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Market Segmentation

Describe about the Marketing Management for Targeting High Risk Customers.

Marketing plan is the process in which an organisation tries to gain profit as well as to increase the number of customers (Terpstra, Foley & Sarathy, 2012). The researcher has developed a marketing plan for the travel company Virgin Australia that deals with the booking service of tickets for travelling, hotel booking service, holiday packages and flight booking service. In this study, the researcher is exploring the special offers that the company is offering in which Virgin Australia can able to gain profit at a time and can also attract more customers to avail their company.

The company is offering an online service for the booking of tickets that can be availed by any customer on their official website. They have launched the online booking system recently due to the craze of the new generation people in app based services. As per the offer, if the customers will book the flight tickets in the peak season before one month of their travelling then the company will give a discount on their tickets up to 20%. Apart from this, the company is offering a holiday package of two persons for the first 500 customers who will avail the service (Hays, Page & Buhalis, 2013). The company is offering another service for using mobile application while booking air tickets and holiday packages. A specific set of terms and condition will be applied for the eligible consumers.

Market segmentation is the process of segmenting the market in a way that the company can differentiate the customers of their organisation and according to the segregation can make business plans as well as marketing plans (Morrison, 2013). It helps the organisations to understand the requirements of the customers according to their demographic, behavioural, psychological conditions. If a company do not separate their market by these parameters then they will not be able to understand the target market for their products or services. This will affect on their business and profit level. Therefore, every company needs to segment the market first before setting the marketing plan for their future business. In this study, the researcher has discussed the marketing plan for the Virgin Australia company and segmenting the market before setting the marketing plan.

The company has separated the market in three segments, such as – demographic segmentation, behavioural segmentation and psychographic segmentation (Evans, Stonehouse & Campbell, 2012). These three parts are referring the customers who avail the company’s services in several times. However, the choice and requirement of these customers are different; still they are the loyal customers of the company. The company operates only services and the customers too have to invite through their innovative and interesting offers to retain them. Therefore, the company here is segmenting the market into three parts to set their target market more particularly. The segments are follows –


(a) Demographic Segmentation – Demographic segmentation of market is mainly based on the variables such as age, religion, sex, generation, occupation, education level etc (Thompson et al. 2013). Organisations divide the market with this parameter as this is one of the most important features of the customers to set the marketing plan for their product or services of any company. This parameter segments the market with different life stage groups of the consumers and of different life cycle. In this case, the company is offering online booking systems that will attracts mainly the customers of the age group of 20-40 who are more habituated with the technological gadgets. Therefore, the company has divided the market according to the use of mobile phones and interest of travelling among the youths.

(b) Behavioural Segmentation – This segmentation is done depending on the attitude of the customers, interest and response rate of them towards any particular product or service etc. In this study the company is dividing the market following their behavioural characteristics (Kazeminia et al. 2015). The researcher has found that the sophisticated group of people those belongs to mainly the upper middle class and economically strong can afford this travel tours per year. They used to get more comfort in their trip whether it is given in the flight or in the hotels they never compromise with the comfort. Therefore, it is a pack of people who wants comfort and ready to pay the required amount to get the comfortable journey.

(c) Psychographic Segmentation – This segmentation is the dividend of the people who prefers to go for the company which is said to be good and reasonable by others. In another word it can be said that these group of customers depends on the views of others while deciding to use a product or service (Chiappa, 2013). This segmentation has helped the company to understand the lifestyle of the customers and after doing this segmentation the company can separate their target customer for the new offers that they are offering.

Target marketing is related to segmenting the market into different segment and later providing the products to one of some key customers by meeting their specific needs. It can be a way of attracting new type of customers and enhancing the scope of the business. The rationality behind targeting the market is related to the making price, promotion and distribution of the product more cost effective and attractive to the customers (Hollensen, 2015). Not all the people will be the customers of service provided by Virgin Australia. Therefore, the organization needs to target some specific group who pose same characteristics for offering customized offers.


The organization will specifically target age group between 20-55 years who are working somewhere. Therefore, these kinds of people will be interested in frequently travelling by flights in many countries. The organization will also target businesspersons and corporate officials for their re-designed offerings provided to attract the customers. As the businesspersons have to travel frequently in many countries for conducting their business meetings and making business contacts, the organization will target these types of the customers to offer attractive discount in flight ticket booking (Fong et al., 2015). The organization will also target corporate officials for offering hotel-booking discounts. These people will be targeted as the corporate officials often need attend corporate parties in many region and countries (Ascarza, 2016). Therefore, offering discount of hotel booking will attract these kinds of customers. The technological aspect of the service offered by the Virgin Australia needs educated customers so that they can effectively handle the service offered by the customers.

