Developing and Managing a Strategic Marketing Plan
Mohamed Mamoun Kahk
21 january 2013
Table of Contents
1- Report body :
2-1 Task (1)
Section 1: Use appropriate marketing techniques to 4 ascertain
growth opportunities in the market
.
Section 2: Plan how to use marketing strategy options in the
market 7 Section 3: Create appropriate strategic marketing
objectives for the market 9.
2-2 Task (2)
Section 1: Report on the impact of changes in the external
environment on a marketing strategy 13 Section 2: Conduct an
internal analysis to identify current 17 strengths and weaknesses
in a marketing strategy
Section 3: Propose strategic marketing responses to key emerging
19 themes in the marketing strategy
2- References . 20Use appropriate marketing techniques to
ascertain growth opportunities in the marketTo ascertain growth
opportunities using marketing techniques in Airline industry for
British Airway we must address the data about the airlines market
and about B.A marketing objectives and strategy and how B.A target
and segment this market and how they position themselves in the
segmented market and what their plan to accomplish this goals and
objectives.Starting from BA mission statement to be undisputed
leader in the world travel passionately committed on excellence and
highest level of customer services BA alludes to create a global
network of which airlines seem to be only apart. So they focused on
their strategic objective to become the worlds leading global
premium airline.
The actions they are taking now to make their cost base more
efficient and their unstinting focus on outstanding customer
service are critical parts of this long-term vision. They will
determine how strongly they emerge from the current downturn and
will help them to create a sustainable and profitable future for
the business, benefiting their customers, colleagues and
shareholders.
In this report we explain the strategy in detail and describe
the actions they are taking to pursue it.
GLOBAL
What they offer will appeal to customers across the globe.
Wherever they operate, individuals and business travellers alike
will want to fly with them whenever they can. Company continues to
be accessible all over the world; this means that company will open
more new markets where it can operate. Company strategic strategy
is to become the most preferable airline across the world in every
point, but its really very hard and long-term strategyPREMIUM
They will make sure all their customers enjoy a unique premium
service whenever and wherever they come into contact with them
.their customers will recognise that the service they offer is
worth paying that little bit more for.
This section covers the quality and service topics, which needs
constant improvement. It is one of the basic strategic directions
of the new company strategy planning company. BA has seen what
means to compete by quality, especially in strong competition
conditions on airline market.AIRLINE
They will remain focused on aviation moving people and cargo is
their core business. They will develop new products and services to
complement this. These objectives will be accomplished by achieving
these 5 strategic goals and therefore they achieve the desired
growthBe the airline of choice for long haul premium customers Long
haul premium customers are key to their profitability. They will
use their deep understanding of what is required to be customers
airline of choice to drive their design choices on product, network
and service. They will also maintain a strong presence in the
cargo, economy and short haul segments, which play a critical
supporting role. Deliver an outstanding service for customers at
every touch pointTheir customer-facing staff have long been
passionate about delivering outstanding customer service. They want
to build on this through a revolution in the way they lead, train
and reward, so that all their customers, on all routes and classes,
enjoy a premium experience. They will invest both in improvements
targeted at their premium customers, such as service style
training, and in those benefiting all customers, such as Terminal 5
and ba.com.
Grow their presence in key global citiesThey aim to provide the
best global connectivity for their customers. They will build their
presence in the top tier global cities, either directly or through
their expanding network of airline partnerships. Whilst the
established global cities such as London and New York remain
critical, we will place a special emphasis on developing their
position in the global cities of tomorrow.
Build on their leading position in London
London is their home city, the emotional and financial heart of
their business. It is also the worlds biggest and most competitive
international air market. Ensuring Heathrow remains a world-class
hub is vital to give them a strong London base to serve the largest
international long haul markets. To support this, they will look to
influence government policy decisions, and work with the airport
owners on the continued development of the infrastructure.
Meet their customers needs and improve margins through new
revenue streams
Airline revenue streams will always be the core of their
business. However, they will look to augment this by building
profitable ancillary services that offer customers great value and
re-enforce their brand. They will explore how they can develop new
products and services which exploit their assets and capabilities,
and meet the needs of their core customers and enhance loyalty.
