Southwest Airlines: Fun Way to Promote

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.

Introduction

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.

Section A

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 a client to refuse buying from that particular company, to the degree to which this could become a trend with other consumers. 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 price sensitiveness decreases as brand loyalty increase.

It is also important to point out that brand loyalty could even potentially mean that a customer will prefer a company's products or services because of loyalty even if there are others on the market with better prices and better quality. The loyalty thus implies a complete commitment to a particular brand, something that was formed over time and is likely to withstand potential changes on the market or to the product or service that is being commercialized.

Kotler (1991) has done a lot of research in the area of brand loyalty. First, he supports the Pareto 80-20 rule, whereby heavy users are the 20% that provide 80% of the entire profit of an organization. Starting from this idea, he defines four types of brand loyalists, depending on the level of brand loyalty.

The four type of brand loyalists are hard-core loyalists, split loyalists, shifting loyalists and switchers. The hard-core loyalists are those who are entirely loyal to one brand and who will purchase that brand under any conditions. The split loyalists are those who are generally loyal to two or three brand, switching between these depending on different factors and constraints.

The shifting loyalists have no particular preference for a brand and will move from brand to brand, according to different external influences. The switchers have absolutely no loyalty towards brands and are generally influenced in their purchasing patterns by factors such as price or the social impact of their purchase.

Other studies, such as Rowley's (2005) classify brand loyalty differently. She proposes the following categories: captive, convenience-seekers, contented and committed. The captive loyalists have no other choice or alternatives; convenience-seekers look to the convenience of the brand rather than any other qualities; contended customers will keep consumption levels at the same amount; and the committed ones are the actual brand loyalists.

An important category of studies looks at the different factors that impact brand loyalty. Some of these have been previously briefly discussed in other contexts. It is obviously a difficult and complex process that eventually results in an individual preferring one brand over any other for an unlimited period of time.

Since most of the studies analyzed here have concentrated on building brand loyalty, it is also interesting to have a look at how brand loyalty is deconstructed. Surowiecki (2014) mentions the case of Lululemon Athletica, an athletic and sports apparel producer, who quickly turned from being a cult and a lifestyle to quickly decelerating sales. Apparently, what led to this was the customers realizing that the quality of the products were quite low (bad materials and bad dyes), something supported by unfortunate statements from the CEO and founder.

Surowiecki argues that people today are more informed and this includes accessing reviews across the Internet, reviews that could negatively impact brand loyalty. People have become much more attached to information that circulates freely across the Internet, from other people's opinion, to information about the products or how they are manufactured and to company practices.

Section B

This section proposes to translate the literature review and theory previously described into the promotional strategy at Southwest Airlines, as well as the brand loyalty. This section will cover the main characteristics of the promotional strategy at Southwest, but will also include a discussion about the instruments and approach that Southwest employs in order to consolidate brand loyalty.

As with any other promotional strategy, Southwest Airlines centered its promotion on its competitive advantages, namely what it brings to the market in a better way than the other airline companies. Primarily, Southwest brings low costs and a more effective route model than the hub and spoke used by other companies, namely the point-to-point. As such, Southwest presents itself as a low-cost leader (Hall, 2008), but also as an organization who brings better service at the same rates.

So, the promotional strategy aims (according to the three objectives discussed in Section A) to bring to cost-conscious business travelers the following information: Southwest gets you from city A to city B. without passing through city C. And at a lower cost. For the business traveler, this message is extremely appealing, because it implies both lower costs and a more timely and efficient journey.

Another important idea that Southwest Airlines had was to focus the promotional strategy on the idea of fun. Before looking closer at how fun is employed in the overall promotional strategy at Southwest Airlines, it is useful to emphasize the fact that fun is not necessarily an element by itself, a quirky way of doing business. Fun actually aims to reflect an organizational culture that emphasizes a positive, can-do orientation (Rodriguez-Ginorio, 2011).

Fun is also an innovative way to tackle an otherwise difficult industry in which to differentiate. As Tubbs and Jablokow (2009) pointed out, it is not only about the idea of fun in itself, but about being creative. With Southwest, the idea was to be creative in presenting a business model in an otherwise tern industry. How to sell better services at lower prices differently? On one hand, by introducing funny advertising campaigns and commercials, as well as by inducing the employees, such as flight attendants, to employ fun on board the airplane.

