Problem Solution: Classic Airlines
Classic Airlines is the world fifth largest airline employing 32,000 employees and earning 10 million dollars. In recent years, Classic has seen a decline in sales and their customer loyalty program, while there has been an increase in fuel and labor costs. The Board of Directors has demanded and cost reduction while increasing its profits. In spite of rising fuel prices, homeland security threats and the onset of online travel sites, Classic Airlines has maintained its position as one of the top five commercial airlines. As outlined here, there are various issues that affect any company at any one time. For Classic Airlines, the main issue is the current ...view middle of the document...
The first major obstacle for Classic is the dropping number of frequent fliers who return to the airline. The board of directors has mandated a 15% cost-cutting measure across the company, so funding for research will not be available. The marketing team will need to re-evaluate the existing data.
Establishing acquirement goals will help lead to retention efforts that maximize long-term rewards and growth. Gaining first-time customers and keeping them as long-term customers has proven to be critical for the success of the company.
Focusing on the most profitable market requires a great deal of planning in the area of segmentation. There is not a promised formula for marketers for determining the most profitable target market. Expanding the market horizons widens the arena for potential customers, and does not exclude those potential customers who were previously not targeted.
However, all of the suggestions so far are meaningless if the customer does not feel valued. Unfortunately, there is no prescription to make a customer feel valued. There are a series of steps that need to be followed. â€œCompanies that pay little or no attention to building loyalty among their customersâ€¦ are doomed to eventual declineâ€ (Duboff & Sherer, 1997).
Stakeholder Perspectives/Ethical Dilemmas
Several opposing interests are involved in the Classic Airlines scenario. While each party believes that it has best intentions in play, the opposing side would argue the opposite is true. The first dilemma is between the CEO & CFO and the three individuals in charge of mitigating the marketing issue: Kevin, Renee and John. While the three marketing experts are convinced that an alliance with Skyway Airlines would be a panacea for Classic Airlines, the CEO and the CFO have not seen supportive evidence to prove this speculation.
In addition, an impasse exists between the Classic Airlines board of directors and the senior management team. No proof exists to suggest that the Classic Airlines staff are disgruntled or the uncertain of the companyâ€™s future. However, rumors are circulating that the board is considering filing for bankruptcy, if the companyâ€™s issues can not be resolved.
The most important conflict for Classic Airlines exists between the company and its customers. Finalizing a program that acquires, retains and benefits customers will ultimately result in positive returns for Classic Airlines.
Frame the â€œRightâ€ Problem
Classic Airlines will become the premiere commercial airline industry leader through an alliance with Skyway Airlines that builds on the strength and integrity of both companies, while allowing for growth and positive return on investment for Classic Airlines and its stakeholders.
Describe the â€œEnd-Stateâ€ Vision
The end-state for Classic Airlines is not just a quick fix for the customer retention and satisfaction issues that are currently at stake. An appropriate end-state focuses on the long-term success of the...