For companies to build a brand and drive profitable growth it needs to connect the customers’ needs with the company’s profits (IMM Graduate School, 2021). To do this marketers need to make use of Empathy. Accourding to Decety and Lame (2006), Empathy has two parts, the ability to take the perspective of another person and response that could mean sharing another person’s emotional state. Richard Branson, the founder of the Virgin Group, is one of the world’s most iconic leaders and has created a brand that is recognised all over the world. However, Branson didn’t achieve this by luck but rather by connecting with people’s thoughts, feelings, and behaviour. From Branson’s early years with Student magazine he was able to develop empathy with his customers and colleagues.
We will uncover more about Richard Branson and the Virgin Group and how they use empathy to connect with their customers. We will consider how Virgin understands its customers’ Emotions; their needs, goals, and values; their culture; and their decision-making. We will consider Richard Branson’s leadership style and then make some recommendations to Virgin Atlantic on how they can reposition themselves to develop empathy with their customers. We will then review how Virgin Active can use immersive research and the Empathy Process to help them create a new Marketing Strategy. Lastly, I will present my learnings through the studying of Strategy Empathy along with an analysis of my Enneagram and Jung’s personality assessments.
The Virgin Group has a long history of challenging the status quote. This started with Richard Branson’s first business, Student magazine. From there every business Branson started was to stand up to big businesses and be the voice of the everyday person. This helped Branson and Virgin develop empathy with their customers.
The Virgin Group has a strong culture, unlike many other corporate companies. Virgin believes in challenging the status quo, to think outside the box of how business is conducted. The strong culture resonates with Virgin’s loyal customers and thinks, feels, and behaves with the same belief system. One cannot consider the Virgin Group without talking about Richard Branson and his leadership style. Bransons’ deep empathy with his customers and his staff has helped create the iconic brand the Virgin is today.
Perhaps Bransons’ most loved company is Virgin Atlantic. It captures the flair and personality of Branson himself while challenging the status quo of the Airline industry with its ongoing rivalry with British Airways. However, Virgin Atlantic should consider using a new and improve brand reposition model to help develop empathy with its target market.
There is no doubt that the COVID pandemic has disrupted industries all over the world and Virgin Active South Africa is no exception. Virgin Active South Africa conducted immersive research and has discovered a change in the way people are active within the South African market. By following the Empathy Process they have discovered new opportunities to connect with a larger target market. Virgin Active has developed a marketing strategy that will inspire people to be more active.
- We live in a world that is changing quicker than we can imagine, so fast for traditional planning methods which relied on plans that were designed to last years. Every leader, manager, and even employee needs to be a strategist and develop deep empathy with customers which leaders to a formidable marketing strategy. If we truly are to build empathy with our customers we need to consider making use of the empathy process to develop a clear and flexible market strategy.Marketing Strategy and Empathy
The Virgin Group is one of the most recognised brands around the world with one of the most charismatic leaders. In this question, we will be considering how strategic empathy is apparent in the Virgin Group.
Sir Richard Branson, the founder of the Virgin Group, was born in 1950 to a Lawyer and a Stewardess. Branson’s parents encouraged him and his two younger sisters to be independent, free thinkers and to share their opinions. Branson struggled through school due to his undiagnosed dyslexia and nearsightedness however this never affected Branson’s confidence in his ability as was evident when he stated that he could run the school better than the headmaster. The headmaster famously responded by informing Branson that he would either end up in prison or become a millionaire. Branson is ever an opportunist and had many business ventures before he left school at the age of 16. In 1968 Branson started his first business, “Student” magazine, that would begin his success journey. The magazine started as a hobby for Branson during his off time. Student magazine was a voice for young people to protest against some of these issues of the day and rebel against the “establishment”, something Richard Branson has used throughout his life and was the exact idea Branson used to start Virgin. Todd A Finkle (2009)
Four Years later Branson decided it was time to move on from the magazine and seized the opportunity to start a musical mail-order business when he was able to get stock of records at a discounted price. Branson used the last edition of the Student magazine to promote his new venture. Branson soon realised that he was unable to keep track of the funds and handle the operations side of the business. He recruited his old friend Nik Powell to run the operations and the intern gave him 40% of the business. Branson used this tactic with every division he started, He would give the leaders of the division shares in that particular division. This incentivised the leaders to grow the business which gave Branson time to seek new opportunities and promote the Virgin brand with his publicity stunts. Todd A Finkle (2009)
With the success of Virgin Records, Virgin then expanded backward into its supply chain by starting a recording studio under the name Virgin Records. With Branson’s drive to be anti-establishment, Virgin Records had great success by signing major artists which other recording studios were hesitant to sign as they considered the artist too risqué. Artists included Mike Oldfield, the Sex Pistols, Phil Collins, Simple Minds, Culture Club, and Boy George. Many of these artists were considered controversial with the lyrics, and lifestyle.
The Virgin Group has continued to expand to multiple industries including Travel and Tourism, Leisure, Social and Environmental, Media and IT, Finance, Health, and Shopping. Branson took the Virgin Group public in 1985 to raise capital however regretted the decision as he believed investment analysts misunderstood his business. In 1987, Branson took the Virgin Group private again by buying back all the outstanding shares at the original listing price which was considerably higher than the current trading price. The Virgin Brand is directly connected to Sir Richard Branson and can be described as being bold, edgy, humorous, and cheeky. (Virgin 2016) Accourding to the Virgin Group website their values have been and always will be the same: Insatiable Curiosity, Smart Disruption, Straight Up, Heartfelt Service, Delightfully Surprising, and Red Hot Relevance (Virgin 2020).
