Page 1: Introduction
Anybody who has bought a car will tell you that there are tangible points of difference which affect their decision to make a purchase. For example, there are many different models of car which have various characteristics. They may have manual or automatic transmissions, fuel injection systems, be small and versatile, designed for a family or for a couple, have four-wheel drive and also have vast differences in fuel-economy, safety, security and performance. The prospective purchaser can read reports through the motoring press, visit a showroom, sit in a car and test-drive it in order to make a comparison of these features.
In the service sector, a consumer has to deal with a completely different set of circumstances. It is just not possible to walk into a hotel reception and ask if you can ‘test-drive’ a bedroom or to turn up at an airport and ask an airline if they could take you up for a ‘test flight’! The ways in which consumers select, test and make decisions about purchases do not apply in the same way for services as they do for manufactured goods. As a result there are more pressures upon service organisations to develop a series of brand values which help to communicate to prospective consumers not just the individual personality of the organisation they might deal with, but also the service elements and characteristics which help to distinguish it from its competitors.
In a highly competitive service industry such as international airlines, organisations wishing to be successful have to be aware of their competitors and the nature of competitive activities.
Following a difficult period at the start of the 1990s, the airline industry is now highly profitable and increasingly competitive and is set for increased growth as new markets such as those in the Pacific Rim, India and China open for business. Even so, transatlantic routes and European routes are still enormously important markets for airlines, particularly in the field of business travel. To survive, airline companies have been forced to focus upon developing their market share by improving their range of services.
In a competitive marketplace, where different service organisations constantly try to create something new and different, consumers minds have become like a sponge which can only digest a limited amount of information relating to different products and services. The problem for international airlines is not just the nature of service improvements, but how such improvements can be transmitted to the minds of prospective consumers.
This case study focuses on how Virgin Atlantic, a comparatively young international airline, has, over a relatively short period, developed a series of brand values which have enabled it to reflect these improvements in service provision. In doing so these values have provided Virgin Atlantic with a unique personality which, through its appeal to consumers, has created a distinct advantage over its competitors. Virgin Atlantic has proved to be one of the most forward-thinking companies in modern times.