...Journal of Business Studies Quarterly 2009, Vol. 1, No. 1, pp. 16-25 ISSN 2152- 1034 A Case Study on Classic Airlines: Practical Marketing Solutions Milaly Tokhi, San Jose State University Abstract In today’s competitive arena, organizations must use all possible means to maximize growth and profitability by focusing on strategic marketing. Classic Airlines has an opportunity to alter the landscape of the airlines industry. In order to succeed, Classic Airlines must be able to correctly forecast market potential and future demand, by establishing long-term marketing objectives. Key words: Marketing, business, organizations, cross-functional teams, environmental scanning. Classic Airlines Classic Airlines is facing an organizational issue. External and internal marketing programs have not been able to satisfy the needs and wants of the stakeholders. Target customers are looking at the services offered by other airlines to satisfy their wants and needs. This has resulted in poor sales and reduced profits for the company. The marketing plan of a firm “helps the firm connect with its customers” (Kerin et al., 2006). Therefore, Classic Airlines wants to develop an effective plan of action that will not only help attract and retain customers, but also boost sales and profits. The Situation Issue and Opportunity Identification Classic Airlines is a 25 year old company that commands a fleet of more than 375 jets that serve 240 cities with more than 2300 daily flights. The...
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...Glyndwr UNIVERSITY ASSIGNMENT FRONT SHEET Student Name: Certification: I certify that the whole of this work is the result of my individual effort and that all quotations from books, periodicals etc. have been acknowledged. |Student Signature: | |Date: | Student Registration Number: Student email address: |Programme : BA (Hons) International Tourism Management HH | |Year/Level : Level 5 | |Academic Year : 2014 | |Semester : | |Module title : Strategic Management for Tourism |Assignment | |Module code: BUS 518 | |Word guide: 3500 | |Percentage Weighting of this assignment for the module: 100% | |Issue date : | Return date : 31St March 2014 | |Lecturer : Gopinath Vedula | Second...
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...Classic Airlines Marketing Solution Introduction Classic Airlines is the fifth largest airline in the world. Despite achieving high profitability, there are a number of organizational issues facing the company. Both internal and external marketing programs have failed to meet stakeholder expectations. Target customers shifted to other airlines in an attempt to get their needs and wants satisfied. The outcome of this shift is low sales and profits for Classic Airlines. The fundamental role of a marketing plan is to enable a firm to establish a strong connection with its customer. In this scenario, Classic Airlines needs to come up with an effective action plan that will help in attracting and retaining customers as well as boosting profits and sales. A marketing solution to Classic Airlines case scenario will be presented using the nine-step model. Description of the Situation Identification of Issue and Opportunity Classic Airlines is one of the major airlines in the world, and has been operating for more than 25 years. The company directs a fleet comprising of jets exceeding 375 and serving 240 towns with daily flights exceeding 2,300. There are several challenges that the company is facing, owed to lack of innovation and escalating costs. In addition to customers not being content with the service received, the management has not identified effective solutions to the issues faced. According to a Classic Airlines’ manager, “rising above our competition without discounting...
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...Classic Airline’s Marketing Problem Resolution Classic Airline’s Marketing Problem Resolution Classic Airline’s has been one of the top five airlines for over the last 25 years. They have had many loyal fliers over the years until recently. Many of their loyal fliers who remained a part of their Classic Rewards program aren’t even always choosing Classic Airlines as their means of air travel. They have come to the conclusion that their current Customer Relations Management system (CRM); the Classic Rewards program; isn’t working to the point that it isn’t keeping current customers or attracting new ones. Classic Airlines must find a way to reestablish their Classic Rewards program so that it will beneficial towards keeping them one of the leading airlines. Through intensive market research and a commitment towards understanding what their customers want by analyzing customer feedback; Classic Airlines will improve their customer loyalty and raise customer value. In order to reestablish Classic Airlines Classic Rewards program as a great marketing tool for the company, they will need to commit to a nine-step problem solving model. A nine-step problem solving model is a structured process in which each step is designed to lead to a predetermined set of results or to find the reason a process is failing. Classic Airlines will use the problem solving model to help them turnaround their Classic Rewards program by identifying the failures of the current system and offering alternatives...
