Problem Solution-Classic Airlines

Problem Solution: Classic Airlines

Classic Airlines is one of the world’s leading airlines and commands a fleet of more 375 jets that serve 240 cities with more than 2300 daily flights. In the 25 years since its inception, Classic has grown to an organization of 32,000 employees, and last year, it earned $10 million on $8.7 billion in sales (Scenario, 2008). Classic Airlines is now faced with decreasing sales resulting from customers having concern flying with the high costs and the 911 attack.

Classic Airlines is facing troubled times with customer satisfaction and union threats. The union basically demanded that Classic Airlines leave the Union out of the marketing tactics. As they continue to strive for a better Classic Rewards Program for frequent flyers, they are constantly faced with the challenges of developing the most effective program without reducing the price of ticket sales. Classic Airlines already reduced the price of tickets and the tactic did not work.

This paper will discuss certain key players at Classic Airlines and its new product solution implementation to provide the reader with an understanding of what is happening to Classic Airlines and the urgency of an effective rewards program to avoid possible bankruptcy.

Kevin Boyle, CMO, seeks guidance from an old friend that he feels will solve Classic Airlines’ problem with drop in sales and customer satisfaction. This paper also discusses the Union’s view on the new program and its impact on the Union. In the interim, Classic Airlines continues to market their current product to increase sales. Classic Airlines will begin this journey of product development and decision making by defining the problems, setting the research objectives to help them discover what customers are aware of and want; and, why a problem exists with customer satisfaction.

Describe the Situation

Issue and Opportunity Identification

Rising fuel costs and customer's uncertainty about flying has forced Classic Airlines to develop an effective rewards program that will enhance their ability to compete for the valued frequent flier with the objective of regaining their leadership in the airline industry and satisfying stockholders.

Stakeholder Perspectives/Ethical Dilemmas

Classic Airlines and the Union are presenting a conflict because Ben does not want the implementation of the new product to impact the union employees. Typically, a company begins to cut costs by lying off, or eliminating, jobs which directly affects the employees. A trade union or labor union is an organization of workers who have banded together to achieve common goals in key areas such as wages, hours, and working conditions, forming a cartel of labor. The trade union, through its leadership, bargains with the employer on behalf of union members (rank and file members) and negotiates labor contracts with employers. This may include the negotiation of wages, work rules, complaint procedures, rules governing hiring, firing and promotion of workers, benefits, workplace safety and policies. The agreements negotiated by the union leaders are binding on the rank and file members and the employer and in some cases on other non-member workers (Wikipedia, 2008). Classic Airlines must develop a new product that will increase sales, and at the same time, maintain a good working relationship with the Union.

Frame the “Right” Problem

Classic Airlines will become the world’s leading airline by providing high quality customer service and developing a rewards program that will beat out the competition. With the high fuel prices, Classic Airlines is showing low sales and membership in the rewards program; and, must develop an effective rewards program plan to “boost” sales in order to maintain its leadership in the airline industry, or face possible bankruptcy.

Describe the “End-State” Vision

Classic Airline’s objective is to implement a successful solution plan for Classic Airline’s new Classic Rewards Program. This new product will enhance the company’s overall status in the airline industry, and prove to be successful by increased sales and customer satisfaction. The Union employees and Stockholders will vision high profits as a result of the new program and will anticipate that Classic Airlines will, once again, become a leader in the airline.

Identify the Alternatives and Benchmarking Validation

Kellogg вЂ"

What makes Kellogg so successful? Kellogg has been the world’s leading producer of cereal and a top manufacturer of convenience foods since 1906. In 2003, Kellogg announced its plans at L!CENSING 2003 International to further expand its reach beyond the cereal and snack food aisles with extensive licensing initiatives in the toy, apparel, entertainment, publishing, and food categories (Kellogg, 2003). Kellogg is so successful because it is the most recognized and trusted cereal and convenience food manufacturer in the world, and people simply trust their products and service. Kellogg getting involved in retail licensing? Why not? They are so trusted by the publicвЂ"how could they go wrong.

Key findings вЂ" After the successful launch of its licensing program in 2001, Kellogg quickly became one of the world's top 100 leading licensors. As one of the most recognized and trusted brand names in the world, with brands and characters that have become a part of everyone's daily lives, Kellogg will continue to leverage its consumer recognition and the overall growth of the food and beverage licensing industry with its expanded licensing program. Kellogg provides the best of both worlds in licensing with great characters and recognizable brands that resonate with kids and adults (Webb, 2003).

Alternative solution for Classic Airlines вЂ" Classic Airlines’ options are clear. With the rising cost of fuel and other commodities, Classic Airlines must develop a rewards program to get back the frequent flyers that have switched to cheaper airlines. Classic Airlines is losing their competitive edge in the airline industry, and now, must focus on creating a quality product that will strengthen the bond between the company and its customers that will result in a long-term customer loyalty. The key objective for Classic Airlines is to determine what their customers are seeking for satisfaction in order to increase sales and stockholder profits. In the 1960’s,