Impact of Strategic Marketing Management On Airline Industry (BA AND EASYJET)

[WHAT IS THE IMPACT OF
STRATEGIC MARKETING
MANAGEMENT IN THE
AIRLINE INDUSTRY -
CASE STUDY OF BA AND
EASYJET
[Type the abstract of the document here. The abstract is typically a short summary of the
contents of the document. Type the abstract of the document here. The abstract is typically a
short summary of the contents of the document.]
TABLE OF CONTENT
WHAT IS THE IMPACT OF STRATEGIC MARKETING MANAGEMENT IN THE AIRLINE INDUSTRY -
CASE STUDY OF BA AND EASYJET
ABSTRACT............................................................................................................................................................ 5
CHAPTER 1 BACKGROUND AND INTRODUCTION TO THE STUDY......................................................7
1.1 BACKGROUND OF THE STUDY...................................................................................................... 7
1.2 INTRODUCTION TO TOPIC................................................................................................................... 9
1.3 PROBLEM STATEMENT...................................................................................................................... 10
1.4 AIM OF STUDY....................................................................................................................................... 10
1.5 RESEARCH QUESTIONS....................................................................................................................... 11
1.6 OBJECTIVES OF THE STUDY.............................................................................................................. 12
1.7 IMPORTANCE OF STUDY.................................................................................................................... 12
1.8 INTRODUCTION TO COMPANIES..................................................................................................... 14
1.8.1 BRITISH AIRWAYS....................................................................................................................... 14
1.8.2 EASYJET........................................................................................................................................... 14
CHAPTER 2 LITERATURE REVIEW............................................................................................................. 16
2.1MARKETING AND IT’S NATURE............................................................................................................. 16
2.1.1 THE DISCIPLINE OF MARKETING AND THE BUSINESS FUNCTIONS...................................18
2.1.2MARKETING DIRECTS TO VALUE CREATION............................................................................ 19
2.1.2.1MISUNDERSTANDING ABOUT MARKETING....................................................................... 20
2.1.2.2MARKETING FROM A DIFFERENT ANGLE........................................................................... 21
2.2 MARKETING LEADING TO STRATEGIC MARKETING...................................................................... 22
2.2.1STRATEGIC MARKETING AND ORGANIZATIONAL CULTURE...........................................25
2.2.2THE NEW CONCEPT...................................................................................................................... 28
2.3 STRATEGIC MARKETING MANAGEMENT.......................................................................................... 31
2.3.1 DEFINING STRATEGIC MARKETING MANAGEMENT..............................................................32
2.3.2THE GOAL OF STRATEGIC MARKETING MANAGEMENT........................................................34
CHAPTER 3 RESEARCH PLAN....................................................................................................................... 39
3 RESEARCH METHODOLOGY...................................................................................................................... 39
3.1 GENERAL DESCRIPTION OF METHODOLOGIES........................................................................... 39
3.1.1 PRIMARY RESEARCH................................................................................................................... 39
3.1.2 SECONDARY RESEARCH.............................................................................................................. 40
3.1.3 ADVANTAGES OF DIFFERENT RESEARCH METHODS........................................................42
3.1.4 DISADVANTAGES OF DIFFERENT RESEARCH METHODS..................................................44
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3.2 REVIEW AND SELECTION OF APPROPRIATE METHODOLOGIES............................................45

3.3 JUSTIFICATION OF APPROPRIATE METHODOLOGIES..............................................................45
3.4 SAMPLING............................................................................................................................................... 46
2.4.1 SUBJECT UNDER STUDY.................................................................................................................. 46
3.5 DATA COLLECTION PROCEDURE..................................................................................................... 46
3.5.1 UNIT OF ANALYSIS........................................................................................................................... 47
3.5.2 TIME HORIZON.................................................................................................................................. 47
3.6 METHOD OF ANALYSIS....................................................................................................................... 48
3.6.1 NATURE AND TYPE OF STUDY.................................................................................................. 48
3.6.2 CASE UNDER CONSIDERATION................................................................................................. 48
3.6.3 RESEARCH QUALITY.................................................................................................................... 48
3.7 RESEARCH LIMITATIONS................................................................................................................... 49
CHAPTER 4 FINDINGS & ANALYSIS............................................................................................................ 50
4.1 BRITISH AIRWAYS............................................................................................................................... 50
4.1.1 STRATEGY OF BRITISH AIRWAYS........................................................................................... 51
4.1.2 FINANCIAL PERFORMANCE OF BRITISH AIRWAYS............................................................54
4.2 EASY JET.................................................................................................................................................. 55
4.2.1 STRATEGY OF EASYJET............................................................................................................... 56
4.3 BUSINESS MODEL OF BRITISH AIRWAYS AND EASYJET...........................................................58
STRATEGIC MARKTEIN MANAGEMENT AT BRITISH AIRWAYS....................................................60
STRATEGIC MARKETING MANAGEMENT AT EASYJET..................................................................... 62
CONCLUSION..................................................................................................................................................... 65
RECOMMENDATIONS..................................................................................................................................... 67
REFERENCE LIST.............................................................................................................................................. 68
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LIST OF FIGURES
Figure 1 corporate strtategy of British Airways.................................................................................... 52

