This presentation shows a Branding Strategy project for an MBA class at USC Marshall School of Business. It suggests the increase of focus on the millennial consumer.

1. MK 533- Branding Strategy Project
Southwest Airlines
Fernando Alves

2. Problem Definition
• Southwest is facing severe competition as other airlines develop a
low-cost business model. Southwest wants to be the top of mind
among Millenials and Gen Z. As these generations are more likely to
spend on experiences rather then on assets, they are seen as a
strategic long term public for the company
• Southwest is already a preferred brand, could it become an esteemed
brand?
Problem Definition Brand Review Trends Recommendation Implementation

3. Who is Southwest?
• Reduce physical barriers that separates peopleCore Purpose
• To be the best domestic airline and top of mind of
consumersVision
• A customer service company that fly planes
• A fun company
• FOR love
Values
• Playful, sensible, funny, oddballPersonality
Problem Definition Brand Review Trends Recommendation Implementation

4. Who is Southwest?
• Free Checked in bags, fun crew,
simpler processes
Capabilities &
Features
• Customer service, cost efficiency
Core
Competencies
• Stress free travel (need)
• Not a price leader anymore (obj)
Needs &
Objections
• The experience on the flight was
as good as the whole trip
Desired
Outcome
Problem Definition Brand Review Trends Recommendation Implementation

5. The Millennial Consumer
Meet Mary, our primary Consumer
25 years old
Value
Experiences
more than
assets
Is lost with no internet
access
Values convenience,
but still wants a human
touch
Source: Euromonitor, Author Analysis
Problem Definition Brand Review Trends Recommendation Implementation

6. Consumer Decision Process
Trust
Good online reviews and friend
referral are key to the decision
making
Price
Market is commoditizing more as
it is easier than ever to compare
Loyalty
Loyalty plans provide non-cash benefits that
can steer the decision from pure pricing
Experience
Different experience promise will make the
consumer crave to try something new and to
develop loyalty over time
Problem Definition Brand Review Trends Recommendation Implementation

7. Industry trends and Benchmark (1)
Wifi on Board becoming essential Indirect competitors, such as railways and cruise
companies, are focusing on experience
Sources: Princess Cruises and Amway Youtube channels, Ibis Research
Problem Definition Brand Review Trends Recommendation Implementation

8. Industry trends and Benchmark (2)
Personalized communication
becoming more widely used
Use of fun to engage consumers and create sense of
community with the brand
Sources: Ryanair and Spirit websites
Problem Definition Brand Review Trends Recommendation Implementation

9. Ideas from outside of the industry
Dinner Time Stories use
augmented reality to elevate the
traditional culinary experience to
entertainment
WeChat combines messenger with
cab booking and online payment.
Sources: Euromonitor
Problem Definition Brand Review Trends Recommendation Implementation

10. Suggested Changes
• Reduce physical barriers that separates peopleCore Purpose
• To be the best domestic airline and top of mind of
consumers an agent for reducing barriers among
people
Vision
• A customer service company that fly planes
• A fun company
• Not only FOR love, but also AGAINST hate
Values
• Playful, sensible, funny, oddballPersonality
Problem Definition Brand Review Trends Recommendation Implementation

11. Suggested Changes
• Free Checked in bags, fun crew, simpler
processes, connected trip, facilitate interactions
among passengers and with crew
Capabilities &
Features
• Customer service, cost efficiency
Core
Competencies
• Stress free travel (need) Memories and
Experiences
• Not a price leader anymore (obj)
Needs &
Objections
• The experience on the flight was as good as the
whole trip
Desired
Outcome
Problem Definition Brand Review Trends Recommendation Implementation

12. A new brand
The Heart and the circle
• The heart is the current southwest logo and symbolizes the love for
their clients, also represented by their stock ticker (LUV)
• The heart can be used as a brand element in several campaigns, it is
an universal symbol of love and should not be removed
• The circle is the expression of the modified brand identity. It
represents unity of people from different races, backgrounds,
cultural preferences, ages, etc. It is the expression of the global tribe
that lives in harmony, that southwest expresses
• The circle also expresses the full connectivity offered during
Southwest Flights. It represents that Southwest now offers end-to-
end connectivity for creating and nurturing relationships during the
flight. Southwest will be now the first airline in the
A reminder that we are al part of the one big global tribe. We
are the circle around a single heart.
Problem Definition Brand Review Trends Recommendation Implementation

13. Brand Ideal
AirBnB campaign we accept is a relevant inspiration for
“New couple”- Natura Christmas Campaign 2017.
Everyone loves, everyone CAN love. Children are not born with prejudice
Everyone has something in common
Problem Definition Brand Review Trends Recommendation Implementation

14. Communication
Introduction of Bluey™,
the ice breaker.
Bluey has magic snowballs that turn
people’s heart into Southwest heart and
people become more gentle with
strangers
Focus on uncommon
connections.
Bring in public figures who disagree
about different issues to make peace.
Show understanding of other people’s
point of view.
Break Stereotypes by
telling stories
Once people explain their story, others
will empathize. Advertising focused on
stories can demystify prejudice and
biases
Problem Definition Brand Review Trends Recommendation Implementation