During this question, we will consider how Strategic Empathy is evident in the Virgin Group. To do this we would need to consider how strategy is formed by considering Strategy Planning and Strategic Learning. Strategy planning is a forward-looking approach to planning a marketing strategy. Strategic Learning is learning derived from observing patterns of behaviour across different touch-points. A good Marketing Strategy should use both Strategic Planning and Strategic Learning.
For companies to build a brand and drive profitable growth it needs to connect the customers’ needs with the companies profits (IMM Graduate School, 2021). To do this marketers need to make use of Empathy. Accourding to Decety and Lame (2006), Empathy has two parts, the ability to take the perspective of another person and response that could mean sharing another person’s emotional state. For marketers to do this they have to move away from the traditional method of Strategic Planning, which is the formation of an annual marketing strategy with a long-term (5 years) view. This process identifies specific market positions and implementations (Brooks 2016). However, we live in a world with Volatility, Uncertainty, Complexity, and Ambiguity as we have recently seen with the COVID-19 pandemic. This suggests that marketing strategies also need to take a more emergent approach to Strategic Learning. Accourding to Mintzberg (2009) strategic learning is a shift in strategy based on the organisation’s learnings. Using both Strategic Planning and Strategic Learning marketers can form a strategy that is both planned and emergent (Brooks 2016). Accourding to Brooks (2016) learning is not strategic unless it inspires action. We will now consider how strategic empathy is evident in the Virgin Group.
It is difficult to separate the Brand personality of the Virgin Group from the personality of Richard Branson himself. They are so intrinsically linked together. Richard Branson has been quoted saying: “A complaint is a chance to turn a customer into a lifelong friend. At Virgin, we think that if we address a complaint well, and even involve the customer in the solution, it brings customers closer to our brand,” Forbes (2016). This happen on a Virgin Atlantic flight when a first-class customer wrote a letter to Branson describing the Indian-themed meal he had received on a flight. Branson could have simply taken the subjective perspective on the matter and passed it on to the relevant department but Branson went further and took on the emotional state of the customer. Branson invited the customer to redesign the Virgin Atlantic menu and later asked the customer to be on the board for the airlines’ culinary council. Branson demonstrates how to empathise with a customer and involved them in the journey of strategic learning.
More than showing Empathy to customers, the Virgin Group shows empathy to its employees. Branson has clearly stated that the pecking order at Virgin is: Staff first, customers second, and shareholders third. The Virgin Group has an extremely collaborative culture where employees are encouraged to share their thoughts, feelings, beliefs, and contributions to challenges. By doing this employees feel respected and appreciated, and are likely to be more loyal to the Virgin Group and make a positive contribution.
Branson also gave each division’s leaders a share of the business they were in charge of. Branson did not do this as an incentive or as a reward to for achieving certain objectives. Branson did this because we wanted the leaders of each division to be inspired to lead the division as if it were their own business. Staff at Virgin are always encouraged and empowered to do whatever they believe is the best solution for the customer. The CEO of Virgin America stated in an interview with Forbes that “It’s easier to ask for forgiveness than to ask for permission,” which was a motto that they used with the Virgin Group when it came to resolving customer problems. It is evident not only that the Virgin Group shows empathy towards its customers but that it empowers its employees to show empathy towards their customers by recognising the customers’ problems and getting involved in resolving the problem for the customer. Empathy is at the heart of everything the Virgin Group does.
- From an early age, Richard Branson, demonstrated empathy with his customers when he started Student magazine, the voice of the people. Branson used his influence to fight the large corporate establishments that people thought were treating them unfairly. Money was not the motivator for Branson, people were. This demonstrates the Branson and Virgin always took the perspective of the customers and respond to that emotional state. The evidence of this is seen in the formation of Virgin Atlantic which happened more because Branson had empathy for people to get to their destination due to a canceled flight. (Kachroo-Levine, 2019)Strategic Learning Frameworks
To truly have Empathy with your customers we have to observe how and why they behave the way they do (Brooks 2016). We need to understand their Emotions; their needs, goals, and values; their culture; and their decision-making.
Accourding to Brooks (2016), There are four theoretical frameworks that lay the foundation for strategic learning. This will provide useful information to marketers and professionals to create empathy with customers and help develop a marketing strategy. These theoretical frameworks answer the questions like: How does culture affect decision-making? How do values affect our emotions?, Are emotions are part of the body or the brain? How do customers’ needs affect their decisions? and is decision-making logical or emotional? (IMM Graduate School of Marketing, 2021)
During this next section, we will dive deeper into each of these four frameworks and then consider one framework and discuss its prominence in the Virgin Group.
Emotions
William James (1884) defines emotions as a bodily feeling moving between “soul and body, heart and brain.” However, there is a lack of agreement on the true definition of emotions. The Basic Emotions Thesis suggests that several primary, universal emotions exist: Fear, Anger, Happiness, Sadness, Surprise, Disgust, and Contempt. This thesis suggests that these emotions are displayed in all humans regardless of culture or beliefs. More recent research has distanced itself away from the idea that emotions are simple but rather that emotions have evolved and become more complicated.
