Classic Airlines Marketing Problem - Essay Example

? ic Airlines’ Marketing problem ic Airlines Marketing problem Introduction Business problems are the challenges that a business encounters that serve as a set back to the business attaining profit or reaching its goals. For instance, the problems that start-up businesses face are different from those that ongoing businesses may face. However, the approach is similar as finding a solution is applicable in both. Ideally, it will not be wise to close down a business because of the problems encountered. In order to solve a problem, it is crucial to apply the relevant problem solving skills in order to overturn the outcomes (Blais, 2012). This is irrespective of a manager’s educational background or their intellectual abilities as problem solving is a nurtured skill. Problems are a part of a business’s routine that helps it to grow. For instance, the objective of this paper will be to solve classic airlines marketing problem using the nine-step model by identifying and defining the problem. Additionally, it will tackle the objectives and obstacles available in the solving of the marketing problem of the airlines marketing department. Issues identification within Classic Airlines Classic airline is the world fifth largest airline with three hundred and seventy five jets in its stable. It has over two hundred and forty flight destinations with at least two--thousand three hundred flights in a day. Its existence is over twenty-five years, which has seen the company grow to having a total number of thirty two thousand employees. Its average turnover per year is between ten million and nine billion. Like any other business structure, Classic Airlines has had its part of challenges. The company witnessed intense plummet of its share price in the stock market because of flying uncertainties. In addition, the negative publicity exhibited by the public, the media and the Wall Street market have gravely affected employee morale hence affecting their overall performance. Problem statement In effect, the consumer confidence on the airline dwindled as the Classic customer reward program membership decreased by an alarming number. The number of flying times that the remaining Classic loyal customers reduced significantly over a short period. Some of the customers jumped ship to access services from the airlines competitors. Moreover, Classic Airline’s inability to meet the rising fuel and labor costs have made the airline unable to compete in a well represented market. In a counter approach move, the airline’s board of directors suggested a cost reduction measure for a period range of one and half years. Under the set period, Classic airline would be able to beef up its frequent flier programs that should bring a significant return on investment. SWOT analysis for the company Strengths Weaknesses Opportunities Threats Long time existence in the market Regular flight delays Investing on the changing customer needs Fierce competition from other players within the travel industry Internationally recognized brand The number of seats that a customer has to have for them to redeem their flier miles The recovery of the travelling industry Fluctuating global currency rates Customer loyalty to frequent flier programs Carelessness of staff leading to loss of client luggage The airlines’ good reputation with the labor unions High fuel and equipment costs Effective implementation of cost reduction measures Poor inter client and staff relationship Venturing in to new destinations both internationally and locally Sanctions imposed by the European Union on carbon emissions and the environment Good relations with its employees Reliance to old forms of travelling techniques Steps in problem solving for Classic Airline’s marketing problem Short-term issues Classic Airlines’ service product Ideally, the greatest, selling point of a product or service is the service product itself. In essence, a service is the act of approaching a need or want in an intangible manner where no one claims ownership. For instance, Classic Airline’s area of service is the offering of flight services to the market in order to make travelling fast and reliable. For this reason a customer judges the quality of service offered by looking at the quality levels of the service features, how the services blend with the quality and lastly the price appropriateness in relation to the services offered. In the execution of the service delivery, the fundamental aspect for a marketer would be the core benefits that will make a consumer appreciate the service. For instance, the core benefit for the airline would be comfort when travelling and reliable flight schedules. Essentially, the marketers become the benefit providers to the set beneficiaries. This gives room to competition and brand creation within the market for the airline to gain recognition. Essentially, competition for the airline will not be in the services it offers to the market, but it will base upon its ability to improve on the services that it already offers to the market. However, the value addition process may be costly to the airline, but the results will be worth the effort. The customers need to foot them cost incurred during the value addition process Services mix Service mix is the mixing of services to establish a blend that will attract customers. For instance, services mix consists of its reliability, length, width, and consistency. This is to mean that the length is the total number of services offered. On the contrary, depth is the number of service variants within which the services roll out to the market. On the other hand, the width depicts the number of service lines that the airline has to offer while consistency refers to the close relation that the service lines has the end utilization, service necessities and modes of distribution for the services. These four service lines will allow the airline to expand its business establishments by incorporating other service lines. Long-term issues Managing Service Quality Measuring of