...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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...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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...Classic Airlines is facing the same issues that many organizations are faced with which is providing increased value to their customers with a tighter budget, as the fifth largest airline Classic airlines has had declining profits and their stock prices have fallen this has adversely affected the organization. To make matters worse Classic Airlines has lost 19 percent of their Classic reward members; and the members they have left are flying with Classic even less these days (UOP Portal, Classic Airlines, 2011). This has forced the company to restructure based on extreme competition and the declining metrics disclosed from their customer loyalty report. Chief Executive Officer Amanda Miller has tasked the leadership teams to make improvements to the frequent flier program that will promote positive returns. The board of directors recently mandated a 15 percent cost reduction across the board that will be in effect for the next 18 months. To achieve this task Classic will need to analyze feedback from customers and understand their objectives and align those with their long term goals. The issues and opportunities present in Classic airlines will be addressed as well as any ethical dilemmas or stakeholder perspectives that need to be addressed. The problem definition and the end state vision will be discussed and the optimal solution will be proposed for Classic Airlines. Issue and Opportunity Identification Classic Airlines has several issues that they need to address...
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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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...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 Solution Odessa Mattern Marketing/571 University of Phoenix Heidi Kelley April 18, 2011 Introduction This paper will be to analyzing and apply a problem-solving process situation at Classic Airlines. Using in the process to come up with the final analysis for Classic Airline. The beginning will give background on the company. The middle will address the problems that Classic Airline is facing It will also show how the challenges and opportunities in each department within the organization. The ending will be the SMART end goals that will measure the end results. Background on Company Classic Airlines has been in business for 25 years and is the world’s fifth largest airline with more than 375 jests that serve 240 cities. Classic Airlines employ 32,000 employees and earned $10 million on $8.7 billion in sales. In the past year, Classic Airlines have seen a decrease of 10% in share prices and a 19% decrease in the number of Classic Rewards members; with a 21% decrease in flights among the remaining member (University of Phoenix). Problems Classic Airline Facing Though profitable, Classic is no stranger to the challenges that plague today’s airlines. The following are problems that Classic is facing: * 19% decrease in Classic Rewards members * The travel downturn that followed September 11, 2001 * Rising cost of fuel and labor * 10% decrease in share prices * Negativity from Wall Street, the media and the public *...
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...Classic Airlines is up against not just one challenge but several challenges they need to deal with. Unfortunately travel has decreased as a result of uncertainty with regards to flying; this has forced the stock prices to be reduce decreasing the price of a share of Classic Airlines stock by 10% over the previous year. The negative messages being conveyed by Wall Street and the media is bringing employee morale down to an all time low. Consumer confidence in the airline has resulted in a 19% decrease in Classic flight reward members which in turn has decreased flights by loyal members by 21%. The rising cost of fuel and labor as a result of economic times is preventing Classic from competing to regain its lost customers. In an attempt to balance out their financial loses and cut down on any further financial crunches, the board of directors is mandating a 15% cost reduction but expects the marketing strategies to be beefed up to bring in more profitable return on investments of the frequent flyer program. This plan is being put into action to prevent bankruptcies of the airlines. Classic Airlines needs a begin with their business mission then move on to a strategic plan. The strategic plan will layout, based on analysis, what areas of the airline market has the most promising opportunities. The next step is a tactical marketing plan that will help to point out promotions that could be featured and services they could offer to bring lost customers back as well as to draw new...
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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 Problem Solution: Classic Airlines Classic Airlines has established themselves as the fifth largest airline within their 25 years of existence. Recently they have experienced a 10% decrease in share prices and are faced with a challenge of expanding their frequent flier program using methods that will demonstrate a return on the investment. Classic Airlines will first take a dive into the environmental factors of social, economic, technological, competitive and regulatory forces in order to determine the right problem. (Kerin 2005) “These five forces may sometimes serve as accelerators or brakes on marketing, sometimes expanding an organization’s marketing opportunities and other times restrict them.” Ultimately Classic Airlines will reach the point where they value their customer’s needs. Airlines will always be in demand; therefore it is imperative Classic Airlines develop a marketing plan that will ultimately keep the airlines ahead of the competition. Describe the Situation Issue and Opportunity Identification Classic Airlines has experienced a 10% decrease in share prices over the past year, along with a 19% decrease in Classic Rewards members, and 21% decrease in flights amongst remaining members. Classic Airlines Employees are experiencing low morale issues from the media input of the state of Classic Airlines. Although the Customer Relationship Management (CRM) system...
