Select a Fortune 500 international company in the service industry. Using your selected company as the basis for your research, prepare a paper that will:Describe the main line of business of the company.Name four of the countries in which the company operates.Explain in detail the implementation of the 4Ps marketing mix concept by the company.Describe any differences observed in the implementation of this concept, from one country to another.
Southwest Airlines Business Research
Southwest Airlines Company is a Dallas-based passenger airline that concentrates its operations in the United States, with only a few destinations in the international markets (six destinations in the international market). Southwest Airlines’ main line of business is freight services. It also provides other ancillary services such as charter services, car rentals, corporate travel & groups, and providing vacation packages. The Company was founded in 1967. Currently, its customer base has grown to over 20 million customers a year. According to a report from Bureau of Transportation Statistics, the company is currently the second largest domestic carrier in the United States, having transported over 8.569 million customers in 2014 (Smallen, 2014). Southwest Airlines came second to Delta Airlines, which recorded 8.850 million customers in 2014. Other close competitors such as American Airlines and the United Airlines recorded 7.104 million and 6.755 million passengers respectively in the same year.
Countries in which the company operates
For decades since inception, the company has primarily operated in the U.S. domestic market, gaining recognition as the top domestic carrier in terms of the number of customers in the U.S. market. In 2012 however, the company launched a growth program which saw it commence flights in a number of selected international destinations. The airline provides flights across a large number of U.S. states such as Denver, Oklahoma, Dallas (headquarters), Las Vegas, and among others. In the recent years, the airline has expanded operations to international destinations such as Mexico, Caribbean, Bahamas, Jamaica, and among others. The company has also made plans to expand to other international destinations such as Puerto Vallarta, Cancun, and Belize City in its international expansion program (Tully, 2015).
Implementation of the 4Ps marketing mix concept by the company
The 4Ps of a marketing mix strategy include the product, price, place, and promotion methods. The 4Ps of Southwest marketing mix are as follows.
Product – the main product offered by the airline is fright services to customers within the U.S. market and a few select international destinations. The company also provides other ancillary services that are meant to attract and retain customers. These include hotel services, car hire services, inflight entertainment, Wi-Fi, and light drinks during flights. These services also help the airline to stay ahead of competition. It is worth noting that the airline industry in the U.S. is characterized by stiff competition. In particular, the low cost model in which Southwest operates has been copied by other airlines such as JetBlue, EasyJet, American Airlines, and among others (“Southwest,” 2016).
Price – Southwest Airlines uses cost leadership or low pricing in the airline industry. The airline is known as a low cost carrier due to its relatively low prices for flights. There are no premium seats reserved for customers. However, priority boarding is provided whereby the first customers to board are allowed to pick any seat, including those which are more spacious. Customers are given discounts if they purchase flight tickets three weeks in advance. Southwest also matches its prices to that of competitors on certain routes.
Place – Southwest Airlines covers about 35 U.S. states. The airline has direct routes in more than 70 U.S, cities (“Southwest,” 2016). Customers can book flights online without having to travel to booking agencies. The airline has also added new destinations in the international market for growth purposes as earlier mentioned.
Promotion – Southwest Airlines uses a variety of promotion methods to attract customers. The airline uses print media, TV and the internet to advertise its products and attract new customers. Apart from media advertising, the company has a number of promotions targeted to customers. For instance, the company provides two bag fly-free offers on all passengers. The airline has established a Rapid Reward Promotions program where customers earn points based on flights they take. These points can later be redeemed. This helps the airline in attracting and retaining customers. The airline also provides coupon codes which enables customers to save up to 35% of the flight costs (“Southwest,” 2016).
Differences observed in the implementation of the concept
There are a number of differences observed in the implementation of the 4Ps marketing mix. The airline’s promotions are targeted for particular countries only. For instance, the airline is offering getaways to Cancun where it promises customers to serve up to $ 200. This promotion is meant to increase the number of passengers on the new route to Mexico and its environs. Southwest Airlines is also offering low freight charges to customers flying to Las Vegas. Some of the promotions offered include free tickets to various entertainment hubs in the city. For instance, the airline is providing tickets to ShowStoppers. This will increase the number of passengers using Southwest Airlines.
Southwest Airlines also prices its services differently often depending on the nature of competition. In countries or states where there is stiff competition, the airline prices its services based on competitor prices rather than on mileage basis (Tully, 2015). In long flight routes which takes more than two hours, the airline gives packaged snacks to customers. These are not available on shorter routes.
Smallen, D. (2014). Pocket Guide to Transportation 2014. Bureau of Transportation Statistics. Retrieved from http://www.rita.dot.gov/bts/press_releases/dot004_14a
Southwest. (2016). Special Offers and Travel Deals. Retrieved from: http://travel.southwest.com/specialoffers/topOffers.html
Tully, S. (2015, Sep. 23). Southwest bets big on business travelers. FORTUNE.