Figure 2 sale of British airways by geograohical segments............................................................... 55
Figure 3framework for devising strategy................................................................................................ 38
Figure 4Strategic Marketing Management Model................................................................................. 47
Figure 5measurement indicator based on survey at british airways.............................................61
Figure 6 easyjet customer satisfaction level........................................................................................... 62
Figure 7route presence of easyjet.............................................................................................................. 63
LIST OF TABLE
Table 1 EasyJet financial performance..................................................................................................... 57
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ABSTRACT
Strategic marketing management in this changing and dynamic era represents to be of
great advantage for a firm. It yields number of benefits which an organization can use to
achieve the long term goal that is profitability. The concept takes into account the major
strategy of an organization that is marketing strategy. Basically by strategic marketing
management work and takes into account a long term view of the organization. The best
thing about strategic marketing management is that integrates and creates link between
the vision, the business model and the goals of that the firm has and in the end help the
management in proper allocation of resources and also in the decision making process in
order to provide optimal results.
Based on the extensive literature review on strategic management and the case study about
two of the major airline namely British Airways and easyJet, this dissertations brings in
maximum analysis about how these firms are taking maximum benefits from strategic
marketing management and what kind of analysis based on literature are implemented and
used by the ongoing organizations in the European airline industry that are part of
strategic marketing management.
This dissertation aims to explore the major aspects as to what are major advantages that
the firms can achieve by adopting strategic marketing management. The kind of analysis
that is required for the proper implementation of strategic marketing management and
what benefits does it yields. How the relationships between the customers and business
gets affected using strategic marketing and most of all this studies provides extensive
information as to how the two selected organization being British Airways and easyJet
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creates fit between their strategies and what role strategic management has in these
strategies. British Airways aims to be the global premium airline and is a long haul airline
whereas easyJet is a low cost carrier. Both organizations are found to have different
business model. The introduction caters to a deep provision of facts about both the
organizations.
The findings state that both the organizations take full account of strategic marketing
practices in various ways like by conducting customer surveys as part of external analysis
and all the strategic goals and decision of British Airways and easyJet are aligned and based
on the internal and external analysis. These firms are aware of the fact that customers are
the most important element and they treat their customers as king. The end result shows
that its important for the airline industry especially with the rising fuel cost and pressure of
inflation so to work upon the best of strategic marketing management practices in order to
achieve operational excellence which ultimately will lead to organizational success.
The dissertation is aligned in a proper manner with introduction to the topic and
companies provided in the first part. Then there is a comprehensive literature review. After
that finding and analysis and last but not the least the conclusion brings along few
recommendations for the selected organization.
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CHAPTER 1 BACKGROUND AND INTRODUCTION TO THE STUDY
1.1 BACKGROUND OF THE STUDY
When considered and analyzed amongst the many other aspects, a strategy for an
organization is a like a plane which can help an organization to achieve the goals and
objectives (Mintzberg 1994). In other words it’s a ‘commitment of present resources to
future expectations’ (Drucker 1999) the real purpose of strategic management is to work
upon and choose organizational goals, the real means as how to achieve those goals and
then ensuring that organization is standing at a sustainable position so that it can work
towards achieving those goals. Along with that these strategies are used as a basis for
managerial decision making (Porter 1980).
Marketing is known as a philosophy that in turn leads to a process which is used by
organizations, groups and individuals as well, so to make them achieve their needs and
wants and that too by identifying value, along with that providing it, communicating it to
others and then to deliver these needs. The core and underlying concepts of marketing
includes customer’s needs and wants and indeed their values; the products and exchange
along with communication and relationships. When marketing is to be considered from a
strategic point of view, it deals with direction and scope of all the long term activities that
are in turn carried out by the organization so to get their competitive advantage. The
organization is known to apply all its resources and that too within the changing
environment so that they can satisfy the customer needs while at the same time can meet
stakeholders expectation. This is known as strategic marketing management.
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Based on this point of view strategic marketing is to develop a strategy that can help in
dealing with major competitors, identifying market opportunities, developing and even
commercializing the new products and the services, allocating the resources among all the
marketing activities and designing a proper organizational structure that ensures that
require level of performance can be achieved. There is no one strategy that can lead to the
success for an organization in all the situations. When thinking about marketing
strategically there are many factors that are to be considered, like the extent product is
diversified and covered geographically; the market segments it serves, channels it uses, the
main role of branding, marketing effort, and the concern about the quality. It’s important
to look into organizational view point related to new product development, its position
whether it’s of a technological leader or a follower, how much innovation, the cost position
and pricing policy of the organization and its relationship with customers, suppliers,
competitors as well as partners.
The strategic marketing management includes three stages. In the first stage the company
is required to do a thorough external and internal analysis. The external analysis can be
done through the industry analysis the most popular being porters five forces. Competitor
and customer analysis are also a part of the external analysis. The internal analysis can be
done with the help of SWOT analysis and also through an understanding of the operations,
management, marketing and financial components of the business. The next stage of the
strategic marketing management process is defining a strategic posture. This provides an
overview of the strategic development of the organization. The third stage is of market
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planning. This is where the marketing plan is devised which meets the needs of the
external and internal environment but also fits the strategy of the organization.
1.2 INTRODUCTION TO TOPIC
Marketing is known as an integrated business process which is used to create value for the
customers and create high quality relationships with the customers in order to get
maximum value in return from the customers. Marketing comes along with a goal and that
is to identify the customer and to satisfy them by creating products and services of very
high quality which in turn fulfill the needs and wants of the customers. Marketing over the
years is found to place a very important role in the business management process that
purely focuses on the customers. But companies are aware of the fact that in order to stay
profitable, the company has to shift from the orientation of products to the orientation of
customers. To achieve the main goal of an organization is to achieve profitability and for
this the company must understand the needs and wants that their target market has and to
create products and services that will deliver the desired level of satisfaction. This is where
the role of strategic marketing management takes a lead. All the companies work on their
marketing strategy and they know that each and every aspect of marketing from the
relationship along with the customers to the value creation turns out to be strategy.
Marketing is defined as the function of management that is responsible for the identification,
anticipation and satisfaction of customers. Therefore the philosophy and the set of techniques
which are used to address issues like research, product design and its development, along with
pricing , packaging , its sales, distribution and the promotion, advertising, PR and even after sales
service. These activities indeed are known to define the scope of marketing and when they are
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integrated with balance within a marketing place they are known as marketing mix ( Doyle 2000).
Day and Montgomery (1999) claimed that marketing is becoming more and more tactical
and looking at this changing tactical orientation which has found to have removed the
innovative element found in marketing and has also prevented marketing from becoming
adaptive to the changes that are taking place in the environment.
When it’s about strategic marketing management, this great concept helps in providing a
very detailed view about the major elements of the marketing strategy of the firm and also
identifies that main links that integrates them. Aaker (2007) explained that the main
benefits that firms working upon strategic marketing management can obtain includes that
they analysis and management of strategic marketing helps an organization deal with the
change. It helps in looking at a long term view, makes the organization look into the
strategic choices which seems not to be working on delivering results, helps in proper
resource allocation decisions and they also help in decision making.
1.3 PROBLEM STATEMENT
The major points that the study takes into account is that how these two companies created
a perfect fit between their strategies and marketed themselves so well that they now have a
leading position in their targeted segments. The dissertation provides an in-depth analysis
of the both these organizations as to how they maintain relationship with their customers
and how these relationships are getting affected by using the strategic marketing.
1.4 AIM OF STUDY
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The aim of the study is to show that strategic marketing management is an important
concept in today’s business world. The study is to show that strategic marketing
management can help be used to overcome the complexities of marketing, then to deal
with the customers’ expectations and stakeholder and in the end to bring together the
influences of the changes that takes place in an environment based on a limited set of
resource capabilities. It is also important to create some strategic opportunities to manage
the changes those are associated within an organization. Through marketing, an
organization works at maximizing shareholders returns and provides maximum
satisfactions to the customers. This is mainly done by creating and working on what is
known to be the competitive advantage by identifying, providing, communicating and most
importantly delivering value to its customers and thus developing long term relationships.
Strategic marketing management this states that has huge benefits for the business.
The airline industry is an important part of the economy for almost all the countries. This
huge sector has experienced many ups and downs in the last few years. It is therefore is of
interest of the researcher to find how the concept of strategic marketing management has
helped two airlines which works upon different business models as one of them is British
Airways which is a full carrier and the other one is Easyjet being a low cost carrier.
1.5 RESEARCH QUESTIONS
After understanding the importance of the topic and shedding some light on relevant
literature it is possible to state the questions this research attempts to answer. Following
can be some of the research questions:
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 What are the advantages of adopting strategic marketing management?
 What kind of analysis is required in order to implement the strategic marketing
management?
 How the customer-business relationship is affected by using strategic marketing?
 How have the two selected organizations created a fit between all their strategies?
1.6 OBJECTIVES OF THE STUDY
The research has the following objectives:
 To study the development of strategic marketing management over time.
 To ascertain and understand the importance of strategic marketing management in
the business world today.
 To study how two organizations (British Airways and Easyjet) in the same airline
industry have benefited from strategic marketing management
 To analyze how these two organizations, with different business models, have
strategically placed and marketed them.
1.7 IMPORTANCE OF STUDY
The topic of this dissertation also is found to be of utmost relevance considering the
changing times. The study provides an in depth analysis about strategic marketing
management as to what are the main benefits of the organizations that are working in this
difficult era where everything is so competitive. The world is now a global village and
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looking into the business environment with respect to the changing economic times, every
organization is striving to achieve more and more profitability. Clearly the economic
situation reveals a different scenario as there are losses taking place and the main aim of
the business firm is to at least make sure that there maintain their current customers base.
Customer retention considering the highly competitive environment is the only way a firm
can maintain their current market share. In order to survive in these difficult times,
organizations are to work very hard on understanding how important strategic marketing
management is in order to be profitable.
The topic takes into consideration the two players from same industry that is airline. The
main reason for the selection of the companies namely British Airways and easyJet is that
they both have different business models. Studying how both these organizations working
upon different business models and using the concept of strategic marketing management
will help in providing a clear understanding about the benefits that these organizations
