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Virgin Atlantic
Jessica Nixon W17006434
Customer Experience and Relationship Marketing - MK9514
Virgin Atlantic are a service organisation which can offer flight only, flight and hotel, flight and car. I will primarily be talking about their flight offering. The airline has expanded from intended flights between UK and New York, to become a global airline offering long haul flights.
To offer their service they use mixed fleet of Airbus and Boeing wide-body aircraft and operates to destinations in North America, the Caribbean, Africa, the Middle East and Asia from its main bases in London and its secondary base at Manchester (Virgin Atlantic, 2019, 3). The Virgin Atlantic aircraft consist of three cabins which primarily all offer a different service: Economy, Premium (formerly Premium economy) and Upper Class (Virgin Atlantic, 2019, 4). Owned by Singapore Airline (49%) and by Virgin group (51%). Full service airline companies dominates the long-haul travel with Virgin Atlantic being one of these (Mintel, 2017, 3).
Virgin Atlantic are a service organisation which can offer flight only, flight and hotel, flight and car (Virgin Atlantic, 2019, a). I will primarily be talking about their flight offering.
Virgin Atlantic are a full service airline, which includes offering food, drink and entertainment (Virgin Atlantic, 2019, e).
To offer their service they use mixed fleet of Airbus and Boeing wide-body aircraft and operate to destinations in North America, the Caribbean, Africa, the Middle East and Asia (Virgin Atlantic, 2019, c).
The Virgin Atlantic aircraft consist of three cabins which primarily all offer a different service: Economy, Premium and Upper Class (Virgin Atlantic, 2019, d). I will be primarily focusing on the Premium Service offering.
Virgin understand that not all customers will want the same service therefore they offer a variety of cabins because they give today’s customer what they want (Doyle & Bridgewater, 2012).
Did you know? Full service airline companies dominate the long travel (Mintel, 2017, c).
The premium class is positioned between economy and business class in terms of price, comfort, and amenities. This cabin is for customers who want a little bit more and are willing to pay that extra amount of money to gain a better service compared to the basic package (Virgin Atlantic, 2019, f).
What is offered in this service:
(Virgin Atlantic, 2019, f)
General target market: Middle/Upper class. Frequent flyers.
Premium class is heavily targeted to younger consumers with it being popular amongst business travelers between the age of 25 – 34 (Mintel, 2017, a). Men are more likely to use premium economy compared to women as business travelers are more likely to be men at 64% (Mintel, 2018, b). Business travelers say that their employer is using premium flight services more than they have done in the past now compared to other cabins (Mintel 2017, a), as organisations are looking to reduce their spending due to Brexit.
The Product Service Continuum
On the premium flight service that Virgin Atlantic provide they position closer to a high service with low physical content. Their main service is the flight from a location to a chosen destination. The flights offered by Virgin Atlantic are a service which is offered on a B2C basis. ‘Services are frequently described as ‘intangible’ and their output is viewed as an activity, rather than a tangible object’ (Rathmell, 1996, p959).
The service is intangible as what they offer cannot be touched and does not have a physical presence (Pride & Ferrell, 2010). The customer does not take ownership of the aircraft; they only have access to the facilities on an occasion, so they are primarily a service with some product components. Delivered are tangible benefits such as the physical movement of people, food and drink, seating, the champagne and newspaper on arrival (Virgin Atlantic, 2019, f). The food and drink that the passenger has on board are tangible because they can be felt and touched.
Characteristics of Service
Virgin Atlantic -
Premium
(Moeller, 2010), Claessens (2015).
Perishability:
Virgin Atlantic's premium class is perishable as it can only sell seats on the plane prior to the departure and cannot be stored for later use. A flight in premium cannot be stored, saved, returned or resold once it has been used. If the customer misses their flight or does now show up they cannot get that exact flight again.
Lack of ownership:
Virgin’s service is primarily the transportation and travel to a different country; therefore, the customer does not own any part of the service they are just using it. When they buy the premium flight, they never have full control of it compared to a product.
Inseparability:
Virgin provide their main service which is the flight which is produced and consumed at the same time in the same location. Even though there are some services not provided at the same time, as before the flight and after there is a service going on. With premium the service offered is a quicker check in for luggage and if enough space in the first class lounge they are offered to go in (Virgin Atlantic, 2019, f). Also, members of the flying club (loyalty scheme) dependent on what tier they have access to the lounge/clubhouse before the actual flight (main service).
Intangibility:
Premium is mostly intangible because it cannot be touched; because they are paying for the service of being taken from one country to another. The passenger will have a ticket that will allow them to get on the flight (with premium they can choose their seat) (Virgin Atlantic, 2019, f). The service does provide some tangible items; in premium, offered is champagne and a newspaper with a amenity kit.
Variability:
Every single customers experience on the flight will have variations being that the more a business uses human contact they are more susceptible to variability. In premium the service will be standardised and offered will be the same service, such as champagne on arrival. In premium every customer will get a leather seat with a head and foot rest (larger than standard), in flight entertainment and food and drink. It depends on who provides the service and when and how, which means the quality of the service can have a great difference.