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...Classic Airlines Marketing Solutions Ricardo R. Bonner MKT 571 November 21, 2011 Abstract The author has read the case study on Classic Airlines and will attempt to help the company by formulating a marketing plan which would help them recognize, diagnose, plan and implement which would put them in a better position for marketing and profitability reasons. The author breaks down Classic’s approach by recognizing its most valued commodity, and seizing on the opportunity to improve it by offering a 9 step process. The author uses examples to both illustrate the flaws inherit in their marketing efforts and to project successes if suggested solutions are utilized. Classic Airlines Marketing Solutions According to its stockholder’s annual report and outside business analysts’ opinions, Classic Airlines (or Classic for purposes of this paper) is poised to assume elite status among air carriers. With its vast assortment of resources and perceived positive PR (public relations) persona, Classic has enjoyed prime positioning because of it. However the economy has altered well-intentioned plans of many companies, including Classic, as the downturn has crippled economic conditions. Classic believes it can identify its weaknesses and craft an effective marketing effort which would position the company to achieve sustained profitability. Classic Airlines believes that recent economic pressures have been the main culprit in its journey from confident trendsetter to...
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...AirAsia Case Study Analysis I. PROBLEM How to continue with its low-cost leadership strategy provided that market fuel prices are unstable and improve its competitiveness among competitors in the LCC segment II. OBJECTIVES To sustain its cost advantage and status as the top low-cost but high quality airline III. AREAS OF CONSIDERATION a. For the past 7 years, AirAsia has been the leading airline in the LCC segment b. In the mid-2008, fuel prices started to be unstable c. The competition became more intensive given that, after the relaunch of AirAsia in 2002, it soon inspired many LCC followers in the region. d. Malaysia Airline tried to penetrate the LCC segment with its “free ticket” strategy IV. ALTERNATIVE COURSE OF ACTION 1. Invest in having its own direct supply of oil through backward integration strategy. * Advantage: Minimized cost on fuel * Disadvantage: Very Costly type of investment 2. Do not expand its long haul business and do not divert its classic business. * Advantage: No additional cost for manpower and other costs related to expansion of its business. * Disadvantage: Only short haul flights will be catered V. RECOMMENDATION It is recommended that the first alternative be pursued which is to invest in having their own direct supply of oil to minimize the cost of fuel needed by the airline even if it will cause a need for a massive capital investment...
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...Mkt 571 Week 6 Final Exam Classic Airlines Marketing Solution MKT/571 Classic Airlines Marketing Solution Classic Airlines Classic Airlines (CA) is the 5th largest airline enterprise in the world that is comprised of more than 375 jets that travel to 240 cities and run in excess of 2,300 flights daily (University of Phoenix, 2012). 25 years following its inception, CA has grown to employ 32,000 people. Last year, CA earned over $10 million profit on $8.7 billion in sales (University of Phoenix, 2012). However, CA has been noticing some negative changes recently. In the last year, the Classic Rewards Program saw a 19% decline in the number of members and the existing members purchased 21% less flights (University of Phoenix, 2012). Increased expenses, the most important of which are fuel and labor, have had a negative impact on the corporation and employee morale is at an all time low due to increased scrutiny on the airline industries from all sectors of the economy, not simply the airline industry. According to the American Marketing Association Board of Directors (2012), “Marketing is the activity, set of institutions, and processes for creating, communicating, and exchanging offerings that have value for customers, clients, partners and society at large (Definition of Marketing, para. 2). Economic conditions have amplified CA’s financial strain. CA can not afford to decrease the ticket prices past the current price or they will face bankruptcy. This is unfortunate...
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...Classic Airlines Marketing Solution MKT/571 Classic Airlines Marketing Solution Classic Airlines Classic Airlines (CA) is the 5th largest airline enterprise in the world that is comprised of more than 375 jets that travel to 240 cities and run in excess of 2,300 flights daily (University of Phoenix, 2012). 25 years following its inception, CA has grown to employ 32,000 people. Last year, CA earned over $10 million profit on $8.7 billion in sales (University of Phoenix, 2012). However, CA has been noticing some negative changes recently. In the last year, the Classic Rewards Program saw a 19% decline in the number of members and the existing members purchased 21% less flights (University of Phoenix, 2012). Increased expenses, the most important of which are fuel and labor, have had a negative impact on the corporation and employee morale is at an all time low due to increased scrutiny on the airline industries from all sectors of the economy, not simply the airline industry. According to the American Marketing Association Board of Directors (2012), “Marketing is the activity, set of institutions, and processes for creating, communicating, and exchanging offerings that have value for customers, clients, partners and society at large (Definition of Marketing, para. 2). Economic conditions have amplified CA’s financial strain. CA can not afford to decrease the ticket prices past the current price or they will...
