Class.