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Virgin Atlantic

Project
by

Valentin Negrel

on 23 September 2013

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Transcript of Virgin Atlantic

Table of contents
Brief information about Virgin Atlantic Ltd.
PEST Analysis
SWOT Analysis
Loyalty program
Loyalty program of airlines
Loyalty program of Virgin Atlantic Ltd.
Conclusion
Annotated bibliography
Brief information about Virgin Atlantic Ltd
Founder: Richard Branson
Year of founding: 1984
“Virgin Atlantic Airways Limited (Virgin Atlantic or “the company”) is a private airline company, which is 51% owned by Virgin Group and 49% owned by Singapore Airlines. The company operates in the Europe, the US, and Asia Pacific. It is headquartered in Sussex, the UK and employs about 9,000 people”.
“ Virgin Atlantic was the first airline to offer individual TVs to their business class passengers”.

References
Virgin Atlantic Airways Limited, SWOT Analysis. (2013). Virgin Atlantic Airways
SWOT Analysis, 1-7.
http://www.virgin-atlantic.com/us/en/footer/about-us.html

Political
Government intervention is action taken by government in order to affect or interfere with decision made by individual and groups
Tax and trade policy can affect on the expenses of the company, consequently the prices of the tickets will increase and therefore the number of customers will decrease
Instability of the country can significantly affect the development of tourism industry

Economic
Economic crises will lead to inflation and the number of customers will decrease
Economic situation of the country will affect the turnover and profit of the company
Increase of the cost in insurance of the country will increase expenses of the company and company will have to increase ticket price, which reduce the number of customers


Socio-cultural
Virgin Atlantic Airways belongs to Virgin group which is a known brand, this will help effectively to build the trust of the customer.
The business should meet customer’s need in particular country (languages usage, food, customer treatment).
The company has to keep in track the trends, life style choices of the customer.
Technological
Pest Analysis
Using online and booking system to buy tickets helps to decrease costs on labor
Provide customers with very modern transportation such as airbus, Boeing
Using biofuel for transportation can promote company as environment friendly

Strengths
 The company has a well-known brand. Virgin Group covers a large number of spheres of market therefore they are easy to recognize and trust to the brand for customers.
The company offers a full service package. Beginning with check-in facilities, lounge areas and clubhouses and the provision of in-flight entertainment.
The company has personal slots at Heathrow International Airport, the largest in the world. The company also provides there lounge areas such as Revivals lounge, Virgin Atlantic Clubhouse and Clubhouse Spa only for club members.
Weaknesses
 Virgin Atlantic does not present in any of the major air alliances (Star, One World, Sky Team).This makes the company a weak competitor.
Small aircraft fleet (Total 44 Aircraft) what makes a company a small player in a large field.
The company is too focused on the London market, while the rest of Europe is not covered. In other words company has a very small number of airports served by them.

Opportunities
Tourism is the fastest growing industry. Only in recent years, total air ticket sales raised by 10%.
The possibility of signing new partnerships with the main air alliances and introduction into the European market.
The possibility of transition to a combined bio fuels to reduce carbon dioxide emissions.
Threats
Nature disasters as storm or tsunami, earthquake, tornado will cause unexpected accident for flight delay.
Terrorism incident will definitely affect to the reputation of the airline company since it relates to security issue.
Increase of fuel price will make impacts on the profitability and competitive position.
The discontents of the employee in salary, insurance welfare.
SWOT analysis
Loyalty program
The strategy of loyalty program is achieve customer perception, then make customer to be sympathy and loyal, and finally, earn annual profit from that loyalty.
If the customers are being in the mood of secure and trusty, this will foster the consumption ability of them special treatments (for example : monetary reward )
To get customer perception, the company have to use the program utility perception.
Once the business got customer’s trust, they will become loyal customer.
After occupying customer loyalty, they will express the attitudinal loyalty (repeat purchasing products from a familiar brand)
The target at the end is to maintain the relationship with loyal customer and make them become lifetime values.
Loyalty program
Concept: influence the customers and their loyalty
3 mechanisms of influence:
Points pressure: more the customers have points, more they want.
Rewarded behavior: When the customers get gift, they are more attached to the brand
Personalized marketing: improve the attitude of the customers
Benefit of LP:
VIP rooms, less latency at the boarding gate, different treatment (1rst class, better meal)
Effect on customer behavior
Increase in purchasing: 4,24%
How to earn points ?
It is very easy: you just need to use the services or buy goods of the company that offer loyalty program.

Loyalty program of airlines
Generally, loyalty program of airlines is divided by statuses in membership such as basic, silver and gold.
Loyalty program in this industry is based on earning miles through flights.
Loyalty program of airlines is based on new technology. Online and booking systems, services in the plane are attracted by customers. Customers are looking for more innovative offerings onboard. New technologies can expand opportunities of airlines’ loyalty program.
“Virgin Atlantic has enhanced its Flying Club loyalty programe to allow members to buy top-up miles. The miles can be spent on flights, hotels, car rental”.

Loyalty program of Virgin Atlantic Ltd.
Loyalty program of Virgin Atlantic Ltd.
The company provides to participants of the program amazing features. Formula of entry and earning points and miles is extremely simple. The more you fly, the more you get.
By becoming a member of the club you are applying for the first stage on the Red then Silver and at the end on the Gold level. As higher the level the more unique services you receive.
By becoming a member of one of the stages of the program, participants receive not only financial benefits in the form of free tickets or upgrade travel status but also social status and special sense of belonging to the company, bond with it, feeling that you treated specially.
This year, Virgin Airlines has launched a revolutionary new bonus for frequent flyer program members. The winner will get unforgettable experience of suborbital space flight.
And even if the member failed to gain enough miles and took 2nd place, awaits him a good consolation prize.
Conclusion
To conclude, it can be said that loyalty programs play an integral part of the success of the company. Individual approach is one of the key values for achieving maximum revenue and satisfying social needs of customers.
There are almost no differences between the principle of operation of loyalty program of airlines and loyalty program of other segments of industries.
Virgin Atlantic Airlines is well-known in the market for their unusual and perfect way of customers' treatment. However, the company should not stop on their achievements and should keep going in the same manner.
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