Marketing of services case study

1. University of Nicosia
The British Airways service delivery process
God save the Queen! Photo by Bachir
MKTG-380 Services Marketing
Lecturer: Alkis Thrassou
Section 01
May, 12 2008
Zehra Fattah
Anastasia Kondratenko
Federico Lovat

2. CONTENTS
1. Corporate overview 3
2. The augmented service 3
3. Breaking down the process 7
4. Flowchart 8
5. Blueprint 10
6. Improvement of service delivery 15
7. Bibliography 19
Can I get you anything? Photo by caribb
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3. CORPORATE OVERVIEW BY DAVID WOODRUFF
From http://www.hoovers.com/british-airways/--ID__41761--/free-co-profile.xhtml
A member of the royal family of European airlines, British Airways (BA) serves
about 150 destinations in some 75 countries from hubs at London's Heathrow and
Gatwick airports. The carrier operates a fleet of more than 240 aircraft, consisting
mainly of Airbus and Boeing jets. BA extends its network via code-sharing relation-
ships, chiefly with AMR's American Airlines and other members of the Oneworld
global marketing alliance, such as Iberia and Qantas. (Code-sharing allows airlines
to sell tickets on one another's flights and thus offer passengers additional destina-
tions.) Among Europe's flag carriers, BA is outranked only by the combined Air
France-KLM and by Deutsche Lufthansa.
THE AUGMENTED SERVICE
Augmented
British Airways is well known for the quality service
Post-flight
of the experience provided. In this paper, Customer
care
we apply the flower of services theory in website
Airport loun-
Frequent-
order to break down and study all the ge
flyer
supplementary (enhancing and fa- Call-centre program
Core Service:
being tran-
cilitating) services that the company Airport desk sported fast, Baggage
safely and
provides in order to deliver the core handling
comfortably
service, that is the actual flight, and
Reservation
to differentiate itself from competi- On-board
On-board
system entertainm
tors. food
ent
On-board
We will see that the company and its part-
flight assi-
ners (the airport staff, the support vehicles, stants
etc) have to put a lot of effort and resources in the
supplementary services while the actual flight has a relatively small part in the proc-
ess. These facilitating services, although necessary, are perceived by the customers
mostly as hygienic factors that is, they don‟t provide additional value to the cus-
tomer experience but if for some reason they fail, they will create a big dissatisfac-
tion. (Think for example at when one luggage is lost.) the customer is paying to be
transported around the world but to make this experience enjoyable, a lot of work
has to be done.
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4. THE PRE FLIGHT
A lot of customers don‟t consciously realize that there is much more to a flight than
booking and attending it.
The price we pay for when purchasing a ticket includes all the supplementary ser-
vices we are going to mention in the next chapters.
The Core product is the transportation from airport A to airport B. but everything
else which accompanies it is called supplementary service, and even if a lot of these
services are expected by the customer, he/she doesn‟t consciously pay for it.
The following are the necessary steps in the process of delivering the service before
the customer gets into the plane. In the following chapter we are going to describe in
detail what happens during the flight.
INFORMATION
The process starts off with the information gathering before attending the flight.
It is very important for the airline to advertise effectively in order to differentiate
from the competitors so that the customer can decide which airline brand to chose.
When advertising it is recommended to underline the features, services and com-
petitive advantages of a brand, as nowadays, being the airline industry in its matur-
ity, a lot of brands seem to be similar in the eyes of the customer.
In recent years, more and more people are searching for information and prices over
the internet, so it is crucial to have a well-designed website that allows potential cus-
tomer to get a feeling of what experience the company is offering and not only to
compare prices and routes.
CONSULTATION
When booking through a travel agent, it is important whether the agent knows about
the subject and is able to give the customer the information he/she needs. Prices in
travel agencies are higher than online so the customer expects the service which he/
she is additionally paying for. Even if the internet is a low-contact channel people
may expect some form of consultation maybe via email or through a specialized
online chat. The same applies to the call center, even though people might already
know what they want, the operator needs to be prepared to answer any specific
question about the flight or the before and after flight.
