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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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