In addition to the Basic Emotions thesis there are two additional theories:
Appraisal Theories: Recent research has moved away from the idea that emotions are basic and suggest that emotions have evolved socially and biologically. Research suggests that emotions are complex and influenced by culture. Accourding to Scherer emotions are based on a process of a person’s assessment of an event that gets the body ready for action. Scherer also suggested that these events could be external like a thunderstorm or internal like a memory. Scherer summarised this in his Component Process Model (CPM). The Scherer model is important to marketers because it reflects the complex emotions that a customer might have when assessing the companies marketing efforts (Scherer, 2005).
Emotions and Memories: Accourding to Brooks, (2016) emotions increase our capacity to remember things. This is important for a marketer because it means that we reinforce brand awareness by creating positive emotions. If we continue to create positive emotions then the events will be more memorable which in turn reinforces the brand, logos, colours, and packing.
Accourding to Brooks (2016), needs also drive emotions.
Needs & Values
Marketing professionals spend a large amount of time trying to understand people’s needs most famously through Maslow’s (1964) Hierarchy of needs. Maslow made two assumptions when developing his model. Firstly, that people always need more and their needs arise in order of importance. Maslow determined there were five levels of needs. Firstly, Physiological needs: These are the most basic form of needs. The need for food, water, shelter, sleep, etc. Secondly, Security needs: The needs for personal security, a job, health, etc. Thirdly, Social needs: The need to belong and be loved, Friendship, intimacy, family, connectedness, etc. Fourthly, Esteem needs: The need to be respected, recognised, success, appreciation, etc. Finally, Self-actualisation: The desire to reach one’s full potential. However, a recent study by Tay and Diener, (2010) shows that there are universal needs but they do not need to be fulfilled in a hierarchical order. Needs can be described as an internal source of motivation that influences an individual to attempt to achieve his or her goals. Needs can be categories into four types; Functional needs: are needs that solve a particular problem; Emotional needs: how to customer feels toward the problem; Self-expressive: what the customer wants to be perceived as a result of solving the problem; and Self-actualising: How a brand may help the customer realise their potential and purpose.
Individuals’ values also affect their emotions. Values can be influenced by culture and social norms. Values can be a point of brand leverage but can also have a significant negative impact on a brand.
Culture
If we are to truly understand how and why people behave then we cannot ignore the influence of culture. Durkheim (1898) summarised it by stating that every person is born and raised into a culture that existed before them and which influences their development, ideas, beliefs, and values and how a person thinks, feels, and behaves. There are two fields of research into culture: Ethnography and Semiotics. Ethnography is the investigation of humans in their living environment: their social systems, their cultures, and everyday practices. Semiotics is the study of everything that can be taken as a sign, essentially the relationship between signs and the environment that they appear in. Semiotics is a huge field of study of which the study of culture is a small part. Marketers must understand the context in which people make decisions based on the situation they are in. We will consider the culture and the Virgin Group in more detail later in the article.
Decision-Making
Decision-making was thought to be logical and straightforward. Aaker (1991) suggested that people identify with the brand personality by repeated experiences of developing awareness, understanding the benefits, and forming an emotional relationship with the brand.
Accourding to Brooks, (2016) customers don’t generally make informed rational decisions but rather make automatic quick decisions based on a shortcut to memory (Heuristics) to assist them. Accourding to Kahneman, (2002) the list of shortcuts to memory is infinite and research continues to develop a wider idea of how they work. Examples of Heuristics:
Availability: The ease with which a customer can recall a memory which leads to decision-making. Previous purchase decisions are “available” to the customer which reinforces the brand awareness and habitual purchases.
Representativeness: The uses of category similarities to short cut to the memory. The use of certain colours or images that relate to the category. For example: The use of the colour green if selling a natural or healthy food. Using something outside of the category similarity could have a negative effect on sales.
Framing: Customers make use of predictions about their emotions and are more likely to try a new product that is framed as minimising the risk. By doing this marketers could maximise the gain or positive emotions.
Affect: By creating a positive environment could give customers a positive emotional mood which leads to a positive outcome.
Marketers have identified the customer journey as a funnel (Figure 5.1) and have focused on reaching customers at each level of the funnel with an appropriate touchpoint.
Changes and additions have been suggested to the funnel to better reflect the digital era. Brooks suggests that instead of relying on the linear purchase decision-making process, one should rather through a path to purchase method. Brooks defined three stages to decision-making as seen in figure 5.2. Pre-purchase, Purchase, and Post-purchase. Brooks suggests that post-purchase is now more important that ever before in the digital era as customers are empowered to share their brand experiences and stories online. (Brooks 2016).
Culture and its prominence in the Virgin Group
The Virgin Group is the polar opposite of what corporate culture is. Virgin staff are encouraged to do things differently. Richard Branson firmly believes that it is the people that make Virgin what it is. It is for this reason that Virgin allows staff to work from home, unlimited leave, integrated technology, and being healthy at work. Virgin believes that staff should be treated like capable adults. If Virgin is about challenging the status quo then it should do the same with the work environment. If the standard way of working is being challenged then so should the working hours. (Virgin, 2021)
The culture of the Virgin Group and the way it treats its staff is directly linked to its target markets. Virgin is appealing to people who think just like them. People would are interested in challenging to status quo, people who are interested in doing something different.
