Virgin Blue - Vision, Mission, Strategic Objectives, and Environmental Analysis - Case Study Example

Executive Summary Virgin Blue is one of the fastest growing airways in Australia is looking towards aiming the people who are price concious. The company has an aggressive marketing strategy and is looking towards becoming a cost leader and differentiator. To ensure efficiency in operation the company has grown its ties with various retailers and is looking towards marketing themselves aggressively. The SWOT analysis also shows that the company has scope for growth. The PESTEL analysis helps to provide the way the external factors are supporting the growth of airlines and the areas the company needs to work on. The company looks to provide different features like no meals for customer who are price conscious and want cheap tickets, more leg space, removing the middle seats and allowing more baggage for business class. The report also provides the customer aimed at and the market segment that the company looks at. The different direction of marketing also provides the different aspect Virgin Blue need to work on so that they are able to improve their performance. Table of Contents Executive Summary ---------------------------------------------------------------------------1 Introduction-------------------------------------------------------------------------------------3 Vision of Virgin Blue----------------------------------------------------------------------4 Mission of Virgin Blue--------------------------------------------------------------------4 Strategic Objectives----------------------------------------------------------------------------4 Environmental Analysis------------------------------------------------------------------------6 Customer Analysis-----------------------------------------------------------------------------8 Competitors Analysis-------------------------------------------------------------------------10 4 P’s of Marketing----------------------------------------------------------------------------11 Budget-------------------------------------------------------------------------------------------12 Conclusion--------------------------------------------------------------------------------------13 References--------------------------------------------------------------------------------------15 Introduction Virgin Blue since operation from 2000 has become one of the largest low cost provider. Virgin Blue being in the leisure sector has transformed itself and is eyeing the business sector as this sector is growing. The company has brought about changes which have helped it to become a cost leader and differentiator. Virgin Blue to market in the business sector is looking towards aggressive marketing. To do this the company has come up with different features such as more baggage allowance and more leg space. The company to retain them is also developing reward programs so that it can retain both the segment and grow to become a leader. The report looks into the marketing aspect of Virgin Blue by analyzing the situational analysis by looking into the manner the internal environment has an effect on the working of the company. Along with it the mission of the company, its promotional strategy and the present strategy has been looked into. Analyzing these factors will help to understand the present strategy of Virgin and understand the marketing strategy adopted by the company. The report understands the customer that been targeted by looking towards analyzing the customers along with the effect external environment has on Virgin. Understanding the external environment will help to find out the manner in which external factors influences internal environment. The report also dwells on the industry analysis and understanding the manner it has an influence on the marketing strategy of Virgin so that the company is able to build a pool of customers who are loyal. Some statistics pertaining to traveller is as follows Vision of Virgin Blue The vision statement for Sony is to provide services so that people feel the spirit of the country and provide quality services by ensuring maximum satisfaction. The statement looks towards developing and designing new products which helps to enhance the experience and also eases the life as it makes it easy for users to simplify their lives. Mission of Virgin Blue Virgin has a mission statement where they look to present before the public the joy and benefit that the user will experience when they travel via Virgin Blue. Virgin Blue looks to provide quality services to the customer so that they are able to associate with Australia by ensuring proper facilities and services. For this Virgin Blue is looking towards having the best in house staff and equipments so that they are able to deliver quality services that satisfy the customers. Strategic Objectives Objectives helps to determine the manner in which business helps to understand the steps for the future that the company looks towards following to achieve the strategic objectives of the business (Cateora, Mary & Graham, 2009). This helps to identify the short and long term objectives of Virgin Blue which is shown below A Short Term Objective To improve the brand image of the organization by focusing services so that customer travelling through Virgin Blue have an enhance satisfaction and looks towards using the services in the future (Czinkota & Ronkainen, 2004) Improving the marketing aspect by looking towards improving the advertising and promotional campaign so that the company is able to attract more customers and increase their customer base (Czinkota & Ronkainen, 2004) Key Performance Indicator: This will help Virgin Blue to build a differentiation in their brand by providing the customers that Virgin Blue is considering the pleasure aspect of customers travelling via airways and will thereby enhance thesatisfaction level. Long Term Objectives Improve the brand image over a long period of time by looking towards building a base of a loyal customer within a period of 3-5 years Key Performance Indicator: To ensure that Virgin Blue achieves its objective the organization should ensure feedback from market to ensure that they develop promotional campaign that highlights the advantages from using the