Classic Airlines

Classic Airlines Marketing Challenges

Lynda Keller

Marketing (MKT/571)

October 22, 2012

Bryce McDonald

Abstract

This paper identified the current marketing challenges of Classic Airlines. The challenges identified include negative demand, lack of customer focus, and failure of Classic Airlines to take advantage of the customer service call center for marketing purposes.

Classic Airlines Marketing Challenges

Classic Airlines current challenges include a 10% decrease in the stock price, low employee morale, and a decrease in membership and use of the airline’s Classic Rewards program. The board of directors is mandating a 15% across the board cost reduction over the next 18 months. The marketing department needs to demonstrate a positive return on investment from marketing activities to convince both the board and Classic’s leadership team of the importance of effective marketing efforts. To demonstrate a positive return on investment the marketing staff will need to review the demand state and determine an appropriate demand state, focus on the customer, and increase employee morale and buy-in from employees.

Demand State

According to Kotler and Keller, “Marketing managers seek to influence the level, timing, and composition of demand to meet the organization’s objectives,” (Kotler & Keller, 2006, p. 10). One of Classic Airlines objectives is to beef up its frequent flier program to demonstrate a measurable return on investment. Classic Airlines has seen a 20% decline in their Classic Reward program and a decrease member participation in the program. The Classic Reward program is likely experiencing a negative demand where customers dislike the program and avoid the product even at a price that is evident in the decrease in member participation. To shift the demand to a more positive demand state the marketing department must identify the underlying cause(s) of the current negative demand state, (Kotler & Keller, 2006).

Radical...