Classic Airline’s Marketing Solution
Introduction
Classic airlines is one of the biggest airline carriers in the world with a fleet of over 375 jet carriers and a daily flight range of over 2,300 to over 240 cities around the world. This being the case, the airline has 32,000 employees around the world with its main mission being a continued increase in operational excellence to give their client a thrilling experience. Over the past few years, the airline has been facing different challenges such as a 19% decrease in reward members that use the airline, as well as a 20% decrease in the total number of flights. This has been extremely worrying especially to the board of directors who have set a cost reduction target of 15% in the next 18 months. With this in mind, it has become increasingly necessary for the board of directors to put in place a transparent planning process that will increase the customer loyalty by improving the already existing customer relationship management system.
Issue and Opportunity
The airline’s overexpansion in the past few years has increasingly become a challenge due to the financial constrains that it faces. As mentioned earlier, the airline has faced a 19% decrease in the number of reward customers, which is worrying to the airline’s board of directors. One vital aspect to note is that, reward customers continue being on the program if they travel at least once in two years. This means that the airline has been losing customers on an annual basis. Another major issue that the airline faces is the decrease in the number of flights that it offers by 20% due to a decrease in the number of customers. This has continued to mount pressure on the board of directors to develop a strategy that will curb the arising issues to prevent the airline from incurring any losses. The airline has also, in recent years, faced a 10% decrease in its stock prices attributed to the appointment of Amanda Miller as the C.E.O. in 2000 to replace the then C.E.O. Jack Broadway. Business analysts argue that this transition came at a critical time, but later came about to become a key setback for the company in terms of productivity and operational excellence.
Classic airline also suffers from low employee morale with business analysts arguing that this is the main cause of the reduction in the customer confidence with the airline. It is essential to note that, in the past 5 years, the airline’s employees have gone on go-slows demanding an increase in payments, as well as a review of the working conditions they experience while working in different countries. This has come amid efforts by the airline to curb the expenditures in terms of labor costs. In a marketing perspective, classic airlines suffers from challenges that it may only occur through increasing customer satisfaction while, at the same time, trying to boost the morale of the employees towards their jobs. Another major issue that the airline is undergoing is lack of modernized flight equipment to monitor the different flight patterns thus understanding the trends in the customers for the airline. The airline industry has become diverse due to technological advancements, which most of the companies in the industry have taken into consideration when offering services to their clients. Therefore, by doing this, classic airline will be guaranteed of customer satisfaction considering that the management will understand the needs of the customers; thus deliver them accordingly.
Stakeholder Groups
An essential factor that may be used in the alignment and implementation of the marketing plan that will be developed is stakeholder alignment. The management of the airline has to understand that, developing a marketing plan that places the airline at a level that is highly efficient may be detrimental in terms of the market response that it will get. In addition, it is equally vital for the management to understand the needs of customers in different countries so as to provide services that are up to date with their tastes. This is noteworthy considering that it will help increase the customer’s confidence with the airline, and help protect the corporate image that is held by the airline. The development of a multifunctional communication framework will increase the efficiency of the services offered by the airlines. This is considering that any queries raised by the customers will be quickly and efficiently dealt. This would be vital in bridging the communication gap between stakeholders in the airline, which will be an essential part in developing a lasting solution between the airline and customers, in the different countries. Thus, looking at the issues that classic airline is undergoing, the stakeholders have found it beneficial to create a scenario where departments within the airline look at issues from their own perspective thus developing strategies that will be able to cub the issues.
Problem Solutions
Although classic airlines could earn $8.7 billion from revenue collections in the different countries that the airline is found, it has struggled from an inefficiency in the customer relationship management system and a reduction in the total sales towards the customers. Furthermore, the airline has been able to increase in terms of efficiency by cutting down the expenditure on fuel prices and a restructuring of the airline’s management, but this has only translated to a decrease in customer confidence. The customer relation management system (CRM) currently used by the airline, to serve the customers, was developed and implemented in 1989. This was in a bid to identify the queries that customers may have with the airline (Worthen, 2009). The CRM also implemented the use of rewards for regular customers depending on the number of flights that he / she makes annually. This has also seemed to reduce in recent years.
The first solution that the airline may use is the identification of the different market segments thus identifying the most influential group of customers that will require quality services (DeLoach, 2004). According to different analysts, the airline industry has been experiencing a decrease in the number of customers annually; thus the existing airlines must offer quality services so as to attract the remaining customer. This may be crucial for the airline while trying to market their services to the customers. The airline may, on the other hand, develop an e-ticketing strategy that will see customers by tickets for different flights from the internet using different cross functional applications. This will not only boost the confidence of the customers towards the services offered by the airline, but will also help to boost the morale of the employees and prevent cases of employee turnover and morale fluctuations.
