Running head: CLASSIC AIRLINES MARKETING SOLUTIONS Classic Airlines Marketing Solutions Marketing 571 May 22, 2010 University of Phoenix Describe the Situation Customer confidence is decreasing as well as Classic Airlines’ Rewards Program which is causing a strain for the company. Due to rising costs in labor and fuel costs, Classic Airlines has not been able to keep up with its competitors. Classic Airlines is facing a 15% across-the-board cost reduction over the next 18 months (University of Phoenix, 2010).
Classic Airlines can turn its problems into opportunities through carefully defining the situation and figuring out how solves these problems with the best solutions. Classic Airlines could examine frequent travelers who expect better service than they might receive on competing airlines and focus more directly on these customers. This would help Classic Airlines increase customer confidence and profitability. This could be done without incurring additional cost, keeping in line with cost reduction and the challenge to do more with less (Kerin, 2006). Frame the “Right” Problem
Classic Airlines should hold its current position by creating customer confidence and loyalty along with improving profitability. This will enable Classic Airlines to become financially stable through growth opportunities, changing of the marketing strategy, and meeting the needs of the customers. Describe the “End-State” Vision Classic Airlines’ reward program should be revised to re-gain customer loyalty by partnering with another airline. Classic Airlines will address the problem by developing a Customer Relations Management program without causing too much debt.
Identify the Alternatives and Benchmarking Validation For every problem an organization faces there will be many solutions available from which to choose to solve the problem. An effective tool used by many organizations to identify potential solutions is benchmarking. Benchmarking allows an organization to evaluate the best practices of other companies that have faced similar challenges and situations in effort to improve upon their own product offerings or processes. The key area for benchmarking in the Classic Airlines scenario is CRM (Customer Relations Management). Customer Relations Management The CRM system called DealerMine has been credited with increasing revenue and improving customer experiences. With this program, companies are able to run daily reports on all the customer “touch points” and provide a performance evaluation to sales and service personnel (Couretas, 2006). Over 70 reports are available for the dealership to identify issues and trends and provide the ability to address them in a timely manner. Evaluate the Alternatives The increase of loyalty program participants and their flight frequency with Classic Airlines should by top priority.
By using campaign performance audits, Classic Airlines would be able to identify and satisfy the needs of the customer and increase the perceived value of flying with Classic Airlines. It could increase client relations which would go a long way to improving Classic Airlines’ sales potential. Alliance agreements with other carriers would expand Classic Airlines available flights and improve customer relations by providing multiple options. The alliance could reduce Classic Airlines’ operating cost because of shared booking and operations.
Finally, frequent performance reports on customer “touch points” would help increase Classic Airlines’ customer relations. Identify and Assess Risks A solution is offered to Classic Airlines to resolve current issues with client need and increase profit. Part of the solution for Classic Airlines’ requires performance audits of current and potential customers which the risks associated with the alternative are the costs and data validity in the performance reports. Another part of the solution is an alliance agreement with other carriers would help resolve current issues.
The associated risk is the quality of service and products offered by alliance partners and the increased exposure of Classic Airlines’ clients to partners. Make the Decision Classic can apply a combination of alternative solutions to solve its problems. Classic Airlines should improve customer loyalty by focusing on its customers and catering to their needs by providing the exceptional in-flight experience. Classic Airlines should take advantage of recognizing the small details that make flying more pleasurable and easier for the customers.
Through partnering with another airline, Classic Airlines will make its frequent flyer program more rewarding and create customer value. Develop and Implement the Solution As with any major organizational change, there are numerous risks which management must take into consideration before any plan of action can be put into motion. Once these have been narrowed down, a final decision can be determined. With the creation of a Passenger Bill of Rights, the company should expect to see an up-front cost.
This is due to the time it will take to get all members of the company to accept and implement the new philosophy. As time passes, it is expected this cost will decline as customer service levels rise to better than acceptable levels. The implementation of this philosophy will cost the company in time and labor. The employees will need to be re-trained, and the customers will need to be convinced to allow the airline a second chance to prove it capable of caring for the customers’ needs and wants.
As long as the company is able to remain focused on the goals and deadlines put in place, they should be able to control the tangible and intangible costs associated with the program. Evaluate the Results Classic Airlines’ improved customer confidence and loyalty can be determined through customer surveys. These surveys should be designed to ask specific questions about Classic Airlines and the customers. Restructuring of the rewards program/frequent flier experience an increase in customer’s flying patterns and loyalty.
Conclusion A problem statement was created to address these issues for Classic Airlines. By doing so, various end-state goals the company wishes to accomplish could be created. Possible solutions to achieve the end-state goals were then researched and discussed. This list was evaluated, and an optimal solution to the problems facing Classic Airlines was decided upon. This solution was then discussed in detail to inform the reader of the likely path the company needs to follow in order to implement the solution.
The steps followed under Problem Based Learning allowed a framework for Classic Airlines to correctly identify, assess, and address the issues it is currently facing. References Couretas, J. (2006). Mining for gold. Automotive News, 81(6223), p. 38-39. Retrieved April 3, 2008, from EBSCOhost database. Kerin, R. (2006). Marketing. New York: The McGraw-Hill Companies. University of Phoenix. (2010, May 21). Classic Airline Scenario. Little Rock , Arkansas, United States: University of Phoenix. .