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Virgin Atlantic Uses Quality As Factor To Succeed Marketing Essay

2244 words (9 pages) Essay in Marketing

5/12/16 Marketing Reference this

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One of the most important aspects that businesses have focused in the last 25 to 30 years is Quality. Considering the competition in the market, Quality has become a key ingredient for success in business. Today we will look at how Virgin Atlantic uses quality as a factor to succeed. We will also have a look at how other companies uses different approach to the provision of quality.

One of the best examples of successful operations management in the airlines sector is the operations management practices in Virgin Atlantic. Virgin Atlantic was found by Sir Richard Branson in 1984. In 1984, when Virgin Atlantic started with a leased Boeing 747 & now after 16 years Virgin Atlantic has 38 aircrafts in its fleet. Virgin Atlantic has added many destinations to their flight list. Virgin Atlantic focuses more on customer delight to set a standard of service for the rest of the industry to follow. They ensure that they offer the best business product in the air, grow our leisure business even further, and run an efficient but effective global airline.

Virgin Atlantic has effectively illustrated the practice of Total Quality Management in order to bring about continous improvement in their service and thereby increasing profits of the airlines.

This study explores the operational strategies and quality approaches employed by Virgin Atlantic to achieve a competitive advantage over other competitors in the airline industry.

Virgin Atlantic Airways Limited is a British airline owned by Sir Richard Branson’s Virgin Group & Singapore Airlines. Virgin group owns 51% of the company and Singapore owns 49%. Virgin operates between the United Kingdom and North America, the Caribbean, Africa, the Middle East, Asia, and Australia. Virgin Atlantic has been renowned for its quality customer service and innovation. Whenever a passenger books a Virgin Atlantic air ticket he thinks there might be something new again. The slogan of Virgin Atlantic is ‘Service the Virgin way’. Virgin has set the standards for quality in the airline industry.

Virgin Atlantic firmly believes that they are a part of the service industry and not the transport industry. Virgin Atlantic has an effective vertically integrated supply chain which is very closely integrated with the customers so that they can understand their customers and what they want.

Competitive Priorities of Virgin Atlantic

Competitive priorities are the central operational dimensions a company or even a process or a supply chain must possess to satisfy its internal and external customers both in present as well as in the future.

Competitive priorities on which Virgin Atlantic has touched the sky of success are as follows:

Quality: Virgin has always given more focus on the quality of service rather than prices.

It aims as giving value for money. Their tickets are expensive compared to airlines like Ryan Air but there is no comparison in the quality of food and service. Virgin believes in making passenger’s journey memorable with their service

Time: Virgin Atlantic has the ability to deliver the tickets once a passenger places the order online. Virgin is known for bringing about innovations. It takes no time in improving the level of service.

Variety: Virgin has different products for different passengers. Virgin Atlantic offers three classes of travel – Upper class, Premium Economy and Economy all with award-winning in flight entertainment.

Applying Porter’s Generic strategy

On applying the Porter’s Generic strategy, it has been observed that Virgin Atlantic uses a combination of differentiation and customer focus. Virgin Atlantic has different type of services for different passengers like they have fashion show & jazz band for passengers who are passionate about fashion and music. They have games and music for passengers who like entertainment, library for people who like to read and massages centers for those who want to relax. Therefore, we can say that Virgin Atlantic follows the principle of differentiation.

Virgin has always tried to understand passengers’ needs and go beyond their expectations. While it describes itself as a niche airline for those passengers who are seeking value for money, its standards could appeal to a broad spectrum of customers. It has managed to serve both sophisticated, demanding executives and easy going, price-sensitive leisure travellers in the same aircraft. According to the Marketing Director Mr. Steve Ridgeway, Virgin attracted a broader range of customers than its competitiors because of it managed this coexistence between passenger groups well. Virgin Atlantic initially was an economical airline for young people who bought Virgin records and shopped at Virgin Retail stores but gradually its target shifted.

Ryan Air is one of Virgin Atlantic’s competitors as a UK based airline. When we apply Porter’s generic strategy to Ryan Air we can make out how different is Ryan Air’s operations from Virgin Atlantic. Ryan Air focuses more on the cost factor rather than customer satisfaction. They have the cheapest flights to several destinations and have a standard service for all the customers.

Virgin’s practice of Total Quality Management

Total quality management is a philosophy for managing an organisation in a way which enables it to meet stakeholder needs and expectations efficiently and effectively, without compromising ethical values. TQM is all about ensuring that the right things are done right first time. TQM tries to improve quality by ensuring conformance to internal requirements. Total quality Management is a philosophy that stresses on three key principles for achieving high levels of process performance and quality. Three principles are customer satisfaction, employee involvement and continous improvement.

The Total Quality Management (TQM) philosophy of management is customer-oriented. Hence, the airline operations must be developed in order to steadily deal with the improvement of their operation through the ongoing participation of all employees in problem solving efforts across functional and hierarchical boundaries. TQM incorporates the concepts of service quality, process management, quality assertion, and quality perfection.

Application of Total quality management approach by Virgin Atlantic

Customer satisfaction: Customers, internal or external, are satisfied when their expectations regarding a product or service is met or exceeded. Often, customers use the term quality to describe their level of satisfaction. Customer satisfaction includes conformance to specifications, values, fitness for use and support.

