Preview

Southwest Marketing Strategy

Good Essays
Open Document
Open Document
1274 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Southwest Marketing Strategy
Southwest Airlines is the industry leader in low cost airfare. They began its operation in 1971 with three Texas based routes and began interstate routes in 1978. When Southwest entered the market in 1971 they employed a market penetration pricing approach. They wanted to provide the best service for the lowest possible price. They saw that if they cut out certain unnecessary benefits they could lower their ticket price to a level far below that of the competition. They do not have in flight movies, meals, or first class sections. This strategy has been very cost effective and Southwest passes the savings on to the customer. They chose to focus on pleasure travelers and low-income travelers opposed to business travelers. This allowed them to take advantage of a market, which was often ignored by other airlines.
Southwest is not concerned with the prices of other airlines. They do not engage in pricing to meet competition, or pricing below competition. CEO Herb Kelleher stated, "We 're not competing with other airlines. We 're competing with ground transportation." This philosophy has led them to be very successful because they are priced below the competition, but don 't raise their prices when the competition does.
Cost controlling is very important in the airline industry. Southwest is very good at controlling their costs. They offer a no frills service for people who want to get to their destination for as little as possible, and are not concerned about the bells and whistles like in-flight movies. Southwest also realized that when their planes are on the ground, they aren 't making money. They decided to keep their planes in the air as much as possible and have worked hard to keep a low turnaround time. They manage to unload passengers and load new passengers for the next flight within twenty minutes, which is shorter than the industry average. Southwest also uses only one kind of plane, the Boeing 737, in order to reduce costs of parts

You May Also Find These Documents Helpful

  • Good Essays

    In order to increase customer satisfaction and maintain the lowest fares, Southwest Airlines has been…

    • 5067 Words
    • 21 Pages
    Good Essays
  • Better Essays

    Shifts in the supply and demand for Southwest Airlines within the industry have changed significantly. The demand has gone up because the supply has gone down. For example, many Airline companies have felt the sting of higher jet fuel costs. Southwest is one of the existing airline companies that have reduced the amount of flights that they book due to rising fuel costs. This creates a lower supply with a higher demand. However the demand may go down due to a rise in ticket prices.…

    • 1125 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Company’s Strategy: Southwest’s strategy is to improve efficiency in its operations and pass cost saving to its customers by offering them low and competitive prices. Southwest Airlines is dedicated to providing the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and company Spirit.…

    • 1027 Words
    • 5 Pages
    Good Essays
  • Better Essays

    Related to Southwest’s passion for low prices, is its frugality with resources and approach to technical change. The company treats its own funds as it expects its customers to do: prudently and as efficiently as possible. Thus, I would disagree with one of the quoted analysts who mentions that Southwest is stuck in their ways. Rather – as when evaluating new aircraft - Southwest appears to consciously not want to be at the bleeding edge of change. Instead, it values a measured approach moving…

    • 1257 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Southwest Airlines

    • 1554 Words
    • 7 Pages

    Southwest continues to be the least expensive airline in the industry, as competition cannot meet the fares that Southwest is putting out into the market. The competition of competing airlines would incur substantial losses if they stayed competitive with Southwest 's fares. Another key factor is that they have only one type of airplane that is used, Boeing 737 's, which helps lower their costs dramatically for training, maintenance and inventory.…

    • 1554 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Rollin Kig and Herb Kelleher started the company with a simple notion: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline” (We Weren’t Just Airborne Yesterday, 2010). As stated in the interview with CEO Garry Kelly, Southwest follows four basic rules: keep cost down, fly all the same planes so parts and maintenance is fairly simple and cheap, treat their customers like kings and queens, and treat their employees even better (Destination CEO Video, 2010.) This is a great way to keep everyone happy and gain loyal customers who will come back to fly with the airline, and in turn giving them more…

    • 887 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Marketing Case Study

    • 532 Words
    • 3 Pages

    Answer : Operating under an intensely competitive environment , Southwest Airlines carefully projects its image so customers can differentiate its product form its competitors .. 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 cost down .Southwest tries hard to differentiate itself by doing seemingly wired 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 .…

