Classic Airlines and Marketing

Classic Airlines and Marketing

The fifth largest airline in the world is Classic Airlines, serving 240 cities worldwide. Their fleet consists of more than 375 jets with more than 2,300 flights daily. Since the launch of Classic Airlines, it has grown to nearly 32,000 employees with $10 million in earnings on an $8.7 billion on sales (University of Phoenix, 2011). The airline is now faced with economic challenges with increasing fuel and labor costs.

Major problems Classic is faced with include customer loyalty problems, decrease in sales, and stock prices. It was recently mandated by their Board of Directors that there has to be a 15% across the board reduction in costs. However, within this mandate Classic still has to improve their frequent flier program which will continue to show a significant return on investment (ROI). Classic will need to address their declining sales and the very noticeable decrease in customer satisfaction without increasing their budgeting costs. This just confirms the current business strategy being used at Classic Airlines is not retaining the customers. For this to be achieved it will require thorough planning and development with a constructive marketing plan.

One issue that stands out in this scenario is Classics inadequate use of their Customer Relationship Management (CRM) software. By not using this software to its full potential, there is dissatisfaction with customers, issues with the customer loyalty program, and the declining stock prices, this has caused stock prices to fall 10% from the previous fiscal year. These fiscal challenges have management rethinking the CRM software and the information it can provide regarding not only the customer frequent flier program but what other airlines are doing to stay profitable. This goes to prove that the customer's perspective of "value" as stated in the scenario does not necessarily mean price. This is backed by the fact that the past marketing VP reduced prices but no increase was seen because of this and it started a price war.

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