Virgin Atlantic's Marketing Mix and Strategic Planning: A Case Study

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MARKETING ESSENTIALS
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Contents
LIST OF FIGURES.............................................................................................................................4
INTRODUCTION............................................................................................................................. 5
LO1................................................................................................................................................. 6
P1 AND M1................................................................................................................................ 6
KEY ROLES AND RESPONSIBILITIES OF MARKETING FUNCTION.................................................6
P2 AND M2................................................................................................................................ 8
INTERRELATION OF MARKETING DEPARTMENT WITH OTHER FUNCTIONAL DEPARTMENTS.. .8
LO2............................................................................................................................................... 10
P3 AND M3.............................................................................................................................. 10
MARKETING MIX..................................................................................................................10
Product................................................................................................................................ 10
Price..................................................................................................................................... 11
Place.................................................................................................................................... 11
Promotion............................................................................................................................ 11
Process................................................................................................................................. 12
Physical evidence.................................................................................................................12
People.................................................................................................................................. 12
LO3............................................................................................................................................... 14
P4 AND M4.............................................................................................................................. 14
MARKETING PLAN................................................................................................................14
EXECUTIVE SUMMARY.........................................................................................................14
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INTRODUCTION....................................................................................................................14
SWOT................................................................................................................................... 15
PORTER’S ANALYSIS............................................................................................................. 15
SEGMENTING TARGETING AND POSITIONING.....................................................................17
ANSOFF’S MATRIX................................................................................................................18
BUDGET................................................................................................................................19
TACTICS................................................................................................................................ 20
CONCLUSION............................................................................................................................... 21
REFERENCES.................................................................................................................................22
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LIST OF FIGURES
Figure 1: Virgin Atlantic Logo.........................................................................................................5
Figure 2: Interrelationship Between Departments........................................................................9
Figure 3: British Airways Logo......................................................................................................10
Figure 4: Marketing Mix...............................................................................................................13
Figure 5: Porter's Five Forces Model............................................................................................16
Figure 6: Segmentation Targeting and Positioning......................................................................17
Figure 7: Ansoff's Matrix..............................................................................................................19
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INTRODUCTION
Marketing can be considered as a set of activities done by an organization to meet its objectives
of satisfying the customers by providing the essential product and services. Through the
process of marketing, the organization creates awareness of the product and services provided
by them for the fulfillment of the customer needs (Baker, 2016).
Hospitality organizations are those organizations which provide services to the customers by
focusing on their higher satisfaction level and an everlasting experience. Over the years, the
hospitality industry has gained huge importance for providing leisure time and gaining financial
advantages out of it (Dzhandzhugazova et al., 2016). The hospitality industry includes travel and
tourism, food and beverages, lodging and boarding, etc.
Virgin Atlantic is a British Airline which was established in the year 1984. The organization is a
joint venture with Delta Air Lines holding 49% of the share and Virgin group holding a major
share of 51% (Virgin Atlantic, 2019). Virgin Atlantic is headquartered in London and provides
easily accessible flights to about 200 gateways. Virgin Atlantic was founded by Sir Richard
Branson and has been providing its hospitality services to the world through high quality and
value for money.
Figure 1: Virgin Atlantic Logo
[Source: Virgin Atlantic, 2019]
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LO1.
P1 AND M1.
Marketing is the set of all the activities done by an organization for the fulfillment of the needs,
wants and demands of the customers. The term marketing includes various concepts which
mainly focus upon the different marketing fields taken into consideration by an organization
(Armstrong et al., 2015). The production concept of marketing focuses on increasing production
through the implementation of lower costs. The product concept of marketing in Virgin Atlantic
refers to the development of services providing higher consumer satisfaction. The selling
concept of marketing in Virgin Atlantic refers to increasing the possibilities of selling the
services.
KEY ROLES AND RESPONSIBILITIES OF MARKETING FUNCTION
Marketing function has played a vital role in the Virgin Atlantic and there are various roles and
responsibilities of the marketing function in the organization, some of which are as follows:
 Identification of Target Market
The most important function played by marketing function in Virgin Atlantic is the
identification of the potential markets of the airline because of which the firm has been
continuously growing its airline services across the globe (Wirtz et al., 2014). Virgin
Atlantic used the marketing function to identify the markets which can provide high
profits and established their brand in the same area.
