Marketing Mix Of Southwest Airlines and 7Ps (Updated 2024)

The Marketing mix of Southwest Airlines analyses the 7Ps of Southwest Airlines, which includes the Product, Price, Place, Promotion, People, Physical Evidence, and Process of Southwest Airlines. As the name suggests, Southwest Airlines is associated with the airline industry. It is a publicly traded company of American origins. Southwest Airlines was founded in 1967, March 16, by its founders Herbert Kelleher and Rollin King, but was able to commence operations in its present name from 1971 to June 18. It faces competition from the following airlines.

• Ryanair
• EasyJet
• WestJet
• IndiGo
• AirAsia
• Pegasus Airlines

About Southwest Airlines

• Type: Airline
• Industry: Transportation
• Founded: March 15, 1967, San Antonio, Texas, United States
• Founder: Herb Kelleher and Rollin King
• Headquarters: Dallas, Texas, United States
• Area served: United States, Mexico, Costa Rica, Guatemala, Honduras
• Key people: Gary Kelly (Chairman) and Gary Kelly (CEO)
• Number of employees: 56,000+

Southwest Airlines Product Strategy

Southwest Airlines has the distinction of being the world’s largest carrier in terms of low-cost market share. It used Boeing 737 in its fleet except between 1979-87 when it had to lease Boeing 727.

Airlines have become the largest Boeing 737 operator in the globe as it undertakes six daily flights with a fleet size of nearly 723 aircraft at the end of the calendar year 2016. Southwest Airlines has adopted a point-to-point system of operations like most airlines, along with a rolling hub model for major cities. It offers alcoholic beverages at a price and non-alcoholic drinks for free in-flight to its passengers.

The new Product Mix of Southwest Airlines in 2024 is as follows (Source).

1. Passenger Air Travel: The primary service offered by Southwest Airlines is point-to-point passenger air travel. They are known for their extensive domestic flight network within the United States and many international destinations.
2. Rapid Rewards Loyalty Program: Southwest operates a frequent flyer program called Rapid Rewards. This program rewards passengers with points based on the amount they spend on fares, which can be redeemed for free flights, upgrades, and other benefits.
3. Business Travel Services: Southwest offers tailored services for business travelers, including flexible tickets, priority boarding, and additional Rapid Rewards points. They cater to corporate travel needs with business-focused fares and benefits.
4. In-Flight Services: While known for keeping extras to a minimum to maintain low costs, Southwest provides in-flight services such as snacks and beverages and free in-flight entertainment like movies and music streaming through their WiFi service.
5. Cargo Transport Services: Southwest also offers cargo transport services, utilizing the cargo hold in passenger aircraft to transport goods. This service complements their passenger flights, providing revenue from the available cargo space.
6. Southwest Vacations: Through partnerships with hotels, car rental companies, and tour operators, Southwest Airlines offers vacation packages. These packages include flights, accommodations, and other travel services, providing a comprehensive solution.
7. Gift Cards and Merchandise: Southwest Airlines sells gift cards, which can be used to purchase flights and other services. Additionally, they have a range of branded merchandise for sale, catering to brand enthusiasts.

Southwest Airlines Pricing Strategy

Southwest Airlines’ pricing and marketing strategy is a masterful blend of competitive pricing, simplicity, and transparency of ticket price, tailored to its brand promise of making air travel affordable and customer-friendly. Here’s a closer look at their approach to ticket prices:

1. Low-Cost, Value-Oriented Pricing: Southwest adopts a low-cost pricing model at its core. This strategy is central to its identity as a budget airline, offering competitive fares to attract cost-conscious travelers and maintain a strong market position against traditional and low-cost competitors.
2. Simplified Fare Structure: Southwest is known for its simple and transparent fare structure. They typically offer three main fare types – Business Select, Anytime, and Wanna Get Away – each with varying flexibility and rewards. This simplicity eliminates confusion and enhances the customer experience.
3. Dynamic Pricing Based on Demand and Timing: Southwest utilizes a dynamic pricing strategy, where ticket prices vary based on demand, time of booking, and the popularity of the route. Early bookings generally yield lower prices, catering to price-sensitive travelers who plan.
4. No Hidden Fees Policy: An essential element of Southwest’s pricing strategy is its “Transparency” policy – no hidden fees for ticket changes or baggage. This policy differentiates Southwest from competitors who charge additional fees and builds customer trust and loyalty.
5. Promotional and Seasonal Pricing: Southwest frequently runs promotional campaigns and offers seasonal discounts, which helps to stimulate demand during off-peak periods and reinforces customer loyalty. These promotions are often marketed aggressively through their website, email newsletters, and social media channels.

