CLASSIC ARILINES AMARKETING SOLUTION
MKT/571 – MANAGEMENT MARKETING
February 12, 2011
Analyze the Current Situation
Classic Airline (CA) is the world’s fifth largest airline that operates 375 jets and serves 240 cities with over 2300 flights daily. In the past 25 years, the company had grown to 32000 employees with billion dollar sales (University of Phoenix, 2010). Considering the increasing global marketplace and competition, over-expansion, changes in consumer spending, and increased concerns with travel and airline security; CA and other airlines are contending with mounting business stressors and reduced profits.
As CA is publically traded, an increase in uncertainty had caused a decrease in the stock price. CA has experienced a 10% decrease in share price. To make matters worse, the company has also experienced a 19% decrease in the number of members in its affinity program and a 21% decrease in flights for the remaining member’s (University of Phoenix, 2010).
With rising costs, especially in airline fuel and labor, CA is stretched financially and this is hampering its ability to compete. To add more, their Board of Directors has required a 15% cut cost reduction over the next 18 months or CA could face bankruptcy. Each functional area will have cuts. Marketing is facing a 21.5% reduction. Sales and Operations will experience cuts at 11.5% (Classic Airline Scenario, 2010).
To ensure the survivability of CA, a marketing solution is needed to help repair the ills of the organization. Three opportunities for improvement have been identified; 1) internal and external pressures causing the decreases in net income need to be identified and a plan to eliminate these pressures is necessary. 2) The challenge in the Marketing Department must be solved and 3) CA must create a financial strategy by investigating available resources and best practices from other airline's marketing solutions.... [continues]
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