Carrols experience of poor baggage handling was published in the web which received widespread exposure in mainstream media.
Industry overview: * Severe economic pressure. * Costs exceeded revenue growth thereby profit margins suffered. * Sources of cost pressures – global recession, competition from low cost carriers, high fuel prices and overcapacity * Customer dissatisfaction due to in-flight services, flight crew and costs and fees. * Successful brands---Singapore Airlines, Virgin Airlines
United Airlines overview: * Oldest commercial airline in US. * Launched a new low-cost carrier- Ted * Due to Sept 11 incident United ran into severe financial difficulty and was filed for bankruptcy protection. * The effect of United Breaks guitars video was similar to that of a parody ad as it generated customer communications.
Response to the problem: * United’s MD of customer solutions apologized and also requested whether they could use the video for training purposes inside the organization. * Owner of Taylor Guitars, offered Carroll 2 guitars and other props for his second video.
Answer 1:
Carroll’s videos depicted the company’s negative points about its customer service which could satirize United and damage its brand. Also it generated customer communications. Since it was with the use of digital media, millions across the globe could view the videos and could post their comments or react against or for it without any fear. Also it was a musical visual video which could capture the attention of many people.
Answer 2:
The options that United had once the videos was launched was:
Options | Advantages | Disadvantages | Utilize the video for improving their customer services | can become more efficient in its operations. | Time-consuming and costly process. | Only compensate Carroll for the damage. | Issue with Carroll is compensated. | Might not be able to retain the