came along by working upon strategic marketing management.
The study is mainly divided into three main parts. First a brief introduction is provided of
both British Airways and EasyJet, so that understanding the company will help in better
analysis of the company. Also in this thesis report an extensive literature has been
provided which provides the background about how strategic marketing management has
evolved and what is the current stance related to that matter. The literature review is being
provided which helped in understanding the concept in a proper manner. Based on the
findings and analysis, the dissertation includes some recommendation that both the
companies can look into for future long term growth plans.
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1.8 INTRODUCTION TO COMPANIES
Two main airline companies; one being British airways and the other being EasyJet are
used for the purpose of analysis in this dissertation. This section provides an introduction
to both the famous airline companies.
1.8.1 BRITISH AIRWAYS
According to the company’s official website, British Airways is known to be one of the
world’s largest airlines which cater to the premium class mainly. This airline is basically a
flag carrier airline in the UK, it’s based on the Waterside which is actually near its main hub
i.e. London Heathrow Airport. The main things which makes British Airways the largest
airline in United Kingdom is that they have a huge fleet size along with that they cater to a
great number of international flights and many international destinations.
1.8.2 EASYJET
The CEO of easyJet stated that the famous airline easyJet came out due to the liberalization
of the European aviation which happened by the Open skies. There are almost 200 carriers
that are currently found to be competing in the short haul market in Europe. The top five of
them includes easyJet, which almost account for 60% of the flown seats and the rest market
is what one can call to be highly fragmented. EasyJet is known to be the as the only main
European short haul carrier which enjoys a significant position in all the major airports and
it also operated with the leading network as it has a presence in almost 100 main routes of
the European short haul aviation ( company’s official website)
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The airline cover almost more than 580 routes over 30 countries. They have a fleet of more
than 200 aircraft. 7,300 people are employed by the company which has almost 1,900
pilots and cabin crew is of 4,300 people. In the year 2010, the company served almost 54
million passengers.
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CHAPTER 2 LITERATURE REVIEW
2.1MARKETING AND IT’S NATURE
The term marketing is mostly found to connote a business function that is peculiar to an
organization. Marketing is mostly viewed as a task where findings are made in order to
stimulate buyers for what the firm produces. This takes into account the development of
the product, its pricing along with the distribution, the communications and mostly
importantly in relatively big firms there is a continuous need to change with the customer
requirements and also to develop new products or to make modification to existing
products in order to meet the needs of their customers. But gone were the times when
marketing was view to be something that was linked with pushing the products because in
the new era it caters to customer satisfaction and is most likely viewed by organizations as
a business activity.
Looking into what marketing is? What are the kinds of phenomena which are found to be
termed as marketing phenomena? What comprises of a marketing system? How the
activities in marketing can be distinguished in comparison to non marketing activities?
Getting to the point what exactly is the proper definition and concept that comes into the
domain of the work that is termed as ‘marketing’? The American Marketing Association is
found to define the term marketing as the performance of the activities in a business that
actually directs the flows of its goods or if they provide services than services from the
producer to the main consumer. Even though this notion came under a lot more criticism
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but still the end results tell that marketing is not what can be easily defined. There is no one
who has being able to provide a very clear definition of the term marketing.
In reality marketing is found to have many definitions. Drucker (1996), marketing is
defined as to identify the customer’s wants and needs and to add value in the products and
services in order to satisfy the identified wants and needs. This definition is found to have
three main components. First one is to identify the wants and needs of the customers, as
the customer is known to be the most important factor in the overall marketing. Second
component states that it is all about adding value to assure that the wants and needs of the
most important customers remains for longer time duration. Thirdly the firm in the long
run needs to generate profits that are to be sustainable. When it comes to effective
marketing in the changing and global demands that are taking place today then the
producers are most often found taking and working upon marketing and applying
marketing to even production and shipping areas.
There was some modification in definition by Doyle (2000) that is of the view that
marketing is like a management process that is working to maximize shareholder’s returns
thus by creating a competitive advantage by communicating, delivering real value to the
customer and thus in the end developing a long term relationship with them. This
definition at that end is very clearly defining the main objectives of marketing and what
should be done to evaluate its performance. The main contribution made by marketing gin
the organization is by formulating the right strategies so to choose the right customers,
building relationships of trust with them and in creating a competitive advantage (Doyle
2000, p. 235).
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2.1.1 THE DISCIPLINE OF MARKETING AND THE BUSINESS FUNCTIONS
McCarthy (1960) worked on a very structured approach that was related to conventional
marketing and it has its focus on the management related to marketing mix and the 4 P
model. This also consisted of limited variables used for decision making which became very
important for developing the theory of marketing and for practicing it at the same time.
regardless what the industry is and whether they a offering a service or a product or even
that can be something else, the dealing and content for the relationship of customers and
the variety that’s being found in the contacts of customers have no moved ahead and
beyond the simple and traditional interfaces which was what assumed to be based on
conventional marketing. There are areas like relationship marketing and a service which
shows that marketing is moving ahead and the growth in this key area is tremendous.
Webster et al., (2005) explained that marketing is what seems to be seen and losing the
credibility it has and hence a downfall is taking place in marketing. There are a number of
reports that are found in USA and similarly from Europe which shows that the Chief
Executive Officer normally has a negative impression related to marketing from the works
of Welch (2004) and Cassidy et al., (2005). In the very famous issue in the year 2005 of
Journal of marketing in which the emphasis was made on the need to look for marketing
renaissance, known professors in marketing were found to raise their voices about the
marketing theory. Brown (2005) explained in one of the essay that it’s important that the
team members from the top management are required to discuss the importance
customers have in their firms and especially when it comes to large firms. When they work
on customer management they don’t consider marketing to play a very important role.
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2.1.2MARKETING DIRECTS TO VALUE CREATION
Sheth and Uslay (2007) in their study suggested that marketing requires taking on a goal
and that is to create value for its customers. This was not regarded as something of a new
concept in literature of marketing but until this time period this view was silenced by the
transaction oriented traditions that exist in marketing and models in marketing. Holbrook
(1994, p. 22) stated that in the year 1990 the concept of value was that it was found to be
the fundamental basis required for all the activities in marketing. Rust and Oliver (1994) in
their study explained that in the end it is the value that attracts the customers and often
lures customers away from the competitor. Eggert et al. (2006, p. 20) were of the view
that by offering superior value to the most important and influential of all i.e. customers , it
is essential in order to create and maintain long-term relationships with the customers.
Looking at it generally, the main goal of marketing can in turn be formulated in the manner
stated as follows:
“The main goal of marketing is to make sure that the firm engages its customers in all
the processes while having the aim to support the creation of value in the designed
processes which will be mutually beneficial.”
But the main concern is how can this value for the customer be understood? Who is the
person who is responsible to create this value for the customer? The current research into
the field of customer value clearly depicts a trend that is different from the value in
exchange view to the notion where the value is not something that is being produced by the
supplier but it’s something that is done by the customers when they use goods and services
and when they make interactions with the suppliers.
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Gro¨nroos (2008), in the year 1979 taking into account the context of services marketing
came to the conclusion that it is quite reasonable to take into consideration both the goods
and the services to be used and bought by the consumers so that to give what one can
contribute as service or even value satisfaction. At the same time he was of the view that
the goods are found to present some potential value or utility to the consumers. When a
purchase of the good is made and after that he initiated and implemented a number of
activities that are required for transforming the potential value into what is known to be
the real value for the consumer, on the other hand a service is found to be an activity all in
itself which has an inbuilt ability that it can transform the potential value that the
consumer is suppose to have to what is known as real value for the consumer.
2.1.2.1MISUNDERSTANDING ABOUT MARKETING
Palmer (2000) claimed that are a number of misunderstanding about marketing. These
misunderstanding mostly relate to what actually is marketing all about. Kyle (2004)
suggested that many people are found to view marketing as a series of well formed tactic
and gimmicks and they define marketing as pyramid programs. When answering this very
important question that is takes into consideration what marketing actually is Gronroos
(1990), argued that marketing is actually a philosophy that guides the whole thinking of the
organization and along with that it’s a way in which all the functions and activities of the
firm are found to be organized. Similarly it’s a set of tools and many important techniques
like promotion, pricing, packaging, designing and distribution. For this reason Palmer
(2000) provided his definition of marketing as to be about utilizing the resources that an
organization has in order to meet and deal with the changing needs of the customers who
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are the one organization are found to be dependent upon. Kotler et al. (1999) are found to
be arguing about what marketing is and they stated that it’s a social along with managerial
process through which individuals as well as groups are found to obtain what they require
as in their needs and wants by creating and exchanging products and most importantly
value that with others.
2.1.2.2MARKETING FROM A DIFFERENT ANGLE
Most of the authors are the ones who discuss marketing as like a discipline in business and
that is from the point of view of manager. It somehow related to how marketing is
associated with companies and most importantly organizations. But looking into the
scenario one can easily tell that marketing is not just a subject which is about and related to
being a manger in marketing, because this discipline is now found to be very
encompassing. According to Hill (2002) & Holt (1998), marketing is something that is
affecting everybody because as consumers somehow we cannot escape what the market is
about and in this way even the ones who are trying to live a very simple life gets affected.
Marketing is not something that is just like an economic activity. It is what drives the
society of consumers along with that it supports the culture of the consumption. Marketing
is what one can say appears to be affecting more and more people all around the world
these days but the effects it has are not what one can say to be new. Looking back over the
centuries, marketing was something that influenced the way empires were built, the
languages evolved, the technologies came into application and transport routes came into
existence. Everything can be traced back into the concept of marketing.
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2.2 MARKETING LEADING TO STRATEGIC MARKETING
Looking at the schools of marketing thought, they range from the traditional approach also
known as classical approach as described by Kotler (1991) to the approach of strategic
marketing by Aaker (1992). Taking this into mind, it’s important to understand that
marketing is what forms the integral part which in turn constitutes the corporate strategy
and the marketing strategy of the firm and this in turn can be interpreted as strategic
marketing. Baker (1996) worked and pointed in his study that the terms like corporate
strategy and marketing strategy are the ones which requires proper clarification so that the
confusion that exists will be eliminated. Both marketing strategy and strategic marketing
are concepts which can be viewed as something that is inseparable from one another. This
argument was further supported by Doyle (1994) who was of the view that the process of
marketing is about interaction that takes place between the supplier and the buyer and this
also includes the end users of the product or service. Baker also worked upon and
suggested that there is a strategy that is found to have emerged from the process of
marketing in itself and these analyses and also interprets the data that has been collected
from the market in a structured and logical way. Marketers are and can collect the data and
in turn produce the required and relevant marketing information, later they can formulate
and also go for implementation of marketing strategy which results in helping the
organization to achieve a sustainable competitive advantage as stated by Aaker (1992).
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Marketing strategists are found to be concerned with working upon creating a fit as
suggested by Porter (1996) that there exists a link between what the marketers are doing
