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Running head: Southwest Airlines Marketing Analysis

Southwest Airlines Marketing Analysis Parvathi Arun Westcliff University August 26, 2018

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Abstract This paper and deals with the process of integrated marketing communications. Development of a media plan is how marketers organize their approach to increase they profit.In this paper we will involve with more swot analysis, target audience and communication medium,

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Competitive Analysis Southwest Airlines is the biggest airlines in United States. The founders concentrated on the domestic travel rather than the international. They wanted to earn customer satisfaction. They decided to give comforts to passengers. Maintain the market with high profits for long term is very difficult. For 40 years they have given their best in this industry with the market capital of $25.8 billion. Their Direct competitors are quite a few such as Delta airlines, American Airlines, United Airlines (Holmes,2016). Here we can do the competitive analysis with United Airlines. This is one of the top most competitors for southwest. Their profit level is 200% higher than southwest. Below we do the SWOT Analysis for both these airlines. SWOT Analysis Table 1: (Reference from (Box and Byus, 2009). Weakness

Strengths

1.

Stagnant Market with

Turnaround time

2.

Many law suits

4.

Customer service

3.

Dependent on one

5.

Good Marketing and

1.

Point to Point service

2.

Fleets Base

3.

profits

company for body parts 4.

Less Price labors

Opportunity

Threads

Relationship with

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Tourism company

1.

High competition

2.

Expanding globally

2.

Government Rules

3.

Customer Happiness

3.

Fuel Charge crude oil

4.

Global economic

like WIFI, texting, snacks and drinks,

rate

live tv 4.

Advantage of E-

condition

commerce

Strengths: 1.

The Southwest airlines is the low-cost so they don’t want to do hubs from

one point to other. This was their major strength in the initial days where they concentrated on the south west regions of USA. On the other hand, United Airlines where concentrating on East to West so they had many hubs between (Box and Byus, 2009). 2.

They have best fleets when compared the united airlines. Their Boeing had

around 700 planes (Box and Byus, 2009). 3.

Their Turnaround time was around 20 minutes whereas some flights in

United is around 1 hour (Box and Byus, 2009). 4.

Good customer service with a smile and care (Box and Byus, 2009).

5.

The price of a trip is lower and acceptable for business people. They save

money in turnaround time and hubs and lower the price for customers (Box and Byus, 2009). 6.

They do marketing like first bag free, two hand luggage, and increased the

reputation in customer’s mind (Box and Byus, 2009).

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Weakness: 1.

Their growth is rapid and their profit stays with one company. So, the

expansion was less for the company when compared to United Airlines (Fitzpatrick, Nguyen& Cayan , 2015). 2.

It got involved in many accidents, class actions and the decision of some

law suits are still in pending. This affects the image and brand value for the company (Fitzpatrick, Nguyen& Cayan , 2015). 3.

The aircrafts are built by Boeing and southwest solo partner is Boeing,

hence if any disagreement the business will be affected (Fitzpatrick, Nguyen& Cayan , 2015). 4.

The employer and employee relationship was low hence there were union

clashes which makes the company name to be spoiled (Fitzpatrick, Nguyen& Cayan , 2015). Opportunity: 1.

Southwest now try to expand its network inside US and internationally

mainly focusing on tourism places like Caribbean, Florida etc. Such enchantments will increase the profits (Fitzpatrick, Nguyen& Cayan , 2015). 2.

The airlines try to increase the base and customer service by having

different hubs across the global (Fitzpatrick, Nguyen& Cayan , 2015). 3.

They are doing all innovative actions like the WIFI connection inside the

flight, texting and live tv for the travelers not to get bored. Recently signed for all football and baseball games (Fitzpatrick, Nguyen& Cayan , 2015).

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In the modern era, the globalization increased the chace of E-commerce.

The southwest should take part in this industry and they are driving through to change their strategy (Fitzpatrick, Nguyen& Cayan , 2015). Threads 1.

The Airline industry has very high competition and this is achieved by

their prices. Recently the price war began (Gupta and Mishra,2016). 2.

There were stringent regulations and legal compliances. These are the

industry which pay high taxes (Gupta and Mishra,2016). 3.

Fuel Charge crude oil rate are the major weakness in this industry. The

price is volatile and the industry must have accompanied with the other charges (Gupta and Mishra,2016). 4.

Global economic condition: The economic threat is the major part with the

competitive company United Airlines. If southwest is unable to grow busier the market will slow down and United market will be in high move (Gupta and Mishra,2016). PESTEL Analysis Table 2: Reference (Kiyak and Pranckeviciute, 2016). Political 1.

Economical Political Interference

and Control

1.

Fuel Prices

2.

Economic Downturn

3. Cost Structure Technological

Social 1.

Demand and Supply

and seasonal changes Legal

1.

Increase the technology

2. Integrate digitization Environmental

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Pending law suits

2.

Regulations

3.

Taxes and flight

7 1.

