Classic_Airline_Smarketing_Solution

Classic Airlines Marketing Solution Classic Airlines Marketing Solution Classic Airlines ,is the world’s fifth largest airline ,failure to increase sales, customer loyalty, and stock prices, has caused Classic caused Classic Airlines to make cost reduction plans in every department, Developing a solution that addresses the declining sales without increasing budgeting costs requires careful planning and development of a productive marketing plan. Classic Airlines will address declining sale and decreased customer satisfaction by introducing a marketing plan, which will improve customer satisfaction. Amanda Miller, the Chief Executive Officer has handed the responsibility of improvements to the frequent flyer miles to the management team members. Classic Airlines seeks to boost employee and customer confidence by keeping costs down while increasing customer and employee satisfaction in the company. Classic Airlines will need to analyze customer feedback to understand long-term forecasting and marketing objectives. Describe the Situation Reduction of the flights cost is impossible and the price structures are currently within the industry’s guidelines. Membership for the Classic Rewards program is growing steadily. Nevertheless, reports information from customer relations point to the most common customer complains which are the customer rewards programs and they the customer is being handled when the Airline made a mistake according to Kevin Boyle. This brings an opportunity to increase value to the customers while gradually increasing costs by developing balance between the target market’s expected prices, the agreeable prices, and value pricing will provide Classic Airlines with increased revenue. Marketing is very important because it puts the customer first to achieve the company’s goals. Classic Airlines needs to know as much as they can about current and potential customers. Kevin Boyle identifies key indicators for two target markets, business traveler and vacation traveler. Both markets have different needs that need to be fulfilled by the company. Customers who are unhappy have lower retention rates and tend to speak negatively about the company, which can cause serious damage to the company image. Exceptional customer relationships maintain high quality communications and boost customer base. Opportunities of increasing customer relationships by understanding the market are essential to the company’s growth. Classic Airlines is faces with rising fuel and labor costs. These increases have forced cost cutting through high passenger load rations and better efficiency costs remain an obstacle to high profit. The airline industry is still recovering from the effects of 9/11 after over –expansion following the downturn. Each company in; the industry is facing similare issues, however the competition has increased. Classic Airlines has to identify where to cut costs and yet continue in providing a positive return on investments to its stakeholders. Some management members seem to be concerned with the financial numbers than with the improvement of the customer service. Classic Airlines needs to maximize customer needs and increase brand loyalty to regain customer and shareholder confidence. Classic Airlines needs to do a better job at performing customer segmentation analysis to position the product for more than just leisure and business travelers. Classic needs to focus on competing directly with the other major airlines. Classic Airlines has already indentified that the segmentation strategy is outdated and does not match the customer values. The CRM system could help in creating automated personalized marketing to communicate with customers and increase loyalty. The software needs to build profiles on its customers to help serve each individual customer .This will increase web site visits and ticket sales. To become profitable and a top company Classic Airlines will need to watch JetBlue who is one of the top companies and who listen to their customers needs and wants and follow through. The recent decline in sales decreased the ability to budget efficiently. A current contract for fuel enables Classic Airlines to save money on fuel utilization. This contract should not be changed because of the 15% in savings. In addition, budget changes to employee contracts will not occur due to union rules and contracts. Classic Airlines received an offer to collaborate with other airlines producing contracts that could enable Classic Airlines to develop stronger customer loyalty through sharing routs and prices, sharing customer services, and syndicate fuel purchase. Some management members do not believe a partnership would benefit Classic Airlines and worry it will result in further decline in market dividends and earnings. Frame the Problem Classic Airlines has to formulate a problem statement to assist the company in making the best decisions. The problem statement is, Classic Airlines will maintain its strategic position in the airline industry by creating customer confidence and loyalty, improving profitability, and aligning with its stakeholders. This will enable Classic Airlines to become financially secure though growth opportunities, formation of strategic alliances the restructuring of its marketing strategy and exceeding customer expectations. State Goals to Solve the Problem Classic Airlines will implement a solid customer service solution that will help bring customers back to the airline. Classic Airlines must achieve a total 15 percent cost reduction over the next 18 months. Classic Airline’s management will create a Stakeholder Management Plan that addresses concerns and implements appropriate solutions. Classic Airlines reward program will be restructured to restore customer loyalty through forming new alliances with other airlines. Additionally, the airline will address the problem of rising fuel costs by developing a system to save on fuel consumption and will reduce prices without sacrificing quality service, The 18 month goal attached to reducing operating costs is a 15% decrease. Identify Alternatives Marketing consists of different types of marketing including basic, reative, accountable, proactive, and partnership marketing (Kotler&Keller, 2006, p.157).Communication is a top success for acquiring and retaining customers, the more knowledge is provided to the customer the less the customer will have to hunt for the correct answers. Classic Airlines would benefit from developing communication channels that address the needs of customers including company newsletter, website, and assistance forums. These forms of communication will enable the company to share valuable methods to differentiate Classic Airlines form other companies and will allow customers the benefit of understanding how programs such as frequent flyer miles can benefit their needs. Another option is to offer information to demonstrate the costs of the flights by comparing them to other airlines. Classic Airlines would benefit by focusing on the development of clear company goals to create marketing plans to address the customers constant need for increased value, data, and strategic alignment to keep the price of flying low. Developing plans, which specifically