Report On Marketing Case Study Of Virgin Atlantic

Question: Summarise Virgin Atlantics background and history, turnover, management structure, current corporate goals and targets, and markets. Your summary should use material from the Virgin Atlantic website, and other relevant online sources Develop a SWOT analysis to identify Virgin Atlantics current situation in relation to its main competitors. You should identify a minimum of three strengths, weaknesses, opportunities and threats. Your model should be developed referencing core marketing texts with content developed from articles and web sites Describe the marketing mix and its role in marketing, referencing two relevant theories and concepts Explain how Virgin Atlantic use the different elements of the marketing mix to promote their brand. You should apply at least one other theoretical model learnt during your lectures. Your explanation should be illustrated with specific examples of Virgin Atlantics events, promotional activities and target audiences (300 words). Create a diagram explaining how special events are defined and classified. Your diagram should draw upon relevant core texts Classify at least four Virgin Atlantic events using the model you have provided Explain the impact of Virgin Atlantics marketing and events strategy Answer: Introduction: Virgin Atlantic is a major airline of UK owned by Richard Bransons Virgin Group and Singapore Airlines. Key people of the organization are Richard Branson, the founder; Craig Kreeger, CEO; and Stephen Murphy, Chairman. In 1984, Richard announced to provide a high quality, value for money airline, would be in operation soon. Three months later, after gaining licenses and staffs, the Airline first took into the skies in June 1984. In the recent perspective, the Board of Directors comprises of seven non-executive directors and two executive directors. The organization structure comp-rises of an Audit committee whose role is to review the accounting policies; the Remuneration committee, whose role is to consider various reports and make recommendation; the Safety governance that looks after the safety and security; and lastly, the Joint Venture Steering committee whose members act as representative of the organization (Virgin-atlantic.com 2016). The airliner has revenue of 2.93 billion with an operating income of 14.4 million. The annual profit of the Airline was 22.5 million compared to 12.4 million last year. According to the Annual Report 2015, Virgin Airline served 5,939,000 customers on 26,739 flights to 29 non-stops destination. The operating bases re London-Gatwick, London-Heathrow and Manchester that include almost 31 destinations. Current corporate goal of Atlantic Airline is to remain as competitive as possible by taking advantage of reducing costs. The ambition of the corporate organization is to become the most loved airline by the customers. They want to be uniquely Virgin Atlantic (Virgin-atlantic.com 2016). The scope of the paper is to analyze the marketing strategies undertaken by Virgin Atlantic and its impact on its business. SWOT analysis of Virgin Atlantic: Strengths: A brand extended beyond aviation: The Airline Company enjoys the positive perception of the fact that the brand has its operation apart from aviation. The Company never fails to represent the values such as quality, value for money, fun and individuality in its advertising campaigns that attracts customers. A strong Atlantic network: In 30 years of its journey, the North Atlantic network remained ata the core of its operation Joint venture with Delta: 49% share holder Delta Airline that operates between UK and United States brings huge share. There has been an increase in the revenue from 5% to 18%. Weaknesses: Poor profitability record: Virgin Atlantic reported a pre-tax loss of 74 million. As a consequence of it, even in the profitable stage the Company lags behind 1% of its revenue. Under-capitalized balance sheet: The average cash balance dropped from 445 million to 360 million. This rapid rate of cash burn resulted in one of the weaknesses of the Airline. Failure of Little Red: The domestic UK route between London Heathrow and Manchester, Edinburgh and Aberdeen leased from Aer Lingus was named Little Red. The trend was a failure and did not help in achieving the target. Opportunities: Delta relationship might drive cost synergies: The Airline might draw its relation with the Delta to reduce the operating cost. 2. Merging and alliance: Merging with British Airways that would result in better operation. Lower expenditure cost and increasing new route option: The Airline has plans to extend its network to Tokyo, Mumbai and Cape Town. Threats: Overcapacity of North Atlantic: Due to over capacity, there has been demand-supply imbalances. Interference of EU in partnership: European Commission has been investigating the operation of partnership of the Airline that created a major threat to the company. Competition among the Gulf airlines: Three Gulf carriers like Emirates, Qatar Airlines, Etihad and Turkish Airlines are tough competitors. PESTLE ansalysis of Virgin Atlantic: Political United Kingdom is a constitutional monarchy and runs under the parliamentary system. Political scenario of the country is stable that provides opportunity to both domestic and international companies to operate in the nation. Economic UK ranks 5th in terms of its GDP. The country welcomes increasing Foreign Direct Investment (Thornton 2016). UK is a free market and provides opportunity for better business. Socio-cultural The Country is open to migration and that resulted in mixed ethnic group of population. People have high standard of living. Technological Being an economically developed country, the country has good access to technology. People are technologically advanced and uses digital and internet platform actively (Coursaris et al. 2014). Legal UKs law is flexible. The country has aviation laws that include aircraft trading, finance and leasing, commercial, litigation and dispute resolution (Thornton 2016). Environmental UK has strict environmental laws. The