Classic Airlines Benchmarking

Generic Benchmarking Worksheet

Task A: Problem/Opportunity Statement

Instructions for Task A: In the Response row, write out the problem/opportunity statements for the scenario for each of the team members.

Response to Task A:

Classic Airlines will become a profitable and successful organization by establishing better relationships with its internal and external customers.

Generic BenchmarkingвЂ"The purpose of generic benchmarking is to identify potential solutions to the problem statements defined in Task A. You will do this by looking at how companies in other industries have dealt with similar issues.

Topic A: Brand Marketing

Instructions for Topic A: In the Response row, each team member must identify at least one company that has faced and addressed similar situations (successfully and unsuccessfully).

• In the Response row, identify whether the company has been successful or unsuccessful.

• In the Response row, summarize your key findings for the company as they relate to the scenario.

• In the Response row, identify at least one alternative solution for Classic Airlines from each company researched.

Response to Topic A:

Company: Southwest Airlines

Status: Successful

Summary:

In 1968, Rollin King and Herb Kelleher founded Southwest Airlines, a new commercial airline that focused simply on getting customers from one location to another on time and for the most economical fare available. After three years of planning, Southwest began its operations in 1971 with very minimal number of planes on its fleet, with only four aircrafts serving three cities, and a maximum revenue of $2 million per annum (Andrews, 2006). After 24 years since the company’s inception, Southwest Airlines’ annual revenue grew to an impressive $3 billion per annum. Today Southwest Airlines “flies more than 70 million passengers in a year to 60 great cities all across the country and that too 3,000 times in a day” (Andrews, 2006). Southwest prides itself to be the fourth largest airline in the United States (Robinson, 2002). Moreover, Southwest’s management, board of directors, and employees are extremely proud of being able to post profitability for 32 consecutive years (Raulf, 2005). Even during the 1990s when the whole air travel industry was going through a difficult period, Southwest was able to maintain its position. Southwest was the only American commercial carrier to positively “turn both operating and net profits” (Grimaldi, 2006). As a result, Kelleher and King gained the lasting respect of their colleagues. Kelleher and King’s business idea has proven to be a success; however, the simple business plan involved more than just getting people from one point to another. Southwest’s success is due in part to the company’s ability to effectively establish and market Southwest as a brand. By branding, Southwest is able to distinguish itself from competitors such as United Airlines, American Airlines, and other commercial airlines. Southwest has employed and continuously employ a variety of branding techniques such as using certain colors, symbols, names and certain words or phrase for its slogan or logos to distinguish itself from its competitors (Kerin, Hartley, Berkowtiz, Rudelius, 2006). Moreover, Southwest sets itself apart from its competitors by identifying itself as the company that fosters positive attitude and humor (McCasland, 2003). What makes Southwest’s branding so effective is that it starts from management and is ingrained in the company’s culture. “Dedication to customer service always follows the trickle-down theory in corporate culture… the company has a reputation for hiring on the basis of a positive attitude and sense of humor” (McCasland, 2003). Southwest is known to hire based on personality (personable, friendly, sense of humor). Moreover, the company’s mission statement clearly states the company’s objectives and purpose of being. Southwest’s purpose for being is “the mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (McCasland, 2003). This purpose is clearly communicated to employees upon recruitment, training, and throughout their employment. Southwest’s branding strategy involves establishing a positive organizational culture and letting that culture speak for itself as the brand. Southwest’s Senior Vice-President of Corporate Communications Ginger Hardage said “the most critical ingredient in any company’s reputation or brand positioning is its People… at Southwest Airlines we believe that Employees personify the brand that is why you will see Employees featured in our advertising” (Southwest Airlines, 2006).

In order to measure the effectiveness of the organization’s branding strategy, Southwest Airlines review overall company performance and uses metrics to assess the effectiveness of performance, processes, and strategies. According to Anne Murray, Senior Director of Interactive Marketing at Southwest Airlines, one way the company is able to measure the effectiveness of its branding strategy is by generating reports on businesses generated through banner ads and comparing it to business/industry standards (iMedia Connection, 2002). Additionally, Southwest considers the growth in brand value and financial equity (return on investment), awareness, and employee and customer retention.

On May 2003, Southwest Airlines received the very first George Kozmetsky Award for Branding Excellence in the 21st Century, a prestigious award established by Center for Brand Research at the University of Texas at Austin and the Institute for Innovation Creativity and Capital (IICC). In determining which organization will win, University of Texas and the IICC selected organizations that have “shown innovativeness and creativity in branding practices which resulted into increased profitability, a history of ethical behavior, respect, integrity in the treatment of its employees, partners, and customers; and acknowledgement, accommodation