...Classic Airlines Marketing Solutions Classic Airlines is a company dealing with increased costs in labor and fuel costs that have resulted in a reduction of bottom line profits in 2004 of over $60 million, while only growing the revenue side by 1%. At the same time the loyalty program has decreased by 19%, and current members are flying 21% less than prior year. Overall the loyalty customers were flying less with Classic and the remaining members flew at a decreased cost in 2004, with a rate decrease of 23% for domestic travel and 19% for worldwide travel. With the combination of reduced fares, increased costs and the pressure of a declining stock price, Classic is in a position of necessary change, and will review ways to reduce expense at the 15% level mandated by the Board of Directors, while still working to maintain current customer base, and attempting to grow the loyalty program. All of these areas of concern have created a reduction in employee morale, and the executive management team will need to work to engage all levels of the organization to improve service levels, and regain the customer trust and loyalty to ensure long term success at Classic. Describe the Situation Classic is in a position of vulnerability with the pressures that it is facing from Wall Street, consumer confidence, as well as pricing and mandated cost reductions. With all of these impacting the employees and the rumor of potential bankruptcy, employee morale is at an all time low. The...
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...Classic Airlines Marketing Solution October 14, 2012 MKT/571 Introduction Classic Airlines is facing both and internal and external marketing crisis. The CEO, Amanda Miller and CFO, Catherine Simpson are basically asking the team led by CMO, Kevin Boyle to revitalize the frequent flyer program without making further discounts to fares while also cutting the marketing budget by an 15% over the next 18 months. Utilizing the nine step problem solving model we will analyze possible solutions and choose the one that will best meet the needs of Classic Airlines and its customers. Defining the problem One of the basic and core concepts of marketing is identifying and meeting the needs, wants and demands of the customer. Needs are basic human requirements like air, food and shelter. Needs can also extend to education, recreation and entertainment and become wants when directed to specific objects that satisfy the need and demands are simply wants backed up by the ability to pay (Kotler & Keller, 2006). When needs, wants and demands are met, customers are more likely to be loyal to the airline. This in turn creates the potential for free word of mouth advertising as the loyal customer shares his or her experience with everyone around them (Anuwichanont, 2010). Classic Airlines seems to be lacking in meeting the needs, wants and demands of their loyalty customers and their loyalty program has seen a decline of 19 percent by January 2006 (University of Phoenix, n.d.)....
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...Running head: CLASSIC AIRLINES MARKETING SOLUTION Classic Airlines Marketing Solution Marketing MKT/571 August 15, 2011 Classic Airlines Marketing Solution Classic Airline the world’s fifth largest airlines, has a fleet of more than 375 jets which serve 240 cities with over 2,300. Flights daily (University of Phoenix 2011). The company is profitable however, there has been a decline in the loyalty rewards program as well as a decrease in share prices. The management team is working to identify a marketing solution and strategy that will provide a win back solution. This paper will perform the nine step problem solving method as it relates to Classic Airlines scenario. Framing the problem: The primary problem for Classic Airlines is a decline in return customers especially the loyalty programs customer base. This problem is due to the cost it takes to lose a customer is greater than the cost to maintain customers in that the cost of marketing to new customers is extensive. According to the text, it can cost a company approximately 5 times more to acquire new customers than to retain the existing customers. (Kotler & Keller 2006). Describe end state and goals: The end state would be for Classic Airlines to win back those loyal customers who currently make up 19% of the decline in the company. Acquiring and gaining new loyal customers at a rate of no less than 15% of the current state. The goals that are attainable and measurable for this second stage will be those...
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...Classic Airlines is the world’s fifth largest airline with a fleet of more than 375 jets serving 240 cities with 2,300 daily flights. The company currently employs more than 32,000 employees, still maintaining profits of over $10 million in the current year. Although profits are not 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...
