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MBA570 - Individual Assignment - Week Six - 08-26-06

MBA570 - Individual Assignment - Week Six - 08-26-06 -...

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Problem Solution 1 Problem Solution: Classic Airlines Robert Sikes, MBA570 University of Phoenix August 26, 2006
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Problem Solution 2 Abstract In any business, customer relationship management has become integral in marketing strategies. However, the cost to maintain a strong and effective system, as well as time- consuming data entry tasks, does little to bolster executive and sales end-user buy-in (Myron, 2006). Nonetheless, companies with declining sales and customer dissatisfaction, like Classic Airlines, must discover alternative solutions, assess risks and mitigation, find an optimal solution, implement the solution, and consider post-implementation gaps, while demonstrating a measurable return on investment for shareholders (University, 2006).
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Problem Solution 3 Problem Solution: Classic Airlines Situation Background Classic Airlines—the fifth largest global airline—operates over 2,300 flights per day on more than 375 jets servicing 240 cities. With 32,000 employees, Classic Airlines realized a net profit of $10 million and $8.7 billion in sales last year. However, due to increased uncertainty about flying, Classic Airlines experienced a 10 percent decrease in share prices in the past year. Additionally, with low consumer confidence and rising fuel costs, Classic Airlines’ Classic Rewards program measured a 19 percent decrease in the number of members and has limited Classic Airlines ability to compete for the valued frequent flier (University, 2006). In order to curb future revenue losses, the Board of Directors recently mandated a 15 percent across-the-board cost reduction over the next 18 months. Within that mandate, Classic Airlines must still find a way to augment its frequent flier program with methods that will demonstrate a measurable return on investment (University, 2006). Issue Identification Classic Airlines has been confronted with several challenges that could impair positioning the company for growth sustainability including decreased frequent flyer program participation. Furthermore, Classic Airlines has ineffective customer relationship management (CRM) system tools in place, which will require major renovation. Marketing success is another critical issue influencing Classic Airlines’ operations, external business drivers, and stakeholders. However, effective and strategic marketing, reference groups monitoring, value-added market research, conducting focus groups, and a customer-driven CRM system can be the first-steps toward Classic Airlines identifying opportunities and potential solutions.
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Problem Solution 4 Opportunity Identification According to the American Marketing Association, “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives” (Nissim, n.d.).
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