2. THE COMPANY
Major U.S. airline and the world's largest low-cost carrier, headquartered in Dallas, Texas
Provides scheduled air transportation in the U.S. and near-international markets
Serves 96 destinations in 41 states
THE INDUSTRY
Provides air transportation for passengers and cargo over regular routes and on regular
schedules
COMPETITORS
American Airlines Group Inc., Delta Air Lines Inc., United Continental Holding Inc., JetBlue
Airways Corporation
4Ps
Product: Scheduled flights, car rental, hotel reservations
Price: Flexible pricing policy, different fare categories, rewards program
Place: Their products are sold online and on all the airports they serve
Promotion: TV, Internet, media, in-airport advertising, e-mail newsletters, DING!, charity
events and sponsorships
3. ECONOMIC ENVIRONMENT
Domestic travel peaked at 681.9 million enplanements in 2007 before falling 4.1% and 5.1% in 2008 and
2009, respectively
The decline in domestic travel ceased in 2010, rising 1.9% from the previous year, as the economic climate
stabilized
Growth of additional 1.3% in 2014
Advanced hedging program that is continually trying to determine future cash flows relating to jet fuel
prices
USE OF TECHNOLOGY
Computerized airline reservation systems, flight operations systems, telecommunications systems, websites,
maintenance systems, check-in kiosks and in-flight entertainment systems
Wireless booking service through mobile phones, and proactive paging service for travel and flight
information updates
Automatic Dependent Surveillance Broadcast (ADS-B). This system uses GPS satellite signals to give air
traffic controllers and pilots more accurate information to promote safety in the sky and on runways
Network Enabled Weather program aims to reduce delays associated with bad weather. Weather is
estimated to be the source of about 70.0% of airport delays annually
4. PRODUCT LIFE CYCLE (Scheduled flights)
Maturity stage (sold since 1971, slowdown in sales growth)
To extend the life of the product: promotional campaigns, new features,
product mix, expanding the target market
SWOT ANALYSIS
Strengths: low prices, due to the low operating costs, modern cost efficient
flight network, service innovation, technical expertise, product innovation,
brand image, excellent customer service and customer support
Weaknesses: mostly domestic flights, huge lateness problem, no assigned
seats for passengers, mishandled baggage, the length of flight is not a factor
in the company reward system, restricted fare tickets
Opportunities: expand the business domestically and internationally,
redesign the booking service, improve their services and add new features
Threats: increasing operating cost, imminent danger of terrorist attacks,
decreased number of business travelers, being copied
5. SUPPLY CHAIN
Key buying industries: Consumers, Public Administration, Freight Forwarding
Brokerages and Agencies, Couriers and Local Delivery Services
Key selling industries: Aircraft Maintenance, Repair & Overhaul in the US, Aircraft,
Engine & Parts Manufacturing in the US, Aircraft Transportation Equipment
Wholesaling in the US, Airport Operations in the US, Gasoline & Petroleum
Wholesaling in the US
B2B & B2C
Business travelers are much less responsive to price changes
Demand for business travel tends to rise when corporate activity in the country
increases
Competition from substitutes such as video conferencing is on the rise
Southwest Airlines is rated among top 15 B2B advertisers in USA
Demand for leisure travel is generally closely linked to disposable incomes and leisure
time availability
Other factors are location of the consumer and population density in the area
B2C marketing includes all the different delivery channels that can reach to potential
customers, main one being their website
6. MARKETING METHODOLOGY
Customer perception of lowest fares airline
Bags fly free
Pets friendly
Rapid Rewards Program
Wi-Fi onboard
Excellent customer service & support
Friendly & fun staff
Response team to handle the social media
7. “We like to think of ourselves as a Customer Service
company that happens to fly airplanes”
(Southwest Airlines Co., 2014).
