Monday December 17, 2012
Professor Douglass Dell
Classic Airlines Marketing Solution
Classis Airlines is currently facing internal and external pressures that contribute to the problem regarding marketing. A decrease in customer participation, increase in fuel prices, a limited financial budget, and decrease in employee morale are amongst the pressures which makes effective marketing a challenge. The company must work hard to set achievable goals to assist them in making a difference in the organization. The nine-step problem-solving model will help Classic Airlines marketing team identify the problem and implement attainable goals to increase sales and boost consumer and employee morale. Describe the Situation
Classis Airlines is currently battling a decrease in participation in their rewards program. According to the article, “Classic Rewards is down nearly 20% from last year” (University of Phoenix Material, 2012). Some consumers have left the program all together and others decreased their activity in the frequent flyer program. The airline also saw a decrease in stock prices which plummeted 10% from the prior year. Fuel prices are continuing to increase and operating expenses have increased too, not to mention the increase in employee salaries. Although salaries have increased, employee morale is the lowest, which makes compromising and team work harder than it’s ever been. Lastly, Classic Airlines face a restrictive cost structure demanded by the Board of Directors and effective immediately. Frame the Problem Right
Classic Airlines is aware of the current issues and they must find ways to increase the customer participation which will increase sales. They have to persuade current stock holders to buy more stock or persuade others to purchase stock to get the 10% back and to exceed the 10% mark. They must make sure that they sustain their current flyers and at least boost 22% of other flyers to purchase tickets so they can stay above the 21% decrease. It is the objective of the marketing team to collect all necessary information to build and implement realistic, achievable, and timely goals that will benefit the airline. Describe and State the Goals
Classic Airlines will set attainable goals that will assist them in maximizing their profits and becoming reputable again. All of the goals they set will have to be reached by a certain time frame. For example, they will have to reach certain goals quarterly, annually, semi-annually and monthly in order to make a difference. In order to remain competitive Classic Airlines have to effectively manage the customer rewards program. They have to implement new goals for the program to increase participation. For example, they will restructure the rewards program by replacing the current system with the CRM system used to interact with consumers. They will also decrease the amount of miles needed to obtain a free trip in the frequent fliers program semi-annually. They will expand the perks to include obtaining points for booking with one of the 25 hotels instead of the current six hotels within the first year of the restructuring. They will boost employee morale by showing that they are sensitive to their issues and complaints too. For example, they will increase employee morale with employee of the month celebrations and yearly bonuses based off of the success of the business. They will also accept last-minute bookings and will not charge an additional fee on a first come first serve basis. They will implement a “refer a friend” program which has benefits for the new customer and the old customer. They will also appoint a team to concentrate on implementing each goal and will measure the effectiveness of the goals by producing quarterly reports and comparing them with the quarterly reports from the prior year. They will also introduce and stress the importance of surveys and customer suggestion...