Marketing Management Report: Virgin Atlantic's Market Environment

This report provides a comprehensive marketing analysis of Virgin Atlantic, a prominent British airline. It begins with an introduction to marketing management and its strategic importance for organizations in a competitive business environment. The report then analyzes Virgin Atlantic's market environment using PEST and Porter's Five Forces frameworks, identifying key issues such as increasing fuel costs, changing weather, and the need to enhance customer reach. The report also outlines marketing objectives, focusing on digital marketing and catering services. Furthermore, it evaluates Virgin Atlantic's segmentation, targeting, and positioning (STP) strategies, considering its two main customer classes and their respective service offerings. Finally, the report offers recommendations for the elements of the marketing mix, emphasizing the importance of product, price, place, and promotion in reaching target customers. The report concludes by highlighting the controls and measurement plan for Virgin Atlantic's marketing efforts.

Marketing Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Analysing the market environment of Virgin Atlantic...........................................................1
2. Identification of some key issues to Virgin Atlantic...............................................................6
3. Marketing Objectives of Virgin Atlantic................................................................................7
4. Evaluating Segmentation, Targeting and Positioning (STP) of Virgin Atlantic.....................7
5. Recommendations for the elements of marketing mix to Virgin Atlantic..............................8
6. Controls and measurement plan for Virgin Atlantic...............................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Organisations are continuously opting for varied strategic methods to successfully sustain
into today's competitive business environment. Now-a-days businesses are full of challenges
with an equivalent consequence of both internal and external obstacles. Therefore, it is important
for a firm to lead with a contingent approach of building effective plans to survive into such
difficult scenario. Marketing is another action plan which directly reflects the sale of a firm with
a positive outlook of instantly raising their profits and revenues. It basically works as a key
source to enhance the firm's future with a prompt and proper utilisation of their plans (Amasaka,
2011). In similar context, marketing management works as a strategic tool of analysing the
present situation of the firm by together comparing it with the ongoing trends. It further helps the
firm to determine any requisite changes to be introduced into their current policies and
procedures with a prominent application of inducting new techniques and measures. The present
report is in similar regard to comprehend the present marketing environment of Virgin Atlantic
and accordingly specifying a scope for its future enhancement. Virgin Atlantic was established in
the year 1984 and it is amongst the renowned names of British Airlines. It mainly operates in the
London with a commercialised name of Virgin Atlantic Airways Limited and headquarters at
Crawley, England (Christopher, Payne and Ballantyne, 2013.).
TASK 1
1. Analysing the market environment of Virgin Atlantic
The airplane industries are constantly on a progressive ride of servicing its users with
much improved techniques of satisfying people. However, it is a bit challenging task for the
companies to regard certain effective measures to beat the competition in today's raising
contending surrounding of business operations. At such difficult stage, a company tremendously
faces various internal and external challenges with a continuous rise of some upcoming
businesses with similar functionalities and thus takes place as their competitors (Cronin Jr and
et.al., 2011.). However, it is crucial to investigate varied affecting factors by utilising some
prominent strategic tools of analysis to successfully lead through such competitions. Below
mentioned tools work with a salient approach of analysing both its intrinsic and extrinsic
environmental factors.
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PEST Analysis- It is an effectual tool to especially analyse the external factors that are
constantly affecting the firm. It comprises four major factors, as discussed below-
 Political- The political factor determines the instability of the domestic market or the one
where the Virgin Atlantic is presently operating its business. It also results the firm to
prevail with a possibility of economic instability where there is a continuous change in
VAT and income tax rates, etc. Economical- The major economic factor are ascertained as the rising costs of fuel and
labour charge which then directly affects on the overall functioning of the cited airline
company. The Air Transportation Association (ATA) has primarily pointed out that the
fuel cost acts as a major expense of an airline company (Mothe and Thi, 2010). Secondly,
a significant fact of making a sound payment to their various levels of employee where
they are obliged to pay a good amount of income to their pilots and flight attendants, etc. Social- These factors are directly associated with a prior fulfilment of customer's
expectation where Virgin Atlantic is fully liable to satisfy the existing needs and demands
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Illustration 1: PEST analysis
(Source: Organizational capability, 2015)

of its customers by together identifying the ongoing markets trends that works as a major
reason to constantly change the desires of their service users. Technological- It is also in similar regard of introducing some innovative approaches to
service the clients in a more proficient way where there is a constant advancement in
technology. Therefore, in such circumstances, the cited firm should opt for much
improved methods of security into their aircraft which gradually reduces the risk of
travelling in air (Nijhof, Forterre and Jeurissen, 2008).
