[FULL ACCESS] Marketing Strategies for Virgin Atlantic

The assignment provides a detailed examination of marketing strategies for Virgin Atlantic, incorporating elements such as SWOT analysis, Porter's Five Forces, and external environmental factors like PESTLE. Additionally, it emphasizes the significance of conducting an organizational audit to identify gaps in existing marketing strategies and address exterior surroundings.

Marketing Management

EXECUTIVE SUMMARY
Marketing management is nothing but the process of formulating strategies and plans that
is used for running the business of organisation. For this process, corporation- al audit is needed
to be conducted. Certain tool and techniques are required to be used that are pestle analysis,
porter's five forces analysis, swot analysis, etc. This all things are covered in this report. Apart
from this, marketing mix has also been described in detail whereby terms like price, promotions,
process, people, physical evidence, etc. are explained. It is to be noted that the complete file is
based on Virgin Atlantic corporation and all the aspects is deal in this context.

1

INTRODUCTION
Marketing management can be simply defined as the process of formulating strategies
and planning for the goods and services , sales, promotions, advertisement, etc. for reaching to
desired customer segment (Navarro and et. al., 2011). For this procedure, tools from competitive
strategy and economics is employed in order to evaluate the industry context in which the
company operates. These involves porter's five forces, investigation of strategic groups of
competitors, value chain analysis and others. The management of marketing is very essential for
every firm as it provides them idea and ways to run their business efficiently. As taste and
preferences of customer changes with time to time, so company needs to plan their strategies of
doing marketing in accordance with that. For this, firm need to conduct survey and examines the
current needs of civilians as well as their culture in order to offer them products or services as
per their demand and which match with their culture. The present report is based on the Virgin
Atlantic. In this project, some necessary conditions has been explained by which consumer
loyalty can be built. For doing this, 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, economy of nation, environment, etc. and after that
they can run their business in that manner so that they get less impacted from all of these factors.
At the same time, by doing Swot analysis, venture can explore its own strength, weaknesses,
threats and opportunities as well. This will help them in knowing about themselves in effective
way and they can take appropriate measures to minimise its weaknesses and can adopt strategies
for coping with their threats.
BODY
Background statement outlining the industry, market positioning and unique selling proposition
Virgin Atlantic is a European aviation company and its head quarter is situated in
Crawley, United Kingdom. This airway organisation was set up in 1984 as British Atlantic
Airways and was in the beginning planned by its co - founder Randolph Fields and Alan Hellary
for flying between Falkland Islands and London. After that the name of corporation changes 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 for around
2

29 destinations. The airway along with the Virgin Holidays is operated as well as governed by a
belongings enterprise known as Virgin Atlantic Limited, which is 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 and is operating its designate in Asia , North America, Caribbean, Africa,
and the Middle East from its important bases at London Heathrow and London Gatwick as well
as from its alternative base at Urban centre (Miquel-Romero, Caplliure-Giner and Adame-
Sánchez,2014). In addition to this, Virgin is also operating their seasonal flights from Belfast and
Glasgow. It has been found that its aircraft includes three cabins that are Upper, Economy and
Premium Economy class. From the investigation, it has been examined that Virgin Atlantic had
offered services to 5.4 million travellers and this made it the 7th largest United Kingdom airline
in context of mass of passengers in the year of 2012.
Marketing positioning
In strategy of marketing and business, market position simply 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 the method of establishing the image of a product or services of a
corporation within market place so that customers prefers them most in relation to other firms.
There is a strong market positioning of Virgin Atlantic in UK as it comes among the one of the
oldest firms within United Kingdom. People living there mostly prefers them for taking any tour
as they trust on their quality of the services and products. This shows that Virgin is successful in
establishing good loyalty among their passengers. And this is the main reason of their strong
market presence in not even UK but also in other countries. They has established an
advertisement movement that concentrates on its clients' travel desires as it looks to position
itself as a “client centric” airway (Michaelidou, Siamagka and Christodoulides, 2011). It is a
global TV ad movement that involves around 30, 60, 80 second TV and cinema spots that is
launched on 3 Jan that consist of print, out of home, digital and societal mediums. These all
promotions are promoting the location or areas that Virgin flies to and the experiences available
in each. This ad follows a traveller on his way for pitching a business idea. It has been noticed
that Virgin Atlantic is naturally attracting those passengers who are passionate about hunting or
seeking new experiences and this advertisement throws down the challenge to them for turning
their ideas and dreams into reality. For this activity, company recently team up with Microsoft in
order to give it control of various aspects of the in - flight experiences like positioning of seats,
3

