Write an essay on Research Project of British Airways?
The report is a research proposal that makes an in-depth study of the marketing strategies utilised by the companies to drive business growth. Hence, all the factors related to devising new and innovative marketing strategies and how it affects the business are discussed in detail. The company chosen for analysis is British Airways, which is a leading airline company in the United Kingdom. A short background study is conducted on the company, and the issues and factors related to its marketing strategies are studied and identified. This study, in turn, helps to make an analysis of the topic in detail to provide proper and logical conclusions and recommendations. A brief and well-structured research methodology is also applied to reach the project objective.
A business sustains and grows on the basis of the strategies that it undertakes. A business also survives on the image and perception of the consumers and hence it is necessary to undertake very well planned and specific marketing strategies to succeed. The marketing strategies are formatted after making a study of the external and internal factors and the consumer behaviours. Also, the competitive structure and priorities play a huge role in defining the marketing strategies. The marketing strategy, when implemented, takes the business further, and a proper and effective marketing strategy will help the business to succeed. Hence, it is very important to make a proper market study and strategies on key dimensions to enjoy growth of the business and increasing sales (Woodley, 2006).
British Airways or BA is a flag-carrier airline company in the United Kingdom. Founded in the year 1974 the airline company has grown into one of the largest carriers and multiple subsidiaries. The slogan of the company is "To Fly. To serve". The presently enjoys a revenue of € 11.421 billion. For a long time, the company was a customer of Boeing, but presently it has also ordered Airbus A320 (Britishairways.com, 2015).
This report will discuss the marketing strategy of British Airways and how it impacts the business that it conducts. The marketing strategy of British Airways has been to serve the clients and expand on a global basis. Hence, the report makes and in-depth study of the factors and the marketing strategies and what impact it has on the business of the company.
The British Airways is an internationally scheduled airline company of United Kingdom. It also engages in operating domestic and international carriage of freight, mail and other ancillary services. With an employee number of 42,377 the Airline Company also boasts of a passenger figure of 33millions. The company was privatised in the year 1987 and is surviving in the stiff and growing competition. The company has already undertaken sustainability and green technology as one of their strategic policies and has taken great initiatives in reducing greenhouse gases. The company has also changed the way they operate a business and have brought in a lot of innovations to provide better service to the customers. British Airways is closely connected with the Heathrow airport and is involved in rapid development regarding the growth of business in the Airline sector (Centreforaviation.com, 2015).
A short analysis of the factors that affect the business of British Airways is done it is done. The recent economic collapse has lead to a downfall in the revenue, and the business had taken up a backseat. With the recent mergers and the air, trade policies have helped the company to buck up and have interesting business opportunities. The environmental and legal scenario was effective in providing broad scope for the development and growth of the company. Although the airline companies has suffered quite a lot due to the recent epidemics and from fear of terrorism, the excellent service and the value added services have been successful in keeping the business on track (Wind, 2005).
The global airline industry is highly related to the global economic condition and growth. The latest advancements in technology and the innovations in the operational as well as the marketing strategies have lead to a new era of and ever growing air traffic. The competition in the service sector is always largely competitive with new and substitute entrants changing the business scope. It is only the old and established firms that have been successful to hold a strong ground amidst the sudden growth phase and the changes. But it is seen that there is much need for analysing and studying the present need of the consumers and from the strategies accordingly.
The objective of the report is to understand the strategic direction taken up by British Airways. The report hence understands the mission and vision of the company, which is to be the best brand in the Airline sector. The external environment of the company is already studied, and it is seen that the scope to formulate new marketing strategies is important by keeping the changes in the environment in sight.
The internal environment is studied with the help of Porter's five forces. The internal environment studies the internal condition of the airline industry and the changes that must be kept in mind while creating the marketing strategies as this will provide the competitive advantage. The main competitors of BA are Easyjet, Air France and Lufthansa. Easyjet is a major competitor in the low-fare sector whereas Air France and Lufthansa provide similar product and advantages (Chahal and Kaur, 2013).
The bargaining power of the customers is increasing due to the availability of the online ticket booking portals, lots of cheaper private airlines and incentives and offers. It is essential that the present marketing strategy so able to understand the consumer need and holds more power over the customer segment (Jeannet, Hennessey and Jeannet, 2004). The bargaining power of the suppliers is also increasing due to the rise in oil prices and economic downturn. The airlines still hold greater power. There are a lot many new entrants in the market as well as substitutes that make such long flights pointless. But the industry is still sustaining itself amidst the above factors.
Finally, the SWOT analysis conducted shows that (Jorge, 2009):
- It is a very well reputed brand
- Great financial size
- Fewer innovations and practices are still traditional
- Poor employee relations has affected the brand image
- It is very much cost effective and at the same time have unique service delivery
- The up gradation to Skytrax will open a new door for business expansion.
