Marketing Virgin Atlantic

 

Chapter One: Introduction

1.1  Aim of the Report

This report will attempt to review the marketing strategies of Virgin Atlantic in the tourism industry. It will discuss the way how the company fragments its audience and targets it and how it is placed on the competitive arena.

1.2 Structure of the Report

The report is structured into five chapters. It will start by describing the company background, then internal analysis by using STP framework. It then gives an external analysis taken in Porters Five Forces. The final chapter includes recommendations for future development.

2. Chapter Two: Company Background

2.1 Company Overview

In 1984, Sir Richard Branson established Virgin Atlantic. It is a British major airline based in London. In its schedule, the airline flies to North America, Caribbean, Africa and Asia (Clarkson, 2019). It is also famed with quality in-flight services and unique brand image.

 

2.2 Industry Role

Being a member of the tourist industry, Virgin Atlantic operates in leisure and business travel environment. It also stands out when it comes to customer service, creative marketing and making sustainability efforts (Our story | Virgin Atlantic, 2025). Virgin Atlantic has entered into strategic partnership with Delta Air Lines and Air Frankel and expanded its international network.

Chapter Three: Internal Analysis

3.1 Customer Segmentation

Virgin Atlantic applies the concept of a multi-dimensional segmentation strategy to divide its consumer population according to geographical, demographical, psychographic, and behavioural factors:

 

Geographic Segmentation: Virgin Atlantic focuses on international travellers, especially between the UK and the destinations in North America, the Caribbean, the African continent and Asia (Our story | Virgin Atlantic, 2025). It operates mainly at the London Heathrow with its strategic national and international linkage to cities that experience large tourist and business travel.

 

Demographic Segmentation: The carrier is targeting people with different ages, professions and income. It owns different Upper Class and Premium Economy products which serve business passengers with high incomes and serve middle-income passengers with Economy Light, Classic, and Delight products.

 

Psychographic Segmentation: Virgin Atlantic targets lifestyle interests of customers like adventure, luxury or stature (Latterly, 2025). The brand carries a strong creative image that appeals to journey-based travellers who prefer comfort, amusement, and individual attention in air travel.

 

Behavioural Segmentation: The airline identifies the groups of customers based on travelling with a purpose (business or leisure), frequency of booking, brand loyalty and price sensitivity. The Flying Club type of programmes are aimed at regular travellers attracting them with tier access benefits and encouraging them to remain loyal with the help of benefits.

3.2 Targeting Strategy

The Virgin Atlantic maintains a strategy of differentiated marketing and appeals to several segments and offers differentiated products and services:

 

Upper Class: It aims at high-end business passengers and provision of their luxury facilities such as flat-bed seating facilities, bespoke lounges such as Virgin Clubhouse, and limousine services.

Premium Economy: It is all about the passengers who want to get more comfort but do not want to spend money on the business segment.

Economy Delight and Classic: Economy Delight and Classic are more customer-oriented to buyers who want a reasonable ratio of cost and experience.

Economy Light: It is a low-inclusive flying choice that suits low-cost travellers.

 

The strategy will help Virgin Atlantic to serve different segments of the markets at a time and have more customers and market share. It is not facing the traps of undifferentiated and excessively unitary niche strategies because it provides personalized experiential services around a unified brand image.

 

3.3 Positioning Strategy

Virgin Atlantic has branded itself as a premium customer-centric airline with style, pioneering services, and compelling character along with the outstanding quality of customer experience. To distinguish between legacy carriers and low-cost competitors, the firm employs powerful emotional branding, which is associated with being fun, flair, and comfortable.

 

The given positioning map (below) locates the Virgin Atlantic in respect to four largest competitors (with references to price and customer experience):

Perceptual Map: Virgin Atlantic and Competitors

Price \ Experience	Budget Experience	Premium Experience
Low Price	EasyJet	British Airways (Economy)
Mid-Price	JetBlue	Virgin Atlantic
High Price	TUI Airways	Emirates

 

Virgin Atlantic operates a mid-premium model, a sweet spot between the price and the quality of provided services, which is relevant to the clients who prefer to receive higher service than regular travellers do not want to pay excessively high prices of the ultra-premium segment. With this strategic position, the airline is able to compete with many customer groups and be able to respond elastically to market changes.

Chapter Four: External Analysis

4.1 Competition Among Existing Firms

The level of competition among airline companies is too severe mainly because there were many competitors that have jointly provided similar services along some common routes. Virgin Atlantic is directly contradicting the British Airways, Emirates, Lufthansa and American Airlines that have worldwide networks and a great customer base.

 

Key factors that increase competitive intensity include:

·         Low differentiation between economy offerings (Block et al., 2021).

·         Price sensitivity among consumers (Khudhair et al., 2021).

·         Overcapacity, particularly during off-peak seasons (Seifi et al., 2024).

·         Frequent price wars and promotional campaigns.

 

To respond to these forces, Virgin Atlantic lays down its strategies on better customer experience, innovation, and good branding. However, being a mid-sized airline, it is not resistant to bigger alliances and low-cost companies.