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...Running head: PROBLEM SOLUTION: CLASSIC AIRLINES Problem Solution: Classic Airlines University of Phoenix January 21, 2008 Problem Solution: Classic Airlines “Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” (Kerin, 2006). Marketing is a fundamental key to any businesses success and involves determining the needs, wants and desires of consumers and satisfying them to the best ability. Classic Airlines is the world’s fifth largest airline they command 375 jets serving 240 cities with about 2300 flights per day for about a quarter of a century. Classic Airlines has around 32,000 employees. They earned about $10 million on about $8.7 billion in sales. With the uncertainty about flying Classic Airlines and the industry has seen this affect stock prices, Classic Airlines in particular has seen a 10% decrease in their share prices over the past year. Classic Airlines is also dealing with low employee morale, and the consumers’ confidence also seems to be declining as well. (Anonymous, 2007a) According to their financials for the past year, Classic Airlines would have been losing money if it were not for the $15 billion aid package passed by Congress for the airline industry (Kaye, 2002), which is resulting in a $22 million Income Tax Provision...
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...QUARTERLY CLASSIC HOTEL RATE FENCES Discounting in the Hotel Industry A New Approach Here’s the case made ten years ago for an approach to discounting that provides a rational method of price segmentation. The hotel industry is just now getting it. BY RICHARD D. HANKS, ROBERT G. CROSS, AND R. PAUL NOLAND T hree busy executives approach a hotel’s front desk, check in, receive their room keys, and head for the elevator. On the way up to their rooms, the topic of room rates comes up. As it turns out, Roy is paying $20 more than Jeanne, while Jennifer is paying $18 more than Roy. Yet all three are staying in essentially the same type of room. Those of you familiar with yield management already have figured out that this hotel’s yield-management system is in top working order. These three guests—all staying on the same night in similar rooms—have received different rates. You might be thinking that those rates are based on their differing needs and willingness to pay. You might also conclude that some logical factor differentiates those guests, something like flexibility in arrival dates or differences in when they booked their reservations. 94 Cornell Hotel and Restaurant Administration Quarterly Your conclusions would be wrong. These three guests booked their reservations on the same day, through the same source. What differentiates these guests has nothing to do with supply and demand, their needs, or their willingness to pay. The difference...
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...An Analysis of McDonnell Douglas’s Ethical Responsibility in the Crash of Turkish Airlines Flight 981 The Memorial of Flight 981 at Ermenonville (Johnston, 1976). Executive Summary In 1974, Turkish Airlines Flight 981 experienced a mid-flight cargo door failure which led to the first total loss of a wide-bodied aircraft in history. The aircraft was a McDonnell Douglas DC-10, and this tragedy was compounded by the fact that sufficient corrective action had not been taken by the manufacturer after precursory failures had occurred over the four previous years. The purpose of this report is to evaluate the ethical nature of McDonnell Douglas’s decisions throughout this crisis, discerning their priorities with regard to safety and financial gain, and to assess if these qualities have changed in response. The origin of this catastrophe lay in a poor handling of design and manufacturing. The cargo door’s design employed faulty philosophies, and decisions regarding its manufacture were driven by savings at the expense of safety. However, though the door’s faults were later exposed, a more serious problem involving the tail control lines in the passenger floor was continually overlooked until the crash. This was due primarily to a policy of using old design strategies which met minimum federal requirements. The company oversimplified the control lines’ failure mode when confronted with it in ground testing and, being committed to their own design, were unable to...