review each need, will enable the company to work continually towards the future for sustainability growth and increased sales. The same plans will enable the company to continue its evaluation of changes in trends and cultural values, which could influence current marketing, and business plans. Primary alternatives include developing a stronger retention plan by changing the rewords system to increase customer value, collaborating with other companies in the industry, and by researching the needs of the segment markets to implement customer acquisition and retention. Evaluate Alternatives The first goal, increase revenue, will be affected by having a good CRM (Customer Relationship Management).A properly managed CRM will guarantee future obligations will be met, which will increase revenues and the cash flow. The second and third goal, increase in customer loyalty participation and expansion of customer base, can be achieved through reconstruction of the marketing techniques. The fourth goal, improving customer and employee satisfaction, is achieved by implementing a solid CRM and establishing a restructuring plan, The reconstruction plan needs to be presented to the board of dirctors,management, and employees, Classic Airlines should replace weak management members or members who see change as negative and who are not willing to cooperate. In addition, the management layer needs to be reduced because often, unprofitable companies are stuffed with middle managers. All changes need to be communicated to the main stakeholders which ill boost their morale and reduce uncertainty. Identify and Asses Risks The biggest risk to Classic Airlines is the cost of implementing plans that may not be successful. Each strategy requires dedication to the development of the plan, the implementation, and the follow through that includes strong communication. Classic management need to evaluate the risks and benefits associated with each alternative and must consider each step before choosing and implementing a specific solution. The main risks involved with entering into partnership with other carriers include the los of customer base due to discontent with partner, alliance members not adhering to contracts and lack of leadership buy-in. Budget related risks are medium to high probability, nevertheless they can be mitigation through the rough consequences by creating a high performing team to be in charge of the projects, and ensure all market segments are identified. The consequences of the risks include CRM system would fail before implementation, heavy and unplanned financial outlays and resistance to change on the part of the stakeholders. An overhaul of the current reward program does not carry heavy risks, but the risks still need to be considered. Risks include no membership growth, high prices of analyzing and developing and lack of internal stakeholder buy-in. Budget consideration are high probability, but the other risks are medium to low. The results include resistance to change, cost overruns, and implementation failure, all carrying high severity. The mitigation techniques would again include clear communication, strong key-player replacement for project management and clearly documented project information. Make the Decision Classic Airlines cannot budget in high costs of excessive research or development of new marketing strategies that increase costs to the company, until the sales have begun to grow again. The best strategy for Classic Airlines is a careful short-term plan embedded in a long-term plan that includes continued research of the current market while analyzing the continued changing markets. Short-term plan is best suited by reviewing the current rewards plan and creating communication that increases the value of the plan to customers who are a member or would benefit form the program. However, this plan cannot be completely successful without changes to the call center that increases the power of the agents to better assist customers in times where errors have occurred or misunderstanding have developed. While many companies focus on either the acquisition or retention as a man goal, the most successful companies have plans for both. Classic should integrate the CRM, and join the marketing alliance. Develop and Implement the Solution Have the management team in the call center, marketing ,and upper management to develop top performing customer service cal centers, empower agents ands use rewards points for customers who had a bad experience and where being misunderstood or by errors of the company. The company should use the website to develop a communication channel with customers to allow them to review their rewards on line, schedule the use, review the policies, and possibly speak with representatives over chat. The needed budget should be prepared within three weeks .Research should be completed within three months. The awards program should be completed for experiment within six months.Clasic Airlines should alos implement the alliance with other carriers and improve their customer’s satisfaction by using their CRM. New CRM software should be implemented and all management involved in implementing this program should go thought the training. Evaluate the Results When evaluating results, importance must be taken to examine both quantitive and qualitative results. The first measurement will be quanitive; the success will come from improved revenue and will be shown by evidence on the monthly or quarterly financial reports and every day stock pricing. The second measurement will be qualitative and will be derived from questioning the passengers and employees through surveys and the results provided by reports generated through the use of the CRM system. By providing strategic alliances with other companies, Classic Airlines will be able to provide its consumers with destinations alternatives that were not available before. The senior management and the employees’ needs to understand that the loyalty or rewards program is not just points or gifts, the program is a true reflection of Classic Airlines. Conclusion Classic Airlines competes in an industry were customer loyalty is difficult to maintain due to changes in safety, required value, and price wars. In order to remain competitive Classic Airlines must differentiate by developing solid retention methods that reflect strong communication and company values. Classic Airlines needs to make a strategic shift and change its structure. The goal is to evaluate all options and update Classic Airlines rewards program, customer packages and implement CRM decisions to optimize key elements of the company overall business plans. Effective customer service relations is essential for Classic Airlines to achieve its goals and become profitable. This includes improved forecasting, and better organization for present and upcoming CRM initiatives. To manage its recovery and future growth, Classic Airlines must guarantee it maintains the right amount of customers and implement a program to handle fluctuations in buying patterns by the customers. By marketing the benefits of expanding into new market segments through strategic alliances combined with better customer service, Classic airlines will once again be a successful airline.