Discussion Southwest airlines
Read the Marketing Excellence Case Study on Southwest Airlines at the end of Chapter 14 and respond to these questions. Your post must be 200 words or more. Please research your original responses to these questions and cite your sources according to APA.
1. Southwest has mastered the low-price model and has the financial results to prove it. Why don’t the other airlines copy Southwest’s model?
2. What risks does Southwest face? Can it continue to thrive as a low- cost airline when tough economic times hit?
Post at least 2 responses, minimum of 150 words in length, to your fellow student’s posts or your Instructor 's posts.
An organization prices its products and services by two criteria1:
1) Market Skimming
2) Market penetration strategies.
Now depending upon the market situation and other factors, different organizations choose different strategies for pricing. It is clear that Southwest Airline had to enter a market which is large and was already dominated by other reputed airlines. In such situation SouthWest airline seem to have adapted low-pricing policy also called Market Penetration Strategy in order to enter the market. This is the principal reason why Southwest airline has adopted a strategy which other airlines don’t necessarily have to since they are the old successful players in the same market having their loyal customer base. It is also difficult for an airline to totally change its own strategy since it risks upsetting its existing customer base.
Since SouthWest airlines continue to serve low airfare to the travelers, it may sort of achieve a reputation of an airline with low quality services although that does not necessarily have to be true. A true price-quality relationship hasn’t been established clearly but according to most of the market researchers, there is a positive relationship between both (Gardner 1970; Lambert 1972; Paterson and Wilson 1985). The pricing of a service or a product depends on a various intrinsic and extrinsic factors
1. Southwest has mastered the low-price model and has the financial results to prove it. Why don’t the other airlines copy Southwest’s model?
2. What risks does Southwest face? Can it continue to thrive as a low- cost airline when tough economic times hit?
Post at least 2 responses, minimum of 150 words in length, to your fellow student’s posts or your Instructor 's posts.
An organization prices its products and services by two criteria1:
1) Market Skimming
2) Market penetration strategies.
Now depending upon the market situation and other factors, different organizations choose different strategies for pricing. It is clear that Southwest Airline had to enter a market which is large and was already dominated by other reputed airlines. In such situation SouthWest airline seem to have adapted low-pricing policy also called Market Penetration Strategy in order to enter the market. This is the principal reason why Southwest airline has adopted a strategy which other airlines don’t necessarily have to since they are the old successful players in the same market having their loyal customer base. It is also difficult for an airline to totally change its own strategy since it risks upsetting its existing customer base.
Since SouthWest airlines continue to serve low airfare to the travelers, it may sort of achieve a reputation of an airline with low quality services although that does not necessarily have to be true. A true price-quality relationship hasn’t been established clearly but according to most of the market researchers, there is a positive relationship between both (Gardner 1970; Lambert 1972; Paterson and Wilson 1985). The pricing of a service or a product depends on a various intrinsic and extrinsic factors
References: 1) Pricing Strategies (2015). From Lessons: Week 7 pricing strategies. Retrieved August 16, 2015 from http://sullivan.angellearning.com/section/default.asp?id=2015SUMMER-MKT570X-A1-07 2) Factors Affecting Pricing Decision (2015). From Pricing Decisions Tutorial. KnowThis.com. Retrieved August 16, 2015 from http://www.knowthis.com/pricing-decisions/factors-affecting-pricing-decision