The Effect of Consumer Behavior on Southwest Airline’s Market Strategies

In: Business and Management

Submitted By ccallahan79
Words 2197
Pages 9
The Effect of Consumer Behavior on Southwest Airline’s Market Strategies
Southwest Airlines provides flight transportation to leisure travel and business travel clients. While they specifically cater to each of these areas of segmentation, Southwest Airlines organizationally competes on a low cost strategy. The company’s approach to the market is to provide a low cost option to both consumer segments, while providing top-notch service and convenience. Southwest’s strategy targets business class travelers, making corporate partnership agreements a large part of their marketing and finance strategy. In catering to the business class bargain hunter, Southwest has established a value concept of customer loyalty and convenient services. Southwest has been able to capitalize this market segment to become the largest domestic airline while also able to maintain the highest customer satisfaction level in the industry.
The company is able to maintain partnerships and brand themselves as an affordable business travel option by providing discount partnerships with affiliate businesses. This allows the airline to maintain market share by providing financial motivations for its business partners to incentivize them to continue to patronize Southwest Airlines. They actively promote their schedule of frequent non-stop flights to major city hubs as well as surrounding cities, proving to be a practical option for business class travelers. Southwest’s business traveler value concept extends to additional accommodations such as first class boarding, frequent flier credits, and a complimentary on board cocktail (Moline 24). Renovations to allow for roomier seats, power outlets and work station counters allows Southwest to provide specific product differentiation that is attractive to business travelers, while maintaining their competitive cost strategy structure.
The company is able…...

Similar Documents

Consumer Behavior in the Asian Market

...might mean losing loyal customers. To solve this Vladimir Djurovic, president of Labbrand, believes that “instead of renaming, Saab could consider developing a better tagline to fit the Chinese market and make the brand more vivid in the imagination of Chinese consumers”. Chivas Regal Trademark Case • Chivas Brothers failed to establish that the spirits brand was “well-known” in China before the registration of Chivas Regal clothing in 2003, which would have been grounds to deny the application.Before the 2003 registration by the Wenzhou squatter, Chivas Brothers (the brand owner) had registered the marks in a number of Classes, including 33, which includes alcoholic beverages. However, just because a brand owner registers the mark in one Class this does not automatically protect against other registrants for different goods/services or for products in other Classes. The board has said the Zhejiang man didn’t violate Chinese trademark law because the brand is used in different kinds of products. • These disputes are won or lost on evidence. Companies that are organized, keep good records, and enjoy management continuity in their overseas operations can prevail, but if a brand owner is unable to come up with sufficient documentation, the squatters will prevail. In terms of the market, this squatter has the right to sell certain types of clothing with the Chivas brand on it, or license/sell that right to third parties. Chivas may therefore wish to purchase the mark, if......

Words: 7595 - Pages: 31

Southwest Airlines Organizational Behavior

...Southwest Airlines Organizational Behavior Herbert David Kelleher led Southwest Airlines to over 30 consecutive years of profitability, first as the company's cofounder and legal counsel from 1966 to 1982, then as its president, CEO, and chairman from 1982 to 2001. Southwest Airlines was incorporated in Texas and is headquartered at Love Field just outside of Dallas. Customer Service started on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities; Houston, Dallas, and San Antonio. Today, Southwest operates 550 Boeing 737 aircraft among 72 cities. Southwest topped the monthly domestic originating passenger rankings for the first time in May 2003. Yearend results for 2010 marked Southwest's 38th consecutive year of profitability. Southwest became a major airline in 1989 when it exceeded the billion-dollar revenue mark. The company has roughly 35,000 employees located in 72 cities throughout the country. In 2010, Southwest Airlines had total operating revenue of 12.1 billion and net income of 459 million. The culture at Southwest Airlines prides itself on their unique and positive organizational culture, an encouraging working environment, and exceptional customer satisfaction.  Southwest proudly declares their distinguishing factors in the airline market, “[w]e are a company of People, not planes.  That is what distinguishes us from other airlines” (Buller & Schuler, 2006, p.118).  Not only do competing airlines attempt to mimic this strategy but......

