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Marketing communications - advertising 10. Marketing communications 10.1 Advertising Advertising plays an important role in informing, entertaining, educating, persuading and reminding customers. This role is more important for services where there is a high degree of intangibility. Additionally effective communications are needed to inform customers about their role in the service delivery process (e.g. how to make reservations, deadlines for limited offers and so on). Advertising can address different publics, internal and externals, separately or all together. The same advertisement can be run to give confidence to investors, boost employees morale and build up the corporate image in customers’ mind. Internal objective can include: to inform employees about changes in the organisation, to keep employees informed about company performance, to incentivate and motivate, to educate employees, to disseminate marketing intelligence within the organisation, as it will be seen in chapter 11 about people and internal marketing. Objectives for external communications in the airline industry are: to inform the target market about current and new service offerings and benefits, to educate customers, to persuade to buy, to remind customers about the service and where it is available, to publicise policy decisions and global alliances, to make public announcement, to address the trade, to bounce out of a difficult market environment, to support and maximise response from other promotional activities, to generate positive PR from new ideas and to build up strong brands and corporate image. Advertising can be directed to build an umbrella brand or masterbrand which is to be associated with the overall airline’s image (Virgin Atlantic) or sub-brands which relates to specific products (Upper Class). Fabio Emanuele Noia, London March 1996 84 Marketing communications - advertising The promotional objectives will dictate the nature and form the promotional message takes and the ideal mix of media (several different media will be used in order to maximise the level of coverage in communicating with the whole of target audience). The promotional message will have a mix of rational (fairly detailed information newspaper and magazine), emotional (to create involvement with the ad, this is particularly used by airline - British Airways effort to differentiate itself on service and friendliness and its promotional campaign positioning it as “the world’s favourite airline”) and humour appeal (to attract audience’s interest without detracting from the actual message (the joke about extraordinary leg-room in the latest Virgin ad). A combination of these different appeals is often used to get the message across. Where there’s little tangible difference between service providers and service offerings advertising can play a fundamental role in differentiating and positioning an airline. Airlines tend to concentrate on building corporate image through their television and press advertising, leaving tactical price-led advertising to black and white classified print and to posters. Corporate image is important in this market, where all of the players offer essentially the same service and fares. Although much of the high expenditure is not targeted on the promotion of particular airline products, a significant proportion is aimed directly on the advertising of specific business products. Some advertising, both press and TV, describe particular product features, such as arrival lounges, sleeper seats, standards of catering and value added products such as valet parking or a limousine service. However, much expenditure, particularly, in the case of advertising, is devoted to the promotion of an image. Increased costs for above the line advertising (especially TV) push airlines to go through the line relying more on below the line activity. Because image is so important in this industry however a high percentage of the total budget is still devoted to TV advertising. Fabio Emanuele Noia, London March 1996 85 Marketing communications - advertising Airlines concentrate their communication activities on corporate advertising campaigns with all their products stemming from a central theme, such as “the world’s favourite airline”. The breadth and depth of product lines will have a bearing on the complexity of marketing communications organisation and operations (8 brands for British Airways against only 4 for Virgin Atlantic). The company structure and the location of marketing communications will depend on the number of markets served, and also on their relative importance. The building up of seamless networks, has seen in chapter 3, has called for integration of marketing communications among partner airlines. One of the key aspect of marketing communications is the consistency of the claims made with the actual product offered. Before privatisation and before they got professional management in BA won awards with their brilliant advertising campaign, while failing to deliver the goods, because of diffuse inefficiency. The problem of consistency can be extended to the concept of seamless journey, when two carriers with different liveries and different standards of service are involved. It is a key role in advertising not to over promise to avoid to under deliver. If an airline raises customers’ expectations too high with its commercials, it will lay the foundations for disappointing and offending them. Once a credibility gap has been developed it is hard to erase it. Fabio Emanuele