Table of Contents

Introduction: ................................ ................................ ................................ ......................... 3 History: ................................ ................................ ................................ ............................. 3 Marketing Strategies: ................................ ................................ ................................ ............ 4 Product Strategy:................................ ................................ ................................ ............... 4 Branding: ................................ ................................ ................................ ...................... 5 Pricing Strategy: ................................ ................................ ................................ ............... 5 Objectives in Pricing: ................................ ................................ ................................ .... 6 Demand Determination: ................................ ................................ ................................ 6 Cost Estimation: ................................ ................................ ................................ ............ 6 Promotional Pricing: ................................ ................................ ................................ ..... 6 Place Strategy: ................................ ................................ ................................ .................. 6 Promotional Strategy:................................ ................................ ................................ ........ 7 Environmental Analysis SWOT and PEST ................................ ................................ ......... 8 SWOT Analysis: ................................ ................................ ................................ ............... 8 Strength: ................................ ................................ ................................ ....................... 8 Weakness: ................................ ................................ ................................ ..................... 8 Opportunities: ................................ ................................ ................................ ............... 8 Threats: ................................ ................................ ................................ ......................... 9 PEST Analysis: ................................ ................................ ................................ ................. 9 Political: ................................ ................................ ................................ ........................ 9 Economical: ................................ ................................ ................................ .................. 9 Social: ................................ ................................ ................................ ........................... 9 Technological: ................................ ................................ ................................ .............. 9 Customer Loyalty: ................................ ................................ ................................ .............. 10 Strategic Goals of British Airways: ................................ ................................ ..................... 10 Customer Relationship Marketing British Airways................................ ........................... 11 British Airways Marketing Viral and Guerrilla ................................ ................................ . 12 Guerrilla Marketing: ................................ ................................ ................................ ....... 12 Viral Marketing: ................................ ................................ ................................ ............. 12 E-Marketing ................................ ................................ ................................ ........................ 13 Conclusions: ................................ ................................ ................................ ....................... 13

References: ................................ ................................ ................................ ......................... 14 Books: ................................ ................................ ................................ ............................ 14 Websites: ................................ ................................ ................................ ........................ 14

Introduction:
The business environment has changed drastically in the 21st century. There are many departments which keep the business running smoothly and effectively in a business, it is also important for these departments to deliver good outcome for the survival of the organisation. Among the most important departments which contribute for the survival we are going to discuss here is marketing. It is a very big department when compared internally within the organisation, because the success of a product entirely depends on how well it has been marketed. In our discussion we will briefly elaborate the different strategies used by British Airways and also various public relation tactics which were used to attract more customers and to maintain the existing customers. In modern competitive business environment, everything is based on customer needs and so as the marketing, where the management of marketing has changed from transactional to relationship. We also have discussed, hoe effective is the outcome of relationship marketing than transactional marketing which depends only on single point of sale transaction, which are referred to as 4 Ps named product, pricing, placement and promotion. Since the business is customer focussed, the loyalty shown is very much important to attract the customer. The effectiveness of the brand name is other key factor of the marketing strategies. New types of marketing strategies have been discussed like guerrilla marketing and e-marketing. The radical changes it brought to the face of marketing by maintaining good customer relations.

History:
The flag off for the first international flight service was between London and Paris in 1919 which was hosted by Aircraft Transportation & Travel Limited (AT&T). As the market at that period was tough for airline service to grow, so some of the airline services planned to merge into a single organisation and it was named Imperial Airways Ltd. Imperial Airways was formed by Instone Airways, Handley Page, The Daimler Airways and British Marine Air Navigation Company. Imperial Airways has extended its flight services from Paris to many other European nation by 1925 and by 1930 it started services to India, middle-east, Singapore and Egypt. Services to Australia were launched in the year 1935. As Imperial Airways was formed, the birth of British Airways is also having the same background. In 1939 both British Airways and Imperial Airways were nationalised to BOAC (British Overseas Airway Cooperation). By 1974 the formation of British Airways was complete after many merges, alterations and evolutions.

Marketing Strategies:
The financial economy and position is in good health for British Airways comparatively, it also gained one of the finest premium air services in the airline industry. British Airways is able to attain such a position by maintaining basic principles of marketing strategies. BA maintained four components to their high standards for achieving marketing competitive advantage. The four components are price, product, place and promotion.

Fig 1: Components of Marketing Strategies. As shown in the figure above, the four components of marketing strategy acts as the four engines, even if one of the component fail to perform it is possible to manage with other components but not for long.

