Southwest Airlines Company, a major airline that is based in Dallas, Texas. At the start the airline’s passenger service was limited to Texas, but the company slowly but surely lengthened its service in many other parts of the United States. Southwest Airlines by focusing on short and frequent flight and by doing tight cost control and by not spending anything on extra services, made Southwest one of the most successful and profitable airline in the U.S
Southwest Airline was founded in 1966 by two persons. One was a lawyer (Herb Kelleher) and other one was a great businessman (Rollin King). They thought to introduce an airline that will only provide service within Texas, Dallas, Houston, and San Antonio. One interesting fact is that two existing airlines, (Texas International) and (Braniff), sued against the new entering airline to prevent it from competing, but the Texas Supreme Court ultimately gave decision in Southwest’s favor. The airline did its first planned flight in 1971 and this flight was from love field to Dallas. In spite of opening of new Dallas international Airport in 1974, southwest keep doing its most of the operations at Love field while many other airlines moved to the Dallas airport.
Kelleher took the in charge of chief executive officer of southwest airline. It was because of his great leadership that southwest airline known as one of the well reputed company in the airliner industry of U.S under his leadership company focused on superior customer services, motivation of employees and tight cost controls without affecting the quality of the service. As the company, s headquarter was based in Love field, southwest used the love theme even in its marketing.
The airline policy of not offering extra services made it possible for the southwest to become one of the leading airliners in the U.S. Southwest did not offer any meal during flight, these were some of the steps to take cost under control and to get high revenue. Moreover, Southwest’s seating policy also has allowed it to load airplane passengers more quickly at the airport gate, permitting more flights per day and thus generating higher revenue. In 1995 Southwest became the first U.S. airline to offer “ticketless” travel on all of its flights. With this system, passengers need only present identification and a confirmation number when checking in for a flight, eliminating the risk of ticket loss or theft. Let’s have a look on the adopted marketing mix of the Southwest airlines, which made the southwest airliner one of the most successful airliner in that time period.
Marketing Mix of Southwest Airlines
It is very important for an organization to have such a marketing mix that fit with the company objectives and goals. It the marketing mix of a company that determine the revenue of the company in a way. Marketing mix have four basic parts which include product,price, promotion and place. These four elements should be designed in such a way that the company ,s product must get maximum cultural acceptance and marketing mix should be altered according to the need of the company I order to get maximum profit.
The product that a company is going to offer should be according to perceived standards of the customers’ only that product could be successful which satisfy the perceived benefit of the customers and their wants. Southwest Airlines offer its customers air transportation with no extra services. If we look upon the customer’s services of the southwest we will come to know that southwest is providing excellent customer services, baggage handling, easier ticketing, flexible flight schedules, easier check in and check outs on the airport. Southwest has also won the prestigious Triple Crown award for its services. In the success of southwest airline one of the greatest contributions is of the employees. Personnel’s of the southwest all very much motivated, hardworking and the overall culture of the southwest is very employee’s friendly. Company has created a can do culture. Company, s employees gather and do meeting on every problem and new innovative strategies are formulated to keep the southwest on horizons of success.
Second important element of marketing mix is the place. A proper place for any product is necessary for its success and the time is also very important. For example offering new blanket in Middle East in summer is like doing suicide for the company. Place along with the time is very important for the successful launch of a product. Southwest deals in short flights. Their average flight duration is near about an hour. This strategy helps them to have tight control over cost and to do better management along with excellent customer services. Southwest do a lot of marketing research before introducing the product in a new place. For example, when southwest was thinking to start its services in Florida, before that southwest started public relationing and awareness campaign in Florida. This campaign tried to make aware the target customers about southwest and also establish a sound and positive image of the company in the minds of the customers. It was not possible for Southwest to resist with Florida’s countless miles of shoreline, its world famous beaches, its many theme parks like Walt Disney World, and its major cruise-line industry. Florida is undeniably one of the most wanted vacation spots in the United States. Southwest by mixing this service with existing routes along with Southwest's loyal customer base, the company was very soon able to build strong grounds in Florida.
The third element of the marketing mix is the Promotion. This involves making aware the target customers about your product. It involves highlighting the unique features of the product, benefits that user can get from the product and the reason that why somebody should use your product. When Southwest enters the market, fares drop by as much as 70 percent. This action often starts a price war that quickly turns into great benefits for customers. Southwest Airlines adopted two major price strategies,
A variable - price strategy and
A low - price strategy,
to compete against other airlines. Passengers would not fly at high prices, and demand for air travel is highly elastic. To keep away competition from new airlines that attempt to copy its low-price strategy, it should not stop focusing on their lower cost strategy. By focusing their efforts on innovative processes to cut costs, they can continue to offer lower prices to their customers and increase customer loyalty.
We can see that the core strength of the southwest airline is in its low fair. Southwest also offers a huge discount for customers who are doing advance ticketing. It is very important to know how southwest can afford such a low fair. The answer lies in control over operating costs. Southwest do not offers meals during flights but they do offer snacks to their customers and southwest also save money by not offering training to their employees, Southwest Airlines tries to use maximum seat capacity, though their fairs are low but their plan never flew empty. In addition, Southwest introduced innovated measures to limit overhead costs by introducing ticket-less travel, and this strategy save them more than 20 billion. Southwest also save the cost by lowering the turnover ratio of the employees, southwest introduces highly innovative programs for employees to keep them motivated and satisfied. One another interesting strategy is that Southwest have only Boeing 737 and all of their pilots are certified to fly these aircraft’s, southwest do no need to provide further training to their pilots and moreover having only one single plane also save the cost of spare parts, since company is using only one type of plane their spare parts and maintenance cost is also very low. This strategy also helps southwest to charge low fares from customers and provides a mean of success for southwest in such a rigid competition.
Aviation Marketing Books
noshow on February 05, 2015:
Southwest was not founded in 1966...
Southwest Airlines Co. (NYSE: LUV) is a major U.S. airline and the world's largest low-cost carrier, headquartered in Dallas, Texas. The airline was established in 1967 and adopted its current name in 1971. The airline has nearly 46,000 employees as of December 2014 and operates more than 3,400 flights per day. As of June 5, 2011, it carries the most domestic passengers of any U.S. airline. As of November 2014, Southwest Airlines has scheduled service to 93 destinations in 41 states, Puerto Rico and abroad.
AAmm on March 01, 2012:
i have an assignmet and im searching for the compititore of southwet airline and their market share?? plz help me
Kim on January 18, 2011:
I know you're trying to provide a service, but your grammar is terrible.
Edward Happer MSc (author) on August 29, 2010:
I am glad it did. Thanks for commenting.
Sharon on August 25, 2010:
Thanks you ! it helped me with my assignment .