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Classic Airlines Marketing

Essay by   •  February 13, 2013  •  Essay  •  553 Words (3 Pages)  •  1,051 Views

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Classic Airlines, the world's fifth largest airlines uses a fleet of 375 aircrafts, employing

nearly 32,000 employees , and earned a $ 10 million profit in their business. Recently, Classic

Airlines has a decline in demand because of 10 % decrease in their share prices,

decrease in amount of customers enrolled in the Classic Rewards program, and decrease in the

market share in the airline industry. With rising investor scrutiny and to overcome the financial

crisis and avoid bankruptcy, the Board of Directors issued an ultimatum to the top management

of Classic Airlines to increase customer participation in the frequent flyer program and cut

operating costs by 15 % over the next 18 months.

Challenges

The airlines industry is an extremely competitive market with cut throat competition between

different airlines. The global economic recession and rising fuel prices have added to the woes of

the airlines industry. The main challenge for airlines is to keep operating costs low while offering

competitive prices and ensuring profitability.

Corporate Culture

The current top level management is resistant to adopting new airlines alliances. Adopting the

new airlines alliances will facilitate Classic Airlines to perform efficient and effective

marketing. They also need to give priority to the customer relationship program (CRM) that

can be used as a tool to identify client's needs and preferences.

The production concept can enable Classic Airlines to regain their market share by dropping the

prices of their tickets. The CEO of Classic Airlines feels that they are not able to drop their

ticket prices further compared to their competitors, it is imperative that they reduce operating

costs. This will give Classic Airlines the option to have more available money to match

competitor's prices and potentially draw back some of their previous customers.

The product concept will enable Classic Airlines to outline the price, distribution,

advertisement, and insurance that the product they are offering their customers is at the right

price and

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