On the other hand, Virgin group will also target new married couple as their customers. The tendency of newly married couple to spend their time together in new country out of their home country leads them to book flights and hotels. Therefore, the organization will find opportunities through targeting these people in their holiday package. The organization will target those people who have the tendency to travel with greater comfortableness and amenities. These kinds of people will be targeted as they seeks specialty in any kind of services. People with high concern brand image will be selected for the redesigned offering of the organization (Goldstein, 2014). These kinds of people will be targeted, as they love to try services of company like Virgin Australia.  Apart from that, Virgin Australia will also target those people who want extra benefit from the service they use. These kinds of people will surely love the discount provided the organization in their service (Armstrong et al., 2014).

Positioning is related to some uniqueness in the service provided by the organization that will make them different from that of their competitors. The organization will offer online ticket booking system through which the customers will book their flight tickets from wherever they want without going to any physical ticket selling stores. The unification of flight ticket booking system will be reflected in providing mobile app and SMS opportunities (Haenlein & Libai, 2013). These will surely attract the new generation people by accessing the app through their mobile phone and booking flight tickets from anywhere they want without even having internet facilities.

Virgin Australia will offer diverse set of offering on their holiday package, where the customer will get 2 day and 1 night free hotel service in renowned hotel on booking the holiday package before one month of their travelling date. Apart from that, the organization will also offer transportation facility after the flight land that will reduce the stress of car booking of the customers after the flight land. In case of flight booking also, the organization will also provide special offer that is related to providing extra amenities in terms of entertainment activities to the customer on booking early ticket.  The customer will avail different kinds of entertainment activities in term of music system and video plays free of cost on early booking of the flight tickets.

Every company needs to develop a marketing plan before offering something new ijn their organisation. In this case, the travel company is offering various kinds of offers regarding discount in their booking systems that have to be marketed to do well in the business. The fundamental changes in the marketing mix are very helpful for any organisation to plan their marketing procedure. Virgin Australia has developed their services according to the need of the customers to gain more profit in this business.

The most important thing for any organisation is the product or service that the company deals with. In this study as the researcher is discussing about the travel company therefore, in this case the product is the services that the company is offering to their customers (Wedel & Kamakura, 2012). The company is offering different services for the customers in recent times to get their business to expand more. The company is revising their service systems according to the choice and requirements of the customers. They have introduced the new online booking system for their customers that will be very fruitful for the company to attract more customers towards the company.

The next marketing mix is the place from where the company is doing the business (Wilkinson, 2013). In this case, Virgin Australia is offering their services on their official website which is accessible from anywhere of the country. The travellers who want to book their services just have to login to their website to avail the facilities. In past the company website was available in the country only and cannot be accessible from outside the company. Now they have realised that this is the best time to expand their business and the first step of their expansion can be tested with the online process. If the online booking system gets huge response then they will plan more activities for the online service users in future. Therefore, they started their online booking business very recently to reach more people anywhere beyond the political boundary (Cross, Belich & Rudelius, 2015). It will surely make them easier to access.

The price is very important marketing element for any company as this is the key factors which decide the organisation’s acceptance among the customers. According to Piercy and Morgan, (2015), price can make the difference between two companies and their products whether the quality really differs from each other. Price is the main thing upon which the business lies on therefore, the companies decide their price after conducting the market research and customers’ taste. In this case, the company has initiated the marketing plan for attracting more customers to their organisation. Therefore, the company should have to reduce their price of services than the other travel companies give. However, it is argued by Pavlou and Stewart, (2015) who said that it is not necessary if the company provide cheap prices for their services then the customers will go for the company. It depends on the value that the company is offering in the services and products with the least price. Therefore, Virgin Australia is offering the customers some discounts on their bookings which will of good facilities. They are not decreasing their service quality but offering some discounts in their services that will be proven as attracting to the customers. They are offering the discounts on booking before one month of their travel and can avail the discount up to 20% (Huang & Sarigöllü, 2012). The customers who will book first will get the opportunity to use the full discount and later customers can avail the discount little less. The mobile app user will get another discount in their time of booking which a helpful process is also for the company to increase their customers.

The promotion is the main element of marketing that can make the difference for the company. According to Rahmani, Emamisaleh and Yadegari, (2015), promotion is the direct contact with the customers and telling about one organisation’s products or services to them in the expectation that the customers will avail those next times. The company is promoting about their services in the online website mainly but they will use the other options too to promote their offers. Promotion normally can be done through the advertising process, personal selling, sales promotion, and social media etc many more communication tools. In this case, as the company is trying to introduce their new offers foe the season then the company is depending on mainly the advertising and social media for their promoting platform. They are using the television and the hoardings, leaflets to advertise their new offers. They have used the social media too for their promotion purpose. As the new generation people are more familiar with the social media therefore, the company has decided to use the social media, mainly face book and twitter for their advertisement. They have created a new page in face book where they are offering interesting gifts for liking the page (Bahadir, Bharadwaj & Srivastava, 2015). This will also promote their recent offers.

