Marketing Analysis of Heathrow Airport

Marketing Analysis of Heathrow Airport Name: Jheanel Davidson AC 1.1 Discuss concepts of marketing for a relevant services industry Marketing, as a concept, implies the approach that is applied in order to transfer the products or services of an organization from just a concept to the customers. It is a process through which an organization communicates the features of its products and services and the brand message to the customers in order to create the demand for such product or service (Kotler, 2000). Marketing management, on the other hand, is considered as an approach that helps an organization in applying the resources of marketing in a disciplined way. The industry size influences the process of marketing management to a greater extent as a big industry will ensure more resources to be deployed for the process of marketing and the same will also help in regulating the process of marketing in the most favorable way. The present paper emphasizes upon understanding the way, the different elements of marketing will help in enhancing the marketing performance of Heathrow Airport (Winer, 2000). Research findings: 1. The marketing process involves a basic step, known as the market analysis. In this step, the market for a particular product or service is analyzed on the basis of the requirements of the customers and the demand for the particular product and service. 2. Customer satisfaction is one of the important elements of marketing. Marketing tactics are formulated in order to satisfy customer needs, in this regards, it is important to discuss providing value to the customer (Johnson and Gustafsson, 2000). 3. One of the important goals of marketing strategy is to create value for the product and communicate its benefits to the customers; this will lead to customer retention. Satisfied customers generally make further purchases. 4. Cost/benefit analysis and conducting an analysis of the efficiency of a marketing strategy is considered as an important step while framing a marketing plan for an organization. This is also considered as one of the essential elements of marketing (Johnson and Gustafsson, 2000). 5. The process of marketing is considered as a business philosophy. It is a business philosophy that focuses on understanding the needs of the customers and on the basis of the identification of the requirements. 6. Relationship marketing is another arm of marketing that emphasizes upon customer retention. This can also be considered as a part of the customer relationship management process (Egan and Harker, 2005). 7. Strategic marketing is considered to be a process that helps a business in disposing of its products or services in such a manner so that the objectives are achieved. Tactical marketing is a process that helps an organization to identify the most viable way to implement the marketing strategy in order to achieve the goals (Kerin, 2006). Discussion Marketing strategy is considered as essential for the survival and future development of every business. Heathrow Airport is one of the busiest airports in London, UK. Conducting market analysis would be regarded as a vital exercise for Heathrow Airport to frame appropriate marketing strategy. The concept of market analysis implies the initiatives taken to understand the requirements of the customers and their demand. In this new age of cut throat competition, conducting a market analysis would be highly beneficial for an organization to ensure its survival. The process of conducting the market analysis will help Heathrow Airport in understanding the growing needs of the customers, that the number of customers is increasing day by day and they have a tight schedule, hence, quality of service will play an essential role to fetch their needs (Ferrell and Hartline, 2005). Providing satisfactory and timely service to the growing traffic and passengers would be the duty of the Airport in order to hold its position. Heathrow Airport has analyzed the demands of the customers and as a result of that, it has formulated new strategies towards the runway and terminal expansion, constructing Heathrow railway hub, air track etc. Marketing strategy provides a huge benefit to different organizations to dispose of its products or services in such a way so that the customer requirements are satisfied. Heathrow Airport has formulated these strategies and communicated the same to the customers in order to provide them maximum satisfaction and strengthen the brand image of the Airport. Creation of value for the customers will be highly important for Heathrow Airport as the same would help the organization in retaining its image and increase the loyalty of the customers. Formulation of an effective marketing strategy would help Heathrow Airport to properly dispose the quality services to the customers that will create a value which is higher than the expectations of the customers, in this process the retention of the customer can be made possible. Tactical marketing would be equally essential for the airport, as the same will help the management in understanding the ways through which the marketing strategy will be implemented to get optimum results. Hence, it will also be paramount for Heathrow Airport to properly analyze the process of implementation and the financial viability of such marketing process. The management at Heathrow Airport is also required to focus on customer relationship management; this approach will help in retaining the customers and increasing their loyalty towards the airport. This can be done my constantly communicating with the customers and providing them quality services in a timely manner (Ferrell and Hartline, 2005). Conclusion An effective marketing strategy can bring incredible results towards the performance and profitability of Heathrow Airport. Through this process, the management will be able to understand the changing needs and demands of the customers and they will be able to track the right path to formulating effective policies and strategies to fulfill the needs of the passengers. Newer initiatives can be taken through the formulation of strategic marketing goals. The profitability of the Airport will enhance drastically through the process of implementing tactical marketing because the same will help the management in providing the ways through which the strategies can be implemented in the most profitable way. The process of marketing will pave news ways towards achieving the organizational objectives; on the other hand, this approach will help in bringing new customers and retaining the existing ones. An effective marketing policy will provide the required support to the management to take the necessary steps that will help in enhancing the competitive power of the airport and its market image. The Heathrow airport is one of the busiest airports in the UK and through formulating new policies to strengthen their services towards fulfilling customer requirements and creating value for them it will be able to increase customer loyalty. The policy of customer relationship management will also help the management in retaining the customers and enhancing the market image of the airport. In this way, the overall value of the organization will also improve. AC1. 