Running head: Marketing Solution.
Marketing Solutions Archana Vasudevan Marketing, MKT/571 November 26, 2012 Maryanne Conlin
Classic Airlines with a fleet of 375 airplanes and more than 2,300 daily flights, has been one of
the Largest airlines in the aviation market. The company had over 8.7 billion dollars in sales with
nearly 10 million dollars in profit (University of Phoenix Material, 2010). However, with rising
overhead costs and decrease in consumer travel, the company is facing a 10 % decrease in share
prices. With the economic slowdown, Classic Airlines needs to analyze critically and identify its
internal and external problems to ensure its profitability in a very competitive market. The first step for Classic Airlines is to define the problem. Classic Airlines is facing high
overhead cost, loss of rewards customers, decline in market share and low employee morale. The
negative publicity from media outlets and Wall Street has resulted in waning consumer
The second step is to measure the problem. There has been a 10% decrease in share
prices, 19% decrease in the Classic Reward program and 21% of customers who purchase a
ticket is not found to be boarding the flight ultimately. Classic Airlines need to focus on the loss
they need to make up and focus on going beyond and over the loss.
The third step is to establish the goals that needs to be reasonable and can be objectively
measured in a timely manner. This will lead Classic Airlines in the right direction and provide a
benchmark that can be measured. They need to measure their profits with the profits of other
airlines which will provide them with performance assessment.
Customer satisfaction must be given the highest priority and customers must be given the feeling
that they are the only reason the airlines is flying. They need to get the Rewards program on
track to get back previous loyal customers and also get new customers into the Rewards program
with the “Refer a Friend” incentive. They can compare quarterly enrollment in the Rewards
program to last year’s for constant evaluation of the success of the changes implemented by
The fourth step for Classic Airlines is to identify the alternative. Research surveys can be
used to identify areas of dissatisfaction among customers. This information can be used to
upgrade the rewards program with focus on customer satisfaction.
The fifth step involves estimating the possible alternative. The loyalty program is a
work in progress and needs constant upgrade at timely intervals to satisfy customer needs. A key
to the success of it is going to be effective marketing strategy.
The sixth step involves identifying and assessing risk. Aggressive marketing of the
Rewards program is associated with high costs and potential risk of disenchantment among
consumers for the tactics used in selling the program. Higher cost incurred could be detrimental
when Classic Airlines is sincerely making an effort to reduce operating costs. Disenchantment
among customers could lead to further loss of customers when Classic is trying to regain lost
Rewards program customers.
The seventh step involves making the decision to use employees that customers have
initial contact with to market and sell the loyalty program. Different marketing strategy will
regain loyal customers and gain new customers. “Because of the...