...Southwest Airlines, owned by Southwest Airlines Company, is a passenger airline primarily operating in the United States. Based on information in their annual stockholders report (Southwest Airlines, 2012), they provide scheduled air transportation for passengers departing and arriving from 103 cities in 41 states. This is limited compared to some of the larger airlines. The airline is the largest US domestic airlines based on the total number of originating passengers boarded. This does not mean they are the largest by fleet size or number of employees. Because of the point to point model rather than the typical hub and spoke model, 71% of Southwest’s fares are non-stop allowing them to increase the total passengers per day per plane. With this point to point model Southwest has made a profit for the past 39 years, and has grown into a $15.7 billion business operating 140 aircraft. Based on Gwynne (2012), Southwest started as a low cost point to point airlines operating from 3 Texas cities in 1971. They offered ticket prices as low as $40 per seat between Dallas, Houston, and San Antonio. Southwest flew from small airports and was able to get people in and out quickly with fewer hassles as compared to the major airlines of the time. Their market strategy at the time was simple. Get people where they wanted to go, on time, for the lowest price possible. This follows the production concept as described by A Framework For Marketing Management (2012). The early Southwest airlines...
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...Running head: IT PAYS It Pays to Fly Full-Service Rene Gonzalez Jr. Ashford University Managerial Marketing BUS 620 Larry Flegle November 28, 2011 It Pays to Fly Full-Service In this essay I will create a nine-component marketing plan on flying full-service business class with Delta opposed to flying with a discounted low-fare carrier like Southwest. As the economy struggles and air travel becomes more competitive it is not easy to establish the best niche market strategy for an airline. Teplensky defined (as cited in Parrish, Cassill, & Oxenham, 2006) niche market strategy as, "an emphasis on a particular need, geographic, demographic, or product segment" (p. 695). Therefore, it would be ideal for Delta to seek a more specific niche in air travel and differentiate by precisely satisfying customers’ needs; rather than attempting to generalize broad niches that only partly satisfy customers’ needs as a whole. Company Overview/ Description of Location Delta Air Lines Inc. has their corporate headquarters in Atlanta Georgia. However, Delta Air Lines Inc. has a vast worldwide airline system. Delta serves over 160 million customers annually, and offers 356 destinations in 65 countries. Additionally, Delta has over 80 years of passenger service, more than 80,000 employees, and 700 aircraft that spread across six continents. Packed with an array of good services, Delta offers more than 13,000 daily flights, SkyMiles rewards (frequent flier plan)...
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...Marketing Mix Paper Have you ever watched a commercial on TV and wondered how somebody created some of these crazy ideas/schemes to entice people to buy things? Make no mistake about it, it's not just some lucky person developing slogans; it's a specialized team that is highly trained to analyze customer needs and carefully develop a strategy to market their goods/services in the economy. The field of marketing is fast becoming the most effective way for businesses to improve their overall performance to compete in today's global economy. Most successful companies have learned by trial and error that catering to needs of their customers, providing quality goods/services, and providing good customer service strengthens continued sales and profits. Marketing oriented companies are also customer oriented and take into account customer needs by focusing on creating goods and services that will outshine their competition. Conducting research is crucial when attempting to identify specific requirements of both existing and potential customers. Marketers maintain open lines of communication between a company and its customers to ensure the success of any marketing method. Over time, customers become loyal and will buy again-and-again as well as provide free word-of-mouth advertising undoubtedly resulting in increased profits. This paper will describe the four elements of the marketing mix (product, place, price, and promotion) and tell how each of the elements impacts an organization's...
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...Case: _______Southwest Airlines 2002___________ Name____Kacey Kurtz__________________________ Southwest Airlines is currently competing in the airline industry. The company’s currency strategy is to carefully advertise its image so that consumers can clearly differentiate Southwest Airlines from other airlines. Southwest Airlines does this by being the only low fare, high frequency, short-haul, and point-to-point carrier in America. Southwest Airlines low fares creates brand equity, because consumers want low fares, and Southwest Airlines is one of the only major airlines that offers this attribute to consumers. Southwest Airlines was also the first airline to offer the frequent flyer program where flyers get credit for the number of trips taken and not the number of miles flown. Since Southwest offers low fares and short travel customers may see that flying is a better alternative than traveling in a car. Some outside conditions that affected Southwest Airlines was deregulation which made the airline industry much more competitive. Everything dealing with air travel is regulated by the government now. Airlines operate in a highly competitive environment where fixed costs are very high and this made it one of the toughest industries to compete in without a lot of airlines going bankrupt. Fuel cost were outrageous that were out of airlines control. Airlines had to fund a lot more towards security since the 911 crisis to keep passengers protected and they...