2 Assess the impact of the marketing environment on the industry The industry is considered as a combination of different organizations, who jointly conducts certain operations for the purpose of producing goods to be sold and the production process is generally carried on in a factory or similar undertaking. The market is considered as a place, where a number of people gather regularly for the purchase and sale of commodities and services (Kotler and Armstrong, 2012). The hospitality industry in the UK is one of the big industries that contribute towards the GDP of UK substantially. There are different segments of the hospitality industry and each of them focuses on the provision of efficient customer services, as the same is considered as the backbone of the hospitality industry. The travel and tourism segment includes tour operators, airlines, travel and tourism organizations, airports etc. The market environment comprises of two different parts, namely micro and macro environment (Kotler and Armstrong, 2012). Findings The findings of the research conducted for the purpose of assessing the impact of the marketing environment on the industry have been provided below: 1. The micro-environment of an organization comprises of the stakeholders. Stakeholders are regarded as the persons or organizations that have an interest in the performance of an organization and its development. The stakeholders have the ability to influence the operations of an organization. There different types of stakeholders, such as the customers, the requirements of the customers influence the operations and strategies of a business, the owners are internal stakeholders, who seek higher return for their investments. Financiers are lenders who are interested in the profitability and stability of an organization for the security of the funds lent. Competitors formulate various strategies that an organization follows in order to maintain its competitive strength. The society is also an evaluator of an organization, effective measures are taken by an organization towards social development and environmental protection will enhance its market image (Mooradian et al., 2012). 2. Macro environment is regarded as the external environment surrounding an organization, it consists of different external factors which are uncontrollable, such as political factors, which are considered as the policies framed by the government, ecological factors, which are considered as the environmental factors, such as environmental protection, preserving natural resources etc., technological resources, these are the improved technological devices and the up-gradation in technology that helps an organization in improving its overall performance, economical factors, these are the economic factors such as, inflation, change in interest rates, recession etc. that can influence the financial performance of an organization, social and legal factors, these can be considered as the change in the behaviour of the customers, change in the attitude of the customers, new laws introduced by the government that may affect the industry (Kerin and Peterson, 2001). 3. There are various tools that can be used for conducting an analysis of the marketing environment of an organization. The internal environment can be analyzed by using the SWOT model. It is considered as a tool that has four different heads, strengths, weaknesses, opportunities and threats and it helps in analysing the mentioned factors relating to an organization. On the other hand, the external environment can also be analyzed by the utilization of certain tools such as PEST analysis and Porters Five Forces model. PEST analysis helps in analysing four main external factors such as political, economic, social and technological factors and Porters model helps in understanding the competitive environment of an organization such as the threat of rivals, bargaining power of the buyer and suppliers and threat of substitutes (McKinney, 2003). Discussion Heathrow Airport pertains to the travel and tourism segment of the hospitality industry and it is regarded as one of the most important airports in the UK. It is regarded as highly essential for the management of Heathrow Airport to analyze the impact of the marketing environment upon the organization and the industry as well. It will be considered as highly beneficial for the management to conduct a stakeholder analysis in order to understand the requirements of the internal as well as the external stakeholders of the organization, such as the customers, suppliers, financiers, owners etc. and to understand their power to influence the operations of the Airport (Hiam and Rastelli, 2007). On the other hand the external marketing factors will also be essential for the management to analyse, as they are uncontrollable and the Airport is required to adopt the changes that are taking place in the external environment such as changes in aviation law, changes in interest rates and inflation that will affect the pricing, how to facilitate sustainable development, the modern technologies that can be used for improving the operations of the Airport and to provide better customer service etc. The PEST analysis will help the management at Heathrow Airport to understand the changes taking place in the political, economic, social and technological factors. The SWOT model will help the management in analysing the internal factors, the internal factors such as the strengths and weaknesses will help the management in utilizing the strengths to provide better customer service, while the weaknesses are required to be minimized to maintain the image of the airport. Similarly, the opportunities and threats should also be considered, as the opportunities will help the management to understand the areas where the business can make further developments, while the threats can hamper the business performance. The competitive factors will drive the competitive environment and the same sh ould be considered by the management in order