This seems to have come from the founder's (Herb Kellerher) idea of creating a company with a relaxed organizational culture (Sandri, Lees, 2001). Relaxed also meant fun and fun reverberated into different areas, including the relationship with customers, the relationship between management and employees, the approach to the market and the way the competitive advantages that Southwest Airlines has are promoted on the market.

This can have an important impact on how clients and partners perceive the company, including, for example, the fact that it could be seen as a company who has no trouble handling its problems, who has excellent relationships with its stakeholders and who is keenly aware of its place on the market and of its vision for the future.

So, the previous paragraphs connect well with the fact that corporate image is a vital part of the promotional mix at Southwest Airlines. The company has everything in place in order to build a solid corporate image, based on good reputation. The company's reputation is based on two essential pillars: it has proven quality service at low prices and it has point-to-point flights. Building on these, the company has built the reputation of a solid organization, which was able to support its business model in a challenging market no matter what the difficulties: legal battles, September 11 or oil crisis that raised the price of fuel.

This image is completed with an excellent advertising campaign. There are several interesting things about the Southwest advertising campaigns. First of all, as previously discussed, they are built around the idea of fun. Second, it is notable that Southwest Airlines has remained dedicated to the traditional advertising environment. For example, in terms of direct marketing, it has a preference for banners, posters and similar instruments of direct marketing. Although one cannot argue that new technologies are also part of the advertising tools Southwest uses (the company has a well-documented website, it advertises on different websites with travel specifics etc.), traditional advertising seems to be preferred.

This is probably because of the characteristics of the industry. It is easier to advertise with posters in airports and other places where the potential client travels and see the promotional message. It is also easier for a company like Southwest to use its strong brand and company image to promote itself as a far more efficient instrument than direct marketing or advertising. It is safe to say that reputation is probably the strongest promotional asset that the company has.

Mirroring some of the advantages of brand loyalty that Reichheld has identified and that have been discussed in the previous section, for Southwest Airlines, the result of brand loyalty is a constant (or growing) number of consumers who chose Southwest because of several reasons. These reasons are identified in the Customer-Based Brand Equity (CBBE) pyramid for Southwest Airlines and include fun, satisfaction, low prices, dependable services and short-haul trips (Keller, 2001).

Looking at Kotler's four categories of brand loyalists, it is clear that Southwest Airline loyalists are usually the type of hard-core loyalists or, at most, split loyalists. Those flying Southwest Airlines have done so for a long period of time not only because they are attracted by the low prices and good services that the company offers or the routes, but because they adhere to a certain set of values that Southwest seems to embody, including a focus on fun as part of the promotion strategy.

When looking at brand loyalty in the case of Southwest, many studies identify an element referred to as "energized differentiation and relevance" (Lauer, 2010). Energized brands had, most importantly, a strong vision that they would put into practice. The vision that Southwest proposes is that "employees are our first customer." This is an interesting proposition that implies that brand loyalty at Southwest Airlines is very closely linked to the employee policy at the company, namely to the fact that the organization ways in which to keep employees continuously motivated, helping them perform better.

Miles and Mangold (2005) have an entire study that analysis this relationship and aims to understand how employee branding links to brand loyalty. Their thesis is that employee branding creates a competitive advantage for the organization, which translates into They point out, in a different work, that the link is a result of the fact that employee branding proposes the internalization, by the employees, of the company vision and brand, which, in turn, is projected onto the customers. This translates eventually into brand loyalty.

Section C

This section will aim to wrap up and conclude the analysis of brand loyalty and the promotional strategy at Southwest Airlines, based on the previous two sections. It will include personal opinions and an evaluation of how successful Southwest was in implementing the appropriate policies to reach its goals.

In my literature review, I explored the notions of promotion and brand loyalty, looking particularly at some of the objectives of promotion, as part of the marketing mix, and some of the characteristics of brand loyalty, including in terms of how brand loyalty divides the consumer according to different categories, what are some of the factors that stimulate brand loyalty and how this is threatened in an informational society.

The first thing that I want to point out is that, obviously, since it is about a market context, the application of the theory in Section A to the particular situation in Section B, namely the Southwest Airlines case, is contextual. However, contextual does not, in any way, mean limited by the case of Southwest Airlines. I believe that Section A proposes some theories that have a general applicability, to a reasonable degree.