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Virgin Holidays is one of the largest operating travel based organisations in the UK. It is ancillary company of Virgin Group which was founded in 1970 by Richard Branson. The Virgin group currently owns around 300 different businesses around the world and growing. In this business report we are going to be looking at Virgin Holidays which was originally formed in 1985, one year after the inauguration of the Virgin Atlantic airlines. Virgin Holidays have self proclaimed itself as being “the UK’s number one long haul operator”, they have been able to achieve this through their rigorous internet based marketing campaign.
The recognized the growing trend of internet technology in 2005 and therefore developed a marketing campaign based around it. In result to that they are now attributed as the largest and most successful transatlantic tour operator to the USA and Caribbean. A vast majority of their customer base prefers to make online arrangements for travel without feeling any need to go to the office. Thus we can assume that how crucial their website and online content is in relation to the success of their business.
Internet technology has been the focal point in the functioning of modern organizations in this tech oriented era. Internet over the years has changed the way how organizations operate and has played an important role in transforming many industries in new and innovative ways helping these organizations achieve greater efficiency thus helping them reach their goals.
The travel industry is very competitive and to be on top of it takes a lot of research and development in the area of technological advancement and how to make full use of it for the benefit of the company. Mass marketing nowadays is considered a concept of the past and marketing on an individualized level is what new and innovative organisations are targeting to achieve to reach a wider audience and eventually maximise profit. This report will take a look at a few internet technology based strategies being implemented by Virgin Holidays which are proving to be successful for them and helping them retain the position of market leader in the travel industry.
E-business can be defined as buying and selling of goods and services over the internet. The internet technology has been continuously evolving since its introduction in the early 90’s. Since then more and more organizations are shifting towards e-business and many relying heavily on internet technology for the day to day operations and communicating with its customers. There has been an ever growing number of business that are selling on the internet, between the period of 2002-2005 the number of business selling online increased from 7-15 percent (Office of National Statistics, 2007). According to the Office of National Statistics (2007) seven out of ten businesses in the UK have a website.
Many businesses are now solely relying on their websites in order to generate business a few examples of successful organizations like these are eBay and Amazon. E-business is an ever increasing market; in 2005 alone the volume of sales over the internet was £103 billion (Office of National Statistics, 2007). Not only is internet technology helping businesses reach a wider target audience through websites and online advertising, for many companies it also helping them achieve organizational efficiency and are a part of the day to day working of the organization. When talking about e-business it is not only the presence of the website that determines a companies use of internet technology but a number of other factors online social media, mobile devices, interactive customer support, internal communication (within organization) and wireless technologies.
Marketing over the internet can be termed as e-marketing. E-marketing is being preferred over other forms of marketing because of its low cost and higher impact on the potential customers. E-marketing is a very low cost method of getting your product and services through across to the target audience over the internet, consequently more and more organizations are using internet as a tool for marketing. The biggest advantage of e-marketing is that it eliminates the role of middle men or subsidiaries and connects the customer direct to the source, thus making it even more cost effective. More people now prefer doing transactions online as over the years it has become very safe and ‘the internet can provide unique interactivity in online marketing processes and increase the customers’ feeling of two-way interaction via personalized marketing messages’ (Bragge J., et al, 2008, p 9).
This is an era where the trend for internet marketing is at an all time high. This has been highlighted by Informa (2011) which states that the total Internet Marketing spending reached $54.1billion alone in during the first quarter of 2010, and is expected to increasing by over $30 billion by the fourth quarter of 2011.
E-marketing is one of the major sources being exploited by Virgin Holidays to increase their recognition and target a broader audience. One of the major advantages that Virgin Holidays has over its competitor is the Virgin brand being attached to it. It has been noted that the Virgin Brand is recognized by 98% of British population (Millennium Group, 1996).
Patrinos (2005) have stated that Virgin Holidays have spent over 80% of their marketing budget on their website to achieve a very user friendly and interactive website or its customers and promote it on major search engines online. Making it fairly simple for the online customers to find and book a holiday of their choice through their website. With the introduction of their self-service tool, customers are now able to access their booked holidays and even make significant changes to it according to their personal choice, which is a first of a kind in the travel industry (Virgin Holidays, 2006). Apart from the website there are other internet outlets too that are used by Virgin Holidays. They have made social groups on Facebook and Twitter for the potential and existing customers of the company which promotes communication and discussion on a forum regarding the services provided by the company. It is a very easy method to advertise and reach many people at once who might be interested in booking a holiday.