From BA strategy and objective we observe how they segment the
market in to 2 segments according to the length of flight to long
haul and short haul, and how they deal with both segments but with
targeting and focusing on long haul customers based on revenue
potential of this segment where the major income came from its
First Class, and Business Class, seats.Also there is other
parameter for market segmentation according to price as full fare
and low fare (both are considered in BA marketing plan)
BA plan is built around their Global Premium Airline strategy,
and defines in detail both what they need to achieve as a business,
and how they need to work together. It encompasses their Compete
2012 change programme. This is linked to their sponsorship of the
London 2012 Olympics and Paralympics Games, and is with refreshing
their culture. The plan is structured around five key themes
Colleagues, Customer, Performance, Excellence and Partnerships
They position themselves as providing a superior values and
truly global nature.
Which appears from their plan and it structured around customer
as they say (what we do to deliver an outstanding experience for
all our customers) as they will continue to evolve their products,
for instance through the roll-out of the restyled First cabin, and
through the development of products fit for the Boeing 787s and
Airbus 380s they have on order. They will refine the Terminal 5
experience for premium passengers, as well as making targeted
investments in overseas lounges. A new in-flight entertainment
system is being introduced on their new long haul aircraft,
starting with Boeing 777- 300ERs in 2010. They will continue the
targeted development of ba.com that has made it such an important
part of the way customers interact with them. They will work to
reaffirm their brand in a changing and fiercely competitive
marketplace.When we talk about growth opportunities we must talk
about Ansoffs model, The Ansoff implies business growth either by
marketing new or existing products in existing or new
markets.Market Penetration
Although BA already has presence in the existing market it is
facing stiff competition. For example, in the short haul market,
rapidly saturating with budget airlines, BA lost 1 billion in
revenues by end of 2009/2010 financial year. The major options
currently are 1) Improving on people processes including bag
handling 2) Further investment on information technology especially
on internet bookings (British Airways 2010, 58)Market
development
Market development strategy focuses on non-buying clients in
already currently targeted segments and focuses on new customers in
new segments .BA is trying to regain some business class customers
from Virgin airlines and other competitors. BAs loyalty programme
where small to medium sized businesses earn loyalty points is a
starting point. Further, BA introduced the successful all business
class service from London to New York in 2011 (British Airways
2010, 65).Product development
Product development entails the process used to bring new
products into the market. For example, BA introduced a new
in-flight entertainment system in the Boeing 777-300 ERs in 2010
and the First Cabin, a sophisticated ne cabin that offers customers
the chance to work, recreate, eat and sleep (British Airways 2010,
67).Diversification
Diversification is a business strategy that attempts to increase
profitability by introducing new products in new markets. New and
emerging markets in the far and Middle East offer the greatest
promise of good revenue returns and reduce the effect of reduced
revenues in the traditional markets. Formation of alliances is a
relatively new trend in new markets, for instance; by collaborating
with Indias Kingfisher airlines, BA will increase destination
connections and improve flight schedules (British Airways 2010,
76).Plan how to use marketing strategy options in the marketWhen we
address using strategic options in the market we must talk about
Porter's Generic Competitive Strategies The generic competitive
strategies is divided into three other parts which is called Cost
leadership, differentiation and focus. The focus strategy has two
variant, cost focus and differentiation focus.(They outline the
three main strategic options open to organization that wishes to
achieve a sustainable competitive advantage1. Cost Leadership.
