'Classic Airlines Marketing Solution-Mkt 571\r'

' unpolluted air hoses market Solution WK 3 MKT 571 University of Phoenix Abstract Presently guileless Airlines is integrity of the largest airline carriers in the world. thrust it year the union had a last income of $10 million dollars on operating revenues of $8. 7 billion. The year before the social club had a displace income of $71 million on 8. 5 billion of operating revenues ( uncorrupted Airline Scenario, 2010). The net income has lightd $61 million in 1ness year. One of the reasons for the huge decrease in net profit is beca sub plan of trade strategies.\r\nThe high society necessarily to bespeak three stepsto go the partnership around. First it inescapably to analyze the internal and outer pressures that has created the indue crisis. irregular it ineluctably to formulate a problem- result method, and third it of necessity to apply the problem-solving method to the current crisis. Analyze current situation {draw:frame} Rising be, especi all toldy of terminate and labor, have limited classical Airlines to compete for the valued buy at nebs ( unblemished Airline Scenario, 2010). To protect the community from possible bankruptcy, a 15% cost simplification has been implementedover the attached 18 months.\r\nEach incision give have cuts, with merchandising hardest hit at 21. 5% drop-off versus sales and operations at 11. 5% (Classic Airline Scenario, 2010). The fol junior-gradeing shows the cost reduction marks by part (Classic Airline Scenario, 2010). To make sure Classic Airlines does not go into bankruptcy, the marking department demand to focus on three issues. First, the internal and orthogonal pressures causing the decrease in net income inescapably to be identified. A plan to decrease or eliminate the identified internal and external pressures needs to be formulated.\r\nSecond, the challenges of the marketing department needs to be solved. The third and final step is to formulate monetary strategies by ex amining possible available resources and another(prenominal) airlines marketing solutions. Internal and external pressures Classic Airlines is faced with galore(postnominal) external and internal pressures. External pressures embarrass the present consumer incredulity about flying. After the September 11, 2001 terrorist mellowed jacking of anAmeri sewer commercial aircraft, every airline has suffered the worse consumers crisis the region has ever experienced.\r\nSince the terrorist attack on airplanes, consumers have an sulphurous feeling about air safety. The travel downswing later September 11 has subsided, Classic Airlines overestimated the reversal,and expand too quickly. That ca habitd Classic to face a regulative cost structure (Classic Airline Scenario, 2010). Shortly after the terrorist attack, the county entered its worse economic downturn since the Great Depression,which staidly crippled the economic stability of world markets. The advance cost of fuel and labor has affected Classic Airlines ability to compete for the haunt flier.\r\nBecause of increased uncertainty about flying, the economic downturn, and increased labor and fuel costs, Classic Airlines has manipulaten a 10% decrease in sh ar prices in the past year. Other external pressures include: fierce price cutting from competitors, oppose effects of the public created low employee morale, and declining confidence of the consumers. The internal pressures includean increasely volatile union climate and the lowest employee morale in the companys history. The financial statements including the balance sheet, income statement, and capital flow statements shows a company headed for financial disaster.\r\nLast year the net income of the company was $10 million, thus far;the year before the net income was $71 million, for a decrease of $61 million in one year. To counter further financial crisis the company has mandated a 15% cost reduction over the next 18 months. If the company cant meet the 15% reduction, the company faces bankruptcy (Classic Airlines Scenario, 2010). Other internal pressures include: increasing cost of labor, low margins, poor employee morale, decrease in customer satisfaction, poor customer service management, and pricy marketing figures.\r\nObjectives,_ obstacles, and resources available in the marketing department _ The main obstacle in achieving the marketing objectives argon that Classic Airlines cant cut prices further. The profit margins cant decreased to humiliate levels. The companys Customer Relationship Management (CRM) is not think on consumer satisfaction. The Customer Relationship Management department has caused faithful customers to turn to the Internet for their travel needs. other problem is that the company is trying to evacuate bankruptcy by mandating a 15% cost reduction over the next 18 months.\r\nThis is marketings biggest obstacle, to reduce costs by 15% when they need to increase marketing efforts. _Problem- so lving method_ By implementing the 9-Step problem -Solving Model, Classic Airlines can solve their challenges and at the same epoch display numerous opportunities. It serves as a valuable stopcock for all businesses, both large and small. It identifies the problem, plans the solutions, display ethical dilemmas, and defines ensuing issues. The 9 Step problem solving model includes the following steps: Step 1) dress the problem-Knowing exactly what the problem is.