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...Running head: SW Airlines Case Study Case Study Southwest Airlines Cardinal Stritch University Advanced Marketing Management CMB 508 September 3, 2013 Scott A. Braucht, MBA Professor In the 1940s travel via airplane was a privilege. Men wore a suit and tie and women wore dresses with a hat and gloves. Parents would endure a 27 hour flight from the middle of the country to Hawaii to see their soldier son at Pearle Harbor. Air travel was a luxury. Customers expected the best in treatment. Chef prepared meals were served on white china with glassware and silverware. A lot has changed since that time. There are a number of discount airlines today. They come and go, but Southwest Airlines has managed to stay in the business since 1971. Their success is due in part to the successful identification of their market and the needs of their customers. Southwest Airlines primary marketing strategy included bright red heart logos and catchy phrases for its peanuts (meals) and their drinks. As it grew, Southwest Airlines became known as the airline with cheap fares, on-time service and, most recently, not charging for luggage when other airlines started to do so. Passengers flying on Southwest Airlines are entertained by the pilots and flight attendants who tell jokes, describe funny facts of the areas as they fly over, and even burst into song. The flights are shorter than other airlines and the planes are turned around on the ground faster than the industry average...
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...Herb Kelleher, co-founder of Southwest Airlines said, “Think and act big and grow smaller, or think and act small and grow bigger (Herb Kelleher Quotes…).” Marketing is an important part to selling a brand. In 2012 the Social Media Agency, “Likeable Media,” named Southwest Airlines in their top five most likeable companies (Five Most Likeable…). Likeable Media commends the airline for its passion for their employees as well as their customers. This in turn creates a passionate staff that encourages Southwest’s brand and helps it to grow. Southwest has been around for thirty nine years and has used multiple marketing strategies to grow their company. Herb Kelleher and Rollin King founded Southwest Airlines in 1971, flying to San Antonio, Houston, and Dallas. The company pioneered many marketing strategies that are still used today. Southwest offered the frequent miles program is the mid 1980’s, the first airline to enact the program. Passengers were able to save up the amount of miles they flew to fly for free or a discounted ticket. Southwest was also the first to offer senior citizen discounts on airline tickets. By 1984, Southwest was ranked first in customer service for four years in a row. In 1987 the company bought out TranStar Airline, and also Morris Air in 1994. After twenty five years, the company was rated the fifth largest United States air carrier, flying over fifty million passengers a year (Southwest Airlines). Marketing is very competitive between airlines,...
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...Mission Southwest Airlines' mission statement reads: "The mission of Southwest Airlines is dedicated to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit." All these traits are what have made Southwest # 1 in fewest customer complaints for several years running. Southwest continues to thrive on its reputation from this # 1 ranking as well as reap monetary rewards that come with this distinction. Southwest’s commitment to their employees reads: “We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer” Objectives Strategy The strategy that Southwest Airlines should use in order to continue its success is also based on the “Short-Haul” strategy. The difference is that the strategy must be inter-converted. Southwest can try its best to duplicate its “Short-Haul” strategy globally. For instance, it can do exactly the same business with the same strategy once again. But this time, Southwest has to do it in every part of the world. For instance, Southwest can expand its business in France, Germany, Australia, Russia, China, Japan, Poland, Greece, etc. All Southwest has...
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...Southwest Airlines Kaushal Desai Vaishali Patel Debra Quach Introduction Although the airline industry is no longer experiencing the rapid growth it exhibited before 1990; commercial air travel in the U.S. remains the preferred method of transportation for a majority of Americans due to cost-effectiveness and timesaving characteristics. From 1980 to 1990 the number of passengers traveling by air increased by approximately 72%, in contrast, in the 1990-1998 period, the airline industry only experienced 36% growth. Furthermore, during 1965-1978, the government regulated the airline industry by forcing artificial wage increases and artificial price levels. In the postderegulation era, labor negotiations were the cause of many labor strikes. The big carriers have tried to cut costs, but have been constrained by strong union opposition. For example, “Unions have fought against moves to shift unprofitable routes to lower cost regional jets with lower paid pilots.” Confronted with cut-throat competition, particularly from low-cost rivals such as Southwest, now America's fourth largest carrier in terms of traffic flown, the big airlines have found themselves caught traditional fare wars that cut into their already slim profit margins. The domestic airline industry in the United States is characterized by intense rivalry and low profit margins. Through product differentiation and a strategy of low cost and no frills, Southwest has been successful in distinguishing itself from its...