 Development of Marketing Strategies
Virgin Atlantic has also utilized the marketing function for the development of marketing
strategies so that they can gain a competitive advantage over other competitors in the
market. Through the development of effective marketing strategies, marketing function
assisted Virgin Atlantic in gaining the higher consumer base (Shaw, 2016).
 Maintaining Harmony Between Firm’s Objectives And Consumer Satisfaction
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Through marketing function, Virgin Atlantic is able to maintain a balance between the
organizational objective of gaining higher profits and consumer satisfaction by providing
high-quality services. The marketing function in the firm ensured that airline firm gains
higher consumer satisfaction by providing higher value for money.
 Market Research
Marketing function has also played an important role in Virgin Atlantic through
continuously studying the changes in the preferences of the customers so that the firm
can develop services matching the customer’s expectations and provide higher
customer satisfaction, which would not only increase the organizational profits but
would also create goodwill of Virgin Atlantic in the airlines industry (Fahy and Jobber,
2015).
 Marketing Mix Decisions
Marketing function assists Virgin Atlantic in taking significant decisions regarding the
marketing mix so that the firm can manage the elements of marketing and maintains
the stake it has on customers and in the market. These decisions help Virgin Atlantic in
developing services as required by the customers and standardizing their high-quality
services.
 Coordination
Marketing function has a major role in Virgin Atlantic for coordinating with all the other
functions so that the firm can excel in all the possible fields and drive a high consumer
satisfaction value (Kotler and Armstrong, 2015). Proper coordination by the marketing
function of Virgin Atlantic also ensured that the costs involved are minimized and the
higher productivity is received.
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P2 AND M2.
INTERRELATION OF MARKETING DEPARTMENT WITH OTHER FUNCTIONAL
DEPARTMENTS.
Marketing function stands of huge importance in Virgin Atlantic as it has assisted in developing
a strong consumer and organizational relationship because of which the firm can relish higher
profits (Du and Vikkelsø, 2016). Through marketing function, Virgin Atlantic has branded itself
for providing high-quality airlines services in about 30 countries worldwide. It is also essential
for the marketing function to maintain harmony with the other functional departments of
Virgin Atlantic, some of which are mentioned below:
 Finance Department
Marketing function of Virgin Atlantic has a balanced relationship with its finance
department. The main reason for the focus on this healthy interrelationship is because
the cost of marketing is being provided by the finance department of Virgin Atlantic. The
finance department also ensures that the costs incurred by the marketing department
are resulting in the equivalent generation of income or not (Groucutt and Hopkins,
2015).
 Human Resource Department
Virgin Atlantic has maintained a strong relationship between its human resource
department and its marketing department as the human resource department provides
the right workforce to the marketing department (Davcik and Sharma, 2016). It is
essential for the human resource department to provide the employees with the
required capabilities to the marketing department to increase their efficiency.
 Operations Department
The operations department of Virgin Atlantic has a strong relationship with that of its
marketing department as the marketing department of Virgin Atlantic promotes what
its operations department can fulfill. Vice versa, it is important for the operations
department of Virgin Atlantic to fulfill what has been promised by the marketing
department because of which a strong relationship has been developed.
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 Research and Development Department
Virgin Atlantic's marketing department is highly dependent on its research and
development department and thus is required to have strong coordination with each
other. Through the efficiency of research and development department of Virgin
Atlantic, the marketing department is able to analyze the expectations of customers and
thus develop the need of its services in the minds of the customers (Groucutt and
Hopkins, 2015). Through this coordination, the firm is also able to forecast the
possibilities of changes in the preferences of the customers and then develop the
marketing strategy accordingly.
 Information Technology
Virgin Atlantic utilizes information technology to provide easily accessible services to the
customer and thus is required to maintain a strong relationship with the marketing
department. Also, the marketing department utilizes the aspects of information
technology like social media marketing, websites, etc. to acquire customers and
maintain their relationship with them (Hvass and Munar, 2012). Therefore, the IT
department and marketing department are required to have a strong interrelationship.
Figure 2: Interrelationship between Departments
[Source: Du and Vikkelsø, 2016]
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Marketing
Department
Finance
Department
Human Resource
Department
Research and
Development
Department
Information
Technology
Department

LO2.