Thirdly, the airline may focus on the development and implementation of a new CRM that will be transparent in every aspect to be a compelling factor for the customers. The airline industry is the most opportune industry; thus the management of classic airline may be in the front line in implementing transparent governing techniques that will include employees in decision making (Somerville, 2004). In addition, the management must take over the leadership roles within the airline that will be able to protect the corporate image of the airline thus increase its value. Next, the airline’s management must understand and take action against the queries that have been raised by the different customers. In addition, through some of the recent surveys that the airline has carried out, it might foretell any shortcomings that may hinder it from achieving its overall target and goal. This is an immensely significant factor in the sense that the queries raised may be able to paint a clear picture of the customer’s feelings towards the airline, which will give the management an opportunity to fix it.
The airline may also consider going into partnerships with different entities, such as Tri-Star, which is a multi-film company that mainly focuses on the production of films. This will be beneficial to the airline considering that the marketing expenses will be shared between the two corporate companies. In addition, most customers from Tri-Star will be able to understand in depth about the services offered by the airline, which may translate to an increase in the total number of customers that use the airline on an annual basis. A key reason for the suggestion of Tri-Star as a partner for classic airline is because it deals with high ranking clients who travel very often; thus might be beneficial for the airline in general. It is also vital to for the airline to consider other partner other than the mentioned in a bid to increasing their market share among the airline companies in the industry. Lastly, the airline may have the alternative solution of benchmarking through the development of realistic growth initiatives, fuel expense cut down, and a strong liquidity for the airline’s assets. In addition, this may take place through the development of a quality and interactive relationship between the airline and the customers. The benchmarking may also be possible through the use of sophisticated technological advancements, such as in-flight satellite phones and entertainment options for the customers while travelling with the airline.
As a way of increasing the morale of the employees, the airline should introduce different incentives that will motivate the employees towards working harder. An example of such incentives is the introduction of gift vouchers and holidays for employees who work harder than others. In the different companies that have introduced such incentives, this has turned out in their favor considering that employees will try as much as possible to earn the said rewards thus increasing the productivity of the company in general. In addition, this may also help in increasing customer satisfaction towards the services offered by the airline in the sense that employees will work towards ensuring the customer is completely satisfied with the services offered by the airline. This will be the determining factor that the management will use towards identifying the employees who have done better than others. Employee motivation may also be achieved from the CRM system whereby the employees will be motivated by the treatment they will get from the management. In other words, the management must make sure that all employees get the same treatment as a way to increase the motivation towards their work.
Evaluation of the Results
After the implementation of a new CRM, the airline will be able to have report scorecards for every element within the airline. This will help to detect any arising issues and deal with the effectively thus protecting the airline’s corporate image. The CRM will also make sure that the airline’s employees have access to unlimited and updated information so as to keep them motivated towards working for the airline. Employee motivation will also be increased through their involvement in determining the root-cause of different issues within the airlines; thus boosting their confidence and motivating them to take more control of situations that may arise. The employees will, on the other hand, be subjected to performance measurement that will be able to determine the capability of all employees. This will be crucial for the airline as the management will utilize these capabilities and use them towards increasing the satisfaction levels of the customers.
The implementation of the new CRM will be a crucial factor in determining the satisfaction levels of the airline’s customers, which will help to increase the number of reward customers drastically. The increase in the number of customers for the airline will translate to an increase in the market share for the airline, which will then translate to an increase in the airline’s share price. The CRM is an essential tool in the management of queries that are raised by the customers, which will help in understanding the customers. Understanding the customers and their needs is the key goal for the new CRM in that some of the queries raised may help in protecting the airline’s corporate image, which determines the relationship between the customers and the airline’s management. In addition, the implementation of the CRM will help to ease up on the pressure that is being mounted on the board of directors considering that most of the decisions will be made through consultations with the employees. This new system may end up as an important asset for the airline in general when delivering quality services to its customers in all its destinations.
Conclusion
Over the past few years, classic airlines has been facing different challenges such as financial constraints, low employee morale, a decrease in the number of flight, as well as, the number of reward customers, and a decrease in its stock market price. This has increased pressure on the board of directors to try as much as possible to develop strategies that will be able to cater for these issues mentioned. As discussed in this paper, the development and implementation of a new customer relationship management (CRM) system will help to identify the underlying issues that may reduce the customer’s confidence towards the airline. In addition, it is essential for the airline to include the employees in decision making through the new CRM to help in boosting their morale towards the airline. The development and implementation of the new CRM system will also be a vital tool in easing up the continued pressure on the board of directors in terms of decision making. This is considering that most of the decisions regarding the management of the airline will be made after consultations with the employees.
References
DeLoach, J. (2004). The New Risk Imperative-An Enterprise Wide Approach. Handbook of Business Strategy, 5(1), 29-34.
Somerville, H. (2004). Travel, tourism and the environmental challenges. Tourism and Hospitality Research, 5(1), 65-71.
Worthen, B. (2009, Apr 20). Technology (A special report): CIO interview: crisis IT: Gerry Coady of frontier airlines holdings talks about the need to focus when times are tough. Wall Street Journal.