4.2 Bargaining Power of Suppliers

The suppliers have high bargaining power in the airline sector since Virgin Atlantic relies heavily on very few suppliers. The aircraft companies such as Airbus and Boeing have led the global market and the airline does not have much freedom of selecting alternative suppliers (Lo Verde, 2024). Likewise, costs are greatly affected by fuel suppliers since fuel consumes a considerable share of operating expenses and it is subject to change in prices within the market. Moreover, the operators of the airports regulate entry into strategic routes and they charge expensive landing and handling charges. In spite of some steps toward depriving some of its dependency on long-term contracts and strategic partnerships (e.g. with Delta Air Lines and Air France- KLM), the supplier power is one of the major problems at Virgin Atlantic.

4.3 Bargaining Power of Buyers

Buyers bargaining power is also high, especially because of the ease with which online booking systems and comparison sites are available. Customers find it very easy to compare the prices of their flights, schedules and services and as a result this makes them very price sensitive and this decreases brand loyalty particularly the economy flights. Flexibility, affordability and added value is what both leisure and business travellers will require (Zhou, 2024). Virgin Atlantic counters this by providing tier pricing structure, frequent flyer programs via Flying Club and excellent customer experience. This, however, may pose little threat considering how flawless the process of changing carriers has been which leaves the customers with a big sway in dictating the pricing of the airlines as well as the services they offer.

4.4 Threat of New Entrants

In commercial aviation industry the threat of new entrants is moderate-low because there are high barriers to new entry (Leonavičius, 2021). Start-ups have a challenge with high capital investment, legally rigorous approvals, safety requirements, and it is a difficulty to establish brand confidence. Moreover, the newcomers may not get privileged slots at the airports and building strategic partnerships may be a problem as well. However, these obstacles have not deterred some low-cost long-haul airlines such as Norse Atlantic which have tried to enter the market in a limited way. Nevertheless, the brand identity and customer network that Virgin Atlantic has developed in addition to its relationship with other members of the SkyTeam offers protection against any upcoming competitors.

4.5 Threat of Substitutes

The threat of substitutes can be called as moderate, and this threat differs according to the purpose of trip and destination. High-speed rail or road may provide competitive options of ferrying domestic or regional travel with respect to cost and convenience (Zhang and Jiang, 2021). In the case of business travellers, certain demand of short trips has been substituted by the virtual communication platforms that include Zoom and Microsoft Teams. There are however no viable alternatives to air travel that can emulate speed and reach among long-haul leisure and international business travel namely, Virgin Atlantic core market. The airline is fighting with this threat through improving customer experiences, brand loyalty and adding value added services that make switching cost high and differentiating the mode with other modes.

Chapter Five: Future Development and Conclusion

5.1 Issues Raised by the Marketing Audit

In the marketing audit of Virgin Atlantic, there are some important issues which affect its long-term competitiveness. Firstly, the brand is widely recognized and has the image of a premium carrier, but it will compete intensively in price regulations with economy and low-cost airlines, which pressurise the margins. Second, the route network that the airline has speaks for itself in terms of limiting its global presence and customer base in comparison with the major global alliances. Third, despite investing in sustainability and digital innovation, few people have become aware of the works and their customers have a low level of perception of the activities. Lastly, the recovery post pandemic highlights the weak points of operation such as the volatile demand and increase in the cost of fuel.

5.2 Strategic Recommendations

As a way of ensuring improvement in future performance Virgin Atlantic needs to review its current marketing strategy and ensure it turns to a more segmented and digital approach to marketing. These are resources such as promoting data-driven personalised marketing, improving the engagement of customers on digital channels and communication its environmental initiatives better. Destination marketing and profitability of the route can be enhanced through the collaboration of tourism boards and local business (Elvekrok et al., 2022). Furthermore, customer loyalty program should be improved, and it should be more integrated with SkyTeam alliance partners. As it manages to merge its brand values with newer consumer values, namely sustainability, flexibility, and digital convenience, Virgin Atlantic will help it to establish itself as a progressive customer-service airline in one of the most competitive global markets.

References

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Clarkson, N. (2019) Celebrating 35 years of Virgin Atlantic | Virgin. https://www.virgin.com/about-virgin/latest/celebrating-35-years-virgin-atlantic.

Elvekrok, I., Veflen, N., Scholderer, J. and Sørensen, B.T., 2022. Effects of network relations on destination development and business results. Tourism Management, 88, p.104402.

Khudhair, H.Y., Jusoh, A., Nor, K.M. and Mardani, A., 2021. Price sensitivity as a moderating factor between the effects of airline service quality and passenger satisfaction on passenger loyalty in the airline industry. International Journal of Business Continuity and Risk Management, 11(2-3), pp.114-125.

Latterly (2025) Virgin Atlantic Marketing Strategy 2025: A case Study – Latterly.org. https://www.latterly.org/virgin-atlantic-marketing-strategy/.

Leonavičius, J., 2021. Overcoming barriers to entry into the United Arab Emirates market: the cases of biotechnology companies (Doctoral dissertation, Kauno technologijos universitetas.).

Lo Verde, A., 2024. Competition Dynamics and Market Power: Analysis of the Duopoly Between Airbus and Boeing in the Civil Aircraft Manufacturing Industry (Doctoral dissertation, Politecnico di Torino).

Our story | Virgin Atlantic (2025). https://corporate.virginatlantic.com/gb/en/our-story.html.

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Zhang, W. and Jiang, L., 2021. Effects of high-speed rail on sustainable development of urban tourism: Evidence from discrete choice model of Chinese tourists’ preference for city destinations. Sustainability, 13(19), p.10647.

Zhou, W., 2024. Competition and development in the aviation industry: An analysis of strategic adaptability and challenges.