PORTER'S Five Force- It is an effectual tool to analysis the various external challenges to the
industry from its varied means of competitors and certain other environmental threats by together
studying its varied levels of capabilities.
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Illustration 2: PORTER's Five Force analysis

 Threats of new entrants- The threat of new entrants is comparatively low for Virgin
Atlantic where there is a requisite of considering a wide range of aspects for entering into
this particular sector of airlines with a huge requirement of capital funds. Power of suppliers- With a limited number of suppliers, the cited firm has to maintain a
long term relationship with them and thence the power of suppliers is significantly high
with no secondary input. Power of buyers- The bargaining power of buyers is tremendously rising with a
continuous advancement in technology and some existing competitors of Virgin Atlantic
like Emirates, etc who are together promoting their services into their websites by varied
means of internet. The customers are therefore able to easily differentiate their prices
with other enterprises to opt for a low cost service (Park, 2004). Threats of substitute products- However, the threat to substitute product of the cited firm
is relatively low due to a strong existence of its unique services. It is because of its fixed
duration and routes to travel under a distinct cost price.
 Competitive rivalry- It is comparatively high for Virgin Atlantic where there are some
major number of competitors who are together making a strong existence of their own
services.
2. Identification of some key issues to Virgin Atlantic
An airline firm needs to exists in a highly competent business scenario with a specific
requisite of continuously altering their services as per the ongoing trends into the market that
equivalently affect the desires of their service users by together changing their needs. Therefore,
the above analysis was to prominently study the present market situation of Virgin Atlantic by
utilizing various strategic tools (Rust and Verhoef, 2005). It has effectively helped out to identify
various issues that are recently being faced by the cited firm to successfully lead into this
particular industry of airlines. Some of these are as mentioned below- Increasing cost of fuel- As already stated above, that the fuel cost is the most affecting
factor in airlines sectors that directly reflects onto the overall functioning of the cited
firm. It gradually increases the production and functional cost of the cited firm where
they are liable to operate their work within a similar range of fare price from their
customers.
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 Change in weather- It is another stage of uncertainties where the weather is a completely
unpredictable variable and can suddenly take a change. Due to which, the cited firm is
sometime obliged to change its flight schedules or even had to cancel their flights by
refunding the money to its entitled users (Vasigh, Tacker and Fleming, 2008).
 Proposing new clients and customers- Lastly is its weakened reach out to customers with
a low consideration of making promotions as and if compared to its existing competitors
who are always striving to create a responsive approach for their customers. However,
Virgin Atlantic is having a strong base of its existing users where they are thoroughly
impressed with its new and varied range of services. But the cited firm should be duly
concerned to acknowledge its sound services with an effective measure of broadcasting it
among a large group of people.
3. Marketing Objectives of Virgin Atlantic
One can easily determine an utmost marketing objective of enhancing the promotional
services of Virgin Atlantic to reach out a maximum number of people. It can be significantly
done by considering an apt budget for making digital marketing of its products and services. It is
amongst the most likeable approach in today's scenario where there is a tremendous demand of
internet with its rising progress to serve its users. Therefore, in similar context, the cited firm too
makes a prominent utilization of technical advancement by acknowledging their varied activities
into its official websites. It also helps their customers to stay aware of their best available
services (Baines, Harris and Lewis, 2002). Secondly, the cited firm is dedicatedly working to
give an enchanting catering services to its client where they have specially introduced an on-
flight clubhouse for their onboard passengers where they can thrivingly enjoy some top level
services by them. However, as per the above identified issues of Virgin Atlantic, they should
together work on attaining a SMART objective. A SMART objective defines an accomplishment
of a specific, measurable, attainable, relevant, and time bounded goal. Thus, the cited firm too
needs to work on a specific goal of referring several prospected customer by promptly measuring
their varied needs and demand with an applicable and reasonable approach which will together
provide the firm to get a timely and positive response by its users.
