Pricing Strategy of Southwest Airlines

How do Southwest’s marketing objectives and its marketing mix strategy affect its pricing decisions?

Operating under an intensely competitive environment , Southwest Airlines carefully projects its image so customers can differentiate its product form its competitors .. To successfully secure its market position , Southwest needs to be extremely Cost-efficient ,Southwest has a well defined business model that uses single aircraft type ,short hauls ,secondary airports , point-to-point versus hub-and-spoke to keep its cost down.

Southwest tries hard to differentiate itself by doing seemingly wired things. For example, not assigning seats in its flights helps to reinforce its image that it gets passengers to their destinations when they want to get there, on time, at the lowest possible fares. By not assigning seats ,Southwest can turn the airplanes quicker at the gate. If an airplane can be turned quicker, more routes can be flown each day. That generates more revenue, so that Southwest can offer lower fares.

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The marketing objective of Southwest Airlines is to attract long term customers who will be loyal to Southwest Airlines and consistently fly their airline. To draw in repeat customers Southwest focuses on customer service and providing a positive experience while flying. The goal is to continually fill flights and bring the maximum revenue on every flight. Marketing Mix: For Southwest Airlines, promotions starts with the insightful understanding of customer benefits and how to translate those benefits into meaningful products and services.

If we look upon the customer’s services of the southwest we will come to know that southwest is providing excellent customer services, baggage handling, easier ticketing, flexible flight schedules, easier check in and check outs on the airport. In the success of southwest airline one of the greatest contributions is of the employees. (In 2004) Little Southwest served a total of 58 cities and 59 airports in 30 states and was offering 14 flights a day from Philly out of only two gates.

Two short of year s after Southwest had boosted daily nonstop flights from 14 to 53. It had added service to 11 new cities and quadrupled it numbers of gates 2 to 8, with its eye on 4 more. Promotional Advertisement for Southwest come in a variety of forms. They advertise on TV commercial, in print ads ,on the radio and through word of mouth. We can see that the core strength of the southwest airline is in its low fair. It is very important to know how southwest can afford such a low fair. The answer lies in control over operating costs.

Southwest do not offers meals during flights but they do offer snacks to their customers and southwest also save money by not offering training to their employees, Southwest Airlines tries to use maximum seat capacity, though their fairs are low but their plan never flew empty. In addition, Southwest introduced innovated measures to limit overhead costs by introducing ticket-less travel, and this strategy save them more than 20 billion. Southwest also save the cost by lowering the turnover ratio of the employees, southwest introduces highly innovative programs for employees to keep them motivated and satisfied.

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