Virgin

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PROJECT ON SERVICE QUALITY OF

Type Founded Headquarters Key people

Private (Limited liability) 1970 (Incorporation: 1989) London, England, UK Richard Branson, Chairman Stephen Murphy, CEO Susannah Parden, CFO Airlines, Trains, Games, Financial services, Internet ,Cable TV, Music, Radio, Cosmetics, Jewellery ,House ware ,Retail Mobile phones US $20 billion Approximately 50,000 people, in 29 countries.

Products

Revenue Employees

PRODUCTS

The story unfolds……
• Branson was born at Stone field Nursing Home in South London. • • His mother used to set challenges for him and his sisters, in order to make them independent. • • Virgin brand took off in the year 1970. • • Branson started with a student magazine at the age of 17 which focused on the issues of students in school.

“ Richard

Branson is Britain's top boss says Learning & Skills Council ”

“ Think

small to score b

Virgin brand so far: Transport & Travel

Virgin brand so far: Leisure & Entertainment

Virgin brand so far: Retail

Virgin brand so far: Communications. Money.

Virgin Mobile India Entry….

Virgin brand so far: Health. Renewables. Charity.

…. one of the most exciting brands in the world

200 companies worldwide, employing 48 500 people, an annual Virgin Group turnover of £10.8bn/US$20.4bn

KEY ASPECTS
qCustomer Service q qSystematic Role q qRole of Technology q qComments q qConsistent Service q qCommunication Channels

Dimensions of Service Quality
qEfficiency qAssurance q q qTangible qTrust q q qEmpathy qReliability q qResponsiveness

Relative Importance of Service
qReliability 32 %

qTangibles 11 % qResponsiveness 22 % qEmpathy 16 %

qAssurance 19 %
16

Determinants
Dimensions of Service Quality 1. Access 2. Communication 3. Competence 4. Courtesy 5. Credibility 6. Reliability 7. Responsiveness 8. Security 9. Tangibles 10 . Understanding / Knowing the Customer
Word of Mouth Personal Needs Past Experience

Expected Service

External Communication to Customers

Service Quality Gap

Perceived Service Quality

Perceive d Service
17

Nature of Service Expectations
Desired Service
Level Customers Believe Can and Should Be Delivered

Zone of Tolerance
Adequate Service
Minimum Level Customers Are Willing to Accept
18

The Two Levels of Expectations Imply Two Corresponding Measures of GAP 5 :
Measure of Service Adequacy ( MSA ) = Perceived Service Adequate Service

Measure of Service Superiority ( MSS )

=

Perceived Service

-

Desired Service

19

Technology ’ s Role Serving Customers
Company
Internal Marketing

Te ch no lo gy

`

External Marketing

Employees

Customers

Interactive Marketing
20

PROCESS MODEL FOR CONTINUOUS MEASUREMENT AND IMPROVEMENT OF SERVICE QUALITY
DO YOUR CUSTOMERS PERCEIVE YOUR OFFERINGS AS MEETING OR EXCEEDING THEIR EXPECTATIONS? NO DO YOU HAVE AN ACCURATE UNDERSTANDING OF CUSTOMERS ’ EXPECTATIONS? YES ARE THERE SPECIFIC STANDARDS IN PLACE TO MEET CUSTOMERS ’ EXPECTATIONS? YES DO YOUR OFFERINGS MEET OR EXCEED THE STANDARDS? YES IS THE INFORMATION COMMUNICATED TO CUSTOMERS ABOUT YOUR OFFERINGS ACCURATE? YES 21 NO TAKE CORRECTIVE ACTION NO TAKE CORRECTIVE ACTION NO TAKE CORRECTIVE ACTION NO TAKE CORRECTIVE ACTION YES CONTINUE TO MONITOR CUSTOMERS ’ EXPECTATIONS AND PERCEPTIONS