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...Presently Classic Airlines is one of the largest airline carriers in the world. Last year the company had a net income of $10 million dollars on operating revenues of $8.7 billion. The year before the company had a net income of $71 million on 8.5 billion of operating revenues (Classic Airline Scenario, 2010). The net income has decreased $61 million in one year. One of the reasons for the huge decrease in net profit is because of marketing strategies. The company needs to take three stepsto turn the company around. First it needs to analyze the internal and external pressures that has created the present crisis. Second it needs to formulate a problem-solving method, and third it needs to apply the problem-solving method to the current crisis. Analyze current situation Rising costs, particularly of fuel and labor, have limited Classic Airlines to compete for the valued frequent fliers (Classic Airline Scenario, 2010). To protect the company from possible bankruptcy, a 15% cost reduction has been implementedover the next 18 months. Each department will have cuts, with marketing hardest hit at 21.5% reduction versus sales and operations at 11.5% (Classic Airline Scenario, 2010). The following shows the cost reduction goals by department (Classic Airline Scenario, 2010). To make sure Classic Airlines does not go into bankruptcy, the marking department needs to focus on three issues. First, the internal and external pressures causing the decrease in net income needs to be identified...
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...AIRLINES Problem Solution: Classic Airlines [Triple click anywhere in this paragraph to begin typing your introduction.] Describe the Situation Issue and Opportunity Identification Classic Airlines commands a fleet of more 375 jets that serve 240 cities with more than 2300 daily flights. In the 25 years since it inception, Classic Airlines has grown to an organization of 32000 employees, and it earned $10 million on $8.7 billion in sales (Simulation, 2009). Classic in no stranger to the challenges that plague today’s airlines. Increased uncertainty about flying has affected industry stock prices across the board, and Classic has seen a 10% decrease in share prices. The airline has been operating under a microscope watch, subject to scrutiny from all sectors. Consumer confidence also appears to be reducing. Classic’s declining Classic Rewards program measured a 19 percent decrease in the number of Classic Rewards members, and 21 percent decrease in flights per remaining member (Simulation, 2009). This gives Classic Airline an opportunity to identify their program and come up with solutions such as an alliance with another company and/or beef up their Customer Relationship Management (CRM) program implemented four years ago. In addition, the raising cost, particularly of fuel and labor has limited Classic’s ability to compete for the valued frequent flier. To alleviate this problem, Classic’s Board of Directors recently mandated a 15 percent across-the-board...
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...Classic Airlines Marketing Solution Introduction The world economy is increasingly been fuel by Service businesses, with stiff competitions, most companies are finding it difficult to differentiate their physical products. To have that competitive edge over competitors, it is critical for service businesses to understand the special nature of services (Kotler, & Keller). One such company that is finding it difficult to understand the nature of services is Classic Airlines. The company is the world’s fifth largest airlines, they operates in 240 cities with an impressive 2,300 daily flights (University of Phoenix, 2012). The company’s financial report shows it earned $10 million on $8.7 billion in sales last year. Regardless of the profits, Classic has been on a downward trend, factors influencing this trend are; the rising cost of fuel and labor, negative media reports, and a constant decline of its stock prices. The Board of Directors are requiring a 15% cost reduction over the next 18 months, employees morale is low, and there is a lot of negative feedback from its customers in regards to the service provided by the company. I will implement a nine-step problem solving method that I will use to identify the problems at Classic Airlines, what opportunities the market has and create effective marketing solutions with a desirable end results to restore customer loyalty, employee morale, and entice investors’ to increase the company’s market value. Step 1: Define/identify...
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...` Soaring Above Classics’ Issues Meredith Simmons MKT/571 September 24, 2012 Heidi Kelley Soaring Above Classics’ Issues Classic Airlines (CA) has historically held an impressive market share, as it has experienced tremendous growth coupled with over 25 years of experience in the aviation industry. However, like many of its competitors, CA has recently been plagued with internal and external issues which could easily pose threats to its survival. In efforts to deal with these obstacles effectively, it is necessary to assess CA’s predicament, discuss and decide on corrective action to prevent any further decline, and review the implemented plans to determine how CA will thrive in the future. In essence, the appropriate parties must comprehend how the company ended up in this situation in efforts to formulate a good plan to rise above it. CA must address these problems swiftly by using the basic problem-solving method. The company must use their marketing resources, as well as some external marketing options, to determine a profitable solution. This paper will demonstrate how the nine-step process can be used as a means to return Classic Airlines back to its place as a major contender in the airline industry now and in the future. The Situation According to the University of Phoenix scenario (2010), some of the challenges are increased hesitation about flying...
