Introduction
British Airways (BA) remains one of the leading carriers in Europe. This is the case because it is “the largest airline company in the United Kingdom in terms of fleet size” (British Airways 2016, para. 2). The airline company has its headquarters in Waterside (British Airways 2016). The UK government established the British Airways Board (BAB) in 1972. The BAB was aimed at managing the British European Airways, Cambrian Airways, Northeast Airlines, and the British Overseas Airways Corporation (British Airways 2016). In 1974, the government merged the companies to form British Airways. In 2011, BA “merged with Iberia to form the International Airlines Group” (British Airways 2016, para. 5). The slogan “To Fly: To Serve” continues to support BA’s business model.
Rationale
The Asian market continues to present new opportunities to different companies in the aviation industry. The continent is characterised by new economic activities and improved living standards. In an attempt to maximise its revenues, British Airways should consider the need to open a new route in Mongolia. Although the country has a small population of around 3 million people, its gross domestic product (GDP) has been growing steadily (see Appendix 1). After joining the World Trade Organisation in the year 1997, Mongolia has been interacting with many nations across the globe. The Mongolian government is currently promoting new strategies to maximise its involvement in international and regional trade operations (Isakova, Plekhanov & Zettelmeyer 2012). That being the case, a new route to this country will definitely be profitable for BA.
Context
Mongolia is a landlocked Asian nation with a population of around three million citizens. The official language spoken in this country is Mongolian. Over 95 percent of the people are Mongols. The country’s GDP stands at 36.6 billion USD. The official currency is known as the Mongolian Tugrik (Isakova, Plekhanov & Zettelmeyer 2012). One US dollar is equivalent to 2460 Mongolian Tugrik. The success of the mining industry has led to increased economic growth within the last seven years. The nation’s current economic growth rate stands at 7.9 percent. In 2011, the country was identified by Citigroup as one of the emerging economies in Asia. Mongolia was also identified by the International Finance Corporation (IFC) as one of the best Asian countries for doing international business (Isakova, Plekhanov & Zettelmeyer 2012). The agricultural sector supports the nation’s economy. Mongolia’s unemployment rate is around 9.4 percent (see Appendix 2). Experts believe that new job opportunities will emerge in the future and transform the situation.
Situation Analysis
In order to achieve the targeted business objectives, the leaders at BA should be aware of the constraints, opportunities, and changes experienced in the global environment (Gupta, Li & Yu 2015). A detailed analysis of the external and internal environments should be done in order to predict the company’s future performance.
Industry Analysis
The aviation industry in Mongolia has been profitable for many companies within the past decade (Alvarez 2011). Modern forces such as technology and globalisation have transformed the manner in which many Mongolian citizens travel from one country to another. The production of superior aircrafts and use of modern informatics continue to dictate the performance of the industry. However, this rapid growth has been affected by changing political patterns experienced in Mongolia. Some issues such as oil prices, insecurity, and economic crises have been observed to affect the Mongolian aviation industry (Isakova, Plekhanov & Zettelmeyer 2012). However, many players in the sector are focusing on the best options to emerge successful in the country. This fact explains why BA should target this growing market. The decision to open a new route to Mongolia will boost its profitability and eventually become a leader in the nation’s aviation industry.
PESTEL Analysis
The Mongolian aviation industry is influenced by a wide range of external factors. Such forces should be carefully analysed by companies that want to achieve their business objectives in the country (British Airways 2016). The PESTEL Analysis presented below gives a detailed summary of the forces dictating the performance of this industry.
SWOT Analysis
Before launching its operations in Mongolia, BA should consider the aspects of its internal environment (Gupta, Li & Yu 2015). The information will be used to implement the best strategies that can support its new business decision. The internal environment is therefore summarised using the SWOT Analysis below.
Implications
Several issues should be considered by British Airways as it embarks on the proposed path. The issues presented below should be carefully analysed in order to ensure the firm realises its goals.
Terrorism
This is one of the biggest challenges affecting many players in the aviation industry. Recently, several planes have been hijacked by unknown people (Isakova, Plekhanov & Zettelmeyer 2012). In countries such as Yemen and Syria, terrorism remains a major challenge affecting the industry.
Oil Prices
The changing prices of oil will have significant implications on the performance of BA.
Competition
The industry is characterised by increasing level of competition. Chances are very high that many citizens in the country use Mongolian Airlines. This is the national carrier and it attracts many passengers in the country (McDonald, Frow & Payne 2011). British Airways will therefore have to consider this issue in order to emerge successful.