Conceptual Model for Understandin g

Customer

Fulfillm ent Gap

Customer Web site Requirement s

Customer Web site Experiences

Perceived e-SQ

Perceived Value

Purchase/ Repurchas e

Company

Informa tion Gap

Marketing of the Web site Communi cation Gap

Design and Operation of the Web site Design Gap

Management’ s Beliefs about Customer Requirements

Customer satisfaction
üDirect selling of goods and services to consumers
ü ü ü

“ üVirgin Atlantic & Virgin Mobile Our goal
üAmenities on the flight üLuxury Boat Service

cannot be profit at any cost , because we know that tomorrow ’ s success depends on the trust we

PRINCIPLE S

SOCIAL RESPONSIBILITY
üVirgin Unite üVirgin Green Fund üVirgin Earth Challenge, save the earth

To w a rd s E m p lo y e e s



“Staff first,

Then Customers and Shareholders”

  



“Strength through Unity.”

Waste Management


üRecycling – IT equipment and mobile phones
ü

üSustainable Printing


“ W E H ATE W A STE”

TECHNOLOGY & VIRGIN

V IR G IN C O N N E C T - WIMAX NETWORK C O V E R IN G 2 0 C IT IE S

VIRGIN LAUNCHES ONLINE MUSIC SERVICE

VIRGIN MOBILE IN SOUTH AFRICA, INTRODUCED 'PER SECOND' BILLING

Virgin Retail Saves 8.5 Hours a Week in Each Store With stock-control solution

Virgin Megastores Opens Music and Video Vault to Customers With

THINKH A T K E

COMPANIES

“ Wallpap
er awards Virgin Atlantic with world's Fastest Airport Check In ”

“ Virgin

Blue is named 2008 Asia Pacific Low Cost Airline Of The Year ”

“ The

Institut e of Customer Service names Virgin Trains as Best Train Operator



Virgin Atlantic Airways Case

Case Objectives
• To integrate the concepts of services marketing as a capstone to the course. • To examine the themes of service quality, innovation, public relations and pricing as they relate to success in a service. • To demonstrate the delivery of customer value. • To illustrate service positioning as a competitive strategy.

• • • • • • • •

Value for Money Innovation Non Conformist

Attributes and Dimensions of  Customer Value Offered by VAA
D y n a m ic Tre n d y F u n D a v id a g a in st G o lia th L ife S ty le P e rso n a l L o w P rice C o n v e n ie n ce F rie n d ly In fo rm a l

Alternative to BA Entertainment Cheapest Deal Young Richard Branson’s Airline

Service Quality Entertainment Fun Innovation



Service

VAA’s Weaknesses • MARKETING STRATEGY
– No clear customer targets – “Wild” image not good for all customers – Public relations efficient but less controllable than advertising – Low trial rate – Power of competing frequent flyer

• SERVICE AND ORGANIZATIO NAL CAPABILITIES
– Punctuality – Age of fleet – Losing momentum on innovation? – For how long can staff be kept motivated?

VAA’s Weaknesses • ECONOMIC • DEPENDENCE VULNERABILI ON BRANSON – Value of VAA TY
– High break-even point – Lack of economies of scope – Capital without Branson? – Real value of Virgin brand?

VAA Possible Actions • PRESERVE AND IMPROVE CURRENT STRENGTHS
– – – – – – – Innovation Service quality Fun Staff motivation Punctuality Fleet renewal Expand Virgin Freeway

AA Possible Actions Action
• BUILD A NEW STAGE IN THE DEVELOPMENT OF VAA
– Transform core values into unambiguous positioning strategy – Design differentiated marketing strategy for specific target groups – Break the trial rate wall – Build selected

VAA - What Happened?
q VAA announced joint Heathrow-Sydney service via Hong Kong with Ansett Airlines q Announced another partnership with Malaysia Airlines for flights from London to Kuala Lumpur q Alliance with Delta approved q VAA renamed its full-fare Mid Class cabin Premium Economy because of confusion q VAA won yet another Executive Travel Airline of the Year award in January 1995 q Branson ranked in eleventh place in 1994 among Britain’s rich with 895 million net worth

Conclusion

THANK YOU ! THANK YOU ! THANK YOU !

THANK YOU !

TH A N K YO U !
THANK YOU !

THANK YOU !

THANK YOU !

THANK YOU !

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