Product Strategy:
Product strategy is vital among the four components, without this there is price, promotion or place. Globally there are two products made available from BA which are service products and flights across destinations in the transport industry. The success of the organisation depends on the range of products that BA can offer to the business. There are five different product levels that BA can offer. The first level is the core benefits, basic obtainable products which satisfies the customer which the flight tickets for travelling to their destinations. British Airways has a series of scheduled flights to most popular location and getting the flight ticket for such travel is the second level and this is the basic product provided the airline to the customer. If compared with Easy-Jet, customer is not possible to have their selection of seats or onboard entertainment other than just the tickets, but in British Airways, they offer customers to choose their preferred seats, meals and drinks from a range of options available in short the third level can be named as expected product. The additional services and offers that BA can provide to the customer are classified as

augmented product, which is level 4 of product strategies. The British Airways offers 3 different executive classes which are blue, silver and gold, each class have different facilities arranged for the customers without wasting their time.

Figure 2: Kapfferers Brand Identity Pyramid

Branding: The pyramid is used for the identification and analyzing the Brands Identity. The components of the pyramid are applicable to British Airways in maintaining their marketing strategies. The brand name developed by British Airways its along process of good service, customer loyalty form the year 1920 and in order to maintain the name BA has to make sure it provides quality flights to their customers all round the year and it forms the brand core of the organisation. The three factors which form the brand style of British Airways are culture, personality and self image. An UK based airline industry which has its own reputed service quality, convenient and confident services provided, quality of service maintained for all types of classes. Physical, reflection and relationship are maintained with the customers which are the brand themes of British Airways.

The art and backbone of marketing for British Airways is their Branding. Branding is used by various means which differentiate British Airways from other airline services and it is also used to understand the advantage it has comparing other airline organisation. It took several years for British Airways to maintain their brand name. When someone encounters the British Airways symbol, various things which goes into the mind should be the safest, comfortable, convenient, and luxury air travel services. The six levels of branding for British Airways symbols are attributes, benefits, values, personality, culture and user or customers. Branding for British Airways is more than a symbol or name; it ensures the customers for the best airline services available promised by the marketers.

Pricing Strategy:
A utility or commodity is the end of economical transaction or activity. Customer who spends will think whether the money is worth for the commodity and this forced the people in the organisation to set the price value very competitive. There are 2 parameters which should be taken care that determines the position of the product in the market which are quality and price, so price factor is vital in how the business behave in the market. In British

Airways the price set are worth for the customers. There are three different classes in the British Airways flights the executive class, middle class and economy class. In executive class gold members are provided with additional on board services and the price set is high, the middle class for silver customers and economy class for blue members. The pricing strategies are classified into 3 which are Premium strategy, medium-value strategy and economy strategy. The pricing policy of British Airways depends on various attributes like selecting the pricing objectives, determine the demand, estimate the cost, analyzing competitors cost, price and offers, and selecting a pricing method. These attributes helped British Airways to revise the price in an effective manner. In market the competition keeps on pushing forward and this forced BA for the price revise.
Objectives in Pricing: Set the price in order to maximize the profit which used to be the primary objective but it has changed as the time progressed due to high competition and so they changed their objective to market share maximization and accordingly the price is revised.

Providing quality products to the Business class customer is not affected by the high competition in the market. This objective remained and will remain in future.
Demand Determination: The demand will be lower of the prices and high and vice versa. The customers of BA are classified into 2, one is sensitive customers and the second is low sensitive customers. Both the type of customers will fall into any category of class they choose to travel and the price is set accordingly. In British Airways the demand is high for the economy class tickets which are low in price and demand is low for business class ticket where the price is higher. Cost Estimation: The price of the ticket includes many non-auxiliary prices. Non-auxiliary prices are which is not earned to the organisation. The British Airways tickets price will be inclusive of VAT, additional services if picked, airport fees and the travel agent commission, this is when the booking is done by an agency. When a booking is done online there will be discount and the commission will also reduce from the price. Promotional Pricing: Introduction of some new offers, discounts etc. According to the season of travel the promotional pricing can be introduced and this will increase the inflow of customers which in turn increase in the market share. Some of the promotional of British Airways are Christmas gift voucher, low fares to European destination, club world business class offer etc.

