Soutwest Marketing Strategy

Marketing Study
Of

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A Paper Submitted in Partial Fulfillment of the Requirements for
GBA 517
Essentials of Marketing Management
At
Cal Poly Pomona University

Submitted by:
Fiorello B. Abenes, Ph.D.
Table of Contents

Preface 3
Introduction 6
  Company History 6
  Regulatory Environment 7
  Company Product 9
Target Market 9
  Market Segment 9
  Competitors and Competition 11
Product and Pricing 12
  Product Positioning 12
  Market Positioning Strategies 12
  Marketing Strategies 14
  Pricing Strategies 15
Distribution and Promotion 17
  Product Distribution Strategies 17
  Promotion Strategies: Marketing Mix 19
    Frequent Flyer Awards 20
    Advertising 20
    Television Sports Advertising 22
    Public Relations 24
    E-Commerce Promotion 28
    Internal Marketing 30
Conclusions 34
Reference List 37

Preface

      I chose to study the marketing strategies of Southwest Airlines (SWA) for this paper because I believe it is the best managed airline in the United States, if not the world. As a business student, stockbroker, and investor, I try to find companies in beleaguered industries that manage to do well in comparison to its competitors. By doing this, I hope to find business paradigms that help me in my MBA studies as well as find profitable investment opportunities for my clients.
      During the months following the terrorist attacks of September 11, virtually every major U.S. air carrier has downsized, laid-off workers, grounded aircraft, and disrupted air service. Southwest, in contrast, has steadily grown: no employees have been furloughed and not a single aircraft was grounded (Southwest Airlines 2002 Annual Report). How did Southwest manage to eke out a profit while its competitors drowned in red ink? One would say it pared down its operating costs that were already the lowest among major airlines (Lim, et al, 2003); but it was more than that. It responded to the tragedy and convinced a petrified... [continues]

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