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...How Southwest sees its own environment in its own business and Industry Southwest Airlines’ Mission and Objectives Southwest Airlines' mission emphasizes a remarkably large degree on customer service and employee commitment. The mission of Southwest Airlines is "dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. Southwest proclaims, "We are a company of People, not planes. That is what distinguishes us from other airlines and other companies." In many respects, the vision that distinguishes Southwest from many of its opponents is the degree to which it is defined by a unique partnership with, and pride in, its employees. The airline's goal is to deliver a basic service very proficiently. This translates into a number of central objectives. A fundamental pillar of its methodology is to provide safe, low price transportation in combination with maximum customer convenience. The airline provides a high rate of flights with consistent on-time departures and arrivals. Southwest's employees also desire to make this product service a "fun" experience Southwest Airlines’ Strategy Southwest Airlines is categorized as a Low Fare/No Frills airline. However, its size and importance have led most analysts to consider it to be one of the major airlines despite its fit in the low fare segment. In a fundamental sense Southwest's business level strategy is to be the cheapest and most efficient...
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...Southwest Airlines Co. Analysis * Introduction and Mission Southwest Airlines Co. is a major U.S airline and the world's largest low-cost carrier. It was established in 1967 and adopted its current name in 1971. The airline operates more than 3,400 flights per day and has more than 46,000 employees as of August 2012. In 2013, Southwest Airlines has scheduled service to 84 destinations in 41 states and Puerto Rico. In 2012, Southwest Airlines was the market share leader in domestic air travel in the United States; it transported more passengers from U.S airports to U.S destinations than any other airline, and it offered more regularly scheduled domestic flights than any other airlines. For the 40th consecutive year, the Company was profitable, earning $421 million in net income. The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. The mission statement has always regulated the way the company conducts their business. The company mission statement also highlights their desire to serve customers better and it provides them with direction when they have to make certain service-related decisions. The company mission statement is also another way of saying, "We always try to do the right thing!" According to the U.S. Department of Transportation, Southwest Airlines has the best cumulative consumer satisfaction record. * Market Share These three...
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...Southwest identified an opportunity within Texas for short distance air service between Houston, Dallas-Fort Worth and San Antonio. These Texas cities were often referred to as one single market area, although they were some of the fasted growing in the nation. Southwest recognized that Pacific Southwest Airlines had a similar business plan in California servicing Los Angeles to San Francisco, so they took this similar concept, and set their goals to provide quick, reliable service that local passengers sought to utilize. Within this Texas market included two other airlines, Braniff and TI. Both did not originally specialize in short distance air travel, and most short distance flights started at a larger location such as New York and traveled through the Texas cities as a multiple stop trip. Southwest’s choice to enter the market initiated a quick process to implement their strategy. Within 4 months, they would implement a marketing strategy and begin servicing the area. The problem with the Texas market was as soon as Southwest implanted a strategy and promotion, Braniff and TI would closely follow and form a very similar strategy. Southwest’s third phase of their advertising campaign led to Braniff once again matching the promotion that they are offering, and Southwest’s response to Braniff’s move would help establish southwest as a successful company. Within the Texas market, Southwest has created many strengths that will help set them apart from the current brand...
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...Consumer Behavior Consumer Behavior: Contrast Jet Blue vs. Southwest Airlines Trident University MKT501 CS1 Identify key external factors that affect the passenger airline industry and explain how that impact occurs There are several external factors that affect the passenger airline industry. Some of the factors that affect the industry are economic crisis, instability in aviation fuel price, and environmental factors. I will elaborate more in detail in the following paragraphs on these factors. The first area I want to talk about is our countries current Economic Crisis, and in my opinion drives all the other factors that affect airline industry’s the most. The current economic situation is not good and therefore will have an effect on what a customer will or will not do. Air travel is very expensive as it is, in my opinion, so a sluggish economy will add more pressure on an individual or family thinking of flying anywhere. The second area that affects the airline industry is the cost of aviation fuel. If fuel prices are high, the airline will have to charge more for tickets. As I mentioned earlier, higher ticket prices is not what the public wants in our current economy. The airline industry is a business and in order to make money and continue to provide the service, the company has a breakeven price, approximately 66% of their operating cost (Airline Economics Break Even Load Factors Paragraph). If the company doesn’t...
