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BRAND EXPLORATORY & STRATEGY REPORT
                          August 7, 2012
INVENTORY OVERVIEW
•  Key Product Attributes
  –  Price
  –  Customer Service
  –  Flight Times and Schedules

•  Bags Fly Free Marketing Campaign
  –  Focus on price savings vs. competitors

•  Strong Social Presence
  –  First airline to hit 3 Million Facebook Followers
  –  Over 1.3 Million Twitter Followers
WHAT PEOPLE ARE SAYING – PROS
                           “They	
  don't	
  suck	
  nearly	
  as	
  
•  Cheap flights            much	
  as	
  everyone	
  else.”	
  
•  Customer service                                 “Southwest	
  is	
  quickly	
  
                                                  becoming	
  the	
  class	
  act	
  of	
  
•  No fees                                          the	
  American	
  skies.”	
  

•  Choose your own seat             “Southwest	
  on	
  a	
  bad	
  day	
  
                                       beats	
  out	
  anyone.”	
  
•  Easy Check-in
•  On-time/Early Flights
•  Comfortable Seats
WHAT PEOPLE ARE SAYING – CONS

•  Seating/Boarding Experience

•  Limited departure/destination cities

•  Inconvenient gate locations
                                            “Southwest	
  saves	
  money	
  
•  No first class/luxury                   by	
  leasing	
  the	
  worst	
  gates.”	
  

•  Lacking on-board entertainment
                   “I	
  detest	
  the	
  chaos	
  of	
  the	
  
                 Southwest	
  boarding	
  process.”	
  
SERVICE HIERARCHY
                •  Wifi	
  on	
  all	
  planes	
  
 PotenFal	
  
                •  More	
  DesFnaFons	
  

                       •  Bags	
  Fly	
  Free	
  
Augmented	
            •  Swabiz.com	
  
                       •  A	
  Fun	
  Flight	
  
                              •  On	
  Fme	
  (ish)	
  
 Expected	
                   •  Reasonable	
  Price	
  
                              •  Friendly	
  Staff	
  

                                      •  A	
  à	
  B	
  
   Core	
                             •  Safety	
  
IN DEPTH INTERVIEWS
WHO DID WE INTERVIEW?
  •  18 Travelers at Tampa & Jacksonville Airports
  •  66% leisure travelers, 33% business travelers
PURPOSE
  •  Determine Southwest’s brand image and associations
  •  Understand customer motivations when purchasing flights
STRATEGY
  •  21 free elicitation questions
  •  Triangle scatter plots
  •  Projective & Laddering techniques
GOAL
  •  Does Southwest’s mission of exceptional
     customer service influence purchasing habits?
BRAND IMAGE ELICITATION
•  Colorful Planes     •  Cattle Call/Crowded

•  Bags Fly Free

•  Fun/Happiness

•  No Assigned Seats

•  Good Prices

•  Great Customer Service
BRAND IMAGE PROJECTION



 Toyota Camry       VW Jetta     Ford Taurus           Lincoln
Lexus • Cadillac   Honda Civic   Chevy • “Old”   Mini Van • Hyundai

                                         Ford Mustang
                                          Honda Civic
                                             “Red”
                                           “Sporty”
LADDERING
                                                                                       Low	
  Prices	
  
                                                                   Savings	
  
                                                                                        No	
  Fees	
  
                                                                  Non-­‐stop	
  
                                                                   Flights	
  
                                               Time	
  is	
  
                                               Money	
  
                                                                  On-­‐Fme	
  

Peace	
  of	
     Able	
  to	
  Focus	
                           Airport	
  
 Mind	
           on	
  PrioriFes	
                              LocaFons	
  

                                                                                      Convenience	
  
                                            Less	
  Stress	
     Easy	
  Flight	
  
                                                                                       Customer	
  
                                                                                        Service	
  
TRIANGLE SCATTER PLOT
        CUSTOMER SERVICE
                               “What	
  do	
  you	
  value	
  most	
  when	
  
                               choosing	
  an	
  airline?”	
  
                               	
  
                               	
  “Where	
  would	
  you	
  put	
  
                               Southwest	
  on	
  this	
  diagram?”	
  




