61 4.7 Putting It Together: Marketing Strategy
Since Southwest Airlines is a familiar example by now, let’s do a more complete review of its strategy to help with your assignments in this course.
In this module we have focused on the following aspects of marketing planning:
- Evaluate marketing strategies for alignment with the organization’s corporate strategies
- Show how common analytic tools are used to inform the organization’s strategy
- Explain inputs and components of a marketing strategy
- Give examples of corporate strategies
- Explain how the development and maintenance of customer relationships are an essential part of an organization’s marketing strategy
The summary below shows one analysis of the planning process for Southwest Airlines:
Corporate Strategy
Southwest Airlines’ strategy is driven by its mission.
The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit.[1]
Note: Southwest Airlines’ mission is not limited to a focus on leisure travel or even air travel. Rather, the company is driven by a mission to provide the best customer service across all sectors.
A Fortune magazine article describes Southwest’s unique profile in the airline industry:
Starting with just four planes flying to three Texas cities on June 18, 1971, [co-founder Herb] Kelleher built a maverick operation that prided itself on charting a different route from other airlines. It wooed passengers with ultra-friendly onboard service, squeezed more flights a day from every plane, and made money not by raising fares but by lowering them—and hence filling seats with folks who could never before afford to fly. Along the way Southwest evolved from an upstart to a colossus that last year carried 134 million passengers in the U.S., more than any other airline and some 20% of the total. In an industry in which every other major company has gone through bankruptcy, Southwest has never gotten close to Chapter 11 and has made money for 42 straight years. [2]
Despite this success, Southwest airlines found its revenue per customer to be low, so it launched a strategy to attract higher-revenue business customers.
Objective: raise the portion of business customers on Southwest from 35% to 40% during the five-year period from 2014 to 2019.
Note: In a competitive industry such as the airlines industry, it is remarkably difficult to gain 1% of market share. Often organizations track .1% and .01% changes.
Analysis Tools
In order to achieve the company objective Southwest needs to bring its strengths to new customers in a way that addresses both its own weaknesses and those of competitors (which create opportunities).
SWOT Analysis
Southwest’s SWOT analysis, below, identifies a number of opportunities and challenges:
Strengths
- Exceptional customer loyalty among price-conscious leisure travelers.
- Strong customer service culture throughout the organization.
- Dom