and what actually the strategists do and this forms the basis of strategic marketing
approach
Henry (1999) stated that the early study of strategic marketing performance dates back to
the period of rapid expansion of the strategic marketing and that was since 1960s.
Although similar studies are found which employs a number of methodologies and they
also uses different measures but in the end the conclusion that tells that they shared one
common interest and that interest is investigating the financial performance consequences
of the basic techniques and activities of the formal strategic marketing and these are the
market research, SWOT, portfolio analysis, mathematical and computer models for the
formal planning of the meetings along with long range written plans. The studies are found
not generally examining the relationship between performance and its extent of the formal
planning. In the same context it’s being referred as “comprehensiveness, rationality,
formality, or simply, strategic marketing”.
At the same time strategic marketing is known as a continuous and a very systematic
process, the one where people are to make decision about the future outcomes that they
want, the ways as to how these outcomes can be achieved and finally how to measure and
evaluate the success. Strategic marketing is found as a very authentic source to help an
organization build their own strength and while capitalizing upon them weaknesses are to
be overcome, to take maximum advantage of the opportunities and to take protective
measures against the threats. According to Bryson (2004), when it’s strategic marketing it’s
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all about making choices. It’s a process that is designed to support leaders in their goals
and the methods they use. When expressed in a different manner, strategic marketing is a
very famous marketing management took and like all other tools the main purpose it’s
being used is to help an organization to work more effectively. So, strategic marketing is
found as a systematic process by which an organization is found to agree on and build
commitment between the main stakeholders and among the priorities that are important
for a responsive environment. Bryson (2004) viewed strategic marketing as a disciplined
effort so that it can produce fundamental decisions and actions that can in turn shape and
guide what an organization is all about, what and why it is doing along with keeping the
future in mind.
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2.2.1STRATEGIC MARKETING AND ORGANIZATIONAL CULTURE
In order to understand and derive the best and right results of the market dynamics, what
the marketers require is to understand what exactly is the external environment and based
on that what are the needs and demands of the targeted customers as stated by Aaker
( 1992). Similarly Greenley (1995) and Montgomery and Weinberg (1991) had same views
like Aaker. It’s very important for the senior marketers to provide support to the staff that
works for them if the need is for the marketing staff to understand and identify along with
the culture of the organization. This shows that they are required to set an example and
inspire their employees so that they can obtain maximum level of commitment for the
organization in order to achieve the desired goals.
Marketing strategy required a very firm and accurate understanding related to needs and
wants of the customers. For this reason the marketing managers are to view the external
environment that too from a holistic perspective and they are to focus their attention on
the entire national as well as the social cultural norms, similarities and differences.
Customer service is what has to be placed in context of strategic marketing which means
that the marketers are to develop a policy related to customer service and this policy
should be very high in quality and the organizations can actually go for a customer
response system which will ensure that the service for the customer is focused on
customers or not. This is what can be traced back and linked to the organization culture
and how can an organization generate maximum satisfaction among its customers looking
from the point of value as explained by Morgan et al., (1998). Figure 1 is what clearly shows
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that how the marketers can work on devising strategy for customer service which will in
turn collect maximum and correct information from the external environment. Identifying
the strengths and weaknesses can be another way to access the internal situation and this
can be a step which can help in improving the situation of the firm. Customer perceptions
also plays a vital role and their perceptions related to brands can what be translated into
effective measure when strategic marketing is taken into account.
FIGURE
1FRAMEWORK
FOR DEVISING
STRATEGY
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Research in the field of marketing strategy covers a very huge domain. Varadarajan &
Jayachandran (1999) researched and were of the view that over a large number of years
what the researcher of marketing strategy have addressed are the issues of organization
that are very much in relevance to marketing strategy like branding, positioning and
segmentation etc, issues of organizations that are related to functions like issues pertaining
to quality management, the interface that exists between the business strategy of the firm
and marketing, the phenomena that are of organizational level which can impact marketing
strategy like corporate culture and market orientation and the last element being the most
critical one is the outcomes related to market strategy which includes the market share and
customer satisfaction being the most important ones. When there is more swing towards
the customer perspective in the marketing strategy as compared and in opposition to the
competitive perspective, one can see clearly that the focus is found to be upon the
customers like to gain more and more understanding of the competitors that the firms has
by means of relationship with the customers.
Looking at strategic marketing from this perspective include the defining of value for
customers, developing the value and as well as delivering the value by means of a process
as explained by Piercy (1998). The orientation of customer value to the marketing strategy
is what required the understanding about the complexities that are related to the
perceptions of customer value, in the process of monitoring the value for customer and the
process that were to be used for leveraging the organizational knowledge that is linked
with it, this concept was suggested by Parasuraman, (1997) and Woodruff (1997).
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Strategic marketing when looked from the perspective and in the light of supply chain
management; it’s very obvious that it becomes more complex as now there is a
coordination of the understanding about value, its creations and the delivery of that value
among three or even more firms. Looking at it, such concept sis what one can actually work
upon in order to gain a strategic advantage in this very highly competitive global era as
stated by D’Alene (1995) and Varadarajan & Jayachandran (1999). Most importantly it
should be kept in mind that the business and the technology changing in this fast pace era
and the accelerating environments all around the globe, which are also creating very high
and turbulent changes in the market place and in turn leading to managerial uncertainty,
can also pose many challenges in the area of strategic marketing.
Here the marketing managers are to think about the marketing strategies that they are
working upon keeping in mind the terms and implications that exists throughout the
process. Considerations are to be made about what the firm resources are and how
effectively are it utilizing its resources and whether the results are obtained by
implementation of those strategic marketing practices.
2.2.2THE NEW CONCEPT
The 21st century concept related to marketing has now moved ahead and beyond what was
found to be an old concept and this new concept which is related to strategic concept and
this concept recognizes that marketing is at the core of everything and it deals with
everything that matters which means that now it’s not just about product or the customers,
but by the word everything it actually means everything and all the factors related to
external environment are related to it. These factors includes the competitors, culture, the
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government and the technology and most of all everything that the company controls like
the price of the products, its place, promotion, positioning and matters related to branding
and most importantly the concept of value as and when perceived and viewed by the
customer (Keegan 2004).
There are companies that are found to be implementing the strategic marketing concept in
order to create and provide very unique value along with that competitive advantage and
last but not the least the bottom line result that is return for the owners and employees.
Brooksbank and Taylor (1999) worked and in their work they stated that since the middle
of the 1980’s, looking at the European as well as studies from North America, they shows
that important contributions were made when basic practices of strategic marketing are
taken into account and this ultimately lead to success for an organization. Despite the fact
that China is found to be emerged as one of the most powerful economic power when taken
into account comparing it with the global economy still this economy generally believes
that strategic marketing is to be used only at the early stage when development is to take
place (Ambler and Wang, 2003).
Based on this point of view strategic marketing is to develop a strategy that can help in
dealing with major competitors, identifying market opportunities, developing and even
commercializing the new products and the services, allocating the resources among all the
marketing activities and designing a proper organizational structure that ensures that
require level of performance can be achieved. There is no one strategy that can lead to the
success for an organization in all the situations. Marketing also plays a vital role as it has
very sound roots and well established notions from the past which are most very fruitful
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for the firms. When thinking about marketing strategically there are many factors that are
to be considered, like the extent by which the product is diversified and covered
geographically; the market segments it serves and caters, channels including marketing
and distribution that it uses, the main role of branding, marketing efforts , and the concern
about the quality. Here four P’s of marketing are mostly what organizations look into in
order to formulate a strategy. It’s important to look into organizational view point related
to new product development, its position whether it’s of a technological leader or a
follower, how much innovation, the cost position and pricing policy of the organization and
its relationship with customers, suppliers, competitors as well as partners.
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2.3 STRATEGIC MARKETING MANAGEMENT
It’s important to set the stage when it comes to strategic marketing management because
linking it with literature and important concepts of strategic management will provide a
better understanding about what the term caters to. Authors and researchers are found
long working upon and explaining the importance that in today’s competitive environment
there is a strong need for more and more strategic planning. As Drucker (1974) said that
there is one most important of all certainty that lies ahead in the future, these are the time
where the managers are to work and perform. The thing that is certain is that the future is
what brings turbulent times. In these turbulent times, the first and foremost task that the
managers are to work upon is that to make sure that the firm has a capacity for survival, to
ensure that it has the strength in its structure, to ensure that they have the capacity to deal
with a hard blow and survive in a difficult time, that if they can adapt with a very sudden
and unforeseen change, to adapt itself to sudden and most importantly if they can avail the
opportunities that change comes along with. Although this was a very ancient kind of
prediction but firms are of the view that still in this 21 st century are to work upon the same
concepts and deal with the turbulent times in order to work along with the changes and to
grab new opportunities.
Haley and tan (1999) in their article explained that the strategic management that exists in
Asia is found to be very different. Decision makers are found to be taught in a different
manner in the West and also in the business schools in Asia. Looking at the last decade, one
can clearly see that it is evident about how the Japanese management systems are
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influencing the management practices in the West. Even though that the Japanese economy
is found to be the second largest of the world’s economy and there they have a substantial
population which is found to be neither compared nor combined with other economies that
are non Japanese. Even though there are differences that exists in the decision making
styles when analyzing the implication that the decision making style that Asians have when
they deal with business related opportunities as it has a strong bearing on the strategic
marketing management practices. It mostly changes the overall way that how the cultures
and its notion have an effect on the strategic marketing management which the firms are to
work upon in order to achieve the highest ladder of success.
2.3.1 DEFINING STRATEGIC MARKETING MANAGEMENT
Aaker ( 2001, p.18) was of the view that the strategic marketing management was designed
in order to help the management so that they can make better strategic decisions and also
to create clear strategic visions which also takes into consideration the creation and
changing and retaining of the strategy of the firm. The process of the strategic marketing
management is found to include the analysis of both the firm’s external and internal
environment. External analysis basically looks into the outside world of the business as like
the areas which have a very huge impact on the business and the way it operates. Areas
which are required to be taken into account while an external analysis is being performed
include the customer analysis, as in what are the segments of the customers, their
motivation and the needs that are unmet. Along with that a competitor analysis is also
found to be useful and can be done. In this analysis, information can be collected about the
objectives, strategies, strengths that the competitor possess and the weaknesses and the
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costs it incurs all are viewed and in turn the collected data is used in formulating strategies
which can benefit the firm in the long run.
According to Jan (2002), the strategic marketing management includes three stages. In the
first stage the company is required to do a thorough external and internal analysis. The
external analysis can be done through the industry analysis the most popular being porters