Southwest Airlines Place Strategy

Southwest Airlines started its operations in the domestic circuit of the United States, and Southwest Airlines currently travels to forty-one states, including one hundred and one destinations like Denver, Dallas, Phoenix, Atlanta, Las Vegas, Orlando, and Oakland. It has spread internationally, including eight Caribbean, Central America, Mexico, and Puerto Rico countries. Southwest Airlines has its headquarters based in Dallas, Texas. It has a strong and widespread distribution channel that operates and handles an estimated 3,900 departures daily with the help of high-quality services of a trained work base that includes more than 53,000 employees at the end of October 2016.

Here’s Southwest Airlines’ first target marketplace marketing strategy.

1. Extensive Domestic Route Network: Southwest Airlines strategically focuses on an extensive domestic route network within the United States, covering major cities and regional destinations. This expansive presence makes them a convenient option for many travelers.
2. Selective International Destinations: In addition to its domestic focus, Southwest has gradually expanded to include flights to select international destinations in nearby regions, such as the Caribbean, Central America, and Mexico, catering to leisure travelers and broadening its market reach.
3. Primary Use of Secondary Airports: Southwest’s strategy is to use secondary airports in major cities. This reduces operational costs and often ws to quicker turnaround times and less congested passenger travel experiences.
4. Direct Online Distribution: Southwest Airlines predominantly sells tickets directly through its website and mobile app, avoiding third-party platforms. This direct distribution model helps maintain low fares and offers a streamlined customer experience.
5. Strategic Partnerships for Extended Reach: Southwest has formed strategic partnerships with other airlines and travel companies while maintaining a point-to-point operation model. These alliances enable them to offer customers services beyond their route network, like international travel and vacation packages.

Southwest Airlines Promotion Strategy

Southwest Airlines believes in its advertising campaigns to create positive brand awareness. It has launched numerous ad campaigns laced with humor to increase brand loyalty and attract customers. As part of its promotional campaign, airlines introduced Rapid Rewards and offered single credit for every flight irrespective of distance. With sixteen credits in two years, a free round trip valid for a year was awarded to a passenger. Its important taglines are Low fares. Nothing to hide; Welcome abroad; Grab Your bag it’s on; The low fare airline; You’re now free to move about the country; Just plain smart and Love is still our field.

Southwest Airlines has become an official carrier of Honor Flight Network and brings ailing and aging war veterans to visit national monuments in Washington D. C. It is the official airline of the San Diego Padres, Milwaukee Brewers, Baltimore Orioles, Texas Rangers, and Super Bowl. It signed a sponsorship deal with Houston Rockets and was the title sponsor of Southwest Airlines San Francisco Chinese New Year Festival and Parade.

Some Recent Video ads and Print ads for Southwest Airlines are:

Southwest Airlines People Strategy

The “People” element of the Service Marketing Mix for Southwest Airlines emphasizes the importance of employees and customers in delivering and perceiving their services. Here are key points regarding the “People” aspect of Southwest airline’s promotion mix:

1. Employee-Centric Culture: Southwest Airlines is renowned for its strong, positive corporate culture that values, respects, and takes care of its employees. The company believes that happy employees lead to happy customers.
2. Customer Service Focus: The airline prioritizes exceptional customer service, with employees trained to go the extra mile to ensure passenger satisfaction. This includes friendly interactions, prompt responses to customer inquiries, and efficient problem resolution.
3. Training and Development: Southwest invests significantly in the training and development of its employees, ensuring they have the skills and knowledge to deliver the company’s brand of service effectively. This includes both technical training and soft skills development.
4. Empowerment and Autonomy: Employees at Southwest Airlines are given a high level of autonomy to make decisions that directly impact customer satisfaction. This empowerment allows for more personalized and immediate service recovery actions when necessary.
5. Recruitment and Selection: The airline strongly emphasizes hiring individuals with the necessary skills and fit well with the company’s culture and values. Personality and attitude are critical factors in the selection process, aiming to maintain a workforce that embodies the company’s spirit.
6. Internal Communication: Southwest Airlines maintains open and effective internal communication channels that encourage employee feedback and foster a sense of community and belonging. This helps align everyone towards common goals and maintains high morale.
7. Recognition and Rewards: The company has recognition and reward programs to acknowledge employee achievements and contributions. This motivates employees and reinforces the behaviors that lead to exceptional service delivery.
8. Community and Team Spirit: Southwest encourages community and team spirit among its employees, promoting collaboration and support. This internal culture reflects how employees interact with customers, enhancing the overall service experience.
9. Leadership Accessibility: Leadership at Southwest Airlines is known for being accessible and approachable, embodying a “lead by example” philosophy. This closeness between management and frontline employees fosters mutual respect and drives a unified approach to service.
10. Customer Engagement and Feedback: The airline actively seeks and values customer feedback, using it to inform service improvements and employee training. This customer-centric approach ensures that the service evolves per passengers’ expectations and needs.

