Product Strategy of the British Airways
1.1 Introduction to product strategy
Product is the most important component in an organization. Without a
product there is no place, no price, no promotion, and no business.
Product is anything that can be offered to a market to satisfy a want
or a need. It is the core ingredient of the marketing mix and is
everything favorable and unfavorable, tangible and intangible received
in the exchange of an idea, service or good (Kotler 11th edition,
2003). British Airways is a business offering service products,
flights across destinations, in the transportation industry. Service
is an intangible product involving a deed, performance or effort that
cannot be stored or physically processed, were customers directly
participate in the production process.
Product strategy is therefore very vital for the organization's
success. It needs to be developed and manage very careful in order to
be successful. British Airways product strategy includes flight
services, quality of flights, various destinations across Europe and
the world, executive class, business class, speed, security, support
facilities and years of experience. It provides the basic product and
various alternatives to satisfy all the different customer needs.
1.2 Product Levels
[IMAGE]
If we have a brief look at Kotler's five-product levels theory, there
are five products levels in regards with the quality and the
expectation of the customers and each level adds more value to the
customer (Kotler 11th edition, 2003).[1]
1. At the beginning is the core benefit, the fundamental service or
benefit that the customer really buying. The most fundamental level is
the core benefits; what the customer really buys. In British Airways
customers buying flight tickets to satisfy their basic need which is
to flight from one destination to another.
2. The second level is the basic product, were customers book their
seat on a schedule flight to a particular destination. British Airways
flies to the busiest airports in Europe in 95 different cities and to
58 other destination across the world.
Sociocultural factors embody the various culture aspects in which a business functions. It is of great significance that a firm has the ability to appeal to the culture that they are working within as it reflects their customer knowledge, determining their performance (David & Fahey 2000, pg. 113). One central issue in regards to sociocultural factors playing an important role in a business’ marketing mix is firm’s ability to adapt marketing strategies in regards to demographics. The universal aging population is a clear indicator of marketing strategies for airlines companies to evolve so that it caters to the needs of the population as a whole. In addition, with Qantas operating as a global company and multiculturalism as a universal force, it is crucial to cultivate innovative marketing plans to accommodate the diverse preferences and needs of other cultures (Teo 1994). As cultures differ in their forms of attitudes and behaviours, consumers coming from these diverse cultures, backgrounds and countries are susceptible to dissimilar intensities of service anticipations (Donthu & Yoo 1998).
Product features; without superior cost advantages and meeting consumer (airline) demands/preferences e.g. Brasilia, the company would not have been able to enter other markets such as the US. Customer focus became a cornerstone of the strategy of the company e.g. design and "robust". Stayed away from the more profitable market e.g. larger carrier market dominated by Boeing and Airbus.
Air France - KLM Organized under French law, Air France – KLM SA, is a limited liability company that operates one of the largest airlines in the world. The core business of Air France-KLM is passenger transportation, however, other activities include maintenance, aeronautics, cargo, and additional air-transport-related activities involving, mostly, catering (Air France-KLM Group, 2016, p. 13). Both Air France and KLM are amongst the few airlines that were founded before World War II. Both bearing the founding day of October 7th, the first, in 1919 originally named Koninklijke Luchtvaartmaatschappij for the Netherlands and Colonies, and in 1933, the other was founded, resulting from five French airlines, which included, Société Générale de Tranasport Aérien (SGTA), Air Orient, CIDNA and Aéropostale ("History | Air France KLM," 2016).
But a year later, at the age of 52, Gopinath began service in south India with a leased 48-seater, $10 million in investment and a conviction that India's burgeoning middle class, which was already buying color TVs and cell phones, would buy air tickets.
