The markets in which BA operate are highly competitive. Direct competition from other airlines on BA routes, as well as from indirect flights, charter services and from other modes of transport. The cost structures of other airlines are lower than BA’s or have other competitive advantages such as support by government intervention. Fare discounting has had a negative effect on BA profitability by a response to competitors’ fares to maintain passenger levels. BA has a strong global market positioning, network and alliances along with a diverse customer base to address the risks.
Customers BA needs to recognise and respond to customer behaviours. A customer’s decision to fly with a particular brand is dependent on their age, income, geographic location, lifestyle and expectations. Taking these factors into account the customer will vote with their feet if BA doesn’t factor these into the customer experience and cater for these needs. Stakeholders Financial stability cannot ensure long term prosperity, BA’s belief is in loyalty, trust and support from its stakeholders – customers, employees, suppliers, banks, governments, pressure groups and local communities. Most of these view BA as one of the UK’s most trusted super brands (2009/2010) .
The driving force for change and growth from a stakeholder’s point of view is within the internal environment, marketing strategies highlight and enforce the areas that need to reform and direct focus. The recent reforms amongst workforce practices, in reaction to the downturn, has led to the employees loosing confidence and lowered morale. Another tool BA would have at their disposal to analyse concisely the above discussion would be by application of SWOT Analysis as illustrated below;- In spite of the current difficult climate and financial constraints BA are very optimistic about the future and recognises more work is needed to remain competitive. A sound marketing environment with a clear and defined organisational objective will be key to BA riding the storm and remain a market leader for the next ten years.
Over the last year under Willie Walsh’s guidance they have achieved considerable savings in operating costs and are well on the way to achieving that magic figure of 10% operating margin. However they also realise that this leaner more sustainable company should not be to the detriment of the customer or to its employees. Therefore a main priority will be to maintain customer confidence, be innovative in providing new services for the customer, providing sound value -added services and promoting on line services. For the employee BA will need to ensure working conditions are fair. Listen to its workforce and react to difficulties raised in a proactive way. Be clear and visionary engaging all stakeholders in making BA a success and maintaining its market share
Monitoring and analysing of the market environment and reacting to the external forces will be an ongoing process for BA, using the tools and updating market conceptions along the way. Keeping it’s finger on the pulse and reacting to the marketing environment in its many guises is at the heart of BA’s strive to be the market leader. (1694 words) Question 2 In order to critically evaluate how BA is responding to its changing environment and adapting the marketing activity I am going to analyse is its Branding.
I start by looking at the quote on Brand Reputation published in BA’s latest annual report 2009/2010. Our brand has significant commercial value. Erosion of the brand, through either a single event, or series of events, may adversely impact our leadership position with customers and ultimately affect our future revenue and profitability.  It appears that BA has learned by its mistakes, in 2008 Terminal 5(T5) opened at Heathrow Airport and heralded as the future of BA. Willie Walsh pre launch statement proclaimed ‘People will be genuinely wowed when they experience Terminal 5.  However T5 was be set with operational issues, mismanagement and plain bad luck from day one with analysts proclaiming a PR disaster.
BA quickly countered the damage done to its Brand Equity – the strength of its marketing and financial value in the marketplace. Worked hard installing faith of its customers, by dealing effectively with the issues emphasising the reliability of BA as a global player and the problems as teething pains. Recently BA has re branded it’s cabins offering a range of comfortable and prestigious flight experiences, along with replacing and upgrading its fleet. It has formed alliances with Iberia (Jan 2011 – forming IAG International Airlines Group) and American airlines via the Open Skies Agreement opening up the competitive landscape ensuring BA is a major stakeholder in the global market.
It make sure BA has pitched itself right fostering and repairing brand loyalty, the management team gauges customer satisfaction though the global monthly Think Customer Survey as well as ongoing research and development of the BA product to mitigate risk. Where BA got its branding spectacularly wrong it has held its hands up, apologising and where it gets it right the steady increase in customer base and flights undertaken speak for themselves. (320 words)
Nortel has over the past year undertaken a programme of divestment of key products to the likes of Ericsson to realise a balance sheet of ï¿½1.7 billion under Creditor Protection Proceedings implemented in January 2009. This radical restructure has enabled them to continue to compete in the marketplace and steam line its products, services and organisational structure. However they cannot reap the rewards and reinvest this revenue until its creditors are satisfied.
As part of that restructure the marketing team have had to adapt their marketing strategy making it leaner and meaner. Bringing their after sales service inline with those services offered by other organisations. Having learned from Block 3 that branding and positioning is fundamental to a restructuring process. I can see offering services and products unique to the marketplace will give Nortel a distinct advantage. Though they are quick to recognise that raising their standards will come at a price “Customers’ demands are increasing; yet raising service level standards from 80% to 85% can mean an exponential increase in Nortel’s costs.”
Developing after sales service as a brand and positioning it as an all in one yet bespoke service will set Nortel apart from the main competitors. Using the comments within the TGF regarding Nortel I understand the importance of a clear market strategy and the marketers responding positively to changes within the marketing environment. They are in a very precarious state presently. Scaling back of overseas operations and offloading of certain products I particularly related to the comments made that possibly Nortel didn’t respond quickly enough with innovative areas and now are suffering at the hands of their competitors, strengthening their brand equity and constant adaptation of the 4’P’s (product, promotion, price, place/distribution) marketing mix maybe a way out of the situation. (293 words)