Noia, London March 1996 86 Marketing communications - advertising 10.1.1 British Airways British Airways has managed in the last 15 years to build the most valued and valuable brand in the airline business with the co-operation of Saatchi and Saatchi advertising agency. BA’s distinctive advertising, which has constantly built on the right expectations, often surprised, thrilled, charmed, and captured the mood of the times around the world (60 countries) has probably constituted BA’s main sustainable competitive advantage. Service and product have contributed to the airline’s standards, but they are less likely to be a major differentiator in an industry where everyone copies each other in a short time. The emotional and financial investment BA has made in its communications over time is the main key for its success. In 1982 (when Saatchi and Saatchi and Lord King were appointed) the turn around began BA was seen as an unattractive investment prospect by the city, staff had nothing to be proud of and there was a gap in customers’ mind between the line “We’ll take more care of you” and reality. Outside the UK the airline was seen as Anglo-centric rather than international (”Fly the flag”). The initial strategy exploited BA’s key strength, its international network. The famous line “The World’s Favourite Airline” translated the corporate goal of being the best and uniquely positioned BA as an airline that more people around the world choose to fly. The very next efforts will probably be dedicated to spread uniformity in image and service policies throughout its alliances network. Key advertising objective has been to add value to the brand giving it a unique and valuable sense of prestige and status, and in the same time to avoid the association of big with cold, to try to communicate that the airline really understands and cares about its customers. There’s no doubt British Airways advertising succeeded in getting people to pay more and attracting a greater share of the market. A product advantage does not remain a competitive advantage very long, unless the company aims at staying constantly ahead of competition (being the most innovative), and customers’ expectations are constantly being raised, making it more and more difficult to surprise them. On the other hand BA’s advertising has succeeded in growing its brand strength on key image dimensions such as prestige and status, size and international, understanding the customer (friendly), leadership and innovation. Fabio Emanuele Noia, London March 1996 87 Marketing communications - advertising BA’s advertising strategy developed on two parallel lines (as a consequence of new inputs from the FMCG industry), a masterbrand which represented the global face of the airline to all flyers and sub-brands to communicate more specific benefits for individual consumer segments. A) Masterbrand advertising We can distinguish different stages in the development of BA’s masterbrand. A first stage (1983-1985) which relies on the “Flying city” (best known as Manhattan) spot was designed to establish the new line, focusing predominantly on impressing upon the customers the size, stature and internationalism of the airline (the ad however was equally addressed to BA’s staff as a morale booster and to the City. It aimed to signal a major change was going on and to associate the company to success through the size concept. A second stage (1985-1987) celebrated change achieved at BA in terms of service. The “Supercare” campaign provided new support for “The World’s Favourite Airline” in the form of excellent customer care. The Superman theme was designed to be impactful and impressive whilst humorous enough to give the commercials warmth. A third stage (1989-1995) which followed the privatisation and the launch of the first sub-brand (Club World) left the City on the side and re-focused on the wider customer base, aiming at refocusing on the umbrella brand, bringing more warmth and humanity to the airline’s professional and efficient personality. “Global”, “Smiling Face” and subsequently “Feeling Good” aimed to do this by turning the straight fact that BA carries more passengers internationally into an involving emotional message: “We bring 24 million people to other people all round the world every year”. The key benefit to communicate was that people fly to meet people. A fourth stage (1996) which signs the beginning of BA’s relationship with the new M&C Saatchi is trying to reposition the airline as more leisure oriented. B) Sub-brand advertising This has been mainly related to the Club World, Club Europe, Concorde, Super Shuttle and First Class products. It is much more tightly focused on specific consumer targets, the overall aim being of getting more people to travel at a higher price. An example is the Fabio Emanuele Noia, London March 1996 88 Marketing communications - advertising £8 million “Boardroom” or “Red eye” ad, which launched the first sub-brand Club World in 1988. This exploited the end benefit of good service, delivering the businessman ready to do business. It was targeted at young, go-getting, jet-setting businessmen. Latest ads such as “Up on the roof” focusing on emerging businessperson’s needs presented a long haul flights a time to escape from all the stresses of business and recharge. The 1996 ads for Club World relaunch focus on a more and more caring airlines offering all the benefits of a cosy and caring environment (lullaby not included). C) The strongest airline brand in the world Interbrand valued the BA brand in 1992 and declared it the most powerful brand in the world. It is estimated that an increasingly high percentage of corporate assets will rely on brand values alone. The value of “The World’s Favourite Airline” can easily be assessed thinking that BA for the last 15 years has been able to command a premium whilst growing its market share. Advertising has been a major contributor of its success and £500 million spent on advertising campaigns over that period the best and most astute investment ever made. D) Media Television British Airways most preferred medium of course. No medium is more adapted to convey a distinctive corporate image for an airline. British Airways fully take advantage of this medium including it in almost the totality of its campaigns. British Airways has produced numerous spots for television some of which are briefly reported below. 