temperature and lighting in real time as users move around the aircraft, with the usage of Xbox
Kinect technology.
Virgin has targeted the 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.
Marketing activities of Virgin have incremented the brand preference over time. In May 2009,
this firm has published around 68 million Euro, on the contrary British Airways faced a loss of
approx 401 million Euro. Virgin has invested a sum of 20.77 million Euro in field of marketing
communications. They also have launched their latest campaign with “ Flying in the Face of
Ordinary “ along with its international brand scheme in the year of 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 a better services and products at a competitive cost. Presently,
Virgin Atlantic is one of the major airway company in all over the world, having a fleet of 38
planes by offering services to 34 routes and also are gaining large number of awards. This has
been examined that due to current political instability in the middle east, specifically in Syria ,
the price of oil get rising. Thus, this is a clear threat to the airline industry that they have to
increase their airfares or charges of travelling (Marshall and LaMotte, 2011). From previous 2
years, the world does not feel reduction in the prices of oil below a 100 dollars. Still, in 2013, the
costing of fuels have stayed below the levels of past years. 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
economy has also effected some of the challengers of Virgin as, regarding geography, the UK
and German markets have recorded a better performance in comparison to rest of the Eurozone.
This shows that there is golden chance to grow for the cited firm as they can take routes of their
competitors that are presently in a nation that is giving poor performance in relation to UK.
Unique selling proposition
A unique selling proposition is nothing but a factor that differentiates a goods or services
from its competitors, such as highest quality, lowest cost or innovative products. Virgin Atlantic
is having a unique selling proposition (Merrilees, Rundle-Thiele and Lye, 2011). They are
providing best quality services and products to their passengers in relation to other airlines
4

corporations. They offer common cargo goods and provides great services so that customers feel
good and travel a smooth journey. They are also giving cashback offers to their bookers. For
example, 15,000 cash back can be provided to those users who will book their flights tickets.
Apart from that they are assuring their clients about safe and secure journey as they recruit one
of the best pilots of the world.
Marketing audit outlining the overall market attractiveness
Marketing audit simply refers to a comprehensive, organised, independent and
continuous investigation of the marketing environment of company's strategies, objectives, aims
and all activities in order to identify problem areas as well as opportunities. In addition to this,
plan of actions is also suggested for improving the marketing positioning of venture. Some of the
key tools and techniques that can be used for carrying out market audit are listed below :
 PESTLE Analysis
 SWOT Analysis
 Porter's five forces
Pestle analysis of Virgin Atlantic
This is tool for finding the impact of external factors on the performance of an enterprise.
By examining influences of those factors company can adopt certain strategies in order 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 context with Virgin group, it can be said that different
factors like taxation policies, labour laws, trade restrictions obligated by the legal
authorities has great influence on 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 involves political instability, licensing bureaucracies
designed by abroad governments, strict regulations and control of business operations by
legal bodies, high customs and traffic given by governments. For instant, import customs
and traffic imposed by U.S. Federal legal authority has negatively decreased the quantity
of products that Virgin will export to the US markets. Besides this, deregulation of the
airways sector by UK government permitted easy entry of new organisations into the
industry in the year of 2006. in addition to this, Virgin is also facing threats of the attacks
5

done by terrorists. Thus, venture need to invest more on assuring safety of the flights so
that people remove this fear from their minds.
 Economical factors : This deals with several factors that would affect overall economical
condition of corporation. This consist of inflation rates, costs of products and services,
foreign exchange rates, interest rates charge on capital and investments, etc. Virgin
Atlantic is facing competition from other ventures. Fir instant, they are forced to reduce
its fair as their challengers such as American Airlines, Fly emirates and Qatar Airways
are offering same services at lower prices (Ling-Yee, 2011). Besides this, other
economical factors that are impacting on the performances of Virgin Group are higher
prices of oils as well as entry of new airways enterprises such as Singapore Airlines in
this industry. Apart from this, high level of unemployment has causes the decrement in
purchasing power of buyers and in turn it minimises the sales volume of firm.
 Technological factor : Different technologies are impacting on the business nature of
airways. The increase in the popularity of internet services around the globe. This
influences positively as well as negatively (Lindgreen and et. al., 2012). For instant,
internet make able the airline operators for reaching to a larger clients and to provide
them services at much low cost. But at the same time, audiences can easily examine the
tickets charges just in few clicks in front of their computer system. Thus, this phenomena
affects the pricing capability of air operators negatively.
 Environmental factors : Global warming is considered as serious issue civilians and the
next generations. Due to sudden changes in weather like snow fall, heavy rainfall,
cyclone, foggy weather, etc. the work of corporation get delays and travellers have to
face inconvenience. Even it also cause death of people when flight gets imbalance in
those circumstances. Therefore, conscious efforts and sustainable development should be
done by Virgin in order to provide assurance against natural disasters. For this, company
can connect with weather forecasting departments and have to 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 : Government impose different types of laws and regulations that have to be
obeyed by the cited firm. If they will not do so then legal authorities can take strict action
against them. Thus, legal factors also plays a vital role in aviation industry.
6

