The open skies may appear free but they are not. There are those in the aviation industry that own and dominate the skies. They exercise this dominance by running successful and efficient airline services. The aviation industry may look lucrative but it has had its share of rocky seas. Terroristic activities like the September 11th bombing of the world trade centre have lead to the decline of economic and business activities in the west. This document through analysis will focus on the major challenges of the industry with an airline in focus: Classic airline. The airline is analyzed in this document from the management level to the roles the company plays in the society. At the end of the discussion, a conclusion is drawn in the document. The conclusion will house a summation of the purpose of the document.
Classic airline is fifth in the ranking of American airlines. The company has managed to make profits despite the current trying economic status. The company has managed to make and maintain profits with sales profits amounting to close to $8.7 billion. The company’s share prices on the other hand have decreased. The reason for the decrease in the share Value is due to the uncertainty created by the terroristic activities affecting the trends in flying. Classic Airlines has been affected negatively since it is a participant in the aviation industry.
The airline, being one of the world’s largest and prestigious airlines has an operation with a fleet of more than 375 jets. These jets serve more than 240 cities nationwide. The cities or destinations are key business centers in the world. The airline manages 2,300 or even more flights with an employee base of close to 32,000 employees today. The company has a lot to offer to its clients and investors. There has been increase in the prices of airfares and air travel costs. These increased prices have left the industry’s investors doubtful of the viability of an investment and troubled regarding the higher risks due to an uncertain future of the industry. Despite this, the top parties in the airline industry have been fighting back the economic setbacks. So many companies are experiencing changes as they try to create a unique cutting edge. The companies want to increase their competitive advantage over their rival. There is increased stiff competition on a global in each passing year in the industries. The economy is however picking and the improvement in the technology is a key motivator and drive for business endeavors among the stakeholders. The market leaders in the aviation industry understand that the client base is becoming more and more demanding for quality and efficient services.
The airline has experienced some problems. The problems include low drive among the employees, low share value, reduced client loyalty, investment decline, high costs, lack of development capital and management. The problems affect both the internal and external status of the company. The internal effects fall upon the managers, employees and shareholders while the clients and potential investors and the society brace the external effects. The internal effects may manifest themselves in form of pay cuts and withdrawal of some work luxuries while the external factors appear in the form of increased prices and less beneficial travel packages.
The company needs to create a marketing structure that will overcome the existing challenges and manage to stop and outdo the competitors in the industry. The company has a dilemma of remaining at the top without tarnishing its image and risking losing the loyal clients. The company board of directors has expressed the need to reduce the costs that are being incurred by the company. The proposed marketing model in this document is known as the 9-Step problem Solving Model. This model has been used before by various marketers in other marketing consultancy in diverse industries of the American economy. The model will help to tackle the problems that Classic Airlines and fellow companies are experiencing as stated by Kotler & Keller (2007).
The airline in the event of cost reduction has had to make some changes to its frequent flier program. This is to improve and increase its membership and to ensure they retain the current existing customer base. The marketing model is expected to cater to the external and internal issue of the company. There are low motivations levels among the employees, poor market prices of the Airline’s shares and the low loyalty levels of customers are some of the problems that need to be addressed by the model. The outcome of the plan should be to elevate the company in relation to its competitors by turning the declining numbers into increased sales and ensure there are appropriate changes within the fleets.
The model through its nine steps will help the airline survive in an industry of consolidation and extreme competitiveness. The 9-Step problem Solving Model to be used on the Classic houses a lot of opportunities for the airline since it identifies the existing problems, outlines the traits of this problems. The solutions are then planned and it helps implement the solutions suggested to meet the set goals. The set goals in the case of classic airlines are financial and ethical in nature.
The 9-step process has nine well-defined and functional steps. Each of these steps in this part of the document will be discussed in the context of Classic Airline. The first of the nine steps requires the marketer to identify the existing problems of the airline. The current problems at Classic airline include low value of the company’s shares, workers who as not motivated, low loyalty levels among the clients, lack of capital for expansion of operations and managerial structures. These problems are the major and outstanding problems of the Airline.
The second step of the model is to define the identified problem. The role of doing this is to be able to explain the capacity to which the problem exists. Employees who are not motivated for example may not serve the clients as required. They may express their attitudes towards the clients driving them away. The problem regard the share value may be expressed in form of charts comparing the price value over periods of time or against other market shares. For the lack of capital, the extent of the delay period for the commencing of the projects may be brought forward. The development of the characteristics of the problem may require one to conduct a survey. The survey may be aimed at, for example finding out why loyal clients left and contacting the current clients in order to create a system and programs that are tailor made for them. The marketer should have in mind the fact that there has been a 21% decrease in flights among the companies current membership.