Words: 2262 - Pages: 10

Consumer Behavior: Jetblue vs Southwest Airlines

...Consumer Behavior Consumer Behavior: Contrast Jet Blue vs. Southwest Airlines Trident University MKT501 CS1 Identify key external factors that affect the passenger airline industry and explain how that impact occurs There are several external factors that affect the passenger airline industry. Some of the factors that affect the industry are economic crisis, instability in aviation fuel price, and environmental factors. I will elaborate more in detail in the following paragraphs on these factors. The first area I want to talk about is our countries current Economic Crisis, and in my opinion drives all the other factors that affect airline industry’s the most. The current economic situation is not good and therefore will have an effect on what a customer will or will not do. Air travel is very expensive as it is, in my opinion, so a sluggish economy will add more pressure on an individual or family thinking of flying anywhere. The second area that affects the airline industry is the cost of aviation fuel. If fuel prices are high, the airline will have to charge more for tickets. As I mentioned earlier, higher ticket prices is not what the public wants in our current economy. The airline industry is a business and in order to make money and continue to provide the service, the company has a breakeven price, approximately 66% of their operating cost (Airline Economics Break Even Load Factors Paragraph). If the company......

Words: 2861 - Pages: 12

Consumer Behavior

...CONSUMER BEHAVIOR PART ONE CONSUMER BEHAVIOR INTRODUCTION As the twentieth century has come to a close and we have moved into the third millennium, we can see many developments and changes taking place around us with all the industries and firms within each industry trying to keep pace with the changes and diverse needs of the people. Though for decades together, marketers have regarded ‘customer’ as the king and evolved all activities to satisfy this concept is gaining more momentum and importance today. This can largely be attributed to the prevailing market situation. Not only competition has become intense but over an above with the market being flooded with many products. The challenge before the marketers is to understand the diversity of consumer behavior and offer goods and services accordingly. Today the company image is built and made known by its customers. Thus the success of the firm will be determined by how effective it has been in meeting the diverse consumer needs and wants by treating each customer as unique and offering products and services to suit his needs and creating a life time value and relationship with him. (Nair 2004; 3) Marketers have come to realize that their effectiveness in meeting consumer needs directly influences their profitability the better they understand the factors underlying consumer behavior, the better able they are to develop effective marketing strategies to meet consumer needs. (Assael 2001; 3) Today, the digital......

Words: 37134 - Pages: 149

The Effects of Brand Relationship Norms on Consumer Attitudes and Behavior

...87  2004 by JOURNAL OF CONSUMER RESEARCH, Inc. ● Vol. 31 ● June 2004 All rights reserved. 0093-5301/2004/3101-0008$10.00 The Effects of Brand Relationship Norms on Consumer Attitudes and Behavior PANKAJ AGGARWAL* The key premise underlying this work is that when consumers form relationships with brands they use norms of interpersonal relationships as a guide in their brand assessments. Two relationship types are examined: exchange relationships in which benefits are given to others to get something back and communal relationships in which benefits are given to show concern for other’s needs. The conceptual model proposes that an adherence to or a violation of these relationship norms influences the appraisal of the specific marketing action and also the overall brand evaluations. Results of three experiments provide converging evidence in support of the theory. Branding and brand-based differentiation are powerful means for creating and sustaining competitive advantage. Prior research has examined differences in how consumers perceive and evaluate brands, for example, through investigating brand equity (Keller 1993; McQueen, Foley, and Deighton 1993), brand personality (Aaker 1997; Plummer 1985) and brand extensions (Aaker and Keller 1990; Nakamoto, MacInnis, and Jung 1993). More recently, researchers have noted that consumers differ not only in how they perceive brands but also in how they relate to brands (Fournier 1998; Muniz and O’Guinn 2001).......