five forces. Competitor and customer analysis are also a part of the external analysis. The
internal analysis can be done with the help of SWOT analysis and also through an
understanding of the operations, management, marketing and financial components of the
business. The next stage of the strategic marketing management process is defining a
strategic posture. This provides an overview of the strategic development of the
organization. The third stage is of market planning. This is where the marketing plan is
devised which meets the needs of the external and internal environment but also fits the
strategy of the organization.
One of the key and most important notions that is found to be underlying the basic
principle of strategic marketing management is the firm’s relative position among its
competitors as stated by Wilson and Gilligan (2005) in their book ‘strategic marketing
management’. They also mentioned that along with the firm’s position as to where it exist
in its competitor circle, a strong need is to take into account the unit costs, the quality of the
product or service that they provide, the most important element that is the prices, and
then market share and profitability of the firm are to be viewed all under the strategic
marketing management. The contribution that all these factors make in the strategic
marketing management which in turn lead to and provides profitability can be estimated
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by using the multiple regression models. This model will help in identifying and locating
the impact that the relatively weak variables have and in turn it can offset along with the
strong variables. Like the low market share can be found to offset the high quality of the
product. Once this model is used by an organization they can access what are the strengths
and weaknesses of the firms are and what are the strengths and weaknesses of the
competitor so that they can work on the best source which can ultimately lead to
competitive advantage by means of a strategic marketing management process.
2.3.2THE GOAL OF STRATEGIC MARKETING MANAGEMENT
Wysocki & Wirth ( 1995) explained that there are at least four goals of the very important
concept of strategic marketing management that are to be understood by the ones who
want to create more and more profitable strategies by using strategic marketing
management . The four goals are as follows:
1. To select accomplishments that are based on reality and in this they need to take into
account all the goals and objectives.
2. To develop or alter the business strategies in a more effective manner.
3. To set firm and operational priorities in order to bring operational change.
4. To improve the performance of a firm.
When there is a desire to have accomplishments that are based on reality, these
accomplishments are found to be mostly shaped by the level of understanding which the
decision makers of the firm have in respect to both the internal and external factors.
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External factors are the ones which are not in control of the decision makers and the firm
and the internal factors are the ones which are under the control. By having a proper use of
the knowledge about the internal and the external factors, this in turn will lead to more and
more effective strategies of business. Strategy as in definitions is meant to be what the
decision makers are found to be making a choice about and that in turn means that it lead
to setting and making priorities in order to deal and lead to operational change. When
thinking about conducting a planning exercise of strategic marketing management, it’s
more than just an exercise. For this reason, it’s important to keep in mind that the main
goal of marketing management is to improve the overall performance of the firm. Figure 2
shows the model of strategic marketing management as will be discussed in detail.
FIGURE 2 STRATEGIC MARKETING MANAGEMENT MODEL
The model is found to be divided in three levels:
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1. External analysis
2. Strategic posture
3. Marketing planning
Looking into it external analysis is found to be the main focus of attention. This analysis is
most important as it provides information about all the relevant and important elements
related to the firm. Keeping in mind this analysis should provide more and more
information and should be purposeful as it focuses on the threats along with opportunities
and strategic choices which are to be identified. Competitor analysis, customer analysis is
mostly done to gain information in external analysis. The fact that at this place a
brainstorming activity would be of great use cannot be eliminated. Similarly porter’s five
forces can also be used to conduct a thorough analysis for the external environment as it
provides maximum information which can be used in order to make strategies for the
future.
The final task of this analysis and the task itself is analytical is to take a look and zero out all
the issue that are strategic and that the management needs to take into account so to form
a very effective and efficient strategic action plan. At this part, the managers are required to
make conclusions and draw facts based upon the analysis conducted in the three levels of
the model. They are also required to look into the company’s situation from an all rounder
perspective and to get to a specific point where they think that they need to work upon and
give their strategic attention to (Thompson and Strickland 1995). Having all the data
gathers, the time is here where all the analysis is put together in a manner that will help the
organization to work upon and craft a strategy that is long term. SWOT analysis that is
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about identifying the firm’s strengths, weaknesses, opportunities and threats can be very
useful when working upon the strategic marketing management model.
Marketing is known as a philosophy that in turn leads to a process which is used by
organizations, groups and individuals as well, so to make them achieve their needs and
wants and that too by identifying value, along with that providing it, communicating it to
others and then to deliver these needs. The core and underlying concepts of marketing
includes customer’s needs and wants and indeed their values; the products and exchange
along with communication and relationships. When marketing is to be considered from a
strategic point of view, it deals with direction and scope of all the long term activities that
are in turn carried out by the organization so to get their competitive advantage. The
organization is known to apply all its resources and that too within the changing
environment so that they can satisfy the customer needs while at the same time can meet
stakeholders expectation. This is known as strategic marketing management.
Each and every aspect of marketing from the relationships of the customer to the creation
of value and strategy is found to be of significance important being a major contributor to
the success of the firm. For a stable growth and being sustainable requires a firm to
understand its markets in great detail and also to create customer value which is the main
principle of marketing. the competitors, customers, consumers, the forces in the market ,
the technology, government all the major components evolve and they are found to be
redefining the industries, organizations are found to be facing new and more challenges
and they are to double their efforts in order to be more effective to produce goods and
services.
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This is where the role of strategic marketing management comes into play. Strategic
marketing management provides a very comprehensive view and it examines all the main
components that are related to marketing strategy and also its integration. Looking ahead
into the future and at the same time working in this challenging economic environment
requires firm to work on strategic marketing management in order to be successful and
gain maximum market share.
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CHAPTER 3 RESEARCH PLAN
3 RESEARCH METHODOLOGY
3.1 GENERAL DESCRIPTION OF METHODOLOGIES
Data collection is the way of collecting information regarding the undertaken research so
that meaningful results and analysis could be carried out. Basically there are two major
methods of data collection. First one is primary and second being secondary.
3.1.1 PRIMARY RESEARCH
When the data collection is done on direct basis and the information that is being collected
is first hand by the researcher then it is what one can call primary research. The researcher
can collect the primary data by a number of ways like by taking interviews, conducting
surveys and asking direct formal and informal questions. The primary research can be
carried out in two broad methods which are as follows.
Quantitative research: It is a scientific approach where the researcher works upon and
tries to find answers to the research questions by providing a statistical analysis. The
quantitative results in this research either approves or disapproves are hypothesis.
Qualitative research: It is also a scientific approach but here the difference is that the
results obtained are not supported by quantitative data as rather results are based on
theoretical information.
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METHODS USED FOR PRIMARY RESEARCH
 Surveys and questionnaires
Surveys and questionnaires are the one of the most common methods which is used in
gathering the information also known as primary data.
 Interviews
The interviews are common but a tricky and efficient way of collecting primary
information. The interviews in this case can be taken face to face, over internet or even on
phone.
 Observations
Observations is also known and used as a great way to collect primary data. The researcher
in this case is mostly found to have a checklist which can help him in collecting the required
information. This method helps in gaining insight about a specific event.
 Focus Groups
The collection of data by focus groups is a way of overcoming the weakness associated with
personal interviews. In this method a moderator is responsible and he or she usually
supervises the group of around 8 or 10 people.
3.1.2 SECONDARY RESEARCH
Secondary research is carried out based on the information and data that is already
available. This information is available and accessed from a number of sources including
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the library and World Wide Web. It may be present in form of journal articles, books,
websites, newspaper articles or other published material.
The secondary research also includes two methods of analysis:
 First method is the statistical analysis in which published information is used to
form an analysis about the specific topic and numerical and mathematical
analysis is done.
 The second is the information research which uses the qualitative information
present in the journals, textbooks and also the electronic resources.
METHODS OF SECONDARY RESEARCH
 Case study method
The case study method is used when the researcher requires an in depth analysis of a
well defined and important particular issue. The case study relevant to that issue at
hand will help in better understanding the scenario in which the case is taking place. It
can help by providing either explanatory or descriptive view or even both.
 Company Websites
Whenever the research is company specific the first and foremost source for collecting
information that is regarding the said company is its official website. The official website
contains all content related to the company and is most of all the perfect reliable source as
content and information available on the official webpage of a company is what is
copyrighted and the company can be held responsible if the information provided is not
true.
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 Media Releases
A media release is actually a document that contains information for the stakeholders and
which is given away as like a method of gaining attention of the media. The press releases
that are specifically provided by the companies are what are important in shaping the
expectations of the market.
3.1.3 ADVANTAGES OF DIFFERENT RESEARCH METHODS
Interviews:
• This is a method to directly interact with the interviewee and help extricate answers
of very complex questions to get benefit from those answers.
• Helps interviewer to focus on a single person who can benefit him by helping him in
making sound analysis.
• The interviewer can work on clarifying any doubt at the very moment interview is
taking place.
Observation:
 Observation is a way of learning about the people without interfering in their setting
 It allows the researcher to study the subjects in their real settings.
 The data provided by observation gives a detailed account about different
situations. Thus it is a richer and more thorough than the survey which albeit
studies a large number of people but provides less rich information.
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 Observation helps in studying various individuals at the same time and also helps
the researcher in analyzing the interaction between the people.
 In some cases people are not comfortable with cooperating with the researcher in
these cases particularly observation remains the only way of getting the data.
Focus Groups:
• The method is better than interview.
• It is exploratory and also guides to the attitudes of the of the people in the focus
group
• Helps in providing in depth information to the researcher
• Visual aids can be used.
Secondary Research:
• Sources of information are already available.
• Easy and timely way of doing research.
• Less costly than the primary research
• Provides a clarification of the topic.
Case Study:
 The data can be examined at micro level
 Gives a practical solution and analysis to a problem
 Gives detailed insight into a specific topic.
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 Useful in exploratory researches.
 Case studies including wide range of topics on several companies are easily
available.
3.1.4 DISADVANTAGES OF DIFFERENT RESEARCH METHODS
Observation:
 Expensive way of data collection.
 The information provided is limited.
 Cannot be used when large samples are involved.
Interviews:
• Also a very expensive approach.
• Very time consuming method of research.
Focus Groups:
• Information gathered may be ineffective
• Number of respondents is limited.
• Moderator must have necessary skills to moderate the focus group.
Secondary Research:
• Reliability and authenticity of information must be maintained.
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• Information can be incomplete.
• Information is easily available in market and no completive edge.
• May not fulfill specific needs.
Case Study:
 Cannot be generalized to majority of population.
 Case studies may have a biased view about a situation
3.2 REVIEW AND SELECTION OF APPROPRIATE METHODOLOGIES
The most important step in the dissertation is finding and mining the relevant information
from the pool of different resources regarding the concept of marketing innovation. A keen
understanding of the concept can only help in carrying out this research in a perfect
manner.
3.3 JUSTIFICATION OF APPROPRIATE METHODOLOGIES