    • 532 Words
    • 3 Pages
    Good Essays
  • Good Essays

    An economical factor that influence Southwest Airlines could be the economical crisis. This crisis is changing the value of money and the perception of customers. Also because of this crisis and because of the internet the customer can become too price sensitive. Because of the fact that labor cost are the highest costs Southwest Airlines has, they need to deal with this. In the economical crisis it is harder to motivate employees and to stimulate lower costs. Southwest Airlines offers a low service to the customer by not offering free beverages and meals, this is just an example that helps in providing such low costs.…

    • 626 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    "The workforce is dedicated to the company. They're Moonies basically. That's the way they operate." Issue: New Competition. Other US airline companies started to imitate Southwest Airlines and created their own low cost carriers (for example: Continental Lite and United's Shuttle).…

    • 1745 Words
    • 50 Pages
    Powerful Essays
  • Good Essays

    southwest airlines

    • 489 Words
    • 2 Pages

    service with the lowest prices in their industry. They have a ten-minute turnaround policy which…

    • 489 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Case Study

    • 363 Words
    • 2 Pages

    Southwest’s traditional pricing strategy has been the choice of buying cheap airplane tickets for just basic transportation services, without any extra service, such as meals. Even though there is many people that buy expensive…

    • 363 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    1. How does Southwest Airlines get its competitive advantage? Southwest Airlines uses a Cost Leadership Strategy, however most pricing strategists would agree that having a low price does not, in itself, constitute a competitive advantage. In fact, thinking that low prices are always a good strategy for competition is deeply misguided. However, at times, targeting low prices can lead to a strategic focus which delivers tremendous results. Modern competitive strategy will often examine firms from a resource-based view. According to this lens, competitive advantage derives from leveraging an inimitable resource to deliver value at a lower cost than the competitors. Price is a completely imitable resource. Any company can match the prices of its competitor if it so chooses. Hence, arguing that a low price is a strategic resource, or that it leads to a competitive advantage in and of itself, is illogical. Southwest Airlines has used the target pricing and utilized a marketing orientation since its infancy in 1971, even though these concepts were not fully defined back then. First, starting with the customers and the value they sought, Southwest Airlines initial target was customers traveling between cities in Texas, specifically between Dallas and Houston, Dallas and San Antonio, San Antonio and Houston. While Texas is larger than many countries, it isn’t so large that people can’t drive from city to city. Hence initially, the most comparable alternative to Southwest, and therefore its prime competition, wasn’t other airlines. Instead, it was the car. In uncovering the car as the competing alternative, Southwest was able to also identify the target price of its offering. Second, to compete with the car, Southwest Airlines had to price their…

    • 1922 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    From the case, we can notify that Southwest Airlines is generally using two competitive strategies. They apply not only the strategy of low costs, low fares and frequent flights to form their cost structure, but also the “People” strategy, Southwest Airlines differentiate themselves by offering affordable journey with the valuable customer services.…

    • 1059 Words
    • 3 Pages
    Good Essays
  • Good Essays

    According to a recent SWOT Analysis done on Southwest Airline's, their current strategy is to position themselves as a cost leadership with a focus strategy. Within their company mission it states they aim to cost-effectively and reliably fly large number of customers on short, non-stop flights. They truly are committed to making flying available to everyone. According to the SWOT Analysis some of their strengths include maintaining operating expenses per available seat mile at 15-20% below average, all their aircraft…

    • 543 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    SouthWest Airline Case

    • 609 Words
    • 3 Pages

    SouthWest Airlines has been meeting the benefits customers want in some way. They are number 1 at low prices, which is the most important benefit customers seek. Secondly, they give the customer the ability to choose their seats if they are on time. Thirdly, they have an attentive customer service. However, SouthWest Airlines has not a big variety of amenities but it never said it had it in the first place, in this way it cannot disappoint the customers if something for which they thought they paid is not working.…

    • 609 Words
    • 3 Pages
    Satisfactory Essays