Underdeveloped Destination
Mongolia is not a developed country. That being the case, specific challenges such as poor infrastructure and reduced profits might affect the company.
Technological Changes
Modern technologies have always been described as disruptive forces in every industry. This force is changing the manner in which tickets and flights are booked. Mongolia is a country that is yet to embrace the power of the internet (Gupta, Li & Yu 2015). British Airways should therefore consider the best strategies to support the diverse needs of the Mongolians using modern technologies. The ultimate goal should be to offer the most desirable support to the targeted customers.
Marketing Objectives and Strategy
Objectives
The SMART (Specific, Measurable, Achievable, Relevant, Timely) framework can be used to come up with the best objectives for the airline company. The targeted objectives are presented below.
- The first objective is for the company to design a powerful strategy that will ensure it launches its flights to Mongolia successfully within a period of six months. This objective is specific, measurable, important, and timely (McDonald, Frow & Payne 2011). The goal will be realised if the right resources are considered.
- The second objective is to increase market share in the Mongolian aviation sector by 20 percent within the first two years. This objective will be realised through the use of advertisements, surveys, and superior products. The objective is also measurable and specific.
- The third objective is to ensure the targeted Mongolian customers are satisfied with the available services. By so doing, the level of satisfaction and repeat business will increase significantly. This goal is relevant, timely, and realistic (McDonald 2011).
Strategy
Segmentation
British Airways can target traveler segment by providing various types of services to the targeted Mongolians. The products presented below can be used by BA to support the needs of different segments in the country.
- Economy class for frequent travelers
- Business class for entrepreneurs in Mongolia
- First class for affluent citizens
- Loyalty programs: These rewards will be used to empower people who use the firm’s services frequently (Gupta, Li & Yu 2015).
Targeting
British Airways should consider the attributes defining the Mongolian aviation industry in order to have a profitable business. The first group of potential customers includes business travelers and corporate leaders (Isakova, Plekhanov & Zettelmeyer 2012). These people tend to travel frequently in order to engage in international trade. Members of this group are between 35 and 50 years of age. The second group includes individuals who travel for leisure (Gupta, Li & Yu 2015). This group should be targeted using competitive prices. Their preferred destinations should also be considered. The business class segment should be characterised by superior services. The three classes (economy, first, and business) will therefore be targeted using geographic, demographic, behaviourial, and psychographic attributes (Table 1).
Table 1: BA’s targeting strategy in Mongolia.
Positioning
British Airways is revered by many passengers because of its ability to deliver exemplary services. In the Mongolian market, BA should use powerful strategies in order to inform more customers about its superior services (Hoffman & Bateson 2010). The firm should use powerful initiatives such as social network media to inform more people about its services. Proper advertising strategies will be needed to attract the targeted customers in every segment.
The positioning strategy should follow the ADIA (Awareness, Desire, Interest, and Action) approach. In order to achieve this goal, the company will have to create awareness in Mongolia using various strategies. For instance, telecommunication measures will inform more people about the products. Advertisement should be executed using a number of avenues such as social media platforms, television channels, and newsprints. This approach will create desire and awareness. The inclusion of loyalty programs and superior products will attract more customers. Each segmented group will be informed about the products and services usually individualised strategies (Hoffman & Bateson 2010). These initiatives will make the positioning strategy successful. The strategy will play a positive role towards making BA profitable. The figure below shows that British Airways should provide high quality services and use fair prices (Figure 1).
Marketing Programme
Marketing is a powerful strategy that can make a huge difference for many companies in the industry. The decision to launch new flights to Mongolia is a bold move that can transform the company’s business performance. Mongolia is a nation that continues to implement powerful initiatives to realise its economic goals (Hoffman & Bateson 2010). The nation’s economy is growing rapidly due to the positive performance of the agricultural and mining industries. In order to emerge successful, British Airways should focus on superior approaches to deliver safe, comfortable, and convenient services to its passengers.
The best marketing approach should focus on the needs of the passengers and the mission of the company. The strategy will have proper promotional and advertising practices. The ultimate goal is to ensure the customers are informed about the quality of services associated with BA. The 7P marketing mix will therefore be used to support the company’s performance (Hoffman & Bateson 2010). The proposed marketing mix for British Airways is presented below.
Product
British Airways will operate flights to and from many cities in Mongolia. The firm will promote positive practices such as checking baggage, on plane meals or snacks, and arrival to destination. These services will be enhanced using various revenue generating activities such as duty free shopping and extra hand baggage. The firm should offer on time travel with flexibility options (McDonald, Frow & Payne 2011).
