Introduction Of Marketing Management Assignment Sample
Marketing management can be defined as formulating strategies and planning for the goods and services, sales, promotions, advertisement, etc., for reaching to desired customer segment (Navarro et al., 2011). For this procedure, competitive strategy and economics tools are employed to evaluate the industry context in which the company operates. These involve porter's five forces, investigation of strategic groups of competitors, value chain analysis and others. Marketing management is essential for every firm as it provides the idea and ways to run their business efficiently. As the taste and pReferences of customers change from time to time, the company needs to plan their marketing strategies in accordance with that. TheThe firm needs to conduct a survey and examine civilians' current needs and culture to offer them products or services as per their demand and match their culture. The present report is based on Virgin Atlantic. In this project, some necessary conditions have been explained by which consumer loyalty can be built. For doing this, a marketing audit has been done by using PESTLE and SWOT analysis. By doing pestle analysis, Virgin Atlantic can easily find out the influence of its external factors like government, technology, society, the economy of the nation, environment, etc. After that, they can run their business less impacted by these factors. At the same time, by doing Swot analysis, the venture can also explore its strengths, weaknesses, threats, and opportunities. This will help them know about themselves ineffective way. They can take appropriate measures to minimise their weaknesses and adopt strategies for coping with their threats.
Background statement outlining the industry, market positioning and unique selling proposition
Virgin Atlantic is a European aviation company, and its headquarter is situated in Crawley, United Kingdom. This airway organisation was set up in 1984 as British Atlantic Airways. Its co-founder Randolph Fields and Alan Hellary flew between the Falkland Islands and London. After that, the corporation's name changed to Virgin Atlantic Airways as Fields sold-out his stocks in the firm after-ward dissonance with Sir Richard Branson on the administration of the venture. It has been examined that this company had approx 8,875 workers in the year of 2016 and are growing afterwards. It serves around 29 destinations. The airway, along with the Virgin Holidays, is operated and governed by a belongings enterprise known as Virgin Atlantic Limited, 49 % governed by Delta Air Lines and 51 % owned by Virgin Group. This venture utilises a mixed fleet of Boeing wide-body aircraft and Airliner. It operates its designate in Asia, North America, Caribbean, Africa, and the Middle East from its important bases at London Heathrow and London Gatwick and its alternative base at the Urban centre (Miquel-Romero, Caplliure-Giner and Adame-Sánchez,2014). In addition to this, Virgin is also operating its seasonal flights from Belfast and Glasgow. It has been found that its aircraft includes three cabins: Upper, Economic, and Premium Economy class. The investigation has been examined that Virgin Atlantic had offered services to 5.4 million travellers, making it the 7th largest United Kingdom airline in the context of mass of passengers in 2012.
In a strategy of marketing and business, market position refers to the perception of customers to brands or products in comparison to the goods and brands of others. So, market positioning can be defined as establishing the image of a product or services of a corporation within the marketplace so that customers prefer them most concerning other firms. There is a strong market positioning of Virgin Atlantic in the UK as it comes among one of the oldest firms within the United Kingdom. People living there mostly prefer to take any tour as they trust their services and products. This shows that Virgin is successful in establishing good loyalty among its passengers. And this is the main reason for their strong market presence in not even the UK but also in other countries. They have established an advertisement movement that concentrates on its clients' travel desires. It looks to position itself as a "client-centric" airway (Michaelidou, Siamagka and Christodoulides, 2011). It is a global TV ad movement involving around 30, 60, and 80 second TV and cinema spots launched on January 3, consisting of print, out of home, digital and societal mediums. These all promotions promote the location or areas that Virgin flies to and the experiences available in each. This ad follows a traveller on his way to pitching a business idea. It has been becoming aware that Virgin Atlantic is naturally attracting those passengers who are passionate about hunting or seeking new experiences. This advertisement throws down the challenge to them for turning their ideas and dreams into reality. For this activity, the company not very long ago teamed up with Microsoft to control different parts of aspects of the in-flight experiences like positioning seats, temperature and lighting in real-time as users move around the aircraft, using Xbox Kinect technology.
Virgin has targeted upper-class consumers who are mainly business passengers and are travelling on transatlantic routes. They realised the chance to gain a considerable market share via effectual marketing of their fun, honest, quality, caring and innovative airline. The marketing activities of Virgin have incremented the brand preference over time. In May 2009, this firm published around 68 million euros. On the contrary, British Airways faced a loss of approx 401 million Euro. Virgin has invested a sum of 20.77 million euros in marketing communications. They also launched their latest campaign with "Flying in the Face of Ordinary "and its international brand scheme in 2013.
