Richard Branson, entrepreneur extraordinaire and chief executive officer of the Virgin business empire, has embarked on a mission of celestial proportions, literally. With plans of launching his newest venture, Virgin Galactic, by 2010, Branson predicts that his meager $250 million investment will become a gold cash cow in as little as five years. While the future of this undeveloped industry appears lucrative and exciting, Branson must now decide how to differentiate Virgin Galactic from the host of competitors emerging in the untapped space tourism industry and build brand recognition with target consumers as a safe and ecologically conscience thrill ride with purpose.
The most significant factor in conquering the market for the space tourism industry will ultimately be passenger safety. Consumers who are wealthy enough to afford the cost of $100,000/hour ($200,000/2 Hour flight) are certainly not seeking a bargain. There is no comparison shopping for early adopters, or those customers that enjoy paying a premium for the newest product or technology. Virgin Galactic’s target consumers, who represent the crème-de-la-crème of modern society, will definitely be choosy when selecting a company to risk their lives with and propel them seventy miles above the earth. A competitor offering superior technologies or safety protocols at additional cost, even a hefty one, would easily win the business of customers in this market segment. And being that Virgin Galactic and competitors are creating an entirely new industry, the initial customer base will be undoubtedly large and comprised of early adopters with no woes over spending.
In any new enterprise, success often develops out of repeated failures. As mentioned in the article, one incident of human loss could adversely impact the entire emerging space tourism industry. Sadly, though preventative measures are incontrovertibly in place, the future will likely hold some sort of space tourism tragedy. Keeping the obvious dangers of space travel in mind, and the fact that this emerging industry receives a plethora of attention and free press, Branson should immediately differentiate Virgin Galactic in the marketplace so that his company is not lumped together with those with inferior technologies and safety protocols. Thus, in the event that an accident occurs which might impact the industry, the damage to Virgin Galactic will be minimal given that they have positioned themselves apart from their competitors in the market.
This task has already been undertaken. Visitors to the Virgin Galactic website are immediately presented with a video demonstration of the basic logistics of the flight and some of the science and research that have gone into the program. The first overview section on the Virgin Galactic website deals exclusively with questions regarding safety. It states that Virgin owns the exclusive rights to the technology that makes space travel safe, affordable, and possible for the everyday consumer. Thus, by discussing the safety issues prior to the excitement, mystery, and adventure of space-travel, Branson is slowly differentiating himself from his competitors, which is not only helpful in terms of everyday business but also could be extremely lucrative in the event of a catastrophe or incident in the emerging industry.
Should Branson succeed in his initial efforts to satisfy the 38,000 people that have deposited their $20,000 toward the cost of their space flight, he will ultimately find himself in another quandary. He will need to discover how to make space travel appealing to his secondary target consumer audience, well-off individuals with the capital but perhaps not the interest. Branson will need to discover how to tap into the psychology of potential clients and make a journey aboard Virgin Galactic seem commonplace, purposeful, and carefree as opposed to radical and reckless. Customers should also be informed of the educational and scientific possibilities of space research.
Virgin Galactic will need to conduct market analysis and research to discover customer motivations and desires for their interest in space tourism. Branson will need to discover common traits in his customer base and identify how Virgin Galactic can serve the needs of the customers in ways that his competitors will not be able to match. If the most common customer concern, aside from safety, is the environment, Branson will need to focus on catering to the green side of his customers. In this instance, his efforts should remain focused on how and why Virgin stands alone from the competition. For example, Virgin Galactic might spend time investing in a cleaner burning rocket fuel or components that ecologically outperform those of his competitors.
The bottom line in this case study is that Branson is engaged in a risky enterprise. He needs to continue to conduct market research, especially in regards to buyer decision processes and psychology. Further, he needs to continue investing in and developing the most premium space vehicles and parts that money can buy, no expenses barred. Virgin Galactic needs to be presented to the public as the flagship company for this exciting new enterprise and the only company who has the proper technology, training, and know-how to succeed in such a grand campaign.
Virgin Galactic is no doubt being watched eagerly by the entire world, optimists and pessimists alike. The initial several months of the company’s business, especially the first few flights, should be handled delicately so that the foundation of the public relations side of Virgin Galactic can be laid on steady ground. Though the young firm has quite a bit to manage in its first few years of existence, customer safety and continual research of improved safety protocols will undoubtedly remain a potential space tourist’s ultimate motivational factor in making a purchase decision.