ORDER TAKING
4

5. The flower of services © 2007 by Christopher Lovelock and Jochen Wirtz
An online booking procedure, which is pretty common in these days, is a convenient
way for the customer to make a reservation. It saves time and money. By the way
older or uneducated people still have some problem in booking through the internet,
in fact, from our interviews panel it appears that most of the “online bookers” are
young or middle aged and above average educated.
(However the number of customers booking online increased significantly in the last
years and the numbers are growing each day.)
In case a problem appears while making an online booking or if the customer has a
problem, the effectiveness of the call centre staff is crucial.
The availability of the customer service can be an important factor when a situation
like that appears. The customer service should be well informed about the products
of the company and also well trained in order to react properly in different situa-
tions.
HOSPITALITY
If there are any delays before the flight it is very important for the airline to provide
hospitality to the customer.
For shorter delays, B.A. gives the customers vouchers, so they can use these during
the waiting times to eat or drink in the restaurants/bars at the airport.
Furthermore if there are longer delays and the customer has an overnight stay, the
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6. airline usually has to provide for a suitable accommodation for the customer in a ho-
tel near the airport.
Even if there aren‟t delays we must remember that the customer probably has to
wait about one hour at the airport so it is important that the servicescape is comfort-
able in order to minimize the impact of the waiting time.
SAFE KEEPING
Travelling by plane is made inconvenient for the customer by the several safety pro-
cedures that people have to attend to before and after the flight.
Moreover, with recent years‟ concern about terrorism the security procedures have
become even more strict. This has an effect on the waiting times and customers, es-
pecially if frequent flyers, may be annoyed by this lengthy process.
It is important that the ground staff is friendly and patient both with experienced
and unexperienced customers. It is interesting to notice that for the company this
stage is untouchable since it is imposed by law it gives very few room for improve-
ment.
EXCEPTIONS
The airline has to be prepared in case there are customers which constitute an ex-
ception.
Exceptions may be handicapped customers, elderly people and babies who need spe-
cial accommodation.
Exceptions can be made with food. Individual references may be considered.
I.e. Vegetarian food has to be provided for vegetarian customers.
Furthermore there are exceptions which can be made with luggage.
BILLING
The billing procedure should be as clear but at the same time as easy as possible.
The Online purchase of flights is very common lately.
However a high number of customers are still skeptical with reveling their bank de-
tails online, so it is very important to design the billing procedures as clear and easy
understandable as possible. As for the brick and mortar agencies the bill should be
standardized in order to impose consistency among the different independent agen-
cies. Being B.A. a traditional carrier the price of the ticket include almost all the ex-
tra like inboard food and entertainment while low-cost companies base their strat-
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7. egy on the separate bills where customers have to pay for each extra service they ask
for.
PAYMENT
The payment for the ticket is usually done at the time of the reservation either via
credit card or, if done in agency, through cash or check.
Payment may be asked from the customer also after the ticket has been issued, for
example when the luggage exceeds the allowance the customer has to pay a certain
amount because of maintenance reasons. Every airline has restrictions when it
comes to the luggage allowance.
Furthermore there are certain items which can be purchased during the flight, such
as duty free products. The customers also have the opportunity to purchase addi-
tional drinks such as alcoholic beverages which are not included the meal. For all
these in-flight payment it is important to give customers many options. Being the
plane a „non-place‟ (thanks to the theory by Marc Augé) customers may expect to be
able to pay with different currencies, as well as with major credit cards.
BREAKING DOWN THE PROCESS
We are going to look now in detail at all the actions that are necessary to complete
the process from the very beginning to the very end. Here, to simplify a bit we imag-
ine a customer buying a ticket online.
