Classic Airlines and Marketing
University of Phoenix (online)
August 1, 2011
Classic Airlines and Marketing
Classic Airlines is the world??™s fifth largest airline with a fleet of more than 375 jets serving 240 cities with more than 2300 daily flights. Classic employs more than 32,000 people worldwide. Last year, Classic earned $10 million on $8.7 billion in sales. Unfortunately, share prices decreased 10%. Wall Street was very critical of Classic resulting in a decrease in employee morale. Consumer confidence in Classic??™s Rewards Program waned, measuring a 19% decrease in membership, and a 21% decrease in flights per members (UOP, 2010). In an attempt to reverse this trend, Classic Airlines must reexamine its marketing strategies.
The growth of discount airlines such as Southwest, JetBlue and others is successful because management is responding to the needs of its customer base, the business traveler. In a time when organizations are looking for ways to cut expenses, an airline that can get the traveler from Point A to Point B at minimum cost will attract contracts with larger organizations as well as the individual traveler.
Classic Airlines is losing its customer base to other airlines. According to its documents, Classic Airlines is not providing high quality service to its customers. Other airlines are meeting and exceeding customer expectations in comparison to Classic Airlines. Customer churn refers to high customer defection. With all things being equal, customers will choose the provider who excels at customer satisfaction. Today??™s consumers are smarter, price conscious, demanding, and less forgiving. Competitors deliberately approach customers with equal or better offers.
The internet provides the consumer with unlimited access to information. Organizations use the internet to communicate their products and services domestically and globally, providing the consumer with the ability to choose who gets their dollars. Successful organizations incorporate the internet with live customer service representatives.
Senior management??™s perception of marketing as an effective business tool is vital to the airlines success. Organizations like Classic Airlines that fail to monitor their customers??™ needs and wants will ultimately lose customers. Difficulty attracting and retaining new customers results in loss of profits, failure to attract and retain high quality employees, and ultimately the company??™s growth. Leadership at Classic Airlines is a house divided. Its CEO and CFO have short-term, sales driven mentality of the business. The CMO, Senior V.P of Customer Service, and Senior V.P. of Human Resources view marketing as an effective means of fulfilling the organization??™s goals by creating, communicating, and delivering value to customers while establishing long term customer relationships to benefit the organization and its stake holders, (Kotler & Kell, (2006). A service industry relies on the satisfaction of its customers. Interactions with multiple people and experiences influence the customer??™s perception of value to himself. Marketing management specializes in the customer. Marketing analyzes the customer, anticipates his need and have the product in place. Marketers understand that without the customer there is no business.
The production concept presumes consumers will prefer products that are easy to acquire and inexpensive, (Kottler & Keller, 2007). The marketing concept in the manufacturing industry is where high production efficiency, low costs, and mass distribution are the means to achieve the organization??™s goals. In order to achieve organizational goals, the organization has to be better in creating, delivering, and communicating superior customer value to its chosen clients than the competition.
In the mid -1950s, this concept was revolutionary. Prior to that time, the prevailing marketing philosophy was to make and sell the product. The CEO of Classic Airlines is of this mindset. She views Classic Airlines in terms of a company selling a product, in this case, seats on a plane. Sell more seats and Classic makes more money. The CEO??™s view is at odds with the reality that the airline industry provides an intangible commodity to the public: the experience and ability of getting from Point A to Point B.
In conclusion, the holistic marketing concept concedes that marketing activities involve creating and building long lasting relationships with key parties, such as customers, employees, marketing partners, and other stakeholders. Marketers use their skills and talent to communicate to employees how their interactions with the public can affect the company??™s ability to meet organizational goals. Every interaction with a company??™s employee can reflect either favorably or unfavorably on the company as evidenced by Classic Airlines call monitoring reports.
Kotler, P., & Keller, K.L. (2007). A framework for marketing management (3rd ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Kotler, P., & Keller, K. L. (2006). Marketing management (12th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.