Analysis of the current market situation
Virgin Atlantic's success is not down to passengers flying on it as they buy into a philosophy, but as it provides better services and products at a competitive cost. Presently, Virgin Atlantic is one of the major airway companies worldwide, having a fleet of 38 planes by offering services to 34 routes and gaining many awards. Due to current political instability in the middle east, specifically in Syria, the oil price rises. Thus, this is a clear threat to the airline industry: they have to increase their airfares or charges of travelling (Marshall and LaMotte, 2011). For the previous 2 years, the world does not feel a reduction in the prices of oil below 100 dollars. Still, in 2013, the cost of fuels has stayed below the past years' levels. This makes them able to minimise their operating expenses. However, sinking fuel prices are also a signal of a weakening economic condition that, in the end, would impact the demand for global air travel. The instability in the economy has also affected some of the Virgin's challenges. Regardinggraphy, the UK and German markets have recorded a better performance than the rest of the Eurozone. This shows a golden chance to grow for the cited firm as they can take the routes of their competitors in a nation with poor performance with the UK.
Unique selling proposition
A unique selling proposition is nothing but a factor that differentiates goods or services from its competitors, such as the highest quality, lowest cost or innovative products. Virgin Atlantic has a unique selling proposition (Merrilees, Rundle-Thiele and Lye, 2011). They provide the best quality services and products to their passengers about other airlines corporations. They offer common cargo goods and provide great services to feel good and travel smoothly. They are also giving cashback offers to their bookers. For example, 15,000 cashback can be provided to those users who will book their flights tickets. Apart from that, they are promising their clients safe and secure trips as they recruit one of the best pilots in the world.
Marketing audit outlining the overall market attractiveness
Marketing audit refers to a comprehensive, organised, independent and continuous investigation of the marketing environment of the company's strategies, objectives, aims, and all activities to identify problem areas and opportunities. In addition to this, a plan of action is also suggested to improve the venture's marketing positioning. Some of the key tools and techniques that can be used for carrying out market audits are listed below :
- PESTLE Analysis
- SWOT Analysis
- Porter's five forces
Pestle analysis of Virgin Atlantic
This is a tool for finding the impact of external factors on the performance of an enterprise. By examining the influences of those factors company can adopt certain strategies to cope with that. Pestle analysis of cited firm is discussed below :
- Political factors: Political analysis examines the impact of government, its norms, rules and regulations on the venture. In the big picture with Virgin group, it can be said that different factors like taxation policies, labour laws, and trade limitations obligated by the legal people in charge greatly influence its operations. They have faced various challenges as they do businesses in foreign nations like Australia and USA (Lusch and Webster Jr, 2011). Some of those situations involve not having a steady, trustworthy government, licensing slow-working people designed by other countries governments, strict rules and control of business operations by legal bodies, high customs and traffic given by governments. For instance, import customs and traffic imposed by US Federal legal authority have negatively decreased Virgin's exports to the US markets. Besides this, the UK government's deregulation of the airways sector permitted easy entry of new organisations into the industry in 2006. in addition to this, Virgin is also facing threats of the attacks done by terrorists. So, the business needs to invest more in promising the safety of the flights so that people remove this fear from their minds.
- Economic factors: This deals with several factors that would affect the overall economic condition. This consist of inflation rates, costs of products and services, foreign exchange rates, interest rates charged on capital and investments, etc. Virgin Atlantic is facing Competition from other ventures. For instance, they are forced to reduce their fair as their challengers such as American Airlines, Fly Emirates, and Qatar Airways offer the same services at lower prices (Ling-Yee, 2011). Besides this, other economic factors impacting the performances of Virgin Group are higher prices of oils and entry of new airways enterprises such as Singapore Airlines in this industry. Apart from this, a high level of unemployment has caused a decrement in buyers' purchasing power. In turn, it minimises the sales volume of the firm.
- Technological factor: Different technologies are impacting the business nature of airways. The increase in the popularity of internet services around the globe. This influences positively and negatively (Lindgreen et al., 2012). For an instant, the internet allows airline operators to reach larger clients and provide services at a much low cost. But at the same time, audiences can easily examine the tickets charges just in a few clicks in front of their computer system. Thus, this phenomenon affects the pricing capability of air operators negatively.
