Analyze Consumer Behavior In Virgin Australia - An Essay On Consumer Behavior.

Customer Behavior in Airline Industry

Discuss about the Consumer Behavior in Virgin Australia.

The customers are the drivers to the organization’s growth. They are the buyer of the services or the products offered by the organization; therefore, there satisfaction and brand loyalty is critical in assuring the profitability of the organization. The companies create different customer segments and then direct their marketing strategies towards different customer segments. Market segmentation is also essential in the product development and designing. The companies cannot create products which appeal to all thee customer segments; therefore, it is essential that the companies create different market segments and develop marketing strategies accordingly (Phillips & Gully, 2013).

In the present competitive market, the acquisition and the retention of the customers is essential as the competitors are implementing different strategies to increase their market share. The competitive companies try to snatch away the share of the other companies to create market dominance. It is necessary that the organization consistently focus on the satisfaction of their customers so that they remain loyal to the organization. The customer satisfaction is also necessary in increasing the brand image of the organization. At present, the companies are commonly using the CSR (Corporate Social Responsibility) to promote the goodwill of the company. The customers are attracted towards the organization which are socially responsible and work for the environment and society (Phillips & Gully, 2013).

The consumer behavior impacts on the purchase trends in the aviation industry. It could be examined that the consumers are concerned about the services provided and the cost of the travel in the airline industry. A large number of customers are concerned about the environmental impact of the travel (Nair, 2013). The services offered to the customers are critical in the selection of the airlines. The customers emphasizes on the boarding and the clearance time, online ticketing and the luggage capacity of the airplane in the selection of the airlines (Soomro, 2012). The service quality in the aviation industry is dependent upon booking, check-in, safety control, boarding and in-flight services to the company. The first step at which the services can be provided by the aviation industry is the booking of the tickets. It creates the impression for the later stages as well as for the organization. If the expectations of the customers are met during this stage, it creates a positive image of the organization. The airline companies can uplift the standard of the services by increasing the security, simplicity and availability of the services. The customers should be able to access the booking system through online mediums, easily book the tickets in a secured manner. The representatives of the organization should also remain available to provide services and solve the queries of the customers (Munroe, 2014).

Customer Segments in Airline Industry

The companies have to take into consideration all the attributes and the preferences of customers to uplift the standard of service offered to the customers.  Meeting the demands and the expectations of the customers can result in satisfied customers and increase the customer retention. In the check-ins of the customers, the efficiency and the helpfulness of the employees is considered as significant success factors. The ability to offer the services quickly and effectively results in efficiency of the organization. The helpfulness and efficiency of the frontline employees is important in increasing the overall satisfaction of the customers (Fojt, 2006).

The safety control and the safety measure implemented by the organization are also critical in building the perception of high service quality. At this stage, the past experiences of the customers are also essential in developing the perception of customers related to the security. At the time of flight boarding, the average waiting time and the information available to the customers is essential in determining the service quality offered to the customers. In the overall service quality measurement, the services offered to the customers during the flight are the most crucial in determining the customer satisfaction with the overall services. During this time, the most significant factors in the determination of service quality are perceived knowledge, perceived trust induction, perceived helpfulness and perceived security by the customers. When a passenger boards a flight, he expects that the official personnel designated will be knowledgeable regarding the flight timings and route and thus inculcate a sense of security. These services are of utmost importance to the customers because if an aviation company will not provide these services, it will directly impact on the consumer perception regarding the quality and the competence of the services regarding the services. The knowledge and security is essential in delivering effective service quality to the customers in the aviation industry (Venkatesh, 2013).

At present, there is intense competition among the airline companies to select the most acquire the maximum customers in the air travel. Accordingly, the airlines provide discounts, no frill offerings or excellent services to the customers. There is growing trend among the budget travellers and the business travellers to use the no frill services for short haul or domestic flights. As a result, various domestic flights have emerged which provide short haul services to the customers and offer frequent travel at cheaper costs. The services offered to the customers are also limited however; they do not create any discomfort to the people. The Virgin Group has also merged with the philosophy of offering excellent services to the customers at competitive prices. In Australia, there are a large number of domestic travelers who use no frill services to travel in major cities. These customers prefer to travel in the most cost-effective manner (Virgin Australia, 2017).

The companies in the airline industry adopt extensive strategies to segment their customers according to their willingness to pay. The primary division of the customers is according to their paying capacity. Most of the customers are given different class of seating such as economy class, business class and the first class. In the airlines industry, the customers can be segmented according to their need of travel and their purchasing power. On the basis if the customer intent, the airline travellers can be differentiated as the business travelers and the leisure travelers. The business travelers are the frequent travelers and travel six to twelve times in a year. Demographically, they can be categorized as males in the age group of 30-50. The median income of this group is higher than other travelers. These customers are connected with their families and friends with technology. They are tech-savvy people and commonly use laptops, smartphones and portable GPS. The time is of high importance to business travelers and they can switch the airline due to the long waiting time. The business travelers are also highly sensitive about the services offered to them and peculiar about the facilities (Business Travel News, 2017).

