The airline industry is one of the most competitive industries in America. Due to the hefty -profits that are associated with the industry, many individuals, and well-to-do companies have invested in this industry, therefore, making it competitive. Another reason behind the competitive nature of this industry is the varying customer tastes and preferences. Most of the customers for this industry are very keen on the quality of the services offered by the airlines as well as the cost of the services. Due to this the customers will never buy a poor quality service for big money. Southwest Airlines Co. is one of the companies which have ventured into this lucrative industry. Currently, the company stands out as one of the world’s largest low-cost carrier. Due to this, the company has become a renowned brand in the airline industry. It has its headquarters in Dallas, Texas. Some of the Southwest Airlines Co. competitors in this industry include; JetBlue, Virgin America, Spirit Airlines among others. Due to this ballooning competition, Southwest would like to know how it should position itself to increase its competitive edge hence make great profits. The method that the company wants to use to achieve this is the use of a perceptual positioning map (Chandrappa, 2015). This map will help Southwest Airlines understand how customers view their services as well as to develop a positioning strategy for its services. This paper represents a perceptual positioning map for Southwest Airlines Co. and its competitors, that is, JetBlue, Virgin America, and Spirit Airlines.
A perceptual positioning map of four airlines above shows the customers’ perception of the companies. To begin with, JetBlue is as the leading company that offers high-quality flights at the lowest cost possible (Chandrappa, 2014). On the other hand, Spirit Airlines is presented as the company that offers the lowest quality of services at the cheapest prices possible. Virgin Airlines are presented almost in the middle of the map since it offers the very high-quality flight services at a relatively high prices that are affordable to most customers. However, Southwest Airlines is mapped just below the JetBlue airline. This is because even though the company offers very high quality and it has been the largest low-price airline previously, it has now been surpassed by the JetBlue airline which seems to have mastered southwest technique of offering very high quality services but at the cheapest price possible.
According to the Airline quality report that was released on Monday, April 13, 2015, the Virgin America Airline was ranked position one in overall performance when compared to all the other airlines in US (USA TODAY, 2015). In the same report, Southwest Airline was ranked position six, JetBlue Airways was ranked in position fourth while Spirit Airlines was not ranked among the top twelve best airlines but has previous been ranked as the worst airline in United States of America (Vasel, 2015). The survey which was done evaluated the 12 largest carriers in America. It was on a number of performance markers which included the percentage of mishandled bags and on-time flights. This reported highlighted that the Virgin America was the leading company in quality improvement as it received least complaints concerning canceled flights and lost luggage. According to Vasel (2015), the Virgin America airline was ranked the best in terms of luggage handling though this has slightly dropped. On-time performance, the company had a score of, the company performance dropped from 83.5% to 82.1% .The Company was also ranked as the busiest airline in America. Speaking after the report, the company CEO, Richard Branson argued that the company had scoped this position because it has great policies and is pretty on time. The company had 82.1% of all their flights on time, only 0.97 bags per 1000 bags were, and only 0.04 per 10,000ticketed passengers were denied boarding the flights all of which are below average. The company recorded only 1.28 per 100,000 passengers’ complaints during this year. Bearing in mind that the cost of the flights for this airline is above that offered by low-cost airlines such as Southwest Airlines and JetBlue airline, it means that her customers expect better services. For this reason, having a low number of complaints means that the company has tried too much the high costs per flights with a corresponding increased quality.
The Southwest Company is one of the largest low-cost carriers in the world, and it was ranked number six according to the Airline quality report released in 2014. As per the report, the company has a market share of 15.7% (Miles & Mangold, 2005). The company was rated being the airline with the lowest additional fees in the entire industry in the US which was more than 40% lower than the additional fees for the JetBlue airline. Moreover, the company has zero fees for checked bags (up to two) and the lowest per fee per bags that are above two. The biggest boost for this company is the low fares and fees. According to Wichita.edu(2015), Southwest was one of the companies that improved much on overall performance which made it rise from position eight in 2013 to position six in 2014. One of the areas that the company greatly improved was on-time performance. Compared to the 2013 report on the on-time performance of the airline, the company had greatly improved, and most of its flights reached their destinations on time (Southwest.com, 2015).This is why the company appears just below JetBlue in term of amenities.
JetBlue, which was ranked position four in this report, was favored by its reduced cost per flights when compared to the Virgin America company whose prices are a bit higher (Jetblue.com, 2015).The company was listed as the leading in terms of Customer Loyalty Engagement Index. In addition to the low fares, the company has second lowest fee schedule, have a lot of appeal to customers and it is somehow flexible and forgives many of its customer’s mistakes when compared to other airlines (Chandrappa, 2014). It has a very low market share of just 5.1% due to its smaller size when compared to such low-cost airlines such as Southwest Airlines (Maxon, 2015).
According to Learnmarketing.net (2015), perceptual maps help a firm to know where it can position its brand. Based on the above Perceptual map, there are several positions where the company can place its brand. One of the positions where Southwest Airline can place its brand is at the medium price and medium quality position (Miles & Mangold, 2005). This is because, at that position, there is a gap which needs to be filled. From the above map, it is evident that most of the companies are offering very low prices for better quality services apart from Virgin America which is offering relatively expensive flights but of high quality. Not all customers are concerned with the high quality provided the cost of the flight is cheap. To cater for these customers, the company should introduce these medium costs medium quality flights. There is also a gap in the high price low-quality position, but the company cannot fill this gap. This is because at no given time a consumer will be willing to pay a large amount of money for low-quality services. A big gap also exists in the low price low-quality position. This position is very tricky for a company to invest. This is because most of the flight consumers if not all are much concerned about their welfare. This position is by the spirit airline which has been previously ranked as one of the worst airlines in the US (Miles & Mangold, 2005).
Based on this map, the best position that Southwest can place its brand is the medium price medium quality position. This is because at this position the company will experience reduced competition when compared to its current position. The company can also introduce short-distance flight to fill the low price low-quality gap (Miles & Mangold, 2005). Most of the consumers who take flights for short distances are not much concerned about the quality of the flights. Lastly, the company can place some of its flights in the highest quality highest price position. In this position, the company can place most of its long-distance carriers to fill this gap. Many of the airlines seem not to be interested in this position and therefore Southwest Company will experience the least competition hence a larger market share.
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