Classic Airlines Marketing Soluition

Classic Airlines Marketing Solution

MKT/571

Scott Hample, MBA

03/07/11

A. Hamlett

Introduction

Classic Airlines is the world’s fifth largest airline with more than 375 jets that serve over 240 cities with over 2,300 daily flights. Classic was formed twenty five years ago, and has grown to an organization of 32,000 employees with last year earnings of $ 10 million on sales of $ 8.7 billion. Classic Airlines has been profitable, but they have experienced the same challenges as the broader airline industry, which includes declining flyers, escalating fuel prices, increasing costs associated with airline security, and civil unrest in certain parts of the world. As a result, airline industry stock prices have been adversely impacted. In that regard, Classic Airlines has experienced a declining stock price in its most recent fiscal year. As a result, Classic Airlines faces an uncertain financial future, and must make changes to its marketing approach.

Problem Identification

Classic Airlines has experienced a 10 % decrease in share price in the most recent twelve month period. Specific marketing challenges for Classic include:

• Connecting With Customers

• Building Strong Brand(s)

• Shaping Its Market Offerings

Classic Airlines’ senior management has identified its problem as “they need to lure back the frequent flyer customers they lost (160,000), and rise above their competition without discounting airfares”.

• Delivering Value

Classic has not delivered the value to its shareholders given its 10% decrease in share prices in the past year.

• Communicating Value

Value was not effectively communicated as evidenced by a 19% decrease in the number of Classic Rewards members, and a 21% decrease in flights per remaining member.

• Creating Long-Term Growth

Problem Definition

Classic Airlines’ problem is to lure back those frequent flyer customers that left the airline (160,000), which will help to restore its stock price to prior year levels, and...