Marketing Management
Introduction
Many organizations nowadays are trying to improve their products and services to attract new customers and retain old ones, and this aim is part of their marketing and business strategy. In their goal to cope with the changes happening in the society, business organizations tend to come up with a variety of projects and business plans for being competitive. Due also to the increasing competition among other companies, large business organizations, such as the Virgin Atlantic Airways and other airlines adopt new technologies and information systems to provide better service to their consumers and to their employees.
In enhancing the competitive strategy and positioning of many companies, a variety of marketing and business strategies and projects are being developed and implemented. With the use of these strategies and projects, the company can create a pleasant relationship with their customers and support the employment of their workers. The company can also be successful in establishing their products and services in the market, and even establish a good reputation in the business scene. With the importance of competitive strategy and positioning, this paper will evaluate the two statements of two authors, in relation to the market strategy of Virgin Atlantic Airways. This will be done with reference to theories in connection with competitive strategy and positioning.
History of Virgin Atlantic Airways
The Virgin Atlantic Airways, referred to as the Virgin Atlantic, is one of the airlines of Richard Branson’s Virgin Group, which is operating long-haul routes between London and North America, the Caribbean, Africa, the Middle East, Asia and Australia, where its main bases are located in London Heathrow and Gatwick, with a smaller base at Manchester International Airport (‘’ 2006). Its history began in 1982, when , an American-born lawyer, established British Atlantic Airways as a direct successor to Laker Airways to restart the failed carrier’s popular transatlantic low-fare services, and operate the first-ever scheduled air service from the United Kingdom to the Falkland Islands. However, to get this new venture to continue, Fields needed another sponsor, and met Richard Branson at a “high society” party in central London. Despite their disagreements, Branson agreed to buy out Fields’ interest in the airline and to rename it Virgin Atlantic Airways. Thus, in 1984, Virgin Atlantic was born, and commenced its inaugural scheduled air service between London Gatwick and Newark using a single, leased Boeing 747-200, on June 22 (‘’ 2006).
The airline has always differentiated itself from its major competitor, the British Airways, by choosing the exact opposite of the ‘stuffy Brit’ image that some people might ascribe to British Airways. So instead, the airline has adopted a rather ‘hip’ image, combined with genuine friendly and good customer service, in addition to Branson’s building on and involvement in the entertainment industry. At present, Virgin operates a fleet of eight 747-400s, ten A340-600s and four A340-400s, with six of the A380 ‘super jumbo’ planes this year. Today, Virgin flies to 20 destinations in 11 countries, including from Manchester, Heathrow and Gatwick to nine cities in the United States. Although too independent and distinctive, Virgin Atlantic Airways have some code sharing with their shareholder Singapore Airlines, Continental, British Midland, and Malaysian Airlines (‘’ 2006).
Marketing Strategy
As part of their marketing strategy, Virgin Atlantic Airways has three classes of service, namely, Economy, Premium Economy and Upper Class. The Premium Economy class provides a separate check-in, a larger seat with more legroom than Economy, and a welcome glass of champagne. Their business-class or Upper Class passengers can request complimentary limousine pick-up and drop-off at the airport, and at their destination, although the limousine is not available to those who purchase the cheaper “Z” coded Upper Class fare. At the airport, Upper Class passengers can use Virgin’s clubhouse lounge, and on board and in the Heathrow and Gatwick clubhouses, passengers can avail themselves of massage services (‘’ 2006). Unlike other international carriers, Virgin Atlantic Airways gives free personal amenity kits, including a toothbrush, pen, earplugs and eye masks to all passengers in the three classes. In addition, Upper Class passengers are now given a paper envelope, with just socks, eyeshades and earplugs in it and other items are available on request. The airline also pioneered the seat-back personal television in all classes, and have begun upgrading their aircraft to an Audio/Video on Demand or the AVOD system called the V:Port, which offers a choice of approximately 50 full length feature films, 60 audio CDs, around 200 hours of television shows, and video games that can also be played competitively against other passengers (‘’ 2006).
