Flying on a Full-Service Airline as Opposed to Low Fare Discount Carrier - Business Plan Example

Flying on a full service airline as opposed to low fare discount carrier Table of Content Company Overview 4 Executive Summary of Marketing Plan 4 Description of Target Market 5 Geographic Segmentation 5 Demographic Segmentation 6 Psychographic Segmentation 6 Behavioral Segmentation 6 Description of Competitors 7 Description of Products and Services 8 Marketing Budget 9 Description of Location 10 Pricing Strategy 11 Summary and Implementation Plan 12 Reference 14 Company Overview Southwest Airlines founded in 1971 is the largest airline in USA. The founders Rollin King and Herb Kelleher are the persons behind the success of Southwest Airlines. The airline is based at Dallas, Texas in USA. Southwest Airlines started with 3 aircrafts but now has over 500 Boeing aircrafts in its fleet. The airline company has grown immensely and is the most preferred airline amongst the consumers due to its low fares and excellent service (Southwest, 2012). The airline is home to more than 35000 employees who are the backbone of the airline company. The employees are provided with friendly working environment to help them deliver the best services to the customers. Southwest Airlines has further strengthened itself by acquiring the Air Tran Airways in 2011. The mission of the company has been to deliver the best quality services to its customers at low price which has enabled the airline to grab a large market share. Executive Summary of Marketing Plan The marketing strategy is an important aspect for the company to launch a new product. The marketing strategy involves factors like target market which hold the key to success for the new airline in the competitive airline industry. It gives the airline company the leverage to target the desired market. Competitor description and the analysis of direct and indirect competitors is also an important part of a marketing plan. The strategy followed by the competitors and its weakness can provide the airline company advantage. Product is what every company offers, though in case of airline industry it is intangible. The product or service is what defines an airline industry. The description of location is another factor which makes the marketing plan important for the company. Location factor defines the access to the new airline across the globe. Pricing strategy can make customers opt for the company’s product or reject it for being expensive. The right method to implement a pricing strategy is to make the product valuable in terms of its price. The implementation plan finally needs to take place considering all the marketing strategy factors. A proper analysis of these factors can provide better knowledge to the Southwest Airline Company regarding the launch of its new full service airline. Description of Target Market A group of people who are looked upon by the company as the customers which can fit in the marketing strategy adopted by the company can be termed as the target market. Target market is the most essential component to a company’s marketing plan. Southwest Airlines marketing plan largely depends on the 4 P’s of marketing mix and the target market to decide the success of its new product. Target market can be segmented into the following four parts: Geographic Segmentation Southwest Airline can segment its desired target market based on the nation, state, region, country, etc. to which a customer belongs. The airline company then can decide whether it wants to function in selected geographic regions or across every geographic area. The airline has to accordingly develop its product or service (Kotler & Armstrong, 2008, p.173). Demographic Segmentation Demographic segmentation is another variable which divides the target market based on the factors like age, religion, gender, family, etc. This segmentation can prove to be a boon for the airline company as it is easily measurable and can be used to select the target market for its new product or service. Psychographic Segmentation This segmentation can help the airline company to divide the customers on the basis of lifestyle, characters related to personality and social class. Behavioral Segmentation Southwest airlines can also adopt behavioral segmentation to select the desired target market based on the customer’s attitude, response and knowledge about a product or service. It is believed that behavioral segmentation is the most reasonable segmentation tool to apply a marketing plan. Southwest Airlines can eventually figure out the segmentation tool to select the desired target market to adopt a marketing strategy for a new product. Description of Competitors Southwest Airlines competitive advantage of being the low cost airline can be defined as irrational though it is the largest airline in USA. The airline has acquired a large market share by neglecting the profit factor. The competition has increased in the low cost airline section as new airlines are emerging fast offering the same services as Southwest Airlines. The airline’s marketing plan to launch a new product becomes all the more important in the competitive market. Southwest Airline has some direct competitors who can pose a big challenge for the airline company. The direct competitors for the Southwest Airline’s are JetBlue Airways, American Airlines and United Airlines as these airlines also deliver low cost service to its customers. Apart from the direct competitors, the airline also faces stiff competition from the indirect competitors like the companies related to cruise and train. Low cost carriers are no more confined to the domestic region only. International airlines have also adopted this strategy by offering people services at low cost and grabbing large market share both domestically and globally. This strategy being pursued by the competitors can make things difficult for the Southwest Airlines in developing a new market plan. The advantage for the Southwest Airline’s lies in the weakness of the competitors which will allow the airline to build its marketing plan and launch a product or service which can change the position of the company. The weakness for competitors can be related to the age and features of aircrafts they use and the unbundling charges incurred to the customers. These weaknesses of the competitors bring in opportunity for the Southwest Airlines which can finally be transformed into the company’s strength. Description of Products and Services The product for the Southwest Airline is supposed to be something unique. The company can opt for a new airline under its brand name which will serve as a full service airline to the customers. The airline’s marketing plan must be such that the new airline of Southwest Airline Company should grab a large market share in terms of customers preferring full service airline as opposed