Marketing_571

Introduction Classic Airlines once an exceptional airline company is now suffering the effects of the down economy and increased consumer anxiety about flying. Classic now feels the need to revamp their program in order to stay in business and remain profitable. Classic Airlines faces a few problems and troubled areas in its industry. Classic needs to increase profits by decreasing costs. In analyzing the issues observed, Classic needs to develop a problem statement. This statement will identify the issues in which need to be solved. The goals of Classic can be developed once the problem statement is created. In addition some alternative solutions aside the problem statement and end state goals need to be looked at. In the end the best solution will be implemented and practiced in Classic Airlines. Problem Identification Classic is faced with many concerns. One of the problem classic faces is the decrease in buyer confidence. The decrease in numbers speak for themselves. The Classic rewards program measured a 19% decrease and flights per remaining showed a 21% decrease. Classic ability to implement new services is hindered due to the lack of stakeholder alliance. The CEO and CFO need to implement ideas from the management team. However the CEO is doubtful to listen to management ideas due to the past marketing plan. With increased public inquiry, Classic is experiencing a 10% decrease in price per share over the last year and increase in cost of fuel and labor. This combination has developed a new issue for Classic which is the employee morale is on an all time low. Classic has told its managers they need to decrease the marketing budget by 15%. Even though this has created massive issues for Classic, it has also created an opportunity for identifying and implementing end state goals to take Classic to the top. Problem Identification and End State Goals Core issues need to be identified if Classic wants to decrease marketing by 15% in expenses over the next 18 months. Consumer dissatisfaction with the rewards program as it exists is the core problem based on the analysis of customer surveys. The problem Classic is faced with is it needs to keep current customers, bring in new customers and at the same time reduce its marketing expenses. Critical analysis is much needed to help Classic make this decision on how to move forward and redeem itself as a top end airline. End State Goals Sufficient planning is a priority when you increase the worth of the company. The end state goal process allows the “SMART” (specific, measurable, attainable, realistic and time bound) objectives,, ultimately aiding the long term effects of change on the airline, their valued customers and its employees. Alternative Solutions and Benchmarking Validation Classic can perform a SWOT analysis which will analyze internal strengths and weaknesses and can other opportunities and threats. Restructuring the Frequent Flier Program is what is needed to compete with other airlines for customer support. One alternative solution is copying a program that has been used before. However reorganization of the awards program will offer frequent fliers and loyal customers. New rewards that feature numerous exchange options can improve customer morale. The finest measure of the end state goal can be investigated and evaluated by identifying multiple alternatives to associate with classic. By researching how other industries have dealt with similar issues. Classic can identify potential solutions to its defined problem statement. One possible alternative for Classic would be to create an alliance with major hotel companies like Radisson Hotel by offering free night stay for frequent fliers. Many hotels are starting to offer airline mileage rewards in their frequent guest programs more often than free nights at the hotel. The Sheraton back in 2007, switched to “miles-only” reward system, allowing guests to trade those miles in for free hotel stays. “People most often want miles out of a hotel frequent guest program. The frequent flyer programs are so important to travelers that 70% of all business travelers belong to an airline frequency program, yet only 40% of them belong to any one hotel program” (Hotel & Motel Management, 2007). This research concludes that travelers treasure frequent flier miles are willing to exchange free hotel stays for airline miles. Analysis of Alternative Solutions Classic can identify some alternative solutions for its problem but benchmark data has been collected. A plan for mitigation will be developed once Classic has narrowed the scope of all alternatives to an optimal solution. By presenting frequent fliers with better service and reforming the Classic Rewards Program is the most important alternative in this situation. Winning back customers, providing outstanding customer service and offering novel choices to cashing in frequent flier miles is the main objective for Classic. In addition convincing executive team to buy into a team oriented business model is a challenge that needs to be faced and dealt with as well. Once the business model is implemented all employees must adhere to the new plan, otherwise termination of that employee may exists. Best Solution The CRM system needs to be competently applied. Most of the Classic’s clients are referred to the internet for customer service, which enables classic to keep head count. When a stronger achievement of CRM takes place, head count level can be kept down while giving employees the opportunity to cross directly with the customers. Suitable and ground-breaking training to all CRMs is the main tool. Implementation Plan “A key of marketing is to develop deep, enduring relationships with all the people or organizations that could directly or indirectly affect the success of the firm’s marketing activities” (Kotler and Keller 2006) By taking the necessary steps to implement a justly consumer approach to relationship management, and developing values employees, Classic will obtain, develop and retain valued loyal customers. Honesty, patience and loyalty along with creating a board of executives to regulate Classic Rewards and Frequent Flier Program will be needed. The board will stick to customer oriented program and regulate the airlines control over mileage redemption. Classic would be able to measure the success of the new program, by measuring its ability to meet and or exceed the industries standards. Evaluation of Results Classic Airlines success at implementation of the plan will be measured by the decline in cost, increase in market share, customer questionare/satisfaction survey results, increase in employee morale and the percentage increase of the corporate stock. Classic should also consider the main objective of the marketing plan when dealing with non financial issues. The three strategic metrics include: market share, lifetime value and brand equity. Measurements should be taken at various times to remain effective as the markets will change. By taking ongoing measurements over a period of time reveals critical information which encourages more support for the plan, as measuring can demonstrate accountability, which in turn provides evidence for undertaking certain marketing projects. Conclusion In an effort to save Classic airlines there needs to be increase in customer morale and enrollment in their frequent flier program, spotlight product market analysis and improve satisfaction as a whole. These challenges can be achieved by creating customer value and loyalty through a tailored customer relationship management (CRM) program. However all employees must practice the new plan and be held responsible for doing his or her part in meeting the end state goals.