In addition to the mentioned amenities, the Virgin Atlantic Airways is also committed to innovation, as it understands that a multi-channel approach is key to improving its service to existing passengers and attracting new ones. This is why, the airlines wanted to upgrade its existing web presence, to a more resilient site that offered a smoother and more compelling service to passengers. In line with their aim to encourage passengers to book online, the website needed to be able to handle increased user traffic, particularly from the United Kingdom and the United States, and its technology architecture had to be capable of supporting other channels in the future (‘’ 2006). With this aim, the airlines worked with Conchango, which led the development and the implementation of the new eBusiness architecture and enhanced website. Aided by a harmonious working relationship between Virgin Atlantic’s IT and marketing teams, Conchango and the airline pooled their creative expertise to design a site, which combines clear Virgin Atlantic branding with a satisfying user experience ( 2006). This partnership has given the airlines a number of compelling benefits. First, there was a step change in the number of bookings that Virgin Atlantic can take online, which means the website can be promoted more widely in both on- and offline marketing. Second, there was a reliable, flexible and scalable state-of-the-art eBusiness platform, which could provide seamless integration between future applications and the core reservation and departure control systems. Third, the new website is robust, attractive and easy-to-use, which offers a new level of customer service. In addition, the passengers can browse flight options and book tickets online, frequent flyers can manage their loyalty point accounts, and freight customers can tract their consignments. Fourth, the new technology can handle any evolution in the airline’s marketing strategy, such as a greater focus in web bookings and additional routes. Lastly, the open architecture of the website means that Virgin Atlantic has maximum flexibility in adapting and extending the technology in the future ( 2006). In essence, with the effective and efficient partnership of Virgin Atlantic with Conchango, it has created a cost-effective solution that directly supports the airline’s e-commerce strategy, both now and in the future ( 2006).
Recently, with their continuous aim to become globally competitive, Virgin Atlantic Airways has chosen WebTrends, Inc., the market leader for web analytics and Marketing Performance Management solutions, to provide strategic focus to its online web and marketing initiatives in the extremely competitive travel industry. It has been reported that WebTrends enabled multiple teams across the organization to get a consistent view of key performance indicators customized to their industry (‘’ 2006). In addition, WebTrends Best Practice Experts were able to leverage the extensive knowledge they have amassed working with leading travel organizations around the globe to further fine-tune the Virgin Atlantic website, developing key performance indicators, dashboards and exclusive performance metrics scorecards to benchmark performance across initiatives (‘2006). Moreover, the airlines was able to tie revenue to specific success events on the page, as well as easily segment its customer base to build promotions for its frequent flyer members and non-frequent flyers (‘’ 2006). These innovations and improvements help the Virgin Atlantic Airways reach their customers efficiently and provide them the best service, to attain customer satisfaction.
Appraisal of Two Statements and Theories
According to (1980), “Competitive strategy is the search for a favorable competitive position in an industry”. (1980) identifies three fundamental competitive strategies, which can serve as guide to any business organization. These three fundamental competitive strategies include overall cost leadership, differentiation, and focus. The resources and skill needed in overall cost leadership are sustained capital investment and access to capital, process engineering skills, intensive supervision of labor, products designed for ease of manufacture, and low-cost distribution system ( 2000). These skills and resources are being exhibited by the Virgin Atlantic Airways by continuously improving and innovating their technology, as by improving their website to efficiently cater to the needs of their customers. In relation to differentiation, the skills and resources needed by an organization include strong marketing abilities, product engineering, creative flair, strong capability in basic research, corporate reputation for quality or technological leadership, long tradition in the industry or unique combination of skills drawn from other businesses and a strong cooperation from channels ( 2000). These skills are being exhibited by the airlines by creative innovation of their website, with the different partnerships with veteran and popular web designer companies, to continually develop their information systems, for the benefit of the company and their consumers. In relation to focus, the company was able to combine differentiation and overall cost leadership in order to determine the needs of the customer and provide solutions for them.
With these skills and resources, the airline was able to develop their competitive strategies, which are their marketing strategies, as their response to the company’s competitive positioning. Competitive strategy is related to competitive positioning, for a company efficiently positions itself in the market, as a response to the strengths and weaknesses of their competitors in the market (‘’ 2004). In finding the company’s competitive position, it can efficiently and effectively identify, plan, implement, and provide the needs of their customers and employees, to generate good profit for the company.
