British Airways

Table of Contents
Executive Summary....................................................................................................................................... 3 Introduction .................................................................................................................................................. 4 Task 1: ........................................................................................................................................................... 5 Dynamics and Trends in the Airline Industry ............................................................................................ 5 Marketing Activities by British Airways .................................................................................................... 5 SWOT Analysis of British Airways ............................................................................................................. 7 (The Write Press Journal, 2012) ................................................................................................................ 7 PESTEL Analysis ......................................................................................................................................... 7 Internal Advertising................................................................................................................................... 8 Task 2: ........................................................................................................................................................... 9 Market Research ....................................................................................................................................... 9 Importance of Market Research for British Airways ................................................................................ 9 STP Analysis for British Airlines ............................................................................................................... 10 Marketing Mix ......................................................................................................................................... 10 Case Study: British Airways Executive club and its Marketing Mix ........................................................ 11 Service Innovation .................................................................................................................................. 12 Task 3: ......................................................................................................................................................... 14 Competitors of British Airways: .............................................................................................................. 14 Suggestions to increase competitiveness ............................................................................................... 14 Recent Case: Online Shopping and Delivery on Board ........................................................................... 15 Strategies to build competitiveness and gain sustainability................................................................... 15 Conclusions: ................................................................................................................................................ 17 Bibliography ................................................................................................................................................ 18

Executive Summary
Aim: The aim of this research is to understand the aviation market in Europe and the position of British Airways as compared to its competitors. The research also aims to understand the marketing activities carried out by British Airlines. Topics Covered: The major topics covered in this report are the trends and market dynamics being followed in the marketing environment of the aviation sector and briefly talking about the British Airways. The report also covers about the market research, its benefits, marketing mix with its components and a small case of the service they are providing and understanding all seven marketing mix components individually. Post that, it covers the recommendations to the British Airlines so as to go to the next level. Key Findings: It is found that the Airlines spend a lot on the primary research and based on their research findings, they improve and target the exact audience to get a better profitability. With respect to marketing, they try to position themselves as a premium airline and hence pricing is higher keeping the luxuries at a greater extend for the high income segment. Recommendations: It is recommended to the airlines that they must try to cut down cost keeping basic luxuries common. They must also deviate their concentration in Europe and move towards expansion in the developing countries in the Middle East.

Introduction
The aim of the research is to understand the volatile aviation industry in Europe and the role played by the British Airways. The report aims to understand in details the marketing activities currently done, its impact on customers; the new marketing activities to be done that increase customer retention and provides a higher profitability There are three major tasks in the report, the first one is covering the dynamics in the aviation industries and the marketing activities done by BA. The second task covers the importance of the market research, both primary and secondary. It even covers the STP analysis and the Marketing Mix with respect to a specific example. The third and the last task covers the recommendations to the airlines with certain fresh ideas which can help take the company to a higher profitability level. About the Airline: The company was founded on 31st March 1974, British Airways (BA) is the largest airline based on its number of flights, international flights and destinations in the United Kingdom (UK). It has continued to grow since privatisation in February 1987. (Airways, n.d.) British Airways, one of the esteemed and biggest companies in the aviation sector now has even the new Boeing 787 Dreamliner. This indicates companys inclination toward adaption of latest fleet of aircrafts and moving towards excellence. (White, 2013) The company has faced a lot of problems a few years back, but luckily has come up from it and now doing pretty well and rather much better than its competitors. The airline believes in innovation and has a trend of showcasing good marketing activities.

