Question

I would like you to share some relevant ideas about your Southwest Airlines Marketing Plan. The following questions might help you with that:

• What product/services you considered in your MP?
• What were the main marketing strategies to taking that product/service into the market?
• What have you learned from developing your MP with regards to the Marketing process?

Answer 1

Product Positioning: Operating under an intensely competitive environment, Southwest Airlines carefully projects its image so customers can differentiate its product from its competitors. Southwest positions itself in all its marketing communications as THE only low-fare, short-haul, high-frequency, point-to-point carrier in America that is fun to fly. Its low-priced fares are a brand equity which it "owns" in the mathematical sense of being the only major airline with a strong score on this attribute based on consumer research (Barlow, 2002). Southwest’s brand exudes an element of fun: a down-home attitude which it leverages to present the consequences of low fares in a positive light. "Dignify" might not be the first word one would think of to describe how Southwest treats passengers: no first class; no food other than peanuts; no assigned seats; no transfers of luggage to other airlines (Teitelbaum, 1992). Southwest’s in-flight service has, in fact, become pejoratively synonymous with peanuts.

Market Positioning Strategies: To successfully secure its market position, Southwest needs to be extremely cost-efficient. Southwest has a well defined business model that uses single aircraft type, short-hauls, secondary airports, point-to-point versus hub-and-spoke to keep its costs down. Southwest tries hard to differentiate itself by doing seemingly weird things. For example, not assigning seats in its flights helps to reinforce its image that it gets passengers to their destinations when they want to get there, on time, at the lowest possible fares. By not assigning seats, Southwest can turn the airplanes quicker at the gate. If an airplane can be turned quicker, more routes can be flown each day. That generates more revenue, so that Southwest can offer lower fares.

Marketing Strategies: Southwest offers a travel product that is built around flights targeted to specific demographics and ticket pricing that is simplified so that passengers know exactly what they are getting for what they pay. Its ugly Boeing 737 planes that provide pared-down utilitarian service, often likened to cattle cars, is exactly what one would expect for the price that is paid. This is in stark contrast to flights geared for business travelers and other passengers who are used to being pampered, paying full price but ending up disappointed in the end.

Building Brand Loyalty: Airports and airplanes traditionally have a love-hate relationship with the public. Along with noise pollution generated by aircraft, there are also traffic problems and urban sprawl that airports bring to communities. Whenever there is talk of airport expansion, people raise up their arms in protest: NIMBY! Unless, it is Southwest Airlines that is coming to town.

Pricing Strategies: With a clear customer target, SWA’s pricing strategy is to charge the lowest possible fare that still enables the airline to make a profit. This reflects its decision to compete not only with airlines, but with all other forms of transportation, including automobiles (it is cheaper to fly than drive). When SWA enters a new market with fares that undercut prevailing rates by 50% or more, traffic explodes, and Southwest nabs many customers who might have driven before (Zellner, 2001).

Promotion Strategies: Marketing Mix - For Southwest Airlines, promotion starts with the insightful understanding of customer benefits and how to translate those benefits into meaningful products and services. Southwest pays close attention to consumer insights and to brand building, and that devotion contributes significantly to the value of the brand. In both print and television, SWA continues to employ the most basic form of price competition by running ads that encourage people to visit their website for the best online deals.

Southwest’s marketing and advertising goal is to be very clear in their low-fare message but at the same time create and reinforce the company’s nutty image (Freiberg and Freiberg, 1997). Southwest attempts to do three things in their advertising: intrigue, entertain and persuade. Southwest encourages employees to dress casually at work. Southwest wants to portray their employees as professional but don not take themselves too seriously. Ad designers try to inject fun and personality in designing SWA ads, giving the target customers a taste for what the Southwest Airlines are going to give them when they get on the plane (cheap but fun!).

Companies can learn from Southwest’s Marketing Strategies to refine their product and pricing, distribution and promotion strategies to strengthen competitive positioning, even when competition tries to copy and/or presented an overly enticing offer to lure loyal customers.