- Environmental factors: Global warming is considered a serious issue for civilians and the next generations. Due to sudden changes in weather like snowfall, heavy rainfall, cyclone, foggy weather, etc., the corporation's work gets delayed, and travellers have to face inconvenience. Even it also causes the death of people when the flight gets imbalance in those circumstances. Therefore, conscious efforts and sustainable development should be made by Virgin to assure natural disasters. The company can connect with weather forecasting departments and take off before taking permission from those members. In addition to this, they can also keep in touch with them even after taking off.
- Legal factors: The government impose different types of laws and regulations that have to be obeyed by the cited firm. If they do not, legal authorities can take strict action against them. Thus, legal factors also play a vital role in the aviation industry.
(Source: What does PESTLE stand for? 2017)
Porter five forces
Porters five forces analysis is a tool for evaluating five factors that determine industry competition. Those five forces are described below :
- Bargaining power of suppliers: In aviation, the power of suppliers is huge as it is linked with three main inputs: fuel, labour, and aircraft. These are related to the exterior environment. For example, oil costing might be stimulated with the variation in the international market. Labor has the power of bargaining, whereas Virgin requires to purchase air - crafts on the leasing system, or they can have their own. In the Virgin group, Boeing and Airbus are the suppliers of air crafts. Another one includes those who design spare parts. Considering that the airways have not several carriers it rules itself in the context of suppliers, it can be said that the power of suppliers is low.
- Substitute of Existing Products: There are no such threats of substitutes for the cited organisation as civilians prefer airways travelling in the west. But in the context of competitors, some substitutes exist for Virgin Atlantic, such as British Airways routes and united routes. They provide the same services even for the same destinations, and Virgin prioritises upper-class users.
- Competitive rivalry: In the context of competitors, the aviation industry is more restricted towards the purchasers' side despite the supplier's side. Thus, passengers can be wholly pampered (Leonidou and Leonidou, 2011). This is why a lower price is charged, including all services, particularly in a case like the US, where core completion in airways industries is examined rather it is most challenging sectors found in the USA. Various competitors have entered the market to earn high profitability with VA like British Airways, EasyJet Airline Company limited, Ryanair Ltd, etc. Hence, Competition is very high.
- Buyers' bargaining power: Customers hold great power as the whole business relies on them. They consist of multiple options via which they can choose anyone for travelling purposes. So, Virgin Group is highly influenced as consumers negotiate a lot in terms of quality of services and its prices because of numerous choices. So, companies have to provide the services at lower rates to maintain their selling rates. This, in turn, caused several losses to Virgin Atlantic.
- Threats towards the entry of new entrants: The entry and exit barriers are very high in the case of the airline industry because huge investment is needed to enter into the new marketplace. Apart from this, companies cannot exist once the regulators bound them. They are forced to fulfil the obligations they have signed in their contract paper. There are also issues in terms of safety, loyalty and financial security. Virgin group is facing a tough exterior environment. It is very hard to take its place by newer entrants.
New marketing mix of Virgin Atlantic
Expansion is an important criterion for making a profit and having growth possible through a Marketing mix. It is regarded as the foundation model of marketing. The marketing mix is defined as the composition of a set of tools used to achieve a marketing objective in the target market. The wide variety of market mixes is divided mostly into 4 parts named as 4 Ps (product, promotion, price and place). The entire marketing strategy decision has evolved regarding these marketing mix decisions.
- Product - It refers to the products or items meant to satisfy customers needs and wants. These goods are both tangible and intangible. All products are meant to follow the product life cycle, making the analyser understand and plan by considering various stages. They must also focus on understanding the problem and focus on rectifying it. The benefits offered by-products must be considered, and we need to understand the potential buyers.
- Price – It covers the actual amount of the final product and how the price will affect the flow of the product in the market. It is not like the objective costing of the end product, but it links the prescribed value to the customer (Kim and Hyun, 2011). It is the only variable that has innuendo for revenue. It is also included in the considerable part of the customer prescribed value. The company has a good pricing strategy and practice, and price-setting depends upon the Fluctuation of a market bus. They emphasise policies of attracting people by allowing discounts, allowances and payment and quick repayment policies. The prices are kept very low compared to others in terms of prices.
- Place - it refers to providing accessibility to customers. The company has a target to reach out to end customers by having good promotions. They have planned effectively for providing conscience to customers. They have the strategy, i.e. intensive distribution, exclusive distribution, for increasing the value and to be known they invest in franchising activities, have essential practices to cover the market apart from these they must have the decision related to location, transport and inventory( warehouse and logistics). The company has warehouses near the airport areas, so it has all the essentials within reach quickly. It is very important to have good management related to a place to minimise the cost.
