CASE STUDY

P&O Ferries

Cross-Channel ferries provide sea passage across the 20 mile (32km) stretch of water between Dover in England and Calais in France. This journey is the shortest route between Britain and continental Europe. One company, P&O Ferries, runs cross-Channel ferries with facilities for foot passengers, cars, coaches and freight business. The company works with a wide range of partners, including tourist boards and travel trade operators. P&O is the largest ferry operator in the market, with significant provision in all major sea routes. It is the largest operator in the Channel.

There are many challenges facing P&O, especially from competition. It has had to become increasingly price sensitive to compete against the other ferry companies offering channel travel. However, its aim is to combine value for money with a quality customer experience. Its main competitors are Norfolk Lines and LD Lines, which offer services on the same route. Another key competitor was Seafrance, which has recently gone into liquidation. Concerns regarding turbulent economic conditions, coupled with uncertainty over the euro, create an uncertain future for all travel operations. In addition, evolving regulations, increasing uncertainty over costs, particularly in the area of fuel, and congested waters in the Channel are factors that affect P&O's operations.

Consumers are not always price sensitive and regularly put comfort ahead of cost and speed as factors influencing their choice of mode of transport when travelling around Europe. As well as being competitively priced, P&O's demand-led online pricing structure is relatively simple and flexible. The P&O ferries also offer customers the benefits of comfort and space - an important travel factor - and on- board entertainment. Other benefits to customers include the freedom to carry baggage and sporting equipment, the ease of taking pets on holiday and, for people who own second homes abroad (such as the many British people with second homes in France), the opportunity to transport items and furniture. The ferry sector has other advantages. Ferries offer efficient security procedures, environmentally friendly travel and lower taxes than air travel. However, low-cost airlines are continuing to expand, and remain a popular choice of travel.

Another competitor is the Channel Tunnel (an undersea rail link between the UK and France), that offers a quicker and more convenient service than a ferry crossing. The Tunnel does not suffer from adverse weather conditions and people going between London and Paris do not need to change trains or even get out of their seats. High speed rail allows passengers from the UK to access cities in France, Belgium, Germany and beyond in shorter times than ever. On the other hand, the Tunnel is a lot less interesting and is uncompetitive on price.

P&O is seeing an increased frequency of short-break holidays and a growth in popularity of the family long-stay market, particularly with visitors who own second properties abroad. The company is also popular with those customers who do not like flying. Like many other similar companies, it uses loyalty schemes to retain customers for repeat purchases.

The above data has been based on a real-life situation, but details have been changed for assessment purposes and may not be an accurate reflection of reported news.

Answer All Questions.

Question One

A. Discuss the customers needs. Is the company fulfilling these needs? (4 marks)

B. Identify TWO stakeholders that are important to the business. Which do you consider to be the most important? ( 4 marks)

Question Two

A. The resource base view of marketing is used by many companies. Identify and explain the type of resource base view that P&O Ferries is using. Justify your response. (6 marks)

B. Discuss the importance of customer loyalty. Outline two marketing strategies that P& O Ferries could use to achieve customer loyalty. (6 marks )

Question Three

A. Discuss ONE micro environmental factor and ONE macro environmental factor that would affect P&O Ferries performance in the current competitive environment described in the case.

(8 marks)

B. Explain Two reasons for conducting a marketing audit. (4 marks)

C. Conduct a SWOT analysis for P&O Ferries. (12 marks)

Use of English ( 3 marks)

APA (3 marks)