"10.4 Direct Marketing"
Marketing communications - Direct marketing 10.4 Sponsorship Sponsorships may be undertaken for three different purposes: marketing, advertising and PR. The PR element is always present. Virgin has massively banked on Branson’s spirit of adventure. The principal values of sponsorship are in creating awareness of a company or its products. PR implications are endless. Main objectives of sponsorship are increased awareness, image enhancement, improved relationship with many different publics, increased sales, attract distributors, sampling and database building, creating a platform for new promotional material, circumventing advertising bans, etc. Virgin’s or better Branson’s several hobbies have often aimed at sponsoring the airline through adventurous record-breaking attempts funded and carried out by Branson himself. Some of the epic adventures which resulted in millions of pound saved in conventional promotional activities, are reported below: 1986 “Virgin Atlantic Challanger II” rekindled the spirit of the Blue Riband by crossing the Atlantic Ocean in the fastest ever recorded time. 1987 The epic hot air balloon crossing of the same ocean in “Virgin Atlantic Flyer”. It was not only the first hot air balloon to cross the Atlantic but it was also the largest ever flown and reached speeds in excess of 130 miles per hour. 1991 Through the Pacific Ocean from Japan to Arctic Canada, the furthest distance of 6,700 miles again braking all existing records with speeds of up to 245 miles per hour, in a balloon of 2.6 million cubic feet. 1996 Branson was supposed to leave from Morocco for his latest adventure: around the world in 18 days with an hot air balloon. Full coverage of the adventure was also ensured on the Internet, but the Virgin Global Challenger journey had to be called of because of bad weather. Fabio Emanuele Noia, London March 1996 136 Marketing communications - Direct marketing British Airways activity in this field has always had a low profile, which the airline however is willing to increase in the next years financing part of the project for the Millennium Wheel project in Greenwich. Another kind of sponsorship undertaken by BA is in support of the arts (e.g. support to London’s theatres etc.). Fabio Emanuele Noia, London March 1996 137 Marketing communications - Direct marketing 10.5 Direct Marketing Listening to the customers has always been an essential part of marketing, and in loyalty marketing where a company actually has customers’ details on database, there is not excuse for not finding out their opinions and reviewing the company’s activity accordingly. As customer loyalty becomes an issue more and more important for airlines, no airline could do worse than avoid direct marketing. Direct marketing is the perfect tool to retain loyalty and increase sales. The target market must be defined, its needs identified and fulfilled. Information technology and several promotions where customers are required to fill in forms permit airlines to acquire, store, recall, process and apply information to several tasks. One of this task is precision marketing. No one knows that better than the airlines where database marketing is one of the key promotional tools mainly in the form of direct mail. The extreme advantage of this technique being the opportunity to target the single individual with offers better tailored to his needs. Direct marketing is especially used in conjunction with frequent flyer programmes. All members of Executive Club and Freeway are sent home direct mail prospecting special offers, new services and products, and an update of their airmiles accounts (see Exhibit 10.?). Every one or two months FFP members receive a statement informing them of how many air miles they have accrued, suggesting how to best use them and also stressing the breadth of available privileges Fabio Emanuele Noia, London March 1996 138 Marketing communications - Direct marketing Fabio Emanuele Noia, London March 1996 139 __________________________________Marketing communications - Word of Mouth 10.6 Consumer magazines Airlines produce different magazine some to be circulated internally, other to be used as a communication tool with customers. The best example of a consumer magazine is the in-flight magazine, a free magazine which is offered on board. Other magazines instead are sent to FFP members. In-flight magazines usually feature articles related to contemporary events, destinations and other most specific subjects (e.g. corporate strategies on a issue targeted at businessmen). The real advantage of this magazines however is to convey useful information about the airline and its services. Some part of the magazine in fact are reserved to illustrate timetables, information about the fleet, arrivals facilities, route maps, duty free and a certain number of advertisements pushing new products or enhanced service. British Airways has several high quality magazines. One is called Business Life, it is printed six times a year and is mailed to Executive Club members. Another magazines which is mailed to customers is Executive Club News featuring information for both the business and the leisure segment. High Life is a monthly in-flight magazine which is circulated among its passengers on certain routes. Simbad is distributed solely on Middle East routes. Virgin Atlantic also offers a high quality in-flight magazine plus literature for its frequent flyers. Fabio Emanuele Noia, London March 1996 139 __________________________________Marketing communications - Word of Mouth 10.7 Word of mouth People talk about organisations, their products, their services and their staff. Among all the elements of the communication mix, word of mouth is the most potent on a one-to- one basis. No advertisement could compete with a friend recommending or criticising a particular product. That’s way airlines have to carefully take into account this medium. Word of mouth can be integrated into a promotional campaign and be generated by other promotional tools. The most influential and controllable aspect of word of mouth communication is an individual’s own direct experience of an airline’s product. That means the delivery must be perfect to generate positive word of mouth. Research undertaken in the past have demonstrated that dissatisfied customers talk more often with more people of their negative experience than they do with their positive ones. The only way to avoid this disastrous tam tam is to avoid negative experience delivering instead the best possible experience. This can be achieved through a culture which is focused on the only two controllable factors: quality (e.g. through Total Quality Management) and customer care (e.g. customer care programmes and total customer satisfaction). These imply an airline fully devoted to quality and its customers, which is the case for both British Airways and Virgin Atlantic. Criticism however, which can originate from so many non controllable variables cannot be totally eliminated, but can be reduced to a minimum which could be outweighed by positive word of mouth generated through excellent service. It is not a case that airlines are trying to direct more and more complaints on their 0800 free-phone numbers in order to detect sources of dissatisfaction in time and find out a solution. Most of the passengers however will never complaint directly with the airline. How can a culture based on quality and customer care be set up and maintained in time? This is the subject of the next chapter. Fabio Emanuele Noia, London March 1996 140