The current dissertation is what can be called as an exploratory study which helps in
explaining the current events of particular nature. It is a purely secondary research where
information is gathered from all the main published material mainly from the online
resources. The study is thus a qualitative study and the focus is on the case study method.
The case study method has been selected after carefully analyzing all the available methods
for research. The case study method is most suitable for the current dissertation because it
is the most appropriate approach that helps in answering the questions related to the
current circumstances (Yin 2003). The case study method is also appropriate because the
events under the study are out of the control of the researcher and the dissertation
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requires lots of in depth study in a short span of time. It is also relevant as the population
and sample size are out of consideration.
Apart from studying the case studies published on the topic and company the dissertation
will also include the literature published by several other researchers. The review of the
existing literature will help in understanding the current position of the research and will
also help the researcher in understanding the theory gas that need to be fulfilled.
The literature review will be done based on the information provided in the articles,
magazines, books, journals and also online resources. Published materials regarding
marketing and innovation will be helpful in making concrete analysis which will further
help in understanding the strategies that companies use for innovation marketing.
3.4 SAMPLING
The case study method will used on two organizations, British Airways and Easyjet. Both of
these organizations are part of the airline industry of Europe. Although both of the chosen
organizations are part of the same industry they both follow a different business model.
2.4.1 SUBJECT UNDER STUDY
There are two main subjects that are under study for this dissertation. Both easyJet and
British Airways are considered to be the subjects that are considered to be studied.
3.5 DATA COLLECTION PROCEDURE
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The way in which the research problem works out is known as the research methodology.
The methodology takes into account several steps which the researcher undertakes so that
he solves the problem. The research methodology not only helps in getting answer for a
particular problem but looking into it also helps the researcher to analyze the different
methods that are available for him, to understand the logic and reason for using a
particular method and also to understand why other methods that are available might not
be useful for the purpose of the study. It also guides the researcher in choosing the
methods of data collection and the means through which the study is analyzed. All in all the
research methodology sets a guideline for a researcher so that he can carry out the
research in a streamlined method.
The research methodology used for this dissertation has three step processes:
1. Collection of data
2. Findings and analysis
3. Concluding the research and providing recommendations based in the information
gathered throughout the dissertation.
3.5.1 UNIT OF ANALYSIS
Individual companies being easyJet and British Airways are the unit of analysis and
information from each company is treated as an individual data source.
3.5.2 TIME HORIZON
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This research study is a cross sectional study as the data gathered is not limited to one
specific point in time. In this study the data is gathered just once which is over a period of
time and the analysis looks into the data collected over the last few years.
3.6 METHOD OF ANALYSIS
3.6.1 NATURE AND TYPE OF STUDY
This study is based on qualitative research because it actually studies strategic marketing
management and its impact on the two main companies of the airline industry both having
different business models. And it is thus evaluative in nature. A step by step that is a
systematic approach is taken into consideration is also employed to conduct an extensive
research on this dissertation. Secondary research has being conducted.
3.6.2 CASE UNDER CONSIDERATION
The dissertation will study the airline industry and the strategic marketing management
that has come about in the major airline players. The analysis is done based on qualitative
data and the cases used for analysis are suitable enough to fulfill the objectives of the study.
3.6.3 RESEARCH QUALITY
For establishing the quality of any research, Yin (2003) provided four tests namely
reliability, construct validity, internal validity and external validity. Following is a brief
summary of what these tests are and how this research meets these quality criteria:
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 Construct validity means establishing right operational measures for the case
study which can be done in three ways including the use of multiple sources of
evidence, establishing the chain of evidence and getting the research draft reviewed
by the key informants. This thesis has used multiple but limited sources of evidence.
However, the information provided in this thesis has been validated by cross
checking it using more than one source.
 Internal validity refers to establishing a causal relationship between certain
events. This thesis through its findings and analysis attempts to make inferences
about the existence of a causal relationship between marketing innovation and the
company’s service level and costs. The resulting relationship however is solely
based on secondary information.
 External validity is a type of test which refers to generalization. It involves
establishing the domain to which the research findings might be generalized. This
thesis lacks external validity as it is based primarily on two case studies and has
only one subject under study i.e. Sainsbury. For enhanced generalized results, future
study on a larger scale would be needed.
 Reliability requires that the same results be generated if the case study is repeated.
Although the chances that the same study would be conducted again are limited but
if the same study is undertaken, the results drawn will be the same. However, there
is a possibility that under that environment, some of the recommendations might
have already been implemented and may not be valid any more.
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3.7 RESEARCH LIMITATIONS
This dissertation is based on only qualitative data and also it’s secondary which limits the
possibility to work and statistically generalize the findings. This fact further limits the
external validity of this thesis as establishing external validity requires more than one or
two cases and subjects under study.
This dissertation is based on only qualitative data and also it contains secondary data which
limits the possibility to work and statistically generalize the findings.
CHAPTER 4 FINDINGS & ANALYSIS
4.1 BRITISH AIRWAYS
The board of British Airways got established in the year 1971 and the purpose was to
maintain a control over the two main nationalized airline corporations of that time known
as BOAC and BEA and also to maintain a control over two smaller airlines which were
regional namely Cambrian Airways and the Northeast Airlines. On the 31 st of March in the
year 1974, all the four main companies got merged and then form British Airways. The
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carrier later on worked on expansion while they went for acquisitions of British Caledonian
in the year 1987 and later Dan Air in the year 1992.
The head office of British Airways is at waterside which is in Harmondsworth located at
London Borough of Hillingdon in England. The trading of British Airways takes place on
London Stock Exchange and this is also the constituent of FTSE 100 Index where it comes
under the main tile of International Airlines Group as stated in Annual report 2010 of the
company.
4.1.1 STRATEGY OF BRITISH AIRWAYS
The main strategy of British Airways is focused upon providing outstanding service to their
customers. From the company’s point of view that is also being stated on company’s official
website, they want to meet the rising expectation of their current customers and this is
what is central to their strategy so that they can transform British Airways into the leading
global premium airline of the world. Figure 3 shows the company’s corporate strategy.
From this it can be clearly seen that they are making sound investment in their staff, in
their fleet and almost all the facilities which ensures them that by this they can provide
excellent customer service.
The company’s financial report explains that the plan that the organization has that is to
transform it into the global premium airline is one way that they want to have a secure
future. This not only caters working on the financial part but also to they work in an
environment friendly manner in all the major operations of the business so that they can
achieve the desired goal.
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FIGURE 3 CORPORATE STRTATEGY OF BRITISH AIRWAYS
SOURCE COMPANY’S OFFICIAL WEBSITE
FIVE STRATEGIC GOALS OF BRITISH AIRWAYS
1. To be the airline of choice for all the premium customers in the long haul.
The premium customers of the long haul are the key for the successful growth and
profitability at British Airways. For this reason the company uses its profound
understanding about all the key requirement s that are to be present in the best airline so
that they can design all the products , service and the networks based on that. The
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organization is also maintaining a very strong presence in all the other like cargo, economy
and segments that cater to short haul as they are also vital playing a supporting role.
2. To deliver an outstanding service at every touch point for the customers.
The main aim for British Airways is to provide the best of all global connectivity for their
customers. They look forward to build a global presence in the top tier cities and that by
either directly providing services or by expanding their network by building partnerships
with other airlines. However the already established global cities like London and New
York are already very critical, they are placing special emphasis on the development of
their position in all the global cities of the future.
3. Grow our presence in key global cities
London is the home city of British Airways which is the emotional as well as the financial
heart of the business of the company. This place is also the world’s largest and most
competitive of all international market of air. This ensures that Heathrow will remain to be
a world class hub and it is also vital as London serves out to be largest international market
for the long haul. In order to support this area, British Airways is constantly found working
upon influencing the decisions of the government policies and they work along the airport
owner to continually develop the infrastructure.
4. To build on their leading position at London
The revenue streams of the airline are always of the core importance to the business.
However for this they build an ancillary service which in turn are profitable and these
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services also offer great value to the customers and that reinforces the brand. The company
explores and works on developing new products and services which take into account the
assets and capabilities in order to meet the customer needs.
5. To meet the customers’ needs and also to generate revenue streams in order to
improve margins.
The customers of the long haul premium are key source of profitability for the company.
For this there they use their work on all the main areas in order to provide the best
customer services.
4.1.2 FINANCIAL PERFORMANCE OF BRITISH AIRWAYS
As mentioned in the financial report of British Airways, the revenue of the group in the
year 2009 – 10 was £7,994 million which was low when compared to the previous year
when the revenue was£8,992 million. The group suffered a per share loss of 38.5 pence in
the year 2009-10 as compared to the loss per share of 32.6 pence in the last year. The
group suffered an operating loss of almost £231 million in the current year.
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FIGURE 4 SALE OF BRITISH AIRWAYS BY GEOGRAOHICAL SEGMENTS
4.2 EASY JET
EasyJet is the company with the full name of easyJet airline company limited, it’s a British
airline that has it’s headquarter at the London Luton airport. The airline is known to be the
one which carries passengers more than all the other UK based airlines. It has its
operations both domestically and internationally covering almost 580 routes. The airline
parent company named easyJet plc is found to be listed on the London stock exchange.
Easyjet got established in the year 1995 and it has seen very drastic expansions since the
time of its establishments. This establishment takes into considerations a number of
acquisitions and openings of base which were fueled by the demand of consumers for the
air travel based on low costs. EasyJet is known to be the second largest of low cost carrier
prevailing in Europe and the top position is guarded by Ryanair. The network of EasyJet is
not only known to ensure that they are well positioned in order to capture the traffic which
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is leisure but also this network enables the company to build its market share in the
European market of short haul air travel.
4.2.1 STRATEGY OF EASYJET
Vision of easyJet
“Turn Europe Orange”
The main differentiating factor of easyJet is their network and that is that they have a
leading presence the top most 100 routes in the Europe and easyjet is found to be having a
position at all the primary airports at the most attractive time and for the sensitive
customers.
The strategy of easyJet is found to be centered on achieving maximum profitability and to
deliver more and more returns. For this purpose the management team of the company is
found to be continually striving to manage the costs and to drive more and more revenue.
Easyjet has worked on its efforts to add more new routes in the business travel market and
for the new business destinations are being added upon which now more has improved
frequencies and more flights working at the peak times.
The network strategy that prevails in UK is found to be focused upon the consolidation of
their position as being the leading airline in UK.
4.2.2 FINANCIAL PERFORMANCE OF EASYJET
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Table 1 shows the financial performance of easyJet. A clear comparison shows that the
company was able to generate a revenue of 2,973.1 £ million which was almost 11.5%
more than the last year. The total revenue per seat in the current year increased by almost
3.3% and was reported to be £53.07 in the year 2010. This showed that it was a great
performance when compared with the difficult times and the main drivers for this growth
turned out to be great network of easyJet, they great management of the routes and also
the growth taking place in the ancillary revenues.
TABLE 1 EASYJET FINANCIAL PERFORMANCE
2010 2009 Change
Total revenue (£ million) 2,973.1 2,666.8 +11.5%