PRICE                   RELIABILITY/
                      EASE OF TRAVEL
SUMMARY
•  Southwest’s brand image is consistent with their
   mission
   –  Fun, friendly, easygoing
   –  Best customer service in industry

•  Customers don’t consider customer service when
   booking a flight
   –  Price, convenience more important

•  Although Customer Service was not the #1 factor in
   the purchasing decision it was often mentioned as a
   reason why established customers liked to fly
   Southwest.
•  Should be used as a retention strategy to encourage
   brand loyalty
BRAND POSITIONING
POSITION
•  “The Low-Cost Leader”
   –  No Baggage/Change Fees

FINDINGS
•  8 out of 18 travelers believed Southwest was a good deal
•  Average flight prices have risen 39%, vs. 10% for competitors

RECOMMENDATION
•  “The Value Leader” in air travel
ONLINE PRESENCE
POSITION
•  Southwest does not partner with third party aggregators

FINDINGS
•  9 out of 18 of travelers used an aggregator
•  Consumer complaints - lack of website functionality
•  “It’s a pain that they are not on an aggregator.”

RECOMMENDATION
•  Update website to reduce customer’s need for
   aggregators
   –  Date/flight matrices
   –  Advanced search tools
CURRENT ADVERTISING
POSITION
•  Free of fees
•  Mainly positioned around baggage

FINDINGS
•  What do you think of when I say Southwest?
   –  6 out of 18 said Bags Fly Free
•  Checking bags makes Southwest more effiecient

RECOMMENDATION
•  Continue to focus on Free Bags as a point of
   difference, reminding consumer during purchase
•  Upfront & honest pricing strategy
SOCIAL MEDIA
POSITION
•  Engage consumers and build a community of Southwest
   brand loyalists

FINDINGS
•  Strong following of loyal consumers
•  They have endured some challenges in managing and
   implementing their strategy

RECOMMENDATION
•  Improve internal communication
•  Integration between marketing and other   organizational
   departments
SWOT
                          Posi%ves	
                                Nega%ves	
  
     	
                      Strengths	
                           Weaknesses	
  
             -­‐Low	
  cost	
                        -­‐Execu%on	
  of	
  promo%ons	
  
    	
  
             -­‐Strong	
  customer	
  service	
   -­‐Limited	
  flight	
  offerings	
  
Internal	
   -­‐Point	
  to	
  point	
  offerings	
   -­‐Labor	
  Costs	
  
             -­‐No	
  bag	
  fees	
  
             -­‐Social	
  Media	
  Presence	
  
               	
  

	
                      Opportuni%es	
                                      Threats	
  
	
              -­‐Business/Government	
               -­‐Consumers	
  resistance	
  to	
  
   External	
   Accounts	
                             higher	
  fares	
  
               -­‐BeJer	
  fuel	
  economy	
  jets	
   -­‐Fuel	
  Costs	
  
               	
                                      -­‐Slowing	
  Global	
  Economy	
  
                                                       -­‐Teleconferencing	
  
FINAL RECOMMENDATIONS
•  Focus on value over price
•  Update website to mimic functionality of
   aggregators
•  Facilitate better coordination between
   Marketing and other organizational
   departments

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Southwest Airlines Brand Exploratory & Strategy