Place Strategy:
Distribution plays a vital role in the marketing strategy. The process which involves new products reaching the market and customer can purchase and own it. Various distribution

channels are available according to the industry; customer-to-business and business-tobusiness are two distribution models, and evaluating alternative channels for distribution. In British Airways, various levels of distribution through which the product follows from the manufacturing to the market place are through agencies, in airports, and through online. Booking through travel agencies is seen attractive to many customers than through online or direct booking. Discounts are available when booked through direct BA, but the price seems to be higher than booked through agencies. The reason behind is, agencies will book tickets in advance with the British Airways marketing team, so they will get ticket with cheaper price and can sell with a low margin to customers due to high competition. The most important thing to be taken care is the genuine nature of the agency. Most of the airports dealing with BA have offices in the airport and customers who had emergency travel situation can book tickets from the airport offices, the only problem is the price will be higher. Online booking facilities are mostly used by business class customers and frequent flyers. Frequent flyers are classified as gold members and they have a different on board service where the standard of service is very high.

Promotional Strategy:
Customers who choose to travel are classified according to their purpose and they are leisure traveller, business purpose and premium travellers. As we discuss the marketing strategies for tourism industry, we focussed on the promotions for leisure traveller. One of the latest promotions for leisure travellers is which shows the difference between British Airways and no-frills airlines, it attacked the competitors who provided low fares by showing the hidden cost behind the low fare schemes. The 8th of November 2010 is when they launched value flying which is getting full service for their journey rather than just paying basic price that is offered by low cost airlines. With British Airways customers get what they pay. It also launched Value Calculator, which helps customer to calculate the hidden charges behind the offered price of the competitive airlines with the British Full Service fare. A face-to-face campaign was conducted in order to increase the number of business travel customers and also they offered free flights across North Atlantic for entrepreneurs to attract more business deals. The main media used is The Wall Street Journal where it is advertised.

Environmental Analysis SWOT and PEST

SWOT Analysis:
This type of analysis comes under microenvironment factors affecting an organisation and the abbreviation for SWOT is strength, weakness, opportunities and threats. These are the factor which decides on the future growth of British Airways. This analysis is also used when launching the business in an economy where by this analysis we can predict the value it brings to the society.
Strength: As every other organisation, for British Airways the value of their brand name proves to the biggest strengths. Customer choosing BA as their preferred airways is partly because of the British Airways brand name. Since the airline industry cannot be categorized as hospitality or tourism industry because the business operations and methods fall in each of these categories, hence Airline industry plays a neutral in hospitality and tourism industry. Services provided to customer both onboard and off board are at high standards which differentiates BA from other airlines. The financial background of BA comparatively much better and stabilised, which posses the other strength of the organisation. Customer attractive programs, seasonal offers, and additional service to premium customers are other area where the company has shown his strength. Weakness: British Airways has introduced many competitive airlines for cheaper flights but was not able to put in the proper place where it can grow. Trade unions are a curse to British Airways in the recent years, strikes, walkouts, campaign etc which had huge impact on the business process. Political influence is also there which initiated these kinds of strikes. British Airways has 3 billion pounds in debt for the pension; the news of such debt will also weaken the British Airways. In many area of business the technological advancement is viewed as growth of the organisation, but in BA it is encountered with reluctance. Public trust is in the way of lost due to many job cuts and employer-employee relationship is not good and this was experienced after the emergence of trade unions. Spending in terms of salaries to a number of positions is very much unnecessary. In 2007 the most important chaos in the history of British Airways is that the passenger luggages were lost and it showed the lack of proper management and the customers started losing the option of BA even in their mind. Opportunities: Ratings for the airways paved the way for the formation of SAQA (skytrax airline quality audit) system which rates the airways after inspection of the services delivered to the customers. Competitors who offered low fares find it difficult to serve consistently and were failed in the reliability issues and hence new markets are available for new entrants. Several merging strategies were employed which resulted in new flying destination came into place.

Threats: British Airways is globally established organisation and it has various offices in many part of the world, UK may be the home country for its operations but the economy of the other countries where it has establishes an office and business operations can cause the entire economy of the company. This is result of globalisation. It is not possible by BA to provide cheaper flights than other competitors in the market, because it is pointless if the ticket price is less than the marginal price. Fuel price is other threat to BA.

