February 19, 2012
Classic Airlines Marketing Solution
Classic Airlines is the fifth largest airline in the world. Starting 25 years ago, they now command a fleet of more than 375 jets that serve 240 cities with over 2,300 daily flights. Classic has grown to an organization of 32,000 employees. Although a very profitable company, Classic, like many others in the airline industry face many challenges such as the rising cost of fuel and the travel downturn that followed the tragedy on September 11, 2001. Another hurdle that Classic is currently facing is declining customer confidence due to their Classic Rewards program that is lacking any real benefits. Their employees are also being affected by media and Wall Street negativity, which is lowering their morale. Problem Identification
Classic Airlines is facing a huge financial crisis and they are implementing a 15% cost reduction across-the- board. They have seen a 10% decrease in share prices in the past year and may soon be facing bankruptcy. Financial success often depends on marketing ability. Finance, operations, accounting, and other business functions will not really matter if there is not sufficient demand for services so the company can make money (Kotler, 2006). There are several issues that the marketing department at Classic will need to focus on. Defining the current state of the frequent flier program in order to maintain the current members and bring back the ones who have left. They need to work on raising themselves above the competition without lowering the cost of the airfare as they have done in the past and were not successful. They also need to work on creating the marketing alliance with Skyway Airlines to build their European traveler client base and also to offer seamless traveling options. Classic will need to focus on improving their customer satisfaction and loyalty, which in the long run will help to increase their revenue, improve employee morale, and keep the shareholders happy. Six Sigma DMAIC
Classic Airlines will need to create and utilize an effective problem-solving method. Six Sigma DMAIC, is a process that explores the answers to basic questions about how a process works, why it is not working as well as it needs to be, and what needs to be done to improve it (Process Management: DMAIC For Everyone, 2007). DMAIC is an acronym for define, measure, analyze, improve, and control. I believe that this is the best problem-solving process for Classic Airlines to follow because it focuses on improving an already existing organization by identifying the issues and putting together a plan to repair them. Below, I have put together the Six Sigma problem-solving method that Classic’s marketing department should follow.
Define- Classic Airlines is currently experiencing a number of problems within their organization. One of the major problems they are facing is a decline in the number of Classic Rewards members. Classic must find a way to beef up its frequent flier program with methods that will demonstrate a measurable return on any investment. They also need to find a way to increase their leisure traveler’s business. Another problem faced by Classic, is their lack of an alliance with any of the other major airlines, which leaves them to be the only major airline without an alliance. Without an alliance, Classic is limiting their flight options that are available to their customers. Their rewards members currently can only earn miles on Classic flights, which places a limit on the amount of flights they can earn while traveling. Another issue that Classic is experiencing is their ineffective use of their current CRM system. CRM is a business strategy directed to understand, anticipate and respond to the needs of an enterprise’s current and potential customers in order to grow the relationship value (Crm Defined And...