Direct And Indirect Marketing Strategy : Spirt Airlines : Marketing Strategies

The pricing strategy does not really differentiate it from the competitors as value-based service is not provided by the airlines. The low-cost structure and revenue strategy of Spirit Airlines give it a sustainable competitive

Spirit Airlines business strategy is that they do not believe customers should have to pay for amenities unless they are absolutely going to utilize them and the services they chose shouldn’t subsidize other passengers. Spirit believes, they can offer a cheap flight with no amenities and each added amenity will be a cost. In the end, the lower fares will stimulate air travel by attracting customers who would have used on-ground

The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B.

Flight Centre offers a very competitive price. The prices are usually are lower than its competitors when it comes to domestic and international flights. It provides the option of different prices ranges. These price ranges depend on the services that a customer requests. It provides economy class, business class, premium class, and first class price ranges. Due to its affordable prices and good services, it has grown to become a 13.5$ billion business comprising of more than 30 brands. It works had to keep up with the competition by providing best possible prices while ensuring customer loyalty (Flight Centre the Airfare Expert).

Operating under an intensely competitive environment, Southwest Airlines carefully projects its image so customers can differentiate its product from its competitors. Southwest positions itself in all its marketing communications as the only low-fare, short-haul, high-frequency, point-to-point carrier in America that is fun to fly (Cheng, 2010). Its low-priced fares are a brand equity which it "owns" in the mathematical sense of being the only major airline with a strong score on this attribute based on consumer research. Southwest’s brand exudes an element of fun: a down-home attitude which it leverages to present the consequences of low fares in a positive light. This is great

Small business customers and leisure travelers were the ones benefited the most from American’s new fare structure. Previously, small business customers who does not have the power and volume to negotiate with airline companies for discounted deals had to pay higher rates for first-class or coach tickets. American’s new cost structure reduced the full coach fares which allowed small business customers to purchase flight tickets at cheaper prices more conveniently. Leisure travelers, unlike business travelers, have more flexibility in terms of travel dates, thus allowing them to take advantage of the advance-purchase discounts and Saturday-night stay discounts under the new fare system.

Social cultural forces are a double-edged sword for the company. Southwest used advertisements that targeted the cultural values and common buyer behavior of upper-middle class to upper-lower class consumers. Ads such as “bags fly free” and “Why do they hate your bags” resonated with consumers that believe airfare should be all-inclusive. The negative effect of this competitive advertising is reduced fee revenue compared to competitors like United Airlines. The demand of niche airlines will change as the demographics change, such as an increase in millennials flying versus baby boomers.

Market structure can be defined as patterns of behaviour by enterprises in an effort to adjust to the markets in which they operate (buy or sell). Pricing strategies and collusive behaviour mergers are a few dimensions of market conduct. It is the industry norm for a legacy carrier to offer service to most popular destinations; Delta reducing routes to a similar schedule as the low-cost airlines is not an option in the multi-billion dollar industry. In order to gain market share from low-cost airlines, Delta must create a value proposition that differentiates itself from its competitors. Many customers will pay a premium if the level of service provided is higher than the low-cost, no-frills

Southwest Airlines began its participation with Sabre at the Basic Booking Request in 1995 after observing the success of JetBlue. They also began the partnership with Sabre in an effort to ease the stress felt by travel agents in Dallas. Southwest Airlines signed a 10-year agreement with Galileo in May 2007, which could potentially allow for international expansion and codesharing opportunities (McDonald, 2007). Kevin Krone, Southwest Airlines vice president of sales, marketing and distribution said in a May 2007 press release that “Southwest recognizes the significant value of Galileo’s distribution channels, and we are please to provide our key travel agent and professional travel manager partners, who also are Galileo subscribers, with increased access to our content. This new agreement allows us to reach new Customers who will now have an opportunity to buy, book, and manage Southwest through the efficiency of the Galileo GDS channel” (Southwest Airlines, 2007, May 16).

fares to establish profitability and loyalty. However, they are not always the cheapest, so their

Over the years, company sustained low operation costs and tickets prices following well-developed strategy. Among other measures, it was able to keep prices low by flying only one airplane type, minimizing service and maintenance expenses, and convincing employees to cut gate turn-around times and make the airline more efficient (Fitzpatrick, 2005).

The airline industry has always been a fiercely competitive sector. Since the invention of low-cost carriers, also known as no-frills or

As a legacy airline, it would not be productive for United to try and gain business from those that are more concerned with lower ticket fares. Instead, the airline chose to focus on the frequent business travelers as their core market. By segmenting the customers, United chose to focus on the global executives as their target market. “These folks made up only 9 percent of United’s travelers, but they represented 46 percent of United’s revenue” (Di Frisco, 2011, para. 2). By using psychographic segmentation,

There have been few inventions to change how people live and experience the world considerably as the creation of the airplane. Today, traveling by air has become the norm and it would be difficult to imagine life without it. Air travel has improved the way people are able to conduct business by shortening travel time and changing their thought of distance. The companies within the airline industry exist in a very competitive market. One of those companies, Southwest Airlines, features low-fare, no-frills air service with frequent flights of mostly short routes. Costs are kept down by the exclusive use of Boeing 737 aircraft, which allows for low maintenance costs and quicker turnaround times for flights, and by an emphasis on ticketless travel (Encyclopedia Britannica). This paper will address two segments of the general environment and how they affect Southwest and the airline industry; evaluate how Southwest has addressed two forces of competition; predict what Southwest might do to improve its ability to addresses these forces; assess the external threats affecting Southwest; discuss Southwest’s greatest strengths and most significant weaknesses; determine Southwest’s resources, capabilities, and core competencies; and analyze their value chain.

The airline industry can be considered an imperfect oligopoly. There are several large carriers that dominate long distance flights, and many small carriers that compete for short distance flights. Competition is fierce, and the return for most carriers is very low. Some airlines are trying to differentiate themselves, like JetBlue for example, by offering superior services at low prices. Other low cost airlines, like Southwest, offer low costs with no frills. Most airlines offer a frequent flyer programs in order to develop brand loyalty. In recent years there has also been several alliances formed between airlines. These alliances enable