Virgin Galactic - Essay Example

?Virgin Galactic Introduction: Ever since Neil Armstrong set foot on the moon, it has been every man’s wish to be able to do the same. Space is one of the most mystifying and romantic locations ever and knowing how hard it is to get there has only made it more sought after. But everyone cannot become astronauts. That is why Richard Branson, with his Virgin Group decided it was time common people get the opportunity to set foot into space. And with this noble thought in mind, the Virgin Group created Virgin Galactic – a company that is dedicated to taking ‘space tourists’ to their most sought after tourist spot – space.1 To do this, Virgin Galactic has modeled its very own spaceships after the history-making SpaceShipOne. Virgin Galactic’s spaceship is called SpaceShipTwo and its mission is to make “affordable exploration of space by human beings a real possibility”.2 Market Segmentation: Market Segmentation is the bifurcation of a large group of people into smaller groups that have similar characteristics.3 The whole point of this exercise is so that an organization may be able to design a marketing mix to fulfill the demands and expectations of the participants in the various sub groups, in a precise manner. The market is usually divided based on geography, demography, consumer behavior and psychography. Geographic Segmentation defines the exact geographic location of residence of the target. It is often divided based on region (continent, country, state, city, etc.), size of metropolitan area based on size of population, population density (urban, suburban, rural, etc.) and climate. Based on these variables, we can define the target audience for Virgin Galactic to be living in urban areas of UK that are densely populated.4 Demographic Segmentation looks at dividing the market based on demographic variables such as age, gender, family size, income, religion, education, social class, etc. Based on these variables, we could say that the target for Virgin Galactic would be high net worth individuals with high incomes, belonging to SEC A+.5 They would be educated and probably come from small families, that is, either bachelors or just married, with no kids. Behavioral Segmentation divides the target based on consumer behavior towards the product or service. It is based on variables such as brand loyalty, user status (i.e. first time user, potential, regular, etc.), readiness to buy, occasions (holidays or other events).6 Based on these variables, the target for Virgin Galactic could be defined as first time users who are most willing to spend money to go into space. They just want to go into space, and aren’t much worried about the money they are spending. Occasions play no role in this. Psychographic Segmentation divides people based on their lifestyles, interests, opinions, values, etc. Based on these variables, we could define the target for Virgin Galactic as people who lead a very frivolous lifestyle, who are willing to spend good money on anything that will make them happy, in this case takes them to space. Their interests would include space, experiencing anything new, especially before their peers. Consumer Profile: Geographic: Region: England City: Birmingham Density: Urban Demographic: Gender: Male Age: 38 years Lifecycle: Married, no children Occupation: Businessman Education: University graduate Income: GPB 500000 per annum Nationality: British Behavioral: User Status: First time Readiness: Very high Benefits: Going into space, making a dream come true, doing something special before peers and competitors. Occasion: None Psychographic: Social class: A+ - high income, high net worth individual Personality: Fun, ambitious, impulsive, confident, athletic, enthusiastic to experience new things Lifestyle: Tech-savvy, plays a lot of sport, fitness freak, socially active Hobbies: Sport, follows tennis, golf and cricket Mobile Phone: iPhone 5 (Contract) Consumer Behavior Factors Consumer behavior refers to the method in which a consumer selects, purchases and consumes certain products to satisfy their wants. There are a number of variables that affect a consumer’s decision to purchase a product or service. The process of buying usually involves the formation of a need, the comparison of various products that can fulfill the need and the final purchase based on various factors. The factors involved can be segregated into social, cultural, personal and psychological. Personal Factors are those that define a person and therefore have an influence in their buying decision. Personal factors include age, occupation, economic situation, lifestyle, personality, etc. With regards to Virgin Galactic, the main factors that could influence consumer behavior would be their economic situation, lifestyle and their personality.7 Social Factors are societal factors such as influence from reference groups, family and the role and status of the potential buyer in society. Influence plays a very important role in the buying process. As such, Virgin Galactic could factor in on the role and status of a potential buyer in the market, since it would prove to be very profitable for one’s image if he were to go into space before any of his peers.8 This is where even influence plays a role, but influence from family in this regard could be more negative since they may worry for his safety, etc. Cultural Factors include cultures of various regions, sub cultures based on nationality, religion, geography, etc. and the social class based on income, education, occupation, wealth, etc. Virgin Galactic may wish to consider mainly the social class based on income, wealth and education since the people that are profound in any of these factors would wish to go into space.9 Nationality, religion, geography, etc. don’t play that much of a role in this buying process. Psychological Factors are quite possibly what influence a buying decision the most. They include motivation, perception, beliefs and attitudes. All of these could either be personal or acquired, but they are what influence a buyer’s decision the most. Thus, the marketers of Virgin galactic may want to market their services in a more psychological manner that will reach out to these consumers. For instance, a man who has dreamed about going into space ever since he was a little boy will be extremely motivated to buy this product.10 A man in love who believes he can make his woman happy by taking her to the moon, could also be a consumer. This is how perceptions also help in marketing brands. Positioning Strategy Positioning of a product, brand or service refers to creating a certain image of it in the target consumer’s mind, usually in relation to other competitive products. To position a product in its consumers’ minds, one could either talk about what distinguishes a product from its competitors or another strategy would be to create a particular image with use of advertising and other such tools. Positioning is extremely important for a brand as it creates a desirable image for the product or brand in the minds of the consumer. The thing about positioning is that it is relative, and once an image is created in the minds of the consumer, it is extremely difficult, not to mention very expensive and strenuous to change that image. Thus, positioning must be dealt with caution, since it can either make or break a brand.11 Virgin Galactic’s space tourism is a brand new concept. Therefore, they don’t need to worry about competition, at least for now. Their best positioning strategy would be to play on the psychology of people. People have always wanted to go to space but not all of them get to become astronauts. Thus, the simplest and most effective method to position this service would be to focus on people’s psychological needs – their dreams to go into space, their need to be one step ahead of others and their desire to do something new, adventurous and completely out of this world! Conclusion This report has been written to help Virgin Galactic define its target and to arrive at a suitable positioning. Based on various variables analyzed, the target has been defined as one living in urban, densely populated areas of the UK, a high net worth individuals with high incomes, belonging to SEC A+, well educated, single, willing to spend money and eager to try out something new. The variables that would define the target’s buying behavior would include - their economic situation, lifestyle and their personality, social influence, income, wealth and education and motivation, perception, beliefs and attitudes. The best way to position Virgin Galactic to this target would be to play on their psyche. Based on the market segmentation and the consumer behavior study, it is clear that the target for Virgin Galactic isn’t worried or concerned about how they spend their money, nor is he bound by any restrictions. He will do what he wants, when he wants, and that’s what Virgin Galactic must keep in mind about its target. Using the psychological route seems a fair way to do this and they can reach out to a wider audience once they even reduce their rates further, since even if their prices drop a little, their whole premise stays the same. They still are making affordable exploration of space by human beings a real possibility. Bibliography Coughlan, AT, Marketing channels, Prentice Hall, 2001. Bhasin, H, Positioning Strategy, retrieved 23 April 2013. http://www.marketing91.com/positioning-strategies/ Kotler, P, Principles of Marketing, Person Education. Lantos, GP, Consumer Behavior in Action: Real-Life Applications for Marketing Managers, M.E. Sharpe, 2010. Shah, A, Factors affecting consumer behavior, retrieved 23 April 2013. Tallon, A, Urban Regeneration in the UK, Routledge, 2009. Virgin Galactic, Virgin Galactic, retrieved 23 April 2013. Virgin, Space is Virgin Territory, , retrieved 23 April 2013. 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