DEFINITION OF MARKETING
A short definition of marketing is the action of business promoting, selling the products and providing service also it includes the way of advertisement. "Marketing is an important activity in organization. Finance, Operations, Accounting, and other functions have no job to do unless products and services with sufficient demand are identified and the organization is set up to satisfy that demand at required profit. ", this is a quotation of Kotler and this is what he have said about what is marketing. He also have said that it is an "important activity in organization" and I agree with him and his definition of marketing.
FUNCTION OF MARKETING
Function of marketing is to assume the whole process to think what and which products will be sold to customers and how they will sell the products and deliver them to customers.
Marketing mix describes the main elements for the organization to achieve the aims and to make customers happy. Those main elements are known as 4P's and they are the Product, Price, Place and Promotion. The organizations are always improving on those elements because they are the most important elements of business.
The business may segment the customers to effectively present their products. Customers will be divided into groups with the same needs. There are four types of segments and they are the Demographic, Socio-economic, Geographic and Psychographic segmentation. The fist one is demographic segmentation and when this method is used customers are divided into different groups depending on the age, gender and ethnic. The second type of segmentation is socio-economic segmentation and customers are divided into different groups of upper middle class, middle class, lowering middle class, skilled working class, working class and hose at lowest level of substance and they are based on occupation not income. Geographic segmentation is the method of grouping people depending on the postcode or area. The Psychographic segmentation is the method of grouping people into groups depending on the personality, hobbies and motivations. So customers are divided into those groups and then employees can easily choose a suitable product for them.
MARKETING COMMUNICATION METHODS
Marketing communication is the way how the company is communicating with the market to let them know about product, services, deals and etc. It is all about branding and being creative, to make related logo and name to the business.
The technology is really important nowadays because in Travel and Tourism sector technology is used as a daily routine, especially travel agents airlines etc. use the technology a lot. Travel & Tourism companies are using view data, CRS and GDS systems. The view data is the interactive screen which allows travel agents to use the tour operators' reservation system. The Computer Reservation System (CRS) is the computer with view data so they have the access to reservation system with all the details of reservations. Nowadays the CRS system is replaced with GDS system, CRS was used by travel agents, airlines etc. The Global Distribution System (GDS) is a developed version of CRS. This system allows people to look for the reservation system of all related companies to them, the up to date time is available and they can use the GDS 24-hour.
TRAVEL AND TOURISM ORGANIZATIONS
British Airways is a company which provides domestic, inbound and outbound flights so that means they are an airline. They also are the UK's flag carrier that means they are representing the UK. This airline is a British airline and this is the PLC company. British Airways is the largest British airline in UK. In terms of passenger measurement British Airways is the second largest airline in UK just behind the EasyJet.
Thomas cook is one of the large sized organizations, this company is based on travel and they are an organizer of trips around the world. It is the second largest company travel in the Europe and it was founded in 2007. They offer to people trips around the world and also they offer hotels, resorts, airlines, package holidays and cruise airlines to their customers. The type of this organizations is the PLC (Public Limited Company) and the area of them is global. There is 31,000 employees in 2012 and the operating income was Â£263, 1 million.
Nature of product is the Intangible, Perishable and Service related. The intangible is when people are buying the product and they can touch it so is means it is tangible and intangible products are the products which people can see or touch before people buy them. Perishable products are usually offered by Travel and Tourism companies for example the flight have left the airport so the tickets are no more sell for this flight. Service related is when the organization is providing the product and the employee is selling it but if the employee will behave baldy then the experience with this company will be bad even is the product is really good.
How the product have effected Thomas Cook in terms of marketing mix? The logo of Thomas Cook is a sunny heart and this show customers that they do sunny holidays with good weather and they are mostly focused on sun. So by this method TC can catch people which are looking for sun on holidays. Advertisement have influenced Thomas Cook because their adverts catch customers. They advertise them in TV and internet such as social media and this type of advertisement is really popular because many people use internet and TV so if they advertise them there the advert will be seen by most of people. USP of TC is that they are the specialist in family package holidays. The UPS is effecting this organization because they are specialist is family package holidays so they know everything about this. This UPS will bring to Thomas Cook families looking for package holidays even the TV adverts and many of their adverts shows children and families there and they are targeted to families.
