Gangotri D.

,Lu XIAO, AhmadrezaZareian ,

shermila Paz, haniyeh Nazarboland, Chandrahas

Case study 4-Virgin America

1. SWOT analysis for Virgin America?

STRENGTHS
- Building strategies based on consumer-
oriented product development and
marketing approach.
- Customer-centric strategies
- One of the cheapest companies
- variety of amenities,
including entertainment, touch screen,
power outlets nearby
every seat and internet on board.
- Virgin America was rated "Best Business-
First Class" among the airlines.
-It has one of the best flight systems
WEAKNESSES
- Virgin America was created by U.K.
entrepreneur Richard Branson. U.S.
laws restrict foreign investors from being
majority owners.
- Another Virgin America weakness is its
lack of flights.
Multiple consumers
Virgin America has never heard of it or
has very little about it.

OPPORTUNITIES
-Could expansion the company
-The company covers an important social
issue of today is the green initiative, Virgin
America has to illustrate its green initiative
in its advertising to create a positive brand
image.
- Virgin America has a new fleet of aircraft
operating at up to 25%
more efficiently than other national fleets
THREATS
- The first major threat to Virgin America is
the current state of the
economy. Both business and tourist trips
are reduced due to the current crisis.
- The second concern for airlines is the
current cost of fuel
- Strong competition within the industry

2. Using the full spectrum of segmentation variables, describe how Virgin America
segments and targets the market for airline services.

Virgin America airlines work on its core value of providing high quality travel at low
cost. This airline targets people based on purchasing capacity and age of target customers.
This airline targets the “creative class” who are young, urban, tech-savvy professionals
using smartphones to frequent social media sites, such as Twitter and Facebook. As
mentioned in the case, this is apt for consumers who are willing to pay just a little more
for an airline that would take care of them.
They target tech-savvy professionals between the ages 25-40 years because such
professionals often travel from one city to another for business work or personal work. At
low cost, Virgin America offers exceptionally good comfort and high quality services. In
order to attract the target audience, this airline offers internet on-flight, plugs for charging
electronics, gaming etc. In addition to these services, Virgin America also has friendly
staff, ample leg space and comfortable seating.

3. Which market targeting strategy is Virgin America following? Justify your

answer.

In this strategy (Concentrated marketing) the company understands that by narrowing the
segment and concentrating this specified segment the profitability will be more, instead
of attracting the different segments in the market.
Such targeting strategy may allow the company to achieve high levels of growth with the
development of that segment of consumers. This strategy allows the company to achieve
a strong market share because of great knowledge of the target segment. Company Virgin
America can always well -shaped its services and other offerings while serving the
customers more effectively and serve them in the best possible manner.

4. Which differentiation strategy is following:

4.1: which value differences?

For Branson’s core value, it is a customer-centric base that is in a product position, which also
permeates Virgin America. Meanwhile, it contains the low-price strategy.
For Virgin, it has its own culture-fun, creative, even whacky. But it started the air service while
the other airlines had established the base on a “customer first” rule. In addition, Virgin did not
focus on the competition of low-price since the other airlines were already beating on this
segment.

4.2: Which overall positioning strategy?

Virgin America was offering exceptional service and unique amenities with targeting a segment
of frequent customers who were young,savvy, influential and willing to pay a little bit more for
the service that serviced them well—the Silicon Valley faction.
In terms of the unique amenities, it was created for its target customer at the beginning, such as
new brands for serving, comfortable leather seating, latest hardware and software in equipment,
ect.
In terms of the service, since it was acquired by Alaska Airlines–another well-known airline with
its high level of service and customer loyalty, Virgin America’s style and quality of service were
shaped by this combination.

5. Write a positioning statement for Virgin America.

This would focus on quality travel at low cost, with extremely good amenities whose target is
young and tech-savvy individuals who travel frequently on airlines for their business needs. At
low cost, airlines offer better comfort and high quality services at affordable prices when
compared to other airlines. Virgin America offers consumers style, relaxation and entertainment
without emptying their pockets. A thorough and accurate creative work plan will allow Virgin
America to produce an effective marketing campaign that will yield a high ROI. Virgin America
aims to give domestic travelers more for their money by providing a higher level of comfort.

6. What are the potential issues for Virgin America following the Alaska Airlines
acquisition? Will Virgin America continue to appeal to the same types of customers?
Why or why not?

Virgin America organization has operated very effectively till now, with profits to show for the
past few years. Further, the top management knows the importance of consistent superior
customer service as it will not take time for competitors to catch up. The company has won
industry awards or efficiency in operations. Thus, the company has a good vision on how to
venture ahead. There will be obstacles as the airline company will expand its services and
increase its scale of operations. Hence, for the fundamental success to continue, the company
should keep enduring the good service and continue with its operational efficiency.
1. Virgin Airlines may not provide customers at the cost it previously provided.
2. There could be an identity crisis. The customer base that choose Virgin America are different
to the customer base that choose Alaska airlines. So, there will not be success unless both operate
differently or rather separately.
3. The Virgin America brand is not only beneficial to Alaska but critical to customer retention.
Hence, Alaska should keep Virgin the way it is, otherwise, it might lose the loyal customer base
for the Virgin America airlines