Virgin Atlantic Airlines
What does the company do to build and retain customer loyalty?
Virgin Atlantic Airways (VAA) is one of the world’s influential airlines and largest British long haul international airlines providing comprehensive long haul services (Brownsell 2013, p. 22). The Virgin Atlantic passenger service unit offers check in facilities, meal catering, baggage handling, and in-flight entertainment. This department works in conjunction with the special assistance unit to help the passengers with special travel needs, such as providing mobility aids, special meals, and health camps at arrival and departure airports.
The airline retains customer loyalty through offering special travelling packages that suit customers’ needs (‘Virgin Atlantic’ 2009, p.50). This package includes the Virgin Holidays, which is considered one of the largest transatlantic tour operators in United Kingdom that offers selections of holidays to Canada, United States, Florida, Madagascan, Malaysia, Panama, Thailand and Caribbean, South Africa, and Kenya.
The company has succeeded in creating strong brand image, which has significantly maintained the customer’s trust (‘Virgin Media Inc. SWOT Analysis‘ 2013, p. 6). In the United Kingdom, the airline company has a strong brand image that has seen it become the largest long haul airline company operating a fleet of 38 aircrafts to more than 30 destinations. They include six routes to Asia, 10 routes to United States, eight routes to the Caribbean, four routs to Africa, one route to Indian Ocean, and one rout to Middle East (Brownsell 2013, p.21). The company has won several awards and recognitions for its unique service which includes; 2013 Sustainable Bio-fuels Award, the best long haul airline award in 2012, “best business/first class airline”, “best economy class airline” and “best airline customer service” award in 2011.
The company focuses on customers’ satisfaction by providing unique services to the passengers (‘Virgin Media Inc. SWOT Analysis’ 2013, p. 7). This includes comfortable seats across all the classes, and quality catering services. The friendliness expressed by the cabin staff along with great entertainment system makes Virgin Atlantic unique compared to its competitors.
One of the greatest concerns in the airline industry is the passengers’ safety (‘Virgin Atlantic’ 2009, p. 51). Due to increase incidences of flight accidents globally, customers wants to associate with company that prioritize on their safety. Virgin Atlantic has strict safety measures that view customer’s safety objectively and holistically making use of only interracially recognized audits from the most respected bodies.
What does the company do to build customer relationships?
To maintain and build an excellent customer service, the company has created a platform where customers can express their concerns about the services offered by the airline (Brownsell 2013, p. 20). This includes the use of website (Virgin Atlantic website) where customers can book their flights, view flight schedule and regular offer in different travelling classes.
The company also makes use of social media platform to communicate flight services and other important event to the customers (Social tracker 2015, p. 1). Through the social media, the company is able to get customers feedback that helps in critical decision making to improve customer service. A technological platform that is more responsive to the growing customers demand is significant in developing a strong customer relationship (Cottineau 2012, p. 243). According to Brownsell (2013), the rise of digital consumer economy is creating both challenges and opportunities for businesses across different industries and markets (22).
The company makes many vital press events that attract great audience as a move to interact and engage its customers (‘Virgin Atlantic’ 2009, p. 50). VAA makes use of popular celebrities such as Spice Girls to attract a large audience, which presents great opportunity for the company to send powerful brand message and launch new routes.
Porter’s five forces analysis
Porter’s five forces is a vital tool that effectively analyses the level of competition in a particular industry and vital business strategy development.
The power of suppliers
Aircraft manufacturers are the primary supplier to the company. The company chiefly relies on Aviation companies, which make Boeing and airbus. Another significant supplier is fuel companies which provides aircraft fuel. The airport also provides services that are vital to the aircrafts. Companies such as Tata Consultancy Services (TCS), IBM and NCR are significant suppliers to the company because they offer IT support services (Brownsell 2013, p. 22).
Threats of Entry
The airline industry is quite saturated. In the United Kingdom, there are more than ten airline companies, competing against each other. Since air travel services are derived demand, new entrants can significantly cut a share in the presently saturated market (Brownsell 2013, p. 21). Virgin Atlantic has significant global influence that makes it stand out as a leader in air travel industry. Despite the high competition in the travel industry, VAA has been able to enter new markets and launch new flight routs often that its competitors in UK.
There is stiff competition in the airline industry as a result of privatization that reduced monopoly in the industry. VAA has many equal competitors who offer equally attractive products and services but VAA always concentrates on creating unique upper class and premier level class for its passengers, an aspect that differentiates it from its competitors (‘Virgin Media Inc. SWOT Analysis’ 2013, p. 8). The main competitors in United Kingdom include British Airways, Atlantic Airlines, Titan Atlantic, Thomas Airlines, Eastern Airways, and BMI Regional among others. The core competences of VAA is its strong reputation in the travel industry blended coupled with high technologies, good schedules, cheap tickets and quality customer service.
The Power of Buyers
VAA is known for excellent customer service that makes it preferable airline compared to other airlines. Through offering cheap tickets, the airline intends to capture all level of people (‘Virgin Media Inc. SWOT Analysis’ 2013, p. 7). The use of website and social media to engage buyers has granted bargaining power to the customers. Customers are able to book for their service through their mobile phone and computers at their convenience without the need of going to the offices. Technology has significantly improved customer service in VAA creating better relationships with the customers.
The threats of Substitute
For every service or product offered in the market, there is always a potential substitute for it (Cottineau 2012, p. 240). VAA majorly deals with air transportation. This mode of transport is utilized by long distance travelers who intend to travel faster in a short span of time. Otherwise, there are alternative modes of transportation such as road and sea that are cheaper compared to air transport. Therefore, the main substitutes for airline industry are ships, vehicles, and trains.
Brownsell, A 2013, ‘Simon Lloyd: Virgin Atlantic’, Marketing (00253650), pp. 20-23, Business Source Complete, EBSCOhost, viewed 21 November 2015.
Brownsell, Alex. “Simon Lloyd: Virgin Atlantic.” Marketing (00253650) (March 6, 2013): 20-23. Business Source Complete, EBSCOhost (accessed November 21, 2015).
Cottineau, J 2012, ‘Six success strategies for building a stronger brand’, Journal Of Brand Strategy, 1, 3, pp. 240-246, Business Source Complete, EBSCOhost, viewed 21 November 2015
‘Social tracker: How has perennial ‘challenger’ airline Virgin Atlantic taken flight on social-media channels?’ 2015, Marketing (00253650), p. 1, Business Source Complete, EBSCOhost, viewed 21 November 2015.
‘Virgin Atlantic’ 2009, Event, pp. 50-51, Business Source Complete, EBSCOhost, viewed 21 November 2015.
‘Virgin Media Inc. SWOT Analysis’ 2013, NTL, Inc. SWOT Analysis, pp. 1-9, Business Source Complete, EBSCOhost, viewed 21 November 2015.