Time Dimension in Augmented Product Adapted from Lovelock and Wirtz 2007
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8. Enhancing
Information see- Information see-
Information see-
king over the king through a-
king by phone
internet gency
Facilitating
Booking
Transfer to airport
Electronic payment through Payment by cash or cheque
CC via internet or phone through travel agent
parking
Last minute desk boo-
Transfer to airport king and payment
parking
Check in baggage
Use of airport facilities (business lounge,
shops, restaurants, toilet…)
Security check
Transfer to the plane
On-board welcome and
Security demonstration
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9. Meal preparation
Flight starts Movies, music and
and loading
newspapers are
selected, bought
and loaded into
the plane
meal
toilet
Movie/music/
newspapers
Informations co-
Radio bridge to
ming from airport
Phone/fax call the earth, call is
routed, payment
through CC
Informations about the con-
necting flight, the weather...
Plane is cleaned,
Control tower gi-
checked and filled
ves permission to
with petrol
land, alert the
Plane lands land crew, bus
and stairs come.
Baggages are
transfered to the
Transfer from plane to airport
belt
Baggage claim Lost baggage desk
Passport control
Use of business room/airport
facilities
Transfer from airport to town
Frequent flyer
9
program
After sale-Complaint management

10. The customer side The company side
Front stage—Back stage Front stage—Back stage
Physical evidence Contact person (visibile) Support processes Contact person (invisible)
Information seeking
on the internet
Maintain IT system
Mechanics Check the
Booking plane
Maintain and organ-
ize shuttles
drive to airport
Shuttle to airport
clean and refill the
plane with food,
drink, newspaper,
Check in baggage, Take baggage, give
petrol
take boarding pass boarding pass Maintain
airport
facilities,
Check passport, Pilots and
Security check Load
toilets,
hand-baggage and Maintain crew get
bars, baggage
person it sys- into plane
shops... into
tem
Wait in the boarding and start
plane
area proce-
dures
Give boarding pass check boarding pass Maintain
support Bus and stairs driv-
Get into bus Drive bus to plane vehicles ers are alerted
Get into plane Crew welcomes pas- Drive stairs to plane
senger and help
Find seat, put hand
finding seat Maintain airport Pilots and control
baggage and seat
infrastructure, IT, tower arrange for
down
Crew shows security radio, radar... take off
procedures
Fasten seat belts
Pilots drive plane to
and enjoy take-off
runway and take off
Crew offers food,
Co-pilot
Sleep, read, eat… drink, newspapers… Pilots fly
manages
enjoy flight and collect garbage
the plane
the music,
afterwards through
air condi-
the route
tioning, ...
Put the seat in the Crew makes sure
upright position, fas- that everything is
Pilots communicate
ten seat belt, close ready for landing Maintain airport in-
with the control tower
table
frastructure, IT,
at the destination air-
radio, radar...
port
Maintain airport Control tower alerts
facilities and sup- land crew and support
port vehicles vehicles
Plane lands and gets 10 its parking position
to

11. The customer side The company side
Front stage—Back stage Front stage—Back stage
Physical evidence Contact person (visibile) Support processes Contact person (invisible)
Support vehicles
Passengers get their Crew helps passen-
come to the plane
hand baggage gers
Maintain Support Crew
Passengers get to
vehicles makes sure Baggage
the bus
are
that noth-
Drive bus to airport trans-
ing has
ferred to
Passengers get to been left in
the plane the truck
the airport
Maintain airport
go to passport con- Control passport Baggage
facilities, It and se-
trol are trans-
curity system...
ferred to
Get baggage the running Plane is
belt cleaned,
go to shuttle stop checked,
Maintain and or-
refilled...
ganize shuttle ser-
vice
Drive shuttle to
town
First step from the consumer is to seek informations about the flight over the inter-
net. From the company side this implies that somebody has put together an IT sys-
tem that can integrate the web-based applications with the internal booking system
of the company. When the customer has decided which flight to buy he can pay with
the credit card directly from the internet. This is made possible by the interactions of
the IT systems of the airline company and the banks managing the transaction.
At this point there‟s usually a time gap in the process. After some days the customer
will go to the airport either by private car, public transport, or shuttle service. In this
last case the company needs to organize, maintain and inform about this supple-
mentary service that normally is a stand-alone service itself.
