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 because the problem is not the price of the ticket. People would pay more money from a CA ticket than is currently charged under different circumstances. However, current circumstances dictate that the value of the ticket is not worth more. Value is more important to the consumer than price. Due to the fact that customer satisfaction is relatively non-existent, CA has no choice but to