Classic Airlines Marketing Solution
The world economy is increasingly been fuel by Service businesses, with stiff competitions, most companies are finding it difficult to differentiate their physical products. To have that competitive edge over competitors, it is critical for service businesses to understand the special nature of services (Kotler, & Keller). One such company that is finding it difficult to understand the nature of services is Classic Airlines. The company is the world’s fifth largest airlines, they operates in 240 cities with an impressive 2,300 daily flights (University of Phoenix, 2012). The company’s financial report shows it earned $10 million on $8.7 ...view middle of the document...
Classic has seen the price of its Stocks prices fallen by 10% within the last year and employee morale is the lowest it’s ever been (University of Phoenix, 2012).
By prioritize these problems with the most important one at the top, customer satisfaction and loyalty can be classified as the main factor. Finding what causing the dissatisfaction among customer and fixing it will help the company start realizing an increase in sales, this will in turn improve employee morale, it will also generate more returns on investment, this will keep the shareholders happy and Board of Directors approval for future programs. On the other hand, if effective market strategies are not implanted to increase sales at Classic and decisive actions not implemented reduce costs; the company will be forced into bankruptcy.
Step 2: Measure/analyze the problem
The number of Classic rewards members are declining at a rate measured to be around 19 percent, and reports also stated that the remaining members that do actually pay for flights has decrease by 21 percent (UOPM, 2012). Compared to its competitors, the rewards program offered by Classic is much more restrictive. The company only allocated 10 seats per flights for its frequent fliers and some direct international flights are prohibited entirely (UOPM, 2012).
The decrease in the company’s market share is measured to be 10%, this was cause by some external pressures like the negative report by the media, Wall Street and the public (UOPM, 2012). More miles are required for reward eligibility, during holidays, blackout date are imposed. This is what causing the rapid decrease in ticket sales, because customers are not satisfied with the services provided by the company, and are shifting to Classic’s competitors that provide better services that satisfy their needs.
The Customer Relationship Management (CRM) system is not being used to its full capabilities. According to Renee Epson “we configured the system in a way that doesn’t integrate the phone channel with the Web channel. If our customers choose to interact with us over both channels, we don’t know they’re the same person” (UOPM, 2012).
Another major factor that is creating internal pressure at the company is the 15% cost reduction plan mandated by the Board of Directors that should be in full effect in 18 months (UOPM, 2012). This has created a negative effect among departments, as well as employees, resulting to low morale across the entire company. With an exact measurement and annalistic view of the company’s problems, management must use holistic market approach to solve these critical problems.
Step 3: Set the goals
Goals are indicative of what an organization wants to accomplish; strategy outlines the infrastructure to achieve organizational goals. Classic must perform a SWOTT analysis. This research will be utilized to develop strategic goals (Kotler, & Keller). The goals formulated by Classic must have these four elements: