1. Marketing
Presentation

3. • Introduction
Part 1: about SW
Case airlines
• Situations of
study SW airlines
Part 2:
Question
& Answer.

4. Company’s slogan
“A Symbol of Freedom’’
The most successful US airlines
• The company set up by
1967 Herb Kelleher
• Southwest airlines was the
nation’s best performing
1972-2002
stock

5. • The company earned $442
2003 million
• Gary Kelly took over CEO
2004 role from Mr. Kelleher
NO.3 among America’s Top
Ten most admired
2005 corporations

6. Listed by Business Ethics
magazine "100 Best
2007
Corporate Citizens"
35,000 employees
2008 $9.1 billion revenue

7. -SW airlines
known as A
low-price
It began to
Made
airport
service SW’s
other
- Fuel-price
higher-cost work
was
increasing
airports worse
rapidly

8. Changing
strategy
Deciding target
customer is
Disadvantage business
travelers
in Changing
Strategy
Most of bargain
customers were
-hunting
business people
Lack of
professional
services

9. Build Expand their
Convenient networks & Earn
customer additional
services
loyalty revenue
Provide frequent - Preferential boarding Make an agreement
flights to 63 cities in - Bonus frequent-flier with discount
32 states credits carrier ATA Airlines
- Free cocktail flight
More nonstop & Develop new
More frequent flights - Renovate boarding areas software to shift
=> suitable for - Install roomier seats, planes to more
business travelers’ power outlets, workstation profitable routes
counters
schedules
- Flat-screen TVs
broadcasting CNN
- Change website
- Discounted Charge extra fees for
contracts with things
business

10. Serve second tier destinations
where cost were lower
NO assigned seats Serve SNACKS instead of
MEALS
NO electronic entertainment NO FEE to change same-
fare ticket
Offered employees profit-
sharing plan

11. „‟A Symbol of Freedom‟‟
Part 2 : answer
the questions.

12. 1. What has been Southwest‟s
traditional pricing strategy?
Why has this pricing strategy
been so successful throughout the
airline‟s first three decades?

13. Low Price

14. 2. What values do airline customers-
both business and leisure travelers-
seek when they buy air travel
tickets ?

15. Each class has different request:
Leisure
travelers
Buiness
- Low pricing -Don’t care much
- On time about price
arrivals, no -The assurance
additional fees. of on time
- High profit arrivals
cities -Safe, convenient
- Using smaller flights with high -
less crowded qualified
airports services

16. Has SW done a better job the
competitors of meeting the needs of
these air travelers? In what ways?
It has done a better job
+ knew clearly who were its
customers(leisure travelers ), what
values, needs of travelers and get
customers to their destination as quickly
as possible

17. 3. What internal and external factors
affect airline pricing decisions?
Internal factors:
- Airline's marketing objectives ….>make profit
 by filling the seat at the lowest possible cost to the
customer.
External factors:
- Rapidly escalating fuel prices. => fuel-price hedging
strategy. “they try to pass to the customer through
increased baggage fees”
- Determination of prices => linked to what the
competitor is doing.”

18. Pricing : Raise
aggressively 6
times in
2006, 11.4
percents
average fare
increasing.
successfully
marketed.
Profit: $100
million of the $1
billion (2010).

19. 4. What is Southwest Airline is
current pricing strategy?
- Low-cost.
- Flight frequency high use & limit the use of travel agents.
- Light standardization,
- Working crew of high capacity
- Lower-cost services in short -haul markets
- Increasing fares in longer-haul markets
- The Pricing Model

20. Does this strategy differentiate
Southwest from its competitors?
- Other airlines cannot compete with
Southwest in the same manner as they do
each other
- Much lower operating costs

21. Is the strategy sustainable?
-The industry's inability to continue to charge
relatively high fares in short-haul markets will
-Creates an even greater need for the government to
encourage low-cost, new entry, as a discipline for
Southwest's pricing behavior in the future.
- Replace service of other major airlines that are
scaling back service or exiting markets dominated by
Southwest.

22. 5. What marketing recommendations,
including pricing recommendations, would
you make to Southwest as it moves into the
next decade?
- Continue to advertise.
- Build the cost.
- Capitalize on the business class seats
available in many of AirTran's planes.