Words: 11722 - Pages: 47

Consumer Behavior

...very important to attract and retain customers which can significantly increase EK share of the market and expand business opportunities. By doing this, the airline should understand consumer behavior, which is to understand the consumers’ mind and discover the challenges and to figure out the potential customers to maintain/develop the relationship and reinforce a consistent service provided. Marslow’s Hierarchy of the travel needs Maslow's hierarchy is to explain the needs of customers, it represents by the shape of a pyramid with the largest, most fundamental levels of needs at the bottom and the need for self-actualization at the top. Physiological: Consumers have needs and wants. Consumer needs to travel because they want to relax and gain an enjoyable experience. If they travel because only they need, they will not consider selecting the different carriers, class of travel etc. such as Cathay Pacific, Air France, business class or economy class. Safety : Once the needs/wants are identified, consumer will concern the safety for flying with the aeroplanes and afraid they will lose their life for this business trip/leisure trip. They will select the carrier based on the age of fleet, accidents record, corporate image of the carrier etc. If consumer fear of travelling because of safety, it is hard to move on the next stage of Maslow’s Hierarchy. It is the reason why consumer will choose the good credibility airline to travel like Emirates airline. Social: It is......

Words: 1790 - Pages: 8

Consumer Behavior

...Value-the customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers. Customer Relationship Management-is the overall process of building and maintain profitable customer relationships by delivering superior customer value and satisfaction. Customer Satisfaction-depends on the product’s perceived performance relative to a buyer’s expectations. Demands-human wants that are backed by buying power Exchange-is the act of obtaining a desired object from someone by offering something in return Internet-a vast public web of computer networks that connect users of all types all around the world to each other and to an amazingly large “information repository’ Market-is the set of actual and potential buyers of a product Marketing-the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return Marketing Concept-holds that achieving organizational goals depends on knowing the needs and wants of target markets and building profitable relationships with them Marketing Myopia-many sellers make the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products Market Offering-some combination of products, services, information, or experiences offered to a market to satisfy a need or want Needs-states of felt deprivation Partner Relationship......

Words: 50597 - Pages: 203

Southwest Strategy

...I. Company background Southwest Airlines is one of the US based major air carrier based out of Dallas Texas where it commenced operations on June 18, 1971. It was founded by Rollin King and Herb Kelleher got together and decided to start a "different kind of airline”. " They began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline" (1). Southwest started with three Boeing 737 aircrafts with focus of serving mainly three cities in the state of Texas; Houston, San Antonio and Dallas. By summer of 1993 Southwest already became the 7th largest airline in the US. Today Southwest operated more than 3,400 flights a day serving 93 destinations across the US and five other countries in the Americas with over 665 aircrafts in its fleets. Southwest strategy is clear and simple, it’s a three headed monster strategy that focuses on, short-haul, high -frequency and low-cost. The NYSE symbol for the company is LUV, which indicated the home of the company at the Dallas Love Field airport and the theme of the cordial relationship created and maintained between Southwest employees and its customer. On Jan 22nd 2014, CEO and chairman of the board announced a record annual income of $1.1 billion or $1.64 per diluted share which is 20 cent higher than the industry average return per share during the same period. ......

Words: 2632 - Pages: 11

Southwest Strategy

...I. Company background Southwest Airlines is one of the US based major air carrier based out of Dallas Texas where it commenced operations on June 18, 1971. It was founded by Rollin King and Herb Kelleher got together and decided to start a "different kind of airline”. " They began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline" (1). Southwest started with three Boeing 737 aircrafts with focus of serving mainly three cities in the state of Texas; Houston, San Antonio and Dallas. By summer of 1993 Southwest already became the 7th largest airline in the US. Today Southwest operated more than 3,400 flights a day serving 93 destinations across the US and five other countries in the Americas with over 665 aircrafts in its fleets. Southwest strategy is clear and simple, it’s a three headed monster strategy that focuses on, short-haul, high -frequency and low-cost. The NYSE symbol for the company is LUV, which indicated the home of the company at the Dallas Love Field airport and the theme of the cordial relationship created and maintained between Southwest employees and its customer. On Jan 22nd 2014, CEO and chairman of the board announced a record annual income of $1.1 billion or $1.64 per diluted share which is 20 cent higher than the industry average return per share during the same period. ......