Country has laws for aviation industries that give guidelines related to environment and sustainability. Marketing mix: Marketing is a continually evolving discipline and is used actively to fight with the competition. Marketing mix is composed of four fundamental elements; product, place, promotion and people. Product The product that fits the requirement of the task of the consumers Place Place indicates the regions where the product should be available for the target group of people. Price The price of the product represents a good value of the product Promotion Promoting the product or service using various tools such as advertising, PR and others Marketing mix of Virgin Atlantic: The main objectives of the marketing strategies of Virgin Atlantic are: To secure a brand in the thought of people with a low budget: The main objective of the band is to create awareness in the mind of the people whenever they think of a dwarf budget to fly. Looking closely, Virgin Atlantic has been successful to reach in the top of mind awareness compared to British Airways. Delivering virginness: The Airline define the concept of Virginness by following six attributes: up-to-date, dynamic, innovative, stylish, helpful, fun. They aim to co-relate each of these attributes with brand preferences that are the key to ensure the efficacy of communication (Chao, Chen and Yeh 2015). Providing correct reasons to people to select Virgin Atlantic: The objective of the Airline is measured by increasing brand preferences of customers. It has been found that brand preference has increased from 49% to 73%. The marketing mix of Virgin Atlantic can be stated here: Product: The airline operates with a three-class cabin configuration- Economy, Premium Economy and Upper Class- the business class. Virgin Atlantic also maintains ten lounges that they named as the Club House that is located in New York, Boston, Washington D.C. and other western and European regions (Kaynak and Kucukemiroglu 2015). Place: The Airline has recently launched a new route to Detroit to increase the frequencies to other US destinations. With this approach, 70% of their flights serve the transatlantic market (Perreault, Cannon and McCarthy 2013). People: The target consumers are the regular users of airlines. Moreover, the recent approach of marketing is to target the consumers who look for a low budget airline (Evans 2012). Promotion: The Airline Company is using the digital media marketing platform to reach out to the targeted consumers. The company has been found to use social media and digital media like television commercials to take the initiative to promote their service (Stelzner 2012). Fig: Diagrammatic representation of Marketing Mix of Virgin Atlantic Special events of Virgin Atlantic Virgin Atlantic has come out with unique marketing and advertising strategies at regular interval. Some of these events can be discussed here: Still Red Hot campaign: The Still Red Hot campaign marked the 25th anniversary of the Airline. The campaign targeted the youth specially those belonging to the age group of 25 years. The campaign highlighted the changes in the brand and the perception of people on the Airline. The campaign was rolled to 13 major markets emphasizing mainly on US, UK and Australia (Coursaris et al. 2014). One-day campaign: Another recent campaign undertaken by the Airline was using the Twitter as the marketing platform. The campaign was again made to target the youth. The twit was trended with the caption one day, the participants were asked to narrate any incident starting with the phrase one day. Huge number of people was found to participate in the campaign, which ultimately resulted in the success of the campaign (Virgin-atlantic.com. 2016). Let it fly campaign: By the beginning of the year 2015, Virgin Atlantic came up with the most awaited advertising campaign, Let it Fly campaign. The objective behind the concept is to bring the customers ethos to life. The campaign aimed at attracting those customers who are passionate about looking for better experiences. The campaign encourages the idea to embrace human spirit and Let it fly. The campaign carries the message that life does not come twice, so one must go for it (Adageindia.in. 2016). Campaign for business traveler: In an advertising campaign in 2015, the Airline aimed at the consumers who travel for their business purpose. The campaign wanted to portray that business activities can be made adventurous if they prefer to travel by Virgin Atlantic. The campaign was equally successful and very nicely had put impact on the travelers (Anderson-Macdonald, Chandy and Zia 2014). Impact of Virgin Atlantics marketing and event strategies The marketing and event strategies have always tried to imply that Virgin Airlines has something to offer to its customers that no other Airline would offer. The message was delivered to increase the band preferences. UK has always been a strong market for Atlantic. The Red Hot campaign held great impact on not only advertising effect but other impact effect as well. The brand out performed throughout the World. All the campaigns were successful in fulfilling the objectives of the marketing (Chauhan 2015). The one-day campaign at Twitter also helped to fulfill the intension of attracting the target consumers to the campaign. Conclusion: By the end of the report it can be said that the marketing strategies of Virgin Atlantic had certain specific strategies to highlight. It always tried to target the consumers who look for a flight in budget. The Airline tried to portray that they are capable of providing everything provided by other Airline but in a budget less than the other Airline. All the campaigns were targeted for different segments of people and have successfully achieved the intention of the marketing purpose. References: Adageindia.in. 2016.Ad Age Homepage - AdAge. [online] Available at: https://www.adageindia.in/marketing/btob/virgin-atlantic-campaign-for-business-travelers-takes-flight/articleshow/46830674.cms [Accessed 10 Aug. 2016]. 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