Jet Blue’s strategy to use a combination of cost leadership and differentiation strategies at the same time in an integrated way helps Jet Blue to overcome any major drawbacks and risks associated with any of the standalone individual strategies. The components and enablers for Jet Blue’s low cost strategy and differentiation strategies are complimentary to each other and they mutually reinforce Jet Blue’s overall integrated combined business level strategy. This combination of low cost and differentiation strategies enables Jet Blue to provide a high quality low cost differentiated customer service experience. This helps Jet Blue create a unique value and also provides a unique competitive advantage for Jet Blue to outperform its competition and achieve long term
American Airlines (American) made four fundamental changes to its rates. First, it moved to a four-tier rate structure; American offered first-class rates and three tiers of coach: full-fare, 21-day advance purchase and 7-day advance purchase. Overall, it expected to reduce coach fares by 38% and first-class fares by 20% to 50%. Though full fare coach prices dropped by about 38%, advance-purchase fares dropped by 6% when compared to the advance purchase tickets already being offered. Through this fare structure, American also eliminated deep discount tickets. Second, American eliminated the negotiated discount contracts of many large companies. Though it intended to fulfill any outstanding contracts, it did not intend to renew any of these contracts. Third, American realigned its pricing with its costs. Under the new structure, American fares were more distance based (therefore cost-based) than they had been in the past. Finally, American changed its non-refundable policy. Advance purchase tickets could now be rescheduled for a $25 processing fee.
In order to fulfil the customers’ needs, the ultimate concern for Airlines Corporation is the service provided. The contributing factor for the latter is...
For the purpose of this assignment, the services provided by Virgin Atlantic will be the point of focus. Service marketing focuses on four distinctive characteristics; intangibility, inseparability, variability and perishability; of services and how they affect both consumer behaviour and the marketing strategy employed by the organisation. The four characteristics of services of the airline are key to understanding how their customers interact with their staff and the service they provide. It is crucial to consider these four characteristics as it helps to distinguish and predict current and future customer behaviour.
When a business aims to be as successful as possible in selling its products and services, it must examine in detail whether or not the products will be attractive and necessary; if the price is optimal; if the product is being distributed in the best locations; and finally, how interest and awareness can be created for the products. In order for a business to target all of these elements to the right people at the right time, it must employ the right type of marketing mix: Product, Price, Place and Promotion. In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customer’s needs, and is succeeding because of this approach.
Which of the three generic strategies (Cost leadership, Differentiation, and Focus) is JetBlue following? Discuss how information systems is used in JetBlue to support its strategy.
After originating in 1985, and flying its first two aircrafts from Dubai to Karachi on the 25th of October, Emirates Airlines soon began transporting more and more passengers to new destinations becoming one of the fastest growing airlines in the world with revenues skyrocketing year after year. Although it is fully owned by the government, Emirates has grown in scale and status not by being protected by the government, but through competition, which is what helps maintain its identity (The emirates story, n.d). The aim of this project is to conduct a marketing audit of Emirates Airlines by assessing its performance in the UAE market and providing recommendations. This assignment is divided into 10 main parts: the environmental context analysis,
From the traditional Organization Development (OD) approach, British Airways (BA) appeared to have thoroughly planned the implementation of the swipe cards in an attempt to “improve the efficient use of staff and resources” (Palmer, Dunford, Akin, 2009, p. 239). The leaders appear to be committed to the plan by achieving a long-term mission. The plan is also action-oriented with an immediate plan to improve efficiency. BA, however, could have benefited from an effective OD practitioner. This type of OD consultant using intrapersonal and interpersonal skills would have taken the proper steps to mitigate potential problems through fact finding, data
The health of the overall U.S airline industry is still tenuous in-spite of the passenger traffic volumes returning to pre-9/11 levels. A survey estimated that from 2001 through 2003, the US airline industry reported to have lost $23.2 billion dollars, compounded by an additional $1.6 billion in the first quarter of 2004. This $24.8 billion shortfall exceeds the total profits earned over the entire six-year period 1995-2000
British Airways Plc (British Airways or BA) is a full service premium airline with a global route network flying to approximately 400 destinations worldwide. The company provides scheduled air services at both domestic and international level. Its services include flights for passengers and cargo. The company provides air transportation services for over 40 million customers a year and serves 35 million cups of tea, 36.5 million meals and 3.7 million bottles of wine for the passengers. The company operates extensive international scheduled airline route networks in association with its joint business agreement, code share and franchise partners.
From the article that I have read recently by Rizal Ahmad in Asian Journal of Management Cases, he described the development of Air Asia Malaysia from 2005 to 2008. Within only four years, AirAsia managed to expand its operations into another ten countries. This article also documents Air Asia's marketing strategy and its approach towards 'market development' and 'product development'. The Blue Ocean Strategy concept is used as a tool to examine Air Asia's strategic moves.