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...This paper will cover a full scale and analysis of Classic Airlines, a 25 year airline organization. Classic Airlines demand is over 375 jets that serve 240 cities with more than 2300 daily flights making it the fifth largest airline in the world (University of Phoenix, 2007). Classic Airlines has grown from a small business to an organization of 32,000 employees and earned $10 million on $8.7 billion in sales (University of Phoenix). A general problem-solving process or framework provides leaders with a way to begin managing and understanding a wide range of decisions to be made, problems that needs attention, and concerns that arise from internal and external customers. According to University of Phoenix Week Three Scenario (2011), “Classical Airlines has seen a 10% decrease in share prices in the past year,” (para 2.) With this decrease in share prices the rising cost (fuel and labor) have hit the organization hard. The employees’ morale is at a low and Classic’s financial strain the corporate culture is under pressure. The board of directors for Classic Airlines has mandated a 15% cost reduction over the next 18 months. This cost reduction brings some challenges for all departments including finance, human resources, marketing, and customer service. From a marketing point of view, Classic is challenged with increasing customer loyalty and satisfaction, while decreasing expenditures. The first step of the problem-solving method is a key question to ask, “Is all the...
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...Classic Airlines Marketing Solution Classic Airlines is one of the largest airlines in the world. Their routes include more than 240 cities and more than 2,300 flights a day. In 2004, they had a net operating income of $10 million dollars (Classic Airlines Scenario, 2011). Despite this achievement, Classic Airlines has been experiencing many challenges in operations that are threatening their profitability. These challenges include increased competition, higher overhead costs, decreased employee morale, dwindling stock prices, shrinking consumer confidence, market uncertainty, and customer dissatisfaction. Classic Airlines could use the nine-step problem-solving model to find the true cause of these symptoms and rectify the problem. Profitability will increase once the true problem is solved effectively. According to the Critical Thinking textbook, “Problem solving is applying critical thinking to achieve the goals and personal harmony that are important in our personal and professional lives” (Kirby & Goodpaster, 1999, p. 251). There are many approaches to problem solving. We will use the nine-step model described in Problem Solving-Based Scenarios (Problem Solving-Based Scenarios, 2011). The first step is to describe the situation. Classic Airlines has experienced a 10% decline in share prices. Customer surveys show that they are becoming dissatisfied with the airline’s customer service and frequent flier program, Classic Rewards. Rewards membership has decreased...
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...RUNNING HEAD: CLASSIC AIRLINES MARKETING SOLUTION Classic Airlines Marketing Solution Shelley R. Brothers MKT/571 Marketing University of Phoenix This paper will break down the problems that Classic Airlines are facing with so many pitfalls in their airline. With using the proper product launch plan, Classic Airlines should be operating up to stands if all goes well. Classic Airlines, a 25 year old airline, is ranked the world’s fifth largest airline consisting of more than 375 jets that makes over 2,300 flights daily to 240 cities. The airline has grown into a 32,000 employee airline and has earned $10 million on $8.7 billion in sales last year (Classic Airline Scenario, 2010). Although Classic Airlines have been profitable, like other airlines, they have struggled through several marketing problems in the past year which has caused them to fall short of hitting rock bottom lowering employee morale and customer loyalty. As the economy continues to struggle Classic’s Board of Director have insisted on a 15% across-the-board cost reduction over the next 18...
