Research Paper on Southwest Airlines: A Leading Low-Cost Carrier in the U.S.

Introduction

Southwest Airlines was founded by Rollin King and Herbert Kelleher in 1967 (Muduli and Kaura 115). It began its operations in three Texas cities but later expanded to fit in the competitive market. Today, Southwest Airlines is among the leading low-cost carriers in the United States airline industry. Southwest Airlines uses an intense marketing model, assuring its customers that it will always offer them discounts, free baggage checks, and low-cost tickets as long as they are traveling within the US. Southwest Airlines has been experiencing rapid growth in the US airline industry; the reason behind this narrative is its business practices and marketing strategies, which escalates its output and services. The report will describe the passenger marketing strategy of Southwest Airlines and evaluate the business practices that make it successful in the US airline industry.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

The "Love" Theme as a Way of Attracting More Passengers

Southwest Airlines was committed to serve its customers by supplying everything from fuel to peanuts into the planes. Larry Muse, their current president designed the "love" theme for luring the focus of passengers derived from the locality where the airline was first based (Love Field in Dallas) (Muduli and Kaura 116). Significant efforts had to be put to successfully implement the "love" theme as a way of attracting more passengers to Southwest Airlines. Further, the drinks that were served on board were termed as "love options," ticket machines were labeled as "love machines," and the overall hospitality was being managed by hard-working, and beautiful cabin hostesses (Muduli and Kaura 116).

After its establishment, it attained its break-even within two years. However, this was not a smooth strategy as Bantiff International, a chief competitor Southwest Airlines, introduced a 60-day "half-price sale" of tickets at approximately $12 as opposed to Southwest's $26 cost of the fare (Muduli and Kaura 117). However, Southwest Airline's counter-strategy was through an advertisement announcing that "nobody should be duped to ditch Southwest Airlines for a crummy $12." Another technique that helped their "Love" theme strategy to work out is the habit of rewarding clients who were buying their tickets at $26 with different gift hampers, such as a bottle of whiskey, ice buckets, and loyalty cards to increase more sales leads towards the acquisition of their tickets at $26 (Muduli and Kaura 117).

In 1993, the airline purchased Morris Air, thereby augmenting the number of operating stations (Muduli and Kaura 116). Southwest Airline planned to reduce the market served by its competitors, and also offers high rates of exits each day to a particular terminus. The frequency of this timeline decreased the effects of a missed flight and helped the company to retain previous and current passengers (Muduli and Kaura 117). They also rewarded customers who could catch the flights the earliest, in their projected eight departure flights per day, it helped to increase the number of passengers desiring to travel with Southwest Airline (Muduli and Kaura 116).

Uniqueness and Pricing Strategy

Fromm in his article explained Southwest Airlines' passenger marketing strategy (n.p). He argued that Southwest Airlines has a management team that understands its market. They know that they do their business in a competitive market, and therefore, cannot compete with the existing airline companies. For them to thrive and remain in the market, they use an approach, which benefits the company as well as the customers. The company keeps its costs down than any other airline company in the US (Boamah 8). Also, it offers useful perks to the customer, for instance, customers get a seat of their choice, early boarders sit in the exit row, and free drink coupons are offered for those who manage to board first (Fromm n.p). It offers unique but functional services, which emotionally benefit the customers thus increasing the productivity of the company.

Customer Satisfaction

According to research, Southwest Airlines is classified among the best airlines in terms of customer satisfaction (Muduli and Kaura 116). The company has a passenger-friendly policy, something that has enabled its success in the business. It is committed to its marketing strategy and personality, and passengers find this compelling and interesting. Southwest Airlines does not charge the passenger for the second checked bags; this is a discount that attracts many customers. Similarly, Southwest Airlines does not charge for transporting pets and shipping checked items such as ski gear and antlers. The company takes a unique strategy that helps it to turn profit unlike other companies, which charge high fares. Southwest Airlines maintains its low flight approach to cater to the budget-minded customer.

Muduli and Kaura proposed that Southwest Airlines has initiated a check-in process that is ticketless travel, a strategy that is not only efficient but saves time (116). At the same time, the process of boarding flights is not complicated with no seat assignment policy. There is freedom within the plane in that passengers who board first have the privilege of accessing exit row and at the same time, every customer decides where to sit. Fromm said that southwest Airlines has made itself attractive to its customers by offering passenger benefit programs, for example, credit that is offered to the frequent passenger (n.p). Today, once Southwest airline has entered the market, they build their loyalty to customers. With their airfares undercut, customers get attracted to the airline and make plans of mainstreaming many tourist destinations given that they will not pay full prices as those of other airline companies. The possibly low fare helps the airline to make profits.

