Professional Documents
Culture Documents
Marketing Management
INTRODUCTION
The assignment focuses on analyzing and comparing two companies which belong to same
sector or industry with a marketing angle. The purpose states that the study of the module
Marketing Management needs to be implemented in virtual front by providing thoughtful process
to the company chosen and revise the value proposition. The assignment is divided into step-by-
step parts towards preparing a plan for the organization under study.
Answer: The requirement of the question speaks about the two companies to be selected of the
same industry which can be compared on various aspects particularly marketing strategy on a
global scale; I have chosen the following two companies:
1. British Airways
a) The value proposition of both the companies can be compared and differentiated based
on there marketing assets.
b) Both the companies are intense competitors in the airline industry in providing superior
customer service.
British Airways Plc, along with its subsidiaries, is engaged in the operation of international and
domestic scheduled air services for the carriage of passengers, freight and mail and the provision
of ancillary services. The Company’s principal place of business is Heathrow. It also operates a
worldwide air cargo business, in conjunction with its scheduled passenger services. The
Company operates international scheduled airline route networks together with its code share and
franchise partners, and flies to more than 300 destinations worldwide. During the fiscal year
ended March 31, 2009 (fiscal 2009), the Company carried more than 33 million passengers. It
carried 777,000 tons of cargo to destinations in Europe, the Americas and throughout the world.
In July 2008, the Company’s subsidiary, BA European Limited (trading as OpenSkies), acquired
the French airline, L’Avion.
Marketing Management
Virgin Atlantic Airways Limited (operating as Virgin Atlantic) is a British airline owned by Sir
Richard Branson's Virgin Group (51%) and Singapore Airlines (49%). It is headquartered in
Crawley, West Sussex, England, near London Gatwick Airport. It operates between the United
Kingdom and North America, the Caribbean, Africa, the Middle East, Asia, and Australia from
main bases at Gatwick and London Heathrow Airport, using a mixed fleet of Airbus and Boeing
wide-body aircraft. The company holds a CAA Type A Operating License to carry passengers,
cargo, and mail on aircraft with 20 or more seats. In the year to February 2009, Virgin Atlantic
carried 5.77 million passengers and made an annual profit of £68.4 million on turnover of £2,580
million.
Question 2. Analyze, evaluate, compare and contrast their mission statements, value;
comparative differentiation, position and marketing assets.
Answer: On a preliminary note it is important to understand the concepts of Mission and Vision
for a particular organization.
While a Vision is defined as the desired or intended future state of an organization or enterprise
in terms of its fundamental objective and/or strategic direction. Vision is a long term view,
sometimes describing how the organization would like the world in which it operates to be.
“Wikipedia- The Free Encyclopedia” defines Mission statement as “a formal, short, written
statement of the purpose of a company or organization.” The mission statement should guide the
actions of the organization, spell out its overall goal, provide a sense of direction, and guide
decision-making. It provides "the framework or context within which the company's strategies
are formulated." Historically it is associated with Christian religious groups; indeed, for many
years, a missionary was assumed to be a person on a specifically religious mission. The word
"mission" dates from 1598, originally of Jesuits sending ("missio", Latin for "act of sending")
members abroad.
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Definition of Vision statement by “Wikipedia- The Free Encyclopedia” outlines what the
organization wants to be, or how it wants the world in which it operates to be. It concentrates on
the future. It is a source of inspiration. It provides clear decision-making criteria.
The difference between Mission and Vision statement is a Mission statement contains the
information of the company in a nutshell about its products and services to customers while a
Vision statement offers the future perspectives of the company or organization, the purpose or
broader goal for being in existence or in the business.
Mission and Vision Statements of the British Airways and Virgin Atlantic is discussed
below:
There is no official mission statement from the company’s website instead the social blogs have
various statements out of which the best one chosen “To be the undisputed leader in world travel
for the next millennium”
“Safety, security and consistent delivery of the basics are the foundation of everything we do.”