Place
The company should liaise with the Chinggis Khaan International Airport (CKIA) in order to manage its operations successfully (McDonald, Frow & Payne 2011). Its online presence will also inform more people about the exemplary services provided by the company. The use of agents and dealers will make it easier for more customers to use BA’s services.
Promotion
The firm should use a powerful promotional model to inform the citizens about its services. The internet will play a positive role towards supporting this strategy. Social media networks will inform the citizens about the services. The use of CSR approaches will encourage more people to embrace BA’s services. Reward systems will ensure the passengers can redeem their points (Isakova, Plekhanov & Zettelmeyer 2012).
Price
A competitive pricing strategy should be used by British Airways. Customers who book their flights early will get increased discounts. Different prices should be used for each of the above segments. Passengers can receive free beverages and snacks (Alvarez 2011).
People
The firm should hire competent marketers to support its business objectives. The cultural attributes associated with Mongolia should be considered throughout the marketing process (Isakova, Plekhanov & Zettelmeyer 2012). The workers should be equipped with the best skills to support the needs of the targeted customers.
Process
The services should be aimed at supporting the expectations of the customers. The use of technology will ensure the company provides evidence-based services to the customers (Hoffman & Bateson 2010). Research and development (R&D) should be considered to produce superior services that have the potential to drive performance.
Physical Evidence
The company’s website will be used to inform the customers about its services, destinations, and initiatives. The issue of customer satisfaction should be taken seriously in an attempt to achieve the targeted objectives (McDonald, Frow & Payne 2011).
Control and Evaluation
The control and evaluation framework guides companies to realise their objectives. The control and evaluation for BA is presented below.
Annual Plan Control
“to become the second preferred company in Mongolia within four years”
The managers at BA should use their competencies to empower the workers. This practice will ensure the marketing and business strategies are aimed at promoting performance (Alvarez 2011). The firm will attract more passengers and eventually become profitable.
Profitability Control
“to become profitable after the first year”
The business strategy is aimed at maximising the firm’s profits. The use of powerful initiatives and marketing processes will attract customers and make BA successful in Mongolia (Alvarez 2011).
Efficiency Control
The organisation’s management and marketers will focus on the issue of efficiency. Evaluations should be done periodically in order to promote the best practices. Sales promotions and distributions channels should be monitored in order to produce positive results (Alvarez 2011). The marketing expenditures should be controlled by competent professionals.
Strategic Control
Strategic control focuses on the best approaches to ensure the company markets its products and services effectively (Alvarez 2011). New market segments will be identified and supported using BA’s superior products.
Conclusions and Recommendations
This discussion shows conclusively that there is a new opportunity in the Mongolian market. Since the country’s economy has been growing steadily within the past few years, British Airways has the potential to succeed in this market. Many people in this country are current engaging in international business activities (Hoffman & Bateson 2010). That being the case, a powerful marketing strategy that considers the challenges affecting the industry will deliver positive results. The managers and marketers must consider the best approaches in an attempt to realise the targeted objectives.
Additionally, some recommendations can make a difference for British Airways. For instance, a powerful pricing strategy is needed to ensure low-income citizens get discounted services. Businesspeople and corporate managers should receive exemplary but expensive services. The company can also consider the need to offer logistical and cargo services in the country. After succeeding in the Mongolian market, British Airways should use a competitive strategy to emerge successful after five years. The company can do this by adopting new technologies that have the potential to make a difference in the industry (Alvarez 2011). Research and development (R&D) is another powerful strategy that can improve the quality of BA’s services. These recommendations will eventually make BA a leading competitor in Mongolia’s aviation sector.
Reference List
Alvarez, S 2011, ‘Marketing in the growing low-cost airline industry’, Rouen Business School, vol. 1, no. 1, pp. 1-49.
British Airways, 2016, Web.
Gupta, P, Li, B & Yu, J 2015, ‘From natural resource boom to sustainable economic growth: Lessons for Mongolia’, Working Paper, vol. 1, no. 1, pp. 1-30.
Hoffman, D & Bateson, J 2010, Services marketing: Concepts, strategies, and cases, Cengage Learning, New York.
Isakova, A, Plekhanov, A & Zettelmeyer, J 2012, Managing Mongolia’s resource boom’, European Bank for Reconstruction and Development, vol. 1, no. 1, pp. 1-36.
McDonald, M, Frow, P & Payne, A 2011, Marketing plans for services: A Complete Guide, Wiley, New York.