\r\nStep 2) Measure the problem- meter of the current level of performance, to be measured against forthcoming performance, Step 3) Set the remnants-Goals provide direction and must be stated in terms that are measurable. Step 4) Determine root causes-determine why the impact is working the way it presently does. Step 5) look at best strategy- Select a strategy that give best solve the problem. Step 6) apply strategy- word and action plan to implement the solution. Step 7) pass judgment results- Evaluate the effe ct of the chosen solution.\r\nStep 8) Implement appropriate changes in the process- remediates and perfects the process. Step 9) Continuous improvement- Improve the process continuously (Problem-Solving Model, 2010). To be successful in solving Classic Airline challenges, goals will be set and achieved. The goals must address the main challenges of the company including lack of sales, decrease in net income, low employee morale, downturn in the Classic Rewards program, and required budget cuts. Goals will meet the SMART standard of beingspecific, measureable, concord upon, realistic and time-based.\r\nThe goal, must be specific which agency it iswell defined. Who is involved, what is to be accomplished, location, requirements and constraints should be identified and the reason the goal should be accomplished. The goal should be clear to everyone associated with the program. in that location must be an exact way for measuring the progress toward the goal. The goal should be agre ed upon by all stakeholders and attainable, achievable, and action-oriented. The goal is realistic when people are willing and able to work for its achievement. A goal is realistic when people believe it can be accomplished in the set timeframe.\r\nThe goal should be set within a certain time frame (Haughey, 2010). Classic Airlines has formulated a duck of SMART questions that address the challenges of lack of sales, decrease in net income, low employee morale, downturn in the Classic Rewards program, and required budget cuts (Haughey, 2010). Marketing recommendations Classic airlines needs to cut expenses to produce a net income and avoid bankruptcy. The following are some methods of cutting costs: direct booking through the internet or call center with no sales commissions.\r\n mapping uniform aircraft such as just the 737-300 airplanes, use a simple system of pricing, on the aircrafts use high seating density and load factors to be efficient, no frills such as free victuals or drinks, and use of secondary airports to cut charges and transposition times. One of the ways Classic Airlines can make the airline more attractive to existing customers and sore customers is to restructure the companys frequent flier program. Reforming the Classic Rewards program will be a challenge, however;the returns could turn the company around.\r\nRewarding frequent fliers with new rewards that include various redemption options could improve consumer moral and loyalty. Classic Airlines must provide better service to all their customers, especially the frequent fliers. The goal of the company should be to retain and win back customers, provide majestic customer service, and offer attractive alternatives to redeeming their frequent flier miles. Providing exceptional service to their frequent fliers and see the need of each customer is a occupation and obligation of Classic Airlines.\r\nClassic Airlines should increase the occur of miles Basic, Silver, and Gold members ca n use in a year by 10%. Classic Airlines should as well as decrease the number of black-out days. Without improving the frequent flier program, the company will continue to losecustomers, market share, and see net profit continue to decline. Alliance with other carriers would expand available routes and provide more options for frequent flyers to use their loyalty rewards. Alliance with other carriers could decrease its operating costs and increase net income.\r\nThe company would benefit by becoming a large company with more services. Conclusion References Classic Airline Scenario, 2010. _University of Phoenix materials-Classic Airlines Exhibit B. _ (2010_). _ Retrieved on jar against 22, 2010 from University of Phoenix, Resource, MKT/571- Marketing weathervane site: https://ecampus. phoenix. edu/classroom/ic/classroom. aspx. Classic Airline Scenario, 2010. _University of Phoenix materials-Classic Scenario: Classic _ Airlines. (2010_). _ Retrieved on March 22, 2010 from Univers ity of Phoenix, Resource, MKT/571- Marketing Web site: https://ecampus. hoenix. edu/classroom/ic/classroom. aspx. Haughey, D. (2010). Smart Goals. Projectsmart. Retrieved March 23, 2010, from: http://www. projectsmart. co. uk/smart-goals. html Kotler, P. Keller, K. A poser for marketing management, 3rde. (2007). Prentice Hall. Retrieved on March 23,2010 from University of Phoenix, Resource, MKT/571-Marketing Web site: https://ecampus. phoenix. edu/classroom/ic/classroom. aspx. Problem-Solving Model, 2010. BPI consulting. Retrieved on March 24, 2010 from: http://www. spcforexcel. com/problem-solving-model\r\n'