YouTube is another source being used for marketing by Virgin Holidays. They have their own channel on which their promotional advertisements are uploaded. This is another free and effective way of reaching out to the potential clients. The most famous ad campaign which is being featured on their website as well is the rock star commercial which symbolizes that no matter who you are as a customer of Virgin Holidays you are going to be treated as a Rock Star. They have a mail subscription service as well which serves the purpose of updating its subscriber of the latest offers available. All these tools combined offer a very well rounded e-marketing campaign.
In addition to the list of benefits that are gained by e-marketing there are exceptions where companies use this medium in ways which may lead to lower sales and deterioration of the organizations reputation. One of the tools which is widely used and is highly discouraged by marketers is marketing through spamming people email. As described by Haig (2001) in ‘The e-marketing handbook’ he explains that the concept of e-marketing relies on pull marketing strategies rather than push strategies. He further explains that since people already know what they are looking for on the internet tools like spam mail are disintegrating for marketing. Thus organizations need to make sure how to use this medium effectively in order to reach their target audience, which Virgin Holidays is doing very efficiently. Personalized marketing has become increasingly popular amongst organizations and in the future I would like to see more individualized customer support which treats every customer uniquely according to the transactions and interests that the customer has shown in the past.
Web Design analysis
Booking holidays is a very essential part of this holiday business. Thus virgin holidays have put much effort on using technology to make this experience as straightforward and hassle free as possible for its consumers. It is fair to say that Virgin Holidays is leaping ahead of its competitors by focusing more on their website. It is noticeable by just glancing at the Virgin Holidays website. The site is very well designed, it looks attractive yet everything you need to know is easy to locate on their home page. The page shows a map of the world which highlights the destinations where the Virgin Holidays are on offer. In case any kind of assistance is required there is a humanized assistant named Valerie available to whom anyone can pose questions or queries regarding the holiday packages or the website.
The website displays all their recent promotions and services for example the V-lounge giving the prospective customers a fairly good idea of how it would be like to book with Virgin Holidays. The page has its special offers and discounts plus a direct link to social networking sites of Facebook, Twitter, where you can instantly share a holiday package of your choice with friends and family.
The web page is very interactive and contains everything necessary for researching and booking a holiday travel package very easily.
Business to Business Analysis
Businesses to business relationships are vital in order to gain competitive advantage over the others in the industry. Having strong relations with other subsidiary organizations, which indirectly affect the selling behavior of the organization can turn out to be very useful in the long run to help eliminate competition. Virgin Holidays has developed strong business to business relations in order to strengthen their internet based marketing by promoting their website on search engines like Wanadoo, MSN and Yahoo.
M-commerce is a market that widely gaining popularity amongst tech-oriented organizations. As the mobile communication industry has seen an ever increasing boom in the past decade. Mobile users are increasing day by day around the world. It has been researched that alone in the USA the mobile subscription has increased 1262.4 percent between the years of 1985 and 2008 (CTIA, 2009). This stat highlights why many organizations are now starting to target mobile users for marketing purposes.
M-commerce has increased and created opportunities for the business providers for providing their services to mobile phone users. As with the introduction of latest mobile technology computers are not necessary for accessing the internet many people prefer to use their mobile devices to browse online. Increasing number of organizations is targeting this audience for marketing their products and services to mobile users. As the price of these devices is going down and their usage increasing on a very fast rate, around 90 percent of the population between the ages of 15-34 have owned or used a mobile phone in 2003 (Office for national statistics, 2003).
Virgin holidays are also interested in marketing to this sector. In the fast paced world these days’ people have less time to browse on computers and because of this there is a large growing market for hand held device (mobiles etc.) which mimics the functions of a computer and offer easy portability to the users. In order to cater to this target audience the virgin group has planned a number of strategies. They launched an application for the users of Ipad in July last year (Virgin, 2010). This is the first of its kind from the travel agencies in UK, giving the company a huge competitive edge over other travel agents. This application has made it really easy for potential customers to share holiday packages on offer by Virgin Holidays with each other through a touch of a button. The app has also made it really easy to book holidays while on the go, it has brought a new horizon to marketing as the app users can access all the offers and advertisements and book them from their Ipad. The application recommends offers according to the specific browsing patterns of the user, making it easy or the users to find the kind of holiday package they are looking for. This personalized form of e-marketing is the next generation form of marketing as research has shown it yields much higher success rate (Bragge J. et al, 2008). This is a first n its type in the travel agency sector. Technology oriented marketing strategies like these are low costing and very effective in reaching the audience desired.
Virgin should focus on targeting more of the hand held device sector, because of its predicted increase over the years. They should concentrate on developing applications for all kind of mobile systems in order to broaden the target market and have their applications widely accessible to make Virgin holidays the number one option for people considering to buy a holiday package.
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