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4. Evaluating Segmentation, Targeting and Positioning (STP) of Virgin Atlantic
Virgin Atlantic works on a segmentation of two different classes by including different
services for each one of them. Its services prevails for two distinguished sections of upper class
and economic class with dissimilar execution of services at each level. The economic class is
further divided into varied other sections of premium and regular economic class with a
significant difference into their services and its cost price. The premium class comprises a
separate portion of cabins with a comparatively high range of fare with an option of paying for
an extra chair. Secondly, it also includes the clubhouse services for their premium class clients
with an inclusion of its price in their fare charges (Blakeman, 2007). However, the regular class
comprises a reasonable and cost effective fare charges with a target of attracting more number of
students to avail their services. It is because the students doesn't have a specific income and
usually travels with a specific purpose of visiting home or for some sort of educational tour, etc.
Contrary to that, the upper class segment is purely focused towards targeting the business
persons of around 30-40 years of age with more number of income. On another hand, the
premium economic class is to attract similar category of business travellers with some definite
leisured services of the cited firm. A proper approach will highly benefit the cited firm with a
constant rise in its future growth.
5. Recommendations for the elements of marketing mix to Virgin Atlantic
Marketing mix is a profound tool to actively build a requisite action plan for meeting the
considerable aspects of a firm. The major prospect of every firm is to higher their revenues by
gaining huge number of profits which is duly possible with a respondent consideration of the
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firm. It together helps the firm to create a requisite product for its customers with a right price
and by promptly acknowledging them about the same. It basically helps the cited firm to target a
particular portion of certain prospected customers by effectively considering their present needs
and demands (Dibb, Farhangmehr, and Simkin, 2001). Virgin Atlantic too targets the section of
business travellers and leisure travellers in which the business passengers are mainly concerned
with their upgraded services and on another hand, the leisure tourists are mostly cost sensitive.
Thus, in similar context, the cited firm too works on three crucial elements of marketing mix
tools, as discussed below- Product- Virgin Atlantic includes both in-flight and ground services for its users where
the ground services are providing transportation or boarding services to the passengers
and some other parking or check in facilities to the customers. It also involves an option
of online booking or cancellation of tickets. In-flight services are with a principal aim of
servicing the clients by some capable employees with requisite skills of customer service
and thence, an utmost importance of promptly training their staffs. Price- It is another major consideration for the cited firm to satisfy the targeted segment
of its customers. Therefore, the cited firm includes a two dimensional service for its
prospected customer's with two distinguished range of services. It mainly includes the
segments of students or leisure tourists and business passengers where there are
respectively both low cost and high priced service for them (Fillis, 2010).
 Promotion-It is the last stage of broadcasting their services to the clients or service users
where the cited firm can effectively utilize some proficient tools of advertisements via
newspapers and magazines. However, it can also utilize the latest trend of digital
marketing especially at times when the cited firm is dealing with an off season time
period.
6. Controls and measurement plan for Virgin Atlantic
A major consideration of enhancing its marketing services has been identified by the
above carried investigation of Virgin Atlantic. Competency of the methods adopted by Virgin
Atlantic by using different measures. On the basis this a systematic and structured plan is
prepared. Therefore, the cited firm should opt for a green marketing strategy to attain a
competitive advantage. It concludes the requisite measure of opting for a definite structure of
marketing mix by effectively segregate it into the four major elements of marketing mix, which
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firstly includes the place with a need base of enlarging its services into some other locations
which newer international destinations (He and Cai, 2012). Secondly, its promotion policy
should reflect their customer loyalty with a raising trust of the users. It also recommends
including certain unique services for its clients and customers with a cost effective plan. With the
use of KPI(Key performance indicator), it is found that there are areas in which virgin Atlantic
gas excellence such as its operations, manufacturing and marketing. Among the all it is inferred
that marketing has been proved the lucrative measure for the organisation in the process of
consolidating large stream of travellers. Further, there are certain risks associated with the
operations of virgin Atlantic that are interference of government groups I order to bring
compliance with the laws related to fuel efficiency. The other contingencies identified are the
shift of customers to other modes of transport or the rival airlines, financial loss due to economic
downturn and many more. It that case it is imperative to adopt pragmatic approach in marketing
to capture the attention of travellers around the globe. Lastly, it should together endeavour to
create new positioning of its swift by acquiring new planes.
