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British Airways (BA) was the world’s largest airline in 1983, winning the Airline of the Year award. However, BA's public image over the years remained weak. This case study looks into how BA can further enhance its global presence through an effective worldwide advertising campaign to “make the airline proud again”.
John A. Quelch
Harvard Business Review (585014-PDF-ENG)
July 17, 1984
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British Airways Case Answers
Introduction – British Airways Case Study
British Airways (BA) was the world’s largest airline in 1983, winning the Airline of the Year award. However, 1982-1983 was their first profitable year in 10 years, and despite service improvements and cost cuts, their public image remained weak. One of the company’s main objectives was to “make the airline proud again”, and this was to be done using a large, worldwide advertising campaign, the concept campaign.
This is an evaluation case because the concept campaign has already been created and aired; there is nothing else to do at the moment until the reaction to the campaign is known. The main issue here is to determine if it will be effective and if they could have done anything else instead or in addition to the campaign to improve their image.
Company – British Airways
BA was the world’s largest carrier in terms of passengers, miles flown, and a number of countries serviced in 1982-1983. 42% of their sales came from the UK, 25% from the rest of Europe, and 33% from the rest of the world. BA was a state-owned enterprise that resulted from the merger of British European Airways and British Overseas Airways Corporation in 1972. Many expected economies of scale to materialize from this merger, but this was slow to happen and BA incurred losses throughout the 1970s. In 1979, there was a change in management at BA as part of the newly elected conservative government’s plan to reduce losses in state-owned enterprises.
This led to improvements in products and services along with a hiring freeze and early retirement program to reduce the size of the workforce. By 1982-83, BA was profitable for the first time in 10 years as a result of these efforts. However, to be sold to private investors by the end of 1984, this performance would have to be sustained. Although 1983 was a great turnaround year in terms of increased performance and service quality, BA’s public image remained weak, having a reputation for being inefficient and incompetent like other state-owned enterprises.
Consumers had many negative associations with British Airways, including that they were inefficient, incompetent, and unfriendly. They were also rated poorly on in-flight service, value for money, and punctuality. Consumers were segmented as business and pleasure travelers, with business travelers requiring higher product and service quality. In the US, perceptions of Pan Am and TWA were better than those of BA, but among BA customers, perceptions of BA were better, meaning that they actually had good service quality. Leisure travelers had a high recall of BA bolt-on features such as hotel, car rental, and packaged tours, but did not see BA as having good value for money or being a good deal. The name of the airline and lack of a strong image led to BA being associated with consumer’s perceptions of Britain as a country.
British Airways had to face different competitors depending on the country the flight route was in. For international routes, in the UK, their principal competitors were British Caledonian and Pan American, and they had a similar share relative to their principal competitor. In the US, their principal competitors were Pan Am and TWA, and they had a lower market share relative to their principal competitors. In other countries, for the most part, they had lower market share than their principal competitors, similar market share in a few markets, with Zimbabwe and Trinidad being the only markets where they had a higher market share. British Airways was often picked as the second choice carrier, particularly for leisure travelers to the UK, after the consumer’s own national flag carrier.
BA offered more international routes than any airline worldwide. In most countries, BA catered to pleasure passengers rather than the business. On top of just travel, British Airways was really providing service and hospitality to consumers. They had their Concorde, First Class, and Super Club service for business class passengers that offered more comfortable seating and higher service level, and hotel, car rental, and package tour packages for leisure travelers.
BA had service in 89 cities in 62 countries outside the UK. After the UK, their second-largest market was the US representing 14% of revenues. Still, the rest of the world outside of the US and UK represented 44% of revenues.
British Airways prices were generally comparable to those of their competitors but were still required to be placed in all advertisements.
Traditionally, with Foote, Cone, & Belding (FCB) agency, BA allowed individual subsidiaries in their respective countries to make promotion decisions for that country, but they had to go through FCB. The purpose of this was to get a better rate from FCB, not to centralize control of their advertising worldwide.
Advertising campaigns were generally tactical in nature, focusing on the features offered by BA that would differentiate them from the competition, but these could be easily mimicked by competition, and they only affected those who cared about the differentiating factor in question. It was also required that every advertisement put out by BA to include a price in it, so it was difficult for British Airways to make advertisements that would be viable to use worldwide, or even within a country.
When Saatchi & Saatchi (S&S) were appointed to take over BA advertising, they were asked to make BA into a global brand and bolster their image. Rather than give individual subsidiaries and affiliates autonomy with their tactical campaigns, they set up a system where all communications would go through headquarters first.
Also, they came up with a concept campaign that would be used worldwide with five objectives: projecting BA as a world leader in air travel; establishing BA as the world’s most successful airline; demonstrating the superiority of BA products; adding value in the eyes of passengers across all BA products; and developing a distinctive, fashionable, contemporary style for the airline. They came up with eleven commercials, one lead one called “Manhattan Landing”, and ten other “preference” series commercials showing famous individuals disappointed not to be booked on BA. These were intended to be aired in all BA markets, with the only change being the voiceover.
Specific to the US, the concept campaign was seen as a means to address the fact that British Airways was not recognized as the world’s largest airline. In the US, for much bigger means better, so this deficiency could mean significant sales if addressed. On top of that, there was a…
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