Ba is a flag carrier of UK so they represent United Kingdom and many British people use BA also they are really popular in the UK. Ba advertise them everywhere such as TV, billboards , online, social media and many more and this is good because in 2008 ba have 31 millions of passengers and in 2014 they had 40 millions of passengers and this is the effect of advertisement. British Airways have their website called British Airways and British Airways Media Center. In this website BA promotes their new products for example the flight to new destination, new aircraft or different classes of travel. They also put their goals in there and their awards up to date. In there people can find many up to date information about British airways company. They also use Facebook and they have their own profile on there. On Facebook they promote their selves and they also promote London, for example they some information about popular attractions and some buildings. They use Facebook because many people use this and this is a good way of advertisement, direct marketing and it is cheap way of advertisement. This allows Ba to ley more and more people know about the British Airways products, flights and so on. They promote London because they are the Flag Carrier of UK so it is a huge competitive advantage for them. Usp of ba is the customer service and they provide an excellent customer service as many people say but also there are some complains and this is why ba have many good reviews . This is how the marketing mix have worked together with ba.
BA have built new aircraft and it is the Boeing 787-9 Dreamliner. BA have let the Boeing 787-9 fly to Abu Dhabi on 5th of November 2015 but it is also will fly to Muscat. The flights are available only from Â£1564 with business class. In first class there is now more space provided and there are new rooms. So the first flight of Boeing 787-9 was to Abu Dhabi and the flights take place form London Heathrow to Abu Dhabi daily. On service on 6th of November the Hollywood stars came on board with Australian Margot Robbie she was attending an exclusive VIP party on Zaya Nurai Island. So she flew with BA on this day. Ba will have good influences because they built a new aircraft so they have more to provide for their customers. Customers flying with British Airways will experience and luxury service and environment. Ba will also gain a competitive advantage over other airlines because of the Margot Robbie flying with them. So this situation is like a type of advertisement because the media are interested in Margot Robbie, so if she flew with them everyone will know about this and her fans can start to fly with BA. It also shows that BA can provide a high level of product and customer service because popular people don't chose things which are not marked as high quality. So this shows that BA can make Margot Robbie happy so they can make everyone happy in terms of their service and product.
PRODUCT LIFE CYCLE
Introduction- new product coming and it is exciting the product is popular and people are buying it a lot. Growth- the profit increases and the sales too it is still popular. Maturity- the sales of the product and the profit suddenly stops increasing so is stays the same. Decline- means that the product is no more popular so the sales and the profit starts to decreasing then the business needs to do something so they repeat the process again and again. Also they may offer new product or change the current product.
The business need to set prices to met the objectives and if the business will not set the right price then they will not make a profit. The simplest calculation of prices is cost plus you add up all the cost to make the full product and you add your percentage to this cost. Competitor pricing means that the company have similar or the same prices as the competition. Discount are cheaper products for someone such as seniors, infants, teenagers or kids also the discount may be for some limited period of time. Seasonality pricing means that the company have different prices in different times of the year and they are called peak off and peak. Peak off period is cheaper than peak period.
How the price have effected Thomas Cook in terms of marketing mix? Competitor pricing is used by TC so they try to set the price of product by the price of the same product but form the competition so they compare prices to other big boys such as TUI. This method is good because many people look at the price of product and if the competition will have the same or lower prices they will chose them. Also Thomas Cook is setting prices such as Â£499 instead of Â£500 because people think that there is big difference and TC use this trick in the marketing. Discounting is important because people look for discounting and many companies have discounting for students of children. For example TC have offers on holidays such as pay for one child and the second child travel for free. This method have a big effect on the company because it attract people because some of the Travel agents don't offer things like this so this get Thomas Cook a competitive advantage. The value for money with Thomas Cook is great because they offer free insurance on foreign exchange for their customers. So people buy products of Thomas Cook and they get free insurance and that is good value for money. By this extra customers get great rates of their foreign exchange and in event of lose of the money or they will be stolen, this is what the insurance with Thomas Cook covers. This free insurance give Thomas Cook a competitive advantage because they will attract more customers and they will be better then the competition because they do not offer stuff like this. They may have a higher number of customers after this because people will be attracted by this. It's beneficial for the customer because they get the free insurance with their product and of course they will travel abroad so they need to exchange their money for different currency, so with Thomas Cook their money are safe and insured in case of robbery of lose of the money also customers get greatest rates for their foreign exchange.
Discounting are lower prices for some people such as children, retired people or recent customers. They provide discounting for customers because people are looking for this and for example children need less than an adult so they don't need more legroom also the discounts for recent customers because they fly often so ba can offer some deals for then to encourage them to fly more and that they see that they fly really often so this is how it effect ba. Competitor pricing allows ba to set their prices right to be better than the competition and this is how the marketing mix is working together with ba. So as I have said before British Airways allows their customers to chose the level of service and the price. For example the return flight from New York cost Â£376 in economy class also customers can chose the first class flight and that will cost them Â£2728.
