Executive Summary The Classic Airline carrier is currently facing a very tough operating environment. It is currently working in a mature industry, having large number of competitors. This creates a hostile competitive environment for the company. This competitive environment of the company has been augmented by a shift in the operating paradigm of the industry…
The airline’s CEO is under immense pressure to turn around the fate of the company. The most problematic situation for the company is that it is currently incurring a large cost per customer per mile, and, to add to this problem, the company has just made a mistake in its marketing program. Thus, in this scenario, a new and a fresh marketing approach is required, implications of which should trickle down to the entire organization. This marketing strategy should keep customers as its focal point, because current customer satisfaction level is very low for the organization. Another important crisis which this marketing strategy should resolve is that of positioning. The current positioning statement of the company is taking it nowhere in terms of differentiating its services. Another implication of this is that the employees of the company are feeling an identity crisis. This situation is further made complex by the inability of the airline’s CEO act effectively regarding the utility of the functional areas of the airline. Her focus on numbers is creating a friction between her and the various departments of the organization, especially the marketing department. This friction is being felt at various levels of the organization and thus is a reason of worry because of its potential negative impact on the airline’s organizational culture. This report recommends a market driven strategy to be adopted by the airline. The major aspects of this strategy are the customers and the market; the company is required to tailor its business processes keeping customers as its focal point. In order to effectively implement this strategy, the airline needs to identify its distinctive capabilities and match them with the needs and aspirations of the customers. The company needs to identify all of its distinctive capabilities so that it can come up with a sustainable value proposition. The airline needs to make considerable efforts to align its various business processes. It needs to build systems which help in the coordination of different organizational activities and facilitate the flow of information. Last but not the least, an articulated vision from the CEO of the airline can do wonders for it. 9-Step Problem Solving Model and its application on Classic Airline Problem Definition Today’s airline industry is undergoing or has undergone a paradigm shift. This paradigm requires from airliners to seek operational excellence and nurture customer loyalty. The fundamental variables defining this new face of the industry are increased fuel cost and rising level of inflation. These two variables have severely hurt the profit margins of airline companies. By increasing the cost per mile per customer for these airliners, these variables have dried the operating profits of these airliners. As a result of this, many airlines have declared bankruptcy. These dynamics show that those airlines which are not operationally efficient and lack customer loyalty are bound to be eradicated from the industry. Framework of the Problem As mentioned above, the two variables which have changed the face of airline industry are fuel cost and inflation level. Due to these variables, airlines have to come up with strategies which allow them to absorb these costs. Airlines also need to come up with some ...
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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.
Classic Airlines is a company in the airline industry with over 25 years of experience. The firm has an operation that includes 2300 daily flights across 240 cities. The firm has a global workforce of 30,000 employees. Due to the size of the company it is imperative for this firm to invest its marketing dollars well.
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 paper starts by identifying as well as defining the problem and this is followed by application of the above mentioned problem solving model. The internal as well as external pressures contributing to Classic Airline’s current crisis will be discussed in detail and the essay will also seek to establish the marketing resources that are available to resolve the crisis.
Last year it earned a profit of $10 million on sales of $8.7 billion. However, Classic Airlines has been facing some similar problems as the rest of the industry, such as rising fuel costs, while its customer retention and loyalty programs have been failing resulting in falling sales and bookings.
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.
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.
improved management system that laid emphasis on meeting customer expectations and at the same time eliminating wasted expenditures and operating costs and put the saved resources to a more effective use.
This case is very much similar to that of Classic Airlines, wherein the
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
5 Pages(1250 words)Essay
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