Classification of the Service
Customisation versus standardisation:
The service is customised dependent on what cabin the customer is travelling in. Premium will be standardised, as every passenger will have a larger seat, larger leg room, fine dining experience with china cutlery alongside all the basics with a selection food which cannot be changed (Virgin Atantic, 2019, f). Throughout the cabin a lot of things will be standardised as in what is presented to the customer, such as the colours and the formation of the plane.
Recipients:
The customers are involved in the service. They must interact with Virgin’s website to book the flight. At the airport two way communication happens as well as on the flight.
Place and time:
There is both physical and non physical interaction. There is not a lot of face to face contact before booking the flight because virgin do not have travel agents for booking flights. Customers have to book through their website. The on flight service is very much about face to face communication which involves being offered food and drink; they would not be able to get a flight without physical interaction.
Demand and supply?
There is always going to be a demand for flights across the United Kingdom (Wilson, 2019). which can change dependent on the economical situation. During the summer, when children have time off, their may be a rise of passengers on flights because they are going away for their holiday. However, because Virgin Atlantic are not just for leisure they are for business too, they may see a demand during school time. Therefore, it is hard for Virgin Atlantic to predict because of the different fluctuations. The premium class may increase in demand by the business people however economy will always be in use as it is the cheapest offering. As Virgin Atlantic's service offering is a flight, if not all the seats are sold for that particular flight they will loose money as that actual seat can be only offered once.
Demand and supply?
There is always going to be a demand for flights across the United Kingdom (Wilson, 2019), which can change dependent on the economical situation.
During the summer, when children have time off, their may be a rise of passengers on flights because they are going away for their holiday. However, because Virgin Atlantic are not just for leisure they are for business too, they may see a demand during school time.
Therefore, it is hard for Virgin Atlantic to predict because of the different fluctuations. As Virgin Atlantic's service offering is a flight, if not all the seats are sold for that particular flight they will loose money as that actual seat can be only offered once.
Demand and supply?
There is always going to be a demand for flights across the United Kingdom (Wilson, 2019). which can change dependent on the economical situation. During the summer, when children have time off, their may be a rise of passengers on flights because they are going away for their holiday. However, because Virgin Atlantic are not just for leisure they are for business too, they may see a demand during school time. Therefore, it is hard for Virgin Atlantic to predict because of the different fluctuations. The premium class may increase in demand by the business people however economy will always be in use as it is the cheapest offering. As Virgin Atlantic's service offering is a flight, if not all the seats are sold for that particular flight they will loose money as that actual seat can be only offered once.
Nature of relationship:
Virgin Atlantic encourage the customer to sign up or log in when booking a flight on their website. Reiterated through each part of the payment is how being a member has many benefits. They ask the customer about signing up before they check out as a guest, which, when the customer is part of the flying club that relationship is fully formed.
Just being a guest of virgin means the customer would not have the relationship with the brand compared to being part of the flying club, because offered to members is access to things in which other people cannot access (Virgin Atlantic, 2019, g).
Every customer at virgin will have an expectation. Expectations are beliefs about a product/service before it is consumed therefore it can change as it is only a prediction (Yi & La, 2004).
Virgin customers will be paying more money for premium therefore they may have greater expectations.
Different types of expectations (Smith, 2012)
Explicit - The customers in the premium cabin will aspect food and drink on board, champagne, newspaper, extra leg room as this has been specifically stated (Fixed standard).
Implicit – Virgin passengers will have expected standards, often when compared to other companies which could be based on past experiences. They may expect that there is on flight entertainment, comfy seats and friendly staff.
Static performance – Customers will expect cleanliness of the aircraft, the tables and seats all wiped and clean windows.
Technological - The development of technologies may mean that Virgin customers have expectations of what is offered on the flight. They may have the expectation of the up to date in flight entertainment.
How can Virgin's passengers’ expectations be formed? Flying with premium before, experience with competitors such as BA, Word of mouth – (trip advisor), passengers own standards and marketing messages given.
The expectations-disconfirmation model (Oliver, 1980)
Customers will have moderate satisfaction with their prior expectation before attending the flight. If the flight exceeds their expectation, they will have high satisfaction however if the service is at a low quality this will result in low satisfaction. Performing beyond customers expectations can result in delight.
Satisfaction is a result of a comparison between what we expected to receive from a business and what we actually did receive (Hill & Alexander, 2017).
Virgin take into consideration their customers expectations. They dedicate time to understand what customers value and then deliver this against those expectations (Rogers, 2017).
Virgin Atlantic highlight on their website the procedures and a plan of how they exceed customers expectations and provide great customer service, therefore their customers may already have high expectations (Explicit) (Virgin Atlantic, 2019, h).
Highlighted on their website is exactly what they are paying for, therefore Virgin must perform this (bigger seat, more leg room, comfort in the cabin, fine dining experience with a structured three course meal on china plates), so their customers are not dissatisfied.
There are no behaviour indicators because customers purchase their flights purely online. So show rooming where something is viewed in store but purchased online and web rooming where research is conducted online then purchased in store does not happen for Virgin Atlantic (Gopalani, & Shick, 2011).
