Classic Airlines

Classic Airlines

Julie A. Perez

Marketing 571

November 1, 2012

Don Olsen

Classic Airlines is the fifth largest airline worldwide with a net income of 10 million dollars this past year. The company services 240 cities with 375 airplanes and more than 2,300 flights per day. Over the past 25 years, Classic Airlines has grown to employ 32,000 people (Classic Airlines Scenario, 2005). Classic airlines currently markets the company's flights, costs, and customer service. Although the company is making desirable profits, it is also experiencing some major financial and customer challenges.

Because of the struggles in the economy, Classic Airlines is experiencing a decrease in its net income as well as a decrease in rewards members. Classic Airlines' current net income of $10 million is nowhere near the previous year's net income of $71 million. From an investment standpoint, the company's share price is 10% lower with the highest labor cost in the industry (Classic Airlines Scenario, 2005). A 19% decrease in rewards members has also hurt the company with a decrease in flights per member. Employee morale is diminishing because of the challenges the company is facing. Classic Airlines is in the process of solving their current challenges and evaluating their current position in the marketplace.

Classic Airlines has a marketing plan that currently focuses on business and leisure traveler differences and each group's behavior patterns. The business traveler is attracted to the quality of customer service rather than the price of the flight. The leisure traveler is attracted to the price of a flight rather than the customer services. In this particular situation, the production concept best describes the company's current scenario. The production concept embraces that consumers will choose a product widely available at a reasonable price (Kotler & Keller, 2006).

To increase net profits each year, Classic Airlines must revamp its reward program and...