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Mkt 571 Week 1 Classic Airlines Marketing Concepts

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Mkt 571 Week 1 Classic Airlines Marketing Concepts
MKT/571
Classic Airlines Marketing Concepts
The marketing team for Classic Airlines is facing the task of renewing the
appeal of an aging airline struggling to maintain financial viability in the
face of legacy costs and a decreasing base of loyal customers. They are
facing an ideological division between the CEO and CFO believing too
much in numbers, and the CMO maintaining that customers determine
value in ways other than price (University of Phoenix, 2008, pp. 3-4, 9).
The challenge for the marketing team is getting the company to embrace
that they must, as Jack Welch said, “change or die” (Kotler & Keller,
2006, p. 4). Focusing on things like a 15% cost reduction target and
hedging fuel prices have led to a 20% reduction in loyalty program
membership, a 10% decrease in share prices, and a looming situation
with union obligations (University of Phoenix, 2008, pp. 1-2, 4, 8).
Marketing Concepts
To improve the outlook for Classic Airlines the marketing team knows
that they will have to use some basic marketing concepts to put
themselves back on the map. They plan on using their existing CRM
system as a means to gather data on existing customers, conducting a
thorough analysis of their current competition, and using their
“fundamentally solid and robust system that's globally accessible” to
form new strategic alliances (University of Phoenix, 2008, pp. 5-6, 9).
According to Kotler and Keller (2006), one way that marketing has
changed in modern days is that brand loyalty is no longer a significant
factor as consumers can access a plethora of data prior to making any
financial decision. This both empowers consumers and increases the
level of competition, as consumers can seek the service that caters to
their individual needs (p. 14). Kevin, the CMO of Classic, knows that the
CRM system already in place has the capability of allowing the entire
airline to be responsive throughout the organizational hierarchy. Kevin
realizes that customers do not equate price with value and sees the
CRM data as an opportunity to exploit alternative areas of value to
distinguish the company (University of Phoenix, 2008, pp. 5-6).

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To analyze competition a company must understand that any potential
substitute is competition, whether competing directly or otherwise. A
large part of any thorough analysis is understanding the task
environment, which consists of the primary operators bringing the
consumable offering to the table (Kotler & Keller, 2006, p. 26). In John
Hartman's SWOT analysis of the competition he observes that some of
their major competitors face problems with seasonal revenue, along with
union and pension obligations (University of Phoenix, 2009). By
recognizing these important macroenvironmental and
microenvironmental forces acting within their industry the Classic Airlines
team can determine specific areas of marketing opportunity (Kotler &
Keller, 2006, p. 52). They observe that each competitor is in a position to
create value through exploiting changing customer needs, which gives
Classic Airlines an opportunity to expand into new areas of value,
targeting new markets of customers in new ways (University of Phoenix,
2009).
The relationship that Kevin Boyle has with Josef Wymann provides
Classic Airlines with an exciting opportunity to explore new areas of
value through a horizontal partnership. Josef offers an expanded
resource space through collaboration, bringing a strong loyalty program
and international partnerships to the table. Classic Airlines provides an
established network of resources that can help Skyway Airlines complete
their newest alliance with an airline in Latin America (University of
Phoenix, 2009). Through this collaboration Classic Airlines could expand
their competency space and provide a more broad and knowledgeable
service through their strategic alliances (Kotler & Keller, 2006, p. 41, 56-
57).
Conclusion
By making use of some basic marketing strategies Classic Airlines will
be able address many of the issues they must face. Understanding their
competition will help them to distinguish their services, and an expansion
through strategic alliances will allow them to operate beyond their
current capacity. The success for Classic Airlines lies with establishing
the value of their services by responding to changing customer demands
and perceptions of value.
References

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Kotler, P., & Keller, K. L. (2006). Marketing Management (12th ed.).
Retrieved from The University of Phoenix eBook Collection database.
University of Phoenix. (2008). Scenario: Classic Airlines Company
Overview. Retrieved from University of Phoenix, MKT/571-Marketing
website.
University of Phoenix. (2009). Classic Airlines documents. Retrieved
from University of Phoenix, MKT/571-Marketing website.

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