Words: 2632 - Pages: 11

Navy: Analysis of Consumer Behavior and Marketing Strategies

...1. Introduction 1.1. Origin Our esteem faculty Md. Farhan Faruqui assigned us a product which is “NAVY” cigarette and completes a study that covers all-important factors of consumer behavior relating to this product. After a brain storming session with in the group we have been studied the behavioral pattern of “NAVY” cigarette. It is due on July 31, 2007. 1.2. Objectives Followings were the objectives of the study: Broad objective: To develop profile of “NAVY” cigarette. Specific objectives: To attain the broad objective following specific objectives were pursued: □ To know briefly about the “NAVY” cigarette industry. □ To find out the group influence on “NAVY” cigarette. □ To identify the motivational factors that influences the “NAVY” cigarette. □ To find the situational influences that affects the “NAVY” cigarette. 1.3 Scope This study focused “NAVY” cigarette smoker of Dhaka City. It covered time span of 15 days starting from 16th July. It is a comprehensive study of the consumer's belief about the “NAVY” cigarette. The report focuses on the Consumer's belief, perception, lifestyle etc. and the currently what consumers are thinking about the “NAVY” cigarette. 1.4 Limitations Several problems were arises to complete this study. They were: 1. Some of the respondents failed to complete the questionnaire due to unavoidable reasons. 2. The management of “NAVY” did not want to reveal all the information about the product 3. For most of......

Words: 7591 - Pages: 31

Consumer Behavior

...Case study one 1. What behaviors are involved in online grocery shopping? The online grocery shopping consists of various types of behaviors; such as information contact, funds access, store contact, product contact and transaction behaviors. Information contact behavior is mostly a part of online grocery shopping, where consumers used to search their required products and order through online processes. The fund access behavior is also used in online grocery shopping while purchasing products through online by using their credit/debit cards or net banking. Sometime, customers used to order through online but visit the nearest stores to bring the product after inspecting; such as fresh vegetables, milk products and meat or animal proteins etc. therefore, they must search for the nearest store and product and contact them to bring those pre-ordered products. There are several behaviors involved in online grocery shopping. For peapod grocery, the order were filled at affiliated stores and delivered to the customer’s home in a ninety minute time period; this save the customers time and reduced the stress that grocery shopping often causes due to lack of time and overcrowding. For these conveniences, the consumers were willing to pay a monthly fee as well as a fee per order that included the services of packaging, transporting, and delivering. Most of the items available for this service are brand name goods, which caused little risk in the consumers mind in purchasing their......

Words: 4522 - Pages: 19

Segmentation and Target Market for Southwest Airlines

...Segmentation and Target Market for Southwest Airlines Steven Garnes MKT/571 August 10, 2015 Denise A. Rueb Segmentation and Target Market for Southwest Airlines Introduction Southwest Airlines was formed in 1967 by Rollin King and Herb Kelleher and started service in June of 1971. The airline is headquartered in Dallas, Texas and originally operated flights within the state of Texas. The company has since expanded and now operates flights from Dallas to almost all major cities in the United States and is considered the largest low-cost carrier in the country. “Southwest seeks to offer a travel product that is built around flights targeted to specific demographics and ticket pricing that is simplified so that passengers know exactly what they getting for what they pay” (Bhutada, 2009). Market Brand Southwest has created a strong market brand by focusing on points of difference. “Points of difference are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand” (Kotler, Keller, 2012). The points of difference for Southwest has been its focus on reliability, the value the airline offers its customers, and the fact it’s a fun airline to fly. Target Market Market segmentation in the airline industry is not as straightforward as it may seem. Airlines may consider it common sense to simply separate the market into business and economy class passengers.......