It can be argued that this statement is true, setting the Virgin Atlantic Airways as an example. In relation to the quest of companies for their competitive strategies, are the forces that affect their ability to make strategic assessments of their competitive position in the market. These five forces include the existing competitive rivalry between suppliers, the threat of new market entrants, the bargaining power of buyers, the power of suppliers, and the threat of substitute products, including the changes in technology ( 2005). These forces affected the Virgin Atlantic Airways, including the technological changes happening in the society today, so it has sought the help of other companies to cope with the changes and use them for their advantage. In response to these factors, the airline was able to identify their competitive strategy by focusing on improving their amenities, such as providing additional features to availing the Upper Class ticket including the limousine, or the V:Port television in all classes. These features enable the Virgin Atlantic Airways to cater to the needs of all its passengers, and provide them the best service the company has to offer.
In addition, the airline’s competitive strategy is innovating and improving their website to accommodate online booking and ticket reservation. This competitive strategy is essential because it has enabled the company to cope with the fast-changing technology nowadays and to respond to how many business organizations rely on advanced technology. Similarly, the customers of Virgin Atlantic Airways would want the same web-based service, so this competitive strategy has given the airlines a good competitive advantage among other airlines.
Moreover, in relation to the statement of (1980), , and (1998) noted that, “Competitive positioning is perhaps most frequently discussed in terms of brand identities”. As was already discussed, the concept of competitive strategy is related to the concept of competitive positioning by the fact that competitive strategies are being developed by a company in response to its found position in the market. This position is determining the strengths and weaknesses of other competitors. If the company is able to determine the strengths and weaknesses of other competitors, then it will be easier for them to plan and implement successful marketing strategies.
It can be argued that the statement of , and (1998) is true, for competitive positioning or determining the strengths and weaknesses of competitors helps the company to establish their brand identity. It has been reported that brand identity is the total proposition or the promise that a company makes to consumers, which may consist of features and attributes, benefits, performance, quality, service support, and the values that the brand possesses ( 2002). Brand identity is everything the company wants the brand to be seen as, for a brand can be viewed as a product, a personality, a set of values, and a position it occupies in people’s minds ( 2002). If the company wants to focus on building on their brand identity, then the company must pay particular attention on the strengths and weaknesses of the products and services of their competitors, in this case, of other airline companies. Once the strengths and weaknesses of the products and services of competitors are determined, the company can now focus on making plans on improving their existing services or implementing new ones. With this, the company can focus on strengthening their weaknesses, and be able to implement strategies concerning the weakness of their competitors. In this way, they will be able to use these weaknesses for their advantage, and even increase their sales. With an effective and competitive positioning in the market, then the company can establish their perceived brand identity, based on the needs of their consumers.
Using the strategy of the Virgin Atlantic Airways, it has able to determine the strengths and weaknesses of other airline companies, such as the British Airways. In contrast to the features and amenities of the British Airways, the Virgin Atlantic was said to be more ‘hip’, as the British Airways is more formal with their amenities, focusing on comfort and class. With the Virgin Atlantic, the amenities involve the focus of the company with the enjoyment of the passengers, as with their implementation of the V:Port feature, where the passengers can choose what movie to watch or CD to listen to and even interact with other passengers through video games. In response to comfort and class, the airline offers limousine services to Upper Class passengers.
With these, the Virgin Atlantic Airways has established its brand identity successfully as being different from other airlines for being ‘hip’ and innovative. Their brand identity made them successful to be regarded as the United Kingdom’s second largest long-haul airline (‘’ 2006), and one of the most successful airline internationally. In addition, the recent innovations and development of the airline regarding technology contributed to its aim to serve its consumers better and give the passengers the edge of experiencing a well take-cared-of flight. These features and amenities, including the new website and online services the airline provides, contribute to its competitive positioning in the market, which give the company its competitive advantage.
Conclusion
The market strategy of the Virgin Atlantic Airways have given the company its competitive advantage over other airline companies, by providing ‘hip’ features and amenities to their passengers. Despite the existence of three different classes in the airline, it still was able to provide with all of the passengers the V:Port feature, which is the latest innovation of the airline. Moreover, because of the desire of the company to improve their services in response to the changes in technology at present, the airlines made partnerships with popular IT companies to develop and improve their website. In this way, the airlines can provide services, such as online booking and ticket reservations, and customer services through their website.
In relation to the two statements discussed and evaluated, the two statements are both true, which were proven through the concepts of competitive strategy and positioning, and the example of the Virgin Atlantic Airways. Competitive positioning is the process of identifying the strengths and weaknesses of competitors in the market, which enables a company to come up with competitive strategies based on those strengths and weakness and be able to create and establish their brand identity in the market. The success of the company lies on the proper and effective application of these concepts in their company, which could give the airlines its competitive advantage among others.
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