- Richard Branson found the Virgin Group with the idea that there were people like him. People that thought, felt and behaved like him and they would be interested in a business that thought the same way. Instead of being like every other company, the Virgin Group appeals to people with similar cultural experiences. This helps reinforce the brand awareness and image of the Virgin Group.Reshaping the Marketing Strategy Template
To prevent a lack of direction and organisational uncertainty, businesses must prioritise developing a strong fundamental marketing strategy, which serves as a blueprint for agile strategy formulation rather than a fixed plan for the future. The reshaped marketing approach doesn’t set goals and plans in concrete instead empathises with the target market and builds a vision of the future for how the brand’s unique selling proposition can fulfill his or her needs. Companies must also emphasise communicating the marketing plan to employees in a way that inspires empathy with customers and clients so that they have the awareness and incentive to implement the brand value proposition (Brooks, 2016).
For learning to inspire action it requires leadership. Smit, et al, 2012 defined leadership as the process of directing the behaviour of people towards reaching the companies mission and goals. It involves taking the lead by bridge the gap between formulating plans and reaching goals. Smith went further to explain that leadership is more specifically about putting together a Vision, Mission statement, Strategic Goals, and strategies, and communicating these to followers. Furthermore, leadership is about the influence a leader has on their followers and the influence the followers have on the leader which allows the leader to adjust their leadership style, plans, and expectations. (Smit, et al, 2012).
James MacGregor Burns, the founded the field of Leadership studies introduced the concept of Transactional leadership and Transformational Leadership. Transactional leadership is when leaders focus on the relationship between the leader and the follower while Transformational Leadership is when leaders focus on the beliefs, needs, and values of their followers (Burns, 2010).
Barnard Bass, et al, 2002, took this idea further by stating: The influence of a leader on his followers is the first measure to determine whether or not he is transformational. The followers of a transformational leader have trust, respect, loyalty, and respect for the leader, and are willing to work more than expected because of the leader’s qualities.
Bass suggested 4 components to Transformational Leadership:
Idealised Influence – where the leader serves as an ideal role model for the qualities he wants his employees to emulate.
Inspirational Motivation – where the leader inspires and motivates people with the vision and by communicating that vision.
Individualised Consideration – where the leader has a genuine concern for the needs and feelings of their employees.
Intellectual Stimulation – where a leader allows their followers to be innovative, creative, and challenge the status quo. The leader is always challenging people to perform at higher levels.
Robert Greenleaf, (1998) developed the concept further by stating that leadership is about serving people.
It’s a popular misconception that leading and service can’t happen at the same time. It is possible, however, if leadership is divided into two parts: vision and execution. Leaders in the visionary role assist in defining the direction. If the direction has been established, the leaders have to articulate what the organisation stands for and what it wishes to achieve. (Smit, et al., 2016).
Richard Branson’s leadership style has been extremely influential on Virgin. Richard Branson’s leadership style is Transformational. In the following sections, we will contrast autocratic leadership and democratic leadership and justify Branson’s leadership style relevance in the Virgin Group.
A study for Michigan University identified two basic forms of leadership behaviour, namely Autocratic and Democratic.
Autocratic vs Democratic
The autocratic leader is primarily focused on the tasks that need to be complete. They are concerned with close supervision and control to make sure that employees do their jobs correctly. This puts pressure on employees to perform and is simply a tool to get the work done. The democratic leader is primarily focused on the people and their needs. They are concerned with motivating and shared participation in management. They also apply less control and more freedom to employees.
After Branson had taken Virgin public in 1985, he regretted his decision, and in 1987 Branson purchased the outstanding shares bank under private ownership. Branson purchased the shares at the original issue price which was a great deal lower than the current price. This clearly shows that Branson wasn’t concerned about the transactional element but more concerned about the people and their needs. This shows that Branson was a clear role model for what he believed. He showed the world that he has a clear vision and was willing to put his money where his mouth is. This represents the idealised influence in Transformational Leadership.
Under Branson’s leadership, Virgin Atlantic pioneered many firsts in the industry. Virgin Atlantic bought back the mystique and luxury of flying that had been lost over the years, all the while making it affordable. When it comes to entertainment Branson was determined to entertain customers on Virgin Atlantic flights even going to the extent of dressing up as a stewardess and serving customers onboard. Virgin Atlantic pioneered many firsts in the industry including in-flight entertainment systems, reclining seats, and home-pick-up services. While also offering in-flight massages, hairstylists, aromatherapists and clowns, at one stage. Virgin Atlantic had captivated Branson and this marked a turning point for the Virgin Group away from the entertainment industry more towards the Travel and Tourism Industry. Branson’s determination and Vision have continued to drive Virgin Atlantic and inspire people. This shows Branson’s Inspirational Motivation with regards to Transformational Leadership. Finkle (2009).
