British Airways Marketing Report Essay Example for Free

British Airways Marketing Report EssayCurrent sh be price is 225 with a range of between 224 and 289. Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably. BA used to operate in an oligopoly securities industry however passim the last century this has changed. Previously it was only large national companies that had enough money to provide flights however nowadaysadays the market operates in perfect emulation with high barriers to entry. BA screwing use trade to promote their product, drive market share, anticipate customer requirements, satisfy customer demand and at long last gain ground a profit. The Marketing Mix The marketing mix is a combination of 4 Ps (product, price, place and promotion) that should be used in society with each other to ensure a competitive edge over other companies. The marketing mix is designed to produce mutu completelyy satisfying exchanges with a scrape market. Prod uct BAs product in essence relates to the flights digested. However, the product can be drilled down into item areas ranging from the aerodrome lounges around the world, the extras that you can buy on board such(prenominal) as model BA aeroplanes or even package holidays.Each of these has been specifically betrothed to meet customer lodgeations (which are highlighted in the section of the report titled target market). This part of the marketing mix focuses on how BAs products are managed and in the Guardian case study article titled BA, Iberia and American Airlines tie-up heralds new era of transatlantic travel dated 06/10/2010 it shows how BA leave made an executive decision to link their websites with other companies to brook the possibility to offer a higher number of routes (products) to their potence customers. hurt Price is simply the amount of money customers must pay to obtain a product. BAs price is generally higher than their competitors although this is because they gestate they are offering higher quality. However, in recent cadences BA appear to be losing the price war against low cost budget competitors such as Ryanair and Easyjet. Following this, BA have undergone marketing strategies to reduce their price and carry out sale discounted periods. BA demand immediate payment for their products, do not give credit terms or allowances. PromotionIn the early days when BA was a nationalised company and the market was an oligopoly, they didnt have to promote as much, as contest was minimal. However, with the growth of new players in the market BA have resulted to advertising in the by-line areas tube place (especially the Jubilee Line red towards Canary Wharf to target higher earners), newspapers (such as the Financial Times and Sunday broadsheets), airports (mainly in Heathrow and Gatwick their primary hubs) and adverts between TV programmes, offset from September 2009 such as the News, Politics programmes and factual documentaries.BA al so use personal advertising techniques with their advert Come together its Christmas. This uses frantic targeting to encourage people to buy their product to visit loved ones during this period. See Appendix 2. Place Currently BA do not operate from capital of the United Kingdom Stanstead however a marketing decision could be taken to include this to their portfolio. This would give them a higher percentage of UK airport utilisation however a cost benefit analysis could prove this move to be not so advantageous.BA have recently taken on Easyjet and are now offering a Gatwick-Marrakech route at discount prices. This gives customers higher choice and allows BA to remain competitive and attempt at satisfying the needs of those who expect to pay less. Once BA have exhausted the 4 Ps, a S. W. O. T. Analysis will be completed to determine and examine inwrought strengths and weaknesses and, external opportunities and threats. S. W. O. T. Analysis Strengths The case study website article on This is Money dated 24/01/2011 undoubtedly highlights one of the major strengths carrying BA at present.The coalition between BA and Iberia has strengthened its financial position and is a step closer to creating a multinational multi-brand airlines group. BA take pride in their strong brand, high quality service and offer prestigious first class airport lounges to ensure that their customers are taken care of to the standard they expect for the prices they are paying. This is what has allowed BA to charge higher fares and gives them the image that higher class passengers are willing to pay for.By linking themselves to fellow competitors (American Airlines) and strengthening their position by joining the One World syndicate, BA have encouraged higher revenues from this tactical decision. Following the strong decline throughout the global recession, BAs strength is bouncing keystone according to the BBC News Article British Airways in first profit for two years. Although the ri se in incomes and ultimately rise in profits was linked to higher cargo fares, BA were able to successfully cut costs and meet their carbon emissions targets also.Weaknesses Despite the above, BA has been renowned for strong continual dismissales as highlighted in the other BBC News Article British Airways reports ? 164m loss. The losses were mainly caused by the volcanic ash cloud and staff strikes both resulting in the cancellation of thousands of flights. Its reported that just 15 days strikes had cost the airline ? 