Marketing Challenge Paper

Marketing Challenge Paper - The Marketing Challenge:...

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The Marketing Challenge: Southwest Airlines Case Analysis Team Detectives Principles of Marketing - BUS 346 Dr. Jeffery E. Danes December 3, 2010
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Executive Summary: Due to their unique strategy, Southwest Airlines has been one of the leading and fast- growing U.S. airlines in this nation. They have attracted an appealing taste to their consumers – with their unspeakable prices and service - that has allowed them to become a profitable and successful company. In the New York Times, an article written by the Bloomberg Business News, they calculated that “Shares of Southwest rose $2.625, to $21.50, on the New York Stock Exchange where 3.61 million shares were traded, almost five and a half times the three month daily average” (Bloomberg Business News). This prospering airline succeeds in the domestic market of airlines because of their unconventional, distinctive, and “cheap” strategy. In the article titled Southwest Blazes Profitable Trail, the author states, “What makes Southwest so special is that everything it does is the exact opposite of more conventional and costly U.S. carriers” (Morton). The initial business plan and strategy was very simple and straightforward; a trait that attracted people all over the U.S. Their number one reason for attraction is because of their low fares and tickets for flights – which is the ultimate bargain for consumers. This is due to the following reasons. Their planes flew from point-to-point rather than using the major airlines hub- and-spoke pattern. There were no assigned seating; essentially it was a first-come-first serve basis. Southwest served no meals, only snacks. They have the bring-your-own meal philosophy. This was a good aspect considering people do not fly airlines for the food and this also kept costs low – beneficial to Southwest and their customers. They did not charge passengers a fee to change same-fare tickets. There was no electronic entertainment which customers had to rely on the flight attendants for entertainment. In addition, they did not offer a retirement plan but offered their employees a profit-sharing plan, thus keep fixed costs low. Most importantly, Southwest provides key, signature customer service, an aspect that truly stuck to their consumers. Even in their mission statement accessible on their website, they strive for the “highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit” (Southwest Airlines Co.). Basically, Peter Morton could sum up the reasons of Southwest’s success in his article by saying, “Besides low fares, it is also renowned among U.S. passengers for its ultra-friendly service, low baggage loss rate, bring-your-meal philosophy and high frequency of service” (Morton). However, Southwest came across an obstacle during their course of success. They had to
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This note was uploaded on 01/06/2012 for the course BUSINESS 346 taught by Professor Jeffreydanes during the Fall '10 term at Cal Poly.

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Marketing Challenge Paper - The Marketing Challenge:...

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