The low cost leader in any market gains competitive advantage
from being able to many to produce at the lowest cost
2. Differentiation
Differentiated goods and services satisfy the needs of customers
through a sustainable competitive advantage
3. Focus or Niche strategy.
The focus strategy is also known as a 'niche' strategy .Where an
organization focuses effort and resources on a narrow, defined
segment of a market. Competitive advantage is generated
specifically for the niche. A niche strategy is often used by
smaller firms. A company could use either a cost focus or a
differentiation focus) British Airways using differentiation
strategy as it differentiates its service from its competitors by
providing outstanding service for customers at every touch point
(class, comfort, and care) using Largest airline in the UK based on
fleet size, international flights and international
destinations.Company aims toprovide superior service for the
complete flight experience from air to ground. British Airway
provides diversity service passenger air, cargo air and corporate
travel (BA Official Web Site)using differentiation strategy BA
create four classes of air travel - economy, premium economy,
business and first - with higher-quality services in business and
first-class than competitors. BA then, via aggressive marketing,
sought to premium price its business and first-class travel in
order to raise profitability from a growing market share.
When we address using strategic options in the market we must
also talk about General electrical model which identifies marketing
strategy options and positions and provides evidence of
opportunities for growth through market development in new markets
and market penetration in existing.
From the analysis above, it is evident that if a market
development strategy was to be pursued by
BA, Asia Pacific and Eastern Europe would be prime markets for
profitability due to high growth. It may also be a requirement to
build defence strategies in BAs core market, Western Europe, due to
low growth and intense competition.Create appropriate strategic
marketing objectives for the marketWhen we talk about strategic
marketing objectives we must talk about BA marketing mix which
defined by Philip Kotler as (the set of controllable tactical
marketing tools that the firm blends to produce the response it
wants in the target market.) And through which the marketing
objectives met.The marketing mix involves of four main
elements.
Product (Defined as anything that is offered to a market for
attention, acquisition, use or consumption and that might satisfy a
want or need.) Page 110British Airways is a business offering
service products, flights across destinations, in the
transportation industry.
There are three levels of product in regards with the quality
and the expectation of the customers and each level adds more value
to the customer(The most basic level is the core product, which
addresses the question: What is the buyer really buying?) Page
561In British Airways customers buying flight tickets to satisfy
their basic need which is to flight from one destination to
another.
(Then build an actual product around the core product. Actual
products may have as many as five characteristics: a quality level,
features, styling, a brand name and packaging. ) In British Airways
were customers book their seat on a schedule flight to a particular
destination, British Airways flies to the busiest airports in
Europe in 95 different cities and to 58 other destination across
the world. It is by far the busiest Airways company in the world
operating a big number of airplanes, Also it contains what
customers expect when the purchase their tickets. In British
Airways customers expect to have an allocated seat, meals and
drinks, on board entertainment good service.
(Then build an augmented product around the core and actual
products by offering additional consumer services and benefits.) In
British Airways they offer additional services and benefits that
exceed customer expectation. The augmented product is the extra
services that British Airways provides and the support facilities.
It has three different executive classes for different needs: the
blue, the silver and the gold. For the member of the silver and
gold there are executive lounges in all the main airports where
customers can relax away from the noise and eat something or even
have a shower and go to the gym. Customer from the first class can
even enjoy an on board sleep in their own bed seat. For busy people
were time is money British Airway offers great services to
eliminate any time lost.
Price (The amount of money charged for a product or service, or
the sum of the values that consumers exchange for the benefits of
having or using the product or service.) Page 110British Airways
prices are offered to ensure that customers get what they pay.
British Airways has set its pricing strategies in a manner that
customers can chose the how much from the extras the company
providing they want, For these different types of customers British
Airways has set different prices considering their different needs:
a) the executive class (golden members), b) the middle class
(silver members) and the economy class (blue members and free
travellers). British Airways pricing strategy attacks with three
strategies: 1. Premium strategy (High-quality/High-price), 2.
Medium-value strategy (Medium-quality/Medium-price) 3. Economy
strategy (Low-quality/Low-price) Those three strategies used by
British Airways in order to satisfy the three different types of
travellers and give them the opportunity to choose the price they
want in relation with quality of the service they would like.
