Identification and Definition
Some of the issues that Classic Airlines are facing are serious issues, even with $10 million earned on $8.7 million customers are leaving Classic Airlines and choosing another airline carrier for service, cheaper price, and customer satisfaction. The Classic Rewards Program suffers from a decrease of 19 percent in members, a 21 percent decrease in the number of flights with current customers, a decrease in stock prices, and a mandated 15 percent budget cost reduction over the next 18 months. A problem that Classic Airlines is dealing with is with the current CEO Amanda Miller, who has her attention on operations and not marketing for the company. “Rising costs, particularly of fuel and labor, have limited Classic‘s ability to compete for the valued frequent flier” (University of Phoenix, 2007, para. 4). Amanda feels the budget should be for fuel and labor, not marketing. Classic’s remaining team handles issues with customer satisfaction and employee’s. Kevin Boyle (CMO) chief marketing officer, is given the task of redeveloping the classic rewards program, to maintain current customers with improved service and encourage new customers to book flights with the company. Boyle needs to create a plan that will ensure the company will make a measurable return on the company’s investment. Classic Airlines has to address the issue of employee morale and provide employees the opportunity to have their voice heard concerning the restructuring of the classic rewards program. Low morale and performance from employees have affected Classics business. Classic airlines must make a decision as to how to get the organization on track with focusing its attention on innovation, customer satisfaction and efficiency. With the enhancement of quality service and non-discounted air fares, marketing will prove to play a successful role for Classic Airline.
Problem Solving Process
Classic Airlines has to choose a problem solving method that would allow them to handle marketing problems, employee morale and create a problem solving process to apply within the company. “To be successful, they should match with the thinking and reasoning processes of the manager” (Wierenga and van Bruggen, 1997). The problem-solving process has nine steps to consider: (1) determine the situation (2) frame the right problem (3) describe end state and goals (4) identify alternatives (5) evaluate alternatives (6) identify and assess risks 7) make the decision (8) develop and implement the solution and (9) evaluate results. Determine Situation
Determining the problem is the critical step of the overall problem-solving method as it determines where the focus of the project lay and where the company defines the problem. The decline of Classic airline market shares many of the shareholders have given a negative reflection of the Classic Airline. The morale of the some employees has decrease due to the negativity from the public and media. High fuel and labor cost are going to be another problem due to the budget cut requested by board members. Declining enrollment in the classic rewards program, has led to a reduction of flights and customers using the airlines to consider other airlines for lower priced flights.
Frame the right problem
The second step is to measure the problem, by measuring the problem Classic Airlines will be able to collect the data needed to determine the extent of the problems the company is having. Survey of current members on customer satisfaction show members were dissatisfied with the classic rewards program and the miles earned for flights. “Members earn one point per flight-mile, with a minimum of 500 miles per roundtrip, and a maximum of 2500 miles per roundtrip. Classic Rewards is a tiered program, with customer’s achieving Silver and Gold level status based on their annual mileage accumulation. Tier-status has a one-year expiration period”...