Words: 2006 - Pages: 9

Consumer Behavior and Marketing Strategy

...e 9e f o no ti d E h n Ne h T i t i The Ninth Edition of a k oo l lo o k a r a m mar a he bbeha l a n Anal fo of a he b r e m s noc ; nci ticognition; consumer beha u oo n r u c urt s structur t l a na r e m s noc consumer anal u N i n t h E d i t i on CO N SU MER BEH AVI OR & MARKETIN G STRATE GY J. Paul Peter Jerry C. Olson Consumer Behavior & Marketing Strategy Ninth Edition J. Paul Peter University of Wisconsin, Madison Jerry C. Olson Pennsylvania State University Olson Zaltman Associates CONSUMER BEHAVIOR & MARKETING STRATEGY Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2010, 2008, 2005, 2002, 1999, 1996, 1993, 1990, 1987 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 CCW/CCW 0 9 ISBN 978-0-07-340476-9 MHID 0-07-340476-4 Vice president and editor-in-chief: Brent Gordon Publisher: Paul......

Words: 278574 - Pages: 1115

Consumer Behavior & Marketing Strategy

...New Features The Consumer Insights section of each chapter shows the relevance of consumer behavior concepts and gives students real-life examples of marketing strategies. Updated chapter-opening vignettes discuss real-world situations involving aspects of consumer behavior. Each chapter concludes with a “Back To…” section that summarizes how the chapter material relates to the opening examples. MD DALIM #1054261 10/14/09 CYAN MAG YELO BLK Revised Marketing Strategy in Action sections focus on consumer analysis issues facing real companies. These cases and accompanying discussion questions help to integrate consumer behavior information in the marketing strategy development process. Retained Features The inclusion of many real world examples of marketing strategies used by actual companies has been highly regarded by reviewers. These examples demonstrate how marketers use consumer behavior concepts while increasing student interest. Review and discussion questions, used for written assignments, in-class discussion, or essay exam questions, emphasize the understanding and application of chapter material to strategic marketing issues. To learn more about this text, please visit www.mhhe.com/peter9e e 9e 9e CONSUMER BEHAVIOR & MARKETING STRATEGY f o no ti d E h n Ne h T i t i The Ninth Edition of The Ninth Edition of Consumer Behavior & Marketing Strategy takes a close look a consumer behavior in order to guide the development of successful a koo l look at r a m marketing......

Words: 285269 - Pages: 1142

Consumer Behavior - What Are the Consumer Behavior Variables That Are Crucial to Your Understanding of This Market

... Consumer Behavior 1. You are the brand manager of a new line of light weight autofocus, economically priced digital cameras. Describe how an understanding of consumer behavior will help you in your segmentation strategy and promotion strategy. What are the consumer behavior variables that are crucial to your understanding of this market ? 2. Gillette, an established market leader in shaving products, is planning a foray into skin care products for men. How can the company use stimulus generalization to market these products ? Can instrumental conditioning also be applied in this marketing situation ? How ? 3. You have been asked to advise a means wear apparel manufacturer, to help them suitably segment their market and identify the most appropriate target segment. The company manufactures both formal and casual wear, and has a stylish, up market range. You want or to apply the VALSII typology to help them identify the target segments. Explain how would you utilize this approach and which segments would be the most appropriate for this manufacturer ? 4. Discuss the components of an attitude. Taking the example of a consumer enable purchase decision, explain what functions do attitudes play in consumer decision making. 5. How as a marketer of home appliances, would you use the knowledge of post purchase evaluation by consumer, to ensure that your consumers do not experience any dissonance ? Describe the response strategies you will......

Words: 362 - Pages: 2