Control and Measurement Plan
Control and measurement plan in virgin atlantics is precessed in systematic and
structured manner inculcating the set of activities in a sequence.
 Virgin Atlantic through developing SMART objectives set the benchmarking and targets
on the basis of some metrics such as sales, profitability, gross margin, market share,
distribution and other related.
 On the basis of above metrics and objectives set, virgin Atlantic measures its
performance level to identify the gap existing and rectify it.
 Evaluation took place by making comparison between the targets set and actual
performance.
 From the results found, corrective measures are adopted such as if gap exists I the fel
efficiency level modern technologies are used, sales are increased through different offers
and other related.
Metrics
There are some parameters on the basis of which performance of control system is
evaluated in Virgin Atlantic. It is segmented in two types that are financial performance and
organisational capabilities which is assessed through different determinants.
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Financial performance Organisational capabilities
 Sales volume
 Gross margin
 Profitability
 Market share value in terms of volume
 Relative price
 Customer satisfaction
 Distribution
 Awareness
 Number of new products
Risk management and contingency planning
The process of identifying the risks and possible contingencies, evaluating and utilizing it
to derive benefits is referred as risk management. It is adopted through the following set of
activities.
 Risk identification: Virgin Atlantic identifies the different risk associated with the
process adopted by it in different operations.
 Risk evaluation: In this process the organisation evaluates the risks identified through
prioritization.
 Elimination: virgin Atlantic now eliminates the risk through implementing different
measures for rectification.
CONCLUSION
The above report showcased the prevailing marketing environment of Virgin Atlantic by
promptly identifying its certain major issues and factors that can gradually hamper its services. It
also detects various marketing objectives of the firm for a timely accomplishment of its stated
organizational goals by critically examining its STP and accordingly building certain
recommendations for it. Lastly, the report has together drawn some measurement plans to
effectively control its previously identified concerns with an overall purpose of building an
effectual plan for its marketing.
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APPENDIX
SWOT Analysis- It a tool which effectively identifies the internal constituents of strengths,
weaknesses, opportunities and threats to a firm by gradually working into the prevailing
condition.
 Strengths- The biggest strength of Virgin Atlantic is its luxurious approach of serving the
customers with a highly efficient team of management. They believe in effectively
carrying a friendly and informal environment for their service users with all requisite
measures of satisfying their existing needs and desires. They thus has a strong base of
customers and thoroughly known as a highly profitable firm with major numbers of
revenues and market shares.
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Illustration 3: SWOT analysis
(Source: Impulsive buying, 2015)

 Weaknesses-A major weakness of the cited firm is its confined operating area where it
largely focuses on its domestic market of London in the UK with a limited number of
planes and an unclear target on customers. Due to which, it together has a low efficient
approach of public relation (Czinkota and Ronkainen, 2012). Opportunities- Some leading scope for Virgin Atlantic can be due to its strong brand
name through which it can promptly spread its services into Asian markets as well. It can
be done by raising its tourism with an internationally extended routes and destinations.
 Threats- A rising competition in its domestic market with few major competitors like
British Airways and Jet Airways could be a major threat to the cited firm where they are
rapidly enlarging their services by introducing several new measures. Another biggest
challenge to an airline company is its altering modulations with high rise in fuel and
labour costs along with varied other challenges, especially at the time of recession (Egan,
2014).
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