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The company generates its revenue from passenger as well as cargo services. The total revenue earned by the company has moved up from $8592 million to $8700 million from the year 2003. Despite the rise in the revenue, it faced a decline in its net income. The main reason for this can be attributed to the rise in its operating expenditure which has moved up by approximately 20% in 2004. This is getting reflected in the annual net profit, as it has dropped significantly from $71 million to $10 million in the year 2004 which is a fall of nearly 86%. The net profit margin ratio of the company has declined from 0.0083 to 0.0011. This means that the net profit margin of the company has declined substantially by 86 % compared to the last year (California State University, n.d.).
In view of this, Classic Airlines has planned for a reduction in its costs relating to Operations, Marketing, Sales, Administration and IT. The company has planned for the highest cost-cut in the marketing division.
The price of the companys stock at the end of 2003 was $33.20 compared to $28.93 in 2004. The dismal financial performance of the company is getting reflected in the stock price which has fallen by nearly 12.86%. The highest price recorded by the company in 2004 is $36.75, in the month of July. This could be due to highest monthly net income posted by the company in the last month at $160 million. Even though it remained above $100 million mark in July, the following months witnessed a sharp fall in the net income. As evident by the financial statements, the companys revenue peaked in the months of June and July in both the years.
The terrorist strike on September 9/11 had a deep impact on the airline industry with most of the airlines reporting dip in profits. This led to an increase in the amount of debt as the company ran into severe losses which had to be financed through external
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This shift in paradigm has been the result of an increase in the level of inflation and a rise in the cost of fuel. These two variables have made it imperative for airline carriers to achieve operational excellence and enhance customer loyalty. Unfortunately for the company, it has encountered some internal problems which are preventing it from addressing these challenges effectively.
Classic Airlines is facing problems as the firm has not been effective at retaining customers. In the last year the firm has lost 20% of the member of its customer loyalty program. The firm has lost approximately 160,000 recurrent clients.
Classic Airlines is a company in the airline industry with over 25 years of experience. The firm has an operation that includes 2300 daily flights across 240 cities. The firm has a global workforce of 30,000 employees. Due to the size of the company it is imperative for this firm to invest its marketing dollars well.
One of the fifth largest airlines, Classic Airlines is experiencing challenges due to larger service costs and fuel costs and issues related to service and marketing. Due to this there has been a steep decline in the consumer traffic.
The paper starts by identifying as well as defining the problem and this is followed by application of the above mentioned problem solving model. The internal as well as external pressures contributing to Classic Airline’s current crisis will be discussed in detail and the essay will also seek to establish the marketing resources that are available to resolve the crisis.
The current paper focuses on the marketing needs of a well – known organization, in the context of the airline industry, Classic Airlines. It should be noted that the above firm has, traditionally, focused on the limitation of its costs, so that its potentials for high profitability are increased.
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).
From there, the model will be used to define a solution and this will be applied to the situation at hand. For the purpose of this discussion, the marketing unit will involve the way of identifying and meeting human needs (Kotler & Keller, 2006). The strategies used and approaches employed will be evaluated.
In today’s competitive market it is the duty of the marketing department of companies to ensure that they maximize growth and profits, and this is achieved by strategic marketing. The commercial airline industry changes rapidly and classic
2 Pages(500 words)Essay
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