- Large competitive market
- Constant changes in the technology and economic condition
Thus, the report describes the scope and potential of the organisation in adopting a well-structured marketing strategy to have a positive impact on the business.
The British Airways is known for its constant development and penchant for growth. Although there is a slight lack of innovation in a very large amount, it is seen that the company tries to excel in the sector by adopting a slow methodology (Maritz, 2008). The essential factor that has lead to the success of the company in the service sector and the airline industry is its cost leadership marketing strategy to sustain in the highly competitive ground (Djordjevic and Djordjevic, 2012).
As noticed by (Smallwood and Greiner, 2008) that British Airways specifically focuses on the use of strong advertising focus to target its customers and highlight the high level of customer service that it provides to the consumers. It is seen that company has undertaken research on the consumer profiles and insights to understand the requirements and build certain brand equity to promote it.
The majority of the business is based on driving consumer trust and alliance. The marketers are paying more attention to theories and strategies to increase their customer retention capacity to gain a competitive advantage (Hoffman, Bateson and Hoffman, 2006). It is perceived by (Fyall and Garrod, 2005) that British Airways have chosen a generic strategy to implement on that will provide the perfect competitive advantage for the company to succeed. It is seen that BA has invested in discounted and massive price related marketing activities to focus on the low-cost " no-fill" segment that is prevalent in the United Kingdom.
But the cost leadership and differentiation did not help the airline company to survive. Hence, as (Thompson and Martin, 2005) said the cost focus and diversification are the only solutions that will help the company to survive and have a sustainable future. The cost focus and diversification help the company to focus on providing better features and opportunities o the consumers to a relatively low cost, and thus it provides a very significant competitive advantage to the organisation. The studies and market analysis shows that the company is very wisely placed in the cost focus segment, and this positioning strategy has helped the company to sustain in the increasingly competitive ground (Tanwar, 2013).
Marketing strategies thus have very serious implication on the business that it conducts. The (Managing culture at British Airways: hype, hope and reality, 2002) finds that the British Airways have been one of the leading companies that managed a very serious cultural shift from pleasure and profit to customer service, so that they could reach nearer to their customers. Hence, it is apparent that the change in direction and strategy is essential to achieving business growth. Thus, it could also be said that the marketing strategies are implemented, redesigned and reimplemented so that it matches the present profile and culture.
Further, the research will discuss other factors and issues that have lead to the construction of different and new marketing strategies to ensure growth and success in the challenging and competitive ground (McDonagh, 2006). The research will also study the poor and irrelevant marketing strategies that will have a negative impact on the marketing strategies. Hence, a brief research is done on the same.
The research questions raise implications for the hypothesis that would be provided through the research. It relates the issues and points identified in the ultimate hypothesis to form and raise questions that will prove that the research is successful in providing proof to the main project topic.
Firstly, as it is specified that British Airways undertakes thorough research and study of the consumer behaviour and the current needs and demands to understand the requirement for the marketing department (Gabrielsson and Gabrielsson, 2013). Thus, the preliminary marketing strategy that is utilised by the company is Advertising that focuses on the customer needs and services. According to the present need of the century and an era of heavy competition, a customer focus is sure to build an effective marketing ground. Thus, the research questions that arise out of the issue are:
Q1: What is the consumer need and demand for the present Airline industry?
Q2: What kind of research was conducted by the British Airways to receive consumer insight?
Q3: What kind of advertising techniques and applications are used by British Airways to achieve the same?
Next, it is also studied that the company used a customer retention program o ensure it gains a competitive edge. British Airways invested in creating consumer trust and alliances to build the brand value and drive the business and hence the research questions that arise are (Paley, 2005):
Q4: In what way does British Airways drive consumer trust and alliance?
Q5: To extent does the customer retention program proves effective in providing a competitive advantage?
Another significant factor identified is the utilisation of Porter's competitive positioning (Singh, 2010). The studies show that the cost focus is the differentiation used along with the diversification criteria and hence, the research question is:
Q6: In what way does British Airways utilise Cost focus and diversification to drive business?
Finally the change in culture and managing the change has helped the Company to sustain itself in the ever-changing airline industry (Sheffield, Goldie and Coleshill, 2000). Thus, the research questions are:
Q7: What was the difference between British Airways past and present organisational culture?
Q8: How did British Airways implement change management to sustain in the competitive ground?
Q9: How do the following marketing strategies prove effective to foster growth in British Airway's business?