The mission statement of Virgin Atlantic is safety, security and consistent delivery in everything we do. Virgin Atlantic’s economy service is segmented into Premium Economy and Economy. Virgin Atlantic’s Economy class aims to give maximum value for money. It offers contoured, space-saving seats with an average seat pitch of 31″, state of the art in-flight entertainment system including video on demand, a choice of three entrees and free drinks and an amenity kit. Passengers can even check in online for all flights except from the Caribbean. Virgin Atlantic’s premium class features enhanced ergonomics for increased comfort and is the biggest seat in its class. It has leather seat covers and increased seat width of 21. The seats have laptop power in all seats on LHR aircraft; passengers can enjoy priority boarding, a separate cabin, pre-departure drink, state-of-the-art in-flight entertainment system and much more. Virgin Atlantic’s upper class suite is different from anything else flying. The upper class passengers get the most comfortable bed and seat in the air. They are also provided with a luxury leather armchair to relax. It is a first class product for a business class fare. These passengers even receive limousine transfers and drive thru check in and many other benefits.

Employee Involvement: A program is employee involvement includes changing organisational culture and encouraging teamwork. When we think about Virgin Atlantic the first thing that comes to our minds in Innovation. Who brings this innovation? It’s the employees. An organisation or a company is just a word, what makes it alive are the people. Employees are the face of the organisation and they are the one who deal with the customers or passengers every day. Who can understand the customers better than them? Virgin Atlantic involves its employees in every decision or every change they make. They get valuable feedback from them which give them a scope of improvement. Virgin Atlantic uses the approach of teamwork where they make teams of individuals and allocate task to them.

Continuous improvement: Continuous improvement is based on a Japanese concept called Kaizen which reflects on continually seeking ways to improve processes. Continuous improvement involves identifying benchmarks of excellent practice. The focus is to reduce wastage, such as reducing the length of time required for any process to complete. Virgin Atlantic as an organisation continues brings about changes in their processes and their operations to increase customer satisfaction. For example, they give more baggage allowance to students compared to Ryan Air.

Now that we have covered what Total Quality Management is all about lets discuss about another widely used Quality approach called Six Sigma. Six Sigma relies heavily on TQM tool is a flexible system of sustaining and maximizing success of the business by reducing defects and variability in processes. Six Sigma’s focus is different from TQM. It is driven by an understanding of customer needs.

Six Sigma is a five step procedure to improve performance. Five steps include define, measure, analyze, improve and control. The classic example of a company who does all this is Air Canada which was founded in 1936 and is the largest airline in Canada that files to 178 destinations worldwide.

How Air Canada uses the Six Sigma approach

Air Canada determines the characteristics of the output which are critical to achive customer satisfaction & they identify any gaps between characteristic and process. For e.g. lengthy security procedure while before boarding a flight. They use flow charts and process charts to get a picture of the process. After they identify the gaps or the defects they quantify it and prepare a plan. Once a plan is ready they perform process analysis by applying tools like Pareto charts or Cause and Effect Diagrams.

Below is an example of a Pareto chart

Once they analyze the defects they redesign or just modify their existing methods to improve the performance of the process to meet the performance objectives. For example, modify the method of security check in, like use an automatic machine which detects restricted items to be carried in a flight rather than a security guard manually checking it.

Once they process is changed or a new process is introduced the job is not done. It very important to monitor its effectiveness to ensure that the expectations are met.

Differences in Quality Approach

Actions that need to be taken by organizations to improve their quality:

Customer centric: An organisation exists because of its customers; if there is no customer then there isn’t any product or service. Every organization must adapt its operations or processes to the customer’s need. For example, if a bank takes 7 days to process a loan and if the customers are not satisfied or not willing to wiat for 7 days the bank has to change its process to meet the customer demand or they will have to close down.

Customer feedback: It is very important for the company to find out if its customers are satisfied with its operations or is there anything they need to change. Feedback of the customers will also help them to bring about innovation in their product or process. For example, Nokia handsets were very user friendly compared to Sony Ericsson but customer were not happy with the sound quality, Nokia got this feedback from its customer(external and internal)and they introduced N series which had an awesome sound quality like Sony Ericsson and it was a big hit between 2007 to 2009

After sales service: Companies should give property warranty for their products. This creates an impression in the minds of the buyers that the company is reliable as it will take responsibility if anything goes wrong with the product after they purchase it. For example, Samsung Electronics in India don’t have the best of quality however they are successful because of their efficient after sales service.

Monitoring: Companies must monitor their processes regularly to ensure that it is meeting the target. If anything goes wrong necessary steps can be taken to fix.

Clear picture of achievement: Customer should inform the shareholders, employees and government about their achievement so that people can define an image of the company. Virgin Atlantic does not prepare its annual budget for the public.

Plan B: When a process has a plan in place and if anything goes wrong while executing it they should have a backup plan as its said that prevention is better than cure.

Process related approach: Companies should not stick to just 1 quality approach. Quality approach a company follows should depend on process.For example, Ford might be using six sigma for production but they can also use Total Quality Management for their sales.

Reflection

Before Quality for me was a general standard or a characteristic of a product or service.

For example, UPS’s quality is that they are quick or Dell’s quality is that they manufacture customized computers.

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