...as viable, there is a lack of customer use in the airline industry since 911. Stock prices have declined 10% because customers are not as secure with flying as they were before the 911 tragedy causing shareholders to keep Classic under scrutiny to make changes. Classics’ Classic Rewards membership has declined 19 % and a 21 % decrease in flights per remaining customer which has caused concern for Classic Airlines. (University of Phoenix, 2012) Another problem for Classic is rising costs of labor and fuel has placed limitations on how Classic competes for frequent flyers. The board of directors has mandated a 15 % across-the-board cost reduction over the next 18 months. The information in this paper will discuss a nine-step problem solving strategy to help Classic Airlines regain customer confidence and satisfaction. The main problem addressed in this paper is maintaining a viable rewards program to lure frequent flyers back to Classic Airlines. Framing the Problem Classic Airlines must first understand that most of the problems the company faces are uncontrollable. Classic needs to determine why the company has been losing rewards members. One of the first steps would be to establish a survey with the existing and potential rewards customers asking questions that pertain to what the company is offering the program. Classic Airlines needs to maximize customer needs and increase brand loyalty to regain customer and investor confidence. Marketing has become increasingly...
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...FINANCIAL INFORMATION ANALYSIS Accounting Analysis Application Exercises Question 2 Most airlines have frequent flyer programs that promise customers free flights once they have accumulated 25,000 miles of travel with the same airline. Using the simple definition of assets, liabilities, revenues, and expenses presented in the lecture, how should these programs be reflected in the airlines’ financial statements? Promises that require future expenditures are liabilities even if they cannot be measured precisely. According to the definition, liabilities are economic obligations of a firm arising from benefits received in the past that are: (a) required to be met with a reasonable degree of certainty; (b) at a reasonably well-defined time in the future; Airline companies have economic obligations to serve frequent flyer program passengers due to ticket sales (benefits) in the past to the frequent flyer program passengers. These obligations are: (a) likely to be met[1]; (b) fulfilled within a well-defined time in the future[2]; A frequent flyer program has an impact not only on the balance sheet but also on the income statement. In principle, the costs associated with benefits that are consumed in this time period are estimated and recognized as expenses (matching concept)[3]; However, it is not easy to measure the costs associated with frequent flyer program accurately. At least the following three cost categories should be considered in the estimation: 1. The administrative...
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...Table of Contents 1.0 Marketing Strategy 1.1 Objectives 1.2 Target & Segmentation 1.3 Positioning 2.0 Strategies 3.0 Marketing Mix 3.1 Product 3.2 Pricing 3.3 Distribution 3.4 Marketing Communications 3.5 Customer Service 4.0 Recommendations 5.0 Plan of Action 6.0 Bibliography 1.0 Marketing Strategy Westpac: THE ASIA PACIFIC INVASION Westpac have been servicing the Pacific Rim since 1901 with rapid support for its growth strategy of servicing Australian and New Zealand customers with links to Asia, and Asian customers with business interests in Australia and New Zealand. With Capital Market Sales and Foreign Exchange capabilities established in Singapore in 2004, Westpac Group Asia was extended to include Corporate and Institutional Banking in 2005, and most recently, Syndicated and Leverage Finance and Asset Finance. Westpac Singapore and Hong Kong offices have a strong focus on private banking for affluent customers with ties to Australia and New Zealand. While most of these Westpac Institutional Bank operations are headquartered in Singapore to cover the continent, the geographic footprint has continued to expand, incorporating Shanghai and Hong Kong Branches in China and Representative Offices in Mumbai, Jakarta and Beijing. (Westpac Group, 2011, Westpac History, 07-06-2011, URL: ) While Westpac began to seriously look at the Asian market by 2005, it was only through the form of corporate banking and as they have positioned themselves...