Vision statement of ‘British Airways’- “To grow a profitable airline, where people love to fly
and where people love to work”
The mission and vision statements of British airways seems to be in the line of business as both
focus on world class operations not just local or domestic functioning, hence it is recommended
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that being a company which caters large scale audience/customers British Airways has to focus
on its principles of functioning to achieve its vision. As far as Virgin Atlantic is concerned,
nowhere it mentions about the functioning and catering the audiences of the world, it is known
fact that Virgin Atlantic is more of a British nature and caters or prefers services priority to
British audiences hence it needs to change its mission and vision statement which though is
appealing but doesn’t come in the line of business.
Answer:
Benchmarking is the process of comparing one's business processes and performance metrics to
industry bests and/or best practices from other industries. Dimensions typically measured are
quality, time, and cost. Improvements from learning mean doing things better, faster, and
cheaper.
Benchmarking involves management identifying the best firms in their industry, or any other
industry where similar processes exist, and comparing the results and processes of those studied
(the "targets") to one's own results and processes to learn how well the targets perform and, more
importantly, how they do it.
Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of
organisations) of 20 improvement tools, followed by SWOT analysis(72%), and Informal
Benchmarking (68%) for benchmarking.
Through SWOT analysis one can benchmark one company with other.
Strengths:
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• Good reputation
• British Airways' strategy and aircraft purchases are seen as an industry leader
"benchmark" that influences other carrier's decisions
• Technological Innovation
• BA may have shifted its emphasis from a market-led approach to an asset-led approach
Opportunities:
• Heathrow – BA Terminal 5
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Threats:
Strengths:
• The second largest long haul airline in the UK and the third largest European carrier over
the North Atlantic
• Customer loyalty
Weakness:
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• Limited destinations
Opportunities
• Airline growth post-recovery because of the trimming of the airlines since 2000
Threats:
It is to be noted that each company in its sector or industry has common opportunities and threats
which can be discussed as follows
Common opportunities:
• Asian market expectation (fastest growing over the next ten years)
• Air services within the European Union were fully deregulated and liberalised
Common threats:
• Economic weakness
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• Middle East developments / Terrorism leading to decreased tourism and confidence in the
airlines / Less demand due to 911
• Environment concerns: EU Carbon Trading for aviation industry; Future tax on aviation
fuel
• Regulation problem for airlines aiming to merge or grow (i.e. antitrust legislation)
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Number of
As of Aug 2009 / 48 As of Sep 2009 / 265
Aircrafts
Destinations 30 222
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Employment Over 9000 42,755
Anglia Ruskin University Page 9
Marketing Management
Question 4: Produce a thoughtful and substantiate revised value proposition; define new mission
statement; new markets; revised comparative differentiation and how the brand should be
changed.
Answer: The mission statement is the key to success and delivering the customer needs on a
short term notice and it needs to be changed every year preferably. We now discuss the
developing of a mission statement, developing vision statement and value statement.
Safety, security and consistent delivery of the basics are the foundation of everything we do.
The success of our three year strategy requires us to build on these foundations by focusing on
the business and leisure markets and driving efficiency and effectiveness.
Latest award: Best Long-Haul Airline 2009 - Sunday Times Travel Magazine Readers
Awards 2009
Leading Transatlantic Airline - World Travel Awards 2009
1. Basically, the mission statement describes the overall purpose of the organization.
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2. If the organization elects to develop a vision statement before developing the mission
statement, ask “Why does the image, the vision exist -- what is it’s purpose?” This
purpose is often the same as the mission.
3. Developing a mission statement can be quick culture-specific, i.e., participants may use
methods ranging from highly analytical and rational to highly creative and divergent, e.g.,
focused discussions, divergent experiences around daydreams, sharing stories, etc.
Therefore, visit with the participants how they might like to arrive at description of their
organizational mission.