The research of the marketing strategies of British Airways would be conducted on the basis of the reports published in the reports in the media which gives an idea of the strategic shift of the brand. The position of the brand in comparison to its competitors would be analyzed while the innovations in terms of marketing those the brand have undertaken specifically to counter the marketing trends are evaluated thereby. The business do not disclose its marketing overview to the larger audience or investor but gives a hint of what its long term plans are from where it seeks profitability to be generated. This shall give the business investors a credible platform to invest while also depict its future endeavors. The Qualitative data from various media sources would be referred to in the process from which a trend shall be established to find a concluding answer to which way the business strategies are progressing and how successful are they in such a dynamic competitive market.
The idea about the strategies and its success can be measured from the implementation stagnancy and execution of it. The failure of the same is depicted by the change in strategic plans and loss of market or failure to recognize the right market that results in a further change in market concentration. The same is discussed in the market and overall strategic success preview.
The Global markets have put forward various challenges to the aircraft business both at home and abroad. This is not just due to growing competition from the rival brands but also immerging trends in the immerging markets. Thus, the businesses have to keep up with these immerging trends to compete with the immerging markets. The beginning of the year saw a shift in the plans of British Airways where it kept the immerging markets as the primary focus in the marketing foray that saw a partnership with commercial teams as well as consumers. This restructuring was done keeping the changing aspect of global business in mind where the markets, as well as market dynamics, were changing fast. Thus, the focus was a duel where the marketing team wished to have consumer experience at the core of every commercial activity since the consumer experience is the key narrative to business development in a market of competition. Since consumer has various Airlines to choose from in the International arena where British Airways is just one of the many to fly, the consumer experience and availability, economy are the key factors those keep the airliner successful among them. The ‘consumer centricity' adopted by the brand has led brands deliver value service for consumers. Furthermore, the airliner have booked a profit of Euro 607 million in the first quarter of 2015 compared to the third quarter of 2014 which gave Euro 477 million (Britishairways.com, 2015). The Management have seen few distinct changes in the senior management which further enforces the idea that the business is going customer-centric in its approaches. Thus, the focus is now not only the cheap flight but also service delivery, where consumers are willing to pay more for services (Hanlon, 1996).
A big step in this direction was taken when the brand announced its loyalty and digital marketing communication to be directed by BBH in addition to advertising remits. This was a classical case. Today's market is dominated by social media, internet devices, communications have reached ahead of media advertising where the internet and handheld devices have enabled both ways communications thus feedback mechanism a part of market communications. The business have understood it and have made personalized offerings more distinct in its loyalty offerings and have generated a ‘online growth consultancy' services for itself to be consistent and be constantly be in touch with the consumers (Dnaindia.com, 2013).
The payment of bills have been made easy, service delivery, and receipt is been made easier where the business knows the client more closely and the offer of the business to the client to know them more closely worked. The client knows all about the services and knows what best they can get in the process of using British Airways, so the client has a choice of price comparison and choosing the one best suited for their use. The economy of scale is one while the both way communication is another where the two greatest boons in the current model of advertising using social media had been well utilized by the British Airways. The E-Bay handles the Email Marketing called E-Dialog which is the Enterprise Marketing Solution used by the brand and together it's a good strategy that the airliner has adopted for its futuristic plans. Further, it is notable that the brand claimed the Global number 1 position in 2012 after the 2012 London Olympics where the Swiss brand Rolex fell to a second place. Thus, this is a great leap for the brand, and the brand has done a great job to have scored such a position being in the service sector in such a competitive market (Profit.ndtv.com, 2015).
It must also be said that the brand have taken the legacy forward from this point to develop a bigger space for themselves. Nevertheless, the growing markets like India, China is replacing many other markets which were primary hubs for the European giants like British Airways which the airliner have used well to incorporate in its bouquet of offerings to balance its act well in those markets and show the strategic shifts well in accordance with the market needs (Raghuvanshi, 2015).
The aviation industry is not only dependent but also service dependent in the world of competitive offerings. The global market has both of them on offer for the consumers who are perceived to be willing to pay more if the services are good. Thus, the airliner has developed the services in a manner that have improved their competence in the global context in both cost and service perspective to attract the bulk of the consumers. However, there is another very major connection that has to be adhered to in this case that makes the case further more complex in the airlines business. The availability and frequency in a market of a particular brand are important which also means the infrastructure for the same market for a particular brand needs to be built. The brand has made a slow but steady entry into the Indian and Chinese Markets which a dedicated flow in the South East Asian Countries in search of new opportunities. This has given not only a new market to serve but also new destinations for the brand to fly (Marketing Week, 2015).
