The Australia Marketing of Southwest Airlines - Term Paper Example

Australia Marketing of Southwest Airlines Introduction At present Southwest Airlines has been in service for 42 years. The airline is based in Dallas, in the United States of America. Southwest acknowledged for its commendable customer service conveyed by a workforce of just about 46,000 individuals. The airline serves in excess of 100 million travelers annually to 96 destinations in 41 states, Puerto Rico Commonwealth, Columbia District, as well as 5 nearby international countries. Southwest is at this moment the largest low-fare carrier in America. The airline is the leading domestic carrier. The financial year ended in 31 December 2012 marked Southwest’s 40th profitability year in a row. Southwest manages just about 3,200 flights daily with the recently acquired AirTran operating almost 500 flights every day. In 2012, Southwest Airlines posted $17.1 billion in total operating revenue and a net income of $421 million. At the onset of October 2013, Southwest along with AirTran had a fleet of 683 737-Boeing jets (SWAMEDIA, 2013) Environmental analysis of Australia Political environment Politics is ubiquitous and it affects everything in humanity. Therefore, it is an important aspect to consider. Australia’s administrative structure is federal having eight state and territory governments plus a national government. Every government has a voted parliament. Australia has enjoyed a rather smooth transition of power from one government to another granting the country a much priced political stability. The state of politics is welcoming with no major political upheaval being reported in the recent past. Economic environment Australia has enjoyed steady and continuous economic growth characterized by low unemployment, controlled inflation, minimal public debt, plus a well-built and secure financial system. In the preceding 20 years to 2012, Australia’s economic growth has been in the positive territory with an average of 3.5 percent a year; no other developed economy in the world has posted a similar growth in history. Low inflation levels allow the Reserve Bank of Australia to flexibly regulate interest rates. Australia was reasonably unaffected by the 2008/09 global financial crisis. By and large, Australia is a thriving Western-style capitalist economy, with a high GDP per capita that matches that of Western Europe (projected to be US$ 64,157 in December 2013). Also, even though the country’s real GDP growth is not linear; there is an upward trend (RBA, 2013) (as indicated in the figures below) Source: Australia Government: Department of Foreign Affairs and Trade (2013) Cultural environment Australia has a predominant multicultural population that practices more or less every religion and way of life. Australia has a well-established tourism industry, indeed tourism is one of the leading industries in Australia. Besides providing employment, tourism contributes $73 billion to the country’s economy each one year, in addition tourism accounts for no less than 11 percent of Australia’s total exports. Tourism cannot exist successfully if people have no taste to move from their homes to visiting tourist destinations. This has cultivated a transport culture in the country with a lot of visitors visiting Australia every year to enjoy the country’s innate scenery (IMMI, 2013). Technical environment Australia has strong institutions that support openness to global trade and investment. Australia scored 82.6 points in the 2013 economic freedom index where it was ranked 3rd freest globally. The country was ranked 10th in the ease of doing business in 2013 (Global Finance, 2013). According to the report, Australia offers easy access to information either online or using brochures which include fast registration of companies and property online. Australia’s regulatory system is one of the world’s most transparent and well-organized that is very much contributing to attracting investors. Tariffs are low owing to discussed trade agreements along with unilateral tariff cuts. Overseas and domestic investors are treated equally, although foreign investments exceeding a particular threshold may well be screened. Australia has an educated population that offers a skilled labor force. Its educational standards have attracted large numbers of international students. Conclusion Generally, Australia has a stable political atmosphere that is business friendly. The country’s financial system has stayed put for quite a long period of time amid promising future expectations. There are far-sighted regulations that enabled Australia to survive the 2008/09 global financial downturn with slight disturbance. A transparent and unwavering business environment makes Australia among most reliable and eye-catching environments for investment (Global Finance, 2013). It merely takes two days to get a business underway. Australia’s labor market is flexible and unemployment is moderately low. Target marketing Australia is favored for its attractive tourist coastal destinations. As indicated in the figure below, the country granted a total of close to 3.29 million tourist visitors as of 30-June-2012 to 30-June-2013 (refer to the appendix). This offers a ready market that