PEST Analysis:
This type of analysis is used for the analysing the macro-environmental factors affecting the business operations of British Airways. The factors are political, social, economical and technological. The report of this analysis is recorded for the developing marketing strategies to the future market.
Political: By the end of 2009, a rule was passed by the government announcing the increase in the rate of duty paid. How government rules and regulation becomes a political factor affecting an organisation, it is because government is formed by political parties and these rules are imposed by them. The additional tax paid by the customer who are travelling is increased due to the variation in the duty and hence customers will think twice before they decide to travel, where previously tourist traveller have never showed hesitation if travelling anywhere by British Airways. The other major concern of British Airways regarding political factors is number of trade union strikes; political influence is the main starting point for such strikes. Passengers were restricted in the case of carrying hand luggages, it was rule by the government, but in this case it is not possible to blame government because only after 9/11 such rules were introduced for higher security. Economical: Some economical condition of a country has always do good for organisation, it was better to have a consistent healthier economy. BA should also be very careful in launching new routes and offices without considering the economic situation of that area. This analysis will help in critical decisions. The year 2010 was considered to be the worst economical year for all industries and BA as well were it encountered changes in the VAT almost 3 times which had huge impact on the turnover of the business. Social:

The parameters such as cultural value, social value, media, etc are to be focused while establishing a new business. BA has always made sure that these values are never troubled.
Technological: The 21st century is supposed to the technological revolution period where so many advancements in technology in almost every organisations and business operation are noticed. The introduction of Business Operations through Business Intelligence technology

enabled employees of BA for the easy access of the managerial information without the help of any system engineers.

Customer Loyalty:
It is the highest reward obtained by any organisation for the kind of customer service they provide. British Airways have different plans for shaping their business into more customer-centric providing higher standard of service onboard and off board. The introduction of the new terminal in the Heathrow Airport in London has already made an impact in the performance and customer services. Introduction of new services o their premium customers, getting a good score in the customer satisfaction scores for the performance with baggage process and introduction of new lounges has contributed to customer loyalty of British Airways.

Strategic Goals of British Airways:

British Airways is working on the principle setting the goal and work hard to achieve it. British Airways has taken some necessary action to make the prices cost effective one and also to develop more focus on customer, a customer-centred business is what BA focused. Both form the important goals of BA in order overcome the current stage and also ensuring a secure future by consistent and profitable business in the future. For achieving these two results, BA has set some goals and was working accordingly to reach it and the goals are, There are premium airway customers who travel very long distances regularly, British Airways analysed what is required so that they can attract such customers to pick BA as their choice of travelling. The proportion of profit obtained from such premium customers is high and hence British Airways has spent lot in understanding the need of premium customers and modification that can de doe with products and standard of service to attract premium customers, so that they pick BA as their choice of air travel. The second goal is to develop and maintain the standard of services offered both to premium passengers and normal passengers. The cabin crew having direct relationship with customers are trained with good skills and also rewarded for outstanding services offered. Through this rewards and appraisal BA can keep their employee focus on the goal of the company. The scope of BA service is increased by the launch of Terminal 5 at Heathrow Airport and the online services provided by BA had raised the standard. Most of the key cities in the world had the presence of BA and it is focussing for adding more cities to their destination. It has planned for extending service to many more cities and provides customers with best global connectivity. Extension to further cities ensures customers to travel any destinations from their home country without any transit which will attract more customers. British Airways home city is London, one of the economically sound cities in the world. The position of British Airways in the market is in a high level and BA achieved it with the help of the world-class hub London where they are providing services to long haul

markets. It is necessary for British Airways to maintain a good relation with the government for influencing the government policies and BA is working as partner with airport for the infrastructure development. Satisfying the needs of their core customers remains the biggest challenge and it is achieved by BA by introducing new products which will have maximum utilisation of the resources available to BA. The revenue system of any organisation of any kind remains most important factor in the business running process and it cannot be changed which will affect the basics of BA. By providing some additional featured services to the customers the revenue factor can be augmented.

Customer Relationship Marketing British Airways

The economical demanding environment of the modern world and to keep the business running in profitable manner it is important for British Airways to have a good relation with the customers they serve. The ultimate goal of British Airways is to maintain a very good customer relation with both leisure and business passengers, so that the revenue is maximised with each global routes. One of the main issues with BA to lose their customer relationship is when the baggage chaos occurred in Heathrow airport. The strategic objectives of British Airways are underpinned due to high level of competition and demand for lucrative travel routes, which is obtained by Business Objects Solutions through Business Intelligence. Various tools are used for analyzing the data that are stored in the huge server. The tools are Business Objects, integrated query, and online analytical processing tool (OLAP) etc. In future there are plans for introducing internet BI solutions for globalising the decision making process. By using various queries and analyzing tools data is collected from the server and it is necessary to manage such data and for that purpose British Airways runs business intelligence through operating systems. Business Objects changed the face of BA in the business operation, where a line manager can access data from the BA warehouse without the need of engineers. The challenge of any airline industry will be to maximise the profit in every single route, but there are many constraints for this achievement. It is possible to overcome all the constraints but it takes time, this is where Business Objects come into play which supports BA for the long term plans, and all the relevant details of individual flights including flights per day, routes etc. As every other airline require, it is also the requirement of British Airways to fill all the seats of a flight in every single route. For this achievement understanding customer behaviour is most important and BA uses Business Objects for understanding customer needs and to maximise the yield in each flights. The above described applications of Business Objectives are some standard features, but the unique advantage of Business Object in British Airways is addressing the baggage handling and punctuality. Every area must be dealt with precision decision in order to achieve competitive advantage other European airline which are possessing high competition. The

