Southwest Airlines Marketing Strategy Essay Example

highly successful company in this market because it positions itself as a carrier that offers enjoyable flights with low fares for short distances and high frequency.

One of SWA's key strategies is its use of a point-to-point route system instead of the hub-and-spoke model. This allows customers to enjoy more direct nonstop flights.

SWA's success is attributed to effective cost control and internal marketing, which reduces connections, delays, and overall travel time. The airline keeps its operations streamlined by providing one class with open seating, no meals, and a fleet of Boeing 737 aircraft for cost-effective training and maintenance. Additionally, SWA utilizes a ticketless travel system to avoid paying commissions to travel agents. However, in comparison to its competitors, SWA does not offer certain in-flight amenities like full meals or in-flight entertainment.

SWA does not assign seats, but rather assigns each passenger a boarding section when they purchase their ticket, following the "first come, first serve" theory. This open seating policy is both a weakness and a strength. In comparison to other airlines, SWA may have smaller fleets, less brand recognition, and weaker code-sharing alliances. The success of SWA in the present and future is influenced by various external factors.

The growth of SWA in the future is affected by various positive factors, such as the travel culture in the U.S., rising consumer income, and new opportunities for destinations in untapped areas. However, there are external threats that have a significant impact on SWA's future success. These threats encompass fuel prices, tax regulations, weather conditions and natural disasters, political circumstances, and strong competition from both air and ground transportation alternatives. Furthermore, the economic stability of the country

plays a vital role in determining the viability of the airline industry since it affects disposable income levels and production costs.

The airline industry faced two major challenges after the 9/11 attacks: restoring customer confidence and managing increasing fuel expenses. However, there is positive news as incomes in the US have been steadily rising, and air travel is now seen as a necessity rather than a luxury. The outcome of ongoing negotiations between SWA and its pilots will be crucial for shaping the company's future.

In terms of regulations, deregulation in 1978 led to the emergence of many new airlines. However, this had minimal impact on SWA as it was already profitable. Currently, the FAA is responsible for regulating and overseeing all aspects of civil aviation.

The agency has various roles, including regulating commercial space transportation and developing new aviation technology. It also implements programs to control noise pollution and mitigate environmental effects. In collaboration with the Department of Homeland Security, it develops programs to address safety and security issues.

In the 21st century, people's travel choices are influenced by lifestyle, values, time sensitivity, price sensitivity, and family considerations. Southwest Airlines (SWA) offers more affordable options compared to its competitors and has excellent on-time statistics. Moreover, SWA was the first airline to introduce a priority boarding option for families with young children.

The recent removal of "family first" boarding and "cattle call" boarding may impact how customers perceive the company. Industry experts predict that there will likely be minimal negative consequences from the former and minimal positive impact from the latter, considering their value and convenience. Competitive-wise, the airline industry is currently recognized as an oligopoly, with a stable number

of well-known competitors and high barriers to entry. Southwest Airlines (SWA) has consistently been the most profitable among all airlines, largely attributed to their consistent service and effective cost management.

In the competitors section, one can review the technology strategy of Southwest Airlines (SWA). SWA capitalized on the growing internet usage in the last decade by being the pioneer airline to establish an online website. Moreover, they were also the first to introduce ticket-less travel and online boarding passes. This innovation enabled customers to bypass lengthy ticket queues and simultaneously reduced company expenses. Notably, their website was the most visited on the internet during 2000 and even incorporated email alerts for airfare sales. SWA consistently harnesses technological progressions to enhance customer convenience and safety.

COMPETITOR ANALYSIS

Generally, airlines engage in competition based on price, services provided, markets served, schedule (frequency and flight times), amenities, and frequent flier programs. As depicted in Figure 4, SWA holds the second highest market share after American Airlines, surpassing larger and more established companies such as United and Delta. The primary differentiating factor among SWA's competitors is maintaining a low-cost structure.

The airline industry faces competition from ground transportation options like buses, trains, and cars; however, these alternatives are not as time-efficient. Key competitors with low fares include Air Tran Airways, Jet Blue Airways, and Continental Airlines. Among them, Southwest Airlines holds the largest market share at 12%, followed by Continental Airlines at 8%, Jet Blue at 4%, and Air Tran Airways at 3%. The main focus of this paper is to examine why Southwest Airlines is currently regarded as the most successful airline. Success in this context refers to achieving a desired or

intended outcome.

Southwest Airlines (SWA) is thriving in terms of financial success, employee contentment, and customer satisfaction. The primary objective of most companies is to generate profits, and Southwest has achieved profitability in 34 out of its 36 years in operation. The key to their success lies in providing an easily accessible and affordable product tailored to specific customer segments. However, offering low fares is not the sole strategy employed by SWA. Their achievement can be attributed to adopting a low-cost business model, which includes utilizing a single type of aircraft, operating an efficient point-to-point route system, and maximally optimizing their assets.

The other major airlines compete by adding benefits and luxury, resulting in added costs. Their proposition has been, and still is, 'We have something more over what other airlines are offering.' SWA, on the other hand, thinks differently by targeting customers who value service and convenience rather than extra luxuries. SWA further reduces costs and increases profitability through their successful website, quick turn-around times facilitated by efficient employees and an open-seating policy, and the industry's top fuel hedge program.

Southwest Airlines has a unique approach to its business model that revolves around prioritizing its employees. The chairman of the airline highlights the importance of putting employees first, as it leads to exceptional care and service provided by them. Consequently, this approach results in customer loyalty and shareholder satisfaction. As a result of this unwavering commitment, there exists an environment of trust and respect that sets Southwest apart from its competitors. The airline's pilots receive the highest salaries in the industry, and the company has never resorted to salary cuts or layoffs.

The employees demonstrate a commitment

to providing excellent customer service. They strive to embody the company's mission statement of warmth, friendliness, individual pride, and Company Spirit. The company's symbol of freedom goes beyond mere advertising. Instead, it represents the company's dedication to offering customers friendly, frequent, convenient, point-to-point, punctual, and low-cost flights. Consequently, the company has achieved the industry's lowest customer complaint rating and highest profit margin, establishing itself as the most prosperous airline.

CONCLUSION
Southwest Airlines is the only major airline that has a strong score on the attribute of low-priced fares. This is a significant brand equity for the airline. However, it cannot rely solely on price competition to stay competitive, especially with the presence of rivals like JetBlue and AirTran. Thankfully, Southwest Airlines also prioritizes other important factors including frequency and convenience of scheduling, facilities, transportation safety and security procedures, customer service, and cost controlling.

The company has a strong competitive advantage, which gives them a certain future. However, predicting the success of airlines is challenging, even with forecasting and hedging. To ensure future success, continuous scanning of the environment and adaptation are vital. Southwest Airline's current success with their business plan and marketing strategy makes them a company worth watching.