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...Classic Airlines: The Situation University of Phoenix MKT/571, Marketing Classic Airlines: The Situation Problem Solution: Classic Airlines In order for Class Airlines to overcome its current conditions, the company must undergo a very structured problem solving process. The nine-step problem solving process is just the process that Classic Airlines need. The nine step process consists of the following: • Step 1: Describe the Situation, o Involves identifying key concepts, issues, and opportunities in order to determine the overall focus of the project (McNeese, 2004). • Step 2: Measure the Problem, o Requires that baseline data be collected on the present processes and that the problem be observed and analyzed from a broad perspective so that many problem solving possibilities may be examined (McNeese, 2004). • Step 3. Set End-Goals, o This step will help provide vision and direction and help make choices as to which path Classis Airlines should take (McNeese, 2004). • Step 4: Identify Alternative Solutions, o Allows Classic Airlines the opportunity to look at other companies as benchmarks in order to develop techniques that will help the company conquer disadvantages (McNeese, 2004). • Step 5: Evaluate Alternatives/Strategies, o Allows Classic Airlines to examine the best strategy that will solves the company’s current problems and avoid future occurrences (McNeese, 2004). • Step 6: Identify and Assess Risks, o Allows Classic Airlines to develop...
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...Classic Airlines marketing solution Classic airlines is one of the biggest airlines and instructions a fleet of more than 375 jets that assist 240 towns with over 2,300 every day air journey. They extend to be a moneymaking business, but with increasing overhead charges and the present state of the finances, classic airlines have known-how some set back. Numerous interior and external stresses assist to Classic Airlines present crisis. In alignment to address this urgent position, Classic Airlines should use the rudimentary difficulty explaining method. They should furthermore utilize their interior trading assets and discover external trading choices to find a moneymaking solution (Arnoult, 2004). These few of the challenges faced by airline managers are also affecting the Classic Airlines. Classic Airlines is one of the worlds fifth largest with more than 2,300 flights daily to and from almost 240 cities in the world. They only earn about 0.1 percent net profit from their sales revenue of $18.7 billion Classic Airlines is operating with a very thin profit margin, which is not very sustainable in the end. A very low profit margin is insufficient for the airlines it makes it hard for them to have an up keep in their competitiveness. Unfortunately, like any other industry, the stock prices of airlines are directly impacted by the airlines ability to accrue money or design wealth for its stockholders. This paper will evaluate and analyze the issues faced by Classic Airlines...
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...James Thompson Airline Competition AVSC2150 What can airlines do to stand out in the oligopolistic airline industry? Rivalry exists in the airline industry as there are several airlines operating at many of the same destinations all around the world. They aggressively compete with each other through offering different services, cutting fares, offering frequent flyer programs and other benefits to gain more consumers than other competitors. Economy of scale means a decrease in a firm’s long term average costs as the size of the operation increases. The more units a company can produce, each unit costs less because fixed cost are spread out over a larger quantity. An airline company lowers costs over time by becoming more efficient in different aspects of production, for example by utilizing the most efficient technology available, specialization of job responsibilities, and effective use of resources. As an airline grows they seek out ways to improve operations to save time and cut costs. An airline might purchase new air craft because of the reduced fuel and maintenance costs compared to the older less efficient aircraft. Airlines can give specific job descriptions to employees to reduce work load and let the employee focus on one particular task thus reducing the time to do each specific task similar to production line work. Or a company might start doing more in house services instead of outsourcing maintenance or services to other businesses. The purpose of a merger...
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...their corporate strategy, the means of differentiating themselves from competitors in the eyes of the customer. And although low cost carriers may be less reliant on CRM as a means of driving competitive differentiation, even they must invest in fundamental CRM technologies and processes to manage the customer efficiently over the course of the travel experience. Increasingly, airlines are recognizing that CRM is a long term investment, with the true benefits reaped through profitable lifelong customer relationships. Although many airlines understand the significance of CRM to their bottom lines, such programs as they exist today are suboptimal. Few airlines truly exploit CRM analytics to segment their customers based on value rather than miles flown, instead, they are using only simplistic segmentation models. CRM investments are largely driven by the competition rather than the needs of the airline’s most valuable customers. In a bid to...
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...“The more you buy, the more you earn” – this is the logic each company sells to customers when introducing their loyalty programmes. Loyalty programmes offer gift redemptions, cash backs, discounts and privileges to customers who make frequent purchases. What is less known is that for every purchase, the data is recorded and used for unknown purposes, leading to privacy related issues. The benefits of loyalty programmes versus the related privacy issues have always been an item of debate. Benefits including customer satisfaction brought by customization, higher earnings for the company and savings for customers bring about higher welfare to both the company and the consumer, and therefore outweigh the privacy issues of data manipulation and information leak which will rarely happen. People often complain about receiving promotions and discounts on items that are worthless to them. Reward programmes address this issue by providing product customization thereby increasing customer satisfaction. Through in-depth analysis of consumer data and customer preferences, spending patterns that signal changes in shopping trends and customer behavior allow companies to customize products for their customers. The United Kingdom based retailer, Tesco PLC, employs this strategy by sending their members tailor-made coupons. This leads to 5 million different versions of mail promotions being sent to 12 million customers. Though customer habits are exposed in the process of determining suitable...