the quality of service output applies in every service output stage. The service expectation of customers derives from sources like word of mouth, adverts, and experiences in using the airlines services (Kotler & Keller, 2007). For instance, customers rate the expected service from the assumed service levels. In essence, customer disappointed is visible when the expedited level falls under the level that the customers’ perceived. Therefore, chances of continued uptake offered will depend on the level of address that the services met. Essentially, the customer reaction to the airlines’ ability to arrive to the destination in time is a subject in question. For instance, when asked about the airlines on time factor, the customer replied that all that mattered was that they reach their destination on their preferred time because it was part of the company’s key promises to the customers. Other aspects of service delivery would be the customer relation service in terms of loss of luggage and the use of too much technology to communicate with consumers (Kotler & Keller, 2007). Incidentally, customers prefer face-to-face communication when they need to access needed information concerning a service. This would make it easy for the marketer of the airline, as the brand that they would try to resell to the market will be one whose reputation precedes the company. The pricing strategy Pricing is the most valued aspect of marketing as it enables a business to produce revenue. In essence, the whole idea of transacting business is to make a profit through the set prices on the services or product (Aken et al, 2006). In marketing, pricing is the least expensive and most flexible change that can apply in a business, as it can change easily. However, pricing elements can be complex as the price placed on a commodity establishes its market appreciation. Therefore, when setting the price for a service or commodity, it is vital for a marketer to ascertain the completion within the market (Aken et al, 2006). In addition, the marketer also needs to understand the customers in terms of their different needs and levels of income. Thirdly, it is vital for the marketer to ascertain the targeted market and come up with a unique market approach when trying to market the services. In relation to Classic Airlines, their price becomes the flight charges for every travel destination. In relation to the airline service providers, the pricing departments within the airlines determine the prices for their services. The pricing department reports directly to the marketing, financial and the accounts departments. In the marketing world, consumers tend to internalize prices before they decide on which to access. This is the consumer psychology aspect Recommendations to the Airline For one, the customer rewards frequent reward flier program would be an excellent way to attract customers to retaining their loyalty to the airline. This is to mean that customers will gain points when they frequently fly with the airline, which they can redeem for discount rates on other services. In essence, the frequent flying will enable the airline to cover on the expenses that incurs when trying to maintain their client base. In addition, arriving at a standard price for their services will depend on the demand levels for the routes, the economic stature of clients, and the competition that it has within the market. Essentially, price evaluation will help the company to improve on its sales levels, as pricing will be subject to the market surrounding. Therefore, the Airline should reconsider its pricing criteria to make the friendly consumer prices to attract more clients. On the other hand, upholding of the company image would need the evaluation of its front office and terminal attendees. They need to constantly be on location, and make the client feel welcome and valued (Kotler et al, 2009). Additionally, those accessing these airlines services need to travel in a clean and friendly environment for them to enjoy their flight aboard the airlines. In this regard, the airline needs to package its services in a way that exceeds consumer expectations. Finally, the services offered by the airline should be of high a standard and the best within the market Conclusion Indeed, the marketing problems that this airline faces are not unique because many airlines experience almost the same problems. However, the establishment of the need to expand the market awareness marks the first step in attaining market stability (Kotler, 2008). For instance, relying on the existing market establishment makes it hard for the airline to stay afloat in a highly competitive market. In essence, service product additions will not only help customers to get additional value to their money’s worth, but it will help the airline to be expansive (Kotler, 2008). Ideally, challenges may pose as opportunities in disguise that help a company to move from one point in the business’ life span. Therefore, in order for a company to grow, it needs to appreciate the hurdles that come its way for they may mark a turning point for business in terms of revenue remuneration. As for the Classic Airlines, the two-year non-profit margin does not mean that the company is a failure, but it shows that intense marketing should apply for the company to regain its fallen glory. The company has high prospects of penetrating the global market and establishing a lasting worldwide presence if only it strives to be better and above its peers (Kotler et al, 2008). References Aken, J. E., Berends, H., & Bij, H. . (2006). Problem solving in organizations. Cambridge: Cambridge University Press. Blais, S. (2012). Business analysis: Best practices for success. Hoboken, N.J: Wiley. Kotler, P., Keller K.L. (2007) A Framework for Marketing Management. Upper Saddle, New Jersey: Prentice Hall. Kotler, P., & Keller K., Brady M., Goodman M., Hansen T. (2009). Marketing management. Harlow, England: Pearson/Prentice Hall. Kotler, P. (2008). Principles of marketing. Upper Saddle River, N.J: Pearson Prentice Hall. Read More