British Airways different pricing strategies in relation with
quality. It shows how the competitors' pricing strategy is
attacking the market. British Airways has split its pricing
strategy in order to cover the three possible segments. * The
premium strategy gives high quality in high prices for executive
and business users. With this strategy British Airways attacks the
business class of its competitors in overseas and international
flights like Virgin, American Airlines and Lufthansa. * The medium
price strategy gives medium quality, less than quality than the
premium strategy and more quality than low price strategy, in
medium prices. * The low price strategy has been developed to gives
the basic product as the low cost airlines (such easy jet and
Raynair) with some more extra benefits which add more quality plus
the advantage of the brand image of British Airways.
Current pricing of airline tickets is generally determined by
the time pricing concept where ticket prices depend on seasons
(flights during holidays are usually more expensive as demand is
higher) as well as yield pricing where tickets booked well in
advance are usually cheaper than tickets booked one day before the
flight.
British Airways had a pricing objective to maximize profits.
However since the introduction of the low cost airlines and the
increased competition the game has changed and with those
objectives British Airways was going nowhere. The low cost airlines
wanted to penetrate the market and thus they used a maximize market
share pricing objective. In other words, small airline companies
with low prices willing to gain more and more customers than the
big airline companies. Under this change of fortune and the higher
competition British Airways had to change its pricing objectives
from maximizing profits to market share maximization. It introduce
different price plans, the economy class, with lower prices which
matching those from the low cost airlines. Another pricing
objective of British Airways is the product-quality leadership
which is still having it despite of the changes. They have the
executive club which offers the best quality of the product. This
objective British Airways will keep it and follow because it is the
brand's image. Promotion(Promotion means activities that
communicate the merits of the product and persuade target customers
to buy it.) In British Airlines multiple choices are available for
communication. It has become easy to select own choice of media.
Among these innumerable choices one can select the medium of TV,
Radio channels, Magazines, News papers, Websites, Video games
etc.Sales promotion
Sales promotion is basically a short term incentive in order to
increase the purchase. It can be very effective in combating
against rivalries marketing campaigns. For e.g.;-British Airways is
the pioneer carriers through the world and have been operating for
over 90 years. Currently, they fly over 300 destinations globally.
Its main hub is at London Heathrow. In addition to this British
Airways now sells holidays and hotels on their website it and
attracts the loyalty of the customers implementing the device of
executive club. Special offers are provide year the round like
exemption in check-in fees for baggage and online check-in so that
passengers can directly take the prefer and choose their seats of
the executive club. This schedule is known as BA miles which is
known to be a very loyal scheme as it also offers car rental,
hotels and their financial and shopping partners. There are other
sales promotions too which include: Providing extra free
accommodations for the price of two, competitions like win a
holiday, free gift like free travel insurance when a holiday is
booked.
Advertising
Advertising is the best medium available to marketers for the
communication. Almost there are 30 tools ofadvertising by British
Airways media they are magazines, TV, Audio, Direct mail, airport
and On board media. In addition to these there are Business Life
online which is the magazine website, High Life Online the travel
magazine, Metro-Twin a social networking website which combines New
York and London.Direct marketing
When the people are approached directly by an organization this
method is called direct marketing. British Airlines is known for
its esteemed services and have always respected privacy and it has
always offered the opportunity to collect the databases about
exclusive fares, special offers and other news stories from British
Airlines group. The details of the customers will flow only in the
British Airways group. The customers can sign up for direct
marketing by getting registered on its website and by joining
executive club. The mobile phone users can get an advantage
ofknowing special offers through the text message alerts. The
organization will make sure that the customers do not receive any
duplicate calls or receive any unauthorized messages. If the people
have registered themselves in the executive club they are even
allowed to change their market preferences by bringing alterations
in their membership profile online by going into change my details
option.
Place:-
Placing means distribution of the products and services and also
how they move from the manufacturer to the customer. the recent
wake of time the organizations like British Airlines directly sell
their products via telephone and the internet which however reduces
the cost of retailers and therefore the world of manufacturers and
the customers have become a small village as they are coming
closer. British airlines first used to sell their products via
retailers but however they switched on to sell their products on
their well published and well furnished website which includes all
the details and features of the service products.
