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Introduction to British Airways

One of the most important parts of international airlines group is British Airways. It is one of the largest international carriers in the UK. Its home base is in London Heathrow, which is regarded as the world’s busiest airport. It flies in 70 different countries and there are about more than 170 countries. It has more than 280 aircrafts fleet and it included A380 and 787. It has the carrying capacity of more than 40 million customers per year (British Airways 2017). This airline is preferred by people due to various benefits it offers to its customers like inclusive fares, availability of free food and drinks when there is a haul for long hours, there is no check-in charge, there is also a facility for providing an allowance of free baggage. It approximately has 40,000 employees, which would include 15000 cabin crews, 5500 engineers and around 3600 pilots. British airways have various sorts of marketing strategies:

Product strategy: the main product here would be the air carriers, which is for the customers who want to travel. There are various sorts of intangible services, which has become a part of the product which the British airways sell. They have different travelling classes like the business class, economy class, executive class and the club class. The products, which the airways sell, are divided into three levels, first is core product, which the customer is purchasing which is the flight ticket in this case (Homsombat Lei and Fu 2014). The second one would be the base product, which is the flight in this case, here the flights are booked by the customers for their respective destination as per schedule of the British airways. The third would be the product expected by the customer, which includes various services like complementary drinks and food, onboard entertainment and various other kinds of services.

Price strategy: price strategy is used to calculate the price of the product. It is the amount which the consumer pays for the product it enjoys. In the premium price strategy the main target society here would be the higher-class people because they are the ones who can afford such high costs. There main customers are business class and executive class users. In case of medium price strategy the service provided is lower than the premium price (Narangajavana et al. 2014). This strategy enables to provide a competition to the other airlines who provide the same kind of service. In the low price strategy it provides the lowest cost along with other added quality services. People would be preferring British airways than any other airlines because of the low cost and the name.

Promotion strategy: in order to promote its brand the British airlines provides various festive offers during the Christmas (Rosenbaum-Elliott, Percy and Pervan 2015). Rates has been reduced to a great extent during the festive season and the people who travel in the gold or the silver class are also provided with free upgrades but only in the case of one way journey.

British Airways' Marketing Strategies: Product, Price and Promotion

The concept of marketing has changed with time and will continue to change with the passage of time. Marketing evolved through stages, which included classical as well as contemporary. In the simple trade era the focus of the marketing activity was trading of resources as well as the exploration. In the middle of the 19th century the staple in the economy was commodities of commerce (Heizer 2016). Everything was done by hand be it harvesting or marketing or making of that product required for trading. The start of a complete new era, which is the production era changed the simple trade era. In the production era, the primary tool for sales was the mass production. The main concern of the business was effective and efficient manufacturing. Mass production is considered the most important marketing technique of the production era. It is believed that if products are made people will buy them. This made the time simpler than the simple marketing concept (Tckhakaia, Cabras and Rodrigues 2015). The sales era was considered as the era of competition. The businesses are not able to sell their mass made products now. The companies have to aggressively promote their products  and even persuade the customers so that they can sell their products. After the sales era comes the relationship era where priority is given to the long term relation between the company and the consumers. This will help to build up trust and loyalty, allow regular returns, and help in the success of the business. Businesses give more preference to the customer who are returning rather than the one who appear for the single time. The social marketing era is the game changer of the marketing field (Malthouse et al. 2013). The use of internet and various other social media help the business to reach out to people and become popular. Areas like sales, relationship, production, trade and other related areas are the main building blocks of marketing. The concept of marketing will continue to evolve for the future marketing leaders for understanding and interpreting results.

The airlines business is brutally competitive like many other businesses. The toughness of the competition cannot be the reason for toughness on customers. However, the customers mainly care about the price and many airlines have cut the cost down at expense of their service quality (Abratt and Mingione 2017). However, the chairman of British airways thinks differently, he thinks that even if there is cut-throat competition there will be no affect in the business of air travel as people are willing to pay if they are provided good service even if the person travels in the economy class (Madar  2015). British airways have launched a global customer relations initiate which aims at overhauling its technology and various other types of services. The main objectives of the British airways include the following:

  • To create a single and global customer platform, which will connect the entire customer, related sites
  • Improving the speed and lowering the cost of service recovery by increase in the operational productivity and performance.
  • Providing the relevant feedback and become aware of the service related problems immediately.
  • Increase in the operational performance and the productivity.
  • Improve the passenger compensation procedures.    