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...The purpose of this paper is to use a problem solving model to analyze the current situation with Classic Airlines. Initially, we will focus on the challenges, opportunities, external and internal pressures of marketing. Next, a clear problem statement will be constructed that is open to multiple solutions. It will conclude with SMART en-state goals that are specific, measurable, attainable, realistic and timely. Classic Airlines has seen a 10% decrease in share prices within the last year as uncertainty about flying has affected industry stock prices. Rising costs, specifically of labor and fuel, have crippled them and negativity from Wall Street, the media and the public has affected employee morale reducing it to an all time low. Although Classic’s Board of Director’s recently mandated a 15% across the board cost reduction over the next 18 months, it’s still mandated they create a way increase the frequent flier program reflecting a measurable return on any investment. The 9 step problem solving model includes the following steps: 1) Describe the situation. Provide an initial description of the issue or opportunity, which will become the basis for defining the “right” problem. 2) Frame the right problem. This is done based on the situation or scenario. 3) Describe end state goals. This is done based on that problem definition from the previous step. 4) Identify alternatives. Possible alternative solutions are created. 5) Evaluate alternatives. The alternatives from the...
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...Classic Airlines Marketing Concepts [student] MKT/571 February 11, 2013 [instructor] Classic Airlines Marketing Concepts The marketing team for Classic Airlines is facing the task of renewing the appeal of an aging airline struggling to maintain financial viability in the face of legacy costs and a decreasing base of loyal customers. They are facing an ideological division between the CEO and CFO believing too much in numbers, and the CMO maintaining that customers determine value in ways other than price (University of Phoenix, 2008, pp. 3-4, 9). The challenge for the marketing team is getting the company to embrace that they must, as Jack Welch said, “change or die” (Kotler & Keller, 2006, p. 4). Focusing on things like a 15% cost reduction target and hedging fuel prices have led to a 20% reduction in loyalty program membership, a 10% decrease in share prices, and a looming situation with union obligations (University of Phoenix, 2008, pp. 1-2, 4, 8). Marketing Concepts To improve the outlook for Classic Airlines the marketing team knows that they will have to use some basic marketing concepts to put themselves back on the map. They plan on using their existing CRM system as a means to gather data on existing customers, conducting a thorough analysis of their current competition, and using their “fundamentally solid and robust system that's globally accessible” to form new strategic alliances (University of Phoenix, 2008, pp. 5-6, 9)...
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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: 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 and Marketing Paper University of Phoenix MKT/571 Classic Airlines is a company that services air travels to its customers along with good customer service throughout the entire experience from the time the customer orders a flight till the time they reach their destination. Rising costs has been one of the main challenges to Classic Airlines. Recently with a 19% decrease in Rewards members and 20% decrease in flights, the firm is losing theirs not only new customers but existing ones as well. Other than budgeting for an expected decrease in business, the firm is also due for a significant change in its marketing strategies to ensure future revenue and avoid the possibilities of bankruptcy. New priorities need to be developed such as highlighting important consumer needs, establishing realistic criteria for finding the appropriate market segments, and developing a relevant feedback system would help the company find problems where the most revenue is generated and enable Classic Airline executives to attack those areas. Based on the current scenario, the firm seems to be suffering from a lack of proper customer relationship management and self identity. CRM is a company-wide business strategy designed to optimize profitability, revenue, and custom satisfaction by focusing on highly defined and precise customer groups (Lamb, Jr., Hair, Jr., & McDaniel, 2006). For example, if Classic Airlines wanted to sustain revenues among its business customers, it...
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...Classic Airlines Marketing Solution Egypt Grandison MKT571 October 10, 2011 This paper will explain and analyzed Classic Airlines, a twenty five-year old passenger airline. Classic Airlines operates more than 375 jets that serve 240 cities and more than 2,000 daily flights; which makes it the fifth largest airline in the world (University of Phoenix, 2011). Therefore, the organization has grown with 32,000 employees, and it earned $10 million on $8.7 billion in sales (University of Phoenix, 2011). Current Situation Classic Airlines is aware of the challenges that come along with a successful organization. With customers unsure about flying because of the rise in prices, it is affecting stock prices. Therefore, causing Classic to have a 10% decrease in share prices last year. Now that the investors are watching Classic more, they have to be aware of the business operations (University of Phoenix, 2011). The reward program had a decrease in numbers and customers are either not flying with Classic, or booking through other airlines. To make matters worse; Classic Airlines has to find a way to make the frequent fliers program appealing to customers, which will bring a hefty return on investment to the company. Stakeholders and Ethical Dilemmas The airline must consider all shareholders and the ethical dilemmas. There are four stakeholders involved in this scenario: Employees, management, shareholders, and of course the customers. Currently the employees have several issues...
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