- Promotions- It is related to communicating with the people in the market. The more penetration they will have In the market, the more they will expand in the marketplace. The promotion activities are categorised into advertising, personal relationship, sales promotion, merchandise media marketing and sales promotions. The promotion mix helps make an appropriate balance between advertising and sales promotion. They channelise strategy to reach the target market. The marketing mix of 4Ps helps in evaluating the market effectively. All the criteria and grouped under the 4 factors, and critically analysing the factors will help achieve more gain in the marketplace.
- People: Employees are treated as the most important part of every corporation as whole work depends on their performance only (Hanna and Rowley, 2011). Thus, Virgin Group should focus on their workforces and provide them with all essential services and equipment required for their job. They should provide highly impressive rewards packages to their crew.
- Process: This is nothing but the distribution process used to provide finished goods and services to the clients or make them available at the marketplace. Virgin needs to adopt effective supplying procedures to not receive any complaints from the customer's side.
- Physical evidence: Virgin also needs to focus on their physical pieces of evidence. This involves the environment in which the services is transferred and where company interact with their consumers (Grönroos, 2011). They require to offer the best quality services to their passengers. The aircraft's seating configuration should be comfortable and spacious. In addition to this, they should also offer healthy food items to their users.
Swot Analysis of Virgin Atlantic
· Good customer service should be expected by clients in each separate business or economy.
· It implements new and advanced applications involving in-flight music, ice creams, movies, games, etc.
· Virgin brand is acknowledged by 98% of the public living in Europe.
· Different innovations should be provided to the holders of the golf club or J-class with lounges providing the best quality food items and comfortableness.
· Recruitment of employees will be done from different airlines having quality trained candidates (Foxall, 2014).
· It engendered from as private organisation allowing for other brands of Virgin and more control.
· They have a relationship with airlines of Singapore because the minimum number of shareholders present there is approximately 49%. The partnership benefits are that the path is non-overlapping, and business concern permits them to transfer more competencies.
· Load factor is healthier than rivalry, so turnover gets high and value becomes large.
· Optimistic promotion regarding winning the quality award better-known to man.
· They are required to better the skill of flights as of having an issue of delayed flights.
· It has limited routes of travelling which reduce their customers.
· Virgin has their hot air magazine besides conventional airway promotion public press with effective content considering articles and merchandising advertisements.
· Due to the tragedy of September 11, they implemented cut ways to Toronto, Chicago, and Cape to reduce the risks regarding clients' safety.
· Late acquiring on the net "missed the Boat" for web pages e-commerce and web sites.
· Single owner biasses are there because Richard Branson is one male manager being the entrepreneur and director of more than one firm.
· Costs associated with the overhead of keeping two five star chefs, lounge and limo service.
· Virgin's reliance on Trans Atlantic traffic makes them more vulnerable to a drop in demand for travel to and from the US.
· Having modern, amusing, maintaining values, protective and make quality regarding the organisation's strategic marketing, which is beneficial for them.
· Implementation of new technology results in improved and an advanced inventory system as an in-flight internet connection system is available.
· Web site must be reinforced so that weakness for e-commerce can be reduced and regular web navigation can be provided. (Chernev, 2014).
· They can generate new additional routes to improve their customers and profits.
· Virgin galactic are flying in outer routes with more space and a warehouse facility.
· Recession can be an incredible offer for investment as they can utilise that in a better way to have more profit.
· Online schemes regarding target stigmatisation and current ad movement through online media preparation and purchasing an account.
· The tragedy of September 11 has affected and resulted in a Recession in the airline industry regarding cancellation of orders and risk aversion for flying customers.
· Focus of the main products will be distracted regarding the huge expansion of brand image in the market, which results in diluting the brand.
· Competition is very high for paths Europe and United.
· Fluctuation of fuel prices results in which the accounts for 15% of the entire disbursement of airlines (Chan et al., 2012).
· Rising labour costs can affect the margins of Virgin Atlantic.
· Focus of VA's system on North Atlantic makes it little wider-ranging than airlines with wide international operations.
From the above-based report, it can be summarised that marketing management is crucial for every firm as without this they cannot achieve their aims and objectives. Thus, Virgin Atlantic should also design its marketing strategies to run its business effectively. For this purpose, they have to examine their strengths, weaknesses, threats, and opportunities. In addition to this, they also need to determine the impacts of external environmental factors like political, social, technological, economic, legal factors, etc., on their business. And This work can be done by doing the organisational audit. This has been clearly explained in this project. Apart from this, the marketing mix has also been discussed in this assignment to fill the gaps that exist in the marketing strategies and the exterior surroundings.
Books and journals