Profit before tax – reported (£ million) 154.0 54.7 +181.5%
Profit before tax – underlying (£ 1
188.3 43.7 +330.9%
million)
Pre tax margin – underlying (%)
1
6.3 1.6 +4.7ppt
Return on equity (%) 8.6 5.5 +3.1ppt
Return on capital employed (%)2
8.8 4.0 +4.8ppt
Basic EPS – (pence) 28.4p 16.9p +68.0%
4.3 BUSINESS MODEL OF BRITISH AIRWAYS AND EASYJET
Both selected organizations clearly vary in terms of their business model. British Airways
provides premium service in the long haul while easyJet provides low cost short haul
services to its customers. Looking at the European industry clearly it’s cyclical and there
57 | P a g e
are fewer opportunities to be profitable. One cannot say looking at the industry dynamics
that these organizations cannot be profitable as they already are but in these difficult times
when people are facing economic downturns the companies are to work very hard in order
to maintain their market position and to sustain their competitive edge.
For this reason there is a need to have flexibility in every aspect related to customers till
the end service including the planning of fleets so that strategic opportunities are utilized
in the most efficient manner.
Looking at the business model of British Airways the vision is to be the global premium
airline. To achieve this vision they have a well designed strategy which in turn works upon
the main elements of their business model. the most important elements that British
Airways focus upon includes making their cost base more and more efficient and also to
provide outstanding customer service which will in turn provide them long term
profitability. British Airways work on the following strategic goals in order to sustain their
position as premium long haul airline:
 Offering services and products that appeal to all the customers around the world.
 Products are designed for both individuals and business travelers in a similar
manner.
 They provide premium services so that customers are willing to pay more for their
airline.
British airways clearly work along the lines of strategic marketing management. The
business strategy of British Airways also shows that to be a global airline they realize that
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both internal and external environment are important and for this reason they have
strategic goals that deal with customers, colleagues and partners.
Looking into the business model of easyJet*, the vision that is to Turn Europe Orange is
achieved by a number of ways which are stated as follows:
 They don’t compromise on the safety of their customers
 They want to give their customers the lowest of all fares and very convenient
airports along with the most friendly service being very reliable as well as punctual.
 They want to have smart cost management
 To attract talented people at the organization
 They want to grow fares by continually optimizing their use of network and also
working upon the proposition of business traveler
EasyJet has many strategic goals which are very important for the business to operate well.
The main task is to low fares to the customers and overall the model is designed in a way
which optimizes the facilities and in the end customers are provided with great service at
low cost. This is where one can clearly see that all the goals are designed keeping in mind
the value they propose to the customers. The services at easyJet are designed with the view
that in order to provide the best service they are working upon all the marketing P’s in a
strategic manner. EasyJet understand what their target segment is and for that what kind
of products, process, pricing is required.
* Company’s annual report 2011
STRATEGIC MARKTEIN MANAGEMENT AT BRITISH AIRWAYS
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The business model of British Airways reveals that the company works very hard to
maintain its current position; even the current situation reveals that. They are usually
found to be conducting extensive internal and external analysis which helps the company
to collect maximum information related to changing customer and operation related
factors which are then used in order to design the marketing strategy and in the end what
they deliver is an outstanding experience for their customers.
In the year 2010, British Airways introduced a new in flight system of entertainment on
their long haul aircrafts especially the Bowing 777 300ERs. This act is made in order to
work along the changing and competitive market place where every player is striving to be
the best. Similarly the company realized that there is a need due to the changing times to
work on Joint Business Agreement and that too along with America and Iberia and is
waiting for the approval from the regulatory bodies. This agreement will be beneficial for
British Airways as they can offer extended connections, better schedules of flights will take
place and there are chances that it will provide ultimately better customer service that is
the main goal of strategic marketing- to provide valued service to the customer.
British Airway’s is found to be very much focused upon external analysis like they monitor
the views of their customers by conducting a customer survey. This survey is named as
Think Customer Survey. This research is an independent one which takes into account
more than 36,000 customers and is conducted every month. This study helps the company
to have a strong measure which tells that how the experience of the customers can affect
the performance of British Airways in comparison to other competitors. At British Airways,
decisions including the financial and investment related are made based on this external
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analysis. Figure 5 shows the result of customer recommendations published in the
company’s strategy report for year 2011.
FIGURE 1MEASUREMENT INDICATOR BASED ON SURVEY AT BRITISH AIRWAYS
The company to obtain the other strategic goal of performance works on meeting the
expectations of customers by working upon a business that is cost effective. British Airways
has a headline that measures their punctuality.
Ready to Go
Punctuality in departure is what the company after carefully conducting external analysis
was able to reveal that is one of the main customer satisfaction drivers. So British Airways
designed a process which based on the strategic marketing management turns out to be
very beneficial for the firm.
STRATEGIC MARKETING MANAGEMENT AT EASYJET
The vision of easyJet is to turn Europe orange and the business model clearly shows that
the company is very up to date about the key changes based on the external and internal
analysis. The firm is a low cost carrier and in order to be the leading low cost airline, they
need to offer the best and most differentiated products means the focus is upon providing
great customer proposition and to develop a network which will provide them with access
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to as many routes as possible. The results of a customer survey conducted by the company
clearly shows that customers are very satisfied by what easyJet offers and there are 80%
chances (figure 6) that they will recommend the service to other to be customers.
FIGURE 2 EASYJET CUSTOMER SATISFACTION LEVEL
Another important aspect the easyJet understands is that to achieve and provide lost cost
services there is a strong need to work upon operational excellence. Taking into account
one of the main consideration was to work on smart cost management. EasyJet is found to
be managing the cost base in an effective manner so that they can offer fares that are
competitive and in turn achieves the main goal of profitability. The Smart Cost
Management is where the firm works very sensibly and most of decisions are made that
are beneficial in the long run especially considering the rising fuel costs and the changes in
currency levels.
Looking at the model of easyJet, one can see very clear differentiating factor as compared to
the leading low cost airline like ryanair. EasyJet is found to be serving mainly on primary
airports and that too at high frequencies. This decision is also based on strategic marketing
management as one can see that by this the company plans to target both the markets of
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business class and leisure class and also this provides the opportunity to enter new
markets to easyJet.
FIGURE 3ROUTE PRESENCE OF EASYJET
The benefit of using primary airport based on the strategic choice that easyJet made and
clearly this tells that at easyJet strategic marketing management is provided utmost
important because this enable the firm to have presence on the top 49 routes (figure 7) of
the European which makes it the leading low cost airline even Ryanair has presence on 42
routes.
Both the selected companies work on their separate business models and are to conduct
very extensive analysis to make strategic choices that will provide them with maximum
growth and profitability. Likewise British Airways is a full fare carrier and in case they
want to increase the comfort level requires them to have a different fleet, additional
services like food and baggage are to be taken into account and also the airports they want
to have access to. This yields whole new strategic marketing offers for the company and in
63 | P a g e
case they think about low cost services will also lead to many decisions that are to be taken
of which can be done only if strategic marketing management is used effectively. Same goes
for easyJet as they have economies of scale and services designed on improving costs which
are based on strategic marketing management and moving towards high cost structures
won’t help the organization to achieve the vision.
CONCLUSION
Based on the literature review it can be concluded that when we talk about customers and
till the very end the product that is to be delivered to the customers, all it requires is
strategic marketing. It’s through and through strategy that when managed in the right
64 | P a g e
order will provide great benefits. The strategic marketing management is what takes into
account both internal and external analysis. External analysis can be done in many ways
like industry forces or customer analysis. The fact is that both the internal and external
analysis will provide information that can help a firm to work and take strategic decisions.
Strategic marketing management provides great benefits which can be clearly seen as both
the selected organizations i.e. British Airways and easyJet were able to reap.
Despite the fact that British Airways has totally different model and being a full fledge
airlines makes it to work and take decision that will provide premium services for the
customers and on the other hand easyJet being the low cost carrier need to focus about
cutting their fares being in such a competitive industry, still it can be seen that these firms
are working upon strategic marketing management and the results clearly shows that they
are good at what they are doing.
British Airways to fulfill their strategic goal and to be the global premium airline aims to
provide outstanding service to their customers. The focus is upon the customers and for
this all their goals are aligned based on the analysis they conducted like they provide
exceptional ancillary services and these services are taken into consideration after
customer surveys and analysis. That’s the reason that the organization was able to
maintain the level of satisfaction of its customers. Even though the company faced loss as
compared to last year profits but in these difficult times every organization is facing this
dilemma and this is the time when British Airways can use strategic marketing
management to reap the actual advantage.
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EasyJet is known to be the leading low cost European airline and its business model is
found to be compared with the famous Ryanair. The company has a vision to turn Europe
orange and with this it is working upon maximizing their development of network. On the
other hand easyJet is found to be utilizing the services of primary airports and this helps
them to get more customers being in the form of leisure as well as business travels. What
made easyJet came up with thought was proper strategic marketing management. The
company is striving to provide lower fares to its travelers and for this their strategic focus
is upon smart cost management. In the end the services are designed to provide value to
the customers and to be profitable.
Both British Airways and easyJet realize the importance strategic marketing management
has and looking at their strategies it can concluded that in order to maintain a proper
relationship with customers , the key is to have strategic marketing management.
RECOMMENDATIONS
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Looking at the global scenario, its quiet evident that changes are taking place in the overall
airline industry. Growing number of players makes this industry very competitive and the
players are to strive to attain their market position. On the most concerned element is the
high escalating fuel costs. Looking at the dissertation report one can clearly see that British
Airways was facing many challenges in this competitive environment as the airline faced
loss in this current and previous years.
At this point in order for British Airways to maintain their market share, the most
important thing is to cut their costs. At this point the business model of British Airways
represent to cater to high cost customers and they provide premium services to maintain
this image. Here British Airways won’t be able to change their fleet as the long haul
requires specific fleet. What can be done at this time in order to be profitable is to work on
cutting cost and this can be achieved if reduction is made in the frills that the company
offers to its customers.
This is not an easy task as this step can turn out to be major concern for the image of the
company. The brand image here is of utmost importance. The company in order to reduce
the frills needs to work on extensive strategic marketing so that the position of the firm
won’t get affected by the reduction in ancillary services. Extensive strategic marketing
management will turn out to be beneficial in this case and the company should thoroughly
analyze their strengths and weaknesses and work on optimizing its strengths.
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Impact of Strategic Marketing Management On Airline Industry (BA AND EASYJET)

