Case Study – Southwest Airlines

Case Study- Southwest AirlinesSouthwest Airlines is a unique and powerful brand in the airline industry. The company has its own distinctive way of marketing and delivering air travel to customers, a way that other companies in the airline industry, as well as outside of it, might find instructive.“Southwest Airlines was incorporated in Texas and commenced Customer Service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities; Houston, Dallas, and San Antonio. Today [that is, mid-2011], Southwest operates 548 Boeing 737 aircraft among 72 cities. ¼ Year end results for 2010 marked Southwest’s 38th consecutive year of profitability. ¼ Southwest is the United States’ most successful low fare, high frequency, point-to-point carrier. Southwest operates more than 3,400 flights a day coast-to-coast, making it the largest U.S. carrier based on domestic passengers carried as of September 30, 2010.”“The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” This mission gives shape, form, and direction to the Southwest Airlines brand and its marketing strategies and activities.Al St. Germain, who is global director of the airline practice at Landor Associates, a brand consulting company, asserts that “an airline brand is essentially the sum of the experiences that passengers have when they fly with that carrier.” St. Germain also points out that many airlines have been inconsistent in the experiences they have provided customers over time but that “Southwest hasn’t failed customer expectations because it’s always been a no-frills airline.” From a brand standpoint, St. Germain considers Southwest Airlines to be “a testament to consistency.”One powerful example of this testament to brand consistency is Southwest’s approach to advertising. According to Herb Kelleher, a Southwest Airlines co-founder and until recently its long-time CEO, good advertising contains three essential elements: (1) advertising must be true; (2) advertising should fairly reflect the company’s attitude; and (3) advertising should be consistent over time. Generating good advertising and achieving brand consistency at Southwest Airlines is, in part, attributable to top executive participation in monthly advertising meetings. Kelleher says that such involvement is helpful with respect to communicating the congruency of the company’s message to the outside world as well as in communicating to Southwest’s employees that the advertising messages are consistent with the treatment they receive.Another powerful example of the testament to consistency is found in Southwest’s tag line Freedom to Fly. Employees think of their jobs in terms of “giving people the freedom to fly” ¾a perspective that permeates not just employees’ thinking but all of Southwest’s operations. With regard to employees’ beliefs, for instance, “on the busiest holidays of the year, ¼ [Southwest’s employees] don’t think their objective is to load bags or to serve in-flight beverages; they know they provide a service which gives people the ability and freedom to spend holidays with their loved ones.” With respect to the broader corporate perspective, Gary Kelly, Southwest’s current chairman, president, and CEO, in commenting on the recent acquisition of AirTran, says: “Once integration is complete in a couple of years, we will have one Brand, one Customer Experience, one livery, one operation under a Single Operating Certificate, and one mission—to give the world the Freedom to Fly while spreading low fares farther.”The Freedom to Fly perspective also contributes to creating memorable customer experiences. “Building a memorable customer experience involves strategy, discipline, technology, relationship management, branding, leadership and commitment¾all wrapped in a process to engage, surprise and delight. You can be sure that ¼ Southwest Airlines ¼ spends countless hours on how best to deliver a unique customer experience.” Sandra Howard, director of advertising at Southwest Airlines, indicates the company has been re-embracing its brand, emphasizing the emotional touch points about customer service, Southwest’s employees, and the experience provided by the brand.So, what are some of the important components of Southwest’s memorable customer experiences? “Southwest’s main advantage is that its rivals often treat passengers like cargo. Not only do ¼ [Southwest’s competitors] squeeze them into seats that make dentists’ chairs seem comfortable, but they do so with an air of ill-concealed resentment.” In contrast, Southwest treats passengers as people rather than cargo. “Southwest doesn’t have premium-class cabins. But the airline in late 2007 began offering 15 more-expensive Business Select tickets on each of its flights, in return for preferential boarding and a free alcoholic beverage. It also began assigning other passengers boarding numbers to ease jockeying in lines.” More recently, passengers who are willing to pay “a $10 fee get boarding priority¾after Business Select holders or mileage-award recipients.” And even small things contribute to Southwest’s memorable customer experiences. “Southwest still gives out free peanuts, an oddly emotive subject among travelers. It lets passengers switch their flights often, for no extra charge.”In contrast to many of its competitors, Southwest Airlines does not charge for checked-in luggage¾the “Bags Fly FreeÒ” campaign. “Executives crow that this has allowed Southwest to poach customers from rivals, which has made up for the forgone fees. Meanwhile, Southwest has no qualms about charging for extras that irk passengers less, such as those early check-ins, and this generates a happy whack of cash.” Observes Kevin Krone, Southwest’s vice president of marketing, “[w]hat other folks are doing is charging money for what they used to do for free. What we’re doing is offering new things that we hadn’t done before.”Considering all the components of Southwest Airlines’ marketing efforts as an integrated package, it is clear that Southwest is a brand that is driven by a purpose¾the Freedom to Fly. “[B]rands that are not driven by purpose will have a tougher time ¼ [a]nd purpose isn’t just good for the soul; it’s good for the bottom line. Studies over the years have shown that organizations driven by purpose and values outperform the general market 15-to-1 and outperform comparison companies 6-to-1.”Questions to address:Describe the marketing exchange relationship that exists between Southwest Airlines and its customers.Describe the 5Cs of the marketing framework as they pertain to Southwest Airlines.How does Southwest Airlines’ approach to providing a total product experience capture the marketing framework elements of STP (segmentation, targeting, and positioning) and the 4Ps (product, price, place, and promotion)?

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