Summary

Southwest
Airlines was organized due to the “consumer dissatisfaction with the service of
existing carriers” and the increasing need for an air service between the cities;
Houston, Dallas-Fort Worth, and San-Antonio. Braniff International Airways and
Texas International Airlines were initially considered the biggest competitors,
but TI was dismissed because of its dull and bland advertisement image. Aside
from the publicity, there was a pricing issue Southwest Airlines need to solve
to compete against Braniff.

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Recommendations

Firstly,
to sustain Southwest’s presence in a long term, they must come up with their
own mantra and slogan instead of having wide variety of messages to create an
image of what Southwest airline represent. Some of the messages could be “the cheapest
airline” and “best customer service”. The Bloom agency’s advertising should be
changed. Because Southwest’s US advertising figure was towards more “fun and
obvious” approach according to Figure B, they should use words like vacation or
summer. The word, “love” does not match the company’s image and what they stand
for. Article gave us the key evidence on page 11 “southwest only offered 8
flights a day on Dallas-San Antonio route, versus 33 flights by their major competitor”.
From my perspective, it happened because the consumers did not get the message
sent by the agents. It needed to be obvious and fun.

If
Southwest Airlines want to increase their price little bit, they need to provide
benefits other than low-fare price such as free bag checking. I think Southwest’s
“lower cost and better service” strategy is what consumers are seeking, which
reflects that Southwest is not product oriented, but consumer oriented. They
need to understand they are not in the airline business, they are in the customer
service business. Their service will be basic, but customers are already
expecting that from what they are paying for. As long as they won’t hide secret
fees to other areas and give what consumers are expecting, Southwest will
succeed in the long run. Therefore, I will recommend the company to stick with the
break-even pricing strategy for now.

Not
only Southwest’s point-to-point routing can be flexible as they can choose
whichever route more profitable, but also having frequent departures instead of
having more destination can simplify structure and allows them to save some of
their cost. I believe in the long run, the competitors who did not match
Southwest airlines fares will ultimately lose and will withdrew from the market,
and the airlines who did charge the same price will see their consumers
increasing but their profit will be decreasing because of bigger operation cost
in the end.

 

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