Southwest Airlines Process Strategy

The “Process” element of the Service Marketing Mix for Southwest Airlines refers to the procedures, mechanisms, and flow of activities by which services are consumed. This is crucial in ensuring service delivery is efficient, high-quality, and meets customer expectations. Here are key points regarding the “Process” aspect of the marketing mix efforts at Southwest Airlines:

1. Online Booking and Check-in: Southwest Airlines offers a user-friendly online booking system, allowing customers to easily search for flights, compare prices, and book tickets. The airline also provides a straightforward online check-in process, enhancing convenience for travelers.
2. Turnaround Process: Southwest is known for its quick turnaround process, allowing planes to spend minimal time at the gate between flights. This efficiency contributes to on-time performance and maximizes aircraft utilization, a key factor in keeping operational costs low and fares competitive.
3. Boarding Procedure: Southwest utilizes a unique open seating policy where passengers choose their seats upon boarding. The boarding process is organized into groups (A, B, and C), determined by check-in time. This process is designed to speed up boarding, reduce congestion, and improve customer satisfaction.
4. Baggage Handling: The airline has streamlined its baggage handling process to ensure fast and accurate luggage delivery. Southwest also distinguishes itself by allowing two free checked bags per passenger, simplifying the process and adding value for customers.
5. Customer Service and Resolution: Southwest has a robust process for handling customer inquiries and complaints, emphasizing swift and effective resolution. This includes a dedicated customer service team accessible via various phone, email, and social media channels.
6. Operational Efficiency: The airline focuses on operational efficiency, using point-to-point flights and avoiding competitors’ traditional hub-and-spoke model. This reduces the complexity of operations and minimizes the chances of delays and cancellations.
7. Employee Training: Employees undergo rigorous training to ensure they are well equipped to perform their duties efficiently. This includes customer service training, operational procedures, and safety protocols, ensuring a consistent and high-quality service experience.
8. Safety Procedures: Southwest Airlines prioritizes safety, strictly adhering to safety protocols and regular training for all crew members. This commitment to safety is integral to the airline’s process and is communicated clearly to passengers.
9. Flight Operations: The airline uses advanced technology and systems to optimize flight operations, including scheduling, route planning, and fuel management. These processes are critical for maintaining punctuality, reducing costs, and minimizing environmental impact.
10. Feedback and Continuous Improvement: Southwest Airlines has a process for collecting and analyzing customer feedback. This feedback informs continuous improvement initiatives, allowing the airline to refine its processes and enhance the overall customer experience.

Southwest Airlines Physical Evidence Strategy

The “Physical Evidence” element of the Service Marketing Mix for Southwest Airlines encompasses the tangible and intangible elements that customers use to evaluate the airline’s service quality. It plays a crucial role in shaping perceptions and providing airlines industry a competitive edge. Here are key points regarding the “Physical Evidence” aspect of the Southwest Airlines marketing mix:

1. Branding and Color Scheme: Southwest Airlines’ distinct blue, red, and yellow color scheme, along with the heart symbol, is easily recognizable and conveys a message of warmth, friendliness, and care. This consistent branding is evident across all physical and digital touchpoints.
2. Aircraft Appearance: The airline’s planes feature a unique livery that stands out at airports, reinforcing brand recognition. The cleanliness and maintenance of the aircraft also contribute to a positive passenger perception of safety and reliability.
3. Airport Presence: Southwest’s check-in counters, boarding areas, and lounges are designed to be welcoming and efficient, with clear signage and branding. These areas show the airline’s commitment to customer service and operational efficiency.
4. Uniforms: Employee uniforms are another form of physical evidence. Southwest’s staff wear practical and comfortable uniforms that reflect the airline’s friendly and approachable image.
5. In-Flight Experience: The interior of Southwest planes, including seating, lighting, and cleanliness, directly impacts passengers’ experience. Comfortable seating and a well-maintained cabin environment serve as physical proof of the airline’s quality.
6. Onboard Materials: Safety cards, in-flight magazines, and menus featuring Southwest’s branding and design aesthetics contribute to the overall customer experience and reinforce the airline’s identity.
7. Website and Mobile App: The airline’s digital platforms are part of its physical evidence, offering an intuitive, user-friendly interface for booking, check-in, and flight information. The design and functionality of these platforms reflect the airline’s focus on customer convenience and service.
8. Customer Testimonials and Reviews: Positive reviews and testimonials from satisfied customers serve as intangible physical evidence, enhancing the airline’s reputation and encouraging potential customers to choose Southwest for their travel needs.
9. Boarding Passes and Itineraries: The design and clarity of Southwest’s boarding passes and itineraries, whether digital or paper, contribute to the passenger’s experience by making travel information easily accessible and understandable.
10. In-Flight Entertainment and Connectivity: The availability of in-flight entertainment options and Wi-Fi connectivity, even though not physical objects, are part of the service’s physical evidence, indicating the airline’s commitment to passenger satisfaction and staying current with technological trends.

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