Brand Case Study

[Southwest Airlines]

The Brand History

The history of Southwest began in 1967 at a hotel bar in San Antonio, Southwest founders Herb Kelleher and Rollin King took out a napkin and scribbled three points of a triangle representing their novel idea.

An airline that would connect the three main cities of Texas; Dallas, Huston and San Antonio.

For 8 years from 1971, Southwest Airlines operated as an interstate only carrier.

It wasn’t until 1979 when U.S. President Jimmy Carter deregulated air travel in the USA, did Southwest really take off.

40 years later, the Southwest Brand has achieved cult status with its customers with a low cost, low stress no nonsense approach to air travel, which has seen it grow to become the largest airline operating in the U.S.

But how did it get there. What makes Southwest so different to all the other airline brands out there and why do their customers love them so much?

Case Study:
Brand Positioning Strategy

When the founders of Southwest were sitting in that bar in San Antonio, their conversation about what would make them different centred on pricing.

Founder Herb Kelleher summed up their position succinctly when he said

I can teach you the secret to running this airline in thirty seconds. This is it: We are the low-fare airline

Low cost pricing as a standalone strategy is nothing new and never tends to last long, but they weren’t selling a commodity that was easily picked up and sold at a cheaper price.

They were building an airline from the ground up and integrating this positioning strategy into every single decision of operations making it next to impossible for existing, more established airlines to replicate.

Their deliberate decision to stock their fleet with only Boeing 737’s had a dramatic impact on their operating, maintenance and staff training costs that was unparalleled.

A Competitive Brand Advantage

From the early days in Texas, Southwest has run a tight and efficient ship through their business operations. A competitive advantage they’ve never relinquished.

Where the airline has really excelled however has been through a deep focus on customer experience, low-cost pricing and logistics solutions.

But Southwest is not all love cuddles and peanuts.

Their outside the box thinking and innovation has moved the industry forward and their development of company culture has positioned them as an airline their motivated employees believe in.

Helpful Brand Personnel

We’ve all had bad experiences with air travel.

Having emigrated to Australia in 2001, I have traveled back to my home country of Ireland more times than I can remember so I’m well versed on how airline staff impact the travel experience.

Some make you feel like you’ve asked them to walk over hot coals when all you’ve asked for is an extra pillow, while others make you feel like they’d actually walk over hot coals for you.

Southwest understands this gripe and has gone to extraordinary lengths to make sure the people they hire are aligned with the brand experience.

Helpfulness is a core value of the brand and ensuring their employees are the most helpful in the industry has given them a distinct advantage.

A Flexible Brand Experience

The Southwest Airlines leadership are people who understand the stresses of air travel and make it their business to reduce that stress wherever possible.

To put it simply, Southwest make flying easier.

Traditionally, the airline industry is full of red tape and “Gotcha” terms and conditions that sting customers for anything outside the “Buy your ticket and get on the plane” model.

At Southwest, policies and procedures have been softened at every corner including a cancellation policy that would make other airline CEO’s look like they were sucking a lemon.

You want to cancel your flight 30 minutes prior to take-off? No Problem.

Pricing Less And Rewarding More

More often than not, a better overall brand experience is a differentiation strategy that comes with a premium price.

And it makes sense. If you want the best services you can’t expect to pay the lowest price. Price and quality are the usual trade-off.

Not only do Southwest offer one of the best experiences in the business, they do it with the lowest prices which is a brand advantage accessible to them via their low operating cost strategy.

Compared to their closest competitors such as Delta Airlines and American Airlines Southwest’s pricing is far more affordable.

But Southwest doesn’t stop there. On top of the savings they afford their customers, they also lavish gifts on them through one of the best rewards programs in the industry.

It’s no wonder their brand loyalty soars so high.

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A Nimble And Innovative Brand

Southwest’s flexible business model allows the airline to stay ahead of the curve with nimble decision-making and forward thinking.

Always focused on customer experience, the airline regularly upgrades its fleet of airplanes and expands its army of loyal followers and service destinations.

Case Study:
Target Market

Commercial airline travel emerged after the Second World War though this wasn’t an inexpensive experience.

There were multiple classes including luxurious lounges where three course meals were served on bone china with champagne in crystal glasses.

Air travel up to the late 60’s was an exclusive luxury reserved for those who weren’t short of a dollar.

When Southwest emerged, they shook up the industry as the first “Budget Airline”.

An Everyday Target Audience

So, who is Southwest’s Target Market?

Cost-conscious, no-frills travellers looking for the best value for their dollar.

Air travel wasn’t just for the wealthy anymore. Southwest expanded the market by slashing costs and today Southwest’s target audience includes

Families

Young travellers

Businessmen and Women

Frequent Flyers

Holiday Makers

They’ve distances themselves from exclusivity and the segment that expects it and have masterfully appealed to their audience by focusing