142m. The strikes had also had a ostracize impact on their declining reputation making some people not wanting to fly with them anymore. BAs reputation was also hit when they were sued ? 10K by competitor Virgin for accessing their private files and consequently trying to poach business. If this wasnt bad enough, in 2009 BA were fined a massive ? 110m for price fixing cognise as a cartel and this is illegal. Although passengers accept that flight travel can be dan gerous, BA adds to its weakness with its own incidents. These range from a mid-air collision in 1976, a pilot being sucked out of the aircraft when a windscreen exploded and in 2008 a BA plane at Heathrow missed the runway and crash-landed.to a greater extent recently, BA has been investigating prices of flights to some destinations that were being charged at 10 times the normal price owing to a system error online. This is going to make people think twice when booking with the company. Opportunities While the above 2 sections focus internally, opportunities and threats highlight those factors that can influence BA externally. The lifting of the recession in recent months has allowed passengers to review their transcending habits and hopefully create higher disposable income in households and allow the loosening of the belt for those corporate company credit cards.BA need to minutely position their marketing strategies at the right time in order to capture these people with that b it of extra money to spend and the report will focus on this issue in the following few pages. BA sold its Gatwick hub airport for ? 1. 5bn, although this was reportedly at a loss (as BA originally paid ? 10. 1bn for it 3 years prior), it gave BA the opportunity to invest its interests elsewhere and concentrate on a smaller number of airports. BA also sold its interest in the London Eye now sponsored by EDF, to focus on other projects. ThreatsBA has been hit by threats in recent years ranging from terrorism, bad weather, volcanoes and more recently the devastating earthquake and tsunami in japan and the civil unrest in Libya. Numerous flights have been call off to the Libyan capital Tripoli costing BA millions of pounds. Following this, BA has been forced to cancel their entire summer 2011 season of flight programmes. The events in Japan have also affected BAs programmes with flights to Tokyo disrupted. The case studies provided highlight how BA went into meltdown following the he avy snow suffered in the UK during celestial latitude 2010.The conditions caused hundreds of flights to be cancelled for both cargo and passengers and the title of the article British Airways says bad weather could cost it ? 50m sums up the situation perfectly. The terrorist events in the USA in 2001 still continue to make passengers nervous of flying, especially Trans-Atlantic and this is always going to be a sensitive subject that BA would find hard to market against. By doing so, they would not want to seem like they are publicising terrorism but at the same time have concentrated their marketing strategies on the highest standard of comfort and relaxability.A final threat is shown in an article by the Telegraph where BA is attacked by a social media Facebook campaign where Gatwick workers have criticised BAs Terminal 5 at Heathrow calling it shambolic and the page was even designed with videos showing the CEO of BA wrestling with baggage and trolleys. This damages BAs reputation and makes a mockery of their brand. every of the factors mentioned above in the marketing mix and S. W. O. T. Analysis are important for BA to consider however if the company does not have a target market to aim their products at, the company would not be able to survive.British Airways order Market and Positioning Strategy In order to ensure BAs products are directed at the correct auditory modality to maximise revenues and profits, careful market research needs to be invested in to find a target market. The basis of target marketing is market segmentation which splits the market into groups of potential customers that have the same characteristics. From the 3 marketing strategies, its believed that BA use a differentiated strategy as they focus on several specific areas of the market to target. The characteristics below offer ome possibilities that link all of BAs customers together. Watch the News on television Celebrities Speak a 2nd row Middle/Upper Class Holiday in non-Eu ropean destinations Read non-fiction In full time employment or retired Have higher disposable incomes By segmenting the customer base to determine a target market BA split the market depending on the following variables * Demographic age, gender * Geographic where the target is based * Geo-demographic size of households, number of cars etc.. depending on location * Psychographic lifestyle, attitudes Behavioural the relationship between the target market and the product As the points show in the round of drinks above, BA focus their marketing strategies on those that have higher income and appear in the middle/upper classes of the population, this is evident from the prices of their products and the quality of the service offered. Both genders are targeted equally with the age range (generally) being between 35 to 65.The BA advertising strategies are positioned to target those situations that their customers can relate to and dream about i. . luxuriousness holidays, comforta ble flights and a reliable service. This concentrates on the behavioural variable. Geographically, as