Blog #2: Southwest Airlines

When we look at industries made up of companies that are substitutes for each other we generally see producers that provide products or services that are very similar to each other, and aside from the recognizable name and colors of their brand, not much varies. For example, when I'm picking a gas station to stop and fill my tank up at, I could really care less about what company it is that's providing the gas so long as their prices are as low as their competitors, or if I'm choosing between Pepsi or Coke I really don't care as long as the prices are comparable and it's convenient to purchase their product. Some people might feel the same way about the services that airlines provide, however, if we compare the companies that we fly with we can find some characteristics unique to each company.


http://www.underconsideration.com/brandnew/archives/new_logo_identity_and_livery_for_southwest_airlines_by_lippincott.php#.VrgbnZODFHw

Southwest Airlines has a marketing strategy and business culture that speaks for it's self. They are the largest domestic carrier in the United States and they have a huge presence in the airline industry. Yes, their futures and commodities trading groups play a major role in the success of the company at the end of each quarter, being that every flight depends on there being two wings full of fuel, but a large chunk of Southwest's success can be attributed to the culture and marketing strategies they have used though they years, originally cultivated by the leadership of business genius Herb Kelleher and on through today with Gary Kelly.

Airline Domestic Market Share November 2014 - October 2015
	Airlines	Share
	Southwest	18.0%
	Delta	16.9%
	American	14.9%
	United	14.7%
	JetBlue	5.3%
	US Airways	5.2%
	Alaska	4.5%
	Spirit	2.5%
	SkyWest	2.4%
	ExpressJet	1.9%
	Other	13.7%
Mouseover each bar for the total.
Market share based on Revenue Passenger Miles November 2014 - October 2015.

http://www.transtats.bts.gov/

Herb Kelleher founded Southwest airlines in Dallas Texas in 1971. The company had just four planes and it only flew to three destinations, all of which were in Texas. It's amazing and inspiring to think of where the company started off and how far it has come. From day one the companies main objective has been to provide as many flights as possible with tickets that sell for the lowest possible price. They've achieved this by implementing a business model that puts the companies employees first. The culture that comes along with a company that values it's employees above everything is apparently really good for business. The idea behind this strategy is that happy employees who "LUV" the company they work for make for happy customers, and happy customers make for happy share holders.

https://www.google.com/search?q=herb+kelleher+1971&espv=2&biw=1333&bih=870&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjnr9fCrefKAhVI9x4KHXO3ASEQ_AUIBygC#imgdii=t_6kAbujzZtkxM%3A%3Bt_6kAbujzZtkxM%3A%3BzWgI742V_xC2AM%3A&imgrc=t_6kAbujzZtkxM%3A

http://afewprinciples.com/2015/06/30/learn-from-the-best/

Everything from how the companies logo looks to the faces of the crew members who greet passengers as they board each flight just radiates the kind of energy that you can only find at companies with employees that understand where the money for their salary comes from. Southwest understands that the most important part of building their brand is to capture the hearts of their passengers. Their logo has always incorporated a heart in it and more recently they have introduced a new logo that is a big heart painted in the companies signature blue red and yellow color scheme. The companies stock exchange symbol is NYSE:LUV. You could say that the company has been built on love and the hard work of its employees.

http://www.ispot.tv/ad/7aIM/southwest-airlines-black-history-month-all-year-round

In the link attached there are dozens of advertisements that show who and what Southwest's values 

Southwest Airlines is an amazing company and the story of how they came to be is inspiring. Using innovative business strategies, the company has worked it's self all the way to the top of the airline industry and it looks like they will continue to grow for years to come, picking up more and more international destinations. Next time I will look at the future of Southwest airlines and discuss whats to come. Thank you for reading!

   

Blog #1: Introduction

Hi there and welcome to my blog! I'm developing this page to help myself and whoever else is interested to learn more about how businesses become successful and how they market themselves. Through the semester I hope to create a page full of interesting marketing examples and insights that will help readers understand a vast range of marketing concepts.

Before I bombard you with articles, videos, and pictures, relating to marketing strategy, I think we ought to take a look at a few fundamental marketing concepts. The fundamental concepts of marketing, or "the marketing mix", are made up of four controllable factors; product, price, promotion, and place. "The four Ps" are areas of focus that are essential to the success of any company.

