Southwest Airlines has been a model of success for the past forty years. It is a success based on company values, on low prices, on business innovation, and on the quality of the service, among other elements. The company built on these values and used an adequate promotional campaign and strategy to build brand loyalty. Today, many of the company's clients use its services because of what is known as brand loyalty: customers buying the same services because of an attachment to the company that often goes beyond simple decision making factors such as price or quality.
The paper concludes that Southwest Airlines has been successful for many different reasons, but primarily through a successful combination of good promotion, relaxed and fun marketing and advertising and a solid set of values and competitive advantages, which it continuously emphasized in its integrated communication strategy. Its promotional mix was adapted to the characteristics of the airlines industry, focusing on traditional marketing and advertising instruments rather than the online technology. Fundamentally, the idea of fun was incorporated in the mix, resulting in an informal approach that appealed to people and that strengthened brand loyalty. Brand loyalty is perhaps Southwest's strongest asset, many of its customers preferring the low cost, efficient model that the company has promoted.
This paper will aim to look at some of these aspects from both a theoretical and practical perspective. First of all, it will examine the theoretical framework, with a focus on brand loyalty and promotion. Second, it will transpose these into practice by examining how Southwest Airlines translates the theory into its own planning and approach, including through its fun-centered advertising. The third section will aim to look at how some of the things discussed throughout can be replicated in other areas, such as business to business. The paper will also look at how information technology improves the opportunities for companies such as Southwest Airlines and how it could potentially create a competitive advantage, particularly as a more efficient instrument of communication.
This section looks at the existing literature on two primary topics that will be the object of this paper. The first refers to promotion, as part of the marketing mix, aiming in particular to understand the theoretical contributions to the promotional mix. The second looks at brand loyalty, particularly at studies that analyze the factors that influence brand loyalty, in particular ways that an organization can maximize brand loyalty.
Kurtz (2010) proposes three distinct objectives for promotion, as part of the marketing mix that a company employs. These include to present information, to differentiate (a product or a company) on the market and to increase demand. As Dunn (1995) mentioned, even if a company has developed the best products and commercializes them at the best prices on the market, it is all useless unless the public knows, in detail, about all these. Promotion is the instrument to make people know about what one has to offer.
One of the important components of promotion is the promotional mix. Since one of the objectives of the promotion element in the marketing mix is to inform the customers and, thus, to communicate efficiently, the promotional mix identifies the best instruments that can be employed in that sense, as well as the degree to which (and the ways in which) these instruments can be used (Chartered Institute of Marketing, 2009). The instruments include advertising, public relations, sales promotion, direct marketing and personal selling. It is thus obvious that the promotional mix is a complex undertaking that needs to follow the company's strategic objectives and the managerial vision.
Harrell (2008) also points out that the company image can be considered a sixth element in the promotional mix. This is probably something that gains more ground and substance in the informational society of today, when information (including bad information) about a company can be accessed by the consumers much quicker.
The corporate image is all about reputation or how a client perceives an organization. If the company's reputation is bad, it is possible for...
The corporate image influences, sometimes in a tacit way, the way the consumer decision is formed. The fact that a company produces, at low cost, in countries where labor legislation is more loose is, for example, a way in which the company's image can be affected. Otherwise, a company that has a strong corporate social responsibility strategy could be perceived as a "good" company and positively influence the purchasing decision.
Probably one of the key aspects about the promotional mix is that it needs to be balanced. All the promotional mix instruments should be included in the overall marketing strategy in a balanced way and applied to the particular situation. This will be further expanded in Section C, when particular types of relationships, such as B2B, will be discussed.
With the current technology, some of the components of the promotional mix gain a new perspective. For example, direct marketing required a database of names and a platform to communicate the advertising message. In the past, this used to be represented by fliers, cell phone text messaging or even phone calls. However, today, with technology, it is more about the email and, more and more, about social platforms like Facebook or Twitter, to enumerate just a few.
Some of the components of the promotional mix, such as advertising, go back at least 150 years. As discussed in the previous paragraph with direct marketing, the new technologies offer enormous opportunities. Advertising has complemented traditional advertising with online advertising. Online advertising has the advantage of being targeted advertising: quite often, Google or Facebook offer the opportunity for businesses to monitor online client activity and, thus, tailor their advertising accordingly. A good example in that sense is the way Google advertises in the Gmail account, on the sides of the email content.
Public relations is the essential mechanism through which information is passed from the organization to the public. The aim is to gain exposure for the company's products, to persuade the public (whereby the public is represented by potential and existing customers) and to promote a certain company image (Rubel, 2007).
Public relations, in the current technological environment, similarly to the other instruments that are part of the promotional mix, have new opportunities. The new channels of communication available for an organization offer new ways in which to provide information to shareholders and more effective ways in which to interact with clients and others on the market.
A particularly interesting expect, especially given the particularities of the industry, is the governmental relations component of public relations. The idea in this case is to properly interact with the government in order to influence it to produce appropriate policy that can drive business for a company.
A lot of the marketing theory has discussed loyalty, namely brand loyalty, as a way in which a company can evaluate its success. According to Paul et. al (2010), as much as 69% of senior marketing managers that were interviewed mentioned that loyalty is a very useful metric and one that they consider when making decisions and evaluating their performance.
The idea of brand loyalty is quite straightforward. Loyalty, in general, shows consistency in one's options. In the case of brand loyalty, it shows the degree to which an individual is likely to continue using a certain brand and under what conditions. This translates in a process that involves repetitive purchases and commitment towards repeatedly buying the same product or service from the same company (Dick, Basu, 1994).
Punniyamoorthy and Raj (2007), following empirical research, have considered that brand loyalty includes, among the most important elements and characteristics, commitment and repeated purchase. Other factors that impact brand loyalty are perceived value and brand trust. All of these contribute to creating brand loyalty over time.
It is important, even given the case in discussion here (brand loyalty in the case of Southwest Airlines) to differentiate between occasional loyalty and true brand loyalty. Occasional loyalty is usually determined by some marginal factor that has an impact on the purchasing decision at a certain moment of time. As Jones,. Mothersbaugh, and Beatty (2002) pointed out, such loyalty can be determined by a lack of viable alternatives or simple convenience. It does not show the adherence to a product or service from a company because of a set of intrinsic qualities that the respective product/service or the company itself has.
What is truly of interest when referring to brand loyalty is to correlate the perception that customers have about a certain brand with a mechanism of continuous repurchasing. Reichheld (1990, 1993) looks at some of the advantages of brand loyalty for an organization. These advantages include constant revenues, the capacity to adopt a pricing strategy with higher price levels etc. This is something that Dawes (2009) supported in his research, where he argued that the…
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