Richard Branson frequently gave the leaders of each Virgin company shares in the company they ran. On the surface, this could display Branson as a transactional leader by giving leaders of each company an incentive to grow the company. However, upon detailed research, you will discover that this is not the case. Branson gave the leaders a share in the company because he wanted them to embrace the Virgin vision and join him on the journey. Branson also did this because it allowed him the time to seek new ventures and plan publicity stunts to bring Virgin greater exposure. This shows Branson’s Individualised Consideration in regards to Transformational Leadership. Finkle (2009).
In 1978, Branson found himself stranded in Puerto Rico because American Airlines had canceled his flight to the British Virgin Islands. Eager to get to the British Virgin Island Branson took the opportunity to charter an aircraft and sell tickets to other people that had been let down by the canceled flight. Branson walk around the airport advertising tickets on the chartered aircraft for ￡39 under the name Virgin Airlines. This adventure sparked an idea in Branson and the next day he started planing to open a new airline. Branson was driven by the view that flying was a bad experience, expensive, poor service, and no entertainment, something Branson was passionate about. Finkle (2009).
So in 1984, Virgin took its largest unrelated leap into the airline business with Virgin Atlantic Airways and Virgin Cargo. The airline business requires a large amount of capital, is very competitive, and is extremely volatile. Once again Branson wanted to fight the peoples’ cause and go up against the “establishments” and British Airways, the national carrier for Britain, was his target. Branson invested most of his attention into the airline while entrusting the other businesses to his executives. Initially, British Airways dismissed Virgin Atlantic and Branson as inexperienced. However, in 1991 Virgin Atlantic was permitted to fly from London’s Heathrow airport, an airport the British Airways had a monopoly over. British Airways responded with the famous “Dirty Tricks” campaign which threatened Virgin Atlantics future. For Virgin Atlantic to survive Branson would need to take British Airways to court. They would require a large amount of funding, something Branson didn’t have as Virgin Atlantic had just declared huge losses financially. Branson had a difficult decision to make, fold and allow the “establishment” to win or sell Virgin Records. Branson decided to sell Virgin Records, take British Airways to court, and emerge victorious. Branson has defeated the “establishment” in court are would continue to fight the battle in the sky. Branson decided to distribute the proceeds, he received from the out-of-court settlement with British Airway, amount all Virgin employees. Branson called it the “BA Christmas Bonus.” The start of Virgin Atlantic shows Branson’s Intellectual Stimulation in regards to Transformational Leadership but being creative, innovative, and challenge the status quo of the airline industry. Finkle (2009).
This shows that Branson’s leadership style is Transformational because he cares about the beliefs, values, and needs of his employees and customers.
- While Branson’s leadership style is predominantly Transformational as can be seen to form an external perspective of the Virgin Group. However, in 1991 Barnard Bass and Bruce Avolio introduce the Full Range of Leadership Model which suggested that effective leaders use Transactional and Transformational leadership styles. They suggested the Transactional and Transformational are not opposed but complementary. Branson would have to fulfill both Transactional and Transformational leadership roles within Virgin however we can agree that in everything Branson does he is serving people.Presentation
Slide 1: Vision
A Vision statement is a description of what the company should look like in 5 or more years. A clear vision statement describes what a company wants to and be for its customers. The customer is the centerpiece of a vision statement. Any strategies that the company decides on should be designed with the vision in mind. (IMM Graduate School of Marketing, 2021)
Virgin Atlantic’s Vision is to embrace the human spirit and let it fly (Virgin Group, 2021).
Slide 2: Values
Values are a companies core beliefs. They are a set of principles that are fundamental to the company. Core values are not a wish list of nice things that a company wants to aspire to. They are a set of guiding principles that inherently exist. (IMM Graduate School of Marketing, 2021)
Virgin Atlantic has a clear unmistakable set of values:
- Insatiable Curiosity
- Smart Disruption
- Straight Up
- Heartfelt Service
- Delightfully Surprising
- Red Hot Relevance (Virgin 2020).
Slide 3: Where are we now? (External)
Macro-environment: This refers to the external environment that Virgin Atlantic operates within.
Political: Virgin Atlantic operates mostly within the UK and the USA which is stable political environments
Economic: Virgin Atlantic operates in the most economically stable countries in the world. The BREXIT deal might affect Virgin Atlantic and would need to be considered carefully.
Social: Virgin as traditional appealed strongly to the British public and should continue these efforts. The COVID pandemic has had an extremely negative effect on the airline industry including Virgin Atlantic. IATA (2021)
Technology: Innovation is rapidly progressing along with Digital Media. Things to consider for Virgin Atlantic would be expanding touchpoint with customers as well as made use of new technologies in its product offers.
Environmental: The UK is plagued by snow in the winter and this harms Virgin Atlantic’s operations. Green energy is a huge topic and is growing quickly. Virgin Atlantic is one of the top airlines promoting innovation regarding bio-fuels and offsetting its carbon footprint.
Legal: The airline industry is heavily regulated and Virgin has to comply with these regulations both in the UK and the countries they fly to. CAA (2009)
Slide 4: Where are we now? (Internal)
Micro-environment: This refers to the environment within Virgin Atlantic.
Competitors: Virgin’s largest competitor is British Airways. British Airways is considered the national airline for the UK and is backed by the government.
Suppliers: Virgin Atlantic has a large number of suppliers for aircraft manufactures, aircraft handles at the airports, catering, and hotels.
Customer: Virgin Atlantic’s customers are people traveling by air from or to the United Kingdom.