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...AirAsia has been a long-standing competitor in the airline industry. Bought over by Tony Fernandez just as it was about to go bankrupt, he managed to turn the structure of the company around and made it profitable. From a regular full-cost airline, it was now a budget airline. Providing its main service of transport, with little importance paid to luxuries and more focus was put into perfecting customer service and time for money. As more budget airlines such as Jetstar Singapore and Tiger Airways Singapore started to come into competition, AirAsia had to start changing their management plans in order to be able to be the first choice for customers, in terms of rates and service. AirAsia stuck to one aircraft type to minimize training and maintenance costs. Tony Fernandez also started off his team of employees to work as one. This created a strong bond between the employees that in turn shows in customer service. Despite the fact that they were a budget airline, employees were shown respect and awarded for performance, thus creating a sense of pride in working for AirAsia. Classical management theories had been first founded by three people who go by the name of Max Weber, Henri Fayol and Lyndall Urwick . They opened the door way to three different classical approaches such as the scientific management, administrative and the bureaucratic approach (Pryor ,2011). According to Robbins (2012), the most recognized pioneer of Scientific Management, would be Fredrick W.Taylor ...
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...Organizational Behavior and Communication Southwest Airlines Co. has a unique organization. They have a unique way of creating value for their employees, and customers. They create an environment that encourages their employees to have “LUV” and “FUN” on the job. Southwest makes a conscience effort to create an environment that allows their employees to have fun on the job. Southwest experiences a low volume of turnover and high productivity. Southwest believes that happy employees will create significant value to the customers and shareholders (Hallowell, 1996). Everyone in the company including the Chief Executive Officer (CEO) have FUN and LUV. The CEO has been observed in costumes, dancing, and partying on flights and at company events. This type of communication supports the organizations culture. The LUV value Southwest incorporates is respect and caring for others. Southwest supports this value in the way they negotiate the pay, and employee benefits. The People Department (human resources) plays a major role in hiring the right people, and acclimating the new employee to Southwest’s unique culture. Southwest creates a sustained culture by their leadership team setting examples for the employee regarding the company’s beliefs and values. They keep the culture alive by utilizing the Peoples Department to train staff, performing evaluations, develop activities, and rewards. At times, they even penalize employees who do not support the company’s culture. ...
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...Case Study: easyJet and Ryanair Flying High with Low Prices Toifl Edith, Maike Klement Hamiyet Karaman, Tsolmonzul Erevgiylkham FK ABWL Marketing 040177/1 WS 06/07 Story - easyJet Founded in March 1995 by Stelios HajiIoannou - the family remains the major shareholder The airline is based at easyLand, at Luton airport 2 Concept - easyJet Reduction of costs through: - reduction of distribution costs No free lunch Efficient use of airports (fast turnaround terms - 30 min)) - Operations out of secondary airports main target group: business travelers 3 Story - Ryanair 1985 founded by the Ryan Family (with a share capital of only £ 1 Million) First route from Waterford in Ireland to London Gatwick 4 Concept - Ryanair Cheap point-to-point flights from secondary airport Single aircraft policy Fast turnarounds Main target group: leisure customers 5 1. How do easyJet and Ryanair achieve success using low-price strategies? 1. How do easyJet and Ryanair achieve success using low-price strategies? A new system allows airline seats to be priced according to supply and demand and achieve high occupancy. - how does it work? They start with low ticket prices, and raise it according to demand. Stelios from easyJet calls this system „yield management“ 7 1. How do easyJet and Ryanair achieve success using low-price strategies? Examples: Ryanair: Linz Stansted flight: 08.12.06 € 59.99 flight: 08.04.07 € 39.99 easyJet: Munich Stansted...
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...At Air New Zealand Read Full Essay Join Now! Aviation industry exerts great influence on growth of national economy and it has an overriding effect on national security. Air New Zealand is an international airline registered and based in New Zealand. It provides cargo transport services and air passenger within New Zealand, as well as to and from major regions. To start with, all outside factors that may influence an organization constitute the external environment .This report will first describe the external environment through three perspectives: economic, technological and global forces, then the major CSR issues and the stakeholders. Finally, it will discuss how stakeholders influence the CSR policy and the implication of it. Air New Zealand has made significant progress in the previous year according to a favorable economic climate and the company records a net profit after tax of $215 million. However, fuel prices continue to reach a record level - the price of jet fuel averaged US$90 per barrel this year, there is a US$13 increase per barrel compared to last year and drives a $143 million of the total increase in fuel cost. As fuel is the largest operational cost of aviation industry, continued high fuel costs remain a serious concern and it provides the airline industry with a significant challenge. Secondly, the success of many organizations depends on how well...
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