ISBM – A Case Study on Classic Airlines Marketing Management Case (20 Marks) A Case Study on Classic Airlines: Classic Airlines is facing an organizational issue. External and internal marketing programs have not been able to satisfy the needs and wants of the stakeholders. Target customers are looking at the services offered by other airlines to satisfy their wants and needs. This has resulted in poor sales and reduced profits for the company. The marketing plan of a firm “helps the firm connect with its customers” (Kerin et al., 2006). Therefore, Classic Airlines wants to develop an effective plan of action that will not only help attract and retain customers but also boost sales and profits. The Situation Issue and Opportunity Identification Classic Airlines is a 25-year-old company that commands a fleet of more than 375 jets that serve 240 cities with more than 2300 daily flights. The company is facing numerous challenges because of rising costs and lack of innovation. Customers are not satisfied with the service they are receiving and management cannot agree on how to correct the issues. A manager at Classic Airlines expresses, “Your challenge is going to be rising above our competition without discounting airfare” (Case Study, 2008). The company will have to figure out strategies to overcome the challenges. Challenges Identification Classic Airlines must address the challenges the company is facing. The company is experiencing a decrease in stock prices. Employee morale is low because of finger-pointing and lack of unity. The case study states that “loyal customers were jumping ship and the ones still aboard seemed to be flying less frequently” (Case Study, 2008). The senior vice president of customer service explains that “customers have no voice” which is a major challenge for the company. Classic Airlines and many of its rivals expanded too quickly (Case Study, 2008). The case study mentions that the CEO and CFO focus on numbers and less on marketing. Membership in classic rewards is down nearly 20% and the average number of flights per member is down more than 20%. The company recently mandated a 15% across-the-board cost reduction over the next 18 months which is also a major challenge for all departments. “Changes in the marketing environment are a source of opportunities and threats to be managed. The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends is called environmental scanning” (Kerin et al., 2006). Environmental scanning will help the company progress A technique for marketing research is to utilize the 5step marketing research approach which encompasses the following steps: Define the problem Develop the research plan Collect relevant information by specifying Develop findings Take marketing actions The final objective of the company is to become the largest airline provider. A SWOT analysis identified several opportunities Answer the following question. Q1. Discuss different opportunities for Classic Airlines Q2. When deciding the optimum solution, Classic Airlines must understand what its goals are, what its end-state vision is, and also what challenges they have faced with product development. Discuss
