Airline Industry : Southwest Airlines

837 Words Oct 2nd, 2015 4 Pages
According to IBISWorld Global, worldwide travel and passenger numbers are expected to grow due to changes in the demographic and economic environments, such as declining unemployment rates and rising income levels. Therefore, airline companies such as Southwest Airlines differentiate their brands from competitors by proactively creating value for customers. Since 2001, the airline industry has experienced greater costs due to the failing economy, volatile prices for fuel, and increased global competition. In order to combat these environmental factors, Southwest Airlines keeps airfare costs lower than those of competitors, focuses on fuel-efficient technology, and expands its services into other countries.

In a time period with a weak economy due to multiple recessions, Southwest Airlines acts in customers’ best interests by marketing their airfare costs as being lower than those of competitors. As mentioned in the textbook, consumers nowadays buy fewer products and services but look for greater value. Therefore, Southwest Airlines uses value marketing by offering low airfare prices. According to Hoovers, Southwest Airlines opposes charging baggage fees to passengers in order to protect its low-cost image. Since Southwest Airlines does not charge additional fees for baggage and extra services, value-savvy customers stay loyal to the firm because the firm reflects customers’ interests of low base fares, and thus fosters the relationship between the customer and the company.…
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