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...products 18 Sign that competition from substitute is strong 19 Competitive pressure stunning from supplier bargaining power 20 PESTEL ANALYSIS 24 SCENARIO PLANNING 56 SCENARIO NO.1 58 SCENARIO NO.2 59 SCENARIO NO.3 59 SCENARIO NO.4 60 SCENARIO NO.5 60 SCENARIO NO.6 60 SCENARIO NO.7 61 SCENARIO NO.8 61 Competitors Objectives 62 Competitor's Current Strategy 63 Competitor's Resources and Capabilities 64 Competitor’s Assumptions 66 Regional Factors 67 Value chain activities: 68 Key competitive advantages: 72 Solutions: 82 Weights of Key success factors in five airlines: 86 COMPETITIVE ADVANTAGE 92 FIVE GENERIC COMPETITIVE STRATEGIES: 92 LOW COST PROVIDER STRATEGIES: 92 DIFFERENTIATION STRATEGIES: 95 BEST-COST PROVEDER STRATEGIES: 96 FOCUS (MARKET NICHE) STRATEGY: 96 STRATEGIC ALLIANCE AND PARTNERSHIP: 97 MERGER AND ACQUISITION STRATEGIES. 98 VERTICAL INTEGRATION. 98 OUTSOURSING. 98 OFFENSIVE AND DEFENSIVE STRATEGIES. 99 APPROPRIATE FUNCTIONAL AREA STRATEGIES. 100 THE IMPORTANCE OF LINKING STRATEGIES TO COMPANY VALUES AND ETHICAL STANDARDS. 100 FIRST MOVER ADVANTAGE AND DISADVANTAGES. 101 TWOS Matrix 102 Strength-Opportunity 102 Weakness-Opportunity 103 Weakness-Threat 104 Space Matrix 105 Financial Strength 106 Score 106 Average 106...
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...experience and why it is that both parents and children are drawn to this concept. Personalization, and not just customization, is the driving force. The case also highlights how founder Maxine Clark stays in touch with the customer and the employees. For Clark, management-by-walking-around is more than just a way to supervise operations. It is a way of conducting her own market research. Clark has also embraced the networking capabilities of the Internet as a way of keeping in touch with the customer. Future prospects for Build-A-Bear’s continued success are also discussed. Teaching Objectives The teaching objectives for this case are to: Introduce students to the concept of customer value creation and its central role in marketing. Allow students to analyze Build-A-Bear’s product offering in depth. Introduce the concepts involved in customer relationship management. Introduce the concepts of customer lifetime value and customer equity. Allow students to develop specific recommendations for Build-A-Bear’s future. Discussion Questions Give examples of needs, wants, and demands that Build-A-Bear customers demonstrate, differentiating each of these three concepts. What are the implications of each on Build-A-Bear’s actions? The purpose of this question is to force students to consider whether or not it is important for a company to differentiate between needs, wants, and demands. By the textbook definition, Build-A-Bear customer needs might include: ...
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...Southwest Airlines Early in his career as CEO, Kelley stuck with the mold that was given to him. When he did make changes, the changes didn’t affect anyone who worked at Southwest. They were still the number one airline and still paid their employees the highest salary out of all the other airline companies. As the company's leader, Kelly said he strives to balance three important areas of focus for the company: low cost, customer service, and focus on its people. The strong customer service was already embedded into the company when he started at Southwest in 1985. Kelley said, communication is the biggest key in being a leader. Kelly, who previously served as CFO, is an accountant by trade. When he became chairman and CEO, he said he found it to be very different than being a financial technician. I think that Gary Kelly is a very good leader because he listens to what his employees have to say and really values their opinion. I don’t think many CEO’s can say that. He knows that in running a successful company, one has to keep employees happy and make them keep wanting to work. Employees are the backbone of your company, they are the ones who keep the company going; sure the executives have to make some big time decisions but for the most part the employees help run the company. Gary Kelley has kept Southwest traditions by the low fares and great customer service. That is what made Southwest what it is today. He then made a decision that I think changed Southwest...
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