Middlemen: Innovation has meant that Virgin Atlantic can remove middlemen and deal directly with their customers. (Grenbald, Rosen, 1999)
SWOT Analysis:
Strengths: Brand Image, Industry Trendsetter, Quality, Customer Satisfaction.
Weakness: Financial, Little Differentiation now, Perceived as expensive.
Opportunities: Change in customer preferences after the COVID pandemic.
Threats: Bankruptcy, BREXIT, COVID financial fall out. (The Guardian, 2020)
Futuring: Futuring is the idea of considering what macro-trends could have long-term effects.
The BREXIT deal will have effects on the airline industry in the UK however this still has not been determined and even the regulations that are in place today may not continue into the future. This may affect people traveling from out European union countries to fly with Virgin Atlantic. Jason Hayward (2021)
The COVID pandemic has had a significant impact on the airline industry in the short term but will also continue to affect the future. Businesses have learned of new ways to operate and business travel may decrease significantly. Leisure travel has also taken a knock and could be a long time before people feel safe enough to travel by air on their next vacation. (Bouwer, Saxon, Wittkamp, 2021)
Slide 5: Where are we going?
Target Market: Before any strategies have been defined Virgin needs to have a clear Target Market. Virgin Atlantic’s Target Market is business travels traveling between the United Kingdom and the United States.
Differentiated Brand Position: This is the position the brand stands for in the customers’ minds. Accourding to Brooks (2016) if a company has empathy towards its customers then brand positioning should be easy. Brand Positioning Architecture can be expressed by a Positioning Wheel or Positioning Pyramid and even as a written statement. For people traveling from or to the UK who want to have a great customer experience at a great price, Virgin Atlantic is the airline that provides the best travel experience because Virgin is people serving people. (Virgin, 2021)
Brand Experience: This includes all touchpoints for engaging with the brand. Purchasing tickets, Airport staff, Lounge staff & amenities, Boarding staff, aircraft, stewards, and pilots. Virgin has many touchpoints that can be used to enforce the vision, values, and strategic objectives.
Brand Objectives: Objectives are the brand’s goals over a certain period by which success will be measured. Virgin Atlantic’s objectives are financial, physical brand experience, and staff engagements.
Financial Projections: This is a financial projection of sales, market share, and profit over a certain period. This helps Virgin determine demands for products and how to price product offerings. (Brooks, 2016)
Slide 6: How are we going to get there?
Product: This is the physical product or service a company sells. Virgin Atlantic is offering a service or transportation by air from and to the United Kingdom.
Place: This is the location that a company operates/sells within. Virgin Atlantic is primarily based in the United Kingdom. (Virgin, 2021)
Price: This is the pricing strategy a company has to reach its target market. Virgin Atlantic is a Premium product offering good value for money.
Promotion: This is how a company promotes its product/service to its target market. Virgin Atlantic makes use of digital media, TV, and billboard advertising. (Finkle, 2009)
Slide 7: A New Way Forward
New Brand Positioning Architecture: A New Brand Position Architecture requires that we understand how they think, feel and behave. To create emotional resonance with consumers we need to reflect of they behave in their social lives. The core of this new brand positioning should reflect what the brand means emotionally and culturally to the target market. We need to inspire people and staff.
Brand Differentiators: What the brand does for me, How the brand makes me look, How the brand makes me feel, How the brand inspires me.
What is the brand’s personality? The Virgin Atlantic Brand expresses the brand values.
What ideologies does the brand stand for? The Virgin Atlantic Brand expresses the brand values.
What do the brand symbols/logo express? The Virgin Atlantic logo symbolises simplicity and strength by using just the word “Virgin” as its logo in bold writing with the use of red symbolising passion and purple symbolising royalty.
Brand Meaning: How does the brand create emotional and cultural meaning with customers. Virgin does this by offering a larger variety of features and offers an experience, unlike any other airline.
8. The Strategic Empathy Process
Accourding to Brooks (2006), Strategic Empathy is the process of “activation empathy-based organisational learning into a Marketing Strategy, as a powerful source of competitive advantage.” (p.76). Brooks went further to describe the three phases of Marketing with Strategic Empathy, namely: Immerse, Activate, and Inspire. However, before one could proceed with these three phases there would need to be some Pre-Planning. The starting point of the pre-planning process is to clearly understand the marketing problem. For this question in the assignment, we will consider Virgin Active South Africa is losing clients due to the Covid-19 pandemic. We will assume Phase One (Immerse) has been completed and will apply Phase Two (Activate) and Phase Three (Inspire) of the Strategic Empathy Process (Brooks, 2016).
It is important that we have a clear understanding of the Pre-Planning and Immerse Phase, and has some data to work with to apply Phases two and three. After considering the details of Pre-Planning and Immerse, we will then apply that information to Phase two and Phase three.
Pre-Planning
The first thing that needs to be established is to clarify what the strategy marketing issue is and ensure that is clearly understood. Key decisions would need to be made to address the marketing issue, what the time frame is to address these issues, and who will be involved in the Strategic Formation Team. Careful consideration will also need to be made to determine what wider stakeholders will be involved in executing the outcomes how the decisions made by the Strategic Formation Team (Brooks, 2016).