1983 “Manhattan”. In order to build up British Airways corporate image. Fabio Emanuele Noia, London March 1996 89 Marketing communications - advertising 1985 “The empire strikes back”. To create great impact and communicate change. 1987 “Earth to Mars and back”. To put the accent on the fact that big is beautiful. 1988 “Super top class seats”. To launch its first brand Club World. 1990 “BA lifestyle” To address the achievers (featuring Robert Hardy’s voice). 1991 “World’s greatest offer”. To counteract the effect of the Gulf War. 1992 “Feeling good”. To launch a new programme of product service and innovations, including individual seat back videos for Club World, a new Club World seat design, a Lounge Pavilion at Heathrow Terminal 4 and complete refurbishment of the airline’s flagship Concorde. 1994 “Island”. The last Saatchi & Saatchi advertisement. Featuring people and helicopters approaching an island to wrap it up with red, white and blue silk. Eventually an aerial view shows the island is a map of the world. The message? Aren’t we great? 1995 “Where is everybody?”. First BA campaign with M&C Saatchi to promote reduced fares “World Offers” to several destinations and boost advanced booking. The campaign is part of an attempt to portray BA as more “leisure oriented” than it has been in the past. An old catchphrase “Where is everybody” updated with new cartoons characters is used. A sheep who has been jumping over a gate thousands of times discovers the bed of the person who has been counting him is now empty. A peacock displaying his feathers finds he is without an audience and so on. The ads show a telephone number(direct response advertising) or invite to contact a travel agent. 1995 “Thank you”. An advertisement for charity donations on BA flights featuring Bangladeshi children kissing the camera. Being big and powerful is one thing, you also have to care about what you are doing and who you do it for. Fabio Emanuele Noia, London March 1996 90 Marketing communications - advertising 1996 “Day dreams”. With the catch phrase “Every year hopes, dreams and ambitions of 30m people fly with BA”. This is part of a two year £100m world-wide advertising campaign. It repositions BA as the dream carrier. In the beginning two ads, one aimed at the business segment and the other at the leisure segment, show a series of day-dreams by passengers, taking in exotic locations, including the mountains of Wyoming and the Sierra Nevada desert (see Exhibit 10.1) omissis. Other spots linked with posters and press advertisements are in the form of day dreams, and particularly focused at the business segment to relaunch the improved Club World (for posters and press advertisements linked to this campaign see Exhibit 10.2, 10.3, 10.4 and 10.5). Big is no longer enough in the supposedly caring mid 1990’s. BA now says it is big and it is kind. The theme also forms part of BA’s new world-wide web site on the Internet. Those last spots (1995 and 1996) have been mainly run on Channel Four in the late afternoon and in the evening during week-days and throughout the day on Sundays. Press British Airways second preferred medium is the press with a wide choice of national dailies, Sunday papers and specialised magazines. Press advertisements often recall and support major TV advertising campaigns, are linked with sales promotion or are joint communications with partner airlines (see Exhibit 10.6, 10.7). omissis Bill posters British Airways has extensively utilised posters in conjunction with other media. An example from the past, which makes an exception to this rule, is the campaign to launch new routes to some European destinations at the end of the 80’s. The posters showed a typical image of the new destination and/or a play on words: Fabio Emanuele Noia, London March 1996 91 Marketing communications - advertising “Fasta to the pasta” for the new direct service from Glasgow to Milan, “Olé in one” for the service from Heathrow to Madrid and “Amsterdam Belfast” for the direct service from Belfast to Amsterdam. Another more recent (1995) posters campaign, which was related with press advertising and point of sales literature featured people from different cultures and countries together with the leitmotiv of the campaign being “There are more things that bring us together than keep us apart” (see Exhibit 10.8) omissis. Recently two campaigns have been supported by posters. One is “Where is everybody?”, which in addition to normal posters features specially made supports incorporating electronic display showing all the discounted fares (1995-1996). The last campaign (1996) which is linked to the relaunch of Club World include posters on road sites and in underground stations featuring the day-dream concept seen