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Mkt 571 - Classic Airlines Marketing Solution

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Classic Airlines Marketing Solution

Akinlua Oludolapo



Edward Foxworth III

Classic Airlines Marketing Solution

According to University of Phoenix (2011), Classic Airlines has grown very much to manage about 32,000employees and also gain $10 million profit from the airlines business. This company is used as a command fleet for about 375jets. Classic Airlines is faced with some challenges coupled with the fact that they have become the world's fifth largest airline around the globe (University of Phoenix, 2011). These challenges have made the company result to a marketing solution that will be valuable to the company consecutively to satisfy their customers and make profit. The challenges faced are outlined as follows:-

- Destructive publication about the agency by the media has affected the employee's morale and reduced their confidence of the customers.

- The Classic rewards program decreased to 19% and 21% decrease in the flights for the residual customers.

- The board of directors reduced the cost of the airline to 15% for the next1.5 years, and the five departments also reduced their cost with regard to the economic situation faced by the company.

These challenges has made Classic Airlines become inadequate in the minds of their customers and reduced their ability to maintain good services to their loyal customers. To improve their services, the company must adapt the nine-step problem and solving process, to enable them assess their alternatives and result to a resolution of conquering these challenges.

The Internal and External Pressures Faced by Classic Airlines

The pressures faced by Classic Airlines are massive based on the economic situation and competition from other airline in the market. The loyal customers are declining from flying with their airlines because the rewards members have decreased to 12%. Also the customers are complaining about the poor customer's services and the reward program that has been reduced to the point that loyal customers are restraining from company. Classic Airlines are also faced with economic situation of high cost of labor and increase in gas prices that has limited them from becoming a frequent flier. The employee's morale to give good service has been reduced and affecting the customer's satisfaction with the services. The company image is at stake and customers are not motivated to fly with the airline. The Chief Executive Officer, Amanda Miller should look into the challengers and derive at a solution to the problems faced in the company.

Classic Airlines should become accustomed to the problem-solving method identified by Management Hub (2005) that consist of nine steps and very important for achieving a successful business.

* Identify problem statement: Making an outline of the problem. Classic Airlines should outline the problem they are currently facing. These problems are: - lack of customer satisfaction, increase in labor cost, decrease in the classic rewards program and employees are rendering poor services.

* Cause of the problem: Classic Airlines are attributed with these problems as a result of the economic situation faced as a typical diversion or breakdown in most current industries

* Research and verify the cause of the problem: Amanda, the Chief Executive Officer should consider carrying out a research, identifying what prompted the problem as regards to the customers detaching from flying with the company. These problems are: - loyal customers are been declined by 19% of the rewards members, flights decrease of 21% for every member, customers dissatisfaction of the customer services, and the rewards of the existing program.

* Identifying possible solutions: Classic Airlines, management team should come together and breed ideas to proffer solutions for the company toward gaining back their customers and making profit. The following are ideas that should be considered:-

- Adapting the use of a marketing plan:- According to Kotler and Keller (2006), "marketing plan should be capitalized on selecting valuable markets, keeping and enlarging both new and old customers towards delivering good customer potential value as a toll for an industry" (Kotler&Keller, 2006). Classic Airlines should aim at increasing their net profit yearly. This involves rewarding their customers, and acquiring a good customer relations officer. This will guarantee more loyal customers and satisfaction of their services.

- Good customer surveys should be carried by the industry. It will help in discovering how well to satisfy their customers, and also finding information from competitors to grow. Through this survey the industry will know where to adjust or bring in new practices that will produce profit at the end the year.

- The New York Times identifies American Airlines as "the second largest airlines in the world. These airlines increased its shareholders by creating alliances with other airline partners. With this partnership, customer's points have been increased with every flight ticket purchased". (New York Times, 2007).

Apart from that, over the years, American Airlines has understood what makes their customers satisfied and are working toward improving their experience as a standard key to the loyal customers. Therefore, in reference to the scenario, Classic Airlines should aim at improving the customer's experience. The shareholders value should be increased. Also, through evaluation, employees of the company should be involved in the agency's decision, by generating their ideas. This will boost the employee's morale and add value to the growth of the agency.

- Apart from that, Classic Airlines should also consider partnering with all other airlines, thereby increasing customers and improving the flying rewards program. This will enable the agency to generate more customers and increase productivity and profit.

- Suggestions from customers should also be considered by the agency. This will help in generating good ideas, and be familiar with what they want from the agency. They should refurbish the rewards program and help customers understand how valuable they are to the company, in view of making profit at the end of the year.

- As a final point, through alliances with other airlines, Classic Airlines will meet their reduction in operational cost of about 25% because they have both domestic and international flight. They can expand



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