The strategy of the British airways for improving the service recovery included providing fast, effective and efficient interactions. An unified solution will now handle more than one million interactions per year and it replace numerous, non-integrated systems. The complex and long customer relations process which used to take weeks to complete are now being simplified and takes less than an hour and helps in gaining 100% efficiency (Lange et al.  2015). Instead of using long manual process to  issue compensation to its customers it now issues compensation card on the spot. This card would be ready for use at thousands of ATM or point of sale location for enhancing the recovery process. Service quality has been greatly improved due to the automation of the workflow between the various departments and the regions. It even has the ability to allocate the resources whenever needed because it has real-time visibility into the customers experience (Cornelissen and Cornelissen 2017). Enhanced collection of data and reporting the capabilities help in providing the organization with in-depth view of the experience of the passenger, it can help British airways to enhance its product being offered based on the information provided(Storey  2014). British airways operation in the market is characterized by slim margins, government regulations, over-capacity, and high competition. All the airlines are having a constant battle in order to survive for a long-term. Due to pressures British airways launched a program called “Future size and shape” which aims at removing the complexity and restoring the airline towards sustainable profit (British airways 2017). It even launched an initiative so that they can consolidate the information from across the organization into the integrated commercial warehouse. British airways way of segmenting and targeting refers to the way where the airline company will identify certain individuals from the public and offer them with packaging services. In segmentation population is divided into various groups as per their characteristics on the other hand in targeting specific groups are chosen and these groups are identified as a result of segmentation so that they can sell the products.

Evolution of Marketing: From Production Era to Relationship Management Era

The changes in the recent economic, political and associated changes can change the practice in the delivery of health and social care and have led the managers and the professionals to recognize the link and the importance between solving the problem and the decision-making skills. However, assessing the impact of the political, environmental, socio-cultural and other types of external influences relating to the health care polices, organizational and proposals programmes has become a recognizable stage for the strategic development of health services and planning of mechanisms. This form of analysis can be undertaken after reviewing the organizations environment using the pest-analysis (Shaw 2016). It has been considered as useful tool for understanding the big picture of the environment in which one is operating and the threats, which one has to face. Understanding the environment helps to take advantage of the various opportunities and minimize various threats. Pestel analysis can also be termed as trends analysis. The external environment can be assessed by breaking it down into various levels like political, technological, social, legal, economic and industry level (Telfer and Sharpley 2015).

The political forces may affect the performance of the organization or the various options available in the economy.

The economic factors influence the nature of the competition, which is faced by an organization and the various financial resources, which is available in the economy (Tribe 2015).

In the sociological trends, the demographic changes influences the trends in the people live and work.

Under the technological trends the novel way organizing and thinking is being developed and not the new approaches and tackling of new and old things.

Under ecological factors, the consideration of how the organization deals with its ecological system is mentioned.

Legislative requirements were initially being included under the political factors but now it requires a heading of its own.

Factor

Impact on industry

Implications

Tax policy

New regulation of tax

It has an influence in the aviation market in terms of the rules to be followed by a business

Terrorism

This can have a great impact in the number of customers

It will have a great impact on the number of customers because it will raise the fear to fly and this will directly affect the profit of the airways (Walters 2016).

Political instability

It can change the agreement and it can even cancel the routes which the airline shares with other countries.

The company might be forced to change the routes, which is not good in terms of logistics because the company will have to spend more time in order to define the new routes.

Election

There is difference in point of view of the politicians regarding the corporation tax between the conservative and labour.

It will affect the company directly because conservative can lead to the reduction of tax, which will lead to an increase in the profit, but the labour available is very less to witness the change (Walters 2016).