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...San Diego 8/9/14 – Saturday * Pick up rental car at Firefly (Driver: Duo Ning, reservation under Siting Feng) * Drive to hotel * Wyndham Garden San Diego 3737 Sports Arena Blvd * SeaWorld * Balboa Park 8/10/14 – Sunday * San Diego Zoo Safari Park San Diego – Anaheim – Los Angeles 8/11/14 – Monday * Check out hotel * Beach: La Jolla cove / Torrey Pines State Beach (on the way to Anaheim) * Drive to Anaheim * Check-in at hotel * Anaheim Portofino Inn and Suites 1831 S Harbor Blvd * Disney California Adventure Park Anaheim 8/12/14 – Tuesday * Disneyland with Magic Morning Los Angeles 8/13/14 – Wednesday * Universal Studios Hollywood * Hollywood Visitors Information Center * Hollywood Bowl * Hollywood Boulevard / Hollywood Walk of Fame * TCL Chinese Theatre * Hollywood Sign 8/14/14-Thursday * Beverly Hills * China Town * Cathedral of Our Lady of the Angels * Little Tokyo * Drop off Ting and Yuqing at hotel * Omni Los Angeles Hotel 251 South Olive St * Drop off rental car Other * Six Flags Magic Mountain * Outlet Mall * Beach * Buy drinks/water/milk for breakfast * Bring hat, swimsuit, and sunscreen Southern California CityPASS SeaWorld * General admission to the world-famous aquatic theme park including all rides and shows. * The voyage begins at SeaWorld. Connect with the sea like never before. Be awed by Shamu in...
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...to arrive and teens may forget what they've purchased in the interim. Anxiety and Desperation Credit card debts can bring about severe anxiety for young people. While making the purchases might have had little psychological impact on the teens, those who have to pay the monthly bills connected to their credit cards might experience negative feelings. A 2008 report by Sallie Mae on "How Undergraduate Students Use Credit Cards" discusses a survey of students in which 45 percent stated that paying credit card bills brings them “high levels of anxiety," while 24 percent stated that credit card bills bring about a feeling of extreme anxiousness. In extreme situations, teens might do things they wouldn't normally do out of desperation. For example, in a May 2010 article on the Daily Finance website, New York Bankruptcy Court Judge, Honorable John C. Ninfo, discusses his two eye-opening articles focused on educating teens about debt: One article is about a college-age teen who committed suicide after finding himself severely in debt, while the other details how a teen robbed a bank after racking up $7500 in online gambling debt. While credit cards can be convenient and in some circumstances, provide cardholders with cash and...
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...Customer Relation Management role When thinking about CRM, do person think first (and often only) of one department in the company? For instance, some companies use CRM for sales management or to handle market segmentation and marketing campaigns. Others use it for knowledge management. And some companies use CRM in the customer service department providing service management. But the role of CRM can be more than just a tool for marketing or customer support, sales force automation. In fact, CRM can help automate business processes and integrate every client-facing department with service organization, resulting in increased customer satisfaction, long-term relationships and increased sales. The concept of CRM is premised on the simple logic of business : it must keep tracking customers once attracted; retain them in business portfolio and profit from their growth. CRM can be viewed in 4 ways * Firstly it is a existing response to the emerging climate of unprecedented customer churn, waning brand loyalty and lower profitability. * Second, CRM is central to the task of making an organization customer centric. * Third, CRM is the definite symbol embracing IT in business. * Fourth, CRM is the most certain way to increase value to the customers and profitability to the practicing organizations. What is so special in CRM programs which drive the customer back to the store? It can be better understood from 2 perspectives: Tangible benefit + Intangible...
