Description
Virgin Atlantic: Case Analysis
Virgin Atlantic Case Study Analysis
The goal of Virgin Atlantic was to provide a unique experience. They wanted that people should remember them and they wanted to be original, spontaneous and informal. Richard Branson has a big role to play in the current image of Virgin Atlantic.
Business Model
The business model of Virgin Atlantic is based on 3 classes 1) Upper Class 2) Mid Class 3) Economy Class Virgin Atlantic tries to cater to all segments of customers in the market through its various classes. The motto of Virgin is to provide best experience to customers at lowest possible cost. The business model was to attract more volume of customers by providing host of features and minimum prices. The logic about the model was same as above. Richard Branson wanted an airline which gave a memorable experience to the travelers. The consequences of the business model were both positive as well as negative(mostly Positive).
Positive 1) Virgin Atlantic became second most preferred airline after British Airways. 2) Virgin Atlantic brand became one of the most recognized. 3) Virgin Atlantic left behind airlines like American and United who were more bigger companies than itself
Negative
1) The management gave more attention to features and customer needs
and forgot about the basic expectations of the customers i.e. Punctuality and Assurance.
Vision (business vision and how was the vision translated into the service product, brand, price and value equation and marketing communication)
As stated by Richard Branson, Chairman and Founder of the Virgin Group, "Our vision is to provide the highest quality innovative service at excellent value for money for all classes of air travelers." The main differentiator for Virgin was the Fun element. Richard didn’t want their flight to be as a mean to travel from one location to another but he wanted it to be a memorable experience. The rise of mid class at VA was due to the Price element in the vision statement. Richard Branson realized that majority of business passengers travelled by economy rather than business so he devised a mid class which gave business type features at low prices. The fun factor led to a host of innovations in flight systems and entertainment systems. The VA was pioneers of this.
For a better and memorable experience for the customer many initiatives were started by Virgin. 1) In house tailor 2) Beauty therapist 3) Baby products and needs 4) Limousine Service 5) Bike Service 6) Birthday celebrations The above list is just a snapshot of the host of services that VA provided to its customers.Many unique requirements were addressed by the staff. Steadily VA became the most preferred flight of Business Executives. Richard Branson contributed a lot to marketing the airline as a brand.He himself got involved in many big campaigns like the Pirate campaign.till date Branson personally promotes the brand with big campaigns,PR activities and celebrities. Due to this unique services and vision,VA won many awards. All these awards were used for further brand development and formed the base for many ads.
Service Quality and Factors influencing it
Service Quality can be understood by seeing the intangible and tangible sides to it. Intangible 1) Reliability 2) Responsiveness 3) Empathy 4) Assurance Reliability
Virgin was not very impressive on it as it was not a kind of flight which was on time always. To improve this they started with the ‘ON TIME INITIATIVE’ Responsiveness VA were very proactive in resolving the customer’s complaints and were not at all defensive. Richard Branson himself travelled with the passengers and talked about the service quality. Assurance VA scores high on assurance. They had good safety arrangements. Half of the fleet was to be renewed in at year end. The other security features were also maintained highly. Empathy The airline tries hard to make up for most of the complaints that it receives and also tries to solve them as soon as possible.The airline understands the smallest details of the customer and try to cater it. Tangible Virgin Atlantic made sure that all tangibles were perfect. The chairs in all the classes had maximum space in comparison to other airlines. Comfort was well taken care of. It was made sure that there was no chance of the passengers getting bored in the flight. In this scenario, they were the pioneers in video on-flight entertainment. They tried to accommodate the most unique kind of requests like birthday cakes or champagne. They made sure that their Upper Class passengers faced no problem. This can be seen in the facility of the limousine service when most of their flights departed from Gatwick.
Experience Creation Model
The experience formed the basis of the service at Virign Atlantic. Whether it was Tailor inside the flight or Audio Video systems or birthday cake and celebration, everything was part of experience to the customer. The limos and the bikes not only formed the part of not only the convenience but also experience as a whole. The experience creation was basically by understanding the smallest of the needs of the customer. The virgin understood what all problems a customer can face on flight.
What if a person has a heart attack? What if there is baby along with a family? Is passenger a business travel or leisure traveler? All such questions formed the part of experience creation. In the seating arrangements also Virgin provided more legroom and more comfort. The complaints of the customers were resolved as soon as possible. The Virgin was a people centric airline which concentrated a lot on having a happy customer. The customer delight and moment of truth all were taken care of. Crew members were trained effectively to give customers a happy and memorable experience.