Factor

Impact on industry

Implications

Inflation

The rise in inflation will increase the fuel price

Increase in inflation is not good for the company because it will lead to a hike in the prices of the fuel prices and company might increase the cost for the customer.

Exchange rate

Euro and pound will have more value than US dollar.

British airways uses pounds and so it can increase its profit while dealing with suppliers or fuel prices because they have US dollar as their currency (Vasigh and Fleming 2016).

Oil Price

Oil price has been increasing and it will not reduce the price

This will affect the final consumers because an increase in the oil price will influence the price of the air tickets.

Economic growth

The economic growth of UK is slow and the reason behind this is increase in the oil prices because of inflation

If the company wants to expand the business or even explore the markets the growth rate is very slow because of this economic growth.

One of the largest airways in the United Kingdom in the terms of fleet size or the international flight destinations is British airways. In order to maintain the number one position it has to maintain high standards in terms of the service provided (Shaw 2016). The company provides its customer twenty-four hour security services and evaluates the situation in a calm and controlled manner. Its services have defined it to be the most quality flight for all the people.

In terms of customer satisfaction and satisfying the wants of the buyers, the products offered by the British airways are the best. They have a fleet size of more than two hundred and ninety five and they provide first-rate service to all the patrons. The British airways main aim is to satisfy the requirements of the customers.

Firstly, the flight rates are reasonable which enables the customer to fly from one destination to another at cheap rates. Secondly, the airway has a connection with some of the busiest airports in the world and it provides excellent schedule for the flights in all the destinations. Thirdly, the in-flight services provided by the British airways is the best in terms of the comfortable seats provided by them, fresh meals and drinks and even some entertainment on the board (Steenkamp 2017). The customers can even go through the magazines they are been provided by the staff and they can even chose the entertainment in the form of movie collections, radio collections or even television programs (Balmer 2013). British airways deliver great support facilities and in order to cater the need of the customers the services they provide has been divided into three executive classes. The customers who belong to the gold class and the one in the silver class can use the executive lounges that is present in all the international airports. They can even spend some time relaxing and eat and even use the gym in the airport.

British Airways' Customer-Oriented Policies: Focus on Service and Efficiency

Place has a very important and a distinct role in the marketing strategy. The British airway has done various mergers and liaisons in the important destinations of the world. The base of British airways is United Kingdom, so it carries its activities in and around of its operational base (Kumar and Steenkamp 2013). The infrastructure of the British airways has been developed and upgraded in order to conduct its activities safely and properly. It has even joined hands with various other airport authorities for carrying out their business activities successfully.  Their main channel for distributing the products is the call centres, online websites and the travelling agents. It now emphasizes on accessing their location smoothly. It is the most popular airlines as it flies through six continents serving more than one hundred and sixty destinations.

The pricing policy of the British airways has been kept in such a way that people of every class can avail the services. The pricing policy is such that it equals to the value that has been provided by the company. The customers are treated as the decision makers and they are the one who will decide the total amount that has to be spent (Halpern 2016). A customer has the liberty to buy the ticket at base price without paying any kind of extra value added benefits or they can even choose the services as per their requirements.

They have even introduced economy-pricing strategy for people who require low priced tickets. People requiring fringe benefits are  covered under medium-value pricing strategy and for travelling in the high-class benefits premium-pricing strategy is being used. The method of splitting the pricing policy has helped the British airways to maintain high standards and even create profits in such a competitive environment (Steenkamp 2017). The airways keep revising its price policy for the competitors for maintaining their loyal customers. The method of pricing of tickets has been proven as a success story.

For creating and maintaining promotional strategies considerable innovations has been put forward. Different strategies have been formed for keeping the communication lines open with all its customers, the customers can even book their tickets through net which would of great advantage for the techno savvy customers. British Airways also provides reasonable ticket prices for various occasions like the Christmas gift vouchers where the customers can get discounted prices (Goodall and Ashworth 2013). Electronic and print media has also helped the British airways for the promotion of its various products and the services.

