United breaks guitar

1. CASE ANALYSIS
UNITED BREAKS GUITARS
SENECA SCHOOL OF
HOSPITALITY AND TOURISM
SERVICES MARKETING
GBD 110
BY: -
JINAL B PATEL
(147174171)
SUBMITTED TO: -
PROF. GOPAL PULAPAKA

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Executive summary
David Carroll one of the passengers of United Airlines composed and produced
a customer complaint music video “United Breaks Guitars”, after a year of
chasing United to recompense the value of his guitar that was broken in transit
by United Airlines. Upon the release of the video over the internet, it captured
viewer’s attention and soon became limelight on YouTube and iTunes. This
raised the questions about United’s nature of communication, customer
service and public relation. As a consequence, United’s stock index went down
by 10 percent causing the tremendous loss for United. Although United
positively responded through various social media platforms such as tweeter
but lack of effort to dissolve underlying issue resulted in social media disaster
at first place. United Airlines must learn from the incident and must make
efforts towards changing and implementing new customer service strategies
and alter its mechanism to deal with the crisis, this requires regularly training
employees to obtain benefits in long run.

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The Incident
In march 2008, Davie Carroll and his band Sons of Maxwell were flying from
Halifax to Nebraska via O’Hare Airport Chicago in United Airlines. In Chicago
Airport Dave’s Taylor guitar was witnessed being thrown by the baggage
handlers. Later, at destination David discovered that Guitar costing $3500 was
severely damaged (Carroll) . Dave chased United through various mails and
phone calls and every time he was fobbed off by department after department.
After six months Dave got his Guitar repaired for $1200, though it played well
but had lost much of what made it special (Carroll). At last, afterseven months
Dave finally got an email from Ms. Irlweg, who said she was sorry for what
happened with Dave and denied his claim providing several reasons like, Dave
did not report to United employees when he landed in Omaha, he did not
report the issue within 24 hours. Ms. Irlweg also stated that is was Air
Canada’s issue (United’s Partner Airline), who already denied the claim as Air
Canada would not pay for the damage caused by United. Dave’s final offer of
$1200 in flight voucher to cover the cost of repairing guitar was rejected after
nine months.
In the final reply to Ms. Irlweg Dave told her that he would be writing three
songs about his experience with United Airlines and post the video across the
social media inviting the viewers to vote on their favourite United song
(Carroll).

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Issues
Lack of internal and external communication at United; Carroll kept on
contacting United for about a year through calls as well as email. Every time
his call was forwarded to various departments and none was able to solve his
issue. It took United nine months to finally close the complaint, that too with
unsatisfied customer. This clearly states communication gap within the
organization, complaint was not transferred to upper level of management
due to rigidity in organizational policies.
Low online presence- soon after Carroll released his first video, it got viral and
got million views. Due to low online presence, United could not address each
of the tweets and posts, which resulted into loosing public confidence.
Soon after the release of Carroll’s video United Airlines' stock price fell 10%,
costing stockholders about $180 million in value causing damage to entire
airline industry (Ayres).
Public Relation crisis- Dave become activist, gained public support, his video
got millions of views and the audience was questioning the customer service
provided by the united.

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Situation Analysis
United Airlines, Inc., commonly referred to as United was founded in 1926.
United is world’s third largest airline operating at 360 airports across six
continents where, 5,300 flights take off every day that counts to two million
flights annually (Sloan). United has strategic alliance with more than 35
airlines worldwide.
Back in early 2000s, United had almost zero online presence, most of its
maintenance services, customer support centers were outsourced to other
countries e.g. India, which hindered in providing quick responses to the
customer which results into unsatisfied and frustrated customer, affecting the
reputation of the company. More over due to direct involvement in 9/11
attack, there already exists bad reputation of the company.
There exists communication gap in the company, e.g. when the complaint was
received from Carroll regarding the broken guitar it was never forwarded to
the upper level of management, moreover no action was taken regarding the
complaint. Also, there was low employee morale.
United must create its presence online. It must invest time and resources
towards developing its online presence and must be present constantly. As it
is said company must be present every where its customers are, now people
are spending a lot of time over the internet, United must take into
consideration what audience are talking about it online and must address the

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queries and issues of the audience. Failing to do so can be a major drawback
for the company.
Implementing new strategies, policies require cost of resources. It also
involves cost of recruiting and training human resources.
Strengths
 Strong brand name.
 Strong Operational Network.
 One of the largest International
Airlines.
 14% Market Share in 2009
 Strategic alliances
Weakness
 Outsourced maintenance
service
 Low online Presence
 Preexisting Bad Reputation
 Communication gap
 Low employee morale
Opportunities
 Public Relation Management
 Potential Online Presence
 Innovation in services
Threats
 Industry Competition
 High cost of training resources
Objective
United’s primary objective must be to recover its lost reputation. United
possesses a good brand name and is world’s third largest airline, the area it

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lags is in providing extensive customer services and creating online presence.
United must work towards gaining back its reputation.
Alternative
United must towards building its presence over social media, Dave
United responded positively to Carroll’s video, Rob Bradfort United’s Managing
Director of Customer Solutions telephoned Carroll to apologies forthe incident
and also assured Carroll to learn from the incident and change its Customer
Service Policy. United also offered $1200 in flight voucher, which Carroll
declined; after which United made no efforts to compensate for the damage,
United could have sent a Taylor Guitar or offered life time free travel with
United to Carroll, the cost of which would have been negligible in front of
gaining the public confidence. Doing so would have made the audience realize
that the United is really sorry for Carroll’s experience and is making an effort
towards the issue.
United also failed to make itself present constantly over the social media, no
other medium apart from twitter was used to address the public. United
underestimated the power of social media which resulted in public service
disaster. Soon after the video went viral United must have constantly
responded to it over social media apologizing for what happened, doing so is
a time-consuming process but what holds the due importance is gaining back

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the public confidence which can only be achieved by providing quick and
regular responses.
More over
United kept ignoring Carroll’s complaint for over a year this clearly indicates
the lack of upward communication. In the last email Carroll even warned Ms
Irlweg stating that he will post three videos describing his experience, United
failed to foresee the consequences at first place. United could have avoided
the entire situation, if the last email from Carroll was timely forwarded to
upper level of management.
Recommendations
I recommend United to change its internal as well as external communication
system. As soon as the complaint is received by the customer it should be
forwarded to the upper level and decisions should be made quickly. Delay in
communicating with customer will only make them more frustrated, causing
negative image for the company. Other way by which decision can be made
quickly is delegating the authority to the employee. Employee must be trained
and given the authority to make decisions when the complaints arises.
United must work toward improving Public Relation. In Carroll’s case United
could have appointed the spokesman, apologizing on the behalf of the
company and assure the viewers that they will take necessary actions towards
changing their customer service policy, video capturing the same could have

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been posted as a response to Carroll’s video. Also, United could have called a
press meeting making the public apology to restore the public confidence.
During crisis, United must use all the possible mediums to keep in touch with
the audience, this will help in assuring the audience that the company is taking
the stand is working towards rectifying the wrong. It must constantly address
the queries of the audience.