P3 AND M3.
MARKETING MIX
Marketing mix can be referred to as a set of tools adopted by an organization for the
achievement of its marketing objectives. Marketing mix of an organization is a set of various
elements through which the awareness of the product/service in the market is created and
sustained (Kotler et al., 2015). The marketing mix was initially consisting of 4 elements which
were Product, Place, Price, and Promotion. Later, it was extended to 7 elements which are
Physical evidence, People and Process.
British Airways was established in the year 1974 and is one of the largest airlines in the United
Kingdom. It was established by a British Airways Board set up by the government of the UK
(British Airways, 2019). The company is headquartered in Harmondsworth, United Kingdom and
is known for its low fare high-quality services. British Airways has an extensive network across
the globe reaching out to about 200 locations in the world.
Figure 3: British Airways Logo
Following is the application of elements of the marketing mix on Virgin Atlantic and British
Airways:
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Product
Virgin Atlantic is a leading airline and offers flights to various different destinations worldwide.
The airplanes of Virgin Atlantic have three classes of seats: Business Class, Economy Class, and
Premium Class. Based upon the fare charged by the passengers, the qualities of services vary
(Singh et al., 2017). Virgin Atlantic has ensured that they provide high-quality services to its
customers. British Airways is also known for providing higher satisfaction to the consumers. It
has been rated highly for the airline services provided to the customers.
Price
With the higher quality of services, the prices charged by Virgin Atlantic are slightly higher
as the company believes in expanding by providing a high quality of services and not by
penetrating the cost of travel. Virgin Atlantic has adapted the comparative pricing strategy
where the consumers can compare the highly charged cost through the high quality of services
provided. On the other hand, British Airways have established itself in the market by providing
affordable travel tickets and high quality of services together.
Place
Virgin Atlantic is a globally set up organization. However, the firm has a limited number of
flights and is not as widely distributed than that of its customers. Operating from majorly 3
airports in the United Kingdom, the airlines have a limited number of destinations. The airlines
are not easily accessible in the context of the destinations. British Airways, on the other hand,
have a widely distributed channel of destinations and have expanded its reach through
continuously merging with the local authorities for carrying out the business activities (Halpern,
2016).
Promotion
Virgin Atlantic provides various promotional offers, especially to women. The company is
known for naming its airplanes based upon women and make use of extensive seasonal
promotions to attract the consumers. British Airways have put various innovative ideas in the
promotion of its brand and thus have received a positive result from the same (Singh et al.,
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2017). They also provide special tickets of their flights as seasonal offers for attracting the
customers.
Process
The process of delivering the services used by Virgin Atlantic is very efficient and proving the
high value of money to the customers. The main purpose of carrying out high-cost services by
Virgin Atlantic is to provide a high level of satisfaction to its customers. Virgin Atlantic has
ensured that the staff and in-flight support is strongly effective and results in giving an
everlasting experience to its customers. The process adopted by British Airways also kept easily
accessible by the customers. The firm has been providing high passenger convenience to its
customer and thus expanding over time. British Airways have been providing various facilities at
the airport to ensure that the customers are highly satisfied.
Physical evidence
Virgin Atlantic has presented itself as a premium brand for air travel and has a logo of purple
color with the logo of Virgin Group on its top. The firm has also utilized various tactics like
naming the airplanes on the name of women to represent women empowerment. Also, the
environment inside the airplanes is maintained to the highest quality (JAIN, 2017). British
Airways have also worked very hard on maintaining its physical evidence. It provides in-flight
food and provides spacious and comfortable seating to its passengers.
People
Virgin Atlantic aims at providing a seamless experience of travel to its customers and thus has
adopted various methods to ensure the same. However, the firm not only takes care of its
customer but also has a strong hold on its employees. The firm relishes a highly motivated
workforce to which timely incentives and training and development programs are being
provided (Halpern, 2016). Virgin Atlantic believes that a highly motivated employee can lead to
highly satisfied customers. British Airways also keep its employees as well as its customers
satisfied because of which it has been growing rapidly over the years.
There are various key elements of the marketing mix adopted by Virgin Atlantic which is to be
changed. For instance, Virgin Atlantic needs to acquire higher destination routes for its
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