Also we must talk about customer relationship management in BA
which is one of the most important strategic marketing objectives,
BA responded to Customers opinions and recommendations and that
reflected in organization actions:The customers opinions and views
observed strictly through Think customer survey. This is
self-governing market research involving large numbers of customers
on monthly basis. The organization also pins down the customer
views on organization presentation with rival, as well as universal
airlines. The customers are the backbone of any business
organization (British airways, 2011).
However, the target, which was set out in 2009/10, not achieved.
Because of the slightly decrease in satisfying the customer for
change catering services. The need is to make strong bridge,
between British airways and mighty customers. This will be more
fruitful for both of them. It will bring more business to the
organization and great satisfaction to the customers (British
airways, 2011).
Also there are different considerations the reflect on customer
satisfaction asA-Waste and its impact on environment and
actions:
To counter the waste problems and its worst effects, like
diseases, landfill, etc. The organization is trying to practice and
find out the ways like; all workers will make use of internet and
computers. The airplanes arriving on airport, the newspapers are
recycled. There are several other recycle centers (British Airways,
2011).
B-Noise, its impact and actions:
The noise had always been worst effects on environment. The
population, which is living near the airports, has great concern
about the noise.
The British Airways is trying their best to complete the goal by
reducing the noise track by 15% by 2015. The International Civil
Aviation Organization (ICAO) will be managing this approach.
However, tow ways are to be experienced to reduce the noise. For
take-off to use the single engine taxi, airspace management,
airport management, and design the use of aircraft secondary, power
units Same as for landing, the efforts are continue like gentle
landing approach with constant speed (British Airways, 2011). This
is also to put into consideration that
Nighttimes movements avoided. It is trying to maintain the
procedure to avoid take-off at night. However, it should focus
while adopting the new scientific methods to deal with problem.
Report on the impact of changes in the external environment on a
marketing strategyThere are different tools we can use when we
examine the external environments and their impacts on marketing
strategy
First we start with PESTEL analysis
Political:
1-Heavy regulation (AEA, 2009), in which Compliance is essential
if BA wants to continue operations.
2- Increased security due to past terrorist threats (DFT, 2008),
which lead to Sufficient security measures should be in place to
ensure consumer confidence and competitive advantage is
maintained.
Economic
1- Global economic crisis: World growth is projected to just
over 2 percent in 2009 (IMF, 2008). Pound weakens especially
against the Euro, Which lead to possible reduction in the amount of
business travel as companies are cutting costs and using
alternative means of communication such as teleconferencing. BA is
vulnerable as a UK operating airline to a poor exchange rate.
2- Oil prices: declined by >50 % since their peak retreating
to 2007 levels. Decline in fuel price = strengthening of the dollar
(IMF, 2008), this Fluctuations in oil prices and exchange rates
will directly affect BAs cost base
3- UK consumer spending saw its sharpest decline for 13 years
between July and September 2008 (Channel 4, 2008), Which lead to
more intense competitionSocial
1- The UK has an aging population, which has its implications on
BA as Potential opportunity for growth as older generations have
more time to spend on leisure activities such as international
travel.
2- Increasing unemployment (Kollewe and Sager, 2008), which lead
to Increased bargaining power as an employer.
Technological
1- A recent survey revealed that 34% of online consumers plan to
use price comparison sites more in 2009 (NMA, 2009), that indicate
Increased consumer awareness and therefore bargaining power.
2- Online booking services and check-in is becoming increasingly
used by the airline industry, which has its implications on BA as
BA must ensure that they remain up to date with these technological
advances whilst avoiding becoming overly reliant, as this may
isolate certain consumer markets (i.e. the elderly) who dont feel
comfortable using such technology.
Environmental/ Ethical
1- Noise pollution controls, and energy consumption controls
(DFT, 2008), this New legislation (e.g. Climate Change Bill)
enforcing tighter environmental regulation and may increase
operational costs each year.
2- Limited land and for growing airports Expansion is difficult
at Heathrow as it would result in a loss in the Londons Green belt
area. (BBC News 2006) which has its implications on BA as Limited
capacity=> utilization of capacity.
