Recommendations Solution for Marketing Issues - Case Study Example

? Project Amanda Miller, CEO Consultant RE: Recommendations Solution for Marketing Issues Memo Purpose The ic Airlines has sustained over the years and has had some glorious days in the recent past. With a fleet of over 375 highly advanced passenger carriers, it needs to be highlighted that the airline company Classic Airlines, is significantly one of the largest airlines that has been dominating the skies of around 240 cities. However, in the recent times, it can be said the airline carrier is plagued with various issues ranging from decreasing stock prices to fall of consumer loyalty as well as rising operating costs. This particular memo is in response to the marketing tactics that can be used to consolidate the airline’s position in the global market, while dealing with the issues related to fall in customer loyalty. It also needs to be mentioned that while designing the approach, focus was given on minimizing the operating cost of the airlines. Recommendation The recommended solution for the issues faced by the airline company on the lines of depreciating customer loyalty for the airlines is multi tiered in nature. Firstly, Classic Airlines, needs to focus more on listening to its customers, since they are the key revenue generator for the airlines Secondly, the airline needs to enter into a code sharing practice with another airline so that the company can get a strong and high flow of steady customers. Analysis and Support of the Recommendations It is of considerable importance to highlight that the airline company has been facing tremendous issue in regards to depreciating consumer loyalty. The issue has been further complicated since the existing customers of the airlines, who fall in the frequent flyers category has demonstrated a dip in the frequency of usage of Classic Airlines. It has been assumed that the dip in the case of existing customers may be emerging either because of the issue related to choosing alternative airline or the factor of related to challenging scenario for the overall economy. It also needs to be highlighted that the airline is also facing multiple other issues. Talking specifically about the various other issues, the first thing that needs to be highlighted is the issue of price cut taken by Classic Airlines. It needs to be mentioned that the airline in the recent past has initiated a price cut for its airline services for the passengers. Needless to say, that though this was a complimentary move done while trying to tackle the past airline issues as well as the price cut drive from the competitors, this further resulted in the limiting of the revenue generating abilities of the airline company. The second issue is that the airline has been facing an issue of increase in operating costs for quite some time. As a necessary counter measure, the top management of Classic Airlines has initiated the mandate to significantly attain a 15 % reduction in costs. It needs to be highlighted that the presence of these additional issues has significantly resulted in the process of limiting the options that can be utilized for providing significant recommendations to the airline’s current problems related to fall in consumer loyalty. While talking in regards to the process of providing recommendation, it can be said that the very first step will be to opt for listening to the customers. Talking in more details, it can be said that the Classic Airlines already has in place, a very high end customer relationship management (CRM) system, which have the potential to provide more operational functions as compared to the ones that are being currently used. As of the recent customer feedbacks received, it has been realized that the current CRM system is too much automated in nature and lacks a human powered interaction. The current CRM system has the ability to integrate phone channels with the currently existing web channels. Though adding a human interaction interface in the current CRM system might prove costly, yet it will help in listening to the customers. For the purpose of inculcating a human system, the marketing department can set up a customer complaint and feedback division, which will simply take feedback from the customers. It has to be highlighted that since the airlines sector falls largely on the lines of service sector. It needs to be highlighted that in the service sector, it is of key importance to listen to the customer’s feedback and demands, so as to provide service improvements. It can be further highlighted that by focusing on the process of listening to the customers, the Gap model, which is a crucial framework of service marketing, can be inculcated (Kossmann 20). Now, talking about the second recommendation, it can be said that by opting for the process of code sharing practice with another airline, the company will be tackle the issue of falling customer demand from the existing customers. It can be said that the entire airline industry has opted for the process of code sharing practice, since it provides a great level of convenience to the passengers (Oh and Pizam 508). It can be assumed that a very critical aspect for the fall in usage frequency from the existing frequent flyers might be because of the inconvenience that the frequent flyers possibly face in the event of non existence of a ticket sharing practice by the airline. It also needs to be highlighted that there is also a significant benefit associated with the process of opting for ticket sharing practice with another airline. It needs to be highlighted that by opting for a ticket sharing practice, the airline company will be able to service a large number of transit passengers. It can be any veteran’s easy understanding that by opting for this particular arrangement, which provides the Classic Airlines the opportunity to service a large number of passengers, the airline company will be highly successful in the process of generating more revenue from its daily operations. Also, while talking from the financial aspect, it can be said that since the airline already operates in a large network of 240 cities, providing code sharing based service won’t lead to an increase in cost of operations. Exhibits Kevin Boyle - Notes From Customer Conversations Key Customer Comments: • “I don’t need the perks, just get me there on time.” • “I know you may need to automate customer service to control costs, but there should always be the option to talk to a real person.” • “I’ve heard you only allow two seats per flight for me to redeem my frequent flier miles. If that’s true, you need to let me reserve them at least six months in advance.” • “Stick to the schedules.” • “Whatever you do, don’t lose my bags. And if you do, don’t treat me like a criminal – you lost them, not me”. • “My friend can use frequent flier miles to make her mortgage payment or save for retirement.” • “One of your competitors just got rid of pillows on board to save almost a half-million dollars a year. Please tell me you’re not going to do that.” • “Treat me like a person, a paying customer, which is what I am.” • “You should have your executives listen in on customer service calls sometime.” • “I don’t care if it costs a couple of bucks more, if you can assure me I’ll arrive on time and be treated like a human being, I’m with you.” • “You know, your competition just put in leather seats with DirectTV in the back of every one.” • “In the unlikely event that you overbook a flight (which has happened to me) please do not infer that it is something I have done to cause (which has also happened to me).” • “Let top-level frequent fliers board early.” • “I remember the good old days, when I flew in and out of New York and you still had a Classic Club at Newark Airport. Those ladies would call my cell phone and let me know if my flight was late, book hotel rooms for me when my flight was cancelled, and always gave me little trinkets to take home to my kids. I would never have dreamed of flying on anything but Classic.” My Picture of the Customer: Business Traveller – • Wants to get from point A to point B as quickly, easily and effectively as possible • Doesn’t like connections, delays • Wants frequent flights to a variety of destinations • Wants quality service • Will pay a premium for these benefits, within reason • Considers his frequent flier points to be the airlines’ investment in him Leisure Traveller – • Much more price sensitive – will schedule trips around discount fares • More tolerable of connections if it saves them money • Doesn’t care as much about the frequency of flights or the variety of destinations • Doesn’t care as much about the quality of service if they save money • Doesn’t make as many trips as the business traveller, but outnumbers the business traveller in sheer volume • One trip decision involves multiple tickets (i.e., a family of four or more, etc.). Works Cited Kossmann, Mario. Delivering Excellent Service Quality in Aviation: A Practical Guide for Internal And External Service Providers. 2006. USA: Ashgate Publishing. Print. Oh, Haemoon and Pizam, Abraham. Handbook of Hospitality Marketing Management. 2008. UK: Elsevier. Print. Read More