CIussIc AIrIIne MurkeLIng ProbIem und

SoIuLIon
euLured

!ntroduction

Classic Airlines is the fifth largest airline in the world and it commands a fleet of 37S and above jets that
serve approximately 240 cities on daily flights that are around 2, 300. Classic Airlines was incepted 2S
years ago and since then, it has grown into a large organization of almost 32,000 employees. Despite the
high rate of profitability of Classic Airlines, challenges that affect today's Airlines are inevitable. Some of
the challenges include uncertainty about flying which has greatly affected stock prices.

The other challenge is consumer confidence that has greatly decreased probably due to increased negativity from the
public, media and even Wall Street. Classic Airlines desire is to boost employee and consumer confidence and this is
through increasing employee and customer satisfaction and keeping down costs. This research paper will use Classic
Airline scenario to present the current issues and opportunities, identify a marketing problem, describe the end state
vision and finally identify solutions to the problem.

iscussion
!dentification of issues and Opportunities
'he marketing activities of Classic Airlines are influenced by several factors and some of these factors are
uncontrolled. !t is evident that the company is faced with rising costs of labor and fuel which has led to
cutting of costs through better efficiency and high passenger load ratios. 'he high costs have also
reduced the chances and ability of Classic Airlines to compete for the position of frequent flier. 'he high
labor and fuel costs are a key obstacle to high profitability of Classic Airlines. 'here is also decreased
consumer confidence and consumers are less willing to travel using the airline (Shaw, 2007).

'herefore, there is increased competition which shows the need for Classic Airlines to identify the
appropriate sector where they can cut costs and at the same time continue providing a positive
investment return for the shareholders.

n order to increase consumer confidence, there is need for Classic Airlines to increase brand loyalty and maximize
the needs of customers. Marketing is therefore of utmost importance since it considers a customer as the first priority
in order to achieve the set goals and objectives. t is therefore necessary for Classic Airlines to identify and know the
potential and current customers and collect comments from them so that they can use them as a marketing leverage
(Armstrong and Kotler, 2010).

One of the greatest opportunities that Classic Airlines has is that of building an alliance with Skyway
Airlines and this will enable several stakeholders to view the alliance as strength to build the Airlines in
the industrial level. Alliance of airlines leads to increased revenue, increase in the number of customers
and eradication of cases where operational efforts are duplicated. Narketing of this new alliance will
eventually attract new customers to Classic Airlines and maintain the current customers (Shaw, 2007).

Classic airlines employees and other internal stakeholders have low morale as a result of a negative
image portrayed in by media and press. 'he desire of any employees of any given organization is to feel
valued, have access to information and the available career opportunities. !t is also evident that for any
given company to be successful, it has to have motivated employees. Hence, Classic Airlines should take
its employees as internal stakeholders, know all their needs and wants and most importantly know the
right steps to take in order to boost employees' morale and confidence (Kotler and Lane, 2008).

&takeholders and Associated Ethical ilemmas
!t is essential for Classical Airlines to take note of stakeholders and the associated ethical dilemmas in
addition to examining the different issues present. 'he four main stakeholders present in the Classical
Airlines scenario are the customers, shareholders, company management and the employees.

t is evident that Classical Airlines employees have a lot of interest that do not seem to be addresses by the company.
However, efforts to educate employees about the importance of Classic Airlines have been made the Human
Resources' vice president. The employees have several needs and some of these needs are job security, better
compensation, growth and advancement opportunities and many other benefits (Armstrong, 2010).

Shareholders need a promising return on their investment and they should be assured of security and
knowledge that Classic Airlines is working for their interests. All the shareholders and investors have a
right to be informed of the company's' whereabouts for instance when the company is facing difficulties,
they should be informed and know the strategies and measures taken to solve the mentioned problems.

'he customers have a right to be given quality services, flexibility and also easy access to their various
destinations. 'hey need to be safe and rest assured that the services received will be timely and that
there is safety to their luggage. !t is important for Classic airlines to tailor and provide their services in a
way that customers' heartily values are given a priority. 'he management team needs to restructure the
rewards program and at the same time put the customers' needs first (Kotler, 2008).

raming the Problem
ormulation of a problem is essential after identifying the issues, opportunities and perspectives of Classic
Airlines' stakeholders. ormulation of the right problem will enable Classic Airlines to make the best
decision and come up with the most appropriate solutions to the problem. 'he problem statement
identified is that Classic Airlines strategic position in the airline industry will be maintained through
creation of customer confidence, increasing the rate of profitability and aligning with its stakeholders. 'he
result of this will be financial security of Classic Airlines through utilization of growth opportunities,
forming alliances with other airlines, making changes to the marketing strategy and going above
customer expectations (Kotler, 2008).