(Source : What does PESTLE stand for ?, 2017)
Porter five forces
Porters five forces analysis is tool for evaluating five factors that aids in determining
industry competition. Those five forces are described below : Bargaining power of suppliers : In the sector of aviation, the power of suppliers is huge
as it linked with three main inputs that are fuel, labor and aircraft. These are related with
the exterior environment. For example, costing of oil might be stimulated with the
variation in the international market. Labor has the power of bargaining where as Virgin
requires to purchase air - crafts on leasing system or they can have its own. In case of
Virgin group, Boeing and Airbus are the suppliers of air crafts. Another one includes who
design spare parts. Taking into consideration that the airways have not several carriers it
rule itself in context of suppliers, it can be said that power of suppliers is low. Substitute of Existing Products : There are no such threats of substitutes for the cited
organisation as civilians give preference to airways in terms of travelling in west. But in
context of competitors , some substitutes exists for Virgin Atlantic such as British
Airways routes and united routes. They provide same services even for the same
destinations but Virgin give priority to upper class users. Competitive rivalry : In context of competitors, aviation industry is more forced to be
restricted towards the side of purchasers in spite of suppliers side. Thus, as a result,
7
Illustration 1: What does PESTLE stand for ?

passengers can be wholly pampered (Leonidou and Leonidou, 2011). This is why a lower
price is charged including all services , particularly in case like US where core
completion in airways industries is examined rather it is most challenging sectors found
in USA. Various competitors has entered into the market for earning high profitability in
relation to VA like British Airways, easyJet Airline company limited, Ryanair Ltd, etc.
Hence, competition is very high. Bargaining power of Buyers : Customers holds great power as whole business relies on
them. They consist of multiple options via which they can choose any one for travelling
purpose. So, Virgin Group is highly influenced as consumers are negotiating a lot in
terms of quality of services as well as its prices because of the availability of numerous of
choices. So, company have to provide them services at lower rates if they want to
maintain their selling rates. This in turn causes several loss to Virgin Atlantic.
 Threats towards entry of new entrants : The entry and exit barriers is competitively very
high in case of air line industry because huge investment is needed to enter into new
market place . Apart from this, companies also cannot exit once they are bounded by the
regulators as they are forced to fulfil their obligations that they have signed in their
contract paper. There are also issues in term of safety, loyalty and financial security.
Virgin group is facing a tough exterior environment because of which it is very hard to
take its place by newer entrants.
8

(Source : Jurevicius, 2013)
New marketing mix of Virgin Atlantic
Expansion is an important criteria of making profit and and having growth which is
possible through Marketing mix . It is regarded as the foundation model of marketing. Marketing
mix is defined as the composition of set of tools used to achieve marketing objective in target
market. The wide variety of market mix are divided mostly into 4 parts named as 4 Ps (product,
promotion, price and place) and the whole marketing strategy decision has been evolved
regarding these marketing mix decisions. Product - It refers to the products or items which are meant to satisfy customers needs
and wants, these goods are both tangible and in-tangible and all product are meant to
follow the product life cycle which makes the analyser to understand and plan by taking
various stages in consideration. They must also focus to in understanding problem and
focus on rectifying it . The benefits offered by product is to be considered and need to
understand the potential buyers . Price – It covers the actual amount of the final product and how price will affect the flow
of product in the market. It is not like the objective costing of end product but it linked
the prescribed value to the customer (Kim and Hyun, 2011). It is only variable which
has innuendo for revenue it is also included in consideration part if customer prescribed
value. The company is having good pricing strategy and practice and price setting
9
Illustration 2: Porter's Five Forces

