Classic_Airline_Marketing_Solution

Classic Airlines Marketing Solution Allen Washington University of Phoenix Abstract Classic Airlines is one of the world’s largest, and most prestigious airlines. Since Classics inception 25 years ago, the company has blossomed into an international force earning the title the fifth largest amongst all active Airlines in the world. Classic houses 32,000 employees “commands a fleet of more than 375 jets that serve 240 cities with over 2,300 daily flights”. (Classic Airlines, 2011) Upon completing last year’s final quarter Classic reported an earnings of $10 million on $8.7 billion in sales. However, similar to other major airlines Classic has recently witnessed a decline in profits due to the economic instability, lack luster marketing, and consumer confidence. Their recent 10% decrease proved that Classic was not exempt from the share price shortcomings that are wreaking havoc on an industry that has been under enormous pressure from the public, the media, and Wall Street. The cynical press has proved to be a hindrance to Classic’s staff hindering their moral. After taking into account of the internal and external pressures contributing the CA’s current crisis, the new objective of implementing strategic market plan to resolve solution is clarified; furthermore, potential issues of implementation is also considered to ensure impact of the plan. The paper will also highlight that implementation of improved CRM which expected to significantly improve the profitability of the organization. Successful implementation requires effective leadership, targeting market group, realizing shared vision among stakeholders and appropriate delivery strategies. Identify the Problem The problem with Classic Airlines is the company has lost their ability to address customers demand.   As a result, the company has experienced a 10% decrease in share prices and customers have lost confidence in the company.   The negative press about this decline has also caused employee morale to be at an all time low. The board of director’s has also implemented a 15% cost reduction prompting Classic Airlines to find a way to reduce the marketing budget and avoid bankruptcy.   Lastly, according to the Customer Loyalty Report, the Reward’s Program has lost more than 160,000 customers, a decrease of nearly 20%. Another problem Classic Airlines faces is the corporate structure of the airlines.   The CEO, Amanda Miller, does not agree with ways to attract the customers’ demands when it comes to pricing.   Management has to develop a leadership team that will establish a new way to focus on customer satisfaction rather than profit to keep current customers and retain new ones.   Keeping customers satisfied will create satisfied employees that will ensure increased profits. Measure the Problem Customer surveys revealed that the focus of Classic Airlines needs to be on the needs and demands of the customer.   These surveys show that 15% of the customers are not satisfied with Classic’s service, 56% are not satisfied with the reward redemption options, 68% would not recommend the Classic Rewards Program to a friend or colleague, and 46% of their customers switched to a competitor (Classic Airlines, 2011).   The customer surveys will ask customers to give their opinions and suggestions to what they want and need from Classic Airlines.   The changes that will be implemented will be based on the data collected from the surveys.   This will help with the implementation of programs designed to help employees increase morale. Set the Goals Goals are defined as objectives that are specific with respect to magnitude and time (Kotler & Keller, 2006).   Classic Airlines must set new goals for the company in order to address the problems they are facing.   These goals will give Classic Airlines a vision and direction on which path needs to be taken in order to accomplish their goals.   The goals that need to be set are improving the market shares and sales, increase profits, improve customer service, and increase employee morale.   Classic Airlines can increase employee morale by implementing training programs for employees.   The training programs will educate employees on improving customer service as well as informative information on services the airlines will offer their customers.   Employees will become confident in their job and it will reflect on their service to the customers. Fuel costs could be reduced 12% by locking in fuel prices through the Fuel-hedging program.   This will allow Classic Airlines to reach the cost reduction of 15% by contributing to this program. Classic Airlines must also develop a new mission statement directed to the needs and demands of the customer.   The new statement must be designed for internal and external customer satisfaction and awareness.   It is imperative that customers can see that the company is credible.   Companies must design marketing communication and informative programs for consumers to learn more about the brand than the information they get from service encounters alone.   The programs will involve marketing and communications that help the firm to develop the proper brand personality (Kotler & Keller, 2007). The main goal of the company is to regain the confidence and the loyalty of its customers.   To gain this confidence, Classic Airlines must rely on customer surveys and make the necessary changes to satisfy the customer. Identify Alternatives and Risks The board of directors will consider all possible alternatives and will adhere strictly to it being done with 15% less in marketing expenses.   There are three possible alternatives. The first alternative is the concept of one stop shopping with Alliance marketing.   This would allow the airline to collaborate with hotels, credit card agencies, and car rental agencies to plan an entire trip with one company at one time.   This concept will address customer satisfaction issues; it will also alert stockholders.   