Hi, need to submit a 1000 words paper on the topic Southwest Airlines Program Formulation and Implementation just on Pricing and Product Strategies. Southwest Airlines Program Formulation and Implementation Just On Pricing and Product Strategies Task Outline i. Introduction ii. Product and Branding Relationships iii. Pricing Methods Used and Price Adaption Strategies iv. Recommendations v. Conclusion Southwest Airlines Program Formulation and Implementation Just On Pricing and Product Strategies Introduction According to Capon and Hubert (2007), Southwest Airlines is a US Airline company that was founded in 1967 in Dallas, Texas. Currently, it is one of the swiftest growing airline corporations in America and has been existent for 35 years. This company charges very low airline fares in the US, and has gradually extended its profits well beyond anyone’s expectations (Smith 2011). The customers pay for the basic transportation services and do not enjoy extra services such as movies and first class attendance. According to Reed (2006), Southwest airlines do not incorporate direct flights to locales outside the US in its flight program. Southwest was successful in establishing affordable prices, which would subsequently define its product of low cost transport. Their perception was to diminish their operational costs and replicate this benefit to the consumers by lowering the flight fee (Reed, 2006).Southwest Airlines did not completely abandon the first class flights but have the consumers an option of choosing according to an individual’s convenience. There was the option of exemplary service, that is, first class or that of basic transportation. This strategy enabled them attest to the demands of a large proportion of clients who were not economically capable of accommodating the extra services of the airline (Capon and Hubert, 2007). Product and Branding Relationships Southwest is definitely an attractive brand due to incorporation of convenient fares to its clients. According to Kim, Lee and Lee (2005), brand affiliation between the purchaser and the brand is essential in determining the success of the brand. If the producers are able to foster a trustworthy relationship with the client, it will guarantee success of the corporation. One of the basic components of branding is a client’s commitment (Mcwen, 2004). The standard measurement of quality should be constant to create consistency and encourage loyalty from the client. Southwest Airlines is consistent in its low pricing policy for a considerable period and this has elevated confidence among clients (Kim, Lee & Lee, 2005).This was a calculative commitment that would benefit the airline and passengers economically. This policy can eventually draw new customers to the corporation’s client list. According to Mcwen (2004), one of the major ways to build a brand is to elevate the consumer’s acknowledgement of the product. This can guarantee that the consumer does not encounter surprises with the product upon its purchase. This will enable the client comprehend what the product entails and whether it is relative to his current economic situation. In addition, promotional offers and other incentives increase client appreciation of the product. According to Franzen and Moriarty (2009), Trust is also another instrumental factor in determining the appreciation of certain brands. It is essential for the consumer to intimately passionate about the product to assure success of the brand. The corporation can highlight this by considering the welfare of the customer while disseminating the product (Kim, Lee & Lee, 2005).The brand should generate an enduring emotional bond with the consumer to warrant continuous success of the firm. Pricing Methods Used and Price Adaption Strategies Pricing is the most recognizable form of strategy that numerous firms adopt to assure increase of consumers (Ferrel & Hartline, 2011). Pricing strategies of corporations have to be inclusive of the costs of the producers and the affordable capacity of consumers. According to Holden and Burton (2010), pricing strategies encompass several mechanisms that corporations can apply in attaining maximum earnings. According to Gitman and Mcdaniel (2009), one of the prominent pricing strategies is penetration pricing where the firm lowers prices to gather a considerable number of clients and then adjust prices upwards. Telecom companies often utilize this mode of pricing that is directed at enthusiastic clients who will take up their services. This approach to pricing is imperative to corporations that are entering the market since it exposes them to potential clients and enables them earn considerable sums. This entails reducing the operational and promotional expenditure to a minimum (Holden & Burton, 2010). Economy pricing can thrive in periods of recession and companies that incorporate this pricing achieve more earnings. Economy pricing is the strategy that Southwest Airlines utilizes through lowering their fares to suit the client’s capabilities to pay. This aspect is a large contributor to the success of the airline Thirdly, Price Skimming involves charging higher prices since the corporation has fewer competitors (Smith, 2011). However, this technique is not sustainable since it attracts more entrants to the industry due to enticing profits. This will eventually diminish the price as supply of this product increases. Also new products influence this mode of pricing but thereafter the manufacturers reevaluate their pricing when similar products saturate the market (Ferrel & Hartline, 2011). Recommendations According to Vasigh, Fleming and Tucker (2008), “Optional Product Pricing” is one of the appropriate methods of pricing since it is based on the preferences of the consumer. The companies offer additional frills to a product and then increase the price. This will ensure a customer has the option of purchasing the product that adequately suits his economic capabilities. This is an inventive way of segregating products with regard to the customer’s desires. In addition, product line pricing is also beneficial to numerous corporations especially the food companies. This entails lowering prices of a product if it is bought in bulk. This can guarantee increase in earnings of the corporation. Conclusion The pricing strategy of Southwest Airlines is responsible for its success. The entity has taken radical measures to execute those policies leading to its gradual advancement. Southwest Airlines should maintain this strategy to ensure that it continues in its progress. The Economy Pricing strategy of Southwest Airlines appeals to a multitude of consumers (Capon and Hubert, 2007). It entices new customers to the Airline and it is now recognizable as the most successful airline corporations. References Capon, N. & Hulbert, J. M. (2007). Managing marketing in the 21st century: Developing and implementing the market strategy. Bronxville, NY: Wessex Inc. Franzen, G. & Moriarty, S. E. (2009). The science and art of branding. Armonk, N.Y: M.E. Sharpe. Ferrell, O. & Hartline, M. (2011). Marketing strategy. Australia: South-Western Cengage Learning. Gitman, L. & McDaniel, C. D. (2009). The future of business: The essentials. Mason, OH: South-Western Cengage Learning. Holden, R. & Burton, M. (2010). Pricing with Confidence: 10 Ways to Stop Leaving Money on the Table. New York, NY: John Wiley and Sons. Kim, H., Lee, M. & Lee, Y. (22 March 2012). “Developing a Scale for Measuring Brand Relationship Quality”. MN: Association for Consumer Research. (2005). Volume 6, 118-126. McEwen, W. (22 March 2012).Building a Brand Relationship. Gallup Management Journal, 08, 1 Smith, T. (22 March 2012). 40 Years of Profitable Service: A Case Study on Southwest Airlines and Target Pricing. The Wiglaf Journal, 1, 1 Reed, D. (2006). At 35, Southwest’s strategy gets more complicated. New York, NY: USA TODAY. Vasigh, B. Fleming, K., & Tacker, T. (2008). Introduction to air transport economics: From theory to applications. Aldershot, U.A.
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