Virgin Atlantic may not have a loyalty team as such but they do use a flying club which is run by computers which rewards and recognizes their most important customers. The team who work alongside the computers manage all forms of communication with the frequent flyers including letters.
The partner liaison team work closely with the loyalty team as they are the core of the flying club. Linking both teams are the flying club members and contracts with potential partners to provide a huge selection of rewards to those part of the frequent flyers programme.
Virgin Atlantic`s research team measure customer satisfaction. They research everything from the punctuality of the flight departures to the length of the check in queues and the quality of in-flight entertainment and general service. All the results are then gathered and fed back to the managers globally and they then provide the airline with valuable opportunity to review and improve services where they can.
The press office for Virgin Atlantic handle is direct communication with press, television and radio. They also work with Virgin Atlantic with their main press office in London. The press office drafts and distributes press releases and providing journalists with information about Virgin Atlantic
The database marketing team work closely with the flying club team as they manage and maintain their customer database. Their database holds a wide range of information including customer details, targeted campaigns. These databases are also used to produce management reports and to track to mileage of their most frequent flyers.
Market research – how?
Virgin Atlantic carries out market research so that they can find out what their customers want. They can do this by using primary research or secondary research. If Virgin Atlantic were to carry out primary research they would use a range of surveys, online surveys, face to face interviews (for example during flight by the cabin crew), sampling (this would be done by focus groups), or questionnaires.
An example of an online survey that Virgin Atlantic uses.
Secondary research is research that has already been carried out and is being used again. It is split into two categories internal and external. Some examples of internal research is primary research that has already been done and is being used again for a different or similar purpose. They might also use previous sales figures or their customer base and loyalty card for Virgin Atlantic this would be their frequent flyer program me.
External research is anything that has been done outside of Virgin Atlantic. For example Virgin Atlantic might use competitor data to see where they need to improve or, to see where they are outstanding compared to other airline companies. They might want to use:
- Previous sales figures
- Commercial publications ( mintel )
- Government publications
Virgin Atlantic may want to use previous sales figures as this will give them a better idea of how many flights they are booking and whether they should lower or raise their prices. By using previous sales figures they can also determine how many flights they have been selling and if they are selling more or less now.
Virgin Atlantic may want to use commercial publications because they can pay for secondary research which has been carried out. This would be useful for Virgin Atlantic because then they would be able to get what they need for a small fraction of the entire cost of having to carry out the research themselves. They can also buy secondary research on other companies, for example they may want to buy some research on British Airways so they can see where they are doing better than Virgin Atlantic. They could use this as a competition factor knowing what they need to improve on to make a bigger profit compared to British Airways.
Government publications are published every year and they show how every business is doing .Virgin Atlantic may want to use government publications because then they can see how well they are doing amongst other major airlines , for example how much profit they are making , how many seats they are selling on flights. They may also want to use them so they can see where they are compared to their major competitors so they can improve so they can give customers what they want and to be the best airline choice for people.
The marketing mix – 4 p`s
product
Virgin Atlantic will use all of their market research to come up with a products that everyone will want to use, some of things that Virgin Atlantic sell alongside flights on routes around the world are value for money, as they give maximum comfort for classes of passengers and they let customers know that they are getting what they are paying for .For example the televisions in aircrafts had larger screens. Virgin Atlantic also sell service, this can be anything from the flight to the airport lounges to the food served during flight. Most importantly Virgin Atlantic sells convince to their customers, as they have everything on their website and by having a website it lets customer book their own holiday from home , lets them choose what they want and it saves customers a journey to the travel agent . Virgin Atlantic is a large company and so they will have many products. Some of these are:
- The Virgin Atlantic Product – Upper Class Suite
- Upper Class
- Premium Economy Class
- Economy Class
- Virgin Atlantic’s new facilities at T3, London Heathrow
- Upper Class airport lounges
- Special features for children & infants
- Passengers with special needs
Medical Equipment available onboard
- Flying Without Fear
- Loyalty Programmes – Flying club
Through market research Virgin Atlantic have found and now offer a fun and innovative product, which includes a high quality service and is convenient for their customer. They do this by offering flights worldwide in three distinct classes. These are:
- Upper class
- Premium economy
- Economy
By doing this they are making sure that can appeal to everyone. For example within all of the flight classes they will have different features which appeals to the people who have chosen to fly using that class.
An example of this is in upper class Virgin Atlantic will give their customers a complimentary limo service on both sides of the Atlantic, in flight beauty therapy , personal 10.4 inch video screens, a sleep service ( which includes pyjamas , full size pillows , duvets and blankets ) and also on board a stand up bar .
In premium economy they will give their customers a dedicated check in desk, up to 6 inches extra of leg room, pre-flight champagne, fast track priority service through immigration borders and a separate cabin.
Finally in economy customers get a television with up to 43 channels of movies, music and games, a choice of three meals including a vegetarian option, ice cream during movies and a children’s service (this includes K-if backpacks, TV channels and special meals.)
Price
Price is an important part of the 4p`s of marketing . For Price Virgin Atlantic must decide how to price their flights and all their products, as this will influence their profit and loss. some of the ways that Virgin Atlantic could price their products are:
- skimming
- penetration
- cost-plus
- competition based
- loss leaders.
