(Perreault, W.E., et al., 2004).
The product is simply providing the right product to the correct target market. Southwest Airlines offer its customers air transportation with no frills. Southwest also offers good customer service with outstanding baggage handling. In fact, they have been awarded the prestigious Triple Crown for Best On-Time Record, Best Baggage Handling, and Fewest Customer Complaints. Southwest uses the Boeing 737 aircraft exclusively, which provides the same conveniences as other competitive discount providers. The airline also offers ticket-less reservations that can easily be made on the internet. How has Southwest achieved such phenomenal success in the face of stiff competition? Basically, Southwest offers no-frills service at low fares on relatively short flights. Additional benefits the airline provides include simple scheduling, ticketless travel, and point-to-point service. The major strength of Southwest Airlines comes from its personnel. Southwest sustains a workforce of 29,000 employees while maintaining a low turn-over rate. The company creates a family oriented culture that inspires teamwork and extracts lots of work from its employees in providing top-notch customer service. Employees team together as a committee to discuss ways of improving the workforce, enhancing service, and reducing customer complaints. Southwest Airlines has created a can-do culture inside the company, and this culture is the spirit of the organization. Now that we've seen the product, let's look at the place. (Matthew Brelis) (Southwest Airlines) (Perreault, W.E., et al., 2004).
The place is getting the product/service to correct target market's place at the right time. Southwest's core marketing strategy is short-haul domestic routes with an average flight length of 394 miles that typically lasts about an hour, allowing the airline to be at or near top in periodic measures of on-time performance. Southwest further takes advantage of serving airports that are readily accessible, rather than using large, crowded international airports. Low fare airlines compete in the segment of the market that accounts for approximately 40 percent of all passenger traffic in the United States. Before starting service to a new city, Southwest first launches an extended public relations program that emphasizes community relations, special events, and direct marketing. The intent is to build awareness of Southwest Airlines and make it a part of the community even before starting service in a given city. For example, in 1996, The CEO Kelleher was contemplating whether or not to expand operations in Florida. After carefully analyzing the pro and cons, the rest is now history. Expanding into Florida offered Southwest readily opened doors to a huge tourism industry. How could Southwest resist with Florida's countless miles of shoreline, its world-renowned beaches, its many theme parks like Walt Disney World, and its major cruise-line industry. Florida is undoubtedly one of the most sought after vacation spots in the United States. By integrating this service with existing routes along with Southwest's loyal customer base, the company was able to gain a solid foothold in Florida. (Southwest Airlines) (Perreault, W.E., et al., 2004).
The third P, Promotion, is mainly concerned with telling the target market about the right product/service. Southwest carefully selects new markets where there are too few flights and often high fares. When it enters the market, fares drop by as much as 70 percent. This action often triggers a price war that quickly turns into tremendous benefits for customers and increases air traffic in that area. Southwest Airlines employs two major price strategies, a variable - price strategy and a low - price strategy, to compete against other airlines. Passengers would not fly at high prices, and demand for air travel is highly elastic. To fend off competition from new airlines that attempt to imitate its low-price strategy, Southwest Airlines should continue to focus on their lower cost strategy. By focusing their efforts on innovative processes to cut costs, they can continue to offer lower prices to their customers while simultaneously boosting customer loyalty. (Matthew Brelis) (Southwest Airlines) (Perreault, W.E., et al., 2004).
Southwest Airlines' main strength lies in its low-fares. The airline is best known for its three categories of ticket prices, and if tickets are purchased far enough in advance the customer stands a good a chance of reaping a huge discount. Southwest keeps its operating costs down by not offering meals on their flights; however, they do offer a variety of snacks. Southwest Airlines also works especially hard to control costs by reducing employee training expenses and cutting spare-parts inventories by using only a single type of aircraft. Moreover, Southwest Airlines focuses on ways to lower cost measured by available-seat-miles with a challenge to fly airplanes with near the maximum seating capacity. In addition, Southwest introduced innovated measures to curb overhead costs by introducing ticket-less travel, which saved the company 21 million dollars. Southwest also reduced employee turnover rates with innovative programs, further reducing operational costs and saving millions of dollars. The key strategy of flying only Boeing 737 jets further cut costs because all of Southwest's pilots are certified to fly any plane within its fleet. Additionally, it's much cheaper to keep parts and spares for only a single aircraft model. Perhaps marketing's most ingenious maneuver was contracting for aviation fuel years in advance, so that SWA was able to stockpile huge quantities of fuel while prices where considerably lower than nowadays. This is one major reason why Southwest is able to under price its competition. (Southwest Airlines) (David Carter, et al) (Perreault, W, E. McCarthy, J.)
In summary, the marketing mix has four elements consisting of: product, place, promotion, and price. This paper has thoroughly discussed how each of these elements impacted Southwest's ability to launch a highly productive marketing campaign that continues to grow in revenue and beat their competition. In a nutshell, the marketing mix simply stated is the glue that holds everything together its four elements must be carefully interwoven from inception of service through sales and customer support. As Southwest continues to grow in the US market, I expect to see them expand their operations to the international arena in the years to come.
References
Perreault, W, E. McCarthy, J. (2004). Basic Marketing (4th ed.) New York: McGraw-Hill.
http://phoenix.edu/resources
Matthew Brelis. Herb's Way. Boston Globe (Nov 2000) Newspaper Company.
http://people.bu.edu/rgleason/herb_s_wayp.html
Dave Carter. et al. Hedging in the Aircraft Industry. The Case of Southwest Airlines
(Nov 2004). http://www.nd.edu/~mpoetzin/Stuff/Fuel%20Hedging%20%20in%20the%20Airline%20Industry%20Case.pdf
Southwest Airlines. (2005) Retrieved March 20, 2006 from,