product. Virgin Blue strategy has a linkage with their vision which will ensure that the company is able to work towards accomplishment of the same. Virgin Blue needs to look towards understanding the risk management strategy so that they are able to control risk which will ensure better results (Fletcher & Crawford, 2011). Environmental Analysis Understanding the industry analysis helps to find out the effect external environment have an influence on the working of Virgin Blue and will help to find the steps that needs to be taken for growth. The analysis is Political The political situation of a country affects business as all the rules and regulations determine the manner in which the organization will perform. Stability ensures that rules are framed towards growth and changes in government leads towards changing policy which is controlled Stable government ensures uniform laws especially retalted to taxation matters which helps the business to be conducted efficiently Economic The economic condition has a vast role to play in the growth of any organization that is performing in the economy Slower growth rate (Mullins, 2009) due to recession is affecting demand for products and services Different barriers of entry has made it difficult for the organization to perform uniformly Increase in operation cost and inflation has also affected the spending mechanism as people look towards cheaper things Social The social culture prevalent in an economy determines the buying habits and has an influence on the manner the economy will perform in the long run. Changes in purchasing habit (Mullins, 2009) has led towards consumer looking for faster mode of transport has increased the relevanc of airlines Growth in the population of generation Y (Mullins, 2009) has led towards a change in purchasing habit as the generation prefers technology in comparison to others Technological The technological changes witnessed by economy has an effect on the way organization performs as shown below The manner in which services have undergone changes (Mullins, 2009) due to changes in technology has made consumer look towards gadgets which improves services Having different gadgets ensures better and faster services thereby making people look towards using it. Environmental Environmental changes impact the decision making of organization and needs to considered The increased importance being laid on environment and steps taken to ensure that the environment is safe has made organization look towards developing products and services which has little harm on the envoronment. Legal Legal changes impact the economy greatky which leads to an effect on the organization performing in the economy Rules regarding wages which ensures minimum wages has increased the cost for businesses and if wages are paid less the workers look towards strike which makes it important to ensure equality for all. Virgin Blue by ensuring sufficient safety facilities both for the crew members and customers have looked towards improving the legal aspect. Customer Analysis The different advertisement campaign launched by Virgin Blue helps to identify the target market the company will look at. The advertisements bring forward the fact that Virgin Blue looks towards households, youngsters, business class and lower end customers who want faster and quicker mode of transport. The target market of both the company looks towards eying customers who are loyal to the brand and people who are most likely so switch to the brand by giving up some other brand (Philip & Gary, 2001) Virgin Blue looks to target a lot of customer of different age because the company looks towards providing services which is varied and according to the requirements of the customer (Luther, 2011). This helps to identify the target market of Virgin Blue as follows Targeted Segment Age Group Class of Customer Customer Needs Rural 5 - 70 years Premium Middle Class Providing quality service and improved connectivity between cities Semi-Urban 5 - 70 years Middle Class Quality product at a price suiting the pocket Businesses also habe to ensure that their strategy matches with those of the competitors so that they are able to move along with competition and look toward gaining a move forward (Ireland, Hoskisson and Hitt, 2007, P. 162). This will help the players to ensure better strategies for the market and face competition in a better way thereby helping to build better strategies (Bangs, 2002, p. 61) This helps to further segregate the market of Virgin Blue based on geographic, demographic and behavioral factors as shown below Geographic Urban, Sub-Urban, Small Town & Rural Demographics Youngsters within the age bracket 18 years to 45 years Social Economic Status Middle & Upper Middle Class Rural market through agents Psychographics People who are concerned about new services and enhanced satisfaction The different advertisement campaign highlights the same and shows the way the company is looking towards having loyal customers at the same time providing new variants to attract more customers who become loyal to the company. Competitor Analysis Virgin Blue faces competition from different airlines which looks towards tapping a similar market. Sony faces competition from Qantas Airways, Pacific Airways and all airways operator in the market. Every player looks to provide similar services and has no differentiation thereby intensifying the level of competition. This makes all players towards replicating same strategies thereby making players fight for a smaller market share (Koranteng, 1999). A comparison of the competitors is as follows Lufthansa Virgin Qantas Swiss Aims at upper segment of the population Aims at all people Aims at all people Aims at upper segment of the population Offers variety at different prices Offers variety at different prices Offers variety at different prices Offers variety at different prices Sells tickets either through agents, counter or over the internet through various sites Sells tickets either through agents, counter or over the internet through various sites Sells tickets either through agents, counter or over the internet through various sites Sells tickets either through agents, counter or over the internet through various sites Offers Similar service Offers Similar