15. Implementation Tactics
Purchase
Moment
Airport and
Flight
Between trips
Main objective A pleasant, hassle free
experience
Ensure connectivity
and positive emotions
Learn about consumer
and get mind space
Activation
tactics
• Option of quick
purchase.
• Donation to non-
profit
• Free on airport and onboard
wifi
• Online trivia about destination
• Competition and prizes
• Happy Hour
• LUV Music festival
• Online travel forum
Media
• Offer aggregators
• Southwest App
• Website
• Airport Billboards
• Southwest App
• Southwest staff
• TV
• Social Media
Problem Definition Brand Review Trends Recommendation Implementation

16. “How Strongly People Believe in an Organization and on its basic precepts weighs
heavily on Success”
Thomas Watson Jr.
President and CEO
IBM 1952-1971

17. Appendix

18. Celebrate Love!
• More than just romantic love, celebrate love to your fellow human
beeings and other travelers
• Share recommendations, insights and care before and during the fly
• Online and offline: Games to promote bonding pre-boarding and
onflight
• Extend to other stakeholders – Provide employees with bonding and
volunteering opportunities
• Love the Disempowered – Have an option to donate a percentage of
the ticket to several different non-profit organizations on the
checkout page.

19. Airline Business Model Disruption

20. Market Characteristics
Industry Size, Growth and Growth Drivers
Airline Travel is an industry that traditionally operates with low profit margins and intense price
competition. The industry is projected to grow 1.5% per year, driven by rising levels of disposable
income, consumer confidence and corporate profits.
Players
The top 4 players hold 75.5% of the market. American Airlines, Delta, United, and Southwest. Other
relevant companies are Jet Blue and Spirit Inc.
Client profile
Clients can be segmented in multiple categories: Business(28.9%) and leisure(69%)* , coach(82%)
and business class(14%), frequent flyers and sporadic. Other forms of differentiation, psycographic
and by preferences, will be further explored. Business client travels 17 times per year on average,
80% of them are men aged between 35-55.
Major Stakeholders
An airline brand strategy must take into account not only it’s customers, but also travel agencies,
employees, investors, and regulators.
*The 2% remaining refers to freight and mail marketSources: IBIS Research, PWC

21. Market Practice trends
• Separate sales of additional items: Additional services and products are charged separately.
Preferential boarding, seat selection, extra bag check in.
• IT systems Modernization: Airlines are making investments to centralize their data storage,
Introduce flexible integration architecture, and upgrade from outdated heavily customized
systems. Also they are investing in customer facing systems, such as check in kiosks, online
booking, check in, miles status control. Proactive notification and mobile check in are major
trends
• Aircraft modernization: The introduction of lighter materials and superior design is allowing
airlines to increase the capacity of their aircrafts, while reducing fuel consumption and increasing
autonomy.
• Onboard Wifi: In the US, 83% of the flights have onboard wifi, 6% up from last year. A recent PWC
survey indicates that 54% of the passengers would opt for fast connectivity over a meal. Many
airlines are making wifi free for elite customers or for everyone.
• Sales of additional services: Southwest is leveraging it’s relationship with consumer to sell hotel
booking, car rental, and travel packages.
• Other trends: Self Service Nation, Airlines as retailers, Digital Travel Assistants, Experiential
Marketing, Inflight Engagement
Sources: IBIS Research, PWC, IATA

22. Consumer insights
Main consumer complains
• Delayed or cancelled flights: 12% of flights are delayed.
• Mishandled Baggage: 1.8%-2% of baggage is mishandled
• Oversales: 0.04% of passengers are voluntarily or involuntarily denied boarding.
Despite the relatively low incidence of complain generation events, these are very upsetting to
consumers, who can be very vocal to their close ones and on social media.
Consumer Rating: Southwest airline is the top rated airline by Consumer Affairs. This brand unique
personality seems to be a point of differentiation
Consumer Retention Programs: All airlines have mileage programs, sometimes in partnership with
credit card companies. Mileage programs are a huge revenue source for airlines, who gets 1.5 cents
to 2 cents per mile from the bank.
Sources: US Transportation Department, Bloomberg
“Airlines are earning upwards of 50 percent of [income]
from selling miles to a credit card company, which we
believe is a great business to be in,”
Joseph De Nardi, senior airline analyst

23. Brand Perception
Brand differentiation is commoditicized.
Southwest needs new points of differentiation

24. Consumer Decision Making
• Problem recognition
• The need to travel, desire to go on holiday
• Setting objectives
• Low fare, frequent service, schedule, network, comfort,
IFE
• Information search
• Internet, Travel guides, agents, GDS, TV holiday channels
• Evaluation of alternatives
• Different airlines, different services, different airports,
different modes,
• Purchase decision
• Booking
• Post purchase evaluation
• Assessed against objectives set (is this really the case?)

25. Sources
• https://search-proquest-
com.libproxy2.usc.edu/abiglobal/docview/1455164729/820652CC429E4605PQ/1
0?accountid=14749
• https://www.marketingweek.com/2016/12/12/norwegian-challenge-
establishment-uk-expansion/
• https://www.mirror.co.uk/travel/news/easyjet-opens-bookings-fearless-flyer-
11984337
• https://www.campaignlive.co.uk/article/easyjet-jet-off-ski-vccp/1449670
• https://www.campaignlive.co.uk/article/easyjet-transformed-customer-data-
emotional-anniversary-stories/1414488
• https://vimeo.com/208603591
• https://www.royalcaribbeanblog.com/category/category/marketing
• Euromonitor
• Ibis Research