Marketing case analysis - Essay Example

Southwest Airlines: A Case Solution College College Marketing 5th April Southwest Airlines: A Case Solution There are two issues for Southwest Airlines in the given case. First, Southwest has to understand the unexpected moves of their major competitor, United Airlines, which are discontinuing their service for Oakland-Ontario and increasing fares by $10. Secondly, how Southwest would have to respond to these competitor moves. Answering to the first consideration at the moment, Southwest Airlines can demonstrate these unexpected moves of United Airlines as inability to compete in long term with Southwest.

The reason for saying so is that Continental Airlines wanted to compete directly with Southwest Airlines and was devastated; United Airlines might want to avoid such a situation too by withdrawing its operations in some major routes. Answering to the second consideration requires some strategies to be implemented. There are two ways for doing so: continue target advertising to the California market, and try to match the United Airlines’ price increase. Target advertising involves the elements of behavioural marketing, which seeks to examine how consumers’ minds work.

The main purpose of such targeting is to reach as many customers as possible. So, Southwest Airlines can continue doing so for the California customers, for which the United Airlines is planning to withdraw their operations. This would allow Southwest to maintain their competitive share of the market prominently in California. This can be done by making print or commercial ads that are pertinent and useful for the customers and those ads must be reflective of their preferences and habits in regards to airlines.

This would allow Southwest to value their customers that are totally loyal to these airlines and give them the best for which their customers have strong preference. The best way of doing it is to eliminate the irrelevant attributes of the product from their advertisements because this would save a lot of advertising money and would definitely reap higher profits. But there can be limitations such as to reach as many customers as possible means a large customer base to be targeted which can prove expensive, getting to know about their behavioural patterns means that the research can be time consuming, and targeting a specific segment for the company means omission of other market segments.

The second possible solution is matching with the United’s increased fare of $10. Although Southwest has established its brand positioning as low price and high service airlines but the company has to change their strategies with the changing competitive environment. The most suitable way of doing so is to charge the customers for bag checking. Rafi Mohammed (2013) states in his article that Southwest might start doing so in near future. In the given case scenario where the possible solution can be increasing fares, this seems to be the most appropriate step.

Southwest can include this strategy as a part of its marketing, or to be more precise, advertising strategy. This would enable Southwest to earn greater proportions of profits. Southwest can do this by, for instance, allowing the handbags checking to be free but the large bags to be checked for some fixed amounts. Another possibility can be increasing checking fares if the baggage exceeds a certain weight limit. On the whole, this would facilitate Southwest Airlines to come at par with the increasing fares of United Airlines so that Southwest does not have to face losses if the competition increases their prices and earns high profits.

Also, there are limitations to this strategy as well. If there are some customers that are regular users of Southwest Airlines, they would know how to carry weights and would be efficient in packing low weight luggage in their bags so that high baggage fares can be avoided. Southwest might not be able to earn the potential profits the way they were supposed to. The best possible solution seems to be the second one because no matter how a customer packs his baggage, either in light weight method or the heavy weight, he or she would have to pay the charges.

In this way, Southwest can earn in either of the case (light weight or heavy weight baggage) because in the proposed solution, Southwest must charge for the bag checking. In their target advertising option, there are chances that a large number of target market does not watch the advertisement, for example, if they are attending a party, or are attending a business meeting etc. In such similar scenarios it is most probable that the target market does not come in contact with any medium of advertisement, either through magazines or television etc.

Ultimately, the advertising investment would go waste. But when it comes to checking bags at the airport, everyone has to pay the charges and all of this would help Southwest to earn greater profits. Southwest Airlines has established its business culture over the past years to be the low price and high service airlines and it must maintain its brand image the same way. But the competitive environment is pushing Southwest Airlines to do more. The company cannot afford to suffer from losses and give in to the competition because sometimes, the competitor moves instigate to do so.

Increase in Southwest Airlines fares through baggage charges does not mean that Southwest is positioning itself as high price, to be more specific, premium brand but it is trying to cope with the competition cleverly and effectively. Work CitedMohammed, Rafi. “Southwest May Start Charging for Baggage, and That’s a Good Thing.” Harvard Business Review. Web. 5th April 2014.