can be tapped by the airline domestically as the tourists need to visit several tourist destinations in the country, especially the coastal regions. Moreover, paid Australian workers enjoy four weeks of leave annually. Also, school going kids in key population centers have their long-break in January. January too wraps up as a strong month in domestic tourism. Summer is Australia’s travel max out season in the south whereas in the tropics, travel peaks in winter. Young Australians who complete high school and have attained the age of majority (18) rejoice completing school for 3 weeks at the close of October and early November. Their numbers flock up most cities and towns they decide to visit. International students too offer a ready market; however, the sector faces a bleak future amid fine-tuning of Australia’s migration policy, shifting discernment of the Australian education, appreciation of the Australian dollar, as well as the intensification of Australia’s abroad competitors. Competitors Southwest is likely to face stiff competition from four other major low-cost airlines operating in Australia. Virgin is working hard to capture a larger domestic corporate market as Qantas struggles to defend is prevalent overall domestic market share. This has predisposed to capacity flooding in the market which, along with dwindling economic conditions, will further lower fares (Parliament of Australia, 2013). All parties as a group have a firm understanding of the business model, regulatory environment, consumer demands as well as capital avenues. Southwest has got to offer competitive low-cost services and top up its value proposition with other services such as EarlyBird Check-In, Wi-Fi, comfy cabin, welcoming crews, magazines, sips and snacks, and messaging. Recommendations Price Southwest’s predominant strength is to continue growing its low-cost standing in the airline industry. Therefore, as the company expands to new markets, it ought to stick to its low-cost offering. This will offer the airline a great competitive advantage in Australia against established rivals like Qantas. A price of just about A$140 one way will be a good starting point. Product/service Seeing as the company has established low-cost standardized travel options, it has got to carry on the same strategy. Its highly efficient operation should be maintained to boost the airline’s value proposition. Southwest should stick to its reputation as a one-stop, low-fare and point-to-point carrier. Time is of essence, and southwest knows how to deal with it by moving travelers in above average times which is obligatory in the airline industry. The company could as well bring other services like online bookings, EarlyBird Check-In, Wi-Fi, comfy cabin, welcoming crews, magazines, online bookings, sips and snacks, and messaging. Place/location Australia’s domestic market mainly comprises high density links of a small set of large cities, plus few other routes. The company should target the coastal urban cities which offer great marketing opportunities as it seeks to establish itself in Australia. An important aspect to note is that Australian’s like to hold their major celebrations on the coastal beaches. For instance, Australian’s party in the sand and stare at fireworks on New Year’s Eve at Manly along with Bondi beaches in Sydney also Glenegl in Adelaide. Australia Day celebrations are hosted on beaches. On Christmas Day around 40,000 international tourists congregate on Bondi Beach (Tourism Australia, 2013). Other prominent beaches include St Kilda (Melbourne city), Surfers Paradise (Queensland Gold Coast), and Cottesloe (Perth). Although Australia is ranked among the top least densely populated countries globally, it is for the most part an urban country, with the majority of the residents residing in these coastal cities. Promotion The first entrants found it hard to market their products, in particular, because most travel agents were allied to serving airlines. However, it is known all over the world that Australians love sports, especially in rugby. The country has over 120 sporting organizations that operate nationwide, locally, and regionally. Also, approximately six-and-a-half million Australians are registered sport members. This is not a bad figure weighed against a population of slightly over 23 million, hence offering a good marketing stage. Besides, considering that Australia offers an ample online connection, Southwest will find it invaluable to use online marketing to reach potential clients. Conclusion Australian has numerous market attributes likely to favor entry of low cost carriers. It has a reasonable count of dense routes, on which a number of competitors may well, co-exist. References Global Finance, 2013, Best Countries for Doing Business Report, 2013, retrieved 13 December 2013, IMMI, 2013, National Agenda for a Multicultural Australia, retrieved 13 December 2013, Parliament of Australia, 2013, retrieved 14 december 2013, RBA, 2013, Australia GDP and Inflation, retrieved 15 December 2013, SWAMEDIA, 2013, Southwest Corporate Fact Sheet, retrieved 14 December 2013, Tourism Australia, 2013, information about Australia travel and guide, retrieved 15 December 2013, Appendix Tourist visa granted 2012-2013 Read More