British Airways: "Go For It, America"- Case Study Analysis

      British Airways:

     British Airways which was largest international airline in the world with total sales revenues of , 3.15 billion in fiscal 1985/86.

     BA carried 1.02 million passengers in 1985-86 which was 12% above the previous year's level.

     BA's sales revenues for its U.S.-U.K. business for the past year (1985-86) were $447 million, with an average round trip fare of $466.

  The U.S. business accounted for 22% of BA's worldwide revenues; U.K. revenues represented 35%, Western Europe 24%, and the rest of the world 19%.

     BA was the market share leader, followed by its two major U.S. competitors, Trans World Airlines (TWA) and Pan American Airlines (Pan Am).

     BA’s overall market share was 29% and its gateway share was 37% which was more than its nearest competitors.

      Terrorism and its impact on European travel:

     A series of terrorist attacks adversely affected American travel to Europe and it started with hijacking of Trans World Airline (TWA) flight 847.

     Palestinian terrorists took over the Italian cruise ship Achille Lauro on October 8, 1985.

     On December 27, 1985 when an attack at the Rome Airport ticket counter left 15 dead and one at the Vienna Airport terminal resulted in four killings.

     Libya’s Col. Muammar el-Qaddafi was suspected to be behind these attacks.

     Continue media coverage created hype and pictured Europe as a dangerous and hostile place

     It resulted in downturn of European Aviation business

     The major downturn felt by BA was affecting American tourism to Europe

     The decline was especially severe in the advance booking segments

     Main problem arises when in just within a day more than 27000 tickets had been cancelled.

     Europe continued to be pictured in the media as a dangerous and hostile place, one to be avoided by vacationing Americans.

     Other factors beyond terrorism were depressed US market which resulted in 25% decrease in dollar value.

      BA's Strategic Alternatives:

     This slowdown hit the BA’s European travel business abruptly and  overcome with this situation BA’s managers evaluated potential marketing alternatives.

     The first alternative was to observe the competitor’s strategy and to see what its competitors are doing in their promotion campaign, like Pan Am was doing full page advertisement in major newspaper explaining the steps it was taking to improve security.

     Another alternative was to do a market research over it but  in this situation they were not having that much of time to conduct a market research because it was already mid April and their focus was to attract the customer between April to October.

     BA’s executives also observed that cutting fares and other bargains also did not appear to be increasing the number of passengers but only reduce the profit.

     In context of competitive activity BA executives found certain alternatives to work upon to attract more no. of customer.

     Option one, to increase commission and promotional payments to the travel agents.

     Option two, cut prices to consumers in order to stimulate market demand.

     Option three, whether to increase expenditure on advertising but the main problem was that what would be the message?

     Option four, cut losses by limiting operations based on conservative assessment of the shrinking market and BA’s potential market share.

     Option five, to go with the ‘Big Idea” promotion and for that BA would require an innovative and unprecedented program.
Marketing Communication Objective:

1.      To regain as much as possible of the U.S. market for travel to Europe during the summer and fall of 1986 (Between April & October) .

2.      To find out an innovative solution which would highlight the point that not only was flying to Europe perfectly safe, but staying there and walking the streets were equally safe.
   Communication Budget:

1.      1.   Revenue target for the U.S. was of $660 mn

2.   2. Projected net total program cost was $5.2 million (including seat, media, and promotion costs)

3.     3. BA's calculations indicated an estimated return on investment of up to 15 times cost.

4.     4. BA's return-on-investment calculations included $66 million as part of the promotion's return.

         Promotional Strategy( “Go for it, America”):
     In collaboration with BA's in-house public relations department and PR firm, Daniel J. Edelman—came up     with a concept that consisted of a two-pronged campaign. The program was named "Go for It, America!"
Th   First part involved a major marketing and public relations and was designed to capture the public attention.
Th   Second part was supposed to keep that momentum going throughout the summer and fall of 1986.

          Part One: Free Tickets Sweepstakes

     On one day all seats on all BA flights to the gateways cities in U.S.A. would be free

     These seats would be awarded via a nationwide sweepstakes

     The proposed media plan involved first using teaser print ads to attract consumer attention without explaining the free seat program.

     Interested readers could enter by filling in a coupon in the ad.

     Those 2,141 passengers who had already booked BA flights on June 10 would automatically receive a free trip to the United Kingdom.

     Total introductory advertising media expenditures would be approximately $2.7 million.

     Each winner in the sweepstakes would be awarded two round-trip seats to the U.K. Included in the 5,200 seats available were 100 seats on a scheduled Concorde flight to London.

Part Two: Sustaining Program

     It would consist of a prize winner on every BA flight from U.S. to Europe and was in effect for five months(Until October)

     In June prize would be free round trip for one on the Concorde or for two via BA super club

     In July a chance to win a ₤500 gift certificate from Harrods department store.

     August winners would get a free week's accommodations in a luxury hotel suite in London.

     In September the prize would be one week's rental of a luxury automobile with driver.

     In October  the winner would receive  ₤500 (approximately $800) in  travelers checks.

In Addition (Tactics) :

     In addition to the per-flight winners, all passengers would qualify to try to win one Dream prize each month through “Scratch Off” card game.

     The winner could take a free travel pass on the Concorde for the next five years (June)

     ₤100,000 shopping spree at Harrods (July).

     A five year lease on a Chelsea townhouse and two round-trip tickets for two each year (August).

     Ownership of a Rolls Royce car (September).

     An investment portfolio valued at 100,000 pounds sterling in U.K. stocks (October).

Implementation and Public Relations:

     Flawless implementation of the program was just as important as the concept itself.

     BA’s PR department worked with professional Edelman Public Relations to execute the whole campaign.

     The PR Programme was on national level but  tailored  to each BA gateway city.

     Came up with an idea of incorporating into the program an afternoon tea with British Prime Minister Margaret Thatcher.

      Conclusion:

     This programme was putting BA at huge risk because situation in Europe was not safe  nad the terrorist attacks put tourists at huge  risk, because of the huge media coverage about these attacks British Airways which was the major player in the market was losing its market share, because as it is mentioned that if in this situation they promote Europe as a safe place to travel then there can be a huge credibility gap and can have negative impact on the consumers and whole cost of campaign will be waste. It is a very challenging venture, which if successful, will put BA on the highest pedestal in the particular section, but would prove to be fatal if unsuccessful.

     It was an desperate attempt by BA to get back its lost market share and to recover its lost due to the downfall in aviation travel and media will also portray it as a desperate attempt by BA. All the tactics and gimmick used by BA in its campaign will ultimately link these things with the attempt of BA to get back its lost revenue.

     In its promotion campaign such a publicized event such as free June 10^th flights , will be inviting terrorists to make an easy attack on passengers, the people of America were unwilling to pay for additional security he costs have to be cut in various basic functionsto accommodate the free flight and other factors. Americans are the terrorists· favorite targets and so many unsuspecting Americans and gathered insuch a large number would be too good a chance to waste.

     The impact of this “Go for it, America” campaign will depend upon kind of services provided by BA and the acceptance of this strategy by American public which further depends upon the political situation and media reports.

     The competitors strategy in situation would be to wait and watch because they are not sure whether this strategy is going to work or not or it will be accepted by Americans. They should watch whether this strategy works in a long run or not, If this works for a long run then definitely it will bring back BA in a profitable position and if it fails then it will definitely result in to huge losses and its recovery will be very difficult.