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...Classic Airlines Marketing Solution Jeanine M. Taylor MKT 571 April 9, 2012 Michael Wilson, MBA Classic Airlines Marketing Solution Classic Airlines is the fifth largest airline in the world with a fleet of more than 375 jets that serve over 240 cities with over 2,300 daily flights. Since it was incepted 25 years ago, the airline has grown to 32,000 employees. Though currently profitable, Classic has not gone unscathed by the challenges faced by the airline industry. Financially, increased uncertainty about flying has resulted in a 10% decrease in Classic’s stock prices. Operationally, the airline is suffering from waning consumer confidence. The airline’s rewards program has lost 19% of its members and the flights booked by the remaining members have decreased 21%. Rising costs, particularly in the area of fuel and labor, have limited the airlines ability to compete for the high value frequent flier. Classic’s board of directors has mandated a 15% cost reduction in all departments over the next 18 months to protect the profitability of the company (University of Phoenix, 2012, Classic Airlines Scenario). Financial success is dependent upon marketing. Without marketing to generate the demand for a product, the company cannot make a profit (Koller & Keller, 2006). Classic’s Chief Executive Officer (CEO), Amanda Miller, has tasked the new Chief Marketing Officer (CMO), Kevin Boyle and his team comprised of the Senior Vice President of Customer Service, Renee Epson...
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...Classic airlines is one of the largest airlines and commands a fleet of more than 375 jets that serve 240 cities with over 2,300 daily flights (University of Phoenix Material, 2009).They continue to be a very profitable company, but with rising overhead costs and the current state of the economy, classic airlines has experience some set back. There are many internal and external pressures that contribute to Classic Airlines current crisis. In order to address this crisis, Classic Airlines must use the basic problem solving method. They must also utilize their internal marketing resources and explore external marketing options to find a profitable solution. Below is a diagram of the problem solving method (BPI Consulting, 2004): The first step is to define the problem. “Step 1 is a critical step in the problem solving process; it determines the overall focus of the project (BPI Consulting, 2004)”. Classic Airlines is a profitable company, however, they have experienced a decline in their market shares. This decrease in shares has resulted in negative press from the media and heavy criticism from market shareholders. These results have greatly affected employee morale, which can influence productivity. Another problem is the rising overhead costs which includes fuel and labor cost. Classic Airlines has implemented a cross-company budget cut for all departments. Classic Airlines has also seen a decrease in the enrollment of their classic rewards program. This means that...
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...Marketing Solution MKT/571 Marketing April 25, 2011 Dr. Bea Bourne Marketing Solution Classic Airlines, one of the largest airlines in the country, “commands a fleet of more than 375 jets that serve 240 cities with over 2,300 daily flights” (University of Phoenix, Classic Airline Scenario, 2011) and has gained 32,000 employees with earnings of $8.7 billion in sales. September 11, 2001 was the start of the economic crisis for the airlines, along with the rising costs of operations. Classic Airlines has internal and external factors, which also contribute to the airline’s crisis. Addressing the crisis, Classic Airlines should consider using a ten-step basic problem-solving method as well as seek suggestions from the airlines internal and external resources. Define the Problem The first step in the method is defining Classic Airlines problem by determining the purpose of the project. Classic Airline’s shares are declining even though the airlines still earn a profit. A problem found is Classic Airline’s reward program offered to customers has declined, which could be because the customers are traveling less because of the economic times or the customers are traveling on other airlines. The decline could also be linked to the lack of customer satisfaction. Employee morale is another contributing factor to the airlines problems. The morale has decreased because of the September 11, 2001 attacks, referred to as 9/11. After 9/11 the airline was criticize...
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...Running Head: Classic Airlines Marketing Solution Classic Airlines Marketing Solution Gabrielle Plooy Marketing/ 571 January 10, 2011 Alan Mandel Introduction Classic Airlines one of the world’s largest airlines is experiencing setbacks that will either reside with proper application of marketing techniques and skills to stabilize current profits while opening the way to future profit gains. In addition to staying profitable the company must rebuild customer confidence and secure the loyalty of the client base while building new ways to improve customer retention as well as attraction of new clients. Building a better way for the company to operate and grow will take the efforts of all employees and department and dedicated efforts of thoroughly reviewing and changing programs that have become stale and unproductive. Monitoring and tracking of the results of the changes will also need to be a focus and priority for the company to turn around the client’s loyalty and rebuild company image in the industry. Introduction of new programs that can grow with the company, development of the cut backs the company must impose to stay liquid, and the monitoring of activity to give vision to where more changes are needed and when needed is imperative for Classic to rebound. Identifying the Issue Classic Airlines is facing a steady decline in loyal frequent flyer customers who have consistently stayed with the airline in the past but have begun to stray to the competition. Through...
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