Classic Airlines has been one of the top five airline companies in the United States and continues to have over $10 million in annual profits. Unfortunately, the company is feeling a strong reduction in the classic rewards program that was initially designed to improve the customer’s experience and become a beneficial method for retaining customers. Their recent customer loyalty report showed extreme numbers that suggests that the company must undergo a very serious marketing campaign in order to turn around this trend and increase its customer-base, and in turn increase its overall profits. Classic Airlines is dangerously close to filing for bankruptcy if the proposed marketing plans by the new Chief Marketing Officer, Kevin Boyle, do not have the desired impacts the company needs.
Before this case is accurately analyzed and recommendations can be proposed, it is important to understand basic marketing concepts that are crucial for the Classic Airlines team and how these concepts can be utilized to enact a goal-oriented problem-solving process. First of all marketing is commonly defined as the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals (Londre, 2009, p. 1). In other words, the people at Classic Airlines need to enact a marketing plan that accomplishes the goal of distributing the plan and pricing, while being promoted to satisfy the customer. Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company (Setiawan, 2009, presentation). Furthermore, “a marketing decision support system is a coordinated collection of data, systems, tools, and techniques with supporting hardware and software by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action” (Setiawan, 2009, presentation). In order for the marketing team to accurately develop a marketing plan that will work to turn around the current situation, the individuals must conduct market research. Renee Epson, the Senior Vice President of Customer Service, commonly suggests conducting market research by surveying the remaining Classic Airlines customers in order to find out what they want and how the company can better improve its service to the customers.
As this data is collected, it is important that various steps are taking to assess the market and the inner workings of Classic Airlines to develop a qualified marketing plan. “Marketing-mix models analyze data from a variety of sources, such as retailer scanner data, company shipment data, pricing, media, and promotion spending data, to understand more precisely the effects of specific marketing activities” (Kotler & Keller, 2009, presentation). A customer-performance scorecard records how well the company is doing year after year on customer-based measures. A stakeholder-performance scorecard tracks the satisfaction of various constituencies who have a critical interest in and impact on the company’s performance including employees, suppliers, banks, distributors, retailers, and stockholders (Kotler & Keller, 2009, presentation). These can both be very useful tools in order to assess the marketplace and the available options that Classic Airlines may be able to use in order to improve production and profit margins.