Task 1:
Research, analyse and evaluate the dynamics and trends within the marketing environment of your chosen Airline Company

Dynamics and Trends in the Airline Industry

British Airways has been through a rough ride through 2010 with the airline industry facing a tough time due to recession. This saw a decrease in the number of passengers and a slowdown in business with a loss of about 500 GBP, along with a strike of the cabin staff. However, there was a turnaround in the business when British Airways was joined by Frank van der Post as an addition to their marketing team in the beginning of 2011. After the joining of Frank as managing director in customer experience and branding, British Airways perception in the minds of the customers took a turnaround. Its rise of affection among the travellers helped reach the second place in Brand Index Buzz among many other airways. British Airways could achieve a balance in the highly unsteady times for the airline industry through several branding and marketing campaigns. Also, the challenging economic times and their effect on the airline industry had affected the business in a negative way. British Airways came up with new strategies that made it rise back to its previous position in the market and representing brand value and customer delight. (Harway, 2007) British Airways has always been an innovator in aviation. The new slogan of To Fly, To Serve helped build confidence among the customers and gained the lost goodwill. Also, British Airways announced an investment then, of about GBP 5 billion which had been worked out on a 'five year plan' to improve on customer-experience, services and increasing capacity by installing new aircrafts, and other services. Also, British Airways used a 90 second video which featured on the television which was a nostalgic tribute to the staff and members of the company that had been with the company for so many years. The bounce back campaigns not only gave British Airways a new purpose, but also, clarified the values core to the company and to its members, including a staff of 40,000. (Airways, n.d.)

Marketing Activities by British Airways

The British Airways advertisement displayed the company's history which was as old as 92 years and their heritage. It provided a great boost to the campaign, and had been researched very well, both on an internal as well as an external basis.

Further, the Olympics in 2012 presented an opportunity to British Airways to adhere to their promise of To Fly, To Serve and even cater to a larger market from a different demographic. BA sponsored the Olympics as the first tier sponsor and this helped it to come into limelight at the games through the massive campaign that it had organised. British Airways was the one to have organised the transfer of the Olympic flame into the country and called it the FIREFLY' plane. Another part of the campaign was the Park Live Event, where it arranged for large screens to be set up in the Olympic Park along with picnic benches. One major marketing strategy risk that British Airways undertook was the Don't Fly' campaign. It conveyed to the British residents to stay in the home country and support their players. This strategy paid off successfully. What BA tried to communicate through this was that as an airline that usually performs the function of flying people in and out of the country, it supported its home country and encouraged its residents to support the games and their countries. According to the managing director in charge of marketing and customer services, the campaign of promoting the home games was a huge advantage as it connected to people at an emotional level and hence turned the event into a huge success. To further soften the serious image, British Airways had put in a bag race advertisement which showed baggage services racing for different luggage of the travellers. The Olympic campaign helped British Airways to try different marketing strategies and experiment with their different campaigns. It helped them reach out to a larger audience and customer base and also maintain their existing customers. (THEDRUM, 2012) BA also acquired the BMI in April, 2012, which basically points out to its intention of winning back their market share. British Airways also attempted to reach a wider segment of customers by repositioning themselves to use the opportunity of short haul customers. It also compared the price differences between different low cost carriers to gain transparency and communicate the hidden charges to customers to be mainly looking at the cheapest means of transport available to go from one point to the other.

SWOT Analysis of British Airways

Strengths: Brand image and awareness Huge organization size Strategic Alliances Solely dedicated Terminal 5 Opportunities: Can be present in developing countries More expansion via online medium through digital marketing Building alliances with new companies

Weakness: Management of manpower Lack of trust by customers No openness towards innovation Reliant more on UK markets Threats: Policies and laws by the government regarding air rules Price competition by low cost carriers High fuel costs

(The Write Press Journal, 2012)

PESTEL Analysis
PESTEL Analysis helps us understand the effect of the environment on the organization Political: Since Airlines have to follow strict regulations by the government to avoid terrorisms and attacks, political decisions affect all the airless drastically Economical: With rising fuel cost, British Airways still have to reduce the prices else face severe competition by the LCC (Low cost Carriers). Social: Going by demographics, the young generation is busy travelling for business travels and the older generation has time to visit to tourist places. Flight rates can be customized accordingly Technical: More investment should be done in technology and British Airlines must ensure that they are updated with the new technical devices that can be put in to their use Environmental: British Airlines takes proper care of the environment factors like no smoke from airlines, proper maintenance of fleet, using green materials wherever possible and they even provide with their environmental reports.

