Analysis on Virgin Media Case Study Assessment Answer

VIRGIN MEDIA CASE STUDY

Company Background

Company

Virgin Media is one of the leading telecommunications businesses in the UK. The business of the company is a large scale, and it earned 5168.2 Million GBP in 2019 (Statista, 2019). In 2017, the number of customers in Virgin media was around 14,000 in the UK (The Guardian, 2017). Around 4 million people in the UK have Virgin TV subscriptions (Virgin media, 2020). Virgin Media is among the six largest telecommunications companies in the UK. The company faces significant competition from BT, Vodafone, O2 and Tesco Mobile.

Market

In the UK, the number of mobile subscribers was around 92 Million in 2018, which suggests that the market is significantly large (Statista, 2018). Optical fibre services are expected to change the scenario of the market shortly. 5G technology will be used substantially in the coming years. The key segments in the market are divided by broadband users, mobile users and TV subscribers. The customers in this industry are price-sensitive, along with being loyal to brands. There is an intense level of competition with the presence of big companies such as BT, Vodafone, Tesco Group and O2.

Customer Group

The potential group of customers will be in the age group of 18 to 30 years of age, specifically the millennial. This group of customers has been focused as Vodafone has launched Fibre broadband which will be largely used by the younger customers. 

Consideration of the focused customer group

Virgin Media has newly launched a fibre broadband service for the consumers of the UK for enjoying uninterrupted internet services. The charge of the service is around 25 GBP per month (Virgin media, 2020). Fibre internet connectivity provides a substantial reliability advantage compared to copper internet connectivity. Therefore, the fibre connection is stronger than copper. In the UK, among adults in the age group of 16 to 34 years, 99% have used the Internet in 2017 (Government of the United Kingdom, 2017). Therefore, millennial in the UK spend a substantial amount of their time on the Internet. Academics and official works are difficult to complete without the help of the Internet. In this age group, most of the people are either studying or working. Therefore, internet connectivity is essential for all of them. Therefore, focusing on this particular group of customers for the newly launched fibre broadband services is suitable. As per Dreyer et al. (2019), a focused customer group for a product needs to be decided based on the features of the product. The broadband service provides quick and seamless services to consumers.

 The broadband also has high flexibility as well as high bandwidth. Therefore, it can offer uninterrupted services. Therefore, it will help consumers in completing their task in time. It is also important to consider that the selection of customers has been made based on demographics as well as behaviours. The millennial in the age group of 18 to 30 years have been chosen as they use the Internet more widely than the other consumers in different age groups. Therefore, they can be considered as the most appropriate customer groups. On the other hand, the behaviour of these customers is that they spend a significant part of their time every day on the Internet. Therefore, they are the most suitable group of customers for Virgin media in terms of Fibre broadband.  

Analysis of the service quality

The service quality of Virgin Media can be analysed with the help of the Servqual model. As per the views of Prentkovskis et al. (2018), the first component of service quality is the tangibles. The tangibles of the service of Virgin media include physical facilities, staff appearances and equipment. As per tangibles, Virgin media provides excellent service as their physical facilities are of good quality and appearance of the staffs is also efficient. The second component is reliability which deals with the ability to perform services. In this Virgin media faces significant challenges. Customers have reported that their Wi-Fi and TV services had poor services (Metro, 2020). The component of responsiveness suggests the willingness of the company to help customers in need (Fan et al. 2017). However, Virgin media has been unable to be responsive as the service status page of the company became unresponsive for six hours in London (Daily mail, 2020). Therefore, customers were unable to report their issues at that time and chose social media to vent their grievances. As per the opinion of Prentkovskis et al. (2018), the following component is an assurance which attempts to discuss the ability of the employees to inspire trust and confidence.

 In Virgin media, employees are the biggest strength of the company. Any issues in the services are attempted to be solved quickly, and customer requests are also taken into account. Therefore, consumers can gain confidence in the brand. The last component of the model is empathy which deals with the quality of individualised services (Fan et al. 2017). In Virgin media, individualised services are not taken into account effectively as in May 2020; a significant amount of problems was faced by consumers for a few weeks almost (Metro, 2020). The company was able to solve the issues of most of the consumers. However, individual customers still faced issues. Therefore, the challenges in the service quality of Virgin media are mainly contributed by lack of reliability, responsiveness and empathy.

Recommendation

The analysis of the service quality of virgin media has stated the main disadvantages of the service. Therefore, an alteration in the marketing mix can help change the service quality of the brand significantly.

People

In the 3P mix, people are substantially important as people buy from the brand or people they prefer. Therefore, the recommendation for people in the case of Virgin media is,

Providing training to customer service providers. This strategy can be significantly helpful in improving the reliability of the services. The training provided by Virgin media to the customer service staff will increase the ability to provide a high quality of services. As per Moreno et al. (2017), millennial consumers largely rely on authenticity. They prefer transparent services. Therefore, to have the customer engagement from this specific group of customers, it is important to consider the importance of good customer services.

Figure 1: Positioning map of the market

(Source: Self-created)

Excellent customer service will also improve the quality of service. Therefore, customer servicing needs to be considered as a significantly important part of the business of Virgin media. For example, an instruction-led training can be given to the customer support staff. These training show manually the verbal as well as non-verbal attributes the customer support staff needs to possess for providing customer services. In customer servicing of the millennial consumers, verbal and non-verbal communication are important parts. Therefore, this strategy of providing training will help in mitigating the challenge of reliability, along with improving the people related to the marketing mix.

Processes

Process in the marketing mix of a product suggests the means of achieving an outcome. Therefore, this component is substantially important in the marketing mix. The recommendation regarding processes will be,

Offering personalised services to the customers

Offering personalised services to the consumers of Virgin media can help improve the responsiveness of the services. As per the views of Moreno et al. (2017), millennial consumers prefer getting personalised services compared to other services. Therefore, to attract millennial customer groups, Virgin media needs to focus on the fact that personalised service is more acceptable to these people. The responsiveness of services which is realised by the brand's willingness can also be improved with personalised services. The personalised service can help to ensure that the millennial customers feel that the company is concerned about the needs of the customers. For example, Virgin Media can create an easy process of installing broadband. In this way, people will be more comfortable in using broadband. The consumers will also consider that the company has designed broadband based on the needs of the customer. This will help in improving the relationship between the millennial buyer and the customer. The challenges of responsiveness will also decrease substantially.

Physical evidence

The physical evidence in the marketing mix helps consumers to evaluate the service before making the purchasing decision. Virgin media needs to design effective physical evidence for attracting customers. Therefore, the recommendation regarding physical evidence will be,

Posting social media reviews on the website. Posting social media reviews about the services of Virgin media can help in attracting more young consumers. Radojka et al. (2017) argued that millennial buyers largely rely on social media for making buying decisions. Therefore, Virgin media must ensure that all of the people in the target group are attracted towards choosing Virgin media over other companies. This can be achieved by increasing the presence of the brand on social media. It is expected that with increased exposure in social media, Virgin media will be able to have more positive customer reviews. These reviews of the customers will encourage other millennial buyers to choose Virgin media. For example, Virgin media can post a picture of the social media post along with its link for checking the authenticity of the review. This strategy will also help in solving the issue of empathy, as well. The challenge of empathy will be mitigated as the company will be able to assure that they can offer individualised services.