Classic Airlines and Marketing
Classic Airlines is the fifth largest airline in the world with more than 32,000 employees, and serves 240 cities with over 2,300 flights daily. However, although the company seems profitable, Classic Airlines is taking a hit in its Classic Rewards Program with a decrease in members of about 19 percent. Although plagued with rising costs of fuel and labor, Classic Airlines must find a way to increase their frequent flier program; ultimately, it will need to prove an increase with a return on any investment with a 15 percent cost reduction over the next 18 months. Classic Airlines’ Chief Marketing Officer, Kevin Boyle, has a few ideas on how to subside the costs while making some changes in marketing alliances, as well as customer relationship management and employee attrition programs (Phoenix, 2012). Though, it is still unknown what plan would work best for the company, or if a combination in the ideas would help the company rise once again.
Marketing Alliances Although a marketing alliance was not originally in the marketing plan, the opportunity presented itself to Boyle by a friend and marketing executive Josef Wymann from Skyway Airlines. Marketing alliances are used to share certain ideas like products or services, promotions, logistics, or pricing (Kotler & Keller, 2006). In this particular alliance, Wymann wants to create a promotional alliance among the European company Skyway Airlines, a Latin American airline, and Classic Airlines. A promotional alliance will help the companies promote the frequent flier programs not only as a whole, but it will help each individual company as well. A marketing alliance could also offset any marketing costs that the companies would otherwise spend on their own; with triple-company marketing, the companies will not only have their own marketing ideas to promote the program, but they will have the other two companies to rely on to help promote the program in the other countries. Overall, return on investments could increase with the offset costs and the promotions of the frequent flier program for each company would increase as well.
Customer Relationship Management and Employee Attrition If a marketing alliance were to occur, it could either act on its own or it could be paired with customer relationship management (or CRM). CRM has become a focus for many companies in today’s business world, and it is necessary to make consumers happy with a product or service. It is also referred as relationship marketing, where a business creates a relationship between a product or service and its customer. Relationship marketing has a goal of earning and retaining a business’s relationships to increase awareness, satisfaction, and build a brand value (Kotler & Keller, 2006). Classic Airlines’ Senior Vice President of Customer Service, Renee Epson, noticed a need for building relationships with the company’s customers. Epson noticed that Classic Airlines’ top management has more of a focus on operations-based ideas to construct customer service. However, Epson believes that the CRM system