service Offers Similar service Offers Similar service The comparison of the different players performing in the airline industry reflects that all the players offer similar products with little differentiation making it difficult for any player to capture a large market. A statistical comparison is as follows Marketing Mix The 4P’s will help to indentify the marketing strategy adopted by Virgin Blue and will guide the marketing team to ensure effectiveness in their marketing process. The description is as follows Product: The product offered by Virgin Blue in divided into leisure sector, business sector and low cost sector. The company has looked towards providing product in each category based on the income levels. The airline has further looked towards ensuring that various in flight services are also provided (Justin, 2008). The variety in services has ensured that the airline is able to cover and tap a wide market. Price: Virgin Blue uses the just in time technology where customers get tickets at a lower rate if it is booked in advance as compared to the date nearing the journey (Colley, 2001). This strategy is reaping good results as they have integrated technology by being online to sell tickets. The company also looks towards differentiating prices during season and off season to attract the required customer base. Place: Virgin Blue has looked towards connecting all the major places by having direct or via flights. This has ensured that people who look towards the airways are provided the same comfort and having connections at most places have ensured that they are able to tap all segment of customers. Promotion: Virgin Blue have designed the promotional package in such a way that it is able to attract maximum travellers. To eye the business sector Virgin Blue offers Corporate Plus fare offers new incentives like access to lounge, baggage up to 32 kg and priority check in (George, 2006). Virgin Blue also offers loyalty programs like velocity for frequent traveller who will get a free life membership card where they can accumulate points of their travel journey and can be redeemed all the year round. (Gunter, 2007) Budget Based on the product, Virgin Blue should use magazines for adverting. This is because of the fact that the magazines will reach the target market which Virgin Blue is eyeing at. It will also attract the reader and will have a long term effect on the mind of the readers compared to other forms of advertisements like radio, billboards and television commercial. Radio which includes mobile is effective & quick and there is good recall but it has a lot of disadvantages like it has short exposure time, there is low attention of the listener, the target market is low and little information can be aired. Outdoor advertising like billboard, bus, and shelters provides a lot of advantage like being attractive, covering a wide area and giving large exposure but the demerits of using it are that their impact is short lived, have a limited market, and is expensive. Television has a big reach, are very visual, have high frequency and can target the specific group depending on programs but the demerit of using television is that the audience may have low recall, expensive, and the time for copy is limited. Based on such findings are the products we decided to use magazines as it suits the budget and have a wide circulation. The cost for advertising in the magazine Air Travel is as follows The cost for advertising in Sky Guide is as follows The client needs to decide which magazine they want to use based on the budget for the advertising of the product. Conclusion The paper thereby helps to indentify the manner in which the marketing of Virgin Blue has been affected due to different factors which are both in the control of the organization and external to the organization. Virgin Blue needs to look towards using these factors as it will help to improve the manner in which business is conducted and will thereby help to increase its market share. The paper also identifies the target custome that the company needs to aim at for its different products. This will help to devise marketing strategies accordingly and will ensure maximum efficiency in its operations. The report also looks into the external environent and brings forward the different points that Virgin Blue needs to look into. This will help the company to ensure that the external environment has little effect on the working conditions and will help to improve its business. The report also explains the need to develop loyalty programs and strategies which will ensure that the organization is able to have a customer base which looks towards the company. This will ensure that Virgin Blue is able to market itself well and increase the penetration level by having products aimed for different section of the customers. References Bangs, D. 2002. The market planning guide: creating a plan to successfully market your business, product, or service, Sixth Illustrated edition, Kaplan Publishing Cateora, P.R. & Mary, C. G. & Graham, J.L. 2009. International Marketing, 14th edn. Irwin: McGraw-Hill. Czinkota, M.R. & Ronkainen, I. A. 2004, International Marketing, 7th edn. South-WesternPublishing:Australia. Coley, A. 2001. Virgin Blue Fire sale wreaks havoc online. Business News, CBS Interactive, A CBS Company Fletcher, R. and Crawford, H. 2011, International Marketing: An Asia-Pacific Perspective, PearsonAustralia. George, T. 2006. New Corporate Plus Fare Delivers Significant Cost Savings to Corporate. News & Press Release, Virgin Blue Pty Ltd Gunter, P. 2007. Virgin Blue Velocity Program. Airline Business Media Partner, Edition 7 Ireland, R. D, Hoskisson, R. E, and Hitt, M. A, 2007. Competing for advantage, Cengage Learning Justin, A. 2008. Airline Industry, Service Sector Management, Business Week Koranteng, J. 1999. Virgin Blue takes early lead in the competition. Advertising Age International, Volume 24, Issue 37, page 63-71 Luther, W. 2011. The Marketing Plan: How to Prepare and Implement It, Fourth edition, AMACOM Div American Mgmt Assn Mullins, K. 2009. Critically examine the main drivers for Virgin Blue growth. Free Press. New York. Phillip, K. & Gary. A. 2001. Principles of Marketing, 9th ed. Upper Saddle River, NJ: Prentice Hall, p.245 Read More