  • 1. BRAND EXPLORATORY & STRATEGY REPORT August 7, 2012
  • 2. INVENTORY OVERVIEW •  Key Product Attributes –  Price –  Customer Service –  Flight Times and Schedules •  Bags Fly Free Marketing Campaign –  Focus on price savings vs. competitors •  Strong Social Presence –  First airline to hit 3 Million Facebook Followers –  Over 1.3 Million Twitter Followers
  • 3. WHAT PEOPLE ARE SAYING – PROS “They  don't  suck  nearly  as   •  Cheap flights much  as  everyone  else.”   •  Customer service “Southwest  is  quickly   becoming  the  class  act  of   •  No fees the  American  skies.”   •  Choose your own seat “Southwest  on  a  bad  day   beats  out  anyone.”   •  Easy Check-in •  On-time/Early Flights •  Comfortable Seats
  • 4. WHAT PEOPLE ARE SAYING – CONS •  Seating/Boarding Experience •  Limited departure/destination cities •  Inconvenient gate locations “Southwest  saves  money   •  No first class/luxury by  leasing  the  worst  gates.”   •  Lacking on-board entertainment “I  detest  the  chaos  of  the   Southwest  boarding  process.”  
  • 5. SERVICE HIERARCHY •  Wifi  on  all  planes   PotenFal   •  More  DesFnaFons   •  Bags  Fly  Free   Augmented   •  Swabiz.com   •  A  Fun  Flight   •  On  Fme  (ish)   Expected   •  Reasonable  Price   •  Friendly  Staff   •  A  à  B   Core   •  Safety  
  • 6. IN DEPTH INTERVIEWS WHO DID WE INTERVIEW? •  18 Travelers at Tampa & Jacksonville Airports •  66% leisure travelers, 33% business travelers PURPOSE •  Determine Southwest’s brand image and associations •  Understand customer motivations when purchasing flights STRATEGY •  21 free elicitation questions •  Triangle scatter plots •  Projective & Laddering techniques GOAL •  Does Southwest’s mission of exceptional customer service influence purchasing habits?
  • 7. BRAND IMAGE ELICITATION •  Colorful Planes •  Cattle Call/Crowded •  Bags Fly Free •  Fun/Happiness •  No Assigned Seats •  Good Prices •  Great Customer Service
  • 8. BRAND IMAGE PROJECTION Toyota Camry VW Jetta Ford Taurus Lincoln Lexus • Cadillac Honda Civic Chevy • “Old” Mini Van • Hyundai Ford Mustang Honda Civic “Red” “Sporty”
  • 9. LADDERING Low  Prices   Savings   No  Fees   Non-­‐stop   Flights   Time  is   Money   On-­‐Fme   Peace  of   Able  to  Focus   Airport   Mind   on  PrioriFes   LocaFons   Convenience   Less  Stress   Easy  Flight   Customer   Service  
  • 10. TRIANGLE SCATTER PLOT CUSTOMER SERVICE “What  do  you  value  most  when   choosing  an  airline?”      “Where  would  you  put   Southwest  on  this  diagram?”   PRICE RELIABILITY/ EASE OF TRAVEL
  • 11. SUMMARY •  Southwest’s brand image is consistent with their mission –  Fun, friendly, easygoing –  Best customer service in industry •  Customers don’t consider customer service when booking a flight –  Price, convenience more important •  Although Customer Service was not the #1 factor in the purchasing decision it was often mentioned as a reason why established customers liked to fly Southwest. •  Should be used as a retention strategy to encourage brand loyalty
  • 12. BRAND POSITIONING POSITION •  “The Low-Cost Leader” –  No Baggage/Change Fees FINDINGS •  8 out of 18 travelers believed Southwest was a good deal •  Average flight prices have risen 39%, vs. 10% for competitors RECOMMENDATION •  “The Value Leader” in air travel
  • 13. ONLINE PRESENCE POSITION •  Southwest does not partner with third party aggregators FINDINGS •  9 out of 18 of travelers used an aggregator •  Consumer complaints - lack of website functionality •  “It’s a pain that they are not on an aggregator.” RECOMMENDATION •  Update website to reduce customer’s need for aggregators –  Date/flight matrices –  Advanced search tools
  • 14. CURRENT ADVERTISING POSITION •  Free of fees •  Mainly positioned around baggage FINDINGS •  What do you think of when I say Southwest? –  6 out of 18 said Bags Fly Free •  Checking bags makes Southwest more effiecient RECOMMENDATION •  Continue to focus on Free Bags as a point of difference, reminding consumer during purchase •  Upfront & honest pricing strategy
  • 15. SOCIAL MEDIA POSITION •  Engage consumers and build a community of Southwest brand loyalists FINDINGS •  Strong following of loyal consumers •  They have endured some challenges in managing and implementing their strategy RECOMMENDATION •  Improve internal communication •  Integration between marketing and other organizational departments
  • 16. SWOT Posi%ves   Nega%ves     Strengths   Weaknesses   -­‐Low  cost   -­‐Execu%on  of  promo%ons     -­‐Strong  customer  service   -­‐Limited  flight  offerings   Internal   -­‐Point  to  point  offerings   -­‐Labor  Costs   -­‐No  bag  fees   -­‐Social  Media  Presence       Opportuni%es   Threats     -­‐Business/Government   -­‐Consumers  resistance  to   External   Accounts   higher  fares   -­‐BeJer  fuel  economy  jets   -­‐Fuel  Costs     -­‐Slowing  Global  Economy   -­‐Teleconferencing  
  • 17. FINAL RECOMMENDATIONS •  Focus on value over price •  Update website to mimic functionality of aggregators •  Facilitate better coordination between Marketing and other organizational departments