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Classic Airlines Essay

879 words - 4 pages

Classic Airlines pg PAGE \* MERGEFORMAT 1
Classic AirlinesUniversity of PhoenixClass Marketing 571Group MKT/571MBA10August 10, 2010Work Shop OneClassic AirlinesThis paper is to address the marketing challenges that Classic Airlines is facing. I will begin with a background of the company and the situation they have found themselves in. I will then discuss the issues and opportunities faced by Classic Airline and finish with a conclusion.Classic Airlines is ranked as the fifth largest airline in the world and has 25 years of experience, however they are not immune to the pressures brought on from the competition. The competitive pressure compounded by the increased lower fares has combined to cause passenger revenue to drop. There are five environmental forces that a business must monitor. First is social, the second is economic, third is technological, fourth is competitive and fifth is regulatory. If a company can identify the trends related to each of these forces the business can develop and maintain a successful marketing program (Kerin). Due to the economic issues of the world and the September 11th attack the airline industry has been hit exceptionally hard worldwide.Situation:Due to the increased uncertainty about flying there has been many concerned in the investment community watching the airline industry. Over the last few years consumer's confidence has been wavering. Classic Airlines reward's programs have declined due to the lower number of reward members and the decreased number of flights. Their customer's that have always been loyal are now unhappy and are shopping the market for other alternatives. And due to the rising cost of labor and fuel Classic Airlines ability to compete for or offer value perked programs to appeal to the frequent flier. And now Classic Airlines is now facing a mandated cost reduction which is to take place over the next year. There are also rumors of the company filing bankruptcy if the company is not able to curb cost, this rumor may be due to the board of directors not releasing much information on the company's current state (Phoenix).Issues:Through the scenario there were multiple issues that are facing Classic Airlines and which plays in the decision's the company is planning to make. The first issue they face is the reduction of customers flying shown by a decrease of 20%. As well the reduction in their customer base has caused a cut in flight prices over the past year and has placed Classic Airlines right above acceptable margins. Classic Airlines is also facing price war with other airlines but have no ability to really lower their prices any further.Classic Airlines has also been facing a lack of trust and their image has been damaged. Classic Airlines has also realized a continuous drop in their stocks through the last year....

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