to maintain the competitive strength of the Airport. These factors include the bargaining power of the customers, the bargaining power of the suppliers of services and technology, the threat of new competitors and the threat of substitutions (Cravens, 1982). Conclusion Analyzing the market environment will be highly beneficial for Heathrow Airport as the same would help it in understanding the changes that are taking place in the internal and external environmental factors. The management will be able to control the internal factors to improve the performance of the Airport, while the external factors are uncontrollable, hence, an analysis of the external factors will help in adopting such changes in order to maintain the competitive strength. For this purpose, it is highly recommended for the management of Heathrow Airport to utilize the tools such as PEST analysis, SWOT analysis, and Porters model. AC 1.3 Evaluate the relevance of consumer markets in the industry Consumer markets are considered as those markets, where the purchase and sale of goods and services are done, which are meant for the general consumers only (Hassan and Kaynak, 1994). The consumer markets include consumer culture that implies the sociological and psychological influences made upon the buying behavior of the customers. There are various factors that can potentially influence the buying behavior of the customers such as, marketing, quality of service, price etc. It has been found in various studies that the objectives of an organization can be achieved by creating a balance between customer and competitor orientation. Moreover, creating value to the customers will also influence their buying behavior to a greater extent and the same will also help in retaining loyal customers (Alessandra, 2007). Findings The findings of the research have been provided below: 1. It has been found that the hospitality industry is highly dependent on the behavior and attitude of the customers. The customers play an important role in the hospitality industry as they decide the development and sustainability of a hospitality organization in the long run. The customer behavior is considered as one of the important factors that the industry players considers while framing new policies. The requirements of the customers are considered as a major factor that is taken into account, while, formulating the marketing policy of an organization (Kessler, 1996). The quality of services provided to the customers and the value created for them is considered as a driving factor that can retain the customers and ensure the long-term stability of an organization in the hospitality industry. This will also affect the profitability and enhance the revenue-generating capacity of the organization. 2. Customer culture is considered as the behavior of the customers that includes social status values and activities of the customers that influences their buying behavior. The customer culture influences the patter of consumption of the customers. The social status of the customers influences their pattern of consumption, such as a high-end customer will go for having luxurious goods, which are offered at high-end prices (Basch, 2002). The theory of consumer culture entirely focuses upon the psychological and sociological factors that influence the buying behavior of the customers. It is regarded as a branch of marketing philosophy that projects the psychological effects created by the buying behavior of the customers and different organizations follow this theory in order to market a particular product or service to the potential customers. This is done by clearly projecting and communicating the features of a particular product or service and how the same is going to affect the li festyle of the potential customers. 3. The hospitality industry highly emphasizes the quality of services provided to the customers and their pricing. The sole objective behind this initiative is to create value to the customers and satisfy their needs. Customer satisfaction and loyalty is a key for success to the participants of the hospitality industry. The participants of the industry always engage in the formulation of new strategies by considering the changing demands of the customers in order to meet them. This will help in achieving huge marketing success. Moreover, customer loyalty will help in enhancing the sustainability of an organization and for that purpose, it will be essential for an organization to create value for the customers and the same can be done by providing services that will meet or exceed the expectations of the customers. This process will help in retaining customers (Lowenstein, 1997). 4. Maintenance of long term relationships with the customers has become highly important in almost every industry. The hospitality segment, particularly, has put increased emphasis towards formulating effective strategy towards customer relationship management (Anderson and Kerr, 2002). The industry participants have taken different steps towards maintaining customer relationships such as loyalty programs, maintenance of customer databases to send them promotional emails, collecting feedbacks from the customers etc. Discussion The sustainability and development of Heathrow Airport can be highly influenced by the consumer markets. Analyzing the consumer culture and preparing the marketing strategy to properly target the customers and communicating the features of the service provided will help the management in enhancing the profitability of the organization. Selecting separate marketing strategy for separate customers with different status and requirements will help the organization in attracting more customers and revenues. In this way, the airport will be able to generate demand for its services (Sheth et al., 1999). Analyzing the customer behavior and requirements will be highly beneficial for Heathrow Airport. For instance, the number of passengers is increasing gradually; this will affect the popularity of the airport due to limited facilities. Hence, the Airport should focus upon expansion of its runways and other facilities to properly accommodate the passengers, the customers have busy schedules an d they require timely services and hence, the management should emphasize upon the provision of timely services to influence the buying behavior of the customers. Customer satisfaction is an important part and the same will influence the management at Heathrow Airport to provide quality services at a reasonable price, as the same will satisfy the customers and create value for them. Customer retention and loyalty is highly paramount for the