Classic_Airlines_Challenges

Running Head: CLASSIC AIRLINES CHALLENGES Classic Airlines Challenges Monique S. Payne MKT.571 07.19.10 ABSTRACT According to the American Marketing Association, marketing is defined as “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 stake holders (AMA Dictionary, 2010).” Therefore, it is often important for a business seeking to remain profitable to analyze the functions of both internal and external factors and Classic Airlines is no different. The challenges that this company faces include a reduction in employee morale, decreasing participation in the rewards programs offered to valued customers and in overall flight purchases. This paper will discuss these challenges and the role that the four P’s as well as both the macro and microenvironment may play in increasing Classic Airline’s profitability. Classic Airlines Challenges Classic Airlines goal is to improve upon product offers and services and the only way to do this is to review the areas that could use a certain degree of change to make the company become more financially sound. The company has an extensive Reward program in place that is extremely beneficial to the frequent flier, however, the high ticket prices and customer service complaints may cause significant financial losses in the future. These problems coupled with increasing concern regarding flying after September 11th, which has also impacted the entire industry financially, has also decreased Classic Airlines share prices resulting in a need for change to turn things around. (Classic Airlines Scenario) Macro and Microenvironmental Roles When it comes to marketing, an important first step in determining the reasons behind a company’s hard times involves knowledge of the internal and external contributing factors to its success. Therefore it is critical that Classic Airlines gains a clear understanding of its microenvironment and macroenvironment. A company’s microenvironment includes that competition, the suppliers and the clientele. The macroenvironment, on the other hand, is defined as “the collection of uncontrollable forces and conditions facing a person or a company, including demographic, economic, natural, technological, political, and cultural forces (AMA Dictionary, 2010).” Since the macroenvironmental factors cannot be manipulated, forecasting the possibilities becomes crucial to Classic Airlines ability to make a profit. Thus, understanding the wants and needs of the customer base as well as being knowledgeable about the competition’s offers and techniques is key to a business’s successful marking plan. This is where the four P’s (Product, Price, Promotion and Place) comes into play. The Product design and features appeal to a customer while Place the brand is advertised impacts the clientele that is exposed. In addition the Price is often what gets a customer to seek a product once they have decided that the product design meets their needs and the way it is promoted through customer interactions with staff as well as advertising, makes a huge difference in a company’s strategy to gain and maintain a client base. Conclusion Focusing on the elements that can be changed would be the next important step in building a loyal customer base and since it is evident that customers desire timely flights, low prices and continued benefits for their patronage to the airline, Classic Airlines can focus on making necessary changes to retain current customers and create a company name that carries a strong and positive reputation. It is also critical for the staff to be highly trained on delivering exceptional customer service and furthermore be rewarded for this service. This way, desirable service is encouraged and customers are made to feel valued and appreciated in regards to their purchases. It is not a good idea for Classic to take anything away from their existing program, which can be learned by their competition, GloablAir’s, approach. However, adding to the benefits of being a loyal customer and illustrating the importance of providing excellent service by the employee with help the business all around. (Classic Airlines Scenario) Reference http://www.marketingpower.com/_layouts/Dictionary.aspx'dLetter=M#marketing+management. Retrieved July 18th, 2010. Kotler & Keller. (2006). Marketing Management (12th ed.). New Jersey: Pearson-Prentice Hall. University of Phoenix. (2010). Classic Airlines Scenario. Retrieved July 17th, 2010 from University of Phoenix, Week One, MKG/571