1、McGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights ReservedVirgin Atlantic Airways CaseMcGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights ReservedVirgin Atlantic Airways:Case ObjectivesTo integrate the concepts of services marketing as a capstone to the course.To examine the themes o
2、f service quality,innovation,public relations and pricing as they relate to success in a service.To demonstrate the delivery of customer value.To illustrate service positioning as a competitive strategy.McGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights ReservedAttributes and Dimensions of C
3、ustomer Value Offered by VAAValue for MoneyInnovationNon ConformistAlternative to BAEntertainmentCheapest DealYoungRichard Bransons AirlineServiceDynamicTrendyFunDavid against GoliathLife StylePersonalLow PriceConvenienceFriendlyInformalService QualityEntertainmentFunInnovationMcGraw-Hill/Irwin2003.
4、The McGraw-Hill Companies.All Rights ReservedComparative Flight Revenuesfor VAA and BAPeak-time London Heathrow/JFK flight at full capacityB747 aircraft with configurations described on p.6 of caseVIRGIN ATLANTIC AIRWAYS Upper Class:50 seats at$1,195=$59,750 47%Mid Class:38 seats at$473=$17,974 14%E
5、conomy:271 seats at$185=$50,135 39%Total Revenues =$127,859 100%BRITISH AIRWAYS(BA)First Class:18 seats at$1,935=$34,830 15%Club World:70 seats at$1,061=$74,270 32%World Traveler:282 seats at$445=$125,490 53%Total Revenues =$234,590 100%McGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights Rese
6、rvedVAAs WeaknessesMARKETING STRATEGYNo clear customer targets“Wild”image not good for all customersPublic relations efficient but less controllable than advertisingLow trial ratePower of competing frequent flyer programsSmall feeder networksSERVICE AND ORGANIZATIONAL CAPABILITIES Punctuality Age of
7、 fleet Losing momentum on innovation?For how long can staff be kept motivated?McGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights ReservedVAAs WeaknessesECONOMIC VULNERABILITYHigh break-even pointLack of economies of scopeCapitalDEPENDENCE ON BRANSONValue of VAA without Branson?Real value of
8、Virgin brand?McGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights ReservedVAA Possible ActionsPRESERVE AND IMPROVE CURRENT STRENGTHSInnovationService qualityFunStaff motivationPunctualityFleet renewalExpand Virgin FreewayMcGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights ReservedVAA Po
9、ssible ActionsBUILD A NEW STAGE IN THE DEVELOPMENT OF VAATransform core values into unambiguous positioning strategyDesign differentiated marketing strategy for specific target groupsBreak the trial rate wallBuild selected feeder lines in EuropeInvestigate sensitivity to price increase,while keeping
10、 a price advantageMcGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights ReservedVAA-What Happened?VAA announced joint Heathrow-Sydney service via Hong Kong with Ansett AirlinesAnnounced another partnership with Malaysia Airlines for flights from London to Kuala LumpurAlliance with Delta approve
11、dVAA renamed its full-fare Mid Class cabin Premium Economy because of confusionVAA won yet another Executive Travel Airline of the Year award in January 1995Branson ranked in eleventh place in 1994 among Britains rich with 895 million net worthMcGraw-Hill/Irwin2003.The McGraw-Hill Companies.All Rights Reserved