for TV spots and press advertisements.. Internet British Airways has just launched its internet site at the address http://www.britishAirways.com. A little bit later than its major competitors. It’s a very attractive opportunity to market products directly to a selected audience and to reach present and potential customers world-wide. British Airways site includes history of the company, information about all its products, its partner airlines, frequent flyer scheme, fares offers, bookings, schedules, in-flight entertainment (included a list of movies available on board), information about employees and employment, community relations etc. Cyberspace browsers are highly demanding in terms of what they can get on the net and the level of sophistication of the overall presentation, in addition their loyalty is very Fabio Emanuele Noia, London March 1996 92 Marketing communications - advertising low. Airlines will need increasingly sophisticated and constantly updated offerings to attract and retain the browsers. An ad hoc navigation system can be created and frequent visitors can be rewarded. It will be essential to monitor the new site and measure its use to provide useful feedback to its development, to adapt it to what the visitors find useful. The airlines need to announce their presence to the world by listing their sites in the numerous directories or listing the site addresses on their advertisements. The internet in fact can be used in response advertising as an alternative, or better an integration, to telephone numbers. In-flight magazines Both airlines offer high quality magazines used to advertise the airline and its services (see chapter paragraph 10.6). Directories Yellow pages and other directories are a must for airlines, which often advertise themselves also in conjunction with travel agents. E) Classified advertising British Airways staffing requirement means almost every third week an advertisement is placed on the press to look for candidates. Positions range from financial controller, IT specialist and commercial planner to customer service executive, cabin crew and, why not, international advertising manager. This is a big opportunities for corporate image people to work very close to the human resource department to enhance the company image and use it in order to get the best candidates. Fabio Emanuele Noia, London March 1996 93 Marketing communications - advertising 10.1.2 Virgin Atlantic advertising The role of advertising in relation to Virgin Atlantic success is an important but often forgotten factor. Although promotion has been product led in its early years, Virgins’ advertising campaigns positioned the airline exactly where it wanted to be, firmly left of centre. Virgin Atlantic preferred media are television, press and radio. Despite the fact that Virgin’s ads in the early 80’s were among the most memorable around, they often did not translate into ticket sales as they were regarded as being flippant or irrelevant, as the one showing a picture of Richard Nixon, arms upraised, flashing the “V” for victory with the caption “At least he knew the best way to get to London”. This is no longer the case. The airline’s more recent TV and radio ads are specifically aimed at the target market, which is typically younger than the average business traveller and more feminine. Virgin Atlantic divides its spend into corporate and business advertising, with the heaviest spending in the business sector in an attempt to attract this important segment of the market. The Economy segment is targeted only to push promotional fares. Virgin Atlantic advertising use a mix of media which includes television, national and local newspapers and the World Wide Web. A) Masterbrand advertising For Virgin Atlantic is very difficult to state if the master brand is “Virgin Atlantic” or simply “Virgin”. As a matter of fact everything going on under the brand name of Virgin, is likely to affect the airline reputation. So here it is assumed the airline has a wider umbrella brand “Virgin” and a masterbrand for the airline business “Virgin Atlantic”. B) Sub-brands advertising Fabio Emanuele Noia, London March 1996 94 Marketing communications - advertising Upper Class call for the biggest share of advertising expenditure. Mid Class however (now Premium Economy) was launched through advertising campaign and still calls for a part of the airline’s advertising budget. Economy class is almost exclusively pushed to fare promotions related campaigns on the press. C) Media Television Its television advertising is mainly focused on its core brand Upper Class with several campaigns featuring famous testimonials and Branson himself. One advertising campaign on TV launched in 1992 was designed to get first-time international travellers to fly Virgin. It featured the actress/comedienne Tracey Ulman playing a variety of off-beat characters who extol Virgin’s virtues and it resulted in increased Virgin brands awareness and bookings. Virgin has recently (last summer) re-run its TV ads featuring the actor Terence Stamp as testimonial for Upper Class to counter BA’s £115 million upgrade of First Class and Club World. In order to foreshadow Virgin expansion a new £5 million Virgin campaign for Upper Class has broken through Rainey Kelly Campbell Roalfe at the beginning of 1996, starring the actress Helen Mirren, demonstrating extraordinary legroom. This last campaign, made of three different spots, has run on Channel Four mainly at late afternoon in the beginning of this year, with two or three repetitions per day. The message