British Airways Marketing Report

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Contents

* Introduction........................................................................................................................... 2 * Brief Background of British Airways....................................................................................... 2 * The Marketing Mix................................................................................................................ 3 * S.W.O.T. Analysis................................................................................................................... 5 * British Airways Target Market and Positioning Strategy....................................................... 7 * Marketing Recommendations............................................................................................... 9 * Conclusion.............................................................................................................................. 11 * Bibliography ......................................................................................................................... 12 * Appendices ............................................................................................................................. 13

Introduction to Marketing
British Airways Report

Introduction
The aim of this report is to examine the company British Airways (BA) by starting with a Marketing Mix and S.W.O.T. analysis while moving onto focusing to the marketing positioning. The report will research into who the customers are and the ways BA attract their target market. Lastly, the report will advise BA of various recommendations with regard to future marketing strategies ending with a final conclusion.

Brief Background of British Airways
British Airways was established in 1974 following a merger between British Overseas Airways Corporation and British European Airways with the aim of providing flights to transport passengers around the world. After 13 years operating as a national company, BA was privatised by the Conservative British Government in 1987 and along the way, acquired many subsidiary companies such as British Caledonian and Dan-Air. More recently, BA have partnered with fellow companies to strengthen their position and created ‘One World’ serving over 700 global destinations. As of January this year, BA merged with Spanish company Iberia to form IAG International Airlines Group – the largest airline in the world. The merger was seen as a positive move following a number of bad years for BA including being hit by severe weather disruptions, volcanic ash, strikes, a growing pension deficit, cheaper competition and continual annual losses. Appendix 1 shows a chart of the group structure of IAG. In brief, BA’s latest financial statements covering 9 months to 31.12.2010 were published on the 25th February. The accounts show a return to profit after a loss making year; operating profit was £342m compared to a loss of –£231m as at March 2010, strong interest cover of 2.7x (they were unable to cover interest repayments in March 2010) and sales increased, revenue for 9 months was £6.7bn. BA’s shares ceased trading on the LSE in January following the merge with Iberia however at the start of the global recession, the price fell dramatically.

Graph 1. BA’s shares between July 2008 and Jan 2011 when they ceased trading. BA now belongs to a very strong group (IAG) whose market capitalisation during March 2011 was £4.2bn with total equity of £4.7bn. Current share price is 225 with a range of between 224 and 289. Marketing is ‘the management process responsible for identifying, anticipating and satisfying customer requirements profitably.’ BA used to operate in an oligopoly market however throughout the last century this has changed. Previously it was only large national companies that had enough money to provide flights however nowadays the market operates in perfect competition with high barriers to...
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