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[WHAT IS THE IMPACT OF

3.2 REVIEW AND SELECTION OF APPROPRIATE METHODOLOGIES............................................45

Figure 1 corporate strtategy of British Airways.................................................................................... 52

Table 1 EasyJet financial performance..................................................................................................... 57

Strategic marketing management in this changing and dynamic era represents to be of

strategy of an organization that is marketing strategy. Basically by strategic marketing

order to provide optimal results.

strategic marketing management.

achieve operational excellence which ultimately will lead to organizational success.

recommendations for the selected organization.

CHAPTER 1 BACKGROUND AND INTRODUCTION TO THE STUDY

1.1 BACKGROUND OF THE STUDY

objectives (Mintzberg 1994). In other words it’s a ‘commitment of present resources to

managerial decision making (Porter 1980).

Marketing is known as a philosophy that in turn leads to a process which is used by

along with communication and relationships. When marketing is to be considered from a

stakeholders expectation. This is known as strategic marketing management.

competitors as well as partners.

strategic marketing management process is defining a strategic posture. This provides an

1.2 INTRODUCTION TO TOPIC

adaptive to the changes that are taking place in the environment.

resource allocation decisions and they also help in decision making.

1.3 PROBLEM STATEMENT

1.4 AIM OF STUDY

resource capabilities. It is also important to create some strategic opportunities to manage

the changes those are associated within an organization. Through marketing, an

organization works at maximizing shareholders returns and provides maximum

known to be the competitive advantage by identifying, providing, communicating and most

1.5 RESEARCH QUESTIONS

can be some of the research questions:

 What are the advantages of adopting strategic marketing management?

 What kind of analysis is required in order to implement the strategic marketing

 How the customer-business relationship is affected by using strategic marketing?

1.6 OBJECTIVES OF THE STUDY

The research has the following objectives:

 To study the development of strategic marketing management over time.

 To ascertain and understand the importance of strategic marketing management in

the business world today.

industry have benefited from strategic marketing management

strategically placed and marketed them.

1.7 IMPORTANCE OF STUDY

management is in order to be profitable.

came along by working upon strategic marketing management.

1.8 INTRODUCTION TO COMPANIES

to both the famous airline companies.

1.8.1 BRITISH AIRWAYS

great number of international flights and many international destinations.

the European short haul aviation ( company’s official website)

CHAPTER 2 LITERATURE REVIEW

2.1MARKETING AND IT’S NATURE

requirements and also to develop new products or to make modification to existing

termed as marketing phenomena? What comprises of a marketing system? How the

activities in marketing can be distinguished in comparison to non marketing activities?

In reality marketing is found to have many definitions. Drucker (1996), marketing is

marketing to even production and shipping areas.

marketing is like a management process that is working to maximize shareholder’s returns

thus by creating a competitive advantage by communicating, delivering real value to the

2.1.1 THE DISCIPLINE OF MARKETING AND THE BUSINESS FUNCTIONS

2.1.2MARKETING DIRECTS TO VALUE CREATION

processes which will be mutually beneficial.”

and when they make interactions with the suppliers.

2.1.2.1MISUNDERSTANDING ABOUT MARKETING

value that with others.