Segmentation and Target Market for Southwest Airlines

2017 words 9 pages
Segmentation and Target Market for Southwest Airlines
Steven Garnes
MKT/571
August 10, 2015
Denise A. Rueb

Segmentation and Target Market for Southwest Airlines
Introduction
Southwest Airlines was formed in 1967 by Rollin King and Herb Kelleher and started service in June of 1971. The airline is headquartered in Dallas, Texas and originally operated flights within the state of Texas. The company has since expanded and now operates flights from Dallas to almost all major cities in the United States and is considered the largest low-cost carrier in the country. “Southwest seeks to offer a travel product that is built around flights targeted to specific demographics and ticket pricing that is simplified so that passengers know
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“Having happy employees means a company is more likely to have happy customers. Southwest knows this and uses it to its advantage. Workers at Southwest enjoy their jobs and see them as a natural part of their lives. This attitude is reflected in Southwest’s employee retention rate which is just over ninety-two percent” (Manuri, 2012).
One of Southwest’s key differentiation strategies is its frequent flyer program called “Rapid Rewards.” Its competitors have frequent flyer programs, but their customers are not able to redeem miles for any seat at any time. Most airline frequent flyer programs have blackout dates, usually during high travel periods, where customers are not able to book flights using their miles. Southwest does not have this restriction, and its customers can redeem their miles for any seat, on any flight, at any time with no blackout dates. “Southwest’s other key differentiation strategy is what they call aggressive promotion. They take their key messages, put them into easy-to-understand commercials, and let the strategies themselves do the talking. Southwest sets up all of its strategies in its commercials. It shows its low costs, emphasis on employees, and its differentiation. This sort of campaign sets the company apart from competitors and makes potential customers aware of Southwest’s unique policies” (Manuri, 2012).
Behavioral Segmentation
“Researchers try to define segments by looking at

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