to low cost carrier. Further Southwest Airline needs to provide services at reasonable price while maintaining the friendly relation with the customers. This will allow customers from other airlines to avail services of new airline. Products like loyalty programs and in-flight and check-in customer services can make the airline company form a new full service airline. The Southwest Airline’s marketing plan to launch a new full service airline should further emphasize on the features such as points collection on every trip. Every time a customer travelling by Southwest’s new airline would earn certain reward points which they can sell at a later date and earn some discount on the ticket price. This will enable the company to build loyalty and trust amongst the customers and their preference can be effectively changed from low cost carrier to full service airline. Further with the introduction of some quality service along with differentiating products the company also has the opportunity to make customers opt for the new full service airline. Marketing Budget Marketing budget can be defined as the statement which analyzes the amount of money required to be allotted for the advertisement and other promotional activities (McKinlay & O’Connor, 2007, p. 129). The marketing budget for the new airline is critical in respect to its proper functioning at the global level. A good marketing budget will also allow new airline perform at par with its competitors. The new airline’s marketing plan will be defined on the lines of high impact strategy based on low budget. High budget does not necessarily mean rise in sales. Going by this fact a low budget well planned marketing plan will be the key factor for the launch of new full service airline. Advertisement is an important aspect of a marketing plan where a company promotes its product through different media to spread awareness amongst the consumers. The marketing budget for the new airline will be very critical. The budget will play a significant role in the success of the new airline. Apart from the marketing budget allocation for the usual ads in electronic and print media the new airline new marking budget will also include promotional activities like personal selling, direct marketing, public relation, promotion of sales, interactive marketing, etc. This will enable the Southwest Airline Company in developing a marketing strategy. Description of Location The location in a marketing plan has a special role to play. Any company wanting to launch a new product in a service industry which is generally intangible has to focus on the location from where it can have maximum access to the customers. Southwest’s new airline will be based at a location which will allow it to cater its services to large number of target group. The new airline will be different so the marketing strategy related to the location will also be different. The description of location does not only mean the place from where the airline is operating but also the availability of its services from different destinations. The better the network of the airline the better it can cater to the large customer base. In today’s scenario the whole definition of location has changed. Internet has taken the place of the tangible location as people prefer online ticket booking, product information and other service availability. The new airline’s prime objective here will be to reach out to large number of consumers by opting for locations which are easily accessible. Pricing Strategy Pricing objective of an organization can be achieved through proper designing of the pricing strategy (Pride, Hughes & Kapoor, 2011, p. 385). Pricing strategy for the airline in a marketing plan will be in line with its services. Southwest Airlines over the years has been following the low cost pricing strategy to gain maximum advantage in terms of market share. But, since the airline is opting for the launch of new full service airline sector its pricing strategy also needs to be revived. The pricing strategy for the Southwest Airline will be implemented in such a way that the airline does not incur loss while launching a new full service airline. Also the strategy will garner profit for the airline company in the long run. The new airline being launched by the Southwest will carry a price tag which makes it most sought after by the customers. Customers are always willing to pay higher price for the product or service provided to them but it has to be worth of that price. The Southwest Airline can also opt for low pricing strategy to attract more customers. The low pricing strategy will give the airline an advantage over its competitors. It can eventually take over its competitors in the full service airline category as well. But the product quality should not be compromised with the price. The customers always prefer paying for quality service which provides maximum benefits. Summary and Implementation Plan The marketing plan holds the key to success for the airline company. The better the marketing plan the better are the chances of attaining success for the company. The marketing plan for the Southwest Airline is related to the launch of its new airline. The new airline will hold the key to success for the company at the global level. Southwest’s marketing strategy talks about the target market for the new airline, the availability of the new airline’s services through different locations. The plan further emphasizes on the product and services offered by the new airline, its pricing strategy which will differentiate it from the competitors. The implementation plan for the Southwest Airline will include all the components of marketing strategy. The new airline will be promoted differently to attract large customer base. The communication process between the administration and employees will be an important part in the implementation plan. The marketing strategy will be based on research through various tools and the data gathered from this research will be analyzed to reach to a conclusion. Customers will be an integral part to the implementation plan and regular feedback from them will make the Southwest strive harder to deliver the best services. Regular analysis of the implementation plan will be the prime criteria for the Southwest. The best marketing strategy and its implementation will lead the company to new heights in the airline industry and make way for the airline to be the best airline in the world. Reference Kotler, P & Armstrong, G. (2008). Principles of Marketing. New Delhi: Pearson Education India. McKinlay, I & O’Connor, M. (2007). Marketing. Cape Town: Pearson South Africa. Pride, W. M, Hughes, R. J & Kapoor, J. R. (2011). Business. USA: Cengage Learning. Southwest. (2012). About Southwest. Retrieved from http://www.southwest.com/html/about-southwest/index.html?int=GFOOTER-ABOUT-ABOUT. Read More