The leisure traveler can be characterized by their long duration of stay at foreign places. The demand of the leisure market segment has grown substantially with the increase in the purchasing power of the customers. The major different between the leisure segment and the business segment is the demographics of the leisure travels. Unlike the business travel which is dominated by men, the leisure travelers have appropriate balance between the male and female travelers. There is also difference in the age profile of these customer groups. While the business market segment is concentrated between the travelers in the age-group of 35-55, the leisure travelers comprises of travelers of all age groups. Children as well as young adults in high income group and increased propensity for travel and tourism are major customers in this segment (Papatheodorou, 2016).

The Virgin Australia is the second biggest airline of Australia. The company has large customer base of the affluent business travelers. Recently, the company has become the most profitable aviation organization in Australia due to the low oil prices and high domestic airfares. The company provides high quality services to the business travelers to increase the customer retention. The satisfaction of the business travelers with Virgin Australia is 86% which is higher than other leading business organizations. The affluent business travelers are the primary target market for the organization and the company has implemented a number of strategies to exploit it. It has increased the number of domestic flights between different business destinations (Roy Morgan Research, 2013).

An airline agency can distinguish itself by the product differentiation or cost leadership. In the aviation industry, the product differentiation can be achieved by providing effective services to the customers.  The aviation companies can provide services at different situations to increase the customer satisfaction. The companies can also differentiate by offering low cost to the customers. At present, a large number of companies are using the cost leadership strategy to attain competitive advantage. The no frill flights are an extension of this strategy (Schermerhorn, 2010).

In the present competitive epoch, the companies are mostly competing upon the services offered to the customers. The focus of the companies is on providing excellent services to the customers to increase the customer loyalty. Virgin Airlines is the most common example of customer-centricity wherein the employees of the organization are focused on creating pleasant and fun experience for the customers. It uses the top-notch planes, competitive fares, excellent services and providing fun and innovative amenities to the customers. Due to the excellent services provided by the company, it is named World’s Best Domestic Airline for the eighth year in a row. It aims to create a ‘guest-centric’ travel experience in which the travel experience in every flight is enhanced through better design, technology and excellent services. The designing of the website is also conducted in such a manner so that it promotes the fun spirit and excellent services provided by the organization (Virgin Australia, 2017).

The self-help section of the company is also extensive and the customers can find updates related to the bookings of hotels, vacation packages or the rental cars. The schedule of the fights and related information such as cabins, food selection is provided at the website of the organization.  The website of the company is designed using the color themes of purples and reds which reflect the fun and cool image of the organization. Virgin Australia is a part of the Virgin Group headquartered in the UK. It is a small company with high presence in the UK and Australian market. Therefore, it is a limited digital marketing budget in comparison to other airlines. The company has to conduct its marketing in its limited budget. Moreover, it is a budget airline and the customers of the airlines travel only once or twice in a year. Therefore, it is important that the company implements effective marketing strategy to establish long-term relationships with the customers.  The employees are also effective in creating social trends which attracts the customers towards the organization (Popick, 2017).

Conclusion

The customers are the buyers of the services or the product and play a vital role in the product development and the development of the marketing strategies. The market of the aviation industry can be differentiated in business travelers and the leisure travelers. The business travelers are in the age group 30-50 and comprises of mostly males. The travelers are concerned about their time and budget. They want excellent services at the cheapest prices. On the other hand, the leisure travelers are the people who travel less often by flights. This customer target group includes the people in different age and gender. The most lucrative customer segment of the company is the affluent business travelers who are willing to pay higher prices for excellent services. The company has implemented different strategies to address the needs of this customer segment. It includes providing excellent services at the time of boarding or in-flight. The company also promotes free and casual spirit. The website of the company is also flexible and user friendly which shows the commitment and the customer-centricity of the organization.

References

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Nair, B. (2013). A Study On The Attitudes And Buying Behavior Of Air Travelers In Contributing To A Sustainable Environment. International Journal of Engineering and Management Studies 4(1), 11-15.

Papatheodorou, A. (2016). Aviation and Tourism: Implications for Leisure Travel. Routledge.

Phillips, J.M., & Gully, S.M. (2013). Organizational Behavior: Tools for Success. Cengage Learning.

Popick, J. (2017). How Virgin Atlantic's Marketing Nails It. Inc. Retrieved from 5 April 2017 from https://www.inc.com/janine-popick/how-virgin-atlantics-marketing-nails-it.html

Roy Morgan Research. (2013). Domestic business travellers most satisfied with Virgin Australia. Roy Morgan Research. Retrieved from 5 April 2017 from https://www.roymorgan.com/findings/domestic-business-travellers-satisfied-with-virgin-201308280121

Schermerhorn, J.R. (2010). Management. John Wiley & Sons.

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Virgin Australia. (2017). Home Page. Retrieved from 5 April 2017 from https://www.virginaustralia.com/uk/en/

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