Conclusion

It can be concluded that the objective of the British airways is to become a global premium airline by approving the ethical practices and create a positive environment in the society by reducing the environmental effect. Applying change management in the company directs the company towards difficult times. However, the reputation of British airlines has been declining and the main reason behind this is the wrong decisions taken by the management, which mainly reflects the hard time, and business environment, which actually exists. The management is however trying to implement new programs and various strategies in the company through marketing communication for creating a better image. The current management realizes the need for leadership and the entrepreneurial competence which would wipe out all the problems of the company. In order to make the company run in the track of success the management has to identify the problems which exists in the company. They will try to resolve the issues and come with some effective programs relating to the change management that will benefit the company.

References 

Abratt, R. and Mingione, M., 2017. Corporate identity, strategy and change. Journal of Brand Management, 24(2), pp.129-139.

Balmer, J.M., 2013. 1 Organisational marketing. Contemporary Perspectives on Corporate Marketing: Contemplating Corporate Branding, Marketing and Communications in the 21st Century, 17, p.1.

Britishairways.com. 2017. Information. [online] Available at: https://www.britishairways.com/travel/home/public/en_gb [Accessed 14 Jul. 2017].

Cornelissen, J. and Cornelissen, J.P., 2017. Corporate communication: A guide to theory and practice. Sage.

Goodall, B. and Ashworth, G. eds., 2013. Marketing in the Tourism Industry (RLE Tourism): The Promotion of Destination Regions. Routledge.

Halpern, N., 2016. Air transport marketing. Air Transport Management: An International Perspective, p.321.

Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.

Homsombat, W., Lei, Z. and Fu, X., 2014. Competitive effects of the airlines-within-airlines strategy–Pricing and route entry patterns. Transportation Research Part E: Logistics and Transportation Review, 63, pp.1-16.

Kumar, N. and Steenkamp, J.B.E., 2013. The National Champions Route. In Brand Breakout (pp. 185-213). Palgrave Macmillan UK.

Lange, K., Geppert, M., Saka?Helmhout, A. and Becker?Ritterspach, F., 2015. Changing business models and employee representation in the airline industry: A comparison of British Airways and Deutsche Lufthansa. British Journal of Management, 26(3), pp.388-407.

Madar, A., 2015. Implementation of total quality management Case study: British Airways. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 8(1), p.125.

Malthouse, E.C., Haenlein, M., Skiera, B., Wege, E. and Zhang, M., 2013. Managing customer relationships in the social media era: introducing the social CRM house. Journal of Interactive Marketing, 27(4), pp.270-280.

Narangajavana, Y., Garrigos-Simon, F.J., García, J.S. and Forgas-Coll, S., 2014. Prices, prices and prices: A study in the airline sector. Tourism Management, 41, pp.28-42.

Rosenbaum-Elliott, R., Percy, L. and Pervan, S., 2015. Strategic brand management. Oxford University Press, USA.

Shaw, S., 2016. Airline marketing and management. Routledge.

Shaw, S., 2016. Airline marketing and management. Routledge.

Steenkamp, J.B., 2017. Global Marketing Mix Decisions: Global Integration, Not Standardization. In Global Brand Strategy (pp. 75-109). Palgrave Macmillan UK.

Steenkamp, J.B., 2017. Global Marketing Mix Decisions: Global Integration, Not Standardization. In Global Brand Strategy (pp. 75-109). Palgrave Macmillan UK.

Storey, J., 2014. New Perspectives on Human Resource Management (Routledge Revivals). Routledge.

Tckhakaia, E., Cabras, I. and Rodrigues, S.A., 2015. Knowledge Management in Airline Industry: Case study from the British Airways.

Telfer, D.J. and Sharpley, R., 2015. Tourism and development in the developing world. Routledge.

Tribe, J., 2015. The economics of recreation, leisure and tourism. Routledge.

Vasigh, B. and Fleming, K., 2016. Introduction to air transport economics: from theory to applications. Routledge.

Walters, W., 2016. The flight of the deported: aircraft, deportation, and politics. Geopolitics, 21(2), pp.435-458.

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