Skimming
Skimming is when there is a release of a new product and it is made as expensive as it can be with consumers still buying it . For Virgin Atlantic this could be their release of a new route and they will make the route more expensive as there will be no other current airlines doing the same route. Another example could be if Concorde was ever brought out again, Virgin Atlantic would have a prime opportunity to make the prices expensive as it was a popular plane and it cuts flight time. For Virgin Atlantic they do have this opportunity as they are bringing out a new plane called the dreamliner, they have developed this by using public demand and what they want. The public always want new products and this is giving Virgin Atlantic the perfect opportunity to make the prices high.
penetration
Penetration is where companies will price lower than other airlines on particular routes which they are running as well. For example if British Airways were running the route Heathrow – Tokyo Virgin Atlantic might buy that route and price it lower than British Airways so they could get into the market for that particular route. After buying the route Virgin Atlantic would then slowly increase the price of the route. However Virgin Atlantic cannot compete with airlines such as Ryan air and easy jet as they are so cheap to begin with.
Cost – plus
cost-plus is where all the products being used are purchased for as cheap as possible and then a percentage of the cost is added on. For Virgin Atlantic this would involve them buying all their in flight products such as food, duty-free and add on a percentage of the cost to create a profit.
Competition based
Competition based is where prices will be put close or the same as other products. Flight costs would be a large factor of competition between other airlines as they all want to have the lowest possible price without making a loss. For example if Virgin Atlantic wanted to they could base all their prices around what other airlines have priced their flights at. British airways could price one of their flights at £500 then Virgin Atlantic at £500 as well. Other airlines could price the same flight between £ 500- £700 and Virgin Atlantic would then place their price at £600 in the middle due to the competition to be the best airline.
Loss leaders
Loss leaders is a pricing technique where products are priced low on purpose so that as they lose profit they will be attracting more customers to buy other products which they know they can make a profit on to make up for the loss they make on the loss leaders. For Virgin Atlantic this might be the duty- free they sell on board. As they can afford to sell these cheap as they are making the money back with the price of the flights.
Place
Place is an important part of any business especially for Virgin Atlantic as they need to be where everyone can reach them such as the airports and where people know them well. An important aspect of place for Virgin Atlantic would be the place they are situated and where they fly to.
Logistics/ distribution
Logistics is the distribution or movement of good around the country. For Virgin Atlantic this would be where they are promoting their flights. For example travel agents. As they use travel agents they will pay agency commissions. Virgin Atlantic use direct marketing techniques to gain new customers but also to retain current customers. By doing this they are extending new products and services to them and this reduces some costs. Also for Virgin Atlantic you can book your holiday/ flight over the internet saving Virgin Atlantic 15% on agency fees.
Transportation
Transportation is the movement is what they would use, for example most companies would have a fleet of Lorries where as Virgin Atlantic have an aircraft fleet. Currently their fleet operates with 38 aircrafts. Virgin Atlantic as well as many other Airlines like keeping the aircraft in the air for as long as possible as this is part of keeping the low cost, as they have to pay for every time they land and use one of the bays in the airports.
Location
The headquarters of Virgin Atlantic is situated in crawley, west Sussex near London Gatwick airport. Virgin Atlantic operate between the United Kingdom and North America , the Caribbean , Africa , the Middle East, Asia and Australia from the main base at London Heathrow Airport.
- Keeping aircraft in the air as much as possible is another important part of the low cost jigsaw. However, the company has been challenged by the European Union in relation to anti-competition laws.
Promotion – billboards , tv adds , radio , internet , leaflets, posrters , sponsership , branding , special offers,
Promotion
- They spend as little as possible on advertising.
- They do not employ an advertising agency. Instead all of the advertising is done in-house. In fact O'Leary himself overseas much of the promotion of Ryanair. They use simple adverts that tell passengers that Ryanair has low fares.
- Ryanair employs controversy to promote its business. For example in 2009, the company reasoned that passengers would be charged £1 to use the toilets on board. O'Leary reasoned that passengers could use the terminals at either the destination or arrival airport. This would speed things up. It was reasoned that this is what passengers wanted - since they did not want other passengers leaving their seats and walking the aisles to go to the toilet. O'Leary also argued that larger passengers should be charged more since they took up more room - again it was reasoned that this is what the majority of passengers wanted.
- Some of their aircraft are decorated in the livery of advertisers e.g. News of the World, Jaguar and Kilkenny (beer).
Enterprise
Team work
As most big commercial airlines feature a top down organizational structure on paper. Many operations that happen in a airline rely on the success of other operations happening in the same airline. For example a pilot won’t be able to fly without the support of enough flight attendants.
Through team work there can be many benefits. Team work is essential so that the workload can be shared between everyone on the team and there for no one on the team has all the priority put on them. By doing this it will also improve efficiency and the rest of the team will provide ideas and give support to the other team members. Also they are more likely to be successful. As well as these benefits of teamwork there is also the opportunity to identify talent.
Team formation
Team formation refers to the 4 stages that are used to create a good team. The four stages of team formation are :
- formatation
- storming
- norming
- performing
the formation stage is where team members will meet and sometimes express their expectations and concerns about what they are doing. As a team they will often set goals and identify members strengths and discuss weaknesses. In more successful teams each member comes to feel that they are now starting to become part of the team and that their particular talent or skills are needed or valued. During the forming stage they must know why they are participating, what they are gaining and what they have to offer.
The storming stage is the most diffuclt stage to get through as confilt , disagreement and personalities clash. Very little communication occurs because no one is listening and there are some members of the team in this stage ares till unwilling to talk openly. The team during this stage might also set goals which are unrealistic as the team can not reach a comprimise.
The norming stage is where the conflict has been resolved and harmoney among the team members emerges. Now in this stage the team will start to feel more comtftable around each other and will feel more secure to express their views. The most important improvement from the last stage is that people start liostening to each other. Team members will now decide on who will have the power in the team , who is the leader and what all other team members roles are.
The performing stage is when a team is able to perform and be able to work effectivaly and productivly. When a team has reached the fourth stage they can be considered a real team. All team members will be honest with one another and will work as one unit. The teams effectiveness show now be much higher than what it was before in the storming stage.