Product

 

"BURLINGTON, Vt. -- At 24 years old, Cyrus Schenck is a college dropout and the founder of a ski company". Renoun skis utilize a patented hyper dampening technology that may change the ski industry forever. The hyper dampening material potentially could be used everywhere, shoes, tires, protective padding, you name it. common goods we see today might be different tomorrow because of Schenck's product. If you want to know more click the link below.

http://www.usatoday.com/story/tech/2015/04/13/new-ski-innovation/25731887/

 Product is the first of the four Ps. It is a good or service that a producer creates in order to meet the needs of consumers. 

There are generally two types of products:

-Physical goods: These products are designed to serve some sort of everyday function for consumers. We are constantly surrounded by these products. Example: a pencil

-Services: This type of product is provided by an organization that provides some sort of service that helps customers get what they need. We depend on this type of product in our lives everyday. Example: Saint Michael's College

Price

 

 3d printers potentially could help companies reduce their costs of production by automating many Jobs traditionally done by employees. We have seen sophisticated modern technology applied in the production of many goods we use and depend on today. For example the robotic instruments used to manufacture cars. such technologies reduce costs and improve efficiency.

http://www.3ders.org/articles/20130205-lenovo-dhl-vision-3d-printing-and-customization-to-become-the-new-norm-in-future.html 

 

 Milton Friedman, a famous economist who had strong faith in markets and their ability to properly dictate prices.
Milton nails it in this videolink: https://youtu.be/7V9ihC1o7wc 

 

Next is price. The price of a good is typically dictated by the cost of production and the market that the good falls in. The cost of production influences price because producers need to be able to pay for the resources and inputs required to create what ever it is that they are providing. A market price is the average price of all goods that are substitutes for each other (or goods that are similar to each other). Honda and Toyota are examples of substitutes. When there are multiple goods or services that are similar, producers compete with each other to provide the best product for the lowest price. Why? because consumers like to see their dollar go further. In economic principal, the profits companies make from sales of goods are zero in the long because when there are profits to be made competitors enter the market driving prices further and further down. When competitors no longer can offer prices that match market price, they are usually forced to leave the market. Consumers should like business competition because it keeps the prices they pay low.

Promotion

 

The new Star Wars movie was promoted everywhere. I've never seen so many advertisements and related products for any other movie. So far, the movie has grossed $895,426,162; more than any other movie in history.

http://www.boxofficemojo.com/alltime/domestic.htm

Third is promotion. This concept is about how producers communicate with consumers, whether it be by TV commercials, or just by word of mouth, promoting a product or service is the best way to make an organizations potential customer base aware. You name it, anything that explains a companies product in a way that hooks consumers is considered promotion.

Place

 

  You can now order Domino's Pizza using twitter. This is a whole new level of accessibility.

https://twitter.com/dominos?ref_src=twsrc^google|twcamp^serp|twgr^author

 

Last of the four Ps is place. This concept is about how producers get their product to their customers. The accessibility dynamic between producers and consumers is important because the success of producers is dependent on how good they are at putting their product in the hands of consumers in exchange for money. On your phone, on the corner, or on the TV, wherever you look there are producers are trying to sell you stuff, and generally, the more convenient they're service is, the more they sell.

Thank you for reading my very first blog! I hope that it was a productive use of your time and you enjoyed the information discussed.

Next time I'm going to talk a little bit about a company that has had a huge impact on my life. My father is a pilot for Southwest and for as long as I can remember he has told stories about his experiences at work, whether he's telling me about a tricky landing procedure he had to pull off, or just a funny story about the company. One thing that my father has told me about his job time and time again is how lucky he is to work for a company like Southwest. My father's passion for aviation and love for his company are why Southwest airlines matter to me. Southwest is a company that does more than just maximize efficiency and real in profits, it's a company that values its customers and employees over everything. The success and stability of the company can be attributed to it's values, and Southwest's values are different. It's customers and employees are number 1, not just because it sounds nice in some phony business model, but because it is how the company was built and how it has succeeded since it was created in 1967. Since then it has grown to become the largest domestic carrier and is still expanding its horizons. This company has utilized all of the concepts in the marketing mix in innovative and inspiring ways that I think we can learn from.