Role of HR
Virgin Atlantic was a people centric airline. Whether it was customers or the employees, the opinion mattered. The kind of people that VA hired was also in sync with the vision of the firm. In the starting Richard hired two ex Laker employees. VA then started hiring pilots and crew from BA itself as the optional retirement age at BA got reduced. Syd pennington was hired form Marks and Spencer to improve the organizational structure from Flat structure to Professional structure.According to management the ideal employee was young,vibrant and energetic. Richard ensured that any employee working in VA should have access to anybody and should be free to communicate any new or fresh idea. The idea of ice cream in snacks is one such example. The suggestions were implemented seriously. The employees were expected to be seriously involved with their work.
Gaps
In ServQual model basically there are 5 types of basic gaps. If we see the Virgin Atlantic case. There is 1 major gap
•
Gap between consumer expectation and management perception : VA management concentrates mainly on the features provided to the customers,fun element,surprise and low costs.But first of all customer accepts on time flight service on which it lacks badly.The On time initiative can lead to reduction of this gap.
One more gap comes in the manner that VA is largely dependent on the image of Richard Branson as such for marketing and branding. People who don’t admire Richard Branson would not travel by Virgin Atlantic if given choice.
Competitors
Major competitor for VA is mainly BA(British Airways).If we see the awareness and brand ratings,we see that Virgin is not far from British Airways.But when it comes to usage Va is just 48% when compared to 93% of BA.The survey is based on 141 sample from UK’s top 500 firms. VA needs to increase the usage as compared to BA.American and united are below VA.VA has been able to become 2nd most preferred flight but still there is stark difference between BA and VA. BA is 15 times a big organization than Virgin Atlantic.Virgin needs to be very careful in tackling BA.They can’t overtake it but they can grow closer to it as the second most preferred.For this they need to be more innovative as ever.They need to win customers from BA on the basis of Service Quality and experience they offer.
Customers Involvement
Virgin Atlantic can involve customers through 1) Being Customer Centric 2) Top management Commitment 3) Highest Service Quality standards 4) Self Service Technologies(SSTs) 5) Satisfying Customer Complaints
6) Satisfying employees as well as customers 7) Timely communication and marketing activities directed to the customers and potential customers
doc_896776374.doc
Virgin Atlantic: Case Analysis
Virgin Atlantic Case Study Analysis
The goal of Virgin Atlantic was to provide a unique experience. They wanted that people should remember them and they wanted to be original, spontaneous and informal. Richard Branson has a big role to play in the current image of Virgin Atlantic.
Business Model
The business model of Virgin Atlantic is based on 3 classes 1) Upper Class 2) Mid Class 3) Economy Class Virgin Atlantic tries to cater to all segments of customers in the market through its various classes. The motto of Virgin is to provide best experience to customers at lowest possible cost. The business model was to attract more volume of customers by providing host of features and minimum prices. The logic about the model was same as above. Richard Branson wanted an airline which gave a memorable experience to the travelers. The consequences of the business model were both positive as well as negative(mostly Positive).
Positive 1) Virgin Atlantic became second most preferred airline after British Airways. 2) Virgin Atlantic brand became one of the most recognized. 3) Virgin Atlantic left behind airlines like American and United who were more bigger companies than itself
Negative
1) The management gave more attention to features and customer needs
and forgot about the basic expectations of the customers i.e. Punctuality and Assurance.
Vision (business vision and how was the vision translated into the service product, brand, price and value equation and marketing communication)
As stated by Richard Branson, Chairman and Founder of the Virgin Group, "Our vision is to provide the highest quality innovative service at excellent value for money for all classes of air travelers." The main differentiator for Virgin was the Fun element. Richard didn’t want their flight to be as a mean to travel from one location to another but he wanted it to be a memorable experience. The rise of mid class at VA was due to the Price element in the vision statement. Richard Branson realized that majority of business passengers travelled by economy rather than business so he devised a mid class which gave business type features at low prices. The fun factor led to a host of innovations in flight systems and entertainment systems. The VA was pioneers of this.
For a better and memorable experience for the customer many initiatives were started by Virgin. 1) In house tailor 2) Beauty therapist 3) Baby products and needs 4) Limousine Service 5) Bike Service 6) Birthday celebrations The above list is just a snapshot of the host of services that VA provided to its customers.Many unique requirements were addressed by the staff. Steadily VA became the most preferred flight of Business Executives. Richard Branson contributed a lot to marketing the airline as a brand.He himself got involved in many big campaigns like the Pirate campaign.till date Branson personally promotes the brand with big campaigns,PR activities and celebrities. Due to this unique services and vision,VA won many awards. All these awards were used for further brand development and formed the base for many ads.
