Classic Airlines is the world’s fifth largest airlines and has witnessed a steady growth in the 25 years since its inception. However, though profitable, the airline has not been spared from the challenges that affect airlines. For instance, increased uncertainty about flying negatively affected the stock prices which saw Classic airlines recording a 10 % decrease in the share prices in 2004. Its negativity has resulted in low employee morale where consumer confidence seems to be declining. Loyal customers also seem to be jumping ship and those remaining are flying less frequently. The airline has come under spotlight as a result of the seemingly mounting problems hence this essay seeks to identify as well as to define the problem bedevilling Classic Airlines. A problem solving model will be applied in a bid to try to address the airline’s current crisis. A close analysis of the case shows that there are both internal as well as external pressures contributing to Classic Airlines’ current crisis. The airline is operating in a competitive environment that is characterised by rising fuel while it is already incurring high operating costs. In a competitive environment, it can be noted that the companies will be fighting for the same customers hence the one with favourable services is likely to appeal to the interests of many customers. Whilst it has been observed that competition is fierce in the airline industry, it has also been noted that a closer look at the profiles of the other competitors shows that to a certain extent, some of them have a competitive advantage over Classic Airlines. The major strengths of the three given competitors indicate that they are dominant players in the industry and they have a global presence and a strong existing network in different destinations they ply. It has also been noted that these players have successful loyalty programs in place which is currently a problem that is affecting Classic Airlines. Its customer loyalty base is waning and a holistic approach has to be taken in order to revive its diminishing fortunes. Another notable strength possessed by the competitors is that they have worldwide brand recognition and they are likely to appeal to a large number of customers. There are also internal factors contributing to Classic Airlines’ current crisis and these include labour costs. The firm is paying top salaries especially to pilots and other employees while other competitors are cutting back pay on such professions. Priority is given to the needs of the workers and this has increased the operating costs of the airline. High salaries offered to the employees are not commensurate with the actual economic state of affairs obtaining on the ground. The stance to give the employees the autonomy to decide destinations through a bidding system is also a contributory factor to the current crisis being faced by the airline. The high operating costs have limited the airline’s ability to compete for valued frequent flier given that it is now confined in a restrictive cost structure. Thus, as noted by Ben Sutcliffe, Classic’s General Counsel, the main problem related to this approach by the airline is that it has one of the highest labour costs which are likely to jeopardize its future. This has mandated a 15 % cost
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It is widely believed that problems are part of everyday business and great problem solvers are better positioned to solve their customer’s needs effectively (Zwilling, 2011). Simply put, a business may not exist if there are no problems. Against this background, this essay seeks to utilize the nine step problem-solving model to solve Classic Airline’s marketing problem…
This shift in paradigm has been the result of an increase in the level of inflation and a rise in the cost of fuel. These two variables have made it imperative for airline carriers to achieve operational excellence and enhance customer loyalty. Unfortunately for the company, it has encountered some internal problems which are preventing it from addressing these challenges effectively.
Classic Airlines is facing problems as the firm has not been effective at retaining customers. In the last year the firm has lost 20% of the member of its customer loyalty program. The firm has lost approximately 160,000 recurrent clients.
One of the fifth largest airlines, Classic Airlines is experiencing challenges due to larger service costs and fuel costs and issues related to service and marketing. Due to this there has been a steep decline in the consumer traffic.
The current paper focuses on the marketing needs of a well – known organization, in the context of the airline industry, Classic Airlines. It should be noted that the above firm has, traditionally, focused on the limitation of its costs, so that its potentials for high profitability are increased.
The first step is to identify the problem. In this case, there are two distinct problems. The airline is facing diminished customer positive sentiment about the brand, which is reflected in sales revenues and losses of brand loyalty in its rewards program.
However, the approach is similar as finding a solution is applicable in both. Ideally, it will not be wise to close down a business because of the problems encountered. In order to solve a problem, it is crucial to apply the relevant problem solving skills in order to overturn the outcomes (Blais, 2012).
From there, the model will be used to define a solution and this will be applied to the situation at hand. For the purpose of this discussion, the marketing unit will involve the way of identifying and meeting human needs (Kotler & Keller, 2006). The strategies used and approaches employed will be evaluated.
Hence, it is believed that classic airlines is not reaching its targeted market effectively.
In order to devise a proper strategy for treating the above problems an internal and external analysis of the firm must be carried out which would help the organization
In today’s competitive market it is the duty of the marketing department of companies to ensure that they maximize growth and profits, and this is achieved by strategic marketing. The commercial airline industry changes rapidly and classic
The study leads to the conclusion that marketing is all about satisfying the needs and wants of the customer along with facilitating the achievement of an organization’s objective. By giving importance to the needs and wants of the customer, the organization is more likely to pay attention to achieve the objectives in the marketplace.
12 pages (3000 words)Research Paper
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