Classic Airlines and Marketing Classic

Classic Airlines and Marketing

Classic Airlines is facing the daunting task of turning around their marketing strategies while at the same time contending with incased government regulation and compliance requirements. Classic Airlines is delivering a service that is considered an experience for business and leisure travels alike. This goes beyond selling just transportation; it is the safety, security, comfort and timeliness of travel that customers are willing to pay their ticket prices to get. This marketing analysis evaluates Classic Airlines from the context of their being a marketer of experiences first and provided of transportation second.

Selling Experiences, Not Just Transportation

Classic Airlines is losing its relationships with customers and having to resort to pricing, promotion and other short-term marketing strategies in an attempt to gain them back. None of these strategies will work, as the customers aren't getting the result they expect or want. Classic Airlines' senior management team needs to re-think their marketing to be more focused on the experience and exceeding expectations of customers, and less on price or promotional programs (Le Bel, 2005). If they can create their own customer experience framework, they will be able to be much more effective in managing the marketing strategies to get their customers back again.

The financial performance of Classic Airlines continues to deteriorate as they focus on price, which only drives the losses deeper and show how inelastic the demand curve is in the airline industry (Oliveira, 2003). Studies have shown that raising prices in inelastic markets can actually increase profitability and create greater levels of differentiation as well, points that Classic Airlines management needs to consider as well (Oliveira, 2003). Today however the company is caught in a spiral of pricing cuts and promotions that is actually hurting top-line revenue growth more than helping it. Classic Airlines needs to be re-centered on the customer experience and re-establish relationships with them, not just throw pricing deals at the customer base hoping they will come back.

Assessing Classic Airlines' Loyalty Marketing

As the financial analysis of Classic Airlines shows, the focus on pricing and off of relationships is causing the company to lose more ticket sales and growth than it enables. The customer loyalty programs also indicate how rapidly Classic is losing customers as well. All of these factors point to how dissatisfied their customers are with their service. Customer loyalty programs have an amplification effect; when relationships are good the programs soar and when relationships are bad, they come plummeting down (Dekay, Toh, Raven,.2009). What Classic must do is turn around the perception of their service as being below the expectations of customers, and embrace choose to begin auditing their performance to see where the shortcomings are (Dekay, Toh, Raven,.2009). Only by doing this can they attain a roadmap to recovery for the most loyal customer bases they have.