Classic Airlines must make these changes quickly to stay competitive.   Competitors are offering low prices and frequent flier miles for any destination.   The company must be able to match these prices or they will face losing a majority of their loyal customers.   A loss of customers will also contribute to low employee morale as well as lower profits. In an effort to increase employee morale, Classic Airlines can offer discounted employee flights and a discounted rate for enrollment into the frequent flyer miles program.   They can also offer employee bonuses for signing customers into the Rewards program. The second alternative would be segmentation strategy.   This type of strategy consists of a group of customers who share a similar set of wants, such as car buyers who want low-cost transportation and car buyers who want a luxurious driving experience (Kotler & Keller).   This would be addressed to the Rewards members and keep its current customers but it would not be successful in addressing old customers.   Customers needs vary, and for this to be successful, the strategy must remain flexible.   Segmentation marketing would question concerns on how the service would affect non-customers of the Rewards Program. The last alternative is to upgrade the (CRM) Customer Relations Management software.   The main goal of this new software is to reduce the costs of marketing and customer service, bring back former customers, satisfy and keep current customers, and attract new customers.   An effective implementation of customer relations management will increase profits, and reduce operational costs.   There are minimal risks in this alternative and it seems to be effective in meeting the needs of Classic Airlines. Make a Decision The best decision to resolving the issues with Classic Airlines is to upgrade the Customer Relations Management (CRM) software.   By upgrading the software, the marketing team will also be in compliance with the regulations set by the board of directors.   To insure the issues of the airlines is addressed; a holistic marketing approach should be implemented. Develop and Implement the Solution The Holistic marketing approach will address internal issues of employee morale and external issues that affect the overall flow of the company.   External issues of marketing include the pricing, stock markets, customer service, and the interests of the stockholders.   Internal issues of marketing include training and employee motivation.   The upgrade to the CRM will aide in the training of the employees.   Technology will make service workers more productive (Kotler & Keller, 2007).   This type of interactive marketing will assist the employees’ skills in serving the customers. Evaluate the Results The outcome of upgrading the software of the CRM will be expensive but it will be a benefit in a relatively short period of time.   It was designed to attract former customers and reduce marketing expenses.   The CEO has seen the numbers showing how positive the upgrade of the system has been.   Continuing the enhancement of the system will provide Classic Airlines with an increase in profits, show an improvement in customer service from its employees, and reduce its operational costs.   The marketing team will also be able to provide the board of directors with the bottom line numbers needed, and operate within the guidelines available to them for their assignment. Classic Airlines will also continue to address the needs and demands of each of its employees as well as its customers.   Surveys will be used to know the satisfaction of its customers and see what improvements can be made.   Addressing the needs of the customers and the employees will also bring an increase in satisfaction and profits.   Profits will be evaluated by the comparison of current financial records to the financial records of last year to determine whether there has been an increase and how long it took for an increase. Conclusion Classic Airlines has been affected by several issues that lead to a decrease in its members of the Rewards Program and in turn its overall profits.   The marketing team was assigned to develop a program to retain their current customers, and bring back former customers from competitors.   The airline needs to redirect its focus from finances to customer satisfaction to avoid the issue of bankruptcy.   Classic Airlines has decided to upgrade their CRM software as the most cost effective way to address employee and customer concerns.   The CRM system upgrade will combine the efforts of employees, corporate heads, and technology to increase profits and reduce the cost of operating the company.   The upgrade will also stay in compliance with the guidelines set by the board of directors. The Holistic marketing concept will be used to control the external, internal, and interactive aspects of the company’s structure.   All three aspects will work together for Classic Airlines to accomplish its goals and adhere to its new mission statement to provide quality customer service.   Classic Airlines will be able to monitor its progress with the new upgraded system.   It will monitor sales, prices, and activities of the Rewards Programs.   With the implementation of the new changes and upgrades, Classic Airlines should be able to gain the confidence of its customers and increase its profits. Classic Airlines will focus more on the satisfaction of their customers than the maximization of their profits.   They will also acknowledge the hard work of their employees in an effort to keep the morale of the employees up and in return provide Classic Airline customers with top quality customer service. Reference Classic Airlines Scenario. (2011). Retrieved August25, 2011, from University of Phoenix: https://portal.phoenix.edu/classroom/coursematerials/mkt_571/20110509/ Kotler, P., & Keller, K. L. (2007). A Framework for Marketing Management. New Jersey: Prentice Hall, Inc. Kotler, P., & Keller, K. L. (2006). Marketing Management. New Jersey: Prentice Hall, Inc.