to be conveyed was especially focused on “seductivity” of business class fares, limo service and “extraordinary leg-room”. Press Brand building is also supported by press advertising with a very simple layout, featuring key appealing benefits the airline conveys to customers such as leg room and special awards (see Exhibit 10.9) omissis, no smoking flights and personal TV set (see Fabio Emanuele Noia, London March 1996 95 Marketing communications - advertising Exhibit 10.10) omissis, wide seats, comfortable space and absolute relaxation thanks to inflight massage (see exhibit 10.11) omissis. The second page of the evening standard seems to be one of Virgin Atlantic preferred positions. Advertising on the press is also used tactically to support promotional fares for Economy class (discounted tickets to specific destinations), or to react to competitors’ moves in prices (see Exhibit 10.12) omissis. To this aim both black and white and Virgin distinctive red ads are used. An example of tactical use of advertising can be given by the swift answer given by Virgin Atlantic to British Airways relaunch of First class and Club World. Virgin placed a full page advertisement in national newspapers challenging BA with comparisons between its new Club World against Virgin Upper Class and then after a short period another one to remind Virgin superior service (see Exhibit 10.13) omissis. Press advertising is also linked with direct response initiatives which facilitate effectiveness measurement. To this aim advertisements shows different telephone numbers in order to detect the source of customers enquiries Some promotional activities are undertaken jointly with partner both in the airline industry and outside (newspapers, retailers etc.). In November 1995 the “Virgin flies Delta to New York” full page coloured ad placed in the Financial Times pushed the Delta-Virgin Atlantic code-sharing. Radio Radio has also been used by Virgin Atlantic to support its TV and press campaigns. The radio better served the airline objectives in terms of targeting for specific segments. World Wide Web Fabio Emanuele Noia, London March 1996 96 Marketing communications - advertising Virgin Atlantic is on the net with a complete description of the airline activities at the address http://www.fly.virgin.com plus a web version of the in-flight magazine under construction. The information provided cover news on the airline, its alliances, its promotional schemes, its frequent flyer schemes, information about hotels, Richard Branson adventures (hot air), a Virgin flight plan to help browsers select their routes and a Trivia quiz for browsers. D) Classified advertisements Virgin Atlantic uses spontaneous demands for recruitment, in addition it places some advertisements on the press for planned recruitment. The last ad was placed in the beginning of the year on the Evening Standard “How was your rush hour today” aimed at recruiting cabin crew. Fabio Emanuele Noia, London March 1996 97 Marketing communications - advertising 10.1.3 Advertising expenditure and relations with the agencies Expenditure Advertising expenditure for the last five years is reported in Table 10.1, 10.2, 10.3, 10.4, 10.5 omissis and Graphs 10.1-10.5 omissis. These data are collected and published by Register Meal for the main media and include both advertising agency commissions and production costs. The figures for every brand or grouping around segments (business or leisure) can be easily read from the tables. If one analyses the total expenditure of the two airlines, can easily notice how the differences in size and financial resource are key determinant in an airline advertising budget. However it would probably be more meaningful to analyse their expenditure in relation to their turnover, and see if there’s any cyclical or anti-cyclical trend. What can be easily told from the graphs is the trend of advertising in relation to some seasonal peaks during the year. Advertising budgets at BA have been relatively low in 1991 and 1992 probably affected by the recession to increase again since 1993. Virgin Atlantic instead has anticipated the increase in its advertising expenditure to 1992 and had kept it almost constant in the following years. British Airways tend to have the same pattern of expenditure during the year, following the general patterns for the industry, with Virgin overtaking British Airways in its total expenditure only once in May 1992. Agencies Since 1982, when it left Foote Cone & Belding, its American owned advertising agency, British Airways has been working with Saatchi and Saatchi, the world famous agency which contributed to its successful image and brands building. In 1995 following internal disagreement between Maurice Saatchi and his agency, culminating in the start Fabio Emanuele Noia, London March 1996 98 Marketing communications - advertising up of the new M&C Saatchi, British Airways handed its account to the new agency. One of the main problems being the global reach of the new agency, M&C eventually managed to offer a satisfactory coverage through an alliance with French agency Publicis Communications. All media have been shifted from Zenith Media into Optimedia. Virgin Atlantic has been a less loyal approach to advertising agencies. In 1991 and 1992 its account was handled by WM Media and Wollams Moira Gaskin O’malley, in 1993 these were replaced by Simon Palmer Denton Clemmow Johnson and MGM. In 1994 it was the time of Rainey Kelly Campbell Roalfe agency which today still retains the account. Fabio Emanuele Noia, London March 1996 99