End&tate vision
Classic Airlines is the fifth largest airline in the world and the endstate vision would be to maintain this
position or move to a higher position if possible. 'he other hope is that the airline will increase customer
satisfaction and profitability and subsequently increase its market share. 'he goals that are to be
achieved within one year include a 20 increase in customer loyalty, 1S increase in new customer
base and a 30 increase in customer satisfaction. 'he above results were obtained through
measurements taken by surveys and feedback (Shaw, 2007).

'he other expected outcome is that Classic Airlines reward program will be revamped and restructured in
order to reform customer loyalty by formation of new alliances with other airlines. !t is also noteworthy
that Classic Airlines will address the challenge of increase labor and fuel costs by inventing a system that
will enable saving of fuel and reduce costs while at the same time providing quality services ( Kotler,
2008).

Alternatives and Benchmarking validation
!t is essential to review the problems, actions taken and the results obtained by Classic Airlines and other
airline companies. !n the Classic Airlines scenario, the aim of review and analysis is to identify the key
facts and concepts that each company excelled or failed to accomplish. 'he aim of Classic Airlines is to
identify the customer needs in order to increase the booking and sales rate. An example of an airline that
faced a similar challenge is ]etBlue Airlines which was successful in researching and finding information
about its customers' desires (Weber, 200S).

Research results from ]etBlue revealed that customers desired comfortable seats, quality customer
services, increase onboard entertainment options and low fares. !t is therefore advisable for Classic
Airlines to make use to the results obtained by ]etBlue Airlines so that it can increase its market share
index and attract more customers. 'he other option is for Classic Airlines to form an alliance with other
airlines and this will help it to be among the leaders in of Airline industries in the world (Weber, 200S).

ecision Naking
A recommended solution has to be made only after assessing and analyzing the current marketing
strategies and identifying the available opportunities. Each recommended alternative solution has its
weaknesses and strengths. Hence, it is essential to analyze each option carefully by weighing the
strengths and weaknesses and then choosing the best solution. 'he best and optimal solution to solve
the Classic Airlines problem is a combination of the available solutions which include restructuring the
award program and forming alliances with other airlines (Armstrong, 2010).

'he mentioned solution will enable Classic Airlines to meet the set goals and objectives. !t will also
increase profitability, reduce the cost of operation and meet all the needs of customers. 'he other
important action that Classic Airlines needs to take is to analyze and respond to ethical issues affecting
the company. Addressing of ethical issues will help the Classical Airline to maintain a strong and positive
relationship with all stakeholders and vendors and at the same time avoid any conflicts of interest that
may arise (Weber, 200S).

eveloping and !mplementing the &olution
After identifying the optimal solution, it is essential for Classic Airlines to develop and implement the
solution for instance building business alliances in order to improve the rewards program. !t is essential
to do an intensive research in order to identify the right business with which to form an alliance.

'he next step is evaluating the results and this can be done by using several ways to measure the results
of decisions made with regard to customer relationship management. !t is essential to consider both
quantitative and qualitative results. Quantitative results can be obtained from financial reports while
qualitative results can be obtained through the use of questionnaires and surveys (Shaw, 2007).

onclusion
Classic Airlines has to make a change within its operating structure and some of the changes include
updating the rewards program and consumer packages. Effective customer relationship management is
also of the essence if at all the company desires to achieve its goals and objectives. !t is therefore
evident that Classic Airlines will once again be among the most successful airlines globally if it expands
into new markets through formation of strategic alliances with other airlines.

%eferences
Armstrong, C., S Kotler, P. (2010) principles of Narketing (13th Ed.). Pearson
Kotler, P., S Lane, K. (2008) A framework for marketing management (4th

Ed.)
Pearson Prentice Hall.

Shaw, S. (2007) Airline marketing and management (6th Ed.). Ashgate Publishing.
Weber, K. (200S) 'ravelers' perceptions of airline alliance benefits and performance.
]ournal of 'ravel Research, 43, 2S726S. Retrieved October 22, 2010 from SACE
ulltext collections.