The company is also trying to please the people or the customers as all companies rely on the people. As the customers are important for any organisation likewise the people relating to the organisation is too important. The people who sales the products from the front line or the sales persons, the people who manage the whole process from the back or the managers and directors are also very important for any organisation (Goldstein, 2014). The company that have the right people can obtain more success in the business. Therefore, Virgin Australia has implemented new training sessions for the staffs who are working in their firm to avoid any kind of misconduct with the customers that can affect the company with a bad impression.

Apart from these, an organisation has to manage the delivery systems of their products or services. As the discussed company deals with the services therefore it is their responsibility to check the facilities and booking they are doing for the customers are executing properly on time (Hollensen, 2015). For this purpose the company has engaged a unit of people for checking this. If there is any misconduct happens then the customers can report to this team to solve the problem. It will make a good reputation for the customers about the company that will increase their liability indirectly.

The last part of the marketing mix is the physical evidence that is very important for possessing a good reputation that the company has no legal issue and is completely authentic (Ascarza, 2016). This will help the customers to understand that the company is using the paper works legally that mean it cannot be fraud. Therefore, this company too is using the physical elements to please the customers and to prove their authenticity.

Strategic fit is the degree of measuring a company’s situation in the market whether it is doing well in the competitive advantages or cannot fitting in the increasing competition for entering other organisations in the same field. According to Chiappa (2013), the strategic fit is the process of understanding if an organisation is able to meet the opportunities in the external environment that the company is gaining from the resources and the capabilities of the resources. The Virgin Australia is using their resources in their strategy making process that is able to attracting the customers and maintains the competitive advantage in the market too.


In concluding the researcher has observed that the marketing plan is very important for any organisation that wants to increase their profit level as well as the customer loyalty and number of customers. The researcher has also discussed the marketing plan for the travel company Virgin Australia which is giving some offers in recent time. Apart from this the researcher has segmented the market and then discussed which customers are the target customers for the company. This discussion enable to understand the researcher that the youth generation customers with interest in travelling are the target market for the company and then elaborated the plan for them.

Reference List

Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.

Ascarza, E. (2016). Retention futility: Targeting high risk customers might be ineffective. Available at SSRN.

Bahadir, S. C., Bharadwaj, S. G., & Srivastava, R. K. (2015). Marketing mix and brand sales in global markets: Examining the contingent role of country-market characteristics. Journal of International Business Studies, 46(5), 596-619.

Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market segmentation: an exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer International Publishing.

Del Chiappa, G. (2013). Internet versus travel agencies The perception of different groups of Italian online buyers. Journal of Vacation Marketing,19(1), 55-66.

Evans, N., Stonehouse, G., & Campbell, D. (2012). Strategic management for travel and tourism. Taylor & Francis.

Fong, N. M., Fang, Z., & Luo, X. (2015). Geo-conquesting: Competitive locational targeting of mobile promotions. Journal of Marketing Research,52(5), 726-735.

Goldstein, K. R. (2014). Predicting the potential for energy efficiency retrofits in single-family homes: an exploration of data targeting mechanisms(Doctoral dissertation, Massachusetts Institute of Technology).

Haenlein, M., & Libai, B. (2013). Targeting revenue leaders for a new product. Journal of Marketing, 77(3), 65-80.

Hays, S., Page, S. J., & Buhalis, D. (2013). Social media as a destination marketing tool: its use by national tourism organisations. Current issues in Tourism, 16(3), 211-239.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Huang, R., & Sarigöllü, E. (2012). How brand awareness relates to market outcome, brand equity, and the marketing mix. Journal of Business Research, 65(1), 92-99.

Kazeminia, A., Del Chiappa, G., & Jafari, J. (2015). Seniors’ travel constraints and their coping strategies. Journal of Travel Research, 54(1), 80-93.

Morrison, A. M. (2013). Marketing and managing tourism destinations. Routledge.

Pavlou, P. A., & Stewart, D. W. (2015). Interactive Advertising: A New Conceptual Framework Towards Integrating Elements of the Marketing Mix. In New Meanings for Marketing in a New Millennium (pp. 218-222). Springer International Publishing

Piercy, N. F., & Morgan, N. A. (2015). Strategic and operational Market segmentation. In Proceedings of the 1993 Academy of Marketing Science (AMS) Annual Conference (pp. 676-676). Springer International Publishing.

Rahmani, K., Emamisaleh, K., & Yadegari, R. (2015). Quality Function Deployment and New Product Development with a focus on Marketing Mix 4P model. Asian Journal of Research in Marketing, 4(2), 98-108.

Terpstra, V., Foley, J., & Sarathy, R. (2012). International marketing. Naper Press.

Thompson, A., Peteraf, M., Gamble, J., Strickland III, A. J., & Jain, A. K. (2013). Crafting & Executing Strategy 19/e: The Quest for Competitive Advantage: Concepts and Cases. McGraw-Hill Education.

Wedel, M., & Kamakura, W. A. (2012). Market segmentation: Conceptual and methodological foundations (Vol. 8). Springer Science & Business Media.

Wilkinson, F. (Ed.). (2013). The dynamics of labour market segmentation. Elsevier.

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