Marketing September 17, 2012 Classic Airlines and Marketing Classic Airlines, the fifth largest airline carrier, currently serves 240 cities with more than 2,300 daily flights. However, Classic Airlines has experienced over the past three years a decline in their frequent flier program Classic Rewards along with customer confidence declining as well and stock prices has decreased by 10% according to University of Phoenix, 2012. Marketing is assigned the task of revamping the customer loyalty program and increasing membership while operating under a 15% reduction in expenses across the company.
The challenges that the marketing management is faced with include a downward turn of morale among the employees; retaining and recruiting of new members for Classic Rewards, and the lack of support from upper management. Marketing management is the process of “creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” (Kotler & Keller, 2006, p. 6). Identifying Marketing Challenges
The marketing management team has identified that the majority (60%) of its Reward membership are at the basic tier, 25% are on the Silver Rewards level, and only 15% are Gold Rewards members. Of these members 80% are business travelers with the remaining 20% leisure travelers. With this information, marketing instituted surveys to determine what the needs of the members are. The replies from the business traveler ranged from the dislike for connections and delays, the desire for quality service, and the idea that the frequent flier points are the result of the airline’s investment in the customer.
Whereas, the leisure traveler is more interested in lower air fare and is more willing to have more connections if it will save the traveler money. Strength, weakness, opportunities, and threats (SWOT) analysis of Classic Airlines top three competitors—British Airlines, Northwest Airlines, and United Airlines—were completed by John Hartman, Senior Vice President of Human Resources. Based on the SWOT analysis, all three competitors have a strong and successful loyalty program. A common weakness between the three companies is the union at each airline.