4. When wording the mission statement, consider the organization's products, services,
markets, values, and concern for public image, and maybe priorities of activities for
survival.
5. Consider any changes that may be needed in wording of the mission statement because of
any new suggested strategies during a recent strategic planning process.
6. Ensure that wording of the mission is to the extent that management and employees can
infer some order of priorities in how products and services are delivered
7. When refining the mission, a useful exercise is to add or delete a word from the mission
to realize the change in scope of the mission statement and assess how concise is its
wording.
8. Does the mission statement include sufficient description that the statement clearly
separates the mission of the organization from other organizations?
How do value leaders escape the commoditization trap? They escape by reinventing their value
propositions. Value propositions define how items of value (product and service features as well
as complementary services) are packaged and offered to fulfill customer needs. To understand
how firms can change their value propositions, we first need to define the concept of a value map
and value Frontier. A value map defines the relative position of different companies in an
industry along the cost performance axis. The value frontier defines the maximum performance
currently feasible for any given cost (to the customer), and represents the different segments
offered to customers. Successful market leaders create unique positions on the value frontier.
However, if all the competitors converge toward a similar point on this frontier, the industry
faces commoditization and potentially reduced margins.
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In order for a company to move to an unique position on the value frontier, it must change its
strategies. Value propositions can be changed along three dimensions (cost, performance, and
customer roles) to achieve one of the three strategies which alter positions on or of the value
frontier (extending toward the low-end, toward the high-end, and shifting the frontier).
First, a company must identify which of the three strategies is appropriate. Extending the frontier
toward the low-end is worthwhile if the low-end frontier point in a specific industry can compete
with the high-end point in another industry (e.g., low-cost air travel competing with buses) or if
customers would be interested in a product/service of lower performance at a lower price.
Extending the frontier toward the high-end can be considered when the high-end in a specific
industry can compete with the low-end point in another industry (e.g., high-quality prepared
pasta competing with restaurants) or when there are customers willing to pay for more
performance than what is currently available. If neither option makes sense, then shifting the
frontier is the only alternative. This has traditionally been the basis of market competition.
Changing value propositions to achieve such frontier changes rely on changing one or more of
the three dimensions. Managers need to think of innovating ways to reduce price, risk, and effort,
as well as to address the multiple roles customer play, such as having customers co-create some
of the work. We have given numerous examples of these, so now we will focus on transforming
product performance by suggesting generic ways of changing product/service attributes.
Value can be enhanced by adding or removing three of the four attributes. The first level (basic
attributes) usually can not be modified, as it represents the attributes without which the product
or service doesn't make sense. We can therefore identify three ways of altering attributes: reduce
expected attributes, add attributes to fulfill desired needs, and elicit and deliver attributes to serve
unanticipated needs.
Expected attributes represent the common wisdom within an industry, the rules of the game.
They usually frame the thinking of managers looking for ways to distinguish their
product/service. Some innovators have been successful at delivering only part of these attributes,
the ones valued most by their customers. They focused on their core strengths and outsourced the
rest to other suppliers, or directly to the customer. For example, in the airline industry, Southwest
Airlines realized that its customers basic needs did not include perks such as food, assigned
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seating, or interline baggage handling. By reducing the level of service, and designing a business
model that efficiently and successfully delivered the basic attributes that mattered to customers
(cheap air travel, frequent departures, on-time arrivals), Southwest is the most successful airline
in recent years.
Desired attributes are those most often already delivered in another customer segment, but
unreachable at the price point of customers who also desire them. Technological innovation is
the most common lever for bringing down the price points to deliver such attributes to a new
market segment. For instance, Virgin Atlantic started providing individual color screens to every
economy class passenger when matrix display technology got advanced enough to lower the
costs sufficiently. One way to elicit these attributes is to find out what performance level
customers would ask for if they had unlimited resources. What service could be delivered to
them? And are there any ways to provide some of these services at a more reasonable price (e.g.
British Airways adding beds to airplanes)?