Service Quality and Factors influencing it
Service Quality can be understood by seeing the intangible and tangible sides to it. Intangible 1) Reliability 2) Responsiveness 3) Empathy 4) Assurance Reliability
Virgin was not very impressive on it as it was not a kind of flight which was on time always. To improve this they started with the ‘ON TIME INITIATIVE’ Responsiveness VA were very proactive in resolving the customer’s complaints and were not at all defensive. Richard Branson himself travelled with the passengers and talked about the service quality. Assurance VA scores high on assurance. They had good safety arrangements. Half of the fleet was to be renewed in at year end. The other security features were also maintained highly. Empathy The airline tries hard to make up for most of the complaints that it receives and also tries to solve them as soon as possible.The airline understands the smallest details of the customer and try to cater it. Tangible Virgin Atlantic made sure that all tangibles were perfect. The chairs in all the classes had maximum space in comparison to other airlines. Comfort was well taken care of. It was made sure that there was no chance of the passengers getting bored in the flight. In this scenario, they were the pioneers in video on-flight entertainment. They tried to accommodate the most unique kind of requests like birthday cakes or champagne. They made sure that their Upper Class passengers faced no problem. This can be seen in the facility of the limousine service when most of their flights departed from Gatwick.
Experience Creation Model
The experience formed the basis of the service at Virign Atlantic. Whether it was Tailor inside the flight or Audio Video systems or birthday cake and celebration, everything was part of experience to the customer. The limos and the bikes not only formed the part of not only the convenience but also experience as a whole. The experience creation was basically by understanding the smallest of the needs of the customer. The virgin understood what all problems a customer can face on flight.
What if a person has a heart attack? What if there is baby along with a family? Is passenger a business travel or leisure traveler? All such questions formed the part of experience creation. In the seating arrangements also Virgin provided more legroom and more comfort. The complaints of the customers were resolved as soon as possible. The Virgin was a people centric airline which concentrated a lot on having a happy customer. The customer delight and moment of truth all were taken care of. Crew members were trained effectively to give customers a happy and memorable experience.
Role of HR
Virgin Atlantic was a people centric airline. Whether it was customers or the employees, the opinion mattered. The kind of people that VA hired was also in sync with the vision of the firm. In the starting Richard hired two ex Laker employees. VA then started hiring pilots and crew from BA itself as the optional retirement age at BA got reduced. Syd pennington was hired form Marks and Spencer to improve the organizational structure from Flat structure to Professional structure.According to management the ideal employee was young,vibrant and energetic. Richard ensured that any employee working in VA should have access to anybody and should be free to communicate any new or fresh idea. The idea of ice cream in snacks is one such example. The suggestions were implemented seriously. The employees were expected to be seriously involved with their work.
Gaps
In ServQual model basically there are 5 types of basic gaps. If we see the Virgin Atlantic case. There is 1 major gap
•
Gap between consumer expectation and management perception : VA management concentrates mainly on the features provided to the customers,fun element,surprise and low costs.But first of all customer accepts on time flight service on which it lacks badly.The On time initiative can lead to reduction of this gap.
One more gap comes in the manner that VA is largely dependent on the image of Richard Branson as such for marketing and branding. People who don’t admire Richard Branson would not travel by Virgin Atlantic if given choice.
Competitors
Major competitor for VA is mainly BA(British Airways).If we see the awareness and brand ratings,we see that Virgin is not far from British Airways.But when it comes to usage Va is just 48% when compared to 93% of BA.The survey is based on 141 sample from UK’s top 500 firms. VA needs to increase the usage as compared to BA.American and united are below VA.VA has been able to become 2nd most preferred flight but still there is stark difference between BA and VA. BA is 15 times a big organization than Virgin Atlantic.Virgin needs to be very careful in tackling BA.They can’t overtake it but they can grow closer to it as the second most preferred.For this they need to be more innovative as ever.They need to win customers from BA on the basis of Service Quality and experience they offer.
Customers Involvement
Virgin Atlantic can involve customers through 1) Being Customer Centric 2) Top management Commitment 3) Highest Service Quality standards 4) Self Service Technologies(SSTs) 5) Satisfying Customer Complaints
6) Satisfying employees as well as customers 7) Timely communication and marketing activities directed to the customers and potential customers
doc_896776374.doc