The popularity of the brand is growing, and the density is growing in these markets. The Indian market gives a free economy comparable to the UK market that the brand knows and recognizes while the plan to do code sharing with an Indian partner is also on their list. The Indian market as the new Asian hub is the key target for British Airways when it targets to compete with the Asian giants like Singapore Airlines, Thai Airways and European counterparts like Lufthansa. The second biggest International hub for the brand is targeted for India after US considering its growth where the Middle Eastern nations see capacity pick such as Emirates (Williams, 2015). The Aviation infrastructure of the nation however needs further development till the plans are laid out till then the British Airways would serve the Indian Market and gather the substantial data needed for such market operations (Vance and Malik, 2015).
The other very important thing is habit and brand loyalty that the Indian market has which have attracted the British Airways along with the Government's attitude towards the foreign investors interested in investing in the Subcontinent. The mix of all the factors have made the selection of Indian market as a strategic asset to venture a well-established strategy for the brand's future (Phadnis, 2015). The population and the potential growth figures that the country portrays to the Global community are the added advantage of the entire plan. The fleet planning is been done on the basis of the political as well as consumer preference impacts (Emerald Group Publishing., 2003).
The density of passengers between destinations determines the fleet size that also needs a return density to come back to the hub from where it started for staff change, repair, etc. Such operational qualities are achieved by selecting the density and destinations well, and allocations of the fleet on such destinations are done accordingly. However, even today there are few facilities those are reserved for few who are willing to pay the high price during the basic minimum for those in the economy class. The parity of services all across the class are being well handled where the difference is been made little to keep the rates comparatively lesser and generate more space for all irrespective of the class (Marketing Week, 2014). The British Airways have lowered its cost with effective distribution of the fares all along its seats with little to differentiate between business and economy class from a service point of view. Various code sharing partnership with regional airlines have been started to boost the sales in those corners where the business is venturing in a big way. India for an example, where Kingfisher, Jet Blue are two significant airlines that are partners in the domestic market that does partnership with this international carrier (Timesofindia-economictimes.com, 2010).
The competitors have led the prices for an offering low. The internal and external strategies of the business have been laid out to suit the changing dynamics of the business. The consumer satisfaction on one side that has driven the internal strategies while fleet density increase in those parts where the consumer density is more has been well chosen by the brand. The strategic outcome of the same is considered to make the British Airways lead in the competitive scenario of the Global aviation. Nevertheless, it is to be seen the European economic crisis have taken the toll on the air travel that have significantly reduced in the last few years. The new hubs are thus growing. The Asia-Europe Hub and vice versa is common now while North America to Asia Hub is also very frequent where the Asian carriers like Emirates, Singaporean Airlines, Thai Airways, Cathay Pacific have an edge over the European giants. The first recommendation is to study the market and study the change properly to identify and apply the changes appropriately. The market recognition is one while deriving the proper market-oriented strategy would be the second focus for the business to make the right plan to venture into those markets and build the long-standing infrastructure to serve the consumers in the specific market.
The British Airways have now introduced the Mobile Application where they track their consumer's location to keep them updated with their flight details. The same can be used in the new market, and new consumers can be made loyal consumers for a longstanding operation in those markets. The application of the right measures at the right time is important during the utility for the strategic approach also needs to be measured so that the business can take right steps to rectify wherever they went wrong. The second recommendation is thus using the technology to take feedback and keep a long standing touch with the consumer to generate consumer loyalty. The consumer loyalty is important in the long term as the business investments in a specific market is dependent on it as well as the growth plans and long-term objectives for a market is set on those grounds where the loyalty generation is more. The generation of loyalty also ensures that the other businesses have to generate a lot extra that is certainly not feasible in the international flight scenario in such a competitive environment. Thus, the duration of a market stay is enhanced by the business with the enhanced loyalty of consumers.
The third recommendation for the British Airways is to have a competitive price and service offerings for its consumers. The competitive airlines industry has changes the way the services are offered along with prices which the airliner needs to study well. The introduction of the new service policy that satisfies all with a well oiled pricing scheme that attracts consumers from all sphere of life and also ensures comfort for all flying would make the business get an edge over most other in the same market. Facility and reliability hold the key to the brand that would hold the key to the brand's future developments and growth.
The British Airways have changed the way the marketing works for its business. It has strategized new policies which have futuristic goals that is been developed in the present day market. One of the most effective of all strategies were the identification of the right market at the right time and made right choices to gain business. The Indian market for an example is a growing market where the business has developed well and is envisioned to do well in the future. The identification is one while the offering is the other very prominent part of the marketing that the business had to offer. The business offered services at a competitive cost for all using the services irrespective of the class of passenger, gaining the trust and faith of all. Further, the way the business have used the technology to generate consumer loyalty was discussed. The way is a great way forward and also a great vehicle to ride considering the feedback enables better service delivery.
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