When at the airport, the customer goes to the monitors to check out which check in
desk to use. Of course there must be an informative system to allow that. At the
check in desk he/she puts the luggage onto the scale while the employee checks out
the documents, prints the boarding pass and the barcode tag for the luggage. This is
made possible by the work of a lot of different people from the airline and from the
airport. When the luggage is checked in it is transported to a sorting area where spe-
cialized employee load the baggage on small trucks to be driven to the proper plane
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12. where the baggage are finally loaded.
After check-in, the customer can go through the security control. Here the security
personnel checks the hand-baggage, the person and the documents of the traveller.
Previously these procedures have been formalized in order to ensure efficiency and
effectiveness. Even at this stage it is crucial the contribution of the IT systems.
After the security check the passenger can go to the gate where the airline employees
check the boarding passes and lead passengers to a bus that is already waiting to get
them to the actual plane. Until now the customer has already experienced a wide va-
riety of locations, employees and servicescapes. We didn‟t focus on the airport sup-
plementary services, although important to improve the overall customer experi-
ence. Imagine how it would be to travel from an airport without shops, bars and toi-
lets. These are all extremely important but describing all of them would make this
paper endless and by the way they are not strictly part of the airline experience.
When the passenger get off the bus, the mobile stairs are already in place in front of
the plane's door. People get on the plane while the last baggages are being loaded.
From now on, it‟s almost all about hospitality. The passengers enter the plane and
the crew is ready to welcome them and to help them find their place. In the business
class, the crew take care about the safekeeping of passengers‟ coats and hand -
baggage. At any time the cabin crew must be ready to answer any question about the
flight, the plane, the usage of cabin devices, etc.
At this moment the audio system plays a soft classical track, the lights are on and the
monitors are off so passengers can easily spot their place without being distracted.
While people seat down, the pilot communicate with the control tower. The host-
esses inform the passengers about the security procedures. The pilot starts the en-
gines, when the control tower gives permission to take off the pilot drives the plane
to the runway, alert the flight assistants and takes off.
After takeoff the monitors are turned on and start to display information about the
flight. The flight assistants start to offer newspapers, headphones, food and drinks
that were previously loaded into the plane. During the flight, the flight assistants
start the movie and the music so the passenger can enjoy them. The lights may be
turned off according to the time of the day.
In the business class somebody may ask to make a phone call or to send a fax. This is
an enhancing service that requires a lot of steps to be completed. The customer
might need to be informed on how to operate the on-board phone. On the backstage,
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13. the IT and radio systems of the plane work to create a connection to the Earth in or-
der to transmit the actual voice but also to connect to the credit card circuit. When
the call is over, the billing and electronic payment procedures take place.
During the flight the crew offers food and drinks. In the first class passengers are al-
lowed to chose from a menu (that involves order-taking by the flight attendants)
while in the economy class the meal is the same for each customer but still, people
are allowed to chose what to drink. In the B.A. case this process doesn‟t involve bill-
ing and payment while low-cost carriers charge for this. When it comes to food, the
flight assistants need to be able to answer questions about the ingredients or to give
advices about specific alimentary needs expressed by customers. Exception manage-
ment is also important at this stage as some people may have special requirements
about food and drinks. Especially in the first class, people expect to have the right to
be picky because of the premium price.
When the people are finished eating the flight assistants collect all the garbage while
some passengers may ask for the toilet.
When approaching the destination, the pilot gets information from the control tower
about the weather, the estimated time of landing and the connecting flights and tells
them to the passenger either via loudspeaker or on the monitors.
When the control tower gives permission to land the pilot turns on the fasten seat
belts signal, turns off the monitors and starts approaching the airport. In the mean-
time the land crew is ready with a car to guide the plane to its parking position.
After parking the plane, a mobile stair and bus come to take the passengers to the
airport, meanwhile, the baggage are transferred to a small truck and then to the belt
at the airport.
After flight experience that consumer receives should be well thought-out by British
Airways as at this stage, evaluation of service performance and future intentions are
considered as the Post purchase behavior of a customer is very significant.
If the customer is satisfied with the service a positive WOF (word of mouth) will take
place.
WOF is the most significant advertising tool and it shouldn‟t be underestimated.
A bad worth of mouth can cause bad damages to the reputation of the company.
