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Transcript
SOUTHWEST AIRLINES
Presented By:•Sheraz Ahmed•Usama Tahir•Naveed Alam
Layout
• Introduction• Achievements• Strategies• Product• Target Market• Product Positioning• Building brand loyalty• Pricing Strategy• Conclusion
Introduction
Founded in 1967 by Rollin King, Herb Kelleher Started operations in 1971 with three Boeing 737s after
winning the lawsuits against themWell known for its Low Fare policy and low cost of
operationsPresently operating in more than 60 countries with over
500 Boeing aircrafts
Introduction (Contd.)
Operate more than 3300 flights a day35000 employees engagedThe United States’ most successful low-fare, high
frequency, point-to-point carrierKnown as a “discount airline” since 1973
Achievements
For the 12th year in a row, FORTUNE magazine recognized Southwest Airlines in its annual survey of corporate reputations in 2008.
2003 Selected as “AIRLINE FOR THE YEAR”2007 included in top 100 most innovative technology
organizationFirst airline to establish a home page on internetRanked number one in customer service36 consecutive year of profitability
Strategies
Fly short routes“Fun-LUVing Attitude” for in-flight15 minute turnaround time“Bags fly free” policyEmployees first, customer second policyLove Bites & Love Potions
DIFFERENTIATION STRATEGY
Strategies (Contd.)
A hedge is an investment position intended to offset potential losses/gains that may be incurred by a companion investment.
SWA used hedging for the following objectives:Plan towards profitability.Plan cash flows.Lower overall fuel expenses.
INTEGRATED LOW COSTS
Strategies (Contd.)
Use a single aircraft model (Boeing 737)Point to Point modelUse secondary airports (Less Congested)Operate in mid-sized citiesNo complementary meals
Product
Southwest’s product is Travel
Competition – not just other airlines but any mode of Transportation
1. Frequent, conveniently timed flights and low fares2. Point-to-point route system as compare to spoke-and-hub3. Direct nonstop
Target Market
Cost and value conscious consumers. Mostly maleSmall business executivesTravel short distancesPrefer low cost faresFrequent schedulesThe other half consists of Value conscious consumers (male, female, families and senior citizens)
MARKET SEGMENTATION
Product Positioning
• Only low fare• Short haul• High frequency• Point-to-point carrier• Fun to fly
Building brand loyalty
What is the southwest effect?
1. Air fares go down2. Tourist traffic increases
Pricing strategy
1. Charge the lowest possible fare2. Compete with all other forms of transportation, including
automobiles
Instead of increasing fares when market gets busier and more people are flying, it simply increases the number of flights
Conclusion
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