On its marketing strategy, Southwest Airlines provides a travel package that is designed around flights meant for specific demographics, and ticket pricing strategy that is simplified so that passengers are aware of what they are getting in return for the money they have paid for (Abenes 1). Since its inception, Southwest Airlines has continuously worked towards ensuring they develop their brand awareness, and loyalty directly to their passengers, through their policies like fare reduction, and increasing tourist traffic through the high frequency of departures. For instance, each day they have to ensure they enter through destinations, like Ontario, Oakland, Hartford, and Buffalo in an attempt to increase their revenue streams (Abenes 1).

Good Branding

Southwest Airlines has shifted its focus in a way that influences the purchase criteria of customers. It builds its advantages through its network effect, something that increases the number of passengers. One thing that makes the company effective is its unique symbol, the heart, which is painted on the underbelly of all its planes (Phelps n.p). The branding is a definition of a promise to the passengers and a reminder that care and empathy will always be key to customer experience. Researchers argue that the branding of the heart explains that Southwest Airlines was founded on love (Miles and Mangold 539). At the same time, the heart shows that customers are valued especially during check-in and turnaround times. The company puts creativity an innovation upfront in that it works to show how it cares for all its passengers (Boamah 8). One marketing and branding expert asserted that Southwest Airline's symbol of the heart helps to differentiate its products and services from other Airline companies around the world (Miles and Mangold 539). It understands the importance of shifting products and services to passengers, and at the same time, shifting its focus from upstream to downstream.

Southwest Airlines uses a smart move in that customers are key to the experience. Also, they use employers to create fun in the planes and bring customer experience to life. The company hires employees for attitude then trains them to acquire the necessary skills, which help them to show care to the customers. According to Phelps, the strategy is called a value zone because every employee who works at the airline is given the task of creating value for the company (n.p). The future of a brand is well explained by those who have experienced it; this means that Southwest Airline's brand is not their say, but what customers experience. The company, therefore, strives to keep the heart as their brand based on the discounts and services that they offer.

Five Main Marketing Strategies of Southwest Airlines

Southwest Airlines' marketing technique can also be explained in five main marketing concepts; product positioning, market positioning techniques, marketing strategies, developing brand loyalty, and Pricing/ Product distribution policy (Abenes 1). On the first aspect; the airline positions itself perfectly so that the passengers can differentiate their package from its fiercest rivals. For instance, the low fare, love theme strategy, high rate of departure flights, and point-to-point carriers in the U.S. helped them to distinguish themselves from their competitors (Abenes 1). Southwest Airline's products display a component of fun; a down-home perception, which it uses to present the impact of low fares positively. Another important aspect is how the airline treats its passengers; equally, justly with no first-class flights, and in a more dignified manner (Abenes 2).

However, there is a need for Southwest Airlines to be tremendously cost-efficient to secure a firm market presence in the American airline industry. Currently, they have a well-structured marketing policy that applies a single aircraft type, short-hauls, and point-to-point versus hub-and-spoke strategy to maintain its prices at relatively low rates (Abenes 3). By not allocating seats to the passengers, has worked to their advantage according to their president, since it helps to strengthen its image that it focuses on getting their passengers on board to their desired destination, at the lowest probable charges (Abenes 1). Also, analysts state that by not assigning seats to passengers, the Airline will be able to cover more routes each day, thereby, generating more revenue than their competitors.

After its inception, Southwest Airlines has focused on two things customer target, and now coupled with its flexible, and convenient pricing strategy, they are braced towards not only generating profit but also maintaining the level of revenues they obtain. The moment they decided to venture into the new market with fare charges reduced by 50 percent, high frequencies of departures, and many more, SWA was able to attract many clients and even increase the rate of passenger retention due to their excellent customer service (Abenes 2). For example, approximately 9,000 passengers used to fly between Louisville and Chicago on weekly basis, however, since Southwest Airlines ventured the airline industry about 25,000 customers fly through the St. Louis-Kansas route after the introduction of $48 fare charges, a route that initially cost $200 (Abenes 2).

Southwest Airline's strategy of product differentiation has given them a significant competitive edge over other rival airlines (Abenes 3). For example, they do not depend only on travel representatives to dispense their brands. Travel bookings on SWA are done primarily via direct marketing, digital marketing with the advancement in technology to lure a wider target audience through exclusive ticketing offers, vouchers for returning passengers, and so on (Abeles 3).

On its marketing strategy, Southwest Airlines provides a travel package that is designed around flights meant for definite demographics, and ticket pricing strategy that is basic so that travelers are aware of what they are receiving in return for the money they have paid for...