Southwest Airlines - Distribution Strategy Essay

Decent Essays
Case Study: Distribution Strategy
Distribution strategies exist in three forms: exclusive distribution, selective distribution, and intensive distribution. Kotler and Keller (2009) define each of the distribution strategies as: exclusive distribution limits the number of intermediaries used; selective distribution depends on a limited number of intermediaries; and intensive distribution works with as many outlets as feasible. The distribution strategy of the airlines industry was not a part of its early history, but is now integral to the success of airline organizations.
The airline industry did not require a distribution strategy initially because passengers could purchase flight tickets directly from the airline’s desk. McDonald
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Fares are typically higher when sold through GDSs rather than through the airlines website directly or through intermediaries. These fares may be higher, according to McDonald (2007), because they cater to business travelers that usually need last-minute fares.
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).
While Southwest Airlines has increased their global distribution system network in recent years, there are still areas
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