British Airways prices its products in a way that allows consumers to decide the level of services they want. For example return flight to New York, purchased online is Â£376 in economy yet consumers pay a huge increase to Â£2728 for the same flight, (www.britishairways.com 2011) but in first class.
BAâ€™s premium and medium strategies offers superior quality for greater price allowing the airline to compete with other quality airlines such as Virgin and American Airlines, and base price on customer valuations â€“ The price â€œis set higher than others to reflect better product quality and exclusivity.â€ (Brassington and Petitt, 2003: 1106). However in recent years the arrival of low cost carriers and economic turmoil forced BA into providing a low cost formula to remain competitive. The first step towards this was in generating ancillary revenues by introducing a fee per one way flight for passengers booking a seat in advance for all seats except first class. (GMID 2011) Even in the low cost formula, BA are still upholding their image of quality and good customer service as unlike the low cost carriers, where ancillary revenues are the money makers with food, drink and priority boarding all costing extra, BA still provide some level of on board service in the cost of their product.
Despite the introduction of a low cost formula, British Airways generally bases prices on perceived value of its brand, and aims to deliver product quality leadership strategy. (www.britishairways.com 2011) The executive club encourages loyalty to the airline and rewards consumers with double airmiles, priority boarding, additional baggage allowance and access to the BA lounge as well as giving the appearance of high quality and good value.
However BA recently lowered the price of their business class ticket due to the recession. It has been recognised the company has had to reduce the price of its business class tickets, to remain competitive alongside such competition as Virgin, who have helped battle down the price, along with itâ€™s cliental that have become less willing to pay higher prices during economic hardship. This has help attract more customers, smaller businesses in particular, who are able to do deals and meet contacts around the world. (Times Online 2011). An excellent strategy that has allowed BA to get away from just large organisations and into the smaller/medium sized business market (GMID 2011) is their Face to Face campaign which, on submittance of a business plan, small/medium sized businesses can apply for free business travel.
The marginal cost of one more passenger is relatively small, as the majority of costs are largely in fixed costs of running the flight (cost of aircraft, fuel, airport duties etc.). According to Chris Tarry, transport analyst for Commerzbank Securities, BAâ€™s selling cost per passenger in March 2002 was just 10.9% of its average ticket price (http://www.insights.org.uk 2011). This allows BA to sell tickets at lower rates when demand is less and higher rates during peak season. For example an economy class ticket to New York would normally be Â£376 return but almost doubles over the peak bank holiday period of the Royal Wedding at Â£616 (www.britishairways.com 2011). The airline aims to get as many people on the plane as possible, even at a lower price, and make some profit, than the plane taking of near empty and making a loss.
Ba is offering the executive club for the customers. There is few types of the club such as blue, bronze, silver and gold. New customers at the beginning need to start with the blue club. The blue club is providing some benefits for members and those are the collection of Avios points, collection of Tier points, sharing avios point with family or other members, keeping your preferences, offers for members and access to app. To reach the bronze club you need to fly at least two times and collect 300 tier points. The bronze club is providing some benefits for members and those are the 25% more reward, business check-in, priority boarding, picking your seat in advance, priority baggage drop off and arrival collection, sharing the avios and keeping your preferences. To reach the silver club you need to fly at least four times and collect 600 tier points. The silver club can offer some benefits to members and those are the 50% more reward, access to some of the lounges, two pieces of checked baggage and sharing avios. To reach gold club you need to fly at least four times and collect 1500 tier points. The benefits of gold club for members are the 100% more reward, access to all the lounges, access to spa, free seat selection and priority number. This club allows customers to have some good deals and they will stay with BA. This club have good impacts on BA because they will have loyal customers and they will make more profit because they will have more customers with them.
How the place is effecting Thomas Cook in terms of marketing mix? The location is effecting Thomas Cook because they have their branch shops is popular destinations such as London, Barcelona, Berlin and many more and in this destinations there is a huge amount of people. Thomas Cook have shops all over London on high streets and there is a lot of people so many people see them and they catch many customers. The location is important because if a business will locate their selves in bad and quite location then they will have less customers because they need to be in the center of attention to catch customers and they need to be accessible. The accessibility is also important because if the business is not accessible then they will be less attractive for customers. Thomas Cook have their branch shops spread all over the world so they are accessible for most of the countries also TC provide service by the phone so they have call center with many languages and different numbers for every country for lower cost. So the accessibility of Thomas Cook is good and the effect is suitable for them because it brings them more customer all over world and it is still the same Unique Selling Point all over the world.The channels of distribution is also playing an important role in the business because customers can buy products of TC by phone, online or face to face. TC have their call centers so they also sell their products on the phone, this is good because some people don't have access to internet or they don't speak well the language and TC can offer them the service in their well know language. TC also have their websites and mobile apps so they offer their products there with many languages because the offer to their customers a website in many languages. TC also have have their branch shops all over the world so this means that people can go there and talk face to face with the employee of Thomas Cook. Some customers prefer this type of shopping because they can ask as many questions as they want and they will get the answer straight away, they don't need to want for and e-mail or phone call. The TC have many channels of distribution in comparison to Expedia , Expedia is only offering their product online on their website they don't have their shops and this is bad because they should give the opportunity of choice to customer as Thomas Cook and by this TC has gain an competitive advantage over Expedia.
