Global case studies of struggling brands show that similar to the concept of a PLC (Product Life Cycle), revival strategies must depend on the stage of life cycle that the brand is in as well as the real reasons why it has lost its connect with its customers. When properly applied, brands can survive many PLCs
On November 29 last year, American Airlines had two key status updates – a change in its CEO and a declaration of bankruptcy. Once the country’s largest airline and harbinger of innovations like the frequent flyer program into the industry, American faces a host of issues; as its competitors United Airlines and Delta have grown larger, and the company has a hard time filling seats. On the other hand, it faces the second whammy of high labour costs, and while declaring Chapter 11, the company admitted that the difference in cost structures with its competitors is untenable.
“I never watch that sort of thing. Never.”
New CEO Thomas W. Horton plans to increase revenues by $2 billion in savings and $1 billion in extra revenues every year; the latter through joint business agreements with major airlines. The critical aspect he seems to be ignoring is the brand perspective. He made the above statement to the Associated Press when asked about satirical online videos of AMR (American’s parent company) top management.
By marketing logic, Horton needs to know everything being said on the web, and on the ground, for employees of the airline have also formed pickets on airports of late. Such bad news travels fast and far. Already, American has been voted among the worst three US airlines with respect to on time performance for five years in a row by the Middle Seat scorecard in the Wall Street Journal. Traditional US airlines in general are doing a bad job of retaining brand equity compared to low cost airlines. As per the J. D. Power North American Airline Satisfaction Study 2011, American ranks 4th among traditional carriers with a score of 656 on overall satisfaction, while the lowest rated low cost player is Frontier Airlines with a score of 688. Traditional airlines have suffered most with passenger perspectives on costs and fees. Interestingly, American Airlines started the policy of charging customers a fee for the first checked in bag. After the cost cutting that happened post 9/11, airlines became increasingly stingy on various customer metrics. Some of them, including American, stopped taking customer complaints on lost baggage by phone and gave e-mail addresses.
On November 29 last year, American Airlines had two key status updates – a change in its CEO and a declaration of bankruptcy. Once the country’s largest airline and harbinger of innovations like the frequent flyer program into the industry, American faces a host of issues; as its competitors United Airlines and Delta have grown larger, and the company has a hard time filling seats. On the other hand, it faces the second whammy of high labour costs, and while declaring Chapter 11, the company admitted that the difference in cost structures with its competitors is untenable.
“I never watch that sort of thing. Never.”
New CEO Thomas W. Horton plans to increase revenues by $2 billion in savings and $1 billion in extra revenues every year; the latter through joint business agreements with major airlines. The critical aspect he seems to be ignoring is the brand perspective. He made the above statement to the Associated Press when asked about satirical online videos of AMR (American’s parent company) top management.
By marketing logic, Horton needs to know everything being said on the web, and on the ground, for employees of the airline have also formed pickets on airports of late. Such bad news travels fast and far. Already, American has been voted among the worst three US airlines with respect to on time performance for five years in a row by the Middle Seat scorecard in the Wall Street Journal. Traditional US airlines in general are doing a bad job of retaining brand equity compared to low cost airlines. As per the J. D. Power North American Airline Satisfaction Study 2011, American ranks 4th among traditional carriers with a score of 656 on overall satisfaction, while the lowest rated low cost player is Frontier Airlines with a score of 688. Traditional airlines have suffered most with passenger perspectives on costs and fees. Interestingly, American Airlines started the policy of charging customers a fee for the first checked in bag. After the cost cutting that happened post 9/11, airlines became increasingly stingy on various customer metrics. Some of them, including American, stopped taking customer complaints on lost baggage by phone and gave e-mail addresses.
For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