The customer journey documents the full experience of being a customer such as the points where they are looking on Virgin's website to end of the service, it shows the original engagement to then hopefully forming a long-term relationship (Richardson, 2010).
Virgin Atlantic want to create the best experience in the sky and improve experiences for customers (CMO, 2018).
Virgin provide constant feedback after every flight to ensure their staff are improving the experience at every touch-point for their customers to ensure that they have a positive experience (CMO, 2018). A successful brand concentrates on customer touch-points to form a relationship with the customer (Hogan et al, 2005).
Customer Journey
Pre purchase phase:
The customer realises they want to book a flight. They may discuss with whoever they are going with to gain their opinion.
They will be looking at different brands and comparing the different prices such as BA. They will ask for recommendations from friends and family. The customer decides that premium offers them more to what economy offers and they want to pay extra in order to gain the extra services.
Purchase phase:
Virgin Atlantic's premium tickets can be bought through their website. The website allows customers to purchase their flights quick. The customer can either print off their tickets or collect them at the airport before the flight.
Post purchase phase:
The delivery would be when the customer has checked in and has boarded the plane of Virgin Atlantic.
The plane would be in the air and this is where interactions between the employee and the customer happen through offering food/ drinks or any other requests.
Maintenance would be by the organisation.
The disposal of the service is short term. However, when a relationship is formed between the customer and Virgin it becomes long term.
(Dhebar, 2013, p. 202)
Relationship Marketing
Virgin's relationship marketing activies are designed to advance or build customer relationships. Service loyalty can be gained by organisations building relationships and providing a brilliant customer service; which gives them a competitive advantage compared to competitors (Raj et al, 1997).
Virgin want to create that relationship with customers and give them; whether flying economy or premium class reasons for them to chose Virgin Atlantic over competitors (Donnelly, 2010).
Did you know? The relationship between an airline and its customers are generally poor which increases their costs (Shaw, 2016).
Flying club loyalty scheme
(Virgin Atlantic, 2019, g).
Why are they designed to improve relationships?
Email Marketing
Virgin send out emails that are personalised that use their customers names. It personifies the experience for the customer, by using their previous activty Eg 'Welcome back, Lewis, would you like to book a seat in the premium cabin again? (CMO, 2018).
It allows virgin to stay connected to their customers.
It gives the customer up to date information and any recent news which shows how Virgin are engaged to that specific customer.
Surveys are sent out to existing customers to find out about their experience.
Why are they are designed to improve relationships?
Email remains the most common internet activity in 2018, with 84% of adults carrying out this activity (ONS, 2018).
Virgin Atlantic have an informative, interactive website with user friendly navigation features.
Offers a live chat – It allows the customers to communicate with Virgin in order to improve their experience if they are having any difficulties.
It allows them to discuss not in the public eye and guaranteed a quick speedy reply. Live chat allows Virgin to build faithful customers around the brand and the service (Markoski et al, 2018). More people use webchat as their primary support channel now (Heathcote, 2016).
'Contact us' – It allows customers to easily reach out to Virgin Atlantic in a quick way. The customer can send a message with minimal effort and gain satisfaction once they receive a response, therefore they become satisfied. When the customer can reach out to the brand they will more likely not seek to a competitor.
Having different methods for the customer to contact the organisation caters everyone; allowing customers to decide what they prefer so
they do not leave (Harstein, 2012).
How does Virgin's website form relationship's?
Listens to customers needs through the live chat, having an accessible website will make customers return and use the website again. Giving the customer the choice, will in turn lead to more engagement. It will build better relationships with customers as it always keeping them up to date with the service offered.
If the website is difficult to use, if users get lost on the website or if the website does not answer basic questions people will just leave (Neilson, 2012).
‘Nielsen’s dimension of web’ – Virgin Atlantic’s website allows customers to book their premium cabin.
Learnability: 8/10. Clear structure. The website has a standard design – easy to locate things. The drop down boxes have the right amount of information and they easily take you to where you want to go.
Efficiency: 8/10. Allows tasks to be performed quick. There are boxes that can be filled out to book a flight, which would take less than a minute. There is not a long procedure at first that the customer will have to go through.
Memorability: 7/10. It is not completely straight forward therefore the customer may need to take some time going through the format of the website.
Errors: 6/10. If information is put in wrong when the customer is booking their flight they may have to start again from the beginning.
Satisfaction: 9/10. Everything is clearly titled with all the information within a click away.
Social Media
Virgin get a mixed range of positive and negative comments on their twitter. They respond to all the messages. If the person on their social media cannot assist, they try find solutions. If virgin were blunt or did not respond this would ruin relationships with their customers. Customers have the expectation of immediate answers therefore Virgin have the pressure of keeping their customer satisfied (Social report, 2017).
Virgin Atlantic use different social media platforms to deliver information to their customers but also connect with them in real time (Kietzmann et al, 2011).
Virgin reply to customers questions/queries and post any new information to keep the customer updated.
How do this help form relationships?
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