Once the flight is completed the passengers is about to leave the plane.
The customer should be satisfied with the service at this point.
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14. This can be achieved by providing a service which was expected by the customer or
even better than expected.
Since i.e. business class travelers are very sensitive and elective, the standards of on-
board treatment and after all experience of traveling should fulfill their expectations
for benefit of the company.
It is important that the service experience the consumer gets differentiates from its
competitors.
The customer will know if he/she is satisfied for the most of the most part once the
plane is landed.
The after flight evaluation which we will talk about in the next chapter will complete
his/her judgment.
After the plane lands, the stairs are placed and ready, the travelers leave the plane
the stewardesses makes sure that all passengers are organized and not bothering
each other.
Flight attendants and pilots biding passengers farewell, always smiling nicely and
being polite, which also leaves an impression on the flight experience of the cus-
tomer.
It is important that the on board staff is well trained to react appropriate even
though customers may be impolite. There are different reasons why customers may
react in an unconventional way. The dissatisfaction of a passenger could lead to an
unreasonable behavior. A lot of customers might know that there are complaint hot-
lines which they can contact after their traveling, so in some situations they try and
relief their anger on the on board staff, as in the eye of many customers every em-
ployee represents the company.
The bus is usually waiting downstairs when the passengers arrive, in case the plane
didn‟t arrive at a gate which is accessible by food.
There should be enough space for all of the customers and if not another bus must
be provided shortly or even be there already.
After passengers have left the plane, the plane is being cleaned, refilled and checked
if anything was forgotten by the travelers and if so, reported and returned to the
owner shortly.
Security procedures take place. The plane is refilled with gas and maintenance work
by engineers takes place. The plane is being prepared for its next flight.
When passengers arrive at the arrival gate of the airport they usually face the pass-
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15. port control queues leading to the passport control. If they are not well organized it
takes a lot of time to pass through.
An effective queue management is very important as customers can get irritated
when they have to face long waiting times after their flight.
When passport control is passed its important that the baggage is transferred to the
belt fast enough and safely.
In case there is a loss of baggage customer service is available and willing to help.
How fast and how efficient this service will be, proportionally will affect the image of
the company.
Usually there are customer service assistants which can be contact right away in case
of lost baggage. In case there is no one around, there are BA offices which deal with
lost luggage.
Usually after reported at the airport the luggage is delivered to the address which is
left at the office by the customer. This may take up to 2 days, depending on where
the final destination of the passenger is. When filling out the form, the customer has
to describe the content of the luggage, and also tick boxed to describe the bags, so
they can be recognized, the right luggage will be delivered and further delays will be
avoided.
This case would fall into the failure recovery process.
In theory this means that if the recovery is well managed, the customer may be more
satisfied, and at the end he/she doesn‟t mind the failure of a service provided.
Furthermore BA offers frequent fliers program. Every customer has the opportunity
to sign up for this program. It is voluntarily, and if the customer decides to sign up,
he/she receives monthly account statements and additional information concerning
the program. The account statements include the archived miles, depending on the
amount of miles the customer flies. These miles are collected and can be used to re-
ceive free gifts/ flights once achieved the required amount.
The miles and more program builds customer loyalty and at the same time it gives
the airline the opportunity to use their customer data for research purposes.
IMPROVEMENT OF SERVICE DELIVERY
As we can see from the blueprint there is much more than the actual flying that must
be done in order to offer the transport service that‟s the reason why people are pay-
15

16. ing.
Before and after the flight people have to go through a lot of procedures and to move
across many locations. These are all time-consuming tasks that take away value
from the flying experience. Even if we like to think that flying is already part of our
daily life, travelling by plane is not really as immediate as getting into the metro or
the bus in our town.
The impact of all these procedures is so big that on the short distances (up to 600
KM) travelling by plane may result in taking only a little less time than by train.
(Don‟t forget the time needed to get to and from the airports).
We suggest using many small airports instead of a few big ones. (Get the service de-
livery closer to the customer) In this way we can reduce the amount of time that‟s
required to get to and from the airport. Odds are that if there are more airports
available, probably the customers won‟t have to spend so much time going to and
from the airport.