Question 5. Prepare the plan to implement the revised value proposition, analyze and
substantiate?
Answer: Using Piercy’s Value Proposition Model the above question can be solved
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Figure 1.1: Key relationships in market strategy (Source: based on Piercy, 1997)
He identifies the key relationship-marketing issue as the refocusing of marketing effort: moving
activities away from a marketing mix that creates a series of one-off transactions, to managing a
complex network of relationships involved in the production of the whole consumer offering.
CONSUMER ANALYSIS
The first jetliner was introduced in 1959, but air travel was quite expensive and only the very
wealthy or business people who worked for very profitable companies, were able to fly. Today,
the airline industry has consumers from every demographic group. Virgin Atlantic customers are
typically passengers who expect more out of their airline and are willing to pay the price for
luxury. Apart from the financial restrictions, Virgin Atlantic carries approximately 4 million
1
passengers annually who come from a wide array of social backgrounds. Due to the fact that
Virgin Atlantic is a British company, about 60 percent of the passengers are comprised of British
citizen.
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Virgin Atlantic segments their passengers into two main categories: Upper Class and
Economy Class, with the latter further segmented into a Premium Class and Regular Economy
Class, consisting of regular economy fare and coach fares. The premium class includes a separate
economy cabin for full fares with an option to pay extra for chauffeur driver cars and clubhouse
lounges. The Upper Class is generally comprised of males between 35 to 45 years of age and that
earn more than $75,000 a year. The Premium Economy is used evenly by business and vacation
Although one might assume that the consumer of Virgin Atlantic is simply buying a
space on an airplane, this is not true. The customer of Virgin Atlantic is interested in the entire
flying experience offered specifically by this company. An important feature that Virgin
Atlantic offers its customers is the Special Assistance program that enables the traveler to
customize their travel from the start by arranging transportation to the airport, selecting their
onboard meals and having transportation at the destination. Though limited to British fliers, a
vacationing consumer is able to purchase a Virgin Holiday package ranging from family
holidays, beach holidays, city breaks, Disney holidays, Flydrive or ski holidays.2
With the widespread use of the internet, more and more people are buying their tickets
online directly from the airline’s website www.virgin-atlantic.com. Another option is to call the
customer service line at 800-821-5438. For consumers who prefer to go through an intermediary,
they can opt to hire a travel agent to book their flight and handle any other necessary
arrangements to make the travel experience enjoyable and stress-free. Virgin Atlantic consumers
2 http://www.virginholidays.co.uk/info/holiday_information/
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use the company’s services year round but during the summer season, the number of travelers is
greatly increased. As stated by the International Air Transport Association (IATA), the number
of international air passenger number rose by 5.9 percent in 2006 and predicts that totals in air
There are many competitors in the airline industry. Consumers have a wide range of
preferences such as comfortable seats at a higher price. The following perceptual map indicates
the location in the consumers mind how Virgin Atlantic is viewed in comparison to competitors.
3
http://money.cnn.com/2007/11/13/news/companies/airline_fuel_fares/index.htm
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The four key relationships identified by Piercy occur in both manufacturing and business
organisations, and include networks of business systems, supply chains and virtual networks all
working together to create the value proposition for the customer.
“Suppliers, shareholders, customers and employees are not rivals for the battle for profits – they
are partners, and will be more successful once they learn to work together.” (Egan and Thomas,
1998)
Bibliography
(Source: http://uk.reuters.com/business/quotes/companyProfile?symbol=BAY.L )
(Source- http://en.wikipedia.org/wiki/Virgin_Atlantic_Airways)
(Source: http://en.wikipedia.org/wiki/Mission_statement)
(Source: http://articles.bplans.co.uk/writing-a-business-plan/mission-statement/367)
(Source- http://managementhelp.org/plan_dec/str_plan/stmnts.htm)
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(Source : http://openlearn.open.ac.uk/mod/resource/view.php?id=210429 )
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