The third step in the 9-step model process is based on illustrating the expected results or the anticipated goals to be achieved. The set goals are basic opportunity for measuring the amount of success attained. The results that Classic Airline aims at getting are of financial, social and psychological in nature. Concerning finance the company wants to make money. In terms of social results, the airline needs to win over former clients and retain the current ones by creating a good social image. The psychological needs of the employees need to be catered to ensure they stay motivated. An appropriate marketing structure should be geared towards attaining these simple goals.
The forth step is identifying of alternative solutions. The reason for this is to create a variety of options to the attaining of the set goals. In Classic Airlines, advertisements of new flight packages may be done through radio as compared to the traditional brochure distribution.
The fifth step entails the evaluation of the identified alternative solutions. The solutions are assessed and their feasible is established. The alternative may be more than one and each of them has a different value and aspects. The marketer should conduct a thorough assessment of the alternatives citing the similarities and any factors that are unique to each available solution.
The sixth step is the assessment of the posed risk. Many solutions exist and they all pose risks. The common types of risks range from financial to having a tarnished image to the client. These risks can only be established if the marketer fast-forwards the outcome of choosing each solution strategy. There may be better and more loyal customers if the staff was highly motivated and friendlier. That is a risk assessment.
The seventh step is making a decision. An ultimate selection of the best and most appropriate solution takes place. There are many problems at classic airlines and there are equivalently many solutions to cater to the solving of the projects. The airline has to consider the best out of the presented ideas. The selected solution must provide a fully covered marketing plan for the many department of the company. the solution must follow the intended structures of the airlines management.
Step 8 is implementing the plan. The best solution is put to test and use. The implementing of such a plan needs great co-operation among stakeholders. The management has to ensure the internal departments of the airline adhere to the set structures of the plan while the external factors and effects of the plan are automatic. An example of this in the airline includes the company creating a marketing campaign to cater and meet the needs of its current Classic Rewards members. The classic reward s membership is an award system for the loyal clients. The rewards should reach out to those who want to join the system and become loyal clients to Classic Airline. The second example of implementing the plan is investing of the company money in some more lucrative industries to earn great returns
The ninth and final step of the marketing model concerns the evaluation of the acquired results. The step will ensure the success of the solution is determined. This step will also look at the goals and prior set expectations in relation to the marketing plan. This step marks the climax of the project with recommendations of the plan future being drawn. The airline at this point ought to have achieved such goals as increase in the number of loyal clients and the resuming of lost ones. The airline should have a fully functional employee base with a lot of motivation. The highly motivated employees will provide clear-cut and competitive service. Other many factors need to be looked into to ensure there is growth and development of the industry and Classic Airline will become a market leader. Classic Airline is therefore ready to make its mark in the aviation industry since all the facets have been put in place. The airline has a key responsibility to serve its clients and the stakeholders to international standards.
The American economy may change due to the development of the new policies of the new government rule. The airline could take advantage of the developmental strategies that the government is set to implement. The company should make use of key methods of advertising and marketing. the technological advancements of the industry should also be put to use by the company. Internet advertising is a key marketing approach for any service provision. The company should also come up with strategies that target the age groups of those in the working age. These strategies should bring new and long lasting solutions to the existing marketing problems.
In conclusion, the aviation or air business is not booming as much as it appears to be. The government through subsidizing and financing the airlines project such as those of Classic airline is trying to conserve the airline business value to the economy. The increased terrorist activities have lead to the poor development and recession of the air travel industry. An even such as the September 11th bombing of the world trade centre has created a lot of fright among citizens as clients and investors in the industry. A marketing plan that has nine steps has been used to solve the existing marketing problem. The model breaks down the marketing plan for the airline. The first step involves identifying the existing problems; the second step is the analysis of the existing problems. The problems are considered in depth. The third step is illustrating the set goals. The values of the goals are outlined and the expected achievements are expected to be met. The fourth step is the development and analysis of the alternative solution. The fourth step is to identify the available alternatives. The fifth step is the evaluation of the alternatives. This is to ensure the alternatives are explained and related to the airline industry. The sixth step is assessment of the posed risk of each solution. The seventh risk is making a decision. The eight steps is implementing the plan that has been selected. The ninth step is the evaluation of the results of the plan. The plan is set to benefit the airline operation by improving both the internal and external environment of the airline business. The most appropriate solution should be put to use to ensure the progress is constant over time. The airline ought to be more decisive and relevant to the situation that the airline is in at the time.
Reference
Kotler & Keller. (2007). A Framework for Marketing Management.(3rd ed.). New Jersey: Pearson-Prentice Hall.