Marketing Issue: According to MoneyWeb (2020), Virgin Active South Africa has been losing clients since Covid-19 lockdowns.
Strategy Decision: Develop a new and improved product offering that attracts people back to Virgin Active.
Time Frame: Virgin Active South Africa should aim to active this marketing campaign towards the end of Spring, going into Summer at the end of 2021 and into 2022.
Strategy Formation Team: This should consist of the Product Development team, Marketing Team, and Select Executive members to help with strategic partnerships.
Wider Stakeholders: The Wider Stakeholders will mostly consist of Ad Agencies to implement the advertising of the new strategy, Support Staff to assist customers engaging with the new strategy, Sales staff assisting new customers, and personal trainers who will engage with clients to new product offerings (Brooks, 2016).
Phase 1 – Immerse
It is important that the Strategy Formation Team not only collected data but that they develop empathy with the customer or consumer. The team needs to do more than think about how the customer thinks or feels but must actively engage with them in the day to day living. This process must not be rushed but careful attention is taken to ensure that learning is not superficial or not complete as this would lead to the marketing strategy being compromised. The research conducted during this phase needs to be immersive and experiential (Brooks, 2016).
Phase one consists of three steps:
Step 1
During step on the Strategy Formation Team will review what existing knowledge and tactics are known to the team and if this information is outdated or incomplete. Allowing a significant amount of time during this step is important as it may lead to new ideas about what information or learning is needed. The goal of this step is not to develop hypotheses but to reflect on existing information that is available to the strategy formation team so that they can determine what their learning objectives are (Brooks, 2016).
Step 2
During this step, the Strategy Formation team must consider the scope of the research that will be conducted and in what context. Context includes: Cultural, Social, Geographical, and retail channels. This will allow them to create an immersive customer research program. Careful consideration will need to be made regarding the group of people being researched. One would need to consider current customers as well as a border group of people to ensure that the learnings are accurate. Consideration must also be given to the context, geographical, social, and cultural influences (Brooks, 2016).
Step 3
During step three an immersive research method needs to be designed and managed. Immersive research needs to be used to uncover customer’s attitudes, perceptions, and motivations which could all be non-conscious. This is done by watching and interpreting the behaviour, experience, beliefs, and emotions of the subject in context. Because this research is so in-depth it needs to be qualitative, meaning that the data is non-numerical and answers questions about how people think, feel, and behave. Rather than outsource this research, the Strategy Formation team should actively participate to order to assist in developing empathy. Extra time should be allowed in case the Strategy Formation team needs to readjust the objectives and answer key questions which may have been brought to light. During this step, the strategy formation team will determine the type of research, where the research will be conducted and the number of interviews. (Brooks, 2016).
Immersive Research is used to understand how consumers use a product in a specific context. The researcher (The Strategy Formation Team) is immersed in the context of the customer to gather data. This allows them to better understand the customer’s experiences, beliefs, emotions, and perceptions. (Brooks, 2016). For this question, we will just consider Ethnographic Research as a type of Immersive Research.
Ethnographic Project
Ethnographic research is the study of the values, beliefs, behaviours, and language of a particular group of people. Data collection is primarily based on observations and interviews. Researchers immerse themselves in the data collected to discover major themes that describe the group’s thoughts, feelings, and behaviours. (Brooks, 2016)
Application: Virgin Active South Africa:
The Strategy formation team will consider what information they already have with regards to peoples exercising habits and what types of exercise they do. Virgin Active will have lots of prior knowledge about its customers, however, that knowledge may be incorrect or misleading. Virgin Active’s learning objective would need to be to determine what types of fitness exercises are most popular in South Africa and how people think, feel and behave regarding these activities. This should not only focus on currently active people but also those who are not active as they may be inspired to comes active should a particular activity be of interest to them. Virgin Active should consider how people’s exercise habits have changed during periods of lockdowns, not only Virgin Active customer but the broader fitness community. How have geographical, Social, and Culture influence people’s exercising?
Phase 2 – Activate
Once the Strategy Formation team has immersed themselves in the customers’ world and has analysed the data they will put all this insight together and will being to activate these key learnings. Once the team has developed these consumer insights they can then start to build an actionable strategy. Phase two has three steps to assist teams to create strategic actions. Brooks (2016).
Step 1 – Analyse Data
Analysing the data collected is just as important as the collection of the data. Analysing the observations and data collected helps build new customer insight which can lead to breakthrough ideas for the marketing strategy. An initial activation session should be done straight after the immersive research is completed so that observations that are still fresh in the mind of the researchers are captured and also identifies questions and priorities which should be further analysed. Brooks (2016).
Once data analysis is finished, activation sessions should be done with the strategy formation team to integrate learnings, build off of these learnings and develop strategic actions and who should be responsible for these actions. These sessions should last one to three days. Brooks (2016).
Step 2 – Develop New consumer insight
During this phase, data is converted into key insights. These insights provide direction and inspiration for the strategy to be formed and applied. These insights should include the potential Target Market, Understanding of the customer Needs, Brand Positioning, The product’s usability and design, How the message should be communicated and what information should be communicated, and what channels the message should be communicated through. Brooks (2016).
Several different methods can assist the Strategy Formation team to develop this data into customer insights:
Theme Clustering: In this method, common themes are group together to find similarities are differences.
