...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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...Individual Assignment Classic Airlines and Marketing Shaquita V. Stewart MKT/571-Marketing Professor, Robert Barnet During the commencement of this course we have has the opportunity to acquire knowledge and insight to many different key aspects and concepts of marketing. In this brief we shall discuss the Classic Airlines scenario, consider the product (i.e. Classic Rewards Program) and service (i.e. Quality Airline Travel) that the company is marketing, while reflecting on what marketing challenges Classic is facing in addition to the corporate culture. Marketing concepts found in the week one reading assignments will also be discussed in their relation to the contents of Classic as both and institution and a brand. Upon review of Classic’s overview, overall, the airline is fairly profitable. The challenge comes in the face of waning consumer confidence; “Loyal customers [are] jumping ship and the ones still aboard seemed to be flying less frequently -- or at least less frequently with Classic Airlines.”1 Rising Costs of fuel and labor are also challenges that Classic faces; “[limiting] Classic‘s ability to compete for the valued frequent flier.” Classic, like many of its competitors overestimated the reversal of the travel downturn. that followed September 11th 2001. Having expanded too quickly, Classic now faces a restrictive cost structure that younger airlines do not. Moreover, to counter...
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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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...Running head: PROBLEM ANALYSIS: CLASSIC AIRLINES Problem Analysis: Classic Airlines Judith Judson University of Phoenix Problem Analysis: Classic Airlines To launch a successful marketing campaign, a company must evaluate all environmental factors must formulate proper implementation procedures. Much of the focus must be in planning to prepare the company for unexpected outcomes, mitigate identified risks, and control the timeframe and budget as much as possible. Classic Airlines is a company with an extensive history of success; however, the company has recently encountered difficulties in their progression toward an effective customer service and marketing campaign. Classic Airlines faces the possibility of failure and possibly bankruptcy if their key project is does not overcome obstacles. It is critical that Classic Airlines regain their position as an industry leader in the market, increase revenue and profits, and create positive, lasting relationships with customers. To achieve this, Classic must enter into a new realm of marketing to meet a growing demand from customers and compete effectively in value and pricing. Describe the Situation Classic Airlines is the world’s fifth largest airline. Classic Airlines commands a fleet of more than 375 jets that serve 240 cities with more than 2,300 flights daily. In the 25 years since inception, Classic has grown to be an impressive organization with 32,000 employees, and last...
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...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 for the lack of attention to security and...
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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 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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...2011 University of Phoenix 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 for the lack of attention to security and...
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...Week Three: Classic Airlines University of Phoenix MKT/571 The economy, increasing fuel costs, and strict security measures lead to intense competition in the airline industry. In attempts to remain profitable and successful, airline company management is challenged to reinvent continually company strategies to remain competitive. Classic Airlines is currently the fifth largest airline company with a fleet of more than 375 jets, serving 240 cities, and more than 2,300 flights daily. To maintain and potentially grow profits and market share, Classic Airlines, and its more than 32,000 employees, will make complex and risky decisions in an attempt to implement problem-solving strategies. The terrorist attack on September 11, 2001 immediately affected the profitability of the airline industry. Leisure travel has been significantly affected because of initial fear of flying and continued increase in security measures. To date, Classic Airlines, although subject to a 10% decrease in market share price, remains profitable. However with low employee morale and decreasing customer loyalty, evident in a 19% decrease in the number of reward members and a 21% decrease in flights of current members, the executive leaders of Classic Airlines elect to reduce costs over an 18-month period. Challenges of reducing expenditures, increasing employee morale...
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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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...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 Concepts Marketing MKT/571 Classic Airlines, an airline organization who faces competition is seen in its reduction of customers’ confidence resulting in lower sales. “Classic Airlines saw a decrease in their share prices and a decrease in the number of customers enrolled in their Classic Rewards Program” (University of Phoenix, 2012). The reward program is recording reduction in the number of members and the increase of fuel and labor costs is pushing the organization to the possibility of going bankrupt. Classic Airlines has had declining profits and their stock prices have fallen which has affected the organization. This has forced the company to restructure based on extreme competition and the declining metrics disclosed from their customer loyalty report. The paper is meant to identify the products or services and its challenges plus discussing the marketing concepts that the organization uses to guide its marketing efforts. Current Situation Classic Airlines is a company with an extensive history of success however, the company has encountered difficulties in their advancement toward an effective customer service and marketing campaign. Over the years the cost of fuel and labor has been increasing and the top executives at Classic Airlines have a hard time figuring out how to cut costs, so that they can afford increases. There is a need for the airline to keep up with providing the best services...
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...Running Head: Issues and solutions for Classic Airlines. Investing for the future: Issues and Solutions for Classic Airlines. The purpose of this paper is to explore the current situation at Classic Airlines, define issues hindering performance, and suggest solutions. The initial step in the process is identifying key challenges and their roots within the company. Current State of affairs Classic Airlines and industry The world’s fifth largest airline, Classic Airlines holds a fleet of more 375 jets that serve 240 cities, with more than 2300 daily flights. Since its inception, 25 years ago, Classic has grown to an organization of 32,000 employees, last year; it earned the low profit of $10 million on $8.7 billion in sales. Key Challenges Although Classic Airline has been profitable, profit margins have been small and continue to show signs of weakness. After a thorough examination of the company’s standings, we found a few critical issues which must be dealt with immediately to save the company from further deterioration. Classic has been effected by the challenges that plague today‘s airline industry, the travel downturn that resulted following the events of September 11, and the rising cost of fuel. However, Classic Air is suffering more losses due to the internal problems that plague the company, specifically the guest relations division; here are the key problems that plague Classic Air: • Experienced a 19% decrease...
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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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...|[pic] |Course Syllabus | | | | | |School of Business | | |MKT/571 Version 6 | | |Marketing | Copyright © 2011, 2010, 2009, 2008 by University of Phoenix. All rights reserved. Course Description This course prepares students to apply marketing concepts to create and sustain customer value. Students learn to solve marketing problems in a collaborative environment. Topics include market research, customer relationships, branding, market segmentation, product development, pricing, channels, communications, and public relations. Students may find it beneficial to refer to concepts learned in Economics. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student...
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