Respective changes and

regulations dues to global warming

charges

Media Plan

Objective of the media plan is to reinforce the brand name in consumer’s mind, to develop the strategy, and increase profitability. Below are some of the media plan of southwest airlines (Chakrabarti, Trehan, & Makhija,2018). Identification of target audience: Southwest airlines, have all low fare and the take profitability of market share. We should also note that Herb Kelleher was a master at achieving low prices. Moreover, low prices are a core part of Southwest Airlines’ strategy. 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 (Chakrabarti, Trehan, & Makhija,2018).

Suggested Media plan are: •

Commercial advertisements with quotes “Behind every seat there is a story”

(Powell, 2003). •

Promotion like frequent flyers

•

Using brand ambassadors

•

Advertising in sports television with discounts for events

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Using corporate discounts

•

Rewards program (Powell, 2003).

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Budget

•

The budget in the above table is focused for each media.

•

The Internet, Social Media, Newspaper and spot television during prime time will

be effective •

Outdoor advertisement and radio will be the good media mix

•

These will target the audience multiple times in daily routine.

•

Budget allowable is $75,000,000.

Competitors The direct competitors are the other low-cost companies that propose the same product with the same range of prices. Delta and United America are their direct competitors Between these companies, the competition is extremely intense and each competitor attempts to gain dominance over others (Powell, 2003). The indirect competitors are the traditional airlines, such as Emriates or BritishAirways. They are indirect competitors because they target different market segments; people interested in buying a cheap flight will be less interested in buying

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flight in traditional companies. Substitutes are indirect competitors as well, but at a smaller level; as it has been said, trains or vehicles do present disadvantages. In a nutshell one can say that rivalry is especially high for the direct competitors (Powell, 2003). Point of parity •

Southwest Airlines compared to the other competitors have several points of

parity that can be exploited to position it in the air market. •

Southwest Airlines points of parity ensure that their prices are low since they

discourage spending on unnecessary items to their daily activities. •

They provide commercial services that which is also a point of parity.

Point of Difference The main points-of-difference that set Southwest apart are: •

Extremely efficient operations that allow for the low-cost system to succeed

•

Low-cost pricing and logistics

•

Motivated team of employees with a fun-loving culture

Potential Brand Associations

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References: Campbell. S (2010) How Southwest Airlines Became a Model for Customer Loyalty. TMCnet. Available from http://www.tmcnet.com/channels/customer-supportsoftware/articles/87080-how-southwest-airlines-became-model-customer-loyalty.htm (cited on 20th, March 2013) Chakrabarti, S., Trehan, D., & Makhija, M. (2018). Assessment of service quality using text mining – evidence from private sector banks in india. The International Journal of Bank Marketing, 36(4), 594-615. doi:http://dx.doi.org/10.1108/IJBM-04-2017-0070

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Fitzpatrick, B. D., Anh Nguyen, Q. Q., & Cayan, Z. (2015). An upgrade to competitive corporate analysis: Creation of A "personal finance platform" to strengthen porter's five competitive forces model in utilizing. Journal of Business & Economics Research (Online), 13(1), 54-n/a. Retrieved from https://search.proquest.com/docview/1655539360?accountid=158986 Gupta, G., & Mishra, R. P. (2016). A SWOT analysis of reliability centered maintenance framework. Journal of Quality in Maintenance Engineering, 22(2), 130-145. Retrieved from https://search.proquest.com/docview/1783240993?accountid=158986 Holmes, Frank. “These Are the 7 Biggest US Airlines.” Business Insider, Business Insider, 6 Apr. 2016, www.businessinsider.com/these-are-the-7-biggest-us-airlines-2016-4. Kiyak, D., & Pranckeviciute, L. (2016). DETERMINING THE RELATION BETWEEN THE BUSINESS ENVIRONMENT AND COMPANIES SOLVENCY FACTORS IN THE POST - CRISIS PERIOD. Ekonomika, 95(3), 64-80. Retrieved from https://search.proquest.com/docview/1894905708?accountid=158986 Box, T. M., & Byus, K. (2009). SOUTHWEST AIRLINES 2007. Journal of the International Academy for Case Studies, 15(2), 7-12. Retrieved from https://search.proquest.com/docview/216294572?accountid=158986 Peterson, Kyle. “American Airlines Files for Bankruptcy.” Reuters, Thomson Reuters, 30 Nov. 2011, www.reuters.com/article/us-americanairlines/american-airlines-filesfor-bankruptcy-idUSTRE7AS0T220111130.

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Powell, T. C. (2003). Varieties of competitive parity. Strategic Management Journal, 24(1), 61-86. Retrieved from https://search.proquest.com/docview/225007655? accountid=158986

Walsh, P. R. (2005). Dealing with the uncertainties of environmental change by adding scenario planning to the strategy reformulation equation. Management Decision, 43(1), 113-122. Retrieved from https://search.proquest.com/docview/212069120? accountid=158986

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