Legal: British Airlines have already signed the open skies agreement and abides by it legally. Also, by maintaining proper relationships with employees and customers, they avoid any legal problems. (The Write Press Journal, 2012)

Internal Advertising
When you are advertising to the end customers who are your main target audience, you must also remember to advertise to the internal members as well. Otherwise, the communication and brand image outside the company would be very nice, but the same would be very bad inside the company. Many companies believes in advertising regularly within the organization; this also keeps the employees motivated to an extent. Internal advertising to the staff and communication inwards is also a very important part of research when it comes to development of strategies. The employees were made to feel like an integral part of the company and feedback was taken from them regarding the customer experiences, their requirements and suggestions for the same. They also passed the video of their new advertisement to the staff asking for their opinions a night prior to the launch of the advertisement to the public. It helped to establish internal communication and strengthened the employee morale. British Airways reported a profit of about GBP 8.1 million, in the first half of the year itself which was due to the positive impact of the marketing campaigns. Even in an industry where there was a lot of turbulence in the condition of the companies in the industry, British Airways marketing efforts helped the company to regain its image and even tap a larger client base. It also helped in creating happier employees and changed the perception of British Airways internally as well as externally. British Airways has achieved progress and altered its position in the minds of the customers and its ranking in the industry through its marketing strategies. (Bacon, 2012)

Task 2:
Using appropriate sources, discuss the importance of market research, marketing mix and service innovation for your chosen Airline Company

Market Research

Definition: Gathering information about the target markets or customers or any other information in an organized way is called market research. It differs from every industry to every company and its needs and goals. Market research is very important to gain an edge over competitors. Generating revenue of more than $501 billion, the global airline industry expanded by 12% in 2010. It is expected to grow by 42% by 2015. Doing a Market Research would never go waste, the analysis and report of one research may sometime be helpful while conducting another research or some other related research project.

Importance of Market Research for British Airways

In case of BA, it is faced with huge competition domestically as well as worldwide. Hence it will help to identify the market size, need, competition, understand opportunities and evaluate brand success. Primary Research: The survey through questionnaire can be divided into two main sections: the current and the past situation. The current situation can be further bifurcated into two categories: passenger information and flight information. The first section collects information about the current situation such as airports (place of departure/destination), travel times, cabin class, and purpose of travel as well as customer characteristics such as age, gender, nationality and ambitions. This section fulfils the purpose of collecting as much demographic data as possible as well as identifying unique characteristics of the airlines customers that includes the individual's personality and the way they connect to their favourite airlines. The second part of the research attempts to investigate the reasons behind the customers decisions i.e. why he/she chose British Airways and also how they are ranking the airline compared to other competitors. This section aims at observing the customers perception about British Airways and comparing it with other competitors.

The British Airlines does spend a lot of money into research every month. They believe in taking customers response and they target their customers dynamically based on responses and even study some of the important hypothesis in detail. (UKEssay, n.d.)

Secondary Research: it gives quick information but the data of past. This research helps BA understand the increase in customer base, sales, profits, employee retention, and information recorded on strategic implications.

STP Analysis for British Airlines

STP analysis stands for Segmentation, Targeting and Positioning. Segmentation: British Airlines segment their customers based on geography, demographics, psychological factors, behavioural factors, their occupation and their income levels. People having low income cannot travel by British Airways and hence they target only the high income people. They divide people into different segment, and according to the price and services, they target their audience. For demographics they can segment as per the age groups and categories of students, working professionals and older segment that doesnt travel much. (Rahman, 2010) Targeting: It is very important to target appropriate audience; else you waste your marketing cost. According to the segments created by the Airlines, they target the high income group, the working professionals rather than the older segment, in case of geography; they target the people mainly in UK. Targeting is very much necessary and hence the firms do survey to find out which segment should they target. For Example, British Airlines carries Think Customer survey every month for 36,000 people and based on its analysis, the segments are chosen and targeted. (UKEssay, n.d.) Positioning: Positioning is the task of reaching the hearts and brain of the targeted segment. We must understand how we should advertise so that the attributes of the service we are marketing should be matching or at least aligned with the attributes of the customers in the target segment. (Anon., n.d.)

