Supplier strategies
Throughout the 1980s and 1990s, the World’s Favourite Airline theme has
been one of the most enduring for any company. At the same time, the rela-
tionship with Saatchi & Saatchi was maintained. With the departure of the
founders, the Saatchi brothers, from the agency in December 1994, BA
decided to review its agency arrangements. While it was reported that BA’s
marketing department wanted to stay with the old Saatchi agency, now
renamed Cordiant, Marshall and Marketing Director Ford Ennals insisted
on loyalty to the Saatchi brothers and moved the account to their new
agency, Saatchi M & C.
In June 1995, The Observer reported that Airbus had launched an
intensive campaign to persuade BA to buy A330s which, they
argued would save millions for BA on its European routes. BA indicated
that they may change from King’s Boeing policy and buy all future aircraft
from Airbus. One reason for this was because of the move of Charles
Masefield from British Aerospace to Airbus and because Boeing was not
committing resources to the development of extra large super Jumbo. By
comparison, Airbus seemed more willing to build such a plane with its
A3XX.
By 1995 the move to centralized buying of air travel by large customers,
discussed above, was gathering pace and BA reorganized its sales teams,
regrouping the top corporations and top agents, and according to National
Sales Manager, Bernard Harrop:
We aim to create better dialogue between corporates, agents and BA ... so
we can redesign the distribution process to find efficiencies.^20There are considerable movements of funds when an air ticket is sold.
The traveller pays an agent who passes the ticket price to BA and then
receives 9 per cent commission from BA and later any additional over-
rides. The agent passes up to 3 per cent of the commission on to the
corporate client. Finally, BA gives the corporate client a separate rebate. A
full explanation of agent and corporation money flow is given in Figure
6.2.6. This complicated flow of payments and information is inefficient
and adds to costs and, as a result, the cost of sales to BA has been rising
steadily.
In 1995, BA segments corporate customers according to how far they
have matured along the travel policy life cycle. (See Figure 6.2.7.)
Each of the national agents has its own sales team assigned to a particu-
lar category, with the top 10 independent multiple location agents having
a sales team. Local agents are segmented regionally. This organization
means that the level of support from BA is business volume dependent.
Figure 6.2.8 illustrates the structure of the sales departments.
Creating and implementing relationship marketing strategies 489