hospitality industry as the same will decide the long-term survival of the firms operating in it. The same is also applicable for Heathrow Airport. This will encourage the management to form new strategies towards customer relationship management (Sheth et al., 1999). Conclusion Customer market can be regarded as one of the important factors that, the management at Heathrow Airport must take into account. Understanding the behavior of the customers would help the same in formulating an effective marketing strategy that would help in creating demand for the services provided by the airport and to maintain its profitability and sustainability. It is recommended for Heathrow Airport to put more emphasis upon analysing the social and psychological factors that influence the buying behavior of the passengers and also to create a strong marketing strategy to attract the customers. Customer relationship management will also be beneficial for the airport, and formulate a strategy in this regards would help the management to retain the customers and create a strong market position. AC 1.4 Discuss the rationale for developing different market segments The concept of market segment has a higher relevance in regards to marketing. A market segment is considered as an association of customers, where the attitude and behavior of all the customers in such association are identical. Market segments are prepared to simplify the process of marketing strategy and strengthen the same (Kruger, 2011). Different market segments have different characteristics and separate marketing strategy is prepared for each of them. The market segments are utilized by different organizations in the hospitality industry to conduct the process of target marketing. The market segment can be done on the basis of four different characteristics, namely geographical segmentation, demographic segmentation, behavioral and psychographic segmentation. Market segments help in enhancing the performance of marketing efforts made by an organization because in this way they can target separate groups of customers and market the products or services as per their needs (McDon ald and Dunbar, 2004). Findings 1. Market segmentation is the process of segmenting the market into different parts in order to target different groups of customers for the purpose of product or service marketing. Market segmentation is beneficial for an organization because it helps in understanding the customer needs and formulating an appropriate marketing strategy for different types of customers (Kruger, 2011). The process of market segmentation helps in creating the demand for a particular product or service for different customers in a systematic way and in this way it helps in enhancing the profitability of a business. It helps in enhancing sales levels and hence supports business growth (Wedel and Kamakura, 2000). The research has highlighted another two strategies of marketing, which are targeting and positioning. 2.Targeting is considered as a process of targeting the potential customers for a particular product or service and formulate the marketing process in such a way that will help in satisfying their demands, this process also helps in enhancing the effect of marketing strategy and increases profitability with sales. 3. Positioning is another strategy of marketing, which is highly relevant to the hospitality industry (Pinson et al., 1996). Position refers to the position that a brand has acquired in the consumer market. The strategy of positioning helps in creating a distinct image for the products of a particular brand and helps in differentiating the products or services from the competitors. This process is essential as it helps in creating a unique brand image and helps the customers to identify the products of a particular brand easily (Hooley and Saunders, 1993). 4. There are four main ways of market segmentation. Geographical segmentation, this is the way of segmenting the market as per geographical regions. Demographic segmentation, it a type of segmentation that helps in segmenting a market as per the demographic features of the customers such as, age, income etc. Behavioral segmentation is considered as a type of segmentation that considers the behavior and attitude of the customers to create different segments. Lastly, the psychographic segmentation is considered as a type of market segmentation that helps in segmenting the market of a product or service as per the lifestyle of the customers. Discussion It will be favorable for the management at Heathrow Airport to formulate different market segments in order to get better outcomes of the marketing strategy formulated by the same. This approach will help in simplifying the marketing process of the organization and this process will also help the management at the Airport to divide the market into smaller groups and formulate an appropriate strategy for each of them. This process will ease the efforts of the marketing team and enhance the feasibility of the marketing process. Considering the psychographic segmentation, if the management formulates separate advertising message for the high-end as well as low-end passengers and properly demonstrate the facilities that are offered to them, then it will become easier to create a huge market demand for the services among the targeted segments (Sheehan, 2011). The strategy of segmentation and positioning will also help in creating a distinct image for the airport in the minds of the custom ers and the same will also help in enhancing the market strength and competitive edge of the airport. Targeting will be beneficial for the management as this process will help in selecting the potential customers, who the services should be marketed. This will increase sales and profitability substantially (Sheehan, 2011). Conclusion To conclude, it must be said that market segmentation is an important part of the marketing strategy for any business. Heathrow Airport must segment its market in different types in order frame a separate policy of marketing for each segment. A single marketing policy may not be effective for every kind of customers; hence, market segmentation is highly expected for the airport. In this regards, it is recommended for the airport to put additional emphasis on target market because this process will help the management in identifying different types of passengers and their needs, this process will help in creating market segments and along with it market positioning should also be taken into account, as the same will help in competitive edge to the airport as compared to the other renowned airports in Europe.