Repetitive Questioning: In this method the question “why?” is repetitively asked. This brings to the surface what the customer is trying to achieve at the deepest level.
Customer Reframing: In this method, the customers’ data is reframed into the context of a different category. This allows the team to create new perspectives and bring in new opinions.
Stakeholder Reframing: In this method, people from the wider stakeholder group are included in full or in part in the activation sessions to bring fresh insight from other areas within the company which might bring about new ideas. Brooks (2016).
Step 3 – Create Strategy Actions
During the step, the strategy formation team will define the actionable steps that need to be taken based on the insights gained so far. The goal is to generate new ideas which may include new products, new pricing, or a new communication strategy. Should there be an urgent market opportunity or competitive threat Phase one and Phase two can be combined into a single activation session called “Agile insight Activation.” Brooks (2016).
Application: Virgin Active South Africa
Step 1 – Analyse the data: During the immersive research, it was revealed that people in South Africa are more active as a result of lockdowns and that they prefer exercising outdoors in new and creative ways like Yoga on the beach, Mountain Biking, Trail Running, and Home gyms. They feel more connected to nature and prefer to engage with people while exercising. South Africans don’t view exercise as a task but rather as a hobby, they enjoy doing exercises like mountain biking, trail running, surfing, and yoga. Exercising is also a social event for many people, they feel like they are part of a community.
Step 2 – Develop New customer insight: It was discovered that there is a change in people’s beliefs and feelings towards gyms in South Africa. Virgin Active customers generally enjoy going into the gym and using traditional gym equipment, however, the growing trend is to engage in more outdoor activities like Mountain biking, trail running, and cycling. This trend is largely driven by the climate in South Africa which suits outdoor fitness events and activities. South Africans, in general, are very active, and being active is also a social event as people enjoy being part of the fitness community that they are involved in.
Step 3 – Create Strategy Actions: Virgin Active would like to expand its reach from being a traditional gym to engaging with the fitness community in outdoor activities. To achieve this Virgin Active has decided to change their product offering from being a traditional gym membership to include an expanded membership program in include options for members to engage with outdoor activities like mountain biking and trail running. Virgin Active will also look at doing some of these classes like Yoga and Aerobics in places like the beach or the park.
Phase 3 – Inspire
Three Strategic Goals
Phase three of the Strategic Empathy Process is called “Inspire.” The goal of this phase is for the communication of the strategic learning to memorable and powerful so that it creates greater learning, engagement, and action. It is best to use strategic storytelling that communicates the insights that have been developed in a way that builds empathy for customers. Inspiring stakeholders has three goals:
- Inspiring action among the wider stakeholder groups.
- Creating a culture of curiosity to maintain Empathy over time.
- Developing a shared purpose with employees and other shareholders. (Brooks, 2016)
Strategic Storytelling
The Marketing Strategy team should not simply present the Marketing Strategy to the company, but bring all the objectives, strategies, and insights from the customer to life to connect people with the customer and create empathy. Because it causes the brain to replicate the storyteller’s ideas and emotions, storytelling can be particularly successful in developing empathy. (Brooks, 2016)
Not only does the audience listen but they also connect emotionally by smiling, laughing, crying, and even frowning, accourding to Gowin (2011 in Brooks, 2016).
It is important to plan with strategic storytelling in mind before strategic learning is implemented. The audience, media, and budget must be considered for strategic storytelling. The goal should be to make the communication as visual and contextual as possible.
If storytellers want to build true empathy with the customer it is key that they use real characters who they may have met during the data collection journey. In order for the story to remain authentic it should not be over edited, or generic but rather be real stories from real customers as this inspires try empathy. A well created story can last a lifetime and can invaluable for the marketing team.
Application: Virgin Active South Africa
During the immersive research, Virgin Active discovered people who had created exercise programs for at home, people that had taken up new forms of being active like montain biking, trail running, and ocean swimming. They had also discovered people that had previously not been active in any way however due to the publicity of the pandemic they became health conscious and became active.
Virgin Active engages with these people and created testimonial videos with these people sharing their stories about the difference being active has made in their lives. How being active also allowed them to become part of a community of people with similar interests and passions. These testimonies share these customers’ feelings towards being active, their beliefs about what being active means to them, and how they engage in their activity that they do. These videos inspire people to become more active, to engage in new activities, and join Virgin Active South Africa in making South Africa more Active.
Conclusion:
Building empathy with current customers and future customers requires a deep understanding of the thoughts, feelings, and beliefs of these individuals. It requires careful planning, immersive research, action, and inspiration. Virgin Active South Africa has been losing members over the last few years and increasingly so since the COVID-19 pandemic lockdowns stopped people from visiting gyms. Virgin Active South Africa conducted immersive research into the fitness community within South Africa to understand the community. During this research, they discovered that South Africans like to be active outdoors and had found new ways of remaining active during lockdowns. The strategy formation team developed an action plan that would see Virgin Active expanding its offering to include more outdoor activities and take some of its indoor classes to outdoor environments to reach a wider audience. This will allow Virgin Active to inspire people who are, or want to be active but don’t want to visit a gym. During this empathy process, Virgin Active has discovered a new marketing opportunity that with enabling them to build more meaningful connections with the fitness community and inspire more people to be active in more ways.
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