Classic Airlines Marketing Solution
Michael R. Engler
7 May 2012
Professor Alan Mandel
Classic Airlines Marketing Solution
Classic Airlines is currently in a state of declining demand and the marketing team has been given the mandate not only to identify the underlying problems but also to find a workable solution that meets the company’s objectives (University of Phoenix, 2005). The marketing team has decided to use an aggressive problem-solving model that includes the following nine-step process:
* Describe the situation
* Frame the right problem
* Describe the end-state and goals
* Identify alternatives
* Evaluate alternatives
* Identify and assess ...view middle of the document...
The level of dissatisfaction with the Classic Rewards program has resulted in a 19% decrease in membership. A further 21% decrease in flights per remaining member indicates frequent flyers are jumping ship to competitor programs offering greater value and loyalty to Classic is declining quickly. The situation has resulted in lost revenue, and this coupled with high fuel and labor costs, has severely limited Classic‘s ability to compete (University of Phoenix, 2005).
The Chief Executive Officer (CEO), Amanda Miller along with the Chief Financial Officer (CFO), Catherine Simpson, have expressed a bias toward budgeting any more money for marketing solutions but rather want to direct available funds toward fuel-hedging and other cost reduction programs. Apparently, the CEO and CFO believe a stronger marketing emphasis threatens their power within the organization and the only effective means to achieve the 15% universal cost reductions mandated by the board in the next 18 months is through cost reduction programs (University of Phoenix, 2005).
Conversely, the Chief Marketing Officer (CMO), Kevin Boyle and his team believe the major function of the enterprise is putting the customer first (University of Phoenix, 2005). They believe that the solution to Classic’s problems lies in reconnecting with customers through creating, delivering, and communicating superior customer value. They must provide a solution that convinces upper management that a company reorientation that responds to, serves, and satisfies the customer will restore the company’s customer base and meet the goals for cost reduction (Kotler & Keller, 2006).
Step 2. Frame the Right Problem
Once the situation has been described, a preliminary issue can be identified and a problem statement can be defined that frames the issue. Effective problem statements are short, succinct, and motivational similar to vision statements. The purpose of the problem statement is to ensure one is solving the “right” problem that enables the creation of different solutions. Because there is rarely just one right problem statement or solution in the world of business, there may be a number of appropriate problem statements depending upon the situation. Thus, a decision can be made about whether there is a problem or if a problem is worth solving (University of Phoenix, 2004).
Because the marketing team believed everything hinged upon reconnecting with customers and providing superior value when compared with the competition, the issue is to show customers that Classic not only understands their needs and what is important to them but is also responsive to those needs. This is a top-down philosophy that puts the customer at the center of the business (University of Phoenix, 2005). As a result, the team came up with the following problem statement to frame the issue:
To become the most competitive and responsive airline in the industry by creating, delivering, and communicating superior customer...