Marketing Mix
Definition: Marketing mix is the framework used for developing the overall brands, products and services. It has basis of 4Ps along with the blend of 3 more since we are dealing with the airline industry. BA being in services sector caters to 7Ps in its marketing mix.

7Ps of marketing mix are: Product Price Place Promotion Process People Physical evidence

Case Study: British Airways Executive club and its Marketing Mix
Studying the case study well learn about the importance marketing mix plays in formation of BAs standards of where it is now presently. The example of British Airways Executive Club mobile application proves to be useful for studying the extended marketing mix because it was a service that was introduced into the world when mobile technology (and hence mobile marketing) really began to take off. Few years ago, British Airways, for its Executive Club Program created a mobile application. This program brought the convenience to customers for collecting frequent flyer mails, making reservations, and managing flight schedules much easier. The app is available on the Google Play Store, Apple Store, and Windows store and even on the Blackberry App World. (Nguyen, n.d.) Product: Extending the Executive Club experience with a mobile application and allowing members to track their miles, reservations, and flight information just a click away. Price: For Executive Club members, its a free service. Place: The application was made available on its website and across mobile application stores. Promotion: British Airways realized that a significant percentage of its e-mail subscribers open mailings with a mobile device. The decision was taken to focus its marketing campaign on mobile-focused emailing promotions by the airlines. In addition, it also segmented the campaign down to four mobile platforms: iPhones, Androids, BlackBerrys, and desktop (as mentioned earlier) computers making it easy for people to download the right application for the right mobile device. Based on the device they were using, Mail recipients were provided tailored emails. People: The mobile application itself is personified for acting as that extra person in customers company. This extra person is there along side with the club member ready to answer his or her questions at any time. What time is the boarding? Which gate should I go? Did I forget to collect my boarding ticket? The application is there on standby, always ready to answer.

Process: The application is comparatively easy to use and allows users to access any needed information (such as flight itinerary) at any point of time. Physical Evidence: Reviews give its main form of physical evidence. It has received nearly 4,000 application user reviews so far. (Desai, 2011)
Results

Over 250,000 of the mobile applications were downloaded shortly after its launch. Its e-mailing campaign gave a large contribution that achieved the following results: mobile e-mail open rate of over 50%and a click-through rate of 25%. Today, the British Airline Executive Club mobile application is considered to be one of the top ten airline applications.
Executing & measuring 7Ps effectively

Lets analyze about applying and measuring the products and processes from the 7Ps. Using the example of a mobile application: companies need to make sure that they are sending out something useful and that is easily available to the end users. If you are planning to make your own company's mobile application, consider going for tools like the PhoneGap or working with a marketing agency that has deep experience in creating mobile applications. A great way to structure and analyze what you are trying to create and deliver to customers is by applying concepts from the 7Ps of marketing It can be used to think at a very high level as much as it can be used to analyze results in great details.

Service Innovation
Innovation is highly considered in coping with international markets, where the competition as well as technological world changes its phase every moment. BA requires regular innovation plans to stay in its competitive position. During past, a global financial crisis set against BAs high exposure to the premium business travel market which resulted in large losses. BA appears to have regained its footing with several key innovative programs and plans now in motion, with those difficult days largely behind it. (Pillsbury, 2012) The benefits of service innovation for British Airways:

GBP 5 billion investment British Airways announced in September 2011 the five-year GBP 5 billion investment program which encompasses several key areas of focus including BAs customers benefitting from new aircraft, updated World Traveler (economy) and World Traveler

Plus (premium economy) cabins, and an array of improvements to in-flight service, such as a more personal service and catering. To Fly. To Serve. Central to this effort is BAs GBP 20 million branding campaign, The To Fly. To Serve. advertisement campaign has the goal of re-igniting passion and belief in the BA brand among its customers and staff. A 90-second commercial, created by Bartle Bogle Hegarty, was launched and premiered on the airlines official Facebook page. Onboard service innovation With special recognition of its top-tier customers, BAs business plan is to deliver outstanding passenger service for all passengers. Its investing in additional training of its flight attendants. Equipped with Enhanced Services Platform feature of iPad 2, attendants know to store and receive relevant passenger details on or before time, such as meal preferences, itineraries and other data items that allow for a more tailored approach to in-flight service. Height Cuisine Hospitality being the major factor in airline business, British Airways has tapped that area of innovation too. To make meals served on airplanes taste better, Height Cuisine is the partnership with English celebrity chef Huston Blumenthal to come up with new, healthy menus and innovative culinary approaches. Premium Services London is a global financial hub which gives BA a very high percentage of business travelers. The airline has upgraded its lounges at Heathrow and launched a new First Class cabin alongside two other niche premium concepts. Meanwhile, BA subsidiary openskies, provides a niche, boutique flying experience on its route between Paris Orly and New Yorks Newark Airport. The airline added an Economy cabin to its premium-only cabin and every passenger has access to an iPad.

Task 3:
As a newly appointed marketing manager of your chosen Airline what marketing techniques will you use to increase competitiveness and sustainability of your company? Your suggestions must be inspired by appropriate theories and real-life/academic case studies

Competitors of British Airways:

There is a huge competition in the aviation sector that is further increasing by the new players coming in every now and then. This industry is not that easy for many competitors to come since a high amount of investment is required. Its not only the money that is involved in this business, but the risks and documentation and arrangements that need to be taken care of. The business is very volatile and both, the entry as well as the exit is a difficult procedure. The competitors in the airline industry, which give British Airlines a tough competition, are Emirates, Cathy Pacific, Lufthansa, etc. All of them are known for something or the other. They all are in the service industry. The net of all flights is that you are reaching from point A to be point B in a given period of time. The difference that matter while is the experience you have during the time of travel. Being in the service industry the company charges you extra for giving you a good experience during the journey. There can be flight ABC charging X$ and another flight could be DEF charring 2X$ for the same journey route. This difference is just for the experience you would have during your journey. (Hoovers, n.d.) Hence, the company must charge the amount, which is almost the same as its competitors and provide some special benefits every now and then. Giving free pick up and drop from airport is a small thing, but if marketed properly can be the turning point for few customers to shift from other airlines to British Airways.

Suggestions to increase competitiveness

The best ways to tackle competition is either crash the price and make it so cheap that other companies cannot afford that less amount. Another way is to develop a Unique Selling Proposition commonly termed as USP. When the customer decides to take upon a service from one of the vendor, either the cost is looked at or the quality of travel. (Peoples, 2012) Today, in such a competitive world where the operational cost is so high, fuel cost is so high, parking charges, airport charges, etc. are very high and hence bringing this down is a bit tedious task. Rather than focussing on price, company should work on the unique features that attract the end customer and target them to buy your premium services. (McGraw-Hill, 2010)

Recent Case: Online Shopping and Delivery on Board

This is the unique Service provided only and only by British Airways. No one had an idea to of such a service that you can buy something or gift someone while in air. British Airways started this unique service and the best was its marketing. It was marketed well mostly through the online media and not much of traditional media. Having such unique quality results into a better brand image. Not only this, British Airways provided many gifts to many customers who bought some deals whose product value is on a higher side. (Highlifeshop, n.d.) British Airways has its own publication of an E-magazine; this magazine is sent to all its loyal customers a bit in advance. Sending this magazine would help the end customer realize what all things they might just require and some might just choose one looking at the deals or the discounts going on.