3- Consumers are becoming increasingly green and more aware of
the environmental impact of their actions. Which result in Failure
to adopt an integrated environmental strategy could lead to a
detrimental effect on the BAs reputation and income.
4- Cancellations of flights and loss of baggage (Channel 4,
2008), such ethical issues could have a detrimental effect on
reputation if left unresolved.
Legal
1- Collusion and price fixing, lead to restriction on mergers
and will have an impact on BAs proposed alliance with American
Airlines.
2- Recognition of trade unions and industrial action e.g. Cabin
Crew strikes. Has its impact as good employee relations are
essential if BA wants to avoid industrial action and interrupted
operations.
3- Open Skies Agreement (AEA, 2009), which is Opportunity for BA
and its competitors to freely transport aircraft between the EU and
US.-----------------------------------Other tool used to examine
the external environments and its impacts on marketing strategy
isPorters Five Forces:It is important to analyse the competitive
nature of the airline industry in order to assess the position of
BA. The Five Forces tool will enable BA to make strategic decisions
in order to increase profitability.Competitive Rivalry
BA caters for both long haul and short haul flights. Within long
haul there is little differentiation between BA and their
competitors, in terms of price and service offering.
The short haul market is more fragmented with many small
players.
Direct competitive rivalry is fierce, e.g. Virgin has a website
opposing the proposed strategic alliance between BA and AA - No Way
BA/AA (Virgin Atlantic, 2008).
Consolidation of competitors has increased competition.
Strength: High
Power of Suppliers
Two aircraft manufacturers = High bargaining power.
BA restricted by sole supplier of fuel to the airport.
Priority of landing slots is given to historic rights of
existing users (IATA, 2008).
BA employees use collective bargaining through trade unions in
order to increase their bargaining power.
Strength: High
Power of Buyers
Low concentration of buyers to suppliers means they have little
bargaining power.
Increased internet usage has amplified awareness and interaction
of customers (Keynote, 2008c).
Strength: Medium
Threat of New Entrants
Significant barriers to entry: such as the competitive
environment, high regularity requirements and high capital cost
requirements.
Barriers to exit are in place which deters new entrants.
The failure of recent airlines such as XL and Zoom is likely to
deter new entrants (Times Online, 2008).
Strengths: LOW
Threat of Substitutes
There are few direct substitutes:
-Short haul flights: the Euro star or a ferry.
-Long haul flights: no notable substitutes.
Strengths: Low The impact of this analysis on marketing strategy
appears in high competitive rivalry and bargaining power of
suppliers so defensive strategies needed to protect market
share.-----------------------------------Other tool used to examine
the external environments and its impacts on marketing strategy
isCustomer Analysis
Over the past decade there has been increasing complexity in
customer needs, as the customer has become more educated and
demanding. Particularly, the following changes have occurred:
A shift in demographics to older passengers. Increased global
connectivity allowing the usage of internet and search mediums
(e.g. comparison and review websites).
Increased requirement for convenience (e.g. new destinations,
quick check-in).
Price has become more of a priority
Segments have become more defined within their needs.
Evidence that BA is failing to respond to the changing customer
landscape includes:
The amount of BA customers recommending their services reduced
from 61% in 2006/07 to 59% in 2007/08. BA have been criticised for
slow innovation. Poor reliability and baggage handling. Failed
attempts to target the price conscious consumer through low cost
airline operation.In addition customer surveys reveal that BA
performs not as good as expected. After months of dealing with
volcanic ash cloud disruption, British airlines have been dealt
another blow: they are some of the worst carriers in the world,
according to a customer survey from the consumer magazine. After a
year plagued by strikes and record losses, British Airways came out
middling in the Research. Customers on its short haul flights
praised BAs cabin staff, cleanliness and approach to dealing with
delays, but it was still rated just 11th out of 18 airlines. On
long haul flights, BAs in-flight entertainment was well rated, but
the airline fell short on value for money, legroom and
refreshments. The airline image has suffered a blow after the
survey, as it has already endured months of strike chaos and
resultant financial turmoil.
