Classic Airlines and Marketing
Classic Airlines is the world’s fifth largest airline, but the recent economic situation has affected profits, especially the airline’s customer rewards program. Of all the areas where Classic Airlines’ sales have suffered, the frequent flier program has experienced a 19 percent decrease in members and a 21 percent decrease in flights per remaining member. To ensure the airline continues to be profitable, the Classic Rewards program must rebound. Classic Airlines faces marketing challenges that include changing technology, customization, and customer empowerment. Besides marketing challenges, the current corporate culture at Classic Airlines threatens the success of the company’s plans to revive profits while making budget cuts.
Marketing challenges The biggest obstacles to Classic Airlines continued success are rising costs and waning consumer confidence. To recover, Classic Airlines needs to market its customer rewards program, Classic Rewards. Three main marketing challenges exist that contribute to the obstacles and stand between the airline and increased profits: changing technology, customization, and customer empowerment. The digital revolution caused by rapidly changing technology has led to more business being conducted over the internet. Consequently, Classic Airlines has followed suit by setting up an internet based system for customers, which decreased the airlines’ costs by reducing the number of people required to man the call centers. Unfortunately, the airline failed to integrate the web channel with the customer service call channel and the result is an inability to recognize the same customer who chooses to communicate over both channels (University of Phoenix, p. 5). Instead of improving customer relations, the changing technology resulted in a degradation of positive customer relationships. Classic Airlines