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...RECOMMENDATIONS REPORT: DELTA AIR LINE, INC. Prepared for: Delta Air Line Executives Prepared by: Olivia Wan April 16, 2013 TABLE OF CONTENTS INTRODUCTION 1 STRENGTHS 1 Frequent Flier Program 1 Baggage System 2 SkyTeam 3 WEAKNESSES 3 Treatment of Delayed Passengers 3 Ticket Over-Sales 4 OPPORTUNITY 5 Entertainment 5 THREATS 5 Competition 5 Unexpected Weather 6 RECOMMENDATIONS 6 Customer Survey 7 Increase Promotions 8 Customer Service Training Program 9 CONCLUTION 10 BIBLIOGRAPHY 11 ILLUSTRATIONS 4,5 Figure 1 …4 Figure 2 5 EXECUTIVE SUMMARY DELTA AIR LINE, INC. PREPARED BY OLIVIA WAN Delta has a very strong frequent flyer program that serves and benefits customers. Also, Delta has made an improvement into baggage system to limit miss handle baggage. Such improvement strengthens the company and allows gaining more trust in customer services. Within the last several years, Delta joined in the SkyTeam program, which provides more destinations that customers can choose from, at the same time they will also get the benefit from the frequent flyer program by traveling other airlines within the SkyTeam program. Airline industry is the kind of industry that provides service to customer. However, Delta have not yet meet their goal to better service it customers. Customers have complaint about their treatment toward the delayed due to the aircraft problem. Also, the over sales ticket have brought down Delta customer service image...
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...Southwest Airlines SWOT Analysis Beresford Doherty February 16, 2009 The Mission Statement 1 The mission statement of Southwest Airlines declares that it is "dedicated to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit." And to its employees, Southwest Airlines pledges a commitment "to provide our Employees a stable work environment with equal opportunity to learn and for personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude with the organization that they are expected to share externally with every Southwest Customer" [1]. Southwest Airlines is a principal supplier of air transportation in the United States for the conveyance of passengers for business and leisure purposes. In accordance with its mission statement, Southwest Airlines has recognized the importance of customer service and has trained its employees to conform, in accordance with responsible awareness of their customers and their needs. Southwest Airlines Co is arguable the most efficient, best performing domestic airline in the United States today. Based on 3 criteria’s from the Federal Aviation Administration (FAA) they are the enforcement of regulations and standards related to the manufacture, operation, certification and maintenance of aircraft. Southwest...
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...indicate that Marriott Hotels and Resorts had the highest occupancy rates in the surveyed years 1997-2001 (Case Exhibit 5) and had the highest percentage of people with incomes exceeding $50,000 per year who preferred the Marriott brand over hotel/motel brands in 2000 and 2002 (Case Exhibit 6). Also, the target market can be defined as "the average upscale traveler who, on average, takes 12 to 14 trips a year", corporate travelers in particular (Case Page 13), as it is the business traveler who usually is the primary decision maker for business trips (Case Exhibit 6). The point of parity between Wyndham's ByRequest program and the Marriott Rewards program is that both reward guests for their frequent reservations and brand loyalty with a free membership and perks such as frequent flyer miles and special offers. However, it is the points of difference between the ByRequest program and the Marriott Rewards program that really adds significant benefit to Wyndham's value proposition. Where Marriott Rewards program offers points to guests which can be accumulated to be...
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...Classic Airlines Marketing Solution Classic Airlines is the sphere's fifth leading airline by way of a fleet of more than 375 jets, serving 240 cities (Keller & Kotler, 2007), using additional 2300 flights daily. The airline has developed into an organization of 32,000 employees from exemption of 25 years ago. The corporation has earned $10 million on $8.7 billion in transactions from the preceding year (University of Phoenix, 2010). The commercial airline industry has continuously been vulnerable to the economic and political fluctuations, typically in times of an economic calamity for that reason; Classic Airline’s tests as an airliner are not unforeseen. The corporation is a significant contender within the airline business; nevertheless, like countless airlines; Classic faces several challenges because of the increasing customer worries about flying and the current market ups and downs. Classic Airlines recognizes changes that are necessary for the business; conversely, the managing team needs to recognize the present-day marketing difficulties that are troubling the business and determine choices for solving these complications. The paper will benefit Classic Airlines by means of the nine-step problem-solving model in the direction of identifying issues and prospects that will support the airline within the current marketing problems, pinpoint the internal and external pressures contributing to the corporation's crisis. By using the nine step-problems solving model...
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