Based on responses from more than 2,000 recent flyers across the
UK, the survey showed that one in 3.8 British Airways passengers
has had their checked luggage lost, delayed or damaged in the last
five years, Overall in the UK only a quarter of those airline
passengers whose luggage was damaged received compensation from the
airline, according to the survey by insurance company LV, Those who
were compensated received an average of just 72 pounds for their
damage. Thirty per cent of travellers waited three months or more
to be compensated for their damaged luggage.
A total of 38 per cent had to wait for between one week and a
month, while just 20 per cent were compensated for the damage
within a week. When it comes to lost luggage, only 27 per cent were
reunited with their bags within 24 hours, the paper reports.
1. British Airways: one in 3.8 passengers
2. Virgin Atlantic: one in 8.3 passengers
3. Emirates: one in 9 passengers
4. 4 Easy Jet: one in 11.1 passengers
5. Ryanair: one in 12.5 passengers
6. Thomas Cook: one in 14.2 passengers
7. Bmi: one in 16.6 passengers
8. Bmi baby: one in 20 passengersAfter we analyse the customers
we must ensure changing customer needs are understood and
met.-----------------------------------Other tool used to examine
the external environments and its impacts on marketing strategy
isCompetitor AnalysisA-Strategic groupBAs direct competitors are
those who operate similar services and lie within the same
strategic group.
The competition is likely to be most intense within this group
as they are seeking similar strategies. Lufthansa and KLM-Air
France are the 2 leading European Airlines Member carriers in terms
of passenger numbers, with 15.1% and 14.1% respectively of the
total number of passengers carried. BA comes in third with 9.3% of
the total (Keynote, 2011). BA faces competition from a small number
of serious contenders in the UK. Within the main contenders are
Virgin Atlantic and United Airlines in the Star Alliance soon
controlling BMI (Euro monitor). Although they do not lie within the
same strategic group as BA the advent of low-cost air travel has
changed the face of the airline industry. Airlines such as Ryanair
and Easy Jet have established themselves among the leading carriers
in Europe, whilst the more established long-haul carriers such as
BA have struggled to keep up with their counterparts growth rates.
Moreover the economic downturn and sharp fall in oil prices has
caused a price war between Emirates, BA and Virgin Atlantic on the
London-Dubai route. Fares have dropped by 30% across the airlines.
Thus competition still remains fierce. Based on the strategic group
analysis it could be argued that there is a gap in the market for a
low cost airline operating a high breadth of service however it is
likely the reason no airlines have adopted this strategy is due to
the fact that it would be destined to fail. This assumption could
be supported by BAs failed attempt to enter this market in recent
years (Telegraph, 2002).
Although low cost airlines are the biggest threat to BA, moving
into low cost market is not deemed appropriate based on previous
failed attempts.
b- Airline Quality Review (AQR)
Skytrax is an independent website and therefore gives an
objective view of BAs quality of service in comparison to its
competitors and may highlight strategic issues that need to be
addressed.
Competitive Spider Index
Created using data sourced from Skytrax, 2008.-The overall
Airline Rating for BA was 4. Its major competitors all scored 4
apart from KLM, which scored 3.
- BA and Virgin Atlantic are virtually identically marked in all
categories with the rest less highly rated.
- BA is not a Quality Approved Airline, whilst Virgin Atlantic
is.
- BA needs to improve upon its interaction with its passengers
across all classes in order to outperform its nearest competitor
Virgin Atlantic.
- BA needs to improve its baggage delivery service. - General
customer reviews have shown a common theme: poor in-flight
entertainment which regularly breaks down.
- BA needs to look at improving its online services by providing
additional services all with a more personal touch.
- Six competitors hold a five-star rating with the independent
evaluator.Based on (AQR) Service Quality needs to be improved to
gain a competitive advantage.
