Classic Airlines, Essay Example

Classic Airlines isan airline operator that provides budget travelling services to its clients. If we study the current marketing challenges being faced by Classic Airlines, it is apparent that a lot of this has to do with poor marketing mix (MindTools). The client feedback shows that not all of the company’s customers put a major emphasis on lower prices, especially business clients who are more interested in timeliness and good travelling experience. Yet the company’s pricing strategy has been inspired by the fact that the company’s customers’ greatest priority is low prices. Similarly, the company designed its promotional programs such as reward programs without properly understanding customers’ characteristics or taking into account customers’ preferences. This may be the reason why reward programs have failed to achieve their objectives because their features are not attractive enough to customers to stay loyal to Classic Airlines.

Classic Airlines’ marketing challenges also stem from the fact that the company has been doing a poor job of monitoring the external environment(Anderson), especially the competition. No company can design an effective marketing strategy until it takes the actions of its competitors’ into account and then devise a strategy to counter competitors’ actions. It is apparent from the customers’ feedback that the competition has been winning over Classic Airlines’ customers through better travelling experience, reward programs, and customer service. For example, some of the competitors offers reward programs that can be used to pay mortgage payments or even save for retirement. One competitor has replaced all seats with leather ones and has installed DirectTV in the back of every seat. It is apparent that Classic Airlines’ marketing problems are also due to their failure to effectively tackle the actions being taken by the competition to win over business and leisure travelers. Classic Airlines may be offering some of the lowest airfares in the industry but their poor customer service and products/services make them poor bargains as compared to the competition.

As far as the company’s corporate culture is concerned, CEO Amanda Miller retains most of the decision-making power. Classic Airlines seems to employ the Hierarchy Cultureas the management places a huge emphasis on stability and efficiency (Ruth Alas, 2009). This explains why the company tries hard to maintain good relationships with employees’ unions even though it also results in high labor costs. The business model revolves around continuous pursuit of lower costs and the communication environment is not as open as some management members including Chief Marketing Officer Kevin Boyle and Senior Vice President of Customer Service Renee Epson would like. Lack of communication may also be the result that the company has not been able to fully exploit the capabilities of its Customer Relationship Management (CRM) system. Similarly, lack of communication also prevents unanimous commitment to competitive strategies within the company. The company’s leadership believes productive efficiency is the key to winning the competition while some management team members want to place greater emphasis on customers’ overall experience than price. The customers’ feedback does indicate that the company needs to shift its focus from product-oriented marketing to customer-oriented marketing.

Classic Airlines has usually competed on the basis of lower prices but it is currently faced with declining revenues as well as lower satisfaction among customers. The feedback from customers reveals that not all customers consider price the most important aspect of their purchase process. The company should also start monitoring its competition more closely and take steps to change customers’ perceptions by improving quality of service and customers’ overall travelling experience.

References

Anderson, A. (n.d.). Five Components of an Organization’s External Environment. Retrieved Decemebr 11, 2012, from http://smallbusiness.chron.com/five-components-organizations-external-environment-17634.html

MindTools. (n.d.). The Marketing Mix and 4 Ps. Retrieved December 11, 2012, from http://www.mindtools.com/pages/article/newSTR_94.htm

Ruth Alas, U. U. (2009). Organizational Culture Types as Predictors of Corporate Social Responsibility. Retrieved December 11, 2012, from http://www.ktu.edu/lt/mokslas/zurnalai/inzeko/61/1392-2758-2009-1-61-90.pdf