The British Airways service delivery process

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Marketing of services case study

Marketing of services case study

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  • 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 2
  • 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. 3
  • 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 5
  • 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- 6
  • 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 7
  • 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 8
  • 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 11
  • 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, 12
  • 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. 13
  • 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- 14
  • 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 16
  • 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- 17
  • 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. 18
  • 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 19