Marking Plan for Virgin Group Ltd - Essay Example

?Running Head: VIRGIN GROUP LTD Inserts His/Her Inserts Grade Inserts Virgin Group Ltd Every business organization functions with a set of core activities and departments. The major functions of every business organization include production, marketing and selling, and these functions are performed with the help of proper planning and analysis of the business environment. In order to align the activities with strategies, it is essential that the organization plans for its short and long term goals in a sophisticated manner. This paper will formulate a marketing plan for the Virgin Group Ltd. It undertakes to conduct the audit of the micro and macro environment of the company. The tool such as Porter Five Forces Model will be useful in assessing the organizational environment along with the discussion of the marketing objectives, core strategies, and the implementations of Marketing Mix decisions of the company. The paper will focus upon one sector of the Virgin Groups and for this purpose; Virgin Atlantic is the segment which is taken into consideration for the environmental audit. Virgin Group Limited The company, Virgin Group Limited, is a venture capital and a conglomerate under the British brand venture capital. A famous business tycoon, Richard Branson, is the founder of this organization (Bloomberg Business Week, n.d.). The company mainly engages in the fields of tourism, broadband, leisure, music, mobile, finance, travel, health, TV, and radio. The business operations of the organization are carried out primarily in Europe, Asia, Africa, Australia, and North America. The organization also involves in the provision of other consumer services such as rail services, cruise packages, airlines, vacation and the transportation services of passenger motorbike. Moreover, the organization functions in providing the online casino and slots, gym facilities, balloon flights, and racing teams; publishes non-fiction books; technical and home IT support, employee health program, provides cord blood stem cell banking, lifestyle and health management, and NHS services; and offers corporate gift vouchers, and online gaming and video games, as well as wines online. The headquarters of the Virgin Group is at The School House, 50 Brook Green in the London Borough of Hammersmith and Fulham (Virgin, 2012). Virgin Atlantic or Virgin Atlantic Airways is one of the largest British long haul international airlines, and operates the services of long haul to more than 30 destinations across the world. It is a private airline which is owned for 49% owned by Singapore Airlines and the Virgin Group owns it for the rest of 51%. At present, the company manages and operates a fleet of Airbus A340 aircraft and Boeing 747. There are 13 747-400s, 38 aircrafts, and six 19 A340-600s and A340-300s which are operated by Virgin Atlantic. The bases of the airline are at Heathrow airports, London's Gatwick and the Manchester airport. Three categories of travelling are offered to customers by the Virgin Atlantic and they include premium economy, upper class, and economy all which comprise of the in-flight entertainment as well. Business Vision and Mission Every business chalks out a mission that signifies its existence, and the purpose of its functioning. Similarly, the Virgin Groups Limited performs with a vision to make its contribution to the creation of fulfilling and happy lives which are sustainable at the same time. The basic objectives of Virgin Atlantic observe that the company will provide services of superior quality to its customers. It would enable them to travel to the places where they cannot go easily. Moreover, Virgin Atlantic also keeps its profitability as one of the major motives of its business operations. Environmental Analysis There are two types of environments in which a business organization operates. In order to analyze the business environment of the organization, PEST analysis has been utilized as follows: Political Factors In order to deal with the environment of the place, the companies have to take into consideration all the political factors which are implied to the region. One of the major issues faced by the company is that the Department of Transport is keeping strict control on the activities of the airline industry. The environmental issues such as noise pollution, climate change and air quality have posed certain issues for the Virgin Atlantic which needs to be resolved. There are certain international law-making institutions that settle the political and legal issues for the organization. For instance, international Civil Aviation Organization, European Union and EUROCONTROL are the establishments which pay attention to the political matters of the aviation industry. Besides this, the global alliances such as the OneWorld Alliance could also prove to be a threat to the isolation of the airlines but the enhancement of their productivity. Economic Factors The economic issues in any industry include the aspects such as deregulations, tariffs, contribution to GDP and other vital elements. Similarly, Virgin Atlantic faces some such issues. Deregulation in the markets of UK is an important feature and it has kept the fares of airlines very low for the reason that investors have been successful in creating new airlines. The prices have gone below the competitive levels, and the airlines industries are striving hard to survive. Moreover, the economic prosperity of a region largely depends upon the contributions of airlines. Though, it has been anticipated that the airlines would continue to finance the economy of UK, however, changing bilateral relations, and altering political situations and other uncertainties may also impact the industry adversely. Moreover, flying costs, rising prices of fuel, and the expenditures to tackle global warming may also affect the prosperity and profitability of the airline industry. Social Factors The social factors mainly constitute the issues of customer expectations. For the airline, two of the major issues of focus include the customers’ reasons for travelling and preferred class of travelling. The elements such as flight schedules, delays, accommodation, seating comfort, airport check-in, post flight services, food services and other issues need to be addressed. In order to understand the social environment, Virgin Atlantic needs to analyze the preferences of customers, quality of its services, and initiatives taken to adopt the customer relationship management (CRM) programs. Since, there are many private investors in the airline industry currently; Virgin Atlantic may have to face threatening competitions from many other good rivals. Technological Factors Technological factors are the vital part of the progress of any company in the industry. In the airline industry, technological advancements are necessary to be tracked and kept updated so as to avoid any risks and dangers in the air travel. According to various studies, 68% of the total accidents and mishaps are subject to the human errors in the airlines. Thus, while analysing the company for its technological progress, Virgin Atlantic needs to keep special knowledge of the design, manufacture, maintenance and installation of the aircrafts and other related equipments (Jamima, 2008). The security needs are also required to be given consideration. Moreover, it is necessary that Virgin Atlantic makes the use of modern technology such as internet, and other methods to facilitate customers in reservation and other processes. SWOT Analysis The concept of SWOT analysis observes the current performance of company with respect to its internal strengths and weaknesses, and the external opportunities and threats. It is the method of strategic planning through which the organizations specify their objectives and assess the position in the industry. The SWOT Analysis of the Virgin Atlantic Airways is given below: Strengths The company, Virgin Atlantic, has much strength to its credit which includes the strong brand image, affiliations with the Singapore Airlines and the comprehensive and sophisticated provision of services. It won the 2010 British Travel Award and also has other recognitions which give it a competitive advantage in the international markets. The baggage handling, meal catering, and in-flight entertainments services give it leverage over the competitors. Virgin Atlantic is a company which is 49% owned by Singapore Airlines and also possesses a network and strong fleet size of the Singapore airlines. Weaknesses Virgin Atlantic is facing major weaknesses in the form of lack of scale and price fixing allegation. During the year 2002 and 2006, the company countered allegations of the illegal price-fixing for the route of London to Hong Kong. This spoiled the reputation of the company and led it to incur more expenditure. Moreover, in order to compete with the large-scale prayers in the industry, Virgin Atlantic needs to expand its scale of operations too. The company carries out its operations and activities in more than 30 destinations across the world while its competitors British Airways and Air France-KLM function at 300 and 244 destinations, respectively, globally. Opportunities Virgin Atlantic possesses a positive outlook of the passenger airline market, growing global market of air freight, and chances for further expansion. The company can enhance its operations with an expectation of the increasing profitability in the regions across the globe. The demand for the transportation is increasing so they company can embark upon targeting a versatile segment of the consumer market. Moreover, it can introduce new services in order to position itself in the various geographical regions. Threats Like every business organization, Virgin Atlantic also faces threats from the external environment which affects its operations. The major threat that it faces is the occurrence of intense competition in the industry and substantial price discounting. The rivals like British Airways, Cathay Pacific and others have contributed to the intense rivalry. Then, the company has to counter the risk of natural disasters which might occur at any time and create uncertainty for the airline. Volcanic eruptions, rain and snowfall are included in the major weather threats and disasters which can disrupt the functioning of any airline. Marketing Objectives The company, Virgin Atlantic, has established strong marketing strategies in order to carry out its operations. The company serves long haul services to over 30 destinations worldwide. During the year 2004, the company obtained its association with the Singapore Airlines and has moved towards the industry in competition with British Airways and other cut throat rivals. The company was capable of making a pre-tax profit of ?18.5 million during the year 2010 and 2011. The present situation of the company depicts it to be surrounded by competitors and struggling to broaden its scale of activities (Virgin Atlantic, 2012). The future outlook regarding the business objectives of Virgin Atlantic indicates that it will earn profitability and obtain more revenues through delivering superior quality services to its customers. It will achieve the desired objectives by purchasing new aircrafts, availing new market opportunities and expanding its functions to more destinations. Sustainable Competitive Advantage Strategy Virgin Atlantic Airline has adopted the sustainable competitive advantage strategy in order to establish and maintain its footing in the market. It achieved the purpose by investing in the aircraft designs, services and flight quality. The company provided a good Total Consumer Experience (TEC) to the customers by serving them before, during and after the flights. The branding strategies of the company, aircraft seating, and provision of online experience to the customers for reservations enhanced the competitive advantage for the company. Virginia Atlantic has gained competitive advantage through its timely services, and facilitates the customers through a good flight experience, online booking facilities, low fares and their own credit cards and holiday packages. Core Strategies The concept of core strategy is one of the most important and vital documents to the planning and development of the business organization. It pertains to the discovery and realization of the basic principles and guidelines of the company and obtaining all the relevant information and people to second the main principles and objectives. The years of revolutions, law and politics in various public organizations have conflicting or ambiguous purpose. In a business organization, the goal of the core strategy refers to the clarification of the mission and vision of the agency and discusses the authorizers for the clarification issues. Above all, the aim of core strategy is to stress upon focus (The Public Strategies Group, 2012). Sustainable Competitive Advantage Virgin company has successfully established the sustainable competitive advantage by providing the best quality services to its customers. According to the general business rules, the competitive advantage can be gained by the companies by providing good value to the customers and making them satisfied with the provision of right product at the right time. The Virgin Group Limited has been able to cope up with the cutting-edge competition successfully and counter their customers by differentiating their own product from their