Cases Questions

Chen Chen

201-388-3924

elsacc.chen@gmail.com

1. First, to quote what Muse told the agency: “We’ve got no hostess and no uniforms and no airplanes and no design and no money but we’re going to have an airline flying in 120 days!” So their first hurdle was basically marketing something that didn’t actually exist and had no pre-existing ideas, assets, people, intellectual property, or branding to build on and use as a jumping off point.

An arguable larger issue was the threat of the SEC should the company decide to market and advertise  the airline before the initial issuance of its stock. Doing so, as argued by the lawyer, might violate Securities and Exchange Commission regulation. The only way around this for the time being was to conduct advertising strictly for personnel.

2.  Consumers look for affordability and punctuality most; if an airline develops a reputation for being constantly late or unreliable for flying out of a particular city, the consumer will most likely do their best to avoid that airline, sometimes at all costs. Part of this also includes the ease of the check in process, which Southwest was keen to focus on with shortened ticket purchase through the use of print-outs and pedal-operated tape recorders to log the names of passengers.

3.  One of the most important segments were the passengers looking to flying between Houston, Dallas and San Antonio but were boarding the legs of longer interstate flights offered by a carrier such as Braniff. As King would realize, this market was substantial and echoed the Los Angeles-San Francisco market. Furthermore, the fliers in the Houston, Dallas and San Antonio triangle felt poorly serviced with Braniff aircrafts constantly either unavailable because of full booking, or regularly delayed.

4. In June 1971 service began and Southwest was quick to survey passengers who were flying out of Houston, and found out that a significant numbers of passengers would much rather be flying out the William P. Hobby Airport (12 miles southeast of Houston, instead of the Houston Intercontinental Airport, (26 miles north of Houston). Quick to satisfy consumer needs, Southwest, during November of 1971, transferred half of their fourteen round-trips flights between Dallas and Houston to Hobby Airport. Southwest also revised schedules by initiating the new daily round-trips between Houston(Hobby airport) and San Antonio. Regarding promotion, the first six months utilized television and publicity events, which featured the Southwest hostesses, and a direct mail campaign was used targeting high-level executives with 50% off vouchers, which was highly effective as ,1700 vouchers were used.

Afterward, Southwest focused more on regular business travelers, which accounted for 89% of their traffic. To do this, Southwest relied heavily on TV advertising, once again showcasing/featuring the hostesses.

5.  The products offered by Southwest are their flight by carrier services between the Texas triangle of Dallas-Houston, Dallas-San Antonio, and San Antonio-Houston. Price-wise, Southwest is competitive (at first offering a distinctly lower price as a market penetration strategy), and later on using half fare prices to successfully fix the problem of low revenue on the Dallas-Houston flights.