Conduct an internal analysis to identify current strengths and
weaknesses in a marketing strategyWhen we conduct an internal
analysis to identify current strengths and weaknesses in marketing
strategy we must analyse the strengths and weaknesses of the
companyInternal Strengths
Brand Image
Partnerships & Alliances
Financial size and stability
Terminal 5Internal Weaknesses
Poor employee relations history
Reliability and trust
Innovation & changeStrategies for Weaknesses not to expose
threats:
Improved environmental stance
In marketing strategy Strengths
Well positioned among business traveller who are less price
sensitive
Founding member of the One World alliance as the driving factor
behind alliances is long-term profitability, and their formation
tends to be for strategic reasons, such as accessing larger
markets, establishing global brand loyalty and building hub-to-hub
traffic (1998). This move is advantageous -for the airline to
service more passengers and establish market reputation.-other
strength is the great opportunity for British Airways, since it has
got the official airline for the London Olympic, 2012. They won
this position for the London Olympic, 2012 from Virgin Atlantic
Airlines. Hence this move from British Airways might open new doors
for opportunity worldwide. There might be a price battle in the
market with B.A; -other strength in marketing strategy is how they
customize their product using different pricing strategies in a
manner that customers can chose what they want.- They target Long
haul premium customers which are key to their profitability.
Weaknesses
-British Airways (BA), has a weakness in winning over customer
loyalty, they lack in their marketing strategy. This weakness has
to be address by the organization. Despite the fact, its growth
through globalization and the increase in travelers needs, the
marketing campaigns were ineffective in the growth of the company.
British Airways has a great infrastructure but they need a boost in
their marketing strategy to gain more customers and their
loyalty.Propose strategic marketing responses to key emerging
themes in the marketing strategyBA strategic marketing responses to
different key emerging themes such as
Globalization impact
Increase travel around world, So BA response by using huge fleet
includes 245 aircraft comprising 57 Boeing 747s, 42 Boeing 777s, 21
Boeing 767s, 13Boeing 757s, 69 Airbus A319/320/321s, 33 Boeing 737s
and 10 smaller aircraft being used in the company regional
business, it also have service network which is one of the world
largest and through its membership in One World, the most
international and of the global airline alliances, the network
extends to some 570 destination in 135 country. Changes in the
political environment:
Politically there is a heavy regulation. So BA joins alliance
industry that will be approach an unapproachable route. This has a
monopoly that each national carrier ties in with slots, in their
home cities. The airline industry gets two sided agreements this is
another political benefit for industry, which all member can
utilize. Political environment concern about the role of government
and its effects on the company. Improvement in health and safety
factors at work place
The organization is committed to provide the best health and
safety services, and is highly engaged to provide support at work
place and remain in touch with liaison Officers and station
commander. The Health and Safety section enthusiastically monitor
all actions, hazards, assessments and tasks (Annual report, p44).
The Operational Intelligence section continues to provide very
useful support to frontline Firefighters by capturing risk
information that may be risky to the safe conclusion of operational
happenings. The organization also has dedicated its services to the
Community Safety. The Community Safety Directorate has
responsibility,
For Youth commitment, Demand Reduction Innovations and
Partnerships Service Delivery
However, the efforts together for fire safety in the Built
Environment, This process involves the broadcasting of information
in relation to new buildings and any other building to
Which material changes have been made?. Organization is also
running the Health and Safety related training courses and
continues to satisfy its legal requirements to provide the best
health and safety services (British Airways, 2010. P4). Change due
to market environmental factors
-British Airways has made significant changes in its business
strategy. The changes are a response to developments in the market
environment which overturned some of the assumptions under which
the company was developing its business in the mid-1990s. Changes
implied radically improving the company financial performance,
convincing their workforce of the paramount importance of customer
service, dramatically improving BA perception in the marketplace,
and maintaining momentum and recapturing the focus that would allow
them to meet new challenges.-Oil price fluctuation is one of
environmental factors so BA responses by buying fuel saving
aircrafts.-Other environmental factors are previously discussed in
this report. Also pricing strategies of BA is clear indicator for
the response to competitors strengths and strategies which
discussed previously in details References Alfred njau kihu,
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