The location of ba is good because they have their own terminal at Heathrow Airport and they have their hub in London this is good because Heathrow is the 6th busiest airport in the world. BA also provide flight to popular destinations such as Barcelona , Paris, New York and many more so people which are using ba have easy access to America and the whole world. The location of BA in popular destinations provide them interst of the market because there is a lot of people and ba advertise them very well. The channels of distribution allows customer to choose the most suitable place for them they can choose from website,app, call center or travel agents. Ba is unique of this that they provide purchase of their tickets by travel agent not many airlines have an choice of this and they also are advertised by travel agents so they catch more customers and this is how the marketing mix is working together with ba.
Ba has decided to start flying to Lima. Lima is located in south America, it is the country and the capital is Peru. Ba will start their journeys to Lima from London Gatwick on 4th of May 2016 and it is a direct flight. They will provide service to Lima three times a week by a three cabin Boeing 777. They will fly there only in summer months, October is also available but only twice a week. The prices start form Â£765 with all the taxes and checked baggage. Ba are proud of being the only airline which provides a flight from London to Peru. Ba will have a good influences by this decision because as they wrote in their article "It is great to be the only airline to offer direct services between London and Peru." this quotation shows what BA says about this new service. Ba will gain an competitive advantage over all the airlines by this also they have provided wider choice of destinations to their customers. Ba have also invested in Peru's growing market. Peru is a gateway to most dramatic places in south America. The influence will it also have that BA will have more customers and their profit will increase because they provide more destinations also people from Lima will start to have put some attention to UK because BA have provided them a gateway to London.
Public relations are the public activities which advertise the company and this method is much cheaper than other method of promotion. Sales promotion are the activities and the aim of those activities are to sell certain product or to catch more customer which will buy the product earlier. Direct marketing is a way of contacting or advertising direct to the customers.
How the promotion is effecting Thomas Cook in terms of marketing mix? Public relations are important because they also bring some customers to Thomas Cook and public relations are events which allows customers to have fun with TC and this is a way of advertisement. The sales promotion encourages customers to buy products of Thomas Cook quicker than before because they see offer and they know that it is just for certain amount of time. Direct marketing is really good for TC because it is a direct advertisement to customer for example email, is works like this if you have bought a holiday package for water sports then you will get offers form Thomas Cook similar to water sports or the same holidays to other destinations. Social media
The public relations of ba allows them to advertise on events and it also allows people to have fun with BA. BA are popular for sponsoring Kidzania and Olympics 2012 this is good because people travelling to attend the Olympics they may have used BA as transport provider so this a way of advertisement and it allows BA to have more customers. So the public relations of BA have bring them more customers also they have painted an aircraft as a panda for the Chinese market and they really have interested them because Chinese people were excited and they show more attention to BA and also to UK and this is how the marketing mix have worked together with BA.
The Boeing 777 have been painted as a big panda and it was for the occasion of service to Chengdu in China. On 22st of September 2013 they have painted the aircraft. This is shown as a way of advertisement and promotion because they flew by this aircraft to China and everyone was talking about this. This have a good influence on customers and people because Chinese market were excited and they really loved it. So they start to put some attention on BA and the UK because BA is a British airline and they are also a flag carrier of UK. This activity have a good and suitable impact on BA because the Chinese market were more interested in BA and UK and some of them have started to use BA to fly to UK and not only so it means that the profit have increased. Social media is used by British Airways to promote them selves. They use Facebook to promote them and social media is a way of advertisement and it is also cheap for the companies and for others. Social media is the most effective way of advertisement because many people use social media daily. So if British Airways is using social media as Facebook they have great way of direct marketing because everything what BA have posted on the Facebook all the people which are interested in BA they will see it. So it is sure that the post or advert will go straight to the customer. People also can contact British Airways through the Facebook so for example they can ask some questions. Use of social media by companies is good because it is cheaper for example from TV advert and many people have seen the company in social media so for BA it have catch many customers. It have catch many young travelers because this is their way of advertisement that they are interested in and they use Facebook a lot so it is most likely that young people will use Facebook and other social media providers to see of contact British Airways.
...(download the rest of the essay above)