punctuality of flights and proper handling of luggage remains the 2 vital features driving the customer in choosing the preferred airline. With the use of Business Objects BA achieved the top rated airline services among Europeans Airlines for punctuality. As baggage handling is the other critical area after punctuality concerned with ranking of the airlines, Business Objects helped BA to baggage handling in proper way and at correct times. Business Objects is the backbone for maintaining a good customer relationship in the present and also it will serve in the same manner for the future.

British Airways Marketing

Guerrilla Marketing:

Viral and Guerrilla

The new unconventional method used by the marketing people in helping the products of an organisation to reach directly to the customer or market where customer can do the purchase is named as guerrilla marketing. The cost involved in this type of marketing strategies is nearly zero. This way of selling new products to the market is most recent trend in marketing strategies and most of the product based organisation uses this methodology for their promotions. The three most important factors in guerrilla marketing strategies are time, energy and imagination, rather than money and that is the reason this become more popular and widely used by any level of organisation because before the introduction of guerrilla marketing the money spend for marketing is huge, but using this type spending is reduced and the result is also good.

Viral Marketing:
This type of marketing is the latest development in the area of marketing, where exploitation of the social networking to a good cause. To increase the awareness of British Airways brand name, launch of new products, and other marketing objectives are achieved by using pre-existing social networking which is a viral process. The various forms of viral marketing are images, video clips, and flash games etc. In 2007 launched a viral marketing advertisement in the form of video clip which promoted the awareness of high standard customer services available with British Airways. Social networks are the place where friends of friends communicate, and share ideas etc, hence by properly utilising both the phenomenons it is possible to spread the message across the globe. There are four rules followed by British Airways while the viral marketing is being used which are giving respect to audience, audience first, marketing second, no barriers should be there, and promoting the viral strategy. The way how the news or advert spreads across people in the social networking world is kind of a virus spreading in the computer and hence this type of marketing is known as viral marketing and it has been very effective for British Airways for their promotions.

E-Marketing
It is otherwise known as internet marketing which promoting a product or a service of an organisation through the internet to the customers. Modern world is entirely swept by the influence of internet for marketing a product or service; internet is the best thing for doing so. By explaining a case study related with British airways how to make the internet market very effective. In competition with many low fare airlines, BA started BA Connect. It was sold to Flybe Airways in March 2007. BA tried to compete with low fare airways competitor to gain advantage over the entire airline industry but failed. Other than main airports like Heathrow and Gatwick, people travelling to different locations are very less in such airports and hence the traffic is low or limited, the cause of British Airways failure is they introduced BA Connect in such limited traffic areas where it reached less number of people, this is the same case with internet marketing to be successful. If British Airways has introduced their BA Connect in main airports like Heathrow or Gatwick where the number of people is more who wishes to travel around UK, the business will have shown some growth and there is no need for it to sell it off. While promoting or advertising look for the place where there is huge population and post the advertisement in such places, so that more people know it and the campaign will be successful.

Conclusions:
The competitive business environment in the modern world has pushed British Airways for introducing various departments which analysed the different market situations. The different market situations are recession in economy, high competition by providing low air fares, environmental factors etc. As the world and economy develops the range of problems also get increased parallel with economic growth. British Airways have to face it and find necessary steps to overcome all such issues and problem and success is obtained, but before facing the problem it is necessary to analysis what is happening in the economy, which is included in this report analysis. The report has dealt with researching all the problem caused to the marketing environment and some marketing strategies which can be used by British Airways to overcome constraints. In British Airways, strategic goals were set which ensures the future of the business and also more cost effective way of strategic goals are designed to maintain certain factors such as cost-effectiveness and quality of customer services etc. If a business is sustained and profited, benefits go to shareholders, staff and customers. So it is important for the various sections of economy to contribute to the business in one way or the other which in turn get benefited and as the British Airways falls under both hospitality and tourism industry it is important to the economy of the country because tourism plays a important in forming the economy of the country.

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