BA is a British company, the target market is centralised in the UK however following partnerships with fellow companies such as American Airlines for example, a wider global base is reached. BA have positioned their product away from their low cost budget competitors acknowledging that they offer a more luxurious alternative to cheap travel. Their positioning strategy can lso be seen in the product class membership which again, separates BAs service away from the Easyjets and Ryanairs. By doing this, BA have created their own competitive advantage and have taken an alternative route to satisfy other customers needs that are not centered around saving money. Marketing Recommendations In order for BA to evaluate how successful their target market strategies and their positioning evasive action are, the report recommends that the company should see how many levels of Maslows Hierarch y of Needs are being satisfied from a purchase of a BA flight. This can be seen in Appendix 3.Psychological needs SATISIFIED shelter from the cold, provision of food and oxygen * Safety needs SATISIFIED provision of a safe surround and reassuring customers * Belongingness and love needs N/A * Esteem needs N/A * Self-actualization needs Possibly relevant to those who are over-coming their fear of flying. Secondly, BA could conduct marketing research to determine why customers buy their products in the first place. This could be conducted as a quick questionnaire either in-flight when the customers are all in one place at the same time or as a mandatory set of questions when booking flights.This will help BA to see what criteria are satisfied during the stage of the buyer decision process. There are 3 possibilities however the report recommends that BA would come across the most popular varible below * Routine Response Behaviour Customers who are frequent flyers, possibly members of the Executive Club, they are aware of the low cost competition however have a loyalty towards BA and favour their service. Appendix 4 shows where the report deems BAs product to currently be in the market.By carrying out the market research above and with the new strong group behind the company, the brand could move backwards in the graph and back and return to the growth stage. This can also be said of Appendix 5, by moving BA from a question mark in the capital of Massachusetts Matrix and positioning it in the star category. The report recommends BA to unless extend their marketing strategy to concentrate on holidays and not just flights. This connect closely with an interview carried out by Marketing Week and BAs Head of Marketing, Richard Tams. We are devoting more and more of our reativity in any given(p) campaign to talking about holidays. BA should extend this further and working with tourist boards of exotic countries to promote cheaper package holidays with the support o f the Government in those further to reach luxurious locations. Tams states we are looking to move BA. com to much more into the space of a travel website rather than a flights website. The report strongly agrees with this marketing strategy and would fully support BAs proposals. This widens their product mix and allows a larger more diverse target market to be captured. oddmentThe report has analysed the company British Airways firstly concentrating on the product mix and a S. W. O. T analysis. The report has described the companys target audience and commented on the current positioning strategy of British Airways. The report has concluded with marketing recommendations that could be put in place to ensure the long time success of the company. Future events that British Airways will have to be aware of include the UK Government adjusting passenger air tax and carbon emission regulations. 2,682 words. Bibliography completely referenced throughout. Books Jobber, D. 2001 4th editio n Principals and Practices of Marketing, McGraw Hill International, P 810 * Kotler, P. 2010 9th edition Principals of Marketing, Pearson * Lamb, C. 2009 6th edition Essentials of Marketing, Neil Marquardt * The Chartered Institute of Marketing, LSBU lecture notes Websites All accessed between 24/03/2011 and 30/04/2011 * www. bbc. co. uk/news * www. dailymail. co. uk/travel/article-1369100/Libya-action-hits-British-Airways-flights. html * www. guardian. co. uk * www. google. co. uk/finance? q=PINK%3ABAIRY * www. iagshares. com www. letsstartthinking. org/quickreference/maslow-need-hierarchy. asp * www. marketingweek. co. uk/sectors/travel-and-leisure/airlines/qa-with-ba-marketing-head-richard-tams/3019560. article * www. news. airwise. com/story/view/1300492770. html * www. news. cheapflights. co. uk/ /ba-takes-on-easyjet-on-gatwick-marrakech-route * http//phx. corporate-ir. net/External. file? item=UGFyZW50SUQ9ODMyOTJ8Q2hpbGRJRD0tMXxUeXBlPTM=ampt=1 * www. telegraph. co. uk/travel/3 366187/British-Airways-staff-attack-passengers-on-Facebook. html * www. thisislondon. co. k/standard/article-23431527-london-eye-looks-for-new-sponsor-as-ba-pulls-out. do * www. thisismoney. co. uk * http//uk. reuters. com/article/2009/10/21/uk-baa-idUKTRE59K1D820091021 * www. utalkmarketing. com/UTMImages/2/BA_terminal5_2. jpg Appendices 1. ) Group anatomical structure of IAG 2. ) BA advert 3. ) Maslows Hierarchy of Needs 4. ) Product Life Cycle 5. ) Boston Matrix 1 . www. iagshares. com 2 . http//www. google. co. uk/finance? q=PINK%3ABAIRY 3 . Lamb, C, 2009 Essentials of Marketing 6th edition. Neil Marquardt,