To improve the flying experience on the short distances it would be necessary to
streamline the entire process but unfortunately this is easier said than done. For ex-
ample, people could go directly to the plane without the need to check in the bag-
gage but this may slow down the boarding procedure and for some people it may be
difficult to carry the baggage up the stairs to the plane.
Also, a lot of time gaps are due to the security procedures that are necessary when
flying but not when travelling on the earth.
One of the tasks that carriers are struggling to improve is the boarding of passen-
gers. This takes a lot of time because people don‟t know exactly where their seat is
and they don‟t know which entrance to use. And even when they know which en-
trance they should use they not always collaborate. There is a psychological effect.
People who waited to be served are less likely to collaborate. It‟s like if they internal-
ize the pace at which the service is being offered. When they have the control of the
pace they rather move slow even if five minutes before they were pushing to get into
the plane. If the boarding procedures are slow with many controls and queues it‟s
likely that people will move slowly also when they could speed up the entire process
at their advantage.
Our suggestion is to arrange the flights on the time when there is not many other
flights, so it could be easier to pass and avoid stress resulted by waiting. Or else, pro-
vide a service that will allow travelers that have arrived even on the peak time to
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17. avoid all the formal interactions that has to do with passport control. This includes
escorting the passenger after arrival straight to the lounge where the client is resting
and could have a drink while the service group is dealing with all necessary migra-
tion tasks. Then the passenger is guided to the place of receiving the luggage, later to
the luggage check and lastly to the meeting room.
This service is already in use within some airports but not promoted by any specific
airlines. Therefore, as first provider of these services it will create a better image for
the company, add some extra financial benefits and, which is most important, create
the value to the customer.
If adopted it could be used for individual passengers, tourist groups and important
clients. It should be available in the short time before flight which will be an extra
benefit for last minute bookings for people who value the time.
As an additional service, British airways can also provide a taxi or limousine booking
before the flight or when the clients have arrived already. The airline company must
ensure that the driver will meet the client and take to important meeting or hotel on
time. This kind of feature will definitely extend the variety of services from just fly-
ing from one airport to another to taking care of the passenger after the flight which
is also be a good opportunity for airlines to build loyal strength of their clients.
BA is a one of the most prestigious airlines worldwide and its services are very high
standard.
However they have to keep being innovative in developing new services in order to
use the competitive adnantage productively.
Here an article written by Woody Harford, the senior vice president for North
American commercial operations of British Airways, talking about a new and en-
hanced service developement.
In the article of the daily International Herald Tribune newspaper online was
mentioned that “all the airlines offer a range of discounts and promotions off
top business-class fares. Some high-volume companies negotiate discounts of
40 percent or more. For others, buying a ticket well in advance brings the fare
down considerably.
British Airways, which is counting on its brand recognition as it takes on
smaller rivals, has not yet announced details, but Harford said that the cabins
on the new route would be comparable to the airline's Club World service be-
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18. tween New York and London - meaning flatbed seats and service at the top end
of the scale. The service will also promote 15-minute check-in at London City
and at whichever New York-area airport is used.
British Airways also plans to start a separate small all-business-class airline
called Open Skies in the spring, flying between New York and cities in Europe
other than London. Last week, British Airways reported a 28.5 percent jump in
operating profit for the last nine months, quot;mainly due to more premium pas-
sengers traveling.quot;
Woody Harford, the senior vice president for North American commercial opera-
tions of British Airways.
Overall we think that for such a sucessful company like British Airways it is impor-
tant to being able to continously adapting to the changing environment in order to
keep up with developments in the industry.
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19. BIBLIOGRAPHY
Storey, Chris; Easingwood, Christopher J. 1998 „The augmented service offering: a
conceptualization and study of its impact on new service success‟. Journal of Prod-
uct Innovation Management, Volume 15, Number 4, pp. 335-351
Zeithaml et al. 2006, Services Marketing – Integrating Customer Focus Across the
Firm, 4th (International) Edition.
McGraw Hill, New York
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