Southwest Airlines’ marketing mix or 4P (product, price, place, and promotion) caters to the needs of travelers, while focusing on affordability as a competitive factor. As a discount carrier, the company highlights competitive pricing to attract travelers and make its marketing strategy effective. The specifics of these 4Ps contribute to business strengths and exploit the market opportunities noted in the SWOT analysis of Southwest Airlines. As industry trends change, so do the elements of this marketing mix to maximize profits based on airline market opportunities. This case of Southwest Airlines provides insights into successful low-cost business models, especially in the commercial aviation market.
The decisions, strategies, and tactics applied in this marketing mix aim for Southwest’s long-term success despite competitors, such as Delta and United. This competitive situation presents strategic challenges that affect Southwest’s performance and the quality of services available to travelers. Through its marketing strategy and marketing mix, the company develops and maintains profitable relations with its target customers, especially in the U.S. civilian aviation market.
Product
Southwest’s product mix revolves around the needs and preferences of customers. The company’s marketing mix includes goods and services that complement each other to satisfy air travelers’ expectations and to maximize revenues from target markets. Southwest’s products include:
- Air transport services
- In-flight merchandise
- In-flight entertainment
- Other services
Southwest’s core product is its air transport service for passengers and freight. Services for passengers are also the basis of the other products included in this marketing mix. These services are offered at competitive prices based on the company’s low-cost carrier model to maintain its corresponding low-cost airline branding. Considering the business opportunities available while customers are traveling with the company, in-flight merchandise and entertainment are included in Southwest’s marketing mix. The merchandise includes food, beverage, and other goods sold to customers while they fly. On the other hand, for a fee, Southwest Airlines offers in-flight Wi-Fi that allows passengers to access content, such as movies and music. Moreover, the company’s 4P includes other services that add value to customer experience and the airline business. For example, customers can book hotels, cars, and vacations. All these products represent the company’s marketing strategy that capitalizes on the niche of needs linked to travelers. The products and their specifications in this marketing mix agree with the goals and business targets based on Southwest’s mission and vision, which emphasize service quality, customer experience, and affordability for the benefit of travelers and other stakeholders.
Price in Southwest’s 4Ps
The price ranges and price points in Southwest’s marketing mix are based on a low-cost carrier model that aims to maintain competitive advantages based on low operating costs and low fares. Southwest’s pricing strategies are:
- Dynamic pricing
- Bundle pricing
- Premium pricing
Dynamic pricing is applied to Southwest’s booking rates. For example, through time-based pricing, airfare becomes higher as the flight date nears. Southwest’s marketing mix also includes bundle pricing, such as for vacation packages involving other companies and service providers. On the other hand, this marketing mix applies premium pricing in a limited way for interested customers. For instance, the Business Select upgrade allows Southwest passengers to access premium products, such as priority boarding and complimentary drinks. These pricing strategies indicate that the company’s marketing strategy is flexible enough to accommodate additional opportunities in the civil aviation market.
Despite variations among these pricing strategies, the actual price points and ranges align with the low-cost targets of Southwest’s generic competitive strategy and intensive growth strategies. Thus, the company’s 4Ps keep low prices and a no-frills approach to maintain the budget carrier branding. External factors and trends affect market conditions and can lead to changes in the actual prices derived through these pricing strategies in the company’s marketing mix.
Place
The places or channels that allow target customers to access Southwest’s services rely heavily on information technology. However, brick-and-mortar booking locations are also included in this marketing mix. With its hybrid distribution or place strategy, Southwest’s channels include:
- Southwest’s booking website and mobile app
- Third-party websites and apps
- Travel agencies and booking offices
Many travelers book their flights online using various options, including Southwest’s website and mobile app, as well as other companies’ booking sites and apps. Brick-and-mortar locations of travel agents and offices are also available. These channels show that Southwest’s marketing mix depends on the company’s online presence, although the online and brick-and-mortar operations of other firms are also significant. This use of information technology optimizes the company’s marketing strategy for high efficiency in reaching target customers and processing bookings. The location strategy included in Southwest’s operations management provides support for optimizing business efficiency and minimizing costs to enable the competitive prices included in this 4P. Even though the place decisions in this marketing mix may affect organizational size and office location, Southwest’s corporate structure (company structure) remains mainly based on flight operations and the locations of airports and hubs.
Promotion in Southwest’s Marketing Mix
Southwest’s marketing communications are typical in the industry. This marketing mix promotes the business and its services mainly through advertising, although other promotional tactics are applied. The primary promotional activities of Southwest are:
- Advertising
- Sales promotion
- Public relations
Southwest advertisements effectively reach target customers. As part of its 4Ps, the company advertises on TV and the Internet to maintain brand awareness and to promote its air transport services, especially during special offers. Sales promotion in Southwest’s marketing mix includes such special offers. For example, the company occasionally offers loyalty deals and airfare discounts. On the other hand, the public relations component of this marketing mix applies some of the branding benefits of Southwest’s stakeholder management and CSR/ESG strategy. This strategy builds the company’s brand and integrates stakeholder interests into business decisions, such as those for the company’s marketing strategy. Furthermore, Southwest’s online presence on Facebook, YouTube, and other online platforms promote the airline business and its affordable airfares through advertising, sales promotion, and public relations.
References
- Kerkemezos, Y., Pennings, E., Karreman, B., & van Reeven, P. (2023). Price asymmetries and the path dependence of market power: Evidence from the US airline industry. International Journal of Industrial Organization, 87, 102921.
- Sezgen, E., Mason, K. J., & Mayer, R. (2023). Airline brand management: A practical perspective to brand management in the airline industry. Research in Transportation Business & Management, 49, 100985.
- Southwest Airlines – Featured Offers and Deals.
- Southwest Airlines – Form 10-K.
- Southwest Airlines – Upgrade Fare Class.
- Southwest Mobile App.
- Southwest Vacations – About Us.
- U.S. Department of Commerce – International Trade Administration – Travel, Tourism & Hospitality Industry.