rivals’. The core competence of the company is product and cost differentiations while providing their customers with the superior quality products. The basic factor which has given the Virginia Group a competitive advantage is that, it functions just as a venture capital organization which is founded on the brands of Virginia Group Limited. The non-related diversification has been involved in this strategy and is applied at the business unit level at individual phase. In the meantime, the hierarchal relationship creates synergies and the dealings of the individual business units with corporate head office. The company is capable of entering the new areas of business and captures the existing and new orders through leveraging the Virgin Brand that has been successful in positioning itself in the minds of consumers. The unique corporate culture of the Virgin Group Limited permits the company to enter the new market segments and implements its business ventures in an effective and adequate manner. Marketing Mix Decisions The decisions of the marketing mix of a company determine the mixture of the 4 Ps which include product, price, promotion and place. The marketing mix plan is used in correspondence with the marketing strategy of the company. the marketing mix analysis of the Virgin Atlantic is given as follows: Product The company, Virgin Atlantic, seeks to provide its customers with the innovative and fun products along with easy access to customers and the premium quality services. Virgin Atlantic Airways offers its customers flights across the world in three different categories or classes: premium economy, upper class, and economy class. Price The company offers reasonable and affordable prices and fares to the customers of the Virgin Atlantic. It provides excellent travel experience to the customers in business, premium and economy class of the airline. The upper class service of the company charges the customers around $9,000 dollars. The customers of the company obtain the premium economy tickets for approximately $3,000 dollars, while the tickets of the flight of economy class are obtained in return of $500.00 dollars to London. Place The company, Virgin Atlantic, is a relatively smaller airline as compared to its cutthroat rivals in the industry. The customers are offered non-stop flights to the United States by the Virgin Atlantic. It adopts the routes from US to London out of Chicago, Boston, Las Vegas, Miami, Orlando, Los Angles, Washington DC (Dulles), New York (JFK), San Francisco, New York (Newark), and Toronto. Virgin Atlantic offers the customers international flights in and out of Tokyo, Johannesburg, Shanghai, Athens, Barbados, Hong Kong, St. Lucia, Delhi, and Antigua. Promotions The promotion of Virgin Atlantic involves the publicized announcement which is intended to target and attract the potential customers for the organizations. The company has been continuously taking up the integrated marketing communication strategies to promote its services through various media of communication. They include the selling of tickets and advertising the company through brochures, word of mouth advertisements, public relations, internet advertisements, direct communication, and travel agents. Moreover, the company offers limo services, exclusive use of clubhouse, full-service bar, restaurant style dining and other entertainment spots to keep its customers satisfied. The Product Life Cycle The concept of product life-cycle management (or PLCM) pertains to the various strategies which the business management utilizes in the form of a life cycle of the product. Every product goes through a certain life cycle and faces the stages of birth, growth, maturity and decline. In order to keep the product smoothly going through the market, the companies need to manage the changes in the conditions in which the advertising and saturation through the succession of the product life cycle stages. The product life cycle of the Virgin Atlantic Airways is as follows: Development The development phase pertains to the introduction of the product. The services of the airline during the initial stage of development took time to be introduced to the customers. The marketing costs were high and sales volume was low with least competition in the airline industry. Moreover, funds were invested to make the customers aware of the product by advertising it. Growth During the stage of growth, the customers started becoming aware of the services of the Virgin Atlantic Airlines. Due to the economies of scale, the costs of the company declined, volume of sales increased, profitability begun to rise and the public awareness also rose. Furthermore, the competition entered in the market thus, brining changes in the prices of the Virgin Atlantic Airways. Maturity Stage At this stage, Virgin Atlantic had become known to the customers fully. They began to experience the service of the companies thus bringing in more profits and lowering the costs on average unit. The Virgin Atlantic, by this time, has reached the saturation point while increasing the sales volume and increase in competitions. Decline Stage The decline stage is the last stage of the company’s product life cycle. It is usually marked with either the end of the company’s product or application of extension strategies on the products or services of the organization. The Virgin Atlantic Airways has been introducing new features and extension strategies in its existing products or services. This has prevented the services of the organization from declining. Conclusion The company, Virgin Group Limited, is a venture capital and a conglomerate under the British brand venture capital. It mainly involves in the fields of tourism, broadband, leisure, music, mobile, finance, travel, health, TV, and radio. The company conducts its business mainly in Europe, Asia, Africa, Australia, and North America. Virgin Atlantic is a sister company of the Virgin Group Limited and has been leading the line of companies in the airline industry. Though, it is facing tough competition, however, the company is trying its best to cope up with the rivals in the industry. Work Cited Bloomberg BusinessWeek, n.d., Virgin Group Ltd.: Private Company Information, Web, Retrieved May 22, 2012 Datamonitor 360, 2012, Company Profile: Virgin Atlantic Airways Limited, Web, Retrieved May 22, 2012 Jamima Bokaie, 2008, Virgin Atlantic rethinks worldwide ad strategy, Marketing, Web, Retrieved May 22, 2012 The Public Strategies Group, 2012, The Core Strategy: Creating Clarity of Purpose, Web, Retrieved May 22, 2012 Virgin Atlantic, 2012, All About Us, Virgin Atlantic, Retrieved May 22, 2012 Virgin, 2012, Our company information, Virgin Group, Web, Retrieved May 22, 2012 Read More