Strategies to build competitiveness and gain sustainability

As the cost increases, all the companies start to increase the ticket size and down the line the prices are at par. Hence, when the customer chooses to fly with some airline, he or she would choose such an airline who has some added benefit or maybe some other exclusive luxuries, etc. Invest highly in recruitment and hiring of the crew in the airlines so that these people are good at communication and even look good. It is not a fixed criterion to keep a female or a male as a host in the aircraft. The current trend it is to keep more females as the front office staff and transferring guys to the back end office (Truxal, 2012) Developing Loyalty Programmes that encourage more people to buy flight packages in bulk. A special dedicated Sales Team must look into corporate accounts which would help us get the leads and convert it into clients. Many aviation companies ignore the fact that they need to go to customers; companies think that they have a good presence online and the customer will be pulled online itself. You cannot ignore the fact that many clients might not use the online portal or might be booking through someone else, for that people should visit the corporate clients to understand the requirements and try to get the same in bulk after meeting them. (Quy, 2009) GAP Analysis: By performing this GAP Analysis, one can come to know that what kind of GAP is going on in the organization currently and how to reduce or eliminate the same. One must be bothered to continuously determine what kinds of GAPs are present currently and what may come down the line. The major types of GAP Analysis are: GAP 1: It is the difference between the listening and thus creates confusion between the company and the employee.

GAP2: The second GAP is the one which exists at the company level only. The gap focuses on the difference between the designs and standards created and it practical working GAP3: This Gap is the most important Gap since it is between the Service provider and the service delivery. If the company assesses and finds that this GAP exists that means we need to work hard on it. GAP4: This Gap is caused when there is a difference in the delivery section and the external communication to the customers Digital Marketing: Last, but not the least, Digital Marketing should be taken to a new level while marketing the British Airways. Technology is going ahead day by day and so are new and new tools coming up to make life simpler. With the help of Digital Marketing, you can track what kind of customers are coming to your Website, what type of customers are leaving your Website. You can now follow these customers wherever they go and even collect feedback from the customers leaving the Website. This feedback gives you a better understanding that where the company is losing customers to its competitors and how can it retain them back.

Conclusions:
The aim of the research of studying in detail the marketing strategies and activities done by the British Airways is completed successfully and many types of analysis such as the SWOGT Analysis, the PESTEL Analysis, the STP analysis, the marketing mix, the 7 Ps of service marketing and even the GAP Analysis are carried out. To summarize the report, we can say that the British Airways is a major and established firm in Europe; in this sector of aviation the market is not controlled by the companies or the market forces, it is the government rules and regulations that have bonded certain laws. The marketing strategies and innovations hold a great deal of importance for British Airways which caters to massive customer base and plans to expand. The following factors can further help with its growth Key findings of the report explain the premium segment, high income groups segment is enjoyed by the airline. The airline has a very strong brand image, but only in the Europe. Outside the Europe, the company needs a lot of branches and they need to expand to the developing countries majorly in the middle-east. The company needs to cut some costs, since the fuel costs are rising and the disposable income of the customers is either reducing or constant and hence people will start moving to Low Cost Carriers down the line if the Airlines doesnt deviate from their current strategies. Some Recommendations to the Airlines:

Take and Implement Reviews understand what the customers think about the application overall and exactly why they like or dont like about the service. Reviews will give you a general indicator on what youre doing right and what you can do better. Technical Improvement - Make sure you implement new versions that will address product or service short comings and include what people want in the application this is collaboration between those making the application itself and the product owner of the application. Customer Retention - Your first sets of happy customers are critical. They will help you win more customers with word of mouth publicity or deter customers with physical evidence (i.e., reviews and ratings). Competitor Analysis The airline must do competitor analysis on a regular basis. With the help of analytical tools, you can measure what types of people are leaving your Website and going to your competitors Website that help you study the reasons of people going back

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