Value Proposition and Positioning

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BRITISH AIRWAYS SOUTHWEST AIRLINES SINGAPORE AIRLINES

MAY 10, 2010

The document compares and contrasts British Airways, Southwest Airlines and Singapore International Airlines; focusing on their positioning, brand identity, segmentation and performance.

MGMT E-6020 Final Project

Value Proposition and Positioning ““In its simplest form, a value proposition is the summation of the brand’’s functional, emotional and self––expressive benefits that bring value to the customer.””1 Southwest Airline’’s value proposition is simply to get passengers to their destinations on time, at the lowest possible cost, and to have fun while doing it. This value proposition is summarized on the Southwest website (www.southwest.com) in the first paragraph of the section, ““The Southwest Difference”” ““History”” as follows: ““More than 38 years ago, Rollin King and Herb

Kelleher got together and decided to start a different kind of airline. They began with one 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.”” Southwest clearly articulates its value on its website and other marketing and trade materials. Its advertisements clearly emphasize cheap flights, are usually colorful and fun. (Exhibit……) Former Chief Executive Officer, Herb Kelleher, was well known for having fun and doing things that his peers might regard as outrageous. An example of an outrageous incident was an arm-wrestling match he had with the Chairman of Stevens Aviation, Kurt Herwald, in 1992 in the Malice in Dallas, for the rights to use the slogan, “Just Plane Smart.” Although Kelleher lost the match, the event generated so much publicity and good will that Kurt Herwald allows Southwest to continue using the slogan.2

British Airways (BA) and Singapore International Airlines (SIA) on the other hand do not have a value proposition that emphasizes having fun. The BA value proposition is to provide its

May 10, 2010

Page 1

MGMT E-6020 Final Project

customers with a full frills service at competitive prices, through an extensive route network. Unlike SIA, BA does not propose a value of superior service. BA captures this value proposition on the ““About BA”” section of its website (www.britishairways.com); ““British Airways is a full service global airline, offering year round low fares with an extensive global route network flying to and from centrally located airports.”” BA clearly articulates its value by offering flights to a truly global network of locations. It serves more destinations than SIA and Southwest do. Its low fares are not very well articulated, as SIA with its superior service manages to offer lower fares for each class for flights between New York and Singapore as detailed in the customer segmentation section. SIA’’s value proposition is to offer its customers superior service at prices that could rarely be matched by its competitors providing similar levels of service. The value proposition includes flying passengers in some of the safest, ““youngest”” and most advanced aircraft fleets in the world. SIA clearly articulates its value through the superior services that it provides to its customers. ““For example, SIA made a promise to deliver a passenger’’s baggage within ten minutes upon arrival in Changi and consistently delivered on that promise.”” (Ramaswamy, Modi, pg 6) Southwest and BA do not have such a remarkable promise. SIA displayed its superior customer service by trying to make the service encounter ““painless,”” enjoyable, easy and rewarding. For example, SIA was one of the pioneers of electronic ticketing through its website. ““To make it easy on the passengers, the company had introduced automated check in systems on certain flights that tended to attract a large number of passengers.”” (Ramaswamy, Modi, pg 6) Southwest just recently introduced the ““early...
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