depends upon fluctuation of a market bus the prices are kept very low as compared to
other in terms of prices. The they emphasis on policies of attracting people by allowing
discounts, allowances and payment and quick repayment policies. Place - it refers to providing accessibility to customers the company has target to reach
out to end customer by having good promotion activity. They have planned effectively
for providing conscience to customer. 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( ware house and logistics). It is
very important to have a good management related to place which will minimise the cost
like the company is having the warehouses near the airport areas so it has all the essential
within the reach invert quick time. Promotions- It is related to communicating to the people in market the more penetration
they will have In market the more they will be able to expand in the market place. The
promotion activities are categorised into advertising, personal relationship, sales
promotion,merchandise media marketing and sales promotions. The promotion mix helps
in making appropriate balance between the advertising and sales promotion. They
channelise strategy to reach target market. The marketing mix of 4Ps helps in evaluating
the market effectively and all the criteria and grouped under the 4 factors and critically
analysing the factors will help in achieving more gain in the market place. People : Employees are treated as 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 work forces and provide them all essential services and equipments
that they require for their job. They should provide highly impressive rewards packages
to its crew. Process : This is nothing but the distribution process that is used for providing finished
goods and services to the clients or making its available at market place. Virgin needs to
adopt effective supplying procedures so that they do not receive any complaints from
customer's side. Physical evidence : Virgin also needs to focus on their physical evidences. This involves
the environment in which the services is transferred and where company interact with
10

their consumers (Grönroos, 2011). They require to offer best quality services to their
passengers. The aircraft's seating configuration should be comfortable and spacious. In
addition to this, they should also offer them healthy food items to their users.
Swot Analysis of Virgin Atlantic
STRENGTH  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 public living in Europe.
 Different new innovations should be provided to the holders of gold
club or J-class with lounges providing 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 of
minimum number of shareholder present at there that is approx 49%.
The reason behind partnership benefits are due to the path are non-
overlapping and business concern permits them to transfer of more
competencies.
 Load factor is healthier than rivalry so that turnover gets high and
value becomes large.
 Optimistic promotion regarding to win the quality award better-
known to man.
WEAKNESS  They require to better the skilfulness of flights as of having an issue
of delayed flights.
 It has limited routes of travelling which reduce their customers.
 Virgin has their own hot air magazine besides of conventional airway
promotion public press with effective content considering articles
11

and merchandising advertisements.
 Due to the tragedy of September 11, they implements cut ways to
Toronto , Chicago and Cape for reducing the risks regarding safety
of the clients.
 Late acquiring on the net ''missed the Boat'' for web pages e-
commerce and web sites.
 Single owner biasses is there due to that Richard Branson is one male
manager being the entrepreneur as well as director of more than one
firms.
 Costs associated in overhead of keeping two five star chefs, lounge
and limo service.
 Virgin's reliance on Trans Atlantic traffic makes them more
vulnerable to drop in demand for travel to and from U.S.
OPPORTUNITY  Having modern, amusing, maintaining values, protective and make
quality regarding the strategic marketing of organisation which is
beneficial for them.
 Implementation of new technology results in improvement and
advanced inventory system as in-flight internet connection system is
available.
 Web site necessarily to 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 having more space and have
a facility of warehouse.
 Recession can be an unexpected offer for investment as they can
utilise that in a better way to have more profit.
 On-line schemes regarding target stigmatization and current ad
movement, through on-line media preparation and purchasing
12

account.
THREATS  The tragedy of September 11 has affected and results to recession in
the whole airline industry regarding cancellation of orders and risk
aversion for flying customers.
 Focus of the main products will be distracted regarding the huge
expand of brand image in the market is too global results in dilution
of brand.
 Competition is very high for paths Europe and United.
 Fluctuation of fuel prices results in which the accounts for 15% of
entire disbursement of airlines (Chan and et. al., 2012).
 Rising of labour costs can affect the margins of Virgin Atlantic.
 Focus of VA's system on North Atlantic makes it little wide-ranging
than airlines with wide international operations.
CONCLUSION
From the above based report, it can be summarised that management of marketing is
very crucial for each and every firms as without this they cannot achieve their aims and
objectives. Thus, Virgin Atlantic should also concentrates on designing their marketing
strategies so that they can run their business effectively. For this purpose, they have to examine
their strength, weaknesses, threats and opportunities as well. In addition to this, they also need to
find out the impacts of external environmental factors like political, social, technological,
economical, legal factors, etc. on their business. And these work can be done by doing
organisational audit